The Federal Highway Administration reports travel on all roads and streets was up 1.6% for January 2012 as compared with January 2011.

However, the long-term trend remains down. In the early ’80s, VMT (moving 12 months total) stayed below the previous peak for 39 months. Currently VMT (moving 12 months total) has been below the previous peak for 50 months – more than 4 years – and has a long way to recover before regaining the previous peak.

In the 13 western states, vehicle miles traveled was down 1.5% for January 2012 compared to January 2011. In Oregon, VMT was down 3.3% in January 2012 compared to January 2011. VMT in Oregon has now been down from the previous year for 13 straight months.

The uptick in VMT in January seems a bit of an anomaly. The EIA reports motor fuel consumption in the U.S. has been down by ~7% this year (the EIA notes that taking into account new methodology which now better accounts for the sharply increased exports seen beginning in 2010 and 2011, U.S. gasoline consumption in January 2012 was more realistically down only 4.3% rather than the 7% or so shown in its weekly reports). According to MasterCard’s SpendingPulse, U.S. gasoline demand fell 7.2% below a year earlier last week, the biggest drop in that measure in more than two years. Gasoline consumption has dropped by 3% over the last 52 weeks. The weekly consecutive decline in year-over-year consumption is longer than the 51-week slide during the recession.

The decline in gasoline consumption is consistent with gasoline prices, which have been rising in concert with crude oil prices. Despite high prices and weak economies in the OECD countries, global demand for oil is refusing to falter.  After hitting new record highs at the end of last year, global oil production is flattening once again, as seen in this chart from OPEC’s March Monthly Oil Market Report.

Reuters reports the national average for a gallon of regular gasoline rose to $3.93 on March 23. As seen in this chart from Gas Buddy, gas prices are beginning to approach heights last seen in the summer of 2008, just before the financial crisis and economic crash.

Auto sales in the U.S. so far this year are a bit of an anomaly, too. Sales were up 11% in January year-over-year, up 16% in February, and are expected to be up 6% in March. The first-quarter annual selling rate is expected to come in at 14.4 million vehicles. Last year, about 12.8 million vehicles were sold in the United States. U.S. auto sales averaged nearly 17 million vehicles a year in the 10-year period ending in 2007.

Meanwhile, auto sales in Europe have collapsed. New car sales were down 9.7% in February. Two months into the year, car sales in the EU are down 8.3% from the same period a year earlier. Mish at Global Economic Trend Analysis posts this chart . . .

. . . and excerpts this commentary:

The harmless looking percentages hide the fact that this February was the worst of the millennium. Only 888,878 units changed hands in the EU27 in February, the lowest level since comparing months made sense (going back further is futile, the EU was much smaller then…) Even during carmageddon, Europe had not seen a February as bad as this one.

EU basket cases Greece and Portugal saw their new car sales nearly halved. These are relatively unimportant markets, by now, tiny Luxemburg has more car sales than Greece. If Greece would leave the EU, it would not even register in the car statistics. What hurts much more is the deterioration of the volume markets. France is down 20.2 percent, not boding well for PSA and Renault. Italy is down 18.9 percent, putting pressure on Fiat. Flat sales in Germany spared Europe a double digit tanking.

Perhaps cars are being replaced in the U.S. simply because they are beginning to wear out. The average age of vehicles on the road in the United States reached a record 11.1 years in 2011.

With gas prices high and rising, and VMT dropping, it’s hard to construct a scenario in which U.S. auto sales continue to increase.

The Census Bureau reports the number of light vehicles registered in the U.S. peaked in 2008 at 247,322,000 million. In 2009 (the latest date for which Census Bureau data is available), registrations declined to 243,999,000. However, the U.S. Department of Energy Center for Transportation Analysis reports the number of light vehicles in the U.S. dropped to 235,034,000 in 2010. Over the two years (2009 – 2010) since the peak in vehicles on U.S. roads for which we have data, new light vehicle sales totaled 22.4 million (10.6 million in 2009, 11.8 million in 2010) while the number of cars and light trucks on U.S. roads declined by 12.3 million. 34.7 million light vehicles were scrapped and disappeared from the vehicle registration rolls over those two years – 17.35 million a year. No wonder gas consumption and VMT are down.

