In violent agreement – both sides in energy wars envision same future, but too entrenched to notice

Here in Canada, energy wars are reaching a fever pitch. The petroleum business has begun to fight back after having been comprehensively outfoxed by a very savvy opponent in the form of formidably organized protest groups. The fossil-fuelers, mostly consisting of technical engineers, geologists, and finance people, was busy focusing on cash flows and finding new reserves, while the climate change team was hard at work building a near unassailable public image. It was like the petroleum industry passed out at a party and awoke the next day and unwittingly headed off into the world with a face full of sharpie art. The world now sees as true such eyebrow raisers as the notion that diluted bitumen is more dangerous than regular oil, that the oil sands are a ‘carbon bomb’ about to ‘ go off’, that pipelines are outrageously dangerous, and that the world will all be driving electric cars within a decade. None of these are remotely true, but it’s too late – any effort to counter these mantras is ridiculed as the voice of the devil himself.

What makes this really ironic is that, if both sides were to put down the paintball guns, take off the masks and compare notes, they’d realize that they are aiming for the same target. That might sound unbelievable, but it’s true.

The more realistic of the climate change warriors want to see a dramatic drop in fossil fuel usage by the year 2050. That’s in 32 years. It seems like a stretch, with global oil consumption growing past 100 million barrels per day, at a rate that’s increasing by 1 percent per year. Not only is the world not getting away from fossil fuels, it’s getting to like them even more.

This increased appetite causes exactly the same consternation in the oil patch, though for reasons that could not be more different. Petroleum industries look at those trends – 100 million b/d is 36 billion barrels per year; a decade’s worth is 360 billion, etc. By 2050, even if consumption remained flat, that would mean almost 1.2 trillion barrels of consumption. Oil producers look at those sums and are forced to conclude, well, there’s no way in hell to do that.

On the oil production side, the world is currently mesmerized by US shale production, which is now over 5 million b/d. Optimistic forecasts have it possibly doubling within a decade, to perhaps 10 million b/d and then flat-lining. That would be 10 percent of global production, if it ever got to that rate.

See the problem? The world is getting pretty picked over for quick and easy oil reserves. New discoveries, which are getting rarer and rarer every year, are in the most remote, inhospitable regions of the world, because all the easy stuff has been gobbled up. Ultra-deep water, or arctic, or undeveloped third-world countries are where the action is, and when those are picked through, that’s it folks.

Places like Canada’s oil sands, one of the largest deposits in the world, can’t begin to make a dent in that total either. The region was stressed to the max to produce 2.5 million b/d like it does now. To double that to 5 million b/d is nearly impossible, and even if it happened, at that rate in 30 years it would only produce 55 billion barrels or 5 percent of what the world looks like it might want.

No matter which side you look at it from, the world is going to need a lot of new energy sources by 2050 and oil will be on the downward slope. It’s funny but sad that each side can’t even hear each other.