Thursday, July 27, 2006

Future crunch ?

[Sarat and I had a really interesting dicussion a while ago...although I have been planning on penning it down, from the get go, I have been downright lazy...so here goes...interestingly, I am often amazed at the kind of great thoughts/materials that come out during discussions with Sarat...man, you are a great intellectual sparring partner (not to mention one for tennis too) !]

We now live in a world, where we are constantly being barraged about the impending oil/energy crisis. So, we are told that oil reserves will die out in around fifty years, and we are nearing the peak of oil production, and all that is left, is the inevitable fall in production, until it just tapers off. Ok, first off, I believe that the fifty years being touted by the media and the oil companies is plain rubbish...I mean, we haven't even started to tap into the vast reserves under Siberia, Alaska, the Rocky mountains, and of course, the granddaddy of all - the deep sea oil reserves ! So, this 50 year deadline may not be such a hard one after all...thinking pessimistically, I believe that it might be closer to 150 years...optimistically, maybe even 200+ years !

[Note : the two graphs above represent various studies about oil reserves and production peaks respectively.]

But this is not to take away from the fact that the oil reserves are in fact finite ! The day will come when we have pumped the last barrel of oil, and we have seen the last of the hydrocarbon-based vehicle being thrown into the dumpster and even the day when the black marketeers run out of the damn thing...so why aren't we worried ? Why doesn't humanity rush into the streets, insane at the loss of the the modern lifestyle and a descent into the middle ages ? Doesn't the end of oil spell doom for our civilization ? Well, not really, because all of humanity rests on hope - hope that an alternative energy source will fill all the needs that hydrocarbon-based energy sources provide today. Nuclear energy, fuel cells, solar energy, biofuels, etc. are already either in the market, or close to being so (being late into the research and development stages). Each one has its share of problems that haven't been surmounted yet. We are nowhere close to that one mass production idea when any one of these (or even a combination) will be able to match the current and future requirements for oil. So, perhaps that next big thing is in the future...perhaps in the immediate future, perhaps a bit further on...maybe far into the future. But worry not, it will come well before the oil crunch hits us, and we shall carry on happily into the future until we colonize the nearby stars and the galaxy and who knows what next...

But hang on a minute, let us study the possible futures of humanity based on the energy demands, and availability of resources to meet these demands...

Scenario 1: Optimisic !
Let us consider the scenario shown in the following figure...
This is the hope that drives us to wantonly use oil and energy without worrying about the future. The blue arrow shows us the point where an alternative energy source, possibly as yet undiscovered, will make up for the impending oil crisis, well before it is a crisis ! This is the perfect world, where we will not even notice the pinch from the production drop in oil and other conventional energy sources. The future for humanity will be bright and we will march into it with even greater speed...

Scenario 2 : Pessimistic
Let us see what happens at the other end of the spectrum...This is the worst case scenario! From the above graph, we see that it is possible that the next big thing will not take off, and hey, may not even arrive, before the oil production drops to abysmal levels. This portends doom for humanity, and for human civilization at the very least...our modern way of life will be threatened, as literally everything - from transportation (people/goods) to power generation, to every day affairs often depends on an easily available resource like oil. Without it being available so abundantly, we will enter crisis mode, and from then on, one can only hope that widespread anarchy doesn't flare up...this is a very bleak future for us indeed...

Scenario 3 : The middle path ?
Suppose the situation is neither perfect nor is it the worst case discussed above...it is average, as life often tends to be...The shaded blue are represents a time frame when we will feel a global crunch...the countries/communities/people at the lower rungs wil probably feel it worse than the ones at the top, but there will still be widespread effects felt for decades...this blue region depicts the time when the oil production is depleting, and the new tchnology has not quite been able to quite catch up the the demands posed by the failure of oil to supply the needs of the ever growing human populace. Global economies will be in ruins, but hopefully not unrecoverably so...prices and inflation will go up, and life will be harder to maintain...it will push back economic growth by a few decades, perhaps even a century or two...but then again, we should be able to get back on track once the new technology takes off and mass production is able to bring the prices down...perhaps the drop in oil and resulting effects might delay/advance the new technology a bit, depending on the thought processes of the world/corporate leaders (will there be a difference between the two ? That is for a later post!)...of course, it might degenerate into the pessimistic model or might be able to gather enough momentum to bring on the perfect model....but an effect will still be felt, and no small one at that.

If we consider the three scenarios, we must notice that they are not all impossible...each one is as likely as the other...we are all so confident of our technological abilities...we take it for granted that technology will show us the way...but what if our current technological ccapabilities are short of such discoveries...even if we have the ideas, we may not be able to implement them. becuase we have yet to make certain technological advancements that will help us make the ideas a reality...da Vinci had the idea of lighter than air flying machines 600 years before it became a reality...no one was able to implement one until the 1900s, because aerodynamics was just not advanced enough, the materials and tools that make it possible weren't invented, and so on...so, the possibility of a crunch occuring is just as real as one not occuring especially due to technological reasons.

So, if any one of the three has as good a chance to occur, and considering that two out of the three scenarios are bad, isn't it possible that we have a 67% chance that the future might have some bleak possibilities, if we consider the energy situation ?