It would seem a safe bet that unless U.S. auto sales return to the record high levels of the early 2000s, cars and light trucks will continue to disappear from U.S. roads and streets. The days of ever-expanding road capacity are over. Or at least they should be. We should be asking ourselves: is there really any need for the Columbia River Crossing? Or is the CRC a multi-billion dollar boondoggle, a bridge to nowhere?

Europe is in recession. The U.S. is still struggling economically. Yet oil prices remain stubbornly high:  Brent crude hit a six-month high above $119 a barrel on Wednesday (February 15), while U.S. crude rose to above $102, as the pot continues to bubble in oil-producing nations in the Middle East and Africa.

Both the U.S. Energy Information Agency and the International Energy Agency have terrible track records when it comes to forecasting future oil prices. Shane Lofgren at Seeking Alpha reports he has searched in vain for any explanation of their forecasting methodologies. Given their lousy track record and lack of any transparency, Lofgren looks to the IMF for a more satisfactory approach. Lofgren describes the model used by the IMF as a “straight from undergrad economics”, “business as usual” model – about as far from a “peak oil” model as you can get.

With what results? What does the model have to say about the direction of future prices? Lofgren sums up the results of his calculations:

If we are looking at the Brent, which tends to be more reflective of global supply and demand conditions, then that would be $136 at year end 2012 and then $158 at year end 2013.

That sounds like a great deal, but it is not unthinkable, as prices grew at a faster rate than that from ’03 to ’08. Now, many assumptions from the model could prove wrong. GDP might come in below that, and again and there will likely be stronger price responses at higher prices. Still, this gives an impression of a much more serious potential increase in prices than the IEA has suggested.

Remember, Lofgren isn’t talking about any peak oil impacts here – he’s assuming a supply response to price increases.

Even at current prices, petroleum consumption in the U.S. is falling off a cliff. Mish Shedlock posts this chart showing rolling three-month averages.

Historically, economic growth has been highly correlated to the growth in energy supplies.

With petroleum consumption plummeting, can the “economy” be far behind?

It’s not just oil. Electricity consumption in the U.S. is down, too. Charles Hugh Smith posts these charts at Of Two Minds.

Electricity usage in the U.S. is no longer growing, but rather is now in a downtrend with no historical precedent.

Hopes that debt crises in the U.S. and Europe can be kicked down the road, eventually to be bailed out by a return to business as usual – robust economic growth – are likely to prove to be nothing more than wishful thinking. Maybe it’s time to get over our love affair with oil? As Paul Simon sang, the problem is all in our heads.

You just slip out the back, Jack
Make a new plan, Stan
You don’t need to be coy, Roy
Just get yourself free
Hop on the bus, Gus
You don’t need to discuss much
Just drop off the key, Lee
And get yourself free

The beginning of 2012 has seen petroleum and gasoline usage in the U.S. fall off a cliff. In two of the last three weeks of January, gasoline usage has dropped below 8,000,000 barrels per day. The last time usage fell that low was the week of September 21, 2001.

This chart by Tim Wallace showing petroleum and gasoline usage, based on Energy Information Agency data with added polynomial trend lines, is posted by Mish Shedlock.

The weekly data in the above chart are from the Energy Information Agency. This chart from the EIA shows the four-week average, which removes much of the week-to-week “noise” and better shows the seasonal pattern and overall trend. The downward trend in gasoline consumption since 2007 and the January 2012 collapse are clearly evident.

Since 2005, global crude oil production has been bumping up against a ceiling around 74 million barrels a day.

