(It's the Energy!) Why Successful Cities Will Be Largely Car-free by the End of 2015

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I realize this is a big, big claim to make. But we will go through all the factors step by step and see that it is the logical conclusion after taking into account trends already under way all around us. These trends are sometimes obvious, sometimes less so,  but the impact they will have on demographics and energy use by 2015 are enormous. (Note: almost all the energy production data I will reference comes from the US Energy Information Administration.)

The first trend, the big kahuna of them all, although largely unpublicized, is that US energy consumption per person is dropping. And it’s going to drop more. Take all the BTUs of energy a country consumes (from whatever source—petroleum, coal, natural gas, nuclear, or renewables), add them all together, and divide by the population that year. For the US, we get:

Though there have been more downs than ups since 1973, per capita energy use (in red) in the US has been dropping rapidly since 2004. In 2012 we used 11% less energy per person than we did eight years ago. I’ve also included the subsets of oil btu/capita (blue) and transport oil btu/capita (green). Both measures were stable for much of the 1990s and have also been dropping since 2004. 2012 was another large drop for all three measures, 3% for each in one year.

How can this be?  We’re producing more oil in the US than ever, right? Well, the “oil” we’re producing contains ever-lessening amounts of energy because much of it isn’t actually oil, it’s natural gas liquids or ethanol or condensate that all have lower BTU content than crude. And we have a growing population, so each year it all gets divided over more people. As to total energy, our use of natural gas is rising, but not as much as our coal use is dropping.

But isn’t this good news? Doesn’t this mean we’re getting more efficient with our energy? Well, yes and no.

The US is a big gobbler of energy, one of the biggest in the world.  Here’s a chart of US and some comparison countries per capita BTU:

  

I used the 2012 US number because that makes us look better. For the other countries, 2011 is the latest data available.

Such wide variations in energy use! In general, countries that use below 100 BTUs/person having been increasing their energy use. (Some are so low, their use can only rise.) In general, countries above 100 BTUs/person have been dropping, except those that are net exporters of energy. Not only do energy exporters tend to use a lot of energy (though I didn't include them in the chart, Saudi Arabia consumes 335 btus/person! Qatar—642! UAE—711!) their usage is, amazingly enough, increasing! The countries showing declining energy use are primarily the high-consuming net energy importers such as the US (as well as much of the rest of industrialized world.) We have to admit this is a trend towards fairness—the energy gluttons get a little less each year, and the energy impoverished get a little more. The world is still a long, long way from any kind of energy parity.

So US energy use is falling a few percent each year. No problem. It certainly doesn’t mean the American way of life will change any time soon. But it’s not just energy use that is falling, it’s the energy available after we use all the energy to extract/make/capture the energy that counts. That is what is available to you, me and the guy behind the tree. What we might call society. And in the US, since the energy it takes to get our energy is increasing, the amount available for society is decreasing even more.

One way to tell is by looking at the percent of US energy consumed by the industrial sector. In 1973, this sector consumed 43% of all US energy. Then, as we offshored manufacturing, it dropped steadily until 2009. Now it is creeping back up, and it’s not because we’re making more cars than in 2007 (we’re not.) Roughly a quarter of all energy used by the industrial sector is used to extract and refine oil, coal and natural gas, and that percentage is creeping up because the EROEI (Energy Returned on Energy Invested--the ratio of the energy we gain from a source to the energy we expend to get that energy) of oil, coal and natural gas is falling. Long ago it took one barrel of oil to get 100. Now it takes one barrel of oil to get 10. This make sense—the easy-to-get stuff is what the energy companies went after first. As the easy stuff gets depleted, they go after the harder stuff, like offshore oil under a mile of water or tight oil that requires energy-intensive fracking. And this dropping EROEI phenomena is not only happening in the US, it’s happening all over the planet.

So from the American energy budget, 8.6% has to be subtracted because it goes into energy extraction and isn't available to society. This percent will increase each year as the EROEI of our fossil fuels sinks. In fact, when we take into account refining and extracting energy, the drop in US per capita energy use last year was 4% rather than 3%.

