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Energy Independence Is a Fantasy – Let’s Focus on Energy Security

The Drake Well Was The Beginning Of Our Oil Binge In The US. Now We Face Peak Oil And Serious Energy Security Problems. But Energy Independence Is A Fantasy.

As I sit here on Memorial Day thinking of my cousin Daniel, who was killed in the first Iraq war in 1991, and all the many others who gave their lives in support of the United States, my mind is drawn to the topic of energy independence. It’s a popular topic these days, and one that has ramifications for whom we might be remembering on future Memorial Days.

As I sit here on Memorial Day thinking of my cousin Daniel, who was killed in the first Iraq war in 1991, and all the many others who gave their lives in support of the United States, my mind is drawn to the topic of energy independence. It’s a popular topic these days, and one that has ramifications for whom we might be remembering on future Memorial Days.

Really, though, energy independence is a fantasy. The world is too interconnected and US oil reserves too depleted for that to happen. Instead, our focus should be on energy security, so this week I’m kicking off a series of articles on that subject. Here are the topics:

  • Why ‘Drill Here, Drill Now’ Won’t Lead to Energy Independence
  • Can Hydrogen and Biofuels Save Us?
  • The Importance of Location Efficiency
  • Putting Freight Back on the Rails
  • Going Local
  • Energy Security at Home
  • The Myth of Endless Economic Growth

I might change things around a bit or add new topics as I write the articles, but the list above is a good start. So, let’s dive in and tackle the first one.

Why ‘Drill Here, Drill Now’ Won’t Lead to Energy Independence

This one’s pretty easy. Just look at the graph below, and you’ll see everything you need to know about it.

The rise, peak, and decline of US oil production. We're well past peak and cannot rely on more drilling to attain energy independence.

Oil production in the United States is 40 years past its peak, which occurred in 1970 when we hit nearly 10 million barrels per day (mbd). M. King Hubbert, a geophysicist for Shell Oil, actually predicted this peak 14 years earlier. He observed that when a field was first drilled, the output ramped up slowly at first and then increased exponentially with time. At a certain point, the extraction rate began to climb less sharply and then level off, remaining fairly constant for a period. Finally, the extraction rate would decline until the well was essentially dead.

Hubbert studied this pattern intensely and M. King Hubbert predicted the peak of US oil production. Now, we must figure out what to do about energy independence and energy security.gathered a lot of data. When he plotted the extraction rate versus time for a whole field, the graph appeared bell-shaped, and the peak of extraction occurred when about half of the oil had been pumped out of the field. From then on, the field produced less and less oil each year. Eventually, it was taking almost as much money to keep the oil flowing as the producer was earning, and they would turn off the pumps.

In 1956, Hubbert predicted that the US (excluding Alaska & Hawaii) would reach its peak of oil extraction around 1970. He based his prediction on the extraction rate at the time, the known oil reserves, and the rate of discovery of new reserves, among other things. His colleagues in the industry still believed the party would last forever and ridiculed his idea that our supplies would start to die out. Well, 1970 came and went more than four decades ago, but Hubbert is the name we remember because he was the one who was right, as the graph above shows clearly. 

No matter how much we try to get back to where we were at the peak, it’s not going to happen. Yeah, we can reverse the downward trend for a while, as we have the past couple of years, but before long that curve will be heading downward again, even if we open every possible area for drilling that we can. We can chant ‘Drill here; Drill now’ or ‘Drill, baby, drill’ all we want. We’ve squarely confronted the limits of geology here.

And if we could magically drill our way back to 10 mbd…

We’d still only be halfway there because we use about 20 million barrels per day. We import the majority of the oil we use in this country, and that’s not going to change by putting every available rig to work drilling for oil in every available place.

That’s the thing about flows and growth. Once you hit the peak and emerge onto the downward slope, you’re drilling more and discovering less all the time. It’s easy to confuse quantities and rates, and this is an area where it happens all the time. Yes, the US has a lot of reserves in the ground. But it’s the rate that we can pump it out and bring it to market that matters.

The only reason we’re still so dependent on oil this far past our peak is that we turned to imports. Without oil from the rest of the world making up the difference between what we use and what we produce, we’d’ve had to find another way long ago.