Gregor Macdonald points out that since 2005, European oil consumption has fallen by 1.5 mbd and U.S. oil consumption by 2 mbd. Macdonald mocks any further attempt to deny the reality of peak oil:

Today, in 2012, I observe that many analysts of global oil production—and the interaction between oil prices and the global economy—continue to engage in a guessing game about the future. But, frankly, the future has already arrived. And it is not a random future, but a future that was held to be improbable, if not impossible. For each extra barrel of oil produced over the past seven years from Russia, and Canada, there has been a loss of production from the North Sea, from Mexico, from Indonesia and elsewhere. And in the case of OPEC, there has been a stubborn flatlining of production growth, which, in the true spirit of argumentum ad ignorantium, has been taken as proof of OPEC’s hidden and secret supply. Thus, we are led to the newest and strangest meme of all: the failure of global oil production to grow over seven years, in the face of a phase transition in oil prices, is not even suggestive of peak oil. But rather, proof of oil’s imminent supply resurrection.

Macdonald oblique phrase -  “a phase transition in oil prices” – refers to the fact that global crude oil supplies are proving inelastic as they no longer increase in response to price signals. Higher prices do not result in increased production, as seen in this chart posted by Gail Tverberg at Our Finite World.

With global crude oil production flat and consumption by “developing” countries such as China and India increasing, something has to give. The “give” is proving to be consumption by developed countries, including the U.S. and European countries.

Historically, economic growth has been closely correlated with oil consumption. To believe that economic growth in the U.S. can resume even while oil consumption is falling would require that the historic connection between oil consumption and growth has been broken. That’s quite a presumption.

In Europe, the most current “rescue” drama involving Greece continues. But the success of any bailout is predicated on a resumption of growth. Is anyone predicting that the downward trend in oil consumption in the EU will reverse? Tverberg points out:

[W]hen limited oil supply is rationed by high oil prices, economic growth slows down, and eventually decreases. When this happens, it becomes much less advantageous to borrow from the future, because the future is no longer better than today. If an economic contraction occurs for very long, the whole debt system can be expected to undergo a major “unwind”.

If no one can rationally expect oil supplies available to Europe and the U.S. to reverse their downward trend and once again begin increasing, what’s the basis for hope for future economic growth? For the faith that today’s debts will be repaid out of tomorrow’s growth?

One would expect that the January plunge in U.S. gasoline consumption would be reflected by a similar plunge in vehicle miles traveled. We’ll see in late March, when the Federal Highway Administration releases its Traffic Volume Trends for January 2012.

AP reports the typical American household will have spent a record $4,155 on automobile fuel this year – 8.4% of what the median family takes in, the highest share since 1981.

Don’t expect 2012 to be any better. More likely, fuel will be getting even more expensive.

Brent crude will average near $111/barrel for 2011, even more than in 2008 when oil prices hit a peak of $147.50/barrel. Some analysts think oil prices will average a bit less in 2012, perhaps averaging $105/barrel. Others analysts predict that oil prices will be even higher than in 2011, projecting WTI (which have consistently been significantly lower than Brent this year) to average $100 per barrel next year, eclipsing 2011′s average of about $95/barrel. Oil-price.net projects WTI prices to be at $112 a year from now.

Nobody is expecting oil prices to drop, or at least not much. Here’s a big reason why: Saudi Arabia, the world’s lowest-cost producer, requires a price of $91/barrel just to break even.

The glory days of cheap gas are over for good. Our memories aren’t playing tricks: remember gas wars, gas at 19.9 cents a gallon? In my Fiat 850 Spyder – $2000 new, right off the lot, and 50 mpg – driving seemed virtually free. We were young and immortal, oil was infinite, and the world was empty and ours for the taking. There were no bounds, no limits. Vietnam and then the first gas crisis in 1973 were the first intimations that the imperial project – to stride over not just the nations of the world, but over Nature herself – was destined to go awry.

