Peak Oil There’s no silver bullet. May 2008

Points for the Day Peak oil is when flows can’t meet the demand. Peak Oil is probably happening about now. World exports are starting to drop. Diesel shortages will come first. Transit has a glorious future.

A Short History of Peak Oil 1956 Hubbert said US to peak in Hubbert said US to peak in US lower 48 peaks – imports begin US lower 48 peaks – imports begin. 1970’s Lots of oil discovered – all is well. 1970’s Lots of oil discovered – all is well Geologists start getting worried Geologists start getting worried World conventional production peaks 2007 World conventional production peaks

Analysts Look at the Future Look at rate of depletion of producing countries Look at rate of depletion of producing countries Watch the progress of new projects. Watch the progress of new projects. Estimate the demand for oil. Estimate the demand for oil. Calculate the balance. Calculate the balance. They are saying shortages within 3 years. They are saying shortages within 3 years. The IEA in Paris The IEA in Paris Most of the peak oil analysts Most of the peak oil analysts US DOE is starting to hint US DOE is starting to hint

Situation in the US Burning 21 million b/d and holding. Burning 21 million b/d and holding. Importing about 12 million b/d Importing about 12 million b/d Refinery utilization low Refinery utilization low Crude stocks average. Crude stocks average. Gasoline stocks high. Gasoline stocks high. Diesel/heating oils stocks low. Diesel/heating oils stocks low. World exports are slowing. World exports are slowing.

Top World Oil Net Importers Rank Country Net Imports 1 United States 12,220 2 Japan 5,097 3 China 3,438 4 Germany 2,483 5 Korea, South 2,150 6 France 1,893 7 India 1,687 8 Italy 1,558 9 Spain 1, Taiwan Netherlands Singapore Thailand Turkey Belgium 546 Rank Country Net Imports 1 United States 12,220 2 Japan 5,097 3 China 3,438 4 Germany 2,483 5 Korea, South 2,150 6 France 1,893 7 India 1,687 8 Italy 1,558 9 Spain 1, Taiwan Netherlands Singapore Thailand Turkey Belgium 546

What is going to happen? Fuel prices are going up and up! Fuel prices are going up and up! Think $5 gasoline, possibly $6 soon. Think $5 gasoline, possibly $6 soon. Spot shortages possible anytime from disruptions (political, hurricanes) Spot shortages possible anytime from disruptions (political, hurricanes) Permanent diesel shortages likely first. Permanent diesel shortages likely first. Europe, China, India, power shortages. Europe, China, India, power shortages. There is no obvious way to avoid this. There is no obvious way to avoid this.

Prices and Transit Cost of fuel going way up. Cost of fuel going way up. Airlines already in big trouble Airlines already in big trouble Demand for transit is increasing. Demand for transit is increasing. How fast? $5, $10, $20, a gallon or shortages? How fast? $5, $10, $20, a gallon or shortages? The diesel shortage problem. The diesel shortage problem. A working fuel. A working fuel. Rationing. Rationing.

A Sudden Shortage A few days or semi-permanent? A few days or semi-permanent? 5% shortfall will cause havoc (Think 1970s). 5% shortfall will cause havoc (Think 1970s). Gas lines = government intervention Gas lines = government intervention Rationing Rationing Car pools Car pools Extended work schedules Extended work schedules Transit Transit Rapid expansion – hours, routes Rapid expansion – hours, routes Equipment. Equipment. Non-conventional vehicles Non-conventional vehicles New services. New services.

Or an Evolving Crisis Gasoline prices increase by a dollar a year Gasoline prices increase by a dollar a year No lengthy shortages – No rationing. No lengthy shortages – No rationing. Increasing demand for affordable transit. Increasing demand for affordable transit. Nothing to really trigger government response. Nothing to really trigger government response. Realization that transit, not more roads is what is needed. Realization that transit, not more roads is what is needed.

Transit after the Peak (Life with less internal combustion) In 3-10 years. In 3-10 years. A lot less moving private cars. A lot less moving private cars. A lot less air travel. A lot less air travel. Most still residing in suburbia. Most still residing in suburbia. Most a lot poorer. Most a lot poorer. Useful assets Useful assets Lightly used highway lanes. Lightly used highway lanes. Great communications – cell and internet Great communications – cell and internet Pretty good electric grid. Pretty good electric grid. Lot of unemployed people. Lot of unemployed people.

Transit will have to change Diesel will be in short supply & expensive. Diesel will be in short supply & expensive. Hybrids, natural gas for awhile. Hybrids, natural gas for awhile. Efficiency is the key. Efficiency is the key. Electric vehicles are the future. Electric vehicles are the future. Service suburbia. Service suburbia. Not dense. Not dense. Goods as well as people. Goods as well as people.