The Post Carbon Reader Series: Energy

Hydrocarbons in North America

By J. David Hughes

About the Author

David Hughes is a geoscientist who has studied the energy resources of Canada for nearly four decades, including thirty-two years with the Geological Survey of Canada as a scientist and research manager. Over the past decade he has researched, published, and lectured widely on global energy and sustainability issues within North America and internationally. He has been interviewed extensively on radio and television, and his work has been featured in Canadian Business, Walrus magazine, and Thomas Homer-Dixons book Carbon Shift (2009). Hughes is a Fellow of Post Carbon Institute.

Post Carbon Institute 2010 613 4th Street, Suite 208 Santa Rosa, California 95404 USA

This publication is an excerpted chapter from The Post Carbon Reader: Managing the 21st Centurys Sustainability Crises, Richard Heinberg and Daniel Lerch, eds. (Healdsburg, CA: Watershed Media, 2010). For other book excerpts, permission to reprint, and purchasing visit http://www.postcarbonreader.com.

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Nonrenewable energy sources are forecast to supply 88 percent of our primary energy consumption by 2030.
Figure 17.1 History and forecasts of North American energy consumption by fuel, 19902030.

North America is at the top of the food chain when it comes to consuming energy: Its inhabitants have nearly four times the average global per capita energy consumption.1 Although Mexicans consume less than the global average, Americans consume 4.5 times and Canadians nearly 6 times as much. In absolute numbers, we in North America consume one-quarter of the worlds primary energy production, even though we make up less than 7 percent of the worlds population. North Americas massive energy diet is largely made up of hydrocarbonsa full 83 percent comes from oil, gas, and coal, and if we include nuclear energy, 91 percent comes from nonrenewable fuel sources. In 2008, North America consumed 27 percent of the worlds oil production, 25 percent of natural gas production, and 18 percent of coal production. Most of the rest of our energy consumption was derived from nuclear power and large hydropower, with renewable energy sources such as biomass, wind, photovoltaics, and geothermal making up less than 2 percent of our total. Moreover, despite a several-fold growth in non-hydropower renewable energy sources, 2 nonrenewable sources are still forecast to supply 88 percent of our primary energy consumption by 2030 (figure 17.1). The sheer scale of our dependency on nonrenewable, energy-dense fossilized sunshine is often lost on those who believe that renewable energy sources can supplant hydrocarbons at anything like todays level
1

160 140 120 Quadrillion Btu per Year 100

History

Forecasts 20% growth 20092030

Hydro/Renewables Nuclear Coal

80 60 40 20 0 1990 1995 2000 2005 2010 Year 2015 2020 2025 2030 Oil Natural Gas

Source: Data from U.S. Energy information Administration, International Energy Outlook 2009, DoE/EiA-0484, may 27, 2009, http://www.eia.doe.gov/ oiaf/ieo/.

of energy consumption. Thus it is prudent to examine the prognosis for fossil fuels within North America, as they will make up the bulk of our energy consumption for many decades to come.3 The North American fossil-fuel story is largely driven by consumption in the United States, the biggest user of energy in the world and, until China overtook it in 2006, the biggest carbon dioxide emitter. Also critical to this story is the vulnerability of the U.S. economy given its addiction to hydrocarbons. It is highly dependent on imported oil and may soon be dependent on imported natural
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Nonrenewable 88%

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Table 17.1 Top Crude oil and Petroleum Product Exporters to the United States, 2008 (oPEC countries denoted by asterisk)

gas. For these reasons, this chapter will focus primarily on the future availability and vulnerability of supplies of hydrocarbons to the United States, and will look in detail at oil, natural gas, and coal.

Country Canada Saudi Arabia* mexico Venezuela*

Exports to U.S. in 2008 (thousand barrels per day) 2,499 1,534 1,305 1,192 991 628 550 514 466 321 259 237 221 211 201 1,821 12,951

