One Billion Motor Vehicles And Peak Oil

Oilprice.com noted that in August, Wards Auto published a story saying that World motor vehicle count now stands at 1 billion.  The U.S. still has the largest registration at about 240 million.   In the Oilprice.com blog, the author considers what 1 billion vehicles and the likelihood of even more being added in the next 25 years might mean. It is interesting reading.  He seems to favor governmental intervention to ameliorate supply (read PEAK OIL) versus demand for fossil fuels.   He says:

It is highly unlikely that there will be anything approaching 240 million registered vehicles in the U.S. 25 years from now. From the vantage point of 2011, it seems probable that many will not be able to afford to own and operate personal motor vehicles of the size and types we have today.

He thinks that the newly mandated CAFÉ standard is just what we need and that we will have to abandon 6 passenger cars and other large sized vehicles. He says:

  In the U.S. we are now facing standards requiring that cars achieve an average of 54.5 MPG 15 years from now. First will come all sorts of weight reductions, such as eliminating spare tires, and adding more plastic and aluminum parts. Engines will become more efficient and car bodies will become more aerodynamic.  Although these changes will be costly, it does not take much arithmetic to conclude that if energy costs are three or four times higher than they are today then mileage will become the key factor by which motor vehicles are judged.

Detractors of these new mileage standards are usually people who have little grasp, or prefer not to think about where real energy costs are going to be 15 years from now. They point out the advanced materials required to build a low-weigh, high mileage, vehicles will be so great that it will push cars beyond what many, if not most, can afford.  

Due to governmental interference, the U.S. is facing an artificial Peak Oil problem.   This artificial Peak Oil Problem is really a part of the Peak Energy Problem that governmental interference is causing.    We have a lot of fossil fuels.  The U.S has the largest reserve of fossil fuels in the world.  It is likely that North America could become energy independent.  Yes, no propping-up Venezuela nor other countries that don’t have our best interest in mind.   And what a break for our balance of payments.  Becoming completely energy independent might possibly be the wrong thing to do because the prices of crude oil could fall below our production cost thanks to the U.S. bringing on more production capacity.  I don’t want the government to dictate how much crude we should produce or purchase.  Let the market decide whether we produce or buy.

Peak Oil will come sometime, but not in the near future.  What the U.S. is facing is an ideological, artificial Peak Oil problem.   The Obama administration gives money to “renewable fuels” programs and tells us that we must do this to reduce the purchase of foreign crude.   How the government thinks they can do this with renewable fuels is beyond comprehension.  Renewable fuels, are now neither economic nor reliable enough to do that.  In fact, the electrical grid people that distribute the nation’s electricity have found it necessary to have fossil fuel powered back-up capacity equal to the wind or solar capacity.  The renewables can’t be scheduled, meaning their supply is too erratic to provide steady voltage and current.  The wind slows down or stops or the sun goes behind clouds and the former balance of supply and demand goes south. They have to have something as a backup to keep the lights on.  Their second argument is that fossil fuels not be used as combustion results in C02.   The fossil fuel back-up capacity blows that argument.  See here and here to read about the folly of renewable fuels.

The Radical Environmentalists fight every attempt to develop our resources.   Oil in Alaska, offshore oil, oil in the Baaken field, nuclear power, low cost coal,etc..  It doesn’t matter, they are against it.   They use global warming, polar bears, darter fish, left-handed ground squirrels  (I guess I made that one up) and one of my favorites–the Houston toad.    According to some reports only 300 Houston Toads remaining in the world and they have been placed on the endangered species list.  “A world without the Houston toad ... is not a world we can physically live in,” says Paul Crump, a reptile and amphibian keeper at the Houston Zoo who works with the small brown toads.  Who knew?  The world is on the way to a collapse. More dangerous issue than the Osama binLaden threat so lets get the Seal Teams to see nothing bad happens to those warty little buggers. (SARC).

Fracking and the oil pipeline from Canada are the causes du jour for the radical environmental crowd.   It is patently clear that they will only be satisfied when this country is reduced to a third world status.   And our Government supports their activities through the EPA and other departments.  God Bless Michelle Bachmann and her vow to eliminate the EPA if she is elected President.  If she is not, she should be given the job as the EPA Administrator.

We will run out of economically recoverable oil some day.  Same for natural gas, iron ore, etc.  But the many forecasts made by experts about when the oil peak would occur have always been vastly overstated.

We quoted The Oilprice.com author saying that in 15 years the price will be 3 to 4 times higher than today.  It could happen but only if we just sit back and let it happen.  For a more realistic assessment of the Peak Oil tipping point, lets look at what has been said on a WardsAuto.com posting titled “Oil’s Price Always Comes Down.”

Five years ago, I believed in the Peak Oil theory. It postulated that global oil production would peak in 2006, and the following shortage would send prices skyrocketing. Sure enough, in 2008 a barrel of oil shot up to $150.

But less than 12 months later, oil plummeted to less than $40 a barrel. Yes, the price now is back up to $100, but I no longer believe in Peak Oil. Here’s why:

Brazil recently discovered massive oil reserves off its coast that match or beat Saudi Arabia’s. Brazil will start tapping those reserves before this decade is out. In Iraq, infrastructure is being put in place to increase oil production six or seven times greater than today, potentially making it the largest oil producer in the world.

And in the U.S., a new drilling technique called hydraulic fracturing is the mother of all game changers. (My emphasis)  Texas wildcatters figured out a way easily extracting natural gas and oil from shale. Using high-pressure water and sand, they fracture the shale, releasing trapped gas. As a result, the U.S. has added 100 years of natural gas use (at current rates), and the price of natural gas has fallen to nearly half from its peak in 2008.

Hydraulic fracturing, or fracking as it’s also called, is controversial. Some environmentalists have seized on it as the next great danger to the planet. A documentary called “Gasland” probably will win an Academy Award for hysterically pointing out the dangers of fracking.

Of course, “Gasland” approaches its topic with the impartiality and evenhandedness of pseudo-documentaries such as “Roger and Me” and “Who Killed The Electric Car?” So far, fracking has been done mostly in the U.S., but it soon will spread to the rest of the world. (My emphasis) Before this decade is out, we are going to see vast increases in the amount of oil and natural gas available. And this will have enormous implications for the auto industry and policy planners.

Closing out is a good time to call for a lesson from “Minnesotans 4 Global Warming”.

http://www.youtube.com/watch?v=nWiKvNDTjB4&feature=player_embedded

cbdakota