Peak oil in retrospect

-November 26, 2014


It is the year 2004. With record high prices at the gas pumps and what seemed like a largely oil-explored world, it was an occasion to do what engineers do best: identify technical problems and devise solutions. With what seemed like a real “peak oil” energy shortage looming ahead, the need for reduction of electric power use had a direct impact on electronic design, resulting in the emergence of low-power circuit design. Is that emphasis still required?


While some decry the demise of the ecosphere due to the burning of hydrocarbon fuels, an equal problem is the anticipated inability to supply those fuels to meet the growing world demand. This article looks in retrospect at the problem, largely through comments from senior oil engineers inside the industry, and then surveys what happened.

The Oil Conundrum

We go back a decade, to 2004. Glenn Morton, a geophysicist who headed North Sea geophysics and reservoir engineering for a major oil company, sized up the global oil situation. It is interesting to consider his comments as an oil-industry technical insider as it contrasts with what economists and oil-company CEOs were saying. The June 2004 cover story of the National Geographic addresses when peak global oil production will occur ( Back then, geologists and economists were embroiled in a debate about the subject. Morton, the geophysicist, comments:


I know a few geologists who think that oil production won't peak for a long time because we keep finding more reserves. I only know of two economists who think the world is about to peak in oil. To me it is amazing that the economist at the Hubbert's Peak Symposium at the Offshore Technology Conference in Houston [in May 2004], Michael Lynch, cited the UK as an example of a province that was continuing to gain production. But his graphs only showed production up to the year 2000, which means he is 3-4 years out of date. If he had shown the last 3 years of production, the data would not have fit his case.


The economists are merely believing Adam Smith that a rise in prices will bring an increased supply - like corn supplies increase when the corn price rises. But oil is not like corn. Oil must obey the laws of fluid flow which are very unforgiving.


In the 1950s, M. King Hubbert devised a method of determining the flow rates of oil fields as a function of time. This method has been rather accurate for over 40 years in predicting rates of various fields, though some refinement to it has occurred.

In a then-recent edition of Science magazine, the argument was made that known oil reserves were huge. Morton granted them the cited number of 3 billion barrels or more but noted that the important variable is not reserves but production. He responded:


Each year more is added to the reserves. Big deal. Reserves don't necessarily translate into PRODUCTION. The world needs PRODUCTION, not reserves. There are an estimated 4 trillion barrels of hydrocarbons in the Orinoco Tar Belts, but no one can get much of it out of the ground because it is extremely viscous - more viscous than road asphalt. So when people are looking at articles like this, ask yourself the following question. If I put a trillion dollars in your bank account (which are monetary RESERVES), but only allowed you to get it out at $10/week (which are monetary PRODUCTION), are you rich?


Another fact about oil supply is that the reserves estimates continue to increase. Morton comments:


When discovered, all fields are under-reported for size. This is due to the SEC regulations which require a division of proved, probable and possible reserves. Unless you can move reserves to the proven category, you can't report them. These stringent requirements for reporting only proven oil, give a false sense that suddenly there is more oil in the world. That isn't true at all. Oil companies know the 3P numbers but are only allowed to report the 1P. Probable and Possible reserves don't get reported until they move to the 1P category.


Over the previous decade (1994 - 2004), oil companies had not made a major effort to find new oil fields because essentially the entire world had been explored. The exceptions are Antarctica and the arctic. Morton commented:


The real place that has had zero exploration and where I believe lie big oil fields is Antarctica. However, current technology can not get any oil out of there because you can't protect the platform and well head on the sea floor from Rhode Island sized icebergs drifting off of that continent.

With the globe essentially explored, what remained were smaller and smaller finds, Morton described:


For the past 24 years the world has been finding less oil. Take a look at the global oil discoveries averaged over 5 year intervals and think about the fact that we use about 27 billion barrels per year. In 1990-95 we [the oil industry] found about 10 billion bbl/year, but pumped 25 billion. Today we find 3 billion per year and pump 27.