oil
Oil is a globally traded and priced commodity. Nonetheless, oil produced at home is much preferable from the point of view of ones national trade balance, and imported oil from secure and reliable sources is much preferable to that from less reliable and potentially hostile sources. Oil consumption in the United States grew by 69 percent from 1965 through 2008, with notable drops following the oil embargo in the late 1970s and during the recession that started in 2008. Domestic oil production peaked in 1970, however, and in 2008 about 65 percent of U.S. oil consumption was imported.4 New U.S. oil discoveries, such as deep-water offshore oil in the Gulf of Mexico and shale oil in the Bakken Formation of Montana and North Dakota, are sometimes touted as panaceas to offset declines in domestic production. In reality, however, these discoveries will add relatively little supply compared to the countrys massive annual consumption of 7 billion barrels, as the Gulf of Mexico is very expensive and time consuming to develop, and the Bakken Formation oil is produced at low rates and has been estimated to contain only 4.3 billion barrels or less of recoverable oil.5 Oil shales in Colorado and Wyoming, although purported to have massive in-place resources, are expensive and logistically challenging to extract and process, and are expected to have limited flow rates and a very low netenergy profit, should they ever be proved to be commercially viable. 6 Ultimately, the potential flow rate of a resource is more important than its purported size and the reality is that the flow rates of North American unconventional-oil sources and oil in difficult locations (such as deep water offshore) cannot be scaled up rapidly enough to significantly compensate for declines in the flow rate of conventional oil.
2

Nigeria* iraq* Algeria* Angola* Russia Virgin islands Brazil United Kingdom Ecuador* Kuwait* Colombia other (80 countries) ToTAL

Source: Data from U.S. Energy information Administration, U.S. imports by Country of origin, June 29, 2009, http://tonto.eia.doe.gov/dnav/pet/ pet_move_impcus_a2_nus_ep00_im0_mbbl_a.htm.

There are geopolitical and economic risks to being dependent on imports for two-thirds of consumption. The Organization of the Petroleum Exporting Countries (OPEC) cartel provided 46 percent of U.S. oil imports in 2008 (table 17.1). Of the major nonOPEC exporters, only Canada and Brazilcomprising 21.3 percent of 2008 importslikely have the ability to increase exports significantly. Although nonOPEC exporter Mexico is the third-ranked source of U.S. imports, it is in steep decline as its Cantarell field (formerly the second-largest producer in the world) has plunged from more than 2 million barrels per day (bpd) in 2005 to half a million bpd at present.7 Canada is the largest oil supplier to the United States. 8 Canadian conventional-oil production peaked back in the 1970s, but Canadian oil production is still big business, and its future is focused on the tar sands of Alberta. As recently as 2007, Canadas National Energy Board (NEB) was highly optimistic about the
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Figure 17.2 Historical production and imports of oil in the United States, 1965 2008, compared to the EiA reference-case forecast, 2008-2035.

tar sands, forecasting a near tripling of production from 1.4 million bpd at present to 4.15 million bpd by 2030.9 But in July 2009, owing to the suspension of several projects due to the 2008 economic downturn, NEB forecast a comparatively restrained doubling of tar-sands output by 2020.10 The Canadian Association of Petroleum Producers, noted for its bullish forecasts, is similarly now more restrained and forecasting an increase to 3.2 million bpd by 2025.11 Given some of the new environmental regulations being implemented for the tar sands, including tailings and carbon management (which will increase cost and make this poor net-energy source of liquids even worse), these forecasts are still highly optimistic. Forecasts of future energy supply that merely extrapolate consumption trends from the past, with the assumption that new supplies will somehow miraculously be available, are trademarks of government energy reports such as those from the International Energy Agency (IEA) of the Organisation for Economic Co-operation and Development (OECD), the United States Energy Information Administration (EIA), and Canadas NEB. One example is illustrated in figure 17.2, which is the EIAs reference case for liquids supply (i.e., all liquid petroleum and natural gas liquid products) in the United States through 2035 compared to actual supply for the previous four decades. The EIA apparently assumes that the geology of the United States oil provinces, with production long in decline, will miraculously heal itself, and production will go up through 2035. This, coupled with a forecast rapid growth in biofuels (mainly ethanol of dubious net-energy content), serves to decrease imports in the forecast from 65 percent of consumption at present to 48 percent in 2035, even though consumption rises by 12.3 percent over this period. The old adage if it seems too good to be true then it probably is comes to mind. The EIAs forecasts are used to inform government and the general public on future energy-supply issues. In light of what we know of global peak-oil issues (i.e., the increasing cost and diminishing quality and
3

25

History Consump on (up 69%)

25

EIA Forecast Consump on (up 12.3%)

20 Million Barrels per Day

20 Net Imports (48% of 2035 consump on)

15

10 Peak 1970 5

Net Imports (65% of 2008 consump on)

15

10

Biofuels an

d Synthe cs

Produc on (down 40% from peak) 1985 Year 1995 2005

Produc on (up 46% from 2008)