A few were prescient. Limits to Growth was published in 1972, foreseeing humanity bumping up against constraints to both sources and sinks by the first decades of this century. Way back in ’56, Shell geologist M. King Hubbard predicted that U.S. oil production would peak in 1970 – a prediction that proved spot on.

Porter Stansbury at The Daily Reckoning posts this chart showing “real wealth” per capita in the U.S. since the mid-’50s.

Note that “real wealth” in the U.S. peaked about the same time as U.S. oil production. Coincidence?

Stansbury measures “real wealth” using a standard commodity index (the CRB) up to 1975 and gold post-1975 (when gold began to trade freely). When peak oil arrived in the U.S., Nixon took the U.S. off the gold standard. With the U.S. kissy-face with the Saudis, the dollar became the petrodollar.

I’m not sure I would put a lot of faith into this measure of “real wealth” – but the correlation of peak wealth with peak oil is provocative. There’s no question that the U.S., indeed the entirety of Earth, has become a poorer, more degraded home for humans since 1970, despite decades of “growth” and “progress”. That degradation doesn’t even begin to show up in our accounts.

Around 1970, reality arose and smacked us across the face.  Humanity has been working through the range of responses – denial, anger, bargaining, depression, not yet acceptance – ever since.

The last post commented on the stark climate warnings contained in the International Energy Agency’s World Energy Outlook 2011:  if we fail to implement new policies by 2017, we are on a dangerous track for a temperature increase of 6°C (11°F) or more.  The IEA’s energy supply and demand assumptions are also worth a look.

The Executive Summary presents the following demand and supply projection for 2035:

Oil demand (excluding biofuels) rises from 87 million barrels per day (mb/d) in 2010 to 99 mb/d in 2035. * * *

The cost of bringing oil to market rises as oil companies are forced to turn to more difficult and costly sources to replace lost capacity and meet rising demand. Production of conventional crude oil – the largest single component of oil supply – remains at current levels before declining slightly to around 68 mb/d by 2035. To compensate for declining crude oil production at existing fields, 47 mb/d of gross capacity additions are required, twice the current total oil production of all OPEC countries in the Middle East. A growing share of output comes from natural gas liquids (over 18 mb/d in 2035) and unconventional sources (10 mb/d). The largest increase in oil production comes from Iraq, followed by Saudi Arabia, Brazil, Kazakhstan and Canada. Biofuels supply triples to the equivalent of more than 4 mb/d, bolstered by $1.4 trillion in subsidies over the projection period.

The “supply” numbers total 100 mbd rather than 99 mbd – let’s presume the 1 mbd discrepancy is due to rounding errors. The IEA projects oil demand will hit 99 mbd in 2035, but the world will be producing only 68 mbd of conventional oil . . . leaving a 31 mbd gap to be filled. NGLs and unconventional oil are projected to cover 28 mbd of that, leaving 3 mbd to be covered by – biofuels? Didn’t the 99 mbd figure for demand exclude biofuels?

That aside, the IEA thinks that the next 24 years will see 31 mbd of “oil” from:

• Natural gas liquids – 18 mbd
• Unconventional sources – 10 mbd
• Biofuels – 4 mbd

This implies three things:

1. That natural gas liquid production will more than double by 2035, from about 8 mbd today.
2. That unconventional oil production doubles by 2035, from about 5 mbd today.
3. That biofuel production will triple by 2035.

Nick Hodge observes the big problem with this is that it’s never been done:

It took us 40 years to add 31 million barrels per day of conventional oil production — the easy stuff.

The IEA is saying we can add the same capacity in half the time using much harder-to-get resources.

Out of the 68 mbd of conventional oil that the IEA projects to be available, 47 mbd – twice the current production of OPEC countries in the Middle East – are from sources yet to be developed, just to offset depletion from existing sources. Really? The world is going to discover and/or develop two more Middle Easts worth of conventional oil, in just 24 years? Where, exactly?