Therein lies the problem. As long as we’re so heavily dependent on oil, we’re never going to achieve energy independence. It’s a fantasy. If we can somehow find a way to match our consumption of oil to what we can produce domestically, then we can talk about energy independence.

Until then, we’d better focus on energy security. This century is not going to be like the last. If we intend to get through The Long Emergency, as James Kunstler calls it, by trying to stay on the same trajectory we’ve been on since the dawn of the Industrial Revolution, we’re doomed to failure. We’re in a major transition now, so let’s focus on the more realistic goal of energy security and scrap the naive call for energy independence.

This Post Has 24 Comments

  1. I agree that energy security
    I agree that energy security is a great ideal but how does a nation that produces less than 5.5 mbd but uses 20 mbd achieve that if not by strict conservation starting NOW?  
    Soon the economics of scarcity will kick in and the price will go up to be all but unaffordable to all but the wealthy. But there are still enough of those folks with money willing and able to consume the 5.5 mbd available in the USA today.  
    I just had a “discussion” with my neighbor earlier today who decided that running his unused car (It has a busted transmission and cannot be driven, and is their third car in a household of only 2) for 3 hours solely to charge its battery is not in anyone’s best interest, especially not the planet’s or my lungs which reside only 15 feet away. But it, apparently, made sense to him because he had “lots of gas in the car” to burn. Never even considered a charger as an option… 
    People (collectively) are insensitive to others, lack common sense and good judgement, and give no regard to the planet or its resources in their day to day life. That is obvious. 
    As far as I can tell virtually nobody in middle class Canada and USA acts like they know anything about peak oil or its ramifications. And the media does not help. They keep reinforcing the notion that cheap oil and gas is a birthright. 
    Where I live in Canada the number 1 or 2 news story is the price of gas when it goes up 3 or 4 cents a litre, complete with “man on the street” interviews full of disgust and amazement. Never is there a story, sidebar or otherwise, with an explanation about peak oil and its implications are. 
    Kunstler (The Long Emergency) and Rubin (Why Your World is Going To Become Much Smaller) nailed it and explained clearly and well but still their message is largely lost. And these are widely available books. Go figure.  
    Yet for a whole bunch of reasons people are in denial of and/or just plain happy to remain ignorant to the coming end of dirt-cheap oil. 
    Energy security is a great ideal, but it is pipe another (I say impossible!) dream. The weight of numbers says otherwise. It will never happen in the USA without a HUGE personal sacrifice today by all its population. 
    And that is not happening any time soon…

  2. Justin:
    Justin: Energy security is different from energy independence. I totally agree with energy independence being a pipe dream, and that’s why the title of this piece starts with ‘Energy Independence Is a Fantasy.’  
    I do believe that energy security is possible, but it will require a huge change in how we view the world, our place in it, and where we’re heading. After I read Kunstler’s book in ’05, I felt kind of like you do. Since then, I’ve come to believe that we humans are actually pretty resilient. The Great Depression was a really bad time for a lot of people, but we worked together and got through it. Even if it’s just for my own sanity, I believe that we can get through this, too. Plus, it’s a lot easier to work with the world as it is now and try to steer it to a better place than to place my bet on having to live in a post-apocalyptic world that may not come about. 
    That’s my two cents anyway.

  3. You talk as if energy is the
    You talk as if energy is the same as oil.

  4. Oil really is the crux of the
    Oil really is the crux of the matter. Oil isn’t going away any time soon, but as it becomes more scarce, the price will increase and everything that depends on oil will increase as well. Our already dwindling middle class will continue to disappear, accelerated by high prices. 
    The sad part is there really is no alternative to oil while keeping our current standard of living in tact. Just stop and list the things we use every day that contain oil or were made possible by oil. There is a finite amount of solar radiation hitting our planet each day. Do we think the planet sustain 7-billion people without abundant oil/coal/natural gas (which is really just stored solar energy anyway)? The planet has been storing solar energy in the form of fossil fuels for billions of years and we have greatly depleted that in a century, and yet we think somehow this is even close to sustainable? 
    The future is going to be challenging to say the least.