0 1965

1975

0 2008 2013 2018 2023 2028 2033 Year

Sources: BP Statistical Review of World Energy 2009, Historical Data, June 2009, http://www.bp.com/statisticalreview; U.S. Energy information Administration, Annual Energy Outlook 2010 Early Release Overview, DoE/EiA0383, December 14, 2009, http://www.eia.doe.gov/oiaf/aeo/index.html.

deliverability of the worlds oil sources), these reports unfortunately promote complacency and hence squander valuable time to mitigate the impacts of declining supply in the belief that all is well on the energy front. Kjell Aleklett, leader of the Global Energy Systems research group at Uppsala University in Sweden, has stated that the head of the EIA is one of the worlds most dangerous people.12 A clear view of the realities of future oil supply is crucialrosy forecasts may serve the immediate needs of bureaucrats and politicians but are a travesty when considering the consequences of the lost opportunity of time and capital in managing a transition to a more sustainable future.

Natural Gas
The United States consumed 22 percent of global natural gas production in 2008. Unlike oil, natural gas is not a globally priced commodity but rather is continentally priced because of the expense and logistical difficulty of moving it across oceans as liquefied natural gas (LNG). LNG accounted for about 8 percent of global gas consumption and less than 2 percent of U.S. consumption in 2008. Thus most natural gas consumption in the United States is from domestic production
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Figure 17.3 The natural-gas exploration treadmill in the United States, 19912009.

25,000 20,000 15,000 10,000 5,000

Trillion Cubic Feet per Year

Successful Wells Drilled

and pipeline imports from Canada. Gas consumption in the United States reached a recent peak of 23.3 trillion cubic feet in 2000. Consumption has declined in all sectors except electricity generation since then, although its use has been rising again recently. The industrial sector, comprising petrochemical, fertilizer, and other industries, declined the most as volatile and often high gas prices pushed factories offshore. Gas production in the United States hit an all-time high in 1973 and then declined, but has been rising to near 1973 levels recently owing to the development of unconventional gas (i.e., shale gas) and unprecedented amounts of drilling. This does not imply a long-term solution to production declines, however. Depletion rates of gas wells are much higher than those of oil wellsoverall decline rates averaged 32 percent per year for the lower forty-eight states in 2006.13 This means that one-third of gas production must be replaced each year by more drilling, and that 60 percent of current lower-forty-eight gas production comes from wells drilled and connected in the previous four years. Unconventional production from shale-gas wells has much higher decline rates than conventional-gas wells, typically in the range of 65 to 80 percent in their first year of production, suggesting that the increased reliance on shale gas going forward is likely to accelerate the overall rate of U.S. gas depletion.14 This has contributed to what I refer to as the exploration treadmill: more and more drilling to keep production flat, let alone growing (figure 17.3). The number of successful gas wells drilled each year has tripled since 1999, yet production has grown by only 15 percent. Active-rig counts (the number of rigs drilling for gas) peaked in late August 2008 and had collapsed by 56 percent by the fall of 2009 (the drop in successful gas wells is just visible in the left-hand chart), a dip that will likely show up in declining U.S. gas production by mid-2010. This exploration treadmill is just as pronounced in Canada, which is the main source of gas imports to the United States. Even though Canadian successful gas-well completions are nearly triple what
4

40,000 35,000 30,000

Wells Completed

25

Dry Produc on

20

Development Exploratory

15

10 PRODUCTION UP 15% 5

DRILLING UP 200% 0 1991 1994 1997 2000 2003 2006 2009 Year

0 1991 1994 1997 2000 2003 2006 2009 Year

Note: The level of effort quantified by the number of wells drilled has tripled, yet production has risen by only 15 percent. Sources: Drilling data from U.S. Energy information Administration, Crude oil and Natural Gas Exploratory and Development Wells, http://tonto.eia.doe. gov/dnav/pet/pet_crd_wellend_s1_m.htm; production data through october 2009 from U.S. Energy information Administration, Natural Gas monthly, http://www.eia.doe.gov/natural_gas/data_publications/natural_gas_ monthly/ngm.html.

they were in 1996, and were at one point in 2004 nearly quadruple, Canadian gas production is now declining at 7.5 percent per year, and Canadas ability to export any gas by 2030 is seriously in doubt.15 Nonetheless, there is a wave of hype promoting natural gas as a panacea to offset the United States extreme vulnerability to imported oil. The natural gas industry has established a new lobbying group in Washington called Americas Natural Gas Alliance, in addition to the existing American Clean Skies Foundation, which was chaired by Chesapeake Energys CEO Aubrey McClendon until December 2009.16 This hype on the ability of natural gas to fuel business as usual for a very long time, including replacing imported oil, is based on shale gas, a resource made accessible by new technology involving horizontal drilling and multiple hydraulic fracture treatments. Chesapeake is a major shale-gas producer, and the ultimate natural gas optimist is McClendon himself, who testified to Congress on July 30, 2008:
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The hype on shale gas as a silver bullet is pervasive.

