A GEOLOGICAL PERSPECTIVE

ON:
Global Warming
Global & US Energy
Futures
Global Free Markets !
. . Peter
. WHAT WE CAN DO
R. Rose
NOW Past President,
American Association of Petroleum
Geologists
 OUTLINE
1. Influence of Anthropogenic Global Warming
(AGW) NOT a settled scientific issue.
2. Alternative Energy Sources will BEGIN to
replace conventional fossil fuels.
3. Robust, trustworthy Free-market Economy
ESSENTIAL to the coming Energy Transition.
4. Effective Remedies we can agree on NOW.
MEDIEVAL
LITTLE
WARMING
ICE AGE
Earth temperature history from Greenland ice
core data
SHAPE OF EARTH’S ORBIT MORE ELLIPTICAL

LESS ELLIPTICAL
W. Soon, 2010
W. Soon, 2010
 380 ppm

Insolation Temperature Track

C02 Doesn’t
Track Temp.
CO2’s HEAT-TRAPPING CAPACITY
DIMINISHES LOGARITHMICALLY

H. L. STEWARD 2008
 (Uncertain) Role of Clouds

• 95% of Greenhouse Gases = Water

Vapor
• Influenced by Cosmic Rays
• Verifiable Feedback to Greenhouse
Effect
– IPCC allies assume most feedbacks (+)
– Lindzen & Soon find many feedbacks (–)
SIGNIFICANCE OF “CLIMATEGATE”:
1. Corruption of Climate Science
 Academic and Government Scientists (U.K. & U.S.)
 Destruction/Alteration of “Inconvenient” Data
 Abuse of Peer-Review Process
 Non-engagement with other Pertinent Science
 Influenced by Social Philosophy -- Politics;
Government Funding, Media Publicity, Financial
Interests
1. Discredited UN IPCC
2. Bad Science → Bad Policies
3. Wasted $, Lost Time
4. Public Loss of Confidence in Science
HUBER 2005
HUBER 2005
US ENERGY-SUPPLY CRISIS:

Convergence of Global Oil Supply &

Demand
Approaching Plateau in Global Oil
Production
Mortgaging of US Assets to Feed US
Motor-fuel Addiction
Crude Oil as a Geopolitical Weapon
 OIL & GAS
A changing environment for future production
A growing world oil
Mb/d
121
% / yr demand
+1.6 107
Transport
driven by transport fuels
90
77 Petrochemicals
66
Non-energy use
50
Heating
Electricity
8 60
Mb/d Hc prices keeping high for long term$/b
1971 1990 2002 2010 2020 2030 7 Spare capacity Brent price 50
6
World oil demand 40
Oil price vs
Mb/d
5
4 30
OPEC spare 3
20

capacity 2
10
Reduction of spare 1
0 0
capacities
Source : IEA, September 2005 1990 1992 1994 1996 1998 2000 2002 2004
 200
8

RESERVES

CUM
CRUDE
 “How many US dollars went
overseas during 2005-2009 to pay
for motor fuel burned in the US?”

–
5 yrs x 365 days/yr x 21M bbl/day x 67% x ~$90/bbl

GREATEST TRANSFER OF WEALTH IN HISTORY?

DISTRIBUTION OF KNOWN RESERVES*
*Gas converted at
5.6BCF = 1MMBOE 2.1 TBBOE
800
700
600
500
B 400 Reserves
B 300

O 200
100
E 0
Iran

Iraq

U. S.
Qatar
Russia

Kuwait

Abu Dhabi

Venezuela
Saudi Arabia

Rest of World
• 67% OF KNOWN RESERVES ARE IN 9 COUNTRIES
• 43% OF KNOWN RESERVES ARE IN 7 MAJOR OPEC COUNTRIES

Petroconsultan
 Tinker, GCAGS DPA Keynote, 2004

U.S. Energy Consumption

40

Petroleum
30
Up, up, up
and away….
Quadrillion Btu

Natural
gas
20

Coal
10 Nuclear
power
Hydro.
Biomass power
0
1775 1800 1825 1850 1875 1900 1925 1950 1975 2000
EIA, 2000, Annual Energy Review 1999, Appendix F, Tables F1a and F1b. QAc8506c
QAd3931x
 Tinker, GCAGS DPA Keynote, 2004

U.S. Consumption

U.S. Energy Consumption

I ask kids
120

100
about Renewable Energy

renewables…
80
Hydroelectric

Nuclear Energy
Quad BTU

Natural Gas
60
Oil Imported
40 Oil Produced

20 Coal

Wood and Waste

0
45

70

95

53

73

78

98
20

45

58

63

68

83

88

93
19

19
18

18

18

19

19
19
19

19

19

19

19

19

19

Data: Annual Energy Review 1999 (EIA, 2000)

QAd1023
QAd3931x
 Tinker, GCAGS DPA Keynote, 2004

U.S. Energy Comparison

Net Energy = Energy Produced - (Energy to Create + Energy to
Operate)