  5. Mark: Yes,
    Mark: Yes, it does come off that way, doesn’t it? I think Andrew nailed it in his comment – we don’t have any alternatives that can replace the quantity of liquid fuel that we’ll need as oil production declines. And oil is so deeply embedded in the global economy that an oil problem, which is really a liquid fuels problem, creates a major problem with our economy. 
    Andrew: Yep! Sounds like you’ve got a pretty good grasp of the situation.

  6. In order for the more
    In order for the more expensive alternative energy options to take hold, we need a healthy economy to foster them along (subsidies, tax credits, etc.) Low cost energy is an important ingredient in having a prospering economy. When I hear people say we can’t drill our way out of the energy crunch, I get the feeling there is anomosity towards oil by many in our industry. When I think of the US drilling for their own oil, I think of good jobs being created. I think of the economy getting better. I think of money be multiplied, giving cities, states and the federal goverment a financial boost. This gives me the feeling that more money is now available to foster other energy sources (and energy efficiency measures) that will reduce our need for fossil fuels in the future. It also makes me feel like our military involvement in the Mideast may be reduced without risking harm to our economy. We really need to promote ‘adult conversations’ among our policy makers and look at things from a more factual view point. We need to stop frightening people with false statements and embrace the things that we need today and those that we will need tomorrow to be a prosperous economy.

  7. Bruce:
    Bruce: Needing cheap energy available to make alternative sources viable is a bit of a catch-22. If we have lots of cheap oil, why do we need to develop alternative sources? If it’s to replace oil because we can’t get enough of it, then low cost isn’t really an option. When a commodity in demand becomes scarce, its price goes up, and that’s what fosters alternatives. 
    If you’re reading animosity toward the oil industry in what I wrote above, then you’re reading more into it than I wrote. I simply laid out the inevitable mathematics of extraction of a finite resource. Also, I grew up in the oil patch and have read enough about peak oil to understand its importance to our lives. There’s no animosity here. 
    Finally, what false statements have I made above? If you’re going to accuse me not being honest, at least tell me specifically what you think I lied about.

  8. Allison, 

    I apologize if I seemed to imply that fales statements were made in this blog. That is not what I was thinking at all. I was thinking of the whole global warming issue and how false reporting and lobbying has led to policies that have misallocated resources. I know how sensitive this subject is and I normally don’t put out comments on blogs because I like to keep myself focused on my business objectives. The point I was trying to make above is that everyone should be working (I am referring mostly to our law makers) to make the economy more prosperous. It helps all businesses grow when we do. I cannot imagine a healthy economy when energy is expensive – that’s all I was trying to say.

  9. Bruce:
    Bruce: Thanks for the clarification. I see what you were saying now. I generally avoid talking about climate change mainly because I think peak oil may trump it, but also it’s just become too politicized, which is unfortunate.  
    I think if we focus on energy security, we can accomplish goals that may help solve all of our problems because saving energy has to be a big part of it, and that helps mitigate the problems of peak oil and climate change as well. And, at least so far, energy security isn’t an issue that’s been demonized by one side or the other, so we can all discuss it rationally. That’s my hope anyway (though I guess I did get a bit defensive there – sorry about that).

  10. I agree completely that the
    I agree completely that the economic impacts of oil scarcity will, unfortunately, be the only thing people in our country will understand. Imagine the good that could have been done if we had the forethought to spend the money we have spent on military conflicts in the past 10 years instead on installing solar domestic hot water systems on American homes? What if we turned the tax breaks we give the oil companies toward this goal? Ironically this would be bad for our economy, which, as you mentioned, is expected to continually grow. 
    Our priorities are all wrong right now. They have been wrong for 50 years and it’s starting to show. Everything is interconnected, and our nation has been built on (and for) abundant energy. As we lose that abundance, it’s going to take us down a few pegs and then hopefully we will remember the spirit that built this country in the first place. 
    The politicians in Washington do not seem to understand the issue, which I believe is, by far, the most important issue facing our nation today. This is an incredibly complex problem with no easy answer, and by essentially ignoring it we seem intent on choosing the most difficult path to the future. 
    Like most issues of this magnitude, I believe this is going to require a generational shift from the Baby Boomers to Gen X and Y before significant change is seen.