I believe natural gas can and should be the driving force for how this Congress can take bold action to free our country from the death grip of high prices for imported oil, thereby improving our economy, enhancing national security and helping the environment. Its a trifecta, triple play and hat trick all rolled into one. I believe U.S. natural gas producers can increase supplies by 5% per year for at least the next decade and that assumes there is no more access to public lands and waters than there is today.17 The hype on shale gas as a silver bullet is pervasive. T.Boone Pickens and McClendon have promoted the natural gas panacea in ads on CNN and elsewhere for the Pickens Plan.18 Actor Tommy Lee Jones was even brought into the fray in 2008 promoting shale gas, and Shale TV, a station dedicated to promoting shale gas in Texas and funded by Chesapeake, was about to be launched until the economy rolled over in the fall of 2008. In Canada, even though gas production is dropping at 7.5 percent per year, Pacific Trail Pipelines is planning on building a 463-kilometer pipeline to connect to a proposed liquefaction facility on the West Coast to export gas it envisages coming from shale gas in northeastern British Columbia (which has little production at present).19 So what are the realities behind shale gas, which now accounts for 14 percent of U.S. production? As of
5

mid-2009 the Barnett shale-gas play (i.e., the production operation), which in part underlies the DallasFort Worth metro area in Texas, accounted for 64 percent of U.S. shale-gas production, a significant part of the remainder being Antrim shale gas in Michigan, which has been in decline for many years. The Barnett play peaked, as predicted, in the first quarter of 2009, by which time more than 12,000 wells had been drilled at a cost of $2 million to $4 million each. Decline rates in the Barnett are typically 65 percent in the first year but initial production rates are high. Other shale plays throughout the United States are having similar experiences of high initial productivities, but also high decline rates and challenging economics. The Haynesville play of east Texas and Louisiana, for example, experienced decline rates of over 80 percent in the first year, and a sky-high cost of up to $10 million per well. 20 In addition, the environmental impacts of shalegas drilling are coming under increasing scrutiny: Two to five million gallons of water are required per well in the Barnett, a third of which is recovered and must be disposed of, with potential impacts on aquifers. Arthur Berman, a geological analyst formerly with World Oil magazine, has done some very insightful analyses of shale-gas potential in the Barnett, Haynesville, and other plays. He has found that decline rates, well lifetimes, and ultimate recoverable reserves for shale-gas wells in these plays have been
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Figure 17.4 United States marketable gas production by region, 19982009.

Trillion Cubic Feet per Year

optimistically assessed, to say the least. 21 Assumptions of production profiles over well life, compared to actual measurements, suggest ultimate recoverable reserves per well are a third of what is commonly quoted, and well life spans could average eight years, not forty years as is commonly assumed. Berman has stated, among other things: I am disturbed that public companies and investment analysts make fantastic claims about the rates and reserves for new shale plays without calibrating them to the only play that has significant production history. Almost every assumption used by the industry to support predictions about the Haynesville or Marcellus shale plays is questionable based on well performance in the Barnett shale. Berman was a contributing editor for World Oil magazine until November 2009 when he resigned after his column was canceled over protests from shale-gas producers, whose stock price and stock issues for raising capital depend on a gung-ho worldview of shale-gas potential. Bermans editor was subsequently fired over the issue. 22 Stifling analysis and debate on such a crucial issue is disturbing considering its importance for planning future energy security. Much more will be known about the true potential of shale gas in plays outside of the Barnett in two to four years. When it comes to the forecasts our leaders use to assess what lies ahead in terms of natural gas supply, the situation is very similar to that previously described for oil. Figure 17.4 illustrates what has actually happened with natural gas in the United States over the past decade. Production (both conventional and unconventional) in Colorado, Wyoming, and Texas has been increasing, whereas production in Kansas, Alabama, Louisiana, New Mexico has been declining, and Gulf of Mexico production fell by more than 50 percent. But looking forward, the EIA provides basically another noworries forecast (figure 17.5) through 2035, with shale gas growing more than fivefold, a miraculous reversal in the geological fortunes of the Gulf of Mexico, and
6

25

20
Texas +35% (Barne shale gas)

15
Other States +41%
Top Five Producers: Colorado (+100% ), Utah (+56%) , Kansas (-38%), California (-6%), Alabama (-34%)

10

Wyomi ng +1

84% Oklahoma +1 0%

Louisiana -1%

Alaska -14%

New Mexico

-7%

Federal Gulf of Mexico -55%

0 1998 2000 2002 2004 Year 2006 2008

Source: U.S. Energy information Administration, data through october 2009 from Natural Gas monthly, http://www.eia.doe.gov/natural_gas/data_ publications/natural_gas_monthly/ngm.html.