Stuart Staniford at Early Warning suggests that the source of new supply is not likely to be Saudi Arabia. He points out that Saudi production has been fluctuating between 8 mbd and 9.5 mbd since 2003. In response to the interruption in Libyan production early this year, Saudi briefly boosted output to a peak of around 9.7 mbd or 9.8 mbd – not quite achieving a promised 10 mbd – but have since eased back to about 9.5 mbd.

Bottom line: is Saudi Arabia going to save the global economy’s bacon? Here’s Staniford’s assessment:

So are we any the wiser as to the great question of whether Saudi Arabia has significant spare capacity and could increase production to 12mbd or more if only they chose?  Only slightly I fear.  I interpret the fact that the Saudis couldn’t quite meet the 10 mbd promise and almost immediately backed off that, despite amply high prices, as consistent with the story that the recent Saudi production expansions have only gone to offset declines elsewhere (perhaps especially in north Ghawar).  The increasing rig count also suggests a lack of comfort with the amount of spare capacity presently available.

However, I can see that someone who thought the Saudis were able to produce more but are profit maximizers who intend to keep prices as high as possible consistent with not actually throwing the world economy into recession might also be able to tell a story about how the Saudis did the bare minimum to moderate prices after it became clear that the Libya price spike was causing global economic harm but then began gradually lowering production as prices slowly began to fall following the price spike, keeping the world in a state of slow growth, but some growth, while maximizing the Saudi take for its oil.  The one weak point in this story is that it offers no explanation for the rising rig count.

Of course – at this point maybe the difference between the two views doesn’t actually matter that much – either the Saudis can’t produce more or they won’t, but either way the effect is to keep oil prices high enough to be a significant constraint on a world economy that is already struggling.

Continued economic growth is dependent on continued expansion of energy supplies.

The EIA is schizophrenic in thinking there’s a way to square the circle. There’s only one way to head off catastrophic climate change: shrink the economy, by a lot, and quickly. Gail Tverberg at Our Finite World explores the implications:

If GDP growth and energy use are closely tied, it will be even more difficult to meet CO2 emission goals than most have expected. Without huge efficiency savings, a reduction in emissions (say, 80% by 2050) is likely to require a similar percentage reduction in world GDP. Because of the huge disparity in real GDP between the developed nations and the developing nations, the majority of this GDP reduction would likely need to come from developed nations. It is difficult to see this happening without economic collapse.

The reality is, we don’t have a choice. Other limits to growth aside, the energy resources necessary to keep the globe on the economic growth path simply aren’t there; growth will come to an end whether we like it or not. The choice we do have is whether to destroy Earth as a host for human life first.

Bad news: a new study finds that the prospects for avoiding dangerous global warming are bleak, indeed.

In the study, titled Emission pathways consistent with a 2°C global temperature limit, the team of scientists reanalyzed a large set of previously published emission scenarios based on integrated assessment models. They found that in the set of scenarios with a ‘likely’ (greater than 66%) chance of staying below 2°C, emissions peak between 2010 and 2020 and fall to a median level of 44 Gt of CO₂ equivalent in 2020 (compared with estimated median emissions across the scenario set of 48 Gt of CO₂ equivalent in 2010).

Current climate models show if the increase in average global temperatures is to be kept below 2°C (3.6°F), emissions must not only peak by 2020, emissions must fall by almost 10% by 2020  – and then continue to fall rapidly to well under half of current emissions by 2050.

Climate scientist Neil Edwards commented on the study’s findings:

The alarming thing is very few scenarios give the kind of future we want.

The International Energy Agency (IEA) recently announced global CO₂ emissions decreased for the first time since 1990, due to the 2008-2009 economic crisis – but warned, don’t expect a trend. A large rebound is anticipated in 2010. (Note: a report published by the European Commission’s Joint Research Centre and PBL Netherlands Environmental Assessment Agency found that global carbon dioxide (CO₂) emissions increased by more than 5% in 2010, reaching an all-time high.)