  11. You certainly appear to
    You certainly appear to lionize Hubbert in this article. Would it interest you to know Hubbert made multiple predictions, that articles such as yours cherry pick so as to make Hubbert look infallible? That Hubbert in his 1956 paper observed that production does not follow a bell curve? That when you look at production curves of 51 non-Opec countries (Campbell 2003) only 8 of them resemble the bell curve Hubbert used? That Hubbert advised the following generation of petroleum geologists to leave the profession? Foolery abounds. 
    What is left? We have a future tightness of energy supply that is going to take us to places (prices, supply) we have never been before. I am convinced the average American will be bidding for a limited supply of the oil commodity, in competition with the richest 10% of Indians and the richest 20-30% of Chinese. The latter peoples can hardly be denied the benefits of this commodity just because it is inconvenient to us. 
    But like all the Chicken Little stories, you are taking a static view of the market and failing to appreciate what innovation might bring in the future. If you command the nations resources and apply them toward solar water heaters, you will get a lot of water heaters where another technology would be more suitable. If you avoid subsidies and let the market choose technologies, you may get something better. 
    I am not disagreeing with the need to transition to alternatives to oil, more so with the way you describe the problem inflexibly. And warning bells go off when you say you have the solution and all you need is a big slug of government money to make it happen.

  12. Correction: In 1956 Hubbert
    Correction: In 1956 Hubbert observed that oil production OFTEN does not follow a bell curve. The word “often” was left out.

  13. Mark: Yes,
    Mark: Yes, the bell curve is an approximation that doesn’t fit every region, but the fact of increase, peak, and decline is not. The Hubbert linearization method is another way to show the data, and it gets to the same answer. Unless you believe in the abiotic origin of oil and think it’s constantly being replenished, we probably believe the same thing. Oil is a finite resource. At some point, production cannot keep up with demand. Maybe you believe it’s a lot further out? 
    No, I’m not taking a static view of the market. I just don’t believe any technological miracle is going to replace the amount of liquid fuel we’ll be losing on the other side of the peak as we face the growing gap. 
    Also, I’m not sure where you read that I have the solution and I need ‘a big slug of government money’ to make it happen, but it wasn’t in this article. I certainly don’t have the solution. I have some ideas, and that’s what it’s going to take a lot of. That and sacrifice as we get used to living with less over the next century.

  14. I re-read your initial
    I re-read your initial article and was sidetracked by a comment which came from you, but in a discussion post: 
    “Imagine the good that could have been done if we had the forethought to spend the money we have spent on military conflicts in the past 10 years instead on installing solar domestic hot water systems on American homes?” 
    That is the one which made me recoil about top-down government solutions. I suppose you missed the fact that hot water is virtually all fueled by electricity (coal, nuclear, gas) or natural gas. Such a move would have done nothing to reduce oil needs, given that oil is primarily a feedstock for vehicle fuels.  
    We can agree that higher prices are in the future, and we will have to become very inventive in ways to use less oil as vehicle fuel.

  15. Mark: Now
    Mark: Now I see why wrote what you did, but still, that comment wasn’t by me either. I think the point Andrew was making, though, was that we’re spending tons of money on energy security already. It’s just that most of it goes to the military to secure oil production and shipping in the Middle East rather than on things like solar water heating that may help here.

  16. I did goof in confusing your
    I did goof in confusing your two names. I admire your diplomacy.  
    If it’s liquid vehicle fuels you need, you need that oil production and secure shipping in the Middle East. It’s a horrible place for humans to live, but that’s where oil comes from. With a few exceptions such as Hawaii and Carribean islands, we do not use oil for electricity nor for hot water. 
    My view is we have a moral obligation to share the commodities of the world with other people in China and India, to name two places. Higher prices will be the most humane means to allocate resources, and with higher prices will come a whole bunch of innovations to help us cope. Most of them will be incremental, and the future will always be something to worry about.