Figure 17.5 United States gas-supply forecast by source, 20072035.

30 Canada Imports

8% growth 20072035

25 Trillion Cubic Feet per Year

20 Lower 48 Unconven onal 15

Alaska Shale Gas +420% Coalbed Methane Lower 48 Conven onal (including Tight Gas) Lower 48 Produc on Grows 22% 20072035

10

Lower 48 Onshore Associated

0 2007 2012 2017 2022 Year 2027 2032

Sources: U.S. Energy information Administration, Annual Energy Outlook 2010 Early Release Overview, DoE/EiA-0383, December 14, 2009, http://www. eia.doe.gov/oiaf/aeo/index.html; Canada deficits based on projections of the Canada National Energy Board, Energy Outlook, November 2007, http://www. neb-one.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/nrgyftr/nrgyftr-eng.html#s4.

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an overall growth in lower-forty-eight production of 22percent by 2035. This forecast is based on the following premises, which may prove to be unwarranted: 1. Drilling rates after a decline due to the current economic recession will be ramped up to equal and higher levels than those at their all-time peak (more than 36,000 successful gas wells per year in 2008), resulting in nearly one million new gas wells drilled by 2035. 2. The observed exploration treadmill of declining average well productivity will cease to operate and in fact will reverse itself, as yet more wells are crowded into available prospects. 3. Shale gas will live up to the hype, despite high decline rates, high costs, and significant associated environmental issues. Such forecasts do not reflect the underlying uncertainties controlling future gas supply and, in my view, are unhelpful in putting together a coherent plan for a sustainable energy future as they lull policy-makers into a false sense of security. In the likely event that EIA forecasts of gas supply do not materialize, imports of LNG will be needed. Much new LNG receiving capacity has been built in the United States over the past few years and at present is highly underutilized. The real story of LNG, however, is global liquefaction capacity, which is much less than global re-gasification capacity. As well as adding geopolitical complications to the gas trade (complications that have long been a fact of life with oil but so far have not been a serious issue for gas), LNG will very likely be a higher-cost supply source because a spot market is developing and the gas will be sold to the highest bidder. LNG is also an unfriendly source of gas from the point of view of net energy and greenhouse gas emissions, as 15 to 30 percent of the energy in the gas is consumed in the liquefaction, transportation, and regasification process.
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Coal
The United States could be said to be a Saudi Arabia of coal as it controls some 29 percent of world resources. The United States produces over a billion metric tons of coal per year, a distant second only to China, which produces more than 2.7 billion metric tons per year. Half of the electricity generated in the United States is fueled by coal, much of it in older plants with less-thanoptimal controls on emissions. In addition, the United States produces more than 60 million metric tons of high-quality metallurgical coal each year, which is used in steel making. Metallurgical coal is indispensable in the steel industry, and hence underlies much of the infrastructure of modern society. In the United States, much of the higher-energy-content coal is mined in Appalachia, which produces bituminous thermal- and metallurgical-grade coals from underground mines and by mountaintop-removal surface operations that have major environmental impacts. 23 Declining Appalachian production is being made up from very large-scale and mainly surface mining operations in the West, in particular the Powder River Basin of Wyoming, which produces more than 400 million metric tons per year from very thick seams of low-sulfur, sub-bituminous coal. Owing to the decline in production of the high-heating-value coals of Appalachia and their replacement with the lowerheating-value coals of Wyoming and other regions, the United States experienced a recent peak in the energy content of extracted coal in 1998 even though the total amount of coal extracted increased through 2008 (although it dropped significantly in 2009). Several studies have recently been published on peak coal, the point at which global coal deliverability will begin an inexorable decline, likely in the 20202030 time frame. These studies are nicely summarized in Richard Heinbergs book Blackout and hence will not be dealt with further here, except to say that the conventional wisdom of coal being a fuel for the long haul has been found severely wanting. 24 Another excellent
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Figure 17.6 Historical coal production, 19772009, and annual production forecasts by region, 20072035.