Furthermore, new fields are depleted more quickly:


Over the years, we have learned how to suck a field dry very quickly. A billion barrel field of 50 years ago is still producing. Offshore a billion barrel field today will be abandoned after only 20-25 years. The second half of the world's oil will be drawn down faster than the first half.


Hope in better oil technology is not the answer. Morton asked why this technology has not worked to maintain the production rate in the UK, down 30% in 4 years, Oman down 30% in 3 years, the US down 50% in 33 years, etc. On May 18, 2004, Morton made the following observation regarding oil prices: 


In spite of OPEC saying that they would raise the quotas, the markets yesterday shrugged it off and the oil price went even higher - a record high in current dollars (no inflation). Part of this price is terrorism fears, but part is reflecting the fact that we have an oil hungry world. China's demand for energy went up 15% from 1st quarter 2003 to first quarter 2004 (The Observer (business), UK, May 16, 2004, p. 5). The markets are clearly saying that they don't believe OPEC has the capacity to fuel the world's energy needs.


As various factions argued about when oil will peak, the clear fact then was that it is not getting any cheaper. Morton expected gas prices to fall, as they have, but over the longer run, as demand exceeds supply, prices will continue to increase. However severe the coming crisis, it poses an opportunity for long-awaited development of alternative energy methods.


Now fast-forward to the present. Unreported yet significant oil in North America is being disclosed. And the conversion to natural gas is in full swing. Whenever oil is found, gas is found. In the past, many gas-field discoveries were abandoned because oil was sought instead. The current consensus is that there is enough natural gas in the world to power it for a long time.


Can we consequently throw out those low-power circuit designs? Not quite. Electronics increasingly is being used in mobile applications where power-line or utility power is not available. Familiar examples are cell phones and small computers carried on person or in a vehicle where electric power is limited. Additionally and more dramatically, there is increasing concern over the collapse of infrastructure in the overdeveloped world.

The prepper movement in North America attests to an increase in public awareness of the fragility of the modern techno-world, especially the modern urban environment. It would not take an EMP bomb to collapse this infrastructure; a collapse in the financial system would impair or destroy the half-dozen money links of credit that move food from farmers’ fields to the unloading docks of supermarket stores. Pumps that are used to distribute fuel and water also run on electric power that must be paid for by utility companies.


A major financial shock alone could possibly leave cities without utilities, a deadly situation that would quickly lead to massive social instability. Large numbers of people desperately seeking life’s essentials wherever they might be found would be unable to be contained by the urban security utility (police) despite recent militarization of local police. If widespread, this could present those in power an opportunity to apply massive control to society - a scenario reminiscent of scenes in the movie, The Pianist, from 1930s Poland.


The legal hurdles in the U.S. have been cleared and the Presidential Directive exists for domestic use of military force and the virtually complete takeover of everything and everyone in U.S. jurisdiction under emergency government (FEMA) control. Yet few Americans have become alarmed. (Mind control works.) Under either of these scenarios, alternative power then becomes important and necessary.

Alternative Energy Solutions

As the existing large-scale solution to the problem of supplying electric power falters, the prospects for alternative energy solutions grow more promising, and they all lead to a need for power and control electronics. Here is a list of what I see as the most interesting possibilities, with some technical comment on them.

  • Solar photovoltaic (PV) panels: semiconductor batch-processed PV panels have been expensive, but there are alternative processes. Continuous-process “extruded” amorphous solar-panel ribbons were projected in 2004 to reach by 2009 a high-volume target price of $0.50/W, competitive with the North American power grid. These PV panels are presently in high volume production from multiple manufacturers. The demand from Europe has been so high that one leading company sold their entire first-year production to a customer in Europe. PV panels are currently being sold for $3.50/W to as low as $1/W from China. Progress was slower than anticipated in 2004 but has since accelerated. A middle-class urban resident can now afford electric power backup with a solar PV electric system, especially if it uses long-life nickel-iron batteries for charge storage.
  • Several different fuel cell technologies are being developed. Hydrogen (proton exchange membrane, PEM) technology has been the leader, under development by The fuel is still gasoline, which contains impurities that will easily foul a PEM “stack”, the chemical-to-electric converter of the cell. The problem is being worked on by Detroit. A pre-conversion process is needed to filter out sulfur compounds, etc., and this is proving difficult (expensive).