The IEA’s findings are contained in a free document that contains highlights from CO₂ Emissions from Fuel Combustion 2011, an IEA statistics publication which will be released in November 2011. The full document, which contains all the latest information on the level and growth of CO₂ emissions, is being released to inform the upcoming UN climate negotiations in Durban. Key findings include:

1. Two-thirds of global emissions for 2009 originated from just ten countries, with the shares of China and the United States far surpassing those of all others (combined, these two countries alone produced 41% of the world’s CO₂emissions).
2. Between 1990 and 2009, CO₂ emissions from the combustion of coal grew from 40% to 43% and natural gas from 18 to 20%, while CO₂ emissions from oil fell from 42% to 37%.
3. Two sectors – electricity and heat generation and transport – produced nearly two-thirds of global CO₂ emissions in 2009, up from 58% in 1990.

In their study, the climate scientists found only three of the 193 scenarios examined would be very likely to keep the warming below the danger level – and all of those require heavy use of energy systems that actually remove greenhouse gases from the atmosphere. That would require, for example, both creating biofuels and storing the carbon dioxide from their combustion in the ground. Edwards put it this way:

What we need is at the cutting edge. We need to be as innovative as we can be in every way.

In the statement quoted above, Edwards is assuming that the objective is to preserve the energy-intensive economic growth paradigm. But the paradigm is the problem. Every day it is becoming increasingly clear that cutting edge technology and innovation are not the answer.

One example: many Oregonians across the political spectrum, including Governor John Kitzhaber, have promoted forest biomass as a energy source, thinking woody debris from thinning, brush clearing and removing dead trees could help the state meet its renewable energy goals while at the same time restoring forest health and providing jobs in rural communities. But not so fast, say OSU researchers: managing forests for biofuel production will increase carbon dioxide emissions from the forests by at least 14%. The OSU press release quotes co-author Beverly Law:

Until now there have been a lot of misconceptions about impacts of forest thinning, fire prevention and biofuels production as it relates to carbon emissions from forests. If our ultimate goal is to reduce greenhouse gas emissions, producing bioenergy from forests will be counterproductive. Some of these forest management practices may also have negative impacts on soils, biodiversity and habitat. These issues have not been thought out very fully.

Looking to technology and innovation to enable humans to continue to pursue the economic growth that is consuming the very ecosystems that sustain us is just the denial of an addict. What is necessary is acceptance: growth is destructive and must be reversed. We must welcome and embrace the collapse of our current economic system, and learn to live within an economic system that conserves rather than consumes the larger systems of which it is a part.

A study by Lieutenant Colonel Christopher Fleming at the U.S. Army War College concludes the volatility we’ve seen in oil prices and the lack of increased production as a response to high prices is evidence that we’re hitting geological limits to global oil production.

The excerpt below is from the abstract of the study “Considering oil production variance as an indicator of peak production“:

The primary finding was unprecedented statistical variance in oil production rates as well as in oil prices beginning approximately 2005 to 2010. In the case of oil production rates, variance is at historically low levels. In the case of oil prices, variance is at historically high levels. The data indicate a new higher order of inelasticity between oil price and oil production.

These findings support peak oil forecasts in the range of 2005 to 2010 and together provide strong evidence that geological factors could presently be limiting world oil production.

The inelasticity between oil price and oil production Fleming talks about is evidenced by the wild swings in oil prices over the last six years, as seen in this graph posted by Stuart Staniford at Early Warning . . .

. . . while the lack of response from oil producers can be seen in this graph posted by Gail Tverberg at Our Finite World showing production from the Middle East and North Africa (MENA) since 1965.

MENA Monthly crude oil production, based on EIA data.

MENA’s oil consumption is rising, so even if MENA’s oil production could rise, that does not mean that oil exports would rise. For example, Saudi Aramco projects Saudi Arabia’s domestic consumption will reach an equivalent of 8.3 million barrels by 2028, more than double the 3.4 million barrels equivalent in 2009 – leaving precious little for export.