in-depth review of U.S. coal resources and other coal issues has been written by Leslie Glustrom. 25 The United States has been a major coal exporter in the past (over 12 percent of total production in the early 1980s), but more recently it has been importing ever-larger quantities of mostly thermal coal (for power generation), mainly from Colombia and Indonesia, although it is still a minor net exporter (59 million tons in 2009). When it comes to future forecasts of coal production in the United States, the EIA provides, as with oil and natural gas, yet another no-worries forecast. 26 Figure 17.6 illustrates the EIAs reference-case forecasts for coal production by region compared to historical production. Coal production is forecast to grow from the lower-quality deposits in the West and decline in the mature mining region of Appalachia. Whether U.S. coal production can be ramped up by 12 percent, as in the EIA forecast, or even maintained is questionable. It would certainly require major new investments in mines and transportation infrastructure as the infrastructure for moving coal from the Powder River Basin, for example, is at maximum capacity. Given the issues with supply of natural gas discussed earlier, and challenges with the scaling up of renewables, there will clearly be a role for coal in the transition to a more sustainable energy future. However, the current focus on carbon capture and storage (CCS) with its parasitic energy losses and high capital costs is, in my opinion, the wrong way to go. Energy losses for CCS amount to 30 percent of the energy produced in a typical coal plant, requiring an increased burn rate for the same amount of electricity, which accelerates the consumption of a nonrenewable resource. Moreover, the capital costs for CCS infrastructure can be 50 percent of the cost of a plantmoney that could be better invested in infrastructure to provide an alternative to high-energy throughput lifestyles. 27 Coal is a low-value fuel compared to natural gas or oil because it is less versatile in its potential applications without significant energy-conversion losses and costs. High-efficiency configurations of coal-fired
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Historical Produc on 1400 1200 1000 800 600 400 200 0 1977 1982 1987 1992 1997 2002 2007 Year 1400 1200 1000 800 600 400 200 0

Forecast by Region Produc on Up 12%

, WY, WA, AK , SD, AZ, NV s Other (ND ntain Rocky Mou t Gulf Coas Montana )

Million Short Tons

Interior

All Regions +55%

Powder River Basin Wyoming

Appalachia

2007 2012 2017 2022 2027 2032 Year

Sources: U.S. Energy information Administration, monthly Energy Report: Coal, February 26, 2010, http://www.eia.doe.gov/emeu/mer/coal.html; U.S. Energy information Administration, supplementary tables 120 and 121 in Annual Energy Outlook 2010 Early Release Overview, DoE/EiA-0383, December 14, 2009, http://www.eia.doe.gov/oiaf/aeo/index.html.

generation with heat capture (combined heat and power, or CHP) have the potential to double the efficiency of coal plants and eliminate the consumption of hydrocarbons that would otherwise be required to generate that heat (thereby also radically reducing emissions). The issue of coal use is often fraught with emotion. However, considering the scale of its contribution to U.S. energy supply, and the lack of scalable alternatives, it is unlikely that it can be completely phased out in the foreseeable future. Coal must therefore be used in its highest-efficiency and lowest-emitting configurations.

The Scaling Dilemma

Hydrocarbons have a role in every aspect of modern life, including building materials, transportation, food, communication, electricity, and so forth. The scale at which hydrocarbons are consumed to fuel the global economy as currently structured makes it impossible to conceive of alternatives to replace them at that scale; clearly a more sustainable future necessitates a radical reduction in the amount of energy consumed. Renewable sources of energy, which must contribute
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Figure 17.7 Forecast U.S. electricity generation by fuel, 20072035.

to a solution, are still dependent on hydrocarbons for their manufacture. Then there is the issue of energy quality. Renewable sources of energy such as wind or photovoltaics are intermittent and unpredictabletheir actual generation is typically a third or less of their rated capacity, and hence they require backup by reliable generation sources, usually fueled by hydrocarbons. Our electricity infrastructure is tasked to provide uninterrupted service at all hours to all users, no matter how high the demandit is highly unlikely that it can be converted to renewable energy at anything like the scale of electricity consumption we enjoy today because of the intrinsic limitations of renewables and the massive scale required. The concept that we can maintain our current massive transportation infrastructure by converting from vehicles that run on liquid petroleum products to those that use electricity or natural gas is likely doomed to failurewe need to rethink our transportation requirements to have a much lower energy footprint. Although electricity generation is only a fraction of the work hydrocarbons perform for us, it is particularly instructive to examine the role of hydrocarbons in electricity generation to appreciate the daunting scale of replacing them with alternatives at present consumption levels going forward. The EIA forecasts U.S. electricity generation to increase by nearly 27 percent from 2007 to 2035 (figure 17.7). Hydrocarbons account for 71 percent of electricity generation at present, with coal being nearly halfand by 2035 they are expected to still be the main power source, at 65 percent of total generation and with coal comprising 44 percent. A massive 452 percent increase in the capacity of nonhydro renewables, if achieved, would make up only just over 11 percent of total electricity-generation market share. Large hydropower is also forecast to grow but lose market share owing to a lack of remaining developable sites, as is nuclear due to the enormous challenges and expense of refurbishing and/or replacing the aging U.S. nuclear fleet.
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+26.5% growth 20072035 6000 5000 Terawa Hours 4000 3000 2000 1000 22.0% 0 2007 2011 2015 Natural Gas +22% 2019 Year 2023 2027 2031 Large Hydro +22% Renewables +452% 6.0% 19.4% Nuclear +11%