In contrast, direct alcohol fuel cells (DAFCs) were stuck on a development problem that was solved a few years ago, and now DAFCs are progressing. This is encouraging because DAFC stacks are not subject to fouling, and either methanol or, preferably, the safer ethanol can be used. Ethanol is a “biofuel” and can be produced with the moderately simple chemical unit operations of sugar fermentation and distillation.

Starches first must be broken into sugars by enzymes. Farmers (such as the Schroeder family in Colorado, including Gene Schroeder, the veterinarian who organized the tractorcade to Washington years ago) have built small commercial plants in their barns, but larger corporate producers also exist, as well as grain-grower ethanol associations in the U.S. and Canada. Sugar cane is the best source and would diversify and stabilize the sugar industry.


Solid oxide fuel cells are also a leading contender and seem more suited for large-scale use. They also run very hot.


The best fuel cell technical site I know of is the site of Ben Wiens, a former Ballard Energy fuel-cell engineer.

  • Biofuels: besides the “ethanol economy”, other plants producing large amounts of oils, such as jetropha, sunflower, soybean, corn, and canola have been studied. These organic oils are combined with hydrocarbon geofuels - typically 20 % “bio” to 80 % “geo”. Direct-injection diesel engines have essentially no degradation using these fuels once a few rubber parts are replaced. Residential-use 5 to 10 kW diesel generators have been run on discarded restaurant frying oil. An enzyme transforms it into biofuel directly burnable in diesel engines.

Changing from gasoline or diesel fuel to ethanol is feasible, though ethanol's heating value (energy/kmol) is somewhat less. Corn oil is about 15 % less relative to No. 2 diesel fuel and is typical. Photosynthesis is one of the best solar conversion processes around. Why not use it? As gas prices increase, there approaches an economic crossover, especially if worldwide cane production were directed at ethanol production. Temperate-zone crops are also quite suitable for biofuels, and ethanol associations have appeared in North America. (See The constraint on biofuels is agriculture and the amount of soil capable of producing ethanol-oriented crops. With limited cropland there is a tradeoff between energy and food production.

  • Solar thermal: use a solar concentrator to heat a fluid stored in an insulated tank as thermal energy. Besides nuclear and chemical energy (such as ethanol in a tank), thermal storage has the highest energy density, especially if state-change materials are used. Then use thermal-to-electrical converters to produce electricity from a temperature differential.

Solar thermal electric systems look quite promising yet nobody seems to be developing them. First, storing heat in a tank is less costly and has less maintenance than storing charge in a battery bank. Second, by separating energy collection from conversion, the additional degree of freedom allows optimization of system sizing, which reduces cost. The thermal-to electrical converter possibilities are

  • Thermocouple stacks = thermoelectric modules (TEMs), used in Igloo-brand car coolers for example. Hi-Z ( is a leader in optimizing TEMs for power generation. Efficiency is the issue. It is increasing but is currently around 4 %. Even so, it beats solar PV at 15 % at a system level because collecting and storing heat is relatively cheap. The expensive TEMs are sized for desired peak power, while the lower-cost collector size is determined by the maximum storage requirement. TEMs are relatively inefficient because thermal and electrical transfer is done by electrons diffusing through semiconductor material. It is the least efficient way to move electrons and heat.


  • Thermionic devices: I know of no commercial work yet but research has looked promising for the last decade.