Ecological economist David Stern recently published a paper on the essential role of energy in economic growth, aptly titled ‘The Role of Energy in Economic Growth“. Stern observes that mainstream economic theory pays no attention to the role of energy; however, physics shows that energy is necessary for economic production and, therefore, economic growth. The “synthesis” model proposed by Stern explains the industrial revolution as a releasing of the constraints on economic growth due to the development of methods of using coal and the discovery of new fossil fuel resources.

Climate considerations aside, for business as usual – the continuation of economic growth – it’s bad enough that the world is bumping up against limits to oil production volume; however, the energy returned on energy investmen (EROI) is dropping, too – it’s costing more and more energy to produce the same amount of oil. A new study titled “A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production” finds:

EROI for finding oil and gas decreased exponentially from 1200:1 in 1919 to 5:1 in 2007. The EROI for production of the oil and gas industry was about 20:1 from 1919 to 1972, declined to about 8:1 in 1982 when peak drilling occurred, recovered to about 17:1 from 1986–2002 and declined sharply to about 11:1 in the mid to late 2000s. The slowly declining secular trend has been partly masked by changing effort: the lower the intensity of drilling, the higher the EROI compared to the secular trend. Fuel consumption within the oil and gas industry grew continuously from 1919 through the early 1980s, declined in the mid-1990s, and has increased recently, not surprisingly linked to the increased cost of finding and extracting oil.

A new paper by economist James Hamilton titled Oil Prices, Exhaustible Resources, and Economic Growth documents that a key feature of the historical growth in production has been exploitation of new geographic areas rather than application of better technology to existing sources, and suggests that the end of that era is nigh. Hamilton shows that economic dislocations have historically followed temporary oil supply disruptions.  He concludes:

If the peaking of global production results in further big increases in the price of oil . . . the economic consequences of reduced energy use would have to be significant.

* * *

If the future decades look like the last 5 years, we are in for a rough time.

Most economists view the economic growth of the last century and a half as being fueled by ongoing technological progress. Without question, that progress has been most impressive. But there may also have been an important component of luck in terms of finding and exploiting a resource that was extremely valuable and useful but ultimately finite and exhaustible. It is not clear how easy it will be to adapt to the end of that era of good fortune.

Tom Murphy writes that we now find ourselves in an energy trap.

In brief, the idea is that once we enter a decline phase in fossil fuel availability—first in petroleum—our growth-based economic system will struggle to cope with a contraction of its very lifeblood. Fuel prices will skyrocket, some individuals and exporting nations will react by hoarding, and energy scarcity will quickly become the new norm. The invisible hand of the market will slap us silly demanding a new energy infrastructure based on non-fossil solutions. But here’s the rub. The construction of that shiny new infrastructure requires not just money, but . . . energy. And that’s the very commodity in short supply. Will we really be willing to sacrifice additional energy in the short term—effectively steepening the decline—for a long-term energy plan? It’s a trap!

A rough time, indeed. Effectively coming to grips with this new reality won’t be from the top down; it’s futile to look for or expect political solutions. Rather, doing so will require the kind of “magic” that begins with the individual, and works outward from there. It’s not the destination that matters, but rather the journey. And anybody can take that first step.

A previous post (Oil supply constraints impacting housing, land use patterns) discussed a post by Sam Foucher at the Oil Drum (The JODI-EIA Divergence) examining data sources for global oil production figures. In that post Foucher observed that the U.S. Energy Information Administration relied on others for its data, implying that the accuracy and reliability of that data might be less than ideal:

The EIA does not collect international production data but apparently pays IHS for the data (at least until the recent budget cuts).

I asked the EIA to comment on Foucher’s observation.  Here’s the response I received from Patricia Smith of the EIA’s International Energy Analysis Team:

Thank you for your interest in the U.S. Energy Information Administration. I have checked with all of the staff involved in putting together our world oil production data series.