Market Share 11.2% 5.8% 17.1%

43.8% 48.5% Coal +14%

21.2% 2035

Source: U.S. Energy information Administration, supplementary table 85 in Annual Energy Outlook 2010 Early Release Overview, DoE/EiA-0383, December 14, 2009, http://www.eia.doe.gov/oiaf/aeo/index.html.

Figure 17.8 Forecast U.S. electricity generation from non-hydropower renewable energy sources, 20072035.
Market Share
} 0.43% } 0.53% } 0.54%

700 600

452% Growth 20072035 (11.2% of Total) Solar Thermal

500 Terawa -Hours 400 300 200 100 2.6% 0 2007 2011

Photovoltaics +2927% Municipal Waste +67% Geothermal +92% Wood and Other Biomass +636% 5.5%

Wind +530%

4.1%

2015

2019 Year

2023

2027

2031

2035

Source: U.S. Energy information Administration, supplementary table 101 in Annual Energy Outlook 2010 Early Release Overview, DoE/EiA-0383, December 14, 2009, http://www.eia.doe.gov/oiaf/aeo/index.html.

The prognosis for non-hydropower renewable sources is particularly at odds with the popular vision of our future economy being powered by wind turbines and solar panels (figure 17.8). The largest single source of renewable energy is actually forecast to be wood and other biomass, growing more than sevenfold to serve
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5.5percent of total market share, followed by a sixfold growth in wind to 4.1 percent of market share. Solar photovoltaics are forecast to grow by thirty times, but even then they would contribute only less than half a percent of forecast generation. This illustrates the scaling dilemma society faces in replacing hydrocarbons in our current business-asusual mode of energy consumption. Even with a radical scale-up, non-hydropower renewables are forecast to make up less than 12 percent of electricity generation in 2035, and a much smaller proportion of total energy consumption. The fossilized sunshine that hydrocarbons represent is an extremely convenient, dense form of energy for which there are no alternatives at the scale of energy throughput we enjoy at this point in humanitys existence. Forecasts of continuing availability of hydrocarbons for the next couple of decades for business-as-usual levels of consumption are tenuous at best and wishful thinking at worst. Solutions to the pending decline in the availability of hydrocarbons rest on rethinking and radically reducing our levels of energy consumption and developing the infrastructure for alternatives to lifestyles now based on cheap energy.