Back to
oil and
gas
QAd3931x
 A Healthy Fossil-fuel Industry will buy us time to make a
safe transition into a Sustainable, Alternate-Energy Future
 WHY WE MUST EXPAND U.S.
NUCLEAR POWER NOW:
• Only Dependable 24/7 Alternative Energy
Source
• High-volume Source of Electric Power
• Re-cycling Spent Fuel Eliminates Nuclear-waste
Storage Problem
• Operational Incidents Causing Nuclear Power-
station Accidents Can be Eliminated
• No Toxic Emissions
• Experience of French Nuclear-power Industry
Causes:
Agriculture
Medicine
Energy

H. L. STEWARD 2008
WORLD POPULATION PROJECTION

SALVADOR 2005
 REQUIREMENTS FOR SUCCESSFUL
TRANSITION TO SUSTAINABLE US ENERGY
SOCIETY
Realistic National Energy Policy: Absent for 30 years

Constructive Industry-Government Relationships: to

Optimize Planning, Prioritization & Support of R&D

Massive Investments: Requires Robust, Trustworthy

Free-market Investment Sector

Stable High Energy Prices and/or Government Support:

to Encourage Conservation and Long-term Investments

Accelerated Construction of Nuclear Power Plants:

Expanded Electric-power Generation

Maintain US Fossil-fuel Industry: as “Bridge to the

Future”
 CONSERVATION
 The quickest, cheapest way to reduce U.S.
Energy Consumption
 Translate “Green Activism” to country-wide
“Energy Frugality Ethic”
 For motor fuels, reinforce by gradual increase
in gasoline & diesel taxes dedicated to
alternate energy development
 (1978-1990) History: U.S. became much more
Energy Efficient, then wasted it on SUVs,
“McMansions”, Frivolous appliances., etc.
 Problem: How to make Energy Frugality a
Permanent National Value
 CAVEAT TO
ENVIRONMENTALISTS:
“The Adoption of Proactive and
Sustained Environmental
Programs Depends Upon a
Healthy Economy”

We Must Stop Getting Stampeded by

Ill-founded, Apocalyptic Scare Tactics
GOOD NEWS I --
We don’t have to accept Anthropogenic Global
Warming to support many measures needed NOW for
a healthy US Energy Future!
I. Transportation:
• Lighter-weight vehicles & higher MPG’s
• Battery-powered autos & reduced speed limits
• Higher taxes on motor fuels & heavier vehicles
• Natural-gas powered trucks, buses & autos
• Shifting long-range freight to railroads
• Efficient ethanol production (NOT CORN!)
GOOD NEWS II --
We don’t have to accept Anthropogenic Global
Warming to support many measures needed NOW for
a healthy US Energy Future!
II. Other Sectors:
• Improved Energy Efficiency -- Residential, Commercial,
Industrial
• Upgrade National Power Grid
• Gov’t support of Alternative Energy Sources -- R&D
• Maximize US Oil & Gas Exploration & Production
• Re-invigorate Nuclear Power
• Educate Energy Workforce
GOOD NEWS III --
U.S. Natural Gas Recoverable
Resources have Increased by
about 35% since 2006, a Current
100-year Supply at Present
Consumption Rates.
- - “Now, How to Gain Access
to Gas-productive Lands?”
GOOD NEWS IV --
Development of Alternative and
Diversified Energy Sources can
Provide Fruitful new Investment
Opportunities to Revitalize the
US Investment Sector.
BAD NEWS --
Proposed “Cap and Trade” or
Carbon Tax measures to restrict
Energy Use are unnecessary and
self-penalizing to the recovery of
a robust economy -- especially
since Developing Nations will
exempt themselves.
DEALING WITH LONG-TERM NATIONAL ISSUES
1) FREE-MARKET OPTION: Problem: Free market
Capitalism is ineffective in dealing with long-term problems
(discounting of future cash flows assigns little or no value to
cash flows beyond 15 -20 years. U. S. markets focus on short-
term results).
2) GOVERNMENT CONTROL OPTION: Problem: Global
experience of 1950-1990 showed that "Planned Economies"
do not work.
3) NATIONAL POLICY OPTION: Solution: Non-partisan
consensus can allow an informed democratic society to deal
with important long-term issues such as Energy (prior U. S.
examples -- Space program; Clean air/water acts; Smoking;
Civil rights). Requirements: Communication of facts and
consequences, Education; Open dialog; Shared sacrifices;
Real bipartisan political leadership; Continuity of policy.
Ingredients for Future
Recovery
• Communicating the problem (education)
• Trustworthy free-market economy
• Informed leadership and media
• Insistence on responsible politicians
• A new national purpose and character
• Sharing the pain of Conservation

WE CAN DO THIS!
Future generations depend on us to make good
decisions.
A GEOLOGICAL PERSPECTIVE
ON:
Global Warming
Global & US Energy
Futures
Global Free Markets !
. . .Peter
WHAT WE CAN DO
R. Rose
NOW Past President,
American Association of Petroleum
Geologists