The statement “The EIA does not collect international production data but apparently pays IHS for the data (at least until the recent budget cuts).” is not necessarily 100 percent accurate.

It’s true, we don’t “collect” international data from any type of survey or similar tool.  Years ago, there was a program through the State Department, that sent out forms to the U.S. Embassy Posts in a number of countries to collect various mineral and energy data.  That program ceased because of staff shortages, and of course budget cuts.

Actually, we use a variety of sources in compiling our data series including,  IEA, Woodmac, Energy Intelligence (until recently), BP, company contacts, national sources, trade data, and industry reports (Platt’s, MEES, Reuters, Dow Jones, etc.).

In previous years, we did use IHS for a handful of countries with smaller levels of production (Cuba, Belize, etc.).

I hope this is helpful.

Evaluating the accuracy and reliability of EIA’s data series would thus require a thorough evaluation of each of the data sources EIA relies on, plus an evaluation of how EIA uses its data sources in arriving at its reported figures. No small task.

One thing is crystal clear: the recently-announced cuts in the EIA budget will mean EIA data will be less reliable and more open to question in the future.

We recently posted about a new study that concluded natural gas – especially from fracking – might be worse than other fossil fuels, even worse than coal, for climate change.

Calculating the net climate impact of an activity is complex and fraught with uncertainties, requiring tracking many different emissions (not just CO2) and accounting for their (time-varying) impacts. Gavin at RealClimate notes a couple of caveats about the results of the study.

For shale gas extraction (and indeed for most fossil fuel extraction), a big issue is fugitive emissions. The estimates for fugitive emissions are uncertain because they are not being reported, either voluntarily by the industry or through regulation from the states. Fugitive emissions mostly consist of methane, which is relatively more important for a 20 year time frame than it is for a 100 year time frame by a factor of ~3. For lack of anything better, the Howarth study had to rely on admittedly poor observations.

Another problem is that, for other fossil fuels, fugitive emissions weren’t considered.

For an apples-to-apples life cycle comparison, one would need to also update the impacts of coal and oil to include their fugitive emissions, their impact on other short-lived components (black carbon, CO, etc). The Howarth study compared apples to oranges.

Still, the main point of the study remains valid: natural gas, conventional or fracked, isn’t the energy or climate panacea we hoped it was.

A new analysis published in Climatic Change, “Methane and the Greenhouse-Gas Footprint of Natural Gas from Shale Formations,” finds that shale gas fracking is worse than coal for its climate change impacts. In fact, if total methane emissions are factored in, shale gas turns out to have the greatest climate impact of all the fossil fuels – and conventional gas isn’t the salvation we thought it was, either.

Why? Methane leaks out during the fracking process:

Natural gas is composed largely of methane, and 3.6% to 7.9% of the methane from shale-gas production escapes to the atmosphere in venting and leaks over the life-time of a well. These methane emissions are at least 30% more than and perhaps more than twice as great as those from conventional gas. The higher emissions from shale gas occur at the time wells are hydraulically fractured — as methane escapes from flow-back return fluids — and during drill out following the fracturing. Methane is a powerful greenhouse gas, with a global warming potential that is far greater than that of carbon dioxide, particularly over the time horizon of the first few decades following emission. Methane contributes substantially to the greenhouse gas footprint of shale gas on shorter time scales, dominating it on a 20-year time horizon. The footprint for shale gas is greater than that for conventional gas or oil when viewed on any time horizon, but particularly so over 20 years. Compared to coal, the footprint of shale gas is at least 20% greater and perhaps more than twice as great on the 20-year horizon and is comparable when compared over 100 years.

This graph from the paper illustrates the climate impacts of various fossil fuels of 20- and 100-year time frames.

Although the authors concede that the data is far from perfect, natural gas may be just as polluting as coal in the long term – and far worse in the short term due to the higher warming impact from methane when it is first released to the atmosphere during the fracking stage.  Gas is no solution to our energy or climate crises.