187. FISHY HIRSCH WEDGES

In the Hirsch Report, the authors propose a 10-year crash program for "mitigating" peak oil. The plan looks like this:

Basically, the idea is to fill in the supply-demand gap opened by peak oil with five new streams of oil (amounts provided after 10 years are given in parentheses):

1) Fuel-efficiency (1 mbd)
2) Heavy oil/Oil sands (8 mbd)
3) Coal liquefaction (5 mbd)
4) Enhanced oil recovery (3 mbd)
5) Gas-to-liquids (2 mbd)

At 19mbd after 10 years, this is definitely a crash program. According to the DOE it took the world 30 years (1975-2004) to add the last increment of 20mbd to the world's supply of conventional oil.

Some of these wedges don't pass the smell test. Take Heavy oil/Oil sands (8mbd) for instance:

Note that most of the contribution from this wedge (5.5mbd) comes from Venezuela, compared to 2.5mbd from Canada. Venezuela is supposed to scale up from 0.6 mbd to 6mbd over 10 years, while Canada scales up from 0.5mbd to 3mbd. Why is it going to be so much easier to scale up in Venezuela than in Canada? And what makes Hirsch et al. think that Chavez is going to comply with America's crash program to save the U.S. economy? Chavez can make more money in the long run by dragging his feet.

It looks like about 30% (5.5/19) of the U.S. mitigation strategy blows a flat tire right there.

The fuel-efficiency wedge is fishy too. As the authors put it:

From the time world oil peaking occurs or is recognized, it may thus take as long as 15 years until strengthened vehicle fuel efficiency standards significantly increase average on-road fleet fuel efficiency. However, care must be exercised in making extrapolations. Most "realistic" enhanced vehicle fuel efficiency standards might not actually decrease future total gasoline consumed in the U.S. due to the anticipated continued increase in numbers of drivers and vehicles. Thus, a new CAFE mandate might decrease the rate at which future gasoline consumption increases, but not necessarily reduce total consumption.(P. 76)

The enhanced oil recovery (EOR) option, apparently involves a crash program of injecting CO2 into oil fields world-wide:

Because it is impossible to evaluate the worldwide impact of Improved Oil Recovery (IOR) techniques, we can only provide a rough estimate of what might be achieved. We focus on a major subset of IOR technologies – Enhanced Oil Recovery (EOR). While EOR can add significantly to reserves, it is normally not applied to a conventional oil reservoir until after production has peaked. As discussed earlier, the most widely applicable EOR process involves the injection of CO2 into conventional oil reservoirs to dissolve and move residual oil. Because EOR processes require extensive planning, large capital expenditures, procurement of very large volumes of CO2, and major equipment for large reservoirs, our simplified assumptions parallel those for our heavy oil and coal liquids wedges. We assume that the massive application of EOR worldwide will not begin to show production enhancement until 5 years after the peaking of world oil production, paced primarily by the difficulties of procuring CO2. We further assume that world oil production enhancement due to such a crash effort worldwide will increase world oil production by roughly 3 percent after 10 years. We translate the 3 percent to 3 MM bpd, based on our assumed world oil peaking level of roughly 100 MM bpd.(P. 82-83)

This clearly has problems. For example, what infrastructure is going to be used to deliver the CO2 to oilfields worldwide? And how much is the delivered CO2 going to cost? Are we going to be running it through pipelines, or transporting it in compressed form in ships?

Note: Dave has a detailed post on CO2 EOR at the Oil Drum today. The technique itself is definitely effective, as you can see from the following production profile for the Weyburn field (click to enlarge):

The problem is the logistics of moving around all that CO2.

-- by JD