Unidentified Projects

Erik Lindberg of Transition Milwaukee wrote an insightful post this week about the establishment's denial of the implications of peak oil for our society's future.  In it, he brought back a graph from a few years ago that made me laugh.  It's a rich enough image that it deserves a little post of its own.

This is from the US Dept. of Energy's Energy Information Administration's annual report from 2009 as parsed in a presentation (pdf warning) given in Washington, DC in April 2009.  They were trying to square known sources of liquid fuels with known depletion curves and the projected demand growth of a business-as-usual global economy.  Starting at the bottom of the graph, the projects go from the most secure (OPEC and Non-OPEC existing conventional oil fields) to the most speculative (Non-OPEC Unconventional and, my favorite, Non-Petroleum Unconventional Liquids). 

Here we are in 2014, and according to this chart, we should be looking forward to an unrelenting decline in petroleum (and apparently Non-Petroleum Unconventional Liquids) supply for the foreseeable future.  The EIA of course does not officially project this type of future, as their 2013 International Energy Outlook shows global oil extraction rising to 115 million barrels per day by 2040.  Apparently these "Unidentified Projects," which represent the equivalent of official hand-waving, will somehow bring four Saudi Arabias' worth of oil to market to save the day.

That requires quite a suspension of disbelief, especially in the face of declining investment in oil extraction projects by just about every publicly traded oil company in the world.  How does more oil appear if no one invests the money to find it, drill for it, pump it out, and transport it to refineries?  Apparently by Unidentified Projects, which Unidentified Parties are investing billions of dollars to bring to market, at prices that cannot make profits for Exxon, BP, or Shell.

The most likely outcome is that those Unidentified Projects will remain unidentified, undrilled, and unexploited.  That's because they either do not exist or are too small/poor quality/inaccessible to bring to market at a profit for the most aggressive profit-seeking organizations in the world.  That means that each year going forward will yield a bit less energy for a society that has only known more and more energy every year since the industrial revolution some 250 years ago.

What does the lived experience of that feel like to the average person in the US?  Rising gasoline prices, higher heating oil and propane prices, rising costs for asphalt, fertilizers, and other things made from oil are just the beginning.  Because our government is desperate to keep the illusion of happy motoring alive, we've subsidized the burning of food in our cars (that's what 10% ethanol in your tank means), so food prices go up while packages of chips get smaller and more filled with air each year.  More broadly it means that people have a harder time finding decent-paying jobs anywhere but the oil industry, because it takes more and more resources to bring ever-crappier oil deposits to market.  Now that the oil majors are cutting investment, though, it would seem that even those jobs are likely to be harder to come by.  It also means that the general standard of living in the US is declining, and that much of our infrastructure that was designed around a cheap energy economy has no future but as a far-flung salvage heap piled atop what used to be prime farmland. 

Looking for a way to avoid such a troubling future?  Trying to claw your way out of long-term unemployment in a stagnant economy that's increasingly offering only part-time or temporary employment?  Struggling with student loan debt after going 5-figures in hock to have a shot at a career like your parents or grandparents might've had?  If you find yourself in need of a decent-paying job in the coming years, it would seem that the EIA recommends looking for work on an Unidentified Project that will keep the national gas tank miraculously full.