  17. I do kow that energy security
    I do kow that energy security is different from energy independence. But for practical purposes it is the same, at least IMHO, in the special case of the USA.  
    When you are the biggest user of a finite resource (oil) that you do not control (USA) its supply you cannot disconnect the two.  
    My point was that a country that with 4.5% of the world’s population (USA) uses 20% of the world’s oil supply (20 bbd) but produces only 5.5 bbd energy security is impossible.  
    Don’t forget the USA passed its peak oil production in the 1970s and has been on the downward slide ever since.  
    There is no hidden vast amount of oil to tap into in the USA.  
    There are no alternative energy solutions to replace the bulk of oil that is used for transportation (fuel for vehicles). 
    Viable alternative energy solutions for non-transportation uses all require massive amounts of oil to manufacture, distribute, service, dispose of, etc. So are they really going to solve our oil dependency? 
    Maybe you could explain what you mean when you said we should “…Focus on Energy Security” and what some of those steps should be. 
    Can you suggest some practical steps forward that will lead to energy security? 
    As for the reference to the great depression and the resilience of man— this is not a great comparison or conditions. 
    Fact is that during the depression many rural farming regions were totally devastated— mainly because of drought and market conditions. But many city folk lived life pretty much as they always did, but things just cost more. Some persevered and some did not. 
    I guess in this regard it is an apt example because in the world of scarce oil those with money will still live a comfortable life, while the majority of us will suffer. 
    But remember the depression came to an end ONLY because the era of abundant cheap oil and industrialization had arrived.  
    The end of the depression was brought about by the huge growth in industrial activity directed at the war effort. And this industrial age continued through the 40s, 50s to today. All possible because of cheap, abundant oil supplies.  
    And in the 30s and 40s USA oil came from the USA. That was security.  
    Not so now. 
    Peak oil and the diminishing supply of oil supply means that there is not enough liquid energy left for us to consume our way out of a major depression.  
    And China and India will be much better positioned to buy the oil the USA needs to feeds its energy monster.  
    I can bet the USA is not going to have unfettered access to the 20bbd in the future. 
    And this is regardless of how clever or inventive people are but a simple fact of a population bend on NOT limiting use of a finite resource.  
    My whole point was that without a fundamental change in behavior today by everyone in the developed world, but especially the USA, the high energy usage party that we have enjoyed for so long is going to end.  
    And there is no security, energy or otherwise, in that to me.

  18. Well Justin, it appears as if
    Well Justin, it appears as if you think energy cannot cross borders. Or do you? Would you argue New Hampshire must limit its oil consumption to what is produced in New Hampshire? Probably not. 
    My point is a world market in a commodity, is not synonymous with lack of security. I don’t see what is so scary here. We can all live on the earth, we can share its resources. OF COURSE we will learn to live with a smaller fraction of the world’s energy. We can.

  19. @M. Johnson  
    @M. Johnson  
    I thought it was obvious that I was talking about NATIONAL borders here. Unless New Hampshire splits from the USA it is irrelevant …  
    And what in my post made you think I was anti-international trade aka sharing? 
    I am anti-wasting. Anti-greed. Anti-entitlement. 
    So, @M. Johnson, do you really believe there is no finite limit of oil on the planet?  
    And what about rates of oil production, which have topped out worldwide, can it simply be turned up to meet endless demand? 
    You say “My view is we have a moral obligation to share the commodities of the world with other people in China and India, to name two places.” 
    So where is this “shared” oil coming from and going to right now?  
    Is the USA sharing?  
    The US has increased its consumption of oil to be 25% of the world’s total. Yet has just 4.5 % of the population. That does not look like sharing to me. 
    Again, to be clear. I am against waste and unrestrained use of a precious, irreplaceable resource, and oil is the key resource that everything else is reliant upon in modern society.  
    Just because one nation has built vast systems that use oil at rate that many energy experts are saying is unsustainable, the world is not morally bound to provide it.  

  20. Great discussions! 
    Great discussions! 
    Allison, also agree that peak oil will trump climate change but does (lack of clean) water trump both?  
    Especially given the interdependence of energy and water (i.e. energy needed to clean/pump or desalinate water & water needed for cooling towers). May be a larger issue for some geographic regions than others. 
    Sorry to introduce another topic/issue into this thread but they are somewhat related.