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Endnotes
1 Calculations from data provided in U.S. Energy information Administration (EiA), International Energy Outlook 2009, may 27, 2009, http://www.eia.doe.gov/oiaf/ieo. other statistics in this paragraph derived from data at this source. A major portion of the renewable energy sector is large hydropower, which by some definitions is nonrenewable in the longer term, and certainly is not without its environmental impacts. U.S. Energy information Administration, International Energy Outlook 2009; international Energy Agency (iEA), World Energy Outlook 2009, http://www.iea.org/weo/2009.asp. Data from spreadsheet available with BPs Statistical Review of World Energy 2009, June 2009, http://www.bp.com/ productlanding.do?categoryid=6929&contentid=7044622. U.S. Geological Survey, 3 to 4.3 Billion Barrels of Technically Recoverable oil Assessed in North Dakota and montanas Bakken Formation25 Times more than 1995 Estimate, press release, April 10, 2008, http://www.usgs.gov/ newsroom/article.asp?iD=1911. A. K. Gupta, m. C. Herweyer, and C. A. S. Hall, Appendix E: oil Shale: Potential, ERoi and Social and Environmental impacts, The oil Drum, April 15, 2008, http://www. theoildrum.com/node/3839. David Luhnow, mexicos Fading oil output Squeezes Exports, Spending, oilonline, September 16, 2009, http:// www.oilonline.com/News/NewsArticles/ctl/ArticleView/ mid/517/articleid/22144/categoryid/16/mexicos-fading-oiloutput-squeezes-exports-spending.aspx. Canada is also an oil importer, as its east coast provinces are highly dependent on offshore oil. This makes Canada a relatively small net exporter of about 1 million barrels per day. Canada National Energy Board, Continuing Trends, chap. 4 in Canadas Energy Future: Reference Case and Scenarios to 2030, http://www.neb.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/ nrgyftr/2007/nrgyftr2007chptr4-eng.html#s4_5 (accessed November 2007). Canada National Energy Board, 2009 Reference Case Scenario: Canadian Energy Demand and Supply to 2020, July 2009, http://www.neb.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/ nrgyftr/2009/rfrnccsscnr2009-eng.pdf. Canadian Association of Petroleum Producers (CAPP), Crude Oil: Forecast, Markets and Pipeline Expansions, June 2009, http://www.capp.ca/getdoc.aspx?Docid=152951&DT=NTV. Kjell Aleklett, Comments on Guardian Article: Key oil Figures Were Distorted by US Pressure, Says Whistleblower, Energy Bulletin, November 10, 2009, http://www.energybulletin.net/50662.
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The 32 percent decline rate for natural gas is found in the chart US Natural Gas Production History, prepared by EoG Resources, inc. from iHS Energy data; see slide 3 of the PowerPoint presentation Washington Energy information meetings, American Exploration and Production Council, July 11, 2007, http://www.dpcusa.org/ natural/ppt/070711.ppt. Shannon Nome and Patrick Johnson, From Shale to Shining Shale: A Primer on North American Natural Gas Plays, Deutsche Bank, July 22, 2008. J. David Hughes, The Energy Sustainability Dilemma: Powering the Future in a Finite World, public lecture given in ottawa, ontario, September 10, 2009, http:// www.aspocanada.ca/images/stories/pdfs/ottawa_ sept_10_2009.pdf. Americas Natural Gas Alliance, http://www.anga.us/; American Clean Skies Foundation, http://www.cleanskies. org/index.html. Aubrey mcClendons testimony to the U.S. Congress, Select Committee on Energy independence and Global Warming, July 30, 2008, http://www.globalwarming.house.gov/ tools/2q08materials/files/0125.pdf. Pickens Plan, http://www.pickensplan.com/act/. Scott Simpson, Kitimat LNG Pipeline Takes Another Step Forward, Vancouver Sun, April 9, 2009, available at http://www.pacifictrailpipelines.com/sites/ptp/files/ VanSun_KLNG_Apr09.pdf; proposed British Columbia West Coast liquefaction terminal, Project Description, Kitimat LNG Terminal, http://www.kitimatlng.com/code/navigate. asp?id=10.

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20 Nome and Johnson, From Shale to Shining Shale. 21 Arthur Berman, Lessons from the Barnett Shale Suggest Caution in other Shale Plays, commentary, Association for the Study of Peak oil and GasUSA, August 10, 2009, http:// www.aspousa.org/index.php/2009/08/lessons-from-thebarnett-shale-suggest-caution-in-other-shale-plays/. Arthur Berman, World oil Editor Fired over oil Shale Columns, Petroleum Truth Report, November 5, 2009, http://petroleumtruthreport.blogspot.com/2009/11/worldoil-editor-fired-over-shale.html. ohio Valley Environmental Coalition, High Resolution mountaintop Removal Pictures, http://www.ohvec.org/ galleries/mountaintop_removal/007/. Richard Heinberg, Blackout: Coal, Climate and the Last Energy Crisis (Gabriola island, BC: New Society, 2009). Leslie Glustrom, Coal: Cheap and Abundant: Or Is It? Why Americans Should Stop Assuming that the US Has a 200-Year Supply of Coal, February 2009, lglustrom@gmail.com.
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U.S. Energy information Administration, Annual Energy Outlook 2010 Early Release with Projections to 2035, DoE/ EiA-0383(2010), December 14, 2009, http://www.eia.doe. gov/oiaf/aeo/index.html. massachusetts institute of Technology, The Future of Coal: Options for a Carbon-Constrained World (Boston: massachusetts institute of Technology, 2007), http://web. mit.edu/coal/The_Future_of_Coal.pdf.

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Acknowledgments
Cover art by mike King. Design by Sean mcGuire. Layout by Clare Rhinelander.

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