111. THE REBOUND

Here's the energy consumption breakdown for the US for 2002 from the DOE (Source: New York Times Almanac, 2004, P. 361):

Coal: 22.7%
Natural gas: 23.6%
Petroleum products: 39.5%
Nuclear electric power: 8.4%
Renewable energy: 6.0%

If we have a 3% per annum decline in petroleum consumption after the peak, that will translate into only a 1.2% decrease in total energy. A decline in oil will only have an attenuated effect on total energy.

For a brief period after the peak, there may be no growth in coal, gas, nuclear or renewable. So we can expect total energy to drop slightly -- i.e. at 1 or 2% per year. (In fact, this is what happened when oil consumption dropped by 15% from 1979-1983. Total energy only dropped by 3% over five years. See #69.) However, high gasoline prices will drive consumers to shift to non-petroleum sources, which will raise prices and encourage investment and growth in those sources. For example, electrical scooters/cars/trains will switch some transportation fuel demand to the grid. Similarly, people will switch from central fuel oil or gas heating, to highly localized electric space heating. Certainly massive new investments will be made in non-conventional, coal, gas, nuclear and renewables. Some of these investments are even underway today.

If coal, gas, nuclear and renewables all grow slightly, their growth can overcome a 3% drop in petroleum, and enable growth in total energy consumption despite declining oil production.

Imagine total energy after the peak, declining by 1 or 2% a year. At some point, the decline in oil (which is getting smaller every year) will be compensated by growth in the non-oil sources, and the curve will stop falling. For convenience, call the subsequent period of new growth the "Rebound". At the latest, I feel the Rebound will begin 10 or 15 years after the peak.

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In 2002, the U.S. consumed 38.4 quads of petroleum products, vs. 61.6 quads for C+G+N+R (coal + gas + nuclear + renewables).

The following shows the depletion per year in total energy consumption (units: quads), assuming an oil decline rate of 3% per year (starting in 2005), and no growth in coal, gas, nuclear, renewables or unconventional oil:

2006 - 1.152
2007 - 1.11744
2008 - 1.0839168
2009 - 1.051399296
2010 - 1.019857317
2011 - 0.989261598
2012 - 0.95958375
2013 - 0.930796237
2014 - 0.90287235
2015 - 0.87578618
2016 - 0.849512594

The absolute amount of energy lost is decreasing in size every year. Furthermore, the percentage decrease in total energy consumption starts at 1.2, and steadily decreases.

2006 - 1.152
2007 - 1.130462933
2008 - 1.109086861
2009 - 1.087879787
2010 - 1.066849433
2011 - 1.046003229
2012 - 1.025348309
2013 - 1.004891497
2014 - 0.984639309
2015 - 0.96459794
2016 - 0.944773266

It seems clear that, eventually, an increase due to growth in C+G+N+R will be able to compensate for the ever decreasing loss in oil energy. At that point, growth in total energy consumption will resume ("The Rebound").

There is no good reason to think that peak oil will cause C+G+N+R to peak.
"Oil will peak; therefore coal, gas, nuclear and renewables must also peak at the same time." That is an extreme, hard-to-defend statement which does not accord with the historical facts (see #69).

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Here's another calculation:
Start with the DOE figures for U.S. consumption in quads for 2002:

Total: 97.71
Coal(C): 22.18
Gas(G): 23.08
Petroleum products(P): 38.40
Nuclear(N): 8.15
Renewables(R): 5.9

Suppose there is a 3% drop in P, to 38.40(.97)=37.24

The total amount of lost energy is 38.4-37.24=1.16 quads

We can divide this loss proportionally to C, G, N and R. The assignment comes out to be (in quads):
C: .43
G: .45
N: .16
R: .11

If each of C, G, N and R can produce that much more, the loss in oil energy can be completely compensated (i.e. .43+.45+.16+.11=1.16).
Doing the calculation, it turns out that each of C, G, N and R must increase by 1.9% per annum to totally compensate for the loss of oil energy.

That's a surprisingly low rate of growth, achieved by dividing the burden of compensation evenly among the alternatives.

So what are the forecasted growth rates for C, G, N and R for a given country? C+G+N+R can probably mask peak oil and allow total energy to grow (or at least stabilize) even after peak oil occurs. How fast can R grow (2%, 3%, 6%?), and how big can it get? What is the forecasted growth in G over the next 10 years for the U.S.? I would be very surprised if it was negative. LNG import facilities are being built. Where will they be sourced, and what is their scheduled capacity? If you knew that, you could calculate the expected growth in G. I would bet the US can compensate by importing gas, for as long as a decade -- much as they have compensated by importing crude oil after the 1970 lower-48 peak.