  21. There is some truth, but the
    There is some truth, but the estimate that we are past our peak is not true, 
    yet there are viable alternatives to oil in the form of hydrogen. Several auto 
    makers, including Honda (FCX Clarity), Ford (FCV Focus) and GM (the Hy-Wire) 
    have hydrogen fuel cell cars, which are estimated to be in production in the 
    next fifteen years. Retooling for fuel stations (logistics) is the main problem. The the price for such vehicles will drop with increased production which won’t 
    happen without a place to refuel. 
    We are still 15-20 years away from the massive changes that will occur, but we 
    still have to move America until that point. Plumbers, electricians, traveling 
    salesmen, grocery deliveries and more than 60% of the jobs in America require 
    gas/diesel to get from point A to point B. Can’t see a plumber coming out to 
    roto-rooter my sewage lines by train, bicycle, or bus. 
    As to petroleum reserves, I try to follow that to some degree because we have 
    oil property in Texas that we haven’t been able to get a drilling permit the 
    last three years. 2100 acres in Jim Wells County. Two years ago a major 
    discovery one county north called Eagle Ford Shale, has lit a fuse under more 
    exploration with every major oil company jumping in. Added to the Bakken 
    Formation in North Dakota, which increased domestic reserves by a potential 10 
    times, we are a long way from being out of petroleum options. Slant or 
    horizontal drilling technology makes new discoveries eminent. 
    “America is sitting on top of a super massive 200 billion barrel Oil Field that  
    could potentially make America Energy Independent and until now has largely gone unnoticed. Thanks to new technology the Bakken Formation in North Dakota 
    could boost America’s Oil reserves by an incredible 10 times, giving western 
    economies the trump card against OPEC’s short squeeze on oil supply and making 
    Iranian and Venezuelan threats of disrupted supply irrelevant”. 
    Additionally, there has been no commercially viable way to reap our untapped oil 
    shale reserves in previous years, but with oil valued at over $40/barrel (today 
    it is at about $98/barrel), it becomes a whole new ballgame with 2 trillion 
    barrels in our reserve. The United States has the largest known deposits of oil 
    shale in the world, according to the Bureau of Land Management and holds an 
    estimated 2.175 trillion barrels of potentially recoverable oil.(John R. Dyni 
    (2005). “Geology and Resources of Some World Oil-Shale Deposits”. Scientific 
    Investigations Report 2005–5294. US Geological Survey. Retrieved 2008-08-11.) 
    We use about 21 million barrels of petroleum per day in the US, 2/3 of that is 
    for transportation. Perfecting hydrogen, solar, wind, wave energy generation, 
    hydro-electric, and other sources can be used if they can find a way to make it 
    commercially viable, but government subsidies and producing below cost is not 
    the answer. Given 2 trillion total reserves and using 21 million barrels per 
    day, would give us about 10,000 days of petroleum use, or about 270 years to go 
    before we run out, barring new discoveries. A lot of incentive is possible at 
    $60-$100/ barrel to perfect new processing methods for oil shale.

  22. But… but… but… that
    But… but… but… that would offend the gods of Gaia! 
    Besides it’s not a perfect solution and won’t help until the future, so let’s just not. 

  23. We’re not going to run out of
    We’re not going to run out of oil. We’re going to run out of cheap oil.  
    We have to reduce our dependence on fossil fuels in general. The wars in the middle east have been a huge waste of resources that could have been used for much more positive uses. We spend trillions subsidizing fossil fuel industries in the least efficient ways. I believe a million solar domestic hot water heating systems would do more for out national security than what we have been doing for the past 10 years. 
    The “free” market (there really is no free market) is reactive, not proactive, and we cannot afford to be reactive to this problem. I do believe this is an issue where government needs to step in and lead us down a path where we actually expend our national resources ($$) on something to make our future better. We spend too much time worrying about the present. We are far too short-sighted. 
    Take away the subsidies to the oil industry, and alternative energy suddenly becomes much more economically viable. The funny part is, we pay a lot more for oil than we realize. We just pay it in the form of taxes and debt rather than at the pump. 
    Drill, baby, drill is no answer at all. It’s just, hopefully, a bridge to the future when we can learn to live within our energy means.

  24. Hubbert’s study and
    Hubbert’s study and prediction is amazingly compelling, based on its simplicity and empiricism alone. But that won’t prevent a good many people from ignoring it in favor of convenient opinions and outright denial.

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