Sarat, though has a better vision for us...he feels that the energy situation will be something like this...i.e., outputs of various smaller energy sources will make up for the global drop in oil production(see blue arrow). The coloured lines representing the various energy sources are cumulative - i.e. they are "added on" to the production from the previous alternative energy source. Interesting, and makes a lot of sense...I can actually see this as one good alternative, considering the way technology has developed over the last few decades...but I have some niggling thoughts regarding this...
  1. Suppose we consider the sum total of all the smaller energy sources, as a single source for analysis, and consider its trends, then won't this cumlative trend also have one of the three possible futures that I indicated above ? Then, the graph shown above, is just the optimistic case that I have explored.
  2. The energy source will be easily available to the common man, mainly because of mass production which drives the per untit price down...but if each of these new small sources are not able to the achieve the same levels of production as oil, won't each one be more expensive than oil in its current state, and thus unaffordable by the common man ?
[Note : the graphs used in this post are just for illustrative puposes, and are not from actual numbers, nor are they indicative of any actual numbers.]

4 comments:

Radha said...

Good analysis.It seems like in most of the scenarios you describe,the usage of conventional energy sources(oil) and mass produced alternative resources are mutually exclusive to a large extent.I see a different future.You were right in saying that the lower rung will feel the crunch more than those more economically comfortable.I think this will be especially true between the developed and the developing/"so called third world" economies. I predict that 50 years into the future,developed countries will have a reliable alternative energy source(unless there is a 3rd world war and this process will be expedited) and will have worked out a model for its mass production.While one part of the world will be using this new energy,the other part of the world will still be using oil.Even with more free economies and globalization, it will probably be a good 3-4 decades before the entire world switches to this alternative energy.The main reason for this gapwill not be advances in technology ,but the power games that will be played in the political/corporate world(I do think each are heavily influenced by the other),because each group of countries(not individual countries anymore) will try and ensure that they control the supply of fuel(oil vs new energy). This scenario is very close to your "average" scenario,but a little more optimistic.

Sib said...

Good points Rads...

Even if the development of the alternative energy source was dependent on oil, then we are just putting off the inevitable, because oil is still a finite quantity...ok, instead of 200, we now 500 years, but the three scenarios remain pretty much the same.

Your idea of the rich countries having the technology while the poor ones use oil scenario also makes a lot of sense, but the major premise for the "negative" possibilities in my post was the technological drawback and lack of mass production...they may still hinder such a process..

Andrew Guenthner said...

It is nice to see you've taken an objective approach in your discussion. If a "future crunch" does happen, we will need a lot more people who, like you, are willing to think things through rationally.
I have three respectful points of disagreement, though:
1) For practical purposes, I don't believe the supply of oil is finite in the long run, because oil may be produced by man-made chemical reactions. Synthetic oil has already been mass produced (e.g. South Africa during sanctions introduced in response to apartheid), and at costs below current market prices for oil. Although it is utterly impractical, even the gases produced by the combustion of oil could, theoretically, be collected and turned back into oil via chemical synthesis! To me, the practically finite resource is oil in deposits that can be pumped to the surface with ease.
2) I think an economic "crunch" is more directly related to a loss in productivity than a loss in supply. For instance, switching to synthetic oil would have a negative economic impact because you have to work a lot harder to get oil if you must build and operate a high-tech factory than if you can simply drill a hole in the ground. (It might also, however, have a positive economic impact by reducing the power of a giant cartel and speculative trading aided by geopolitical uncertainty, neither of which boost productivity in my opinion). Since productivity is the key factor, the "crunch" can always be mitigated by improved energy efficiency. In fact, you could argue this is already happening; high oil prices today are far less of a threat to the economy than they were thirty years ago, because of dramatic increases in, for instance, the amount of information that can be transmitted globally per unit of energy required.
3) To me, Da Vinci's flying machine really can't be compared to current altenative energy technologies. The former seems more like a very vivid and insightful product of the imagination, and would be more akin to describing interstellar space travel today. The fully-functional solar panels on my roof, on the other hand, are definitely not imaginary, and might even pay for themselves.

Sib said...

Hey Andrew,

Thanks for taking the time to read and comment on the post. Great points you make there.

First off, the da Vinci example was just to point out that even if we have the drive/ideas, be able to surmount the technological barriers. Even if we have an idea that might be the next killer technology, then we may not have the tools or principles developed enough to get it to reality.

Now that it is out of the way, this idea of synthetic oil is interesting - I had assumed that once we're done with natural oil, we are more or less done with its uses...but isn't a factory that once set up, starts mass producing oil FAR better than regular oil ? I mean, each time a well runs out, we need to spend time and HUGE amount of money to dig another one, if we find one...but the factory, in the long run, should be able to produce enough oil cheaply enough to make it way cheaper than what it is now.

In fact, even using oil efficiently, doesn't make the problem any less important...oil (natural) WILL run out some day...and am not fully aware of the requirements/complications for the synthetic version...so we're just pushing the problem a little further into the future.

Great thoughts though...I shall have to find out some more about the points that you have raised !