Reference: “Multilayer Thermionic Refrigerator and Generator”, G.D. Mahan, J.O. Sofo, and M. Bartkowiak, Dept. of Physics and Astronomy, U. of Tennessee, Knoxville, TN,37996-1200, and Solid State Division, Oak Ridge National Laboratory, Oak Ridge, TN 37831-6030 ; arXiv:cond-mat/9801187 v1 19 Jan 1998


In thermionic conversion, electron transport is ballistic instead of diffusive, and efficiency figures (which can be calculated to about 1 % accuracy on the basis of solid-state physics) are 2 to 5 times higher than thermoelectric devices.

  • Thermotunneling devices: place two metal plates 10 nm apart and electrons will tunnel across them. Tunneling is a quantum phenomenon that requires this close spacing. (Thermionics requires about 100 nm spacing.) is the leading company, funded by Rolls Royce, headquartered in the tax haven of Gibralter, with actual development in Canada. Using existing semiconductor processes and some novelties, prototype devices have shown an efficiency of 15 % - and this was a decade ago. This is sufficient to obsolete the internal combustion engine. It would eclipse ordinary solar PVs too. This technological development seems strangely stalled - at least for publicly-disclosed technology.
  • Low differential-temperature Stirling engines: The Stirling heat engine has been around for well over a century though it fell out of use from the lack of stainless steel in the 1800s. It is making a comeback and several commercial concerns are working on product development. The free-piston design has one moving part. Efficiency is 40 % or more, rivaling large steam turbines, and is essentially maintenance-free. The Swedish submarine builder, Kockums, uses them in subs because they are nearly silent. At present, they are unaffordable, but mainly from lack of high-volume commercialization. Inventor Dean Kamen was working on a patented design a decade ago.
  • Thermophotovoltaics (TPV): An enhancement to PV conversion uses an optical frequency converter film in front of the PV layer to convert more thermal solar energy to the frequency conversion range of silicon panels. This scheme might keep PV competitive with solar thermal. It has been in the research stage of development for more than a decade.
  • Wind, ocean waves, ocean thermal, geothermal, etc.: these augment the more direct solar methods. In his Foundation sci-fi trilogy, Isaac Asimov had a whole planet running on the geothermal temperature difference. A mine a mile deep is well above ambient surface temperature. Wind is feasible on or near large bodies of water and on hilltops. Ocean energy has been attempted and is still in its early stages of development. Of these, the leading contender is wind power. This is the cheapest alternative source for urban residents, especially those who live atop tall buildings. Every skyscraper is a potential wind “farm”.

In summary of the alternatives, a decade ago there were several promising energy developments with a 1 to 10 year time frame for mass commercialization. In that time, only solar PV and large-scale wind have achieved high-volume application.  The alternatives result in a distributed and not necessarily centralized electric power source which reduces the need for more copper distribution lines, and relies upon energy that will be available for the foreseeable future (and then some). It also is more robust relative to social instability to have many small distributed sources. It also vastly increases the emphasis in electronics on power conversion. Semiconductor power switches have undergone vast improvement over the last decade to where TO-220 MOSFETs sell for around a U.S. dollar and have channel on-resistances of as low as a milliohm.


A key question a decade ago was whether enough interested inventors, developers, financiers, and entrepreneurs would arise in time to avert the perceived oil crisis and maintain global energy supply. With the resurgence of oil (albeit more expensive to acquire) and especially natural gas, the direness of the peak oil scenario a decade ago has faded, though the new threat of developed-world infrastructure failure and social instability has shifted threat consciousness to small-scale preparedness for loss of electric power. As more residents acquire working off-grid systems, one element of social collapse might be ameliorated, if or when it happens.


In a related way, low-power electronics would expand the effective number of loads that could be run by limited-energy off-grid power systems. If enough people in a collapsed city or country could keep their cell-phones and iThings running, charging batteries from solar or wind sources, a cell-phone Internet communications structure with solar or wind-powered cell stations could become established, and the Internet could take on a new form independent of the large-scale telecom utilities. In this scenario, low-power electronics and off-grid power conversion would be even more important. The closing question is whether there would be enough resources to keep producing the integrated electronics needed for a distributed-infrastructure environment.

Thumbnail image courtesy of Air Resources Board (ARB) California EPA 

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