Now let’s consider the oil we import. In 2012, the US imported substantially less oil than in previous years. Good news! This is due, in part, to our producing more domestic oil, but also because we dropped our total oil per person, as we have ever since 2004. Still, in 2012 we imported 16.2 quadrillion BTUs of oil, or 45% of the all the oil energy we consumed. Now as oil-importers, we’re not concerned with the amount of oil the world produces, but, rather, how much oil is available for export. (Also, how much of that “oil” is actually crude, the high BTU stuff we want to buy.) The oil in the world available for export is shrinking, for three reasons: 1) Oil EROEI is dropping in other countries since they, too, went after the easy-to-obtain oil first; 2) the consumption of oil in oil-exporting countries is on the rise due to population growth in those countries and the demands for a higher energy lifestyle; and 3) a growing percentage of “oil” produced by oil exporters is natural gas liquids, not crude. The oil available globally for export increased by 1/2 of a percent between 2011 and 2012, and this was with record high world prices for oil. Moreover, this ½ of a percent was entirely due to Libya coming back on line with their oil production after their hiatus due to revolution. If Libya had produced as much oil in 2011 as it did in 2012, oil available for export in 2012 would have dropped by 1.4% compared to 2011. 

By 2015, due mostly to depletion but also due to rising consumption, quite a few countries will be leaving the elite oil-exporters club. They will include Denmark, Yemen, Syria, Cameroon, Congo (Kinshasha), Ivory Coast, Malaysia, Papua New Guinea and Argentina. Brazil flirted briefly with being in the club from 2008- 2011 but left the club in 2012. Vietnam left the club in 2011, Egypt in 2010, the UK in 2006, Indonesia in 2004, Tunisia in 2000. (Remember, once a country leaves this club, it almost never goes back. Instead it generally joins our club, the oil-importing one, a club that is getting crowded and competitive!)

After examining production and consumption statistics of each oil-exporting country and conservatively extrapolating out current trends, (see this post for what's going on in Europe right now) I project that in 2015 there will be 11 percent less crude oil available on the world market for export than in 2012. Here is the breakdown by continent. Remember, exports = production - internal consumption.

World Oil Available for Export (Years 2011, 2012 and 2015 Projection)(thousand barrels/day)

		2011	2012	2015	Reason for change
North America		2137	2316	1700	(Mexico drop)
Central/S America		2893	2729	2190	(Venezuela and Ecuador drop)
Europe		1818	1695	1300	(Denmark and Norway drop)
Eurasia		9571	9555	8460	(Azerbaijan, Kazahstan and Russia drop)
Middle East		20007	19865	18480	(Iran rise, rest drop)
Africa		7277	7778	7248	(Libya and Sudan rise, Algeria, Angola, Nigeria drop)
Asia/Oceana		247	233	156	(Brunei drop)
Total		43,950	44,171	39,534

No big deal, you might say. That’s only 4.6 or so million barrels less of oil a day. There will still be 39.5 million available! (90% of it will be crude.) But we must consider who besides us will want that 39.5 million barrels/day.

If we extrapolate past oil imports and population growth rates, we get 2012 oil import consumption that will turn into 2015 oil import demand along these lines (million barrels/day):

China   5.6-->6.5

India    2.5-->2.9

Africa  1.6-->2.5

Asia/Oceana  12.2-->14.5

Europe  12.5-->12.0

Cen/S America  1.4-->2.5

Mexico/Canada 0-->0

Total 35.8 (2012) --> 40.9 (2015)

This total oil import demand of 40.9 is just a little over the 39.5 million barrels/day of world oil exports predicted. Not too bad. Seems like it should just about work out.

Wait a minute! We forgot the US! Last year we imported 7.45 million barrels of crude oil per day! Where is that 7.45 going to come from? Which countries and/or continents are going to slash their oil budget so we can get ours?

This is the time to remember that most of the world is using far less oil per person than we are, and they use the oil they do get far more productively. Also remember that Asia has very little oil of its own and must import almost all they use. Our 7.45 million barrels of imported oil is going to drop, by my estimate to 3.3 million barrels/day, and not through a miraculous improvement in the gas mileage of the American fleet of cars. Which country or continent will make do with less to give us our 3.3 million barrels, I can only speculate. The world price of oil may rise a little to make this redistribution happen, but for reasons I discuss later, I don’t think it’ll have to rise too far, maybe only to $5 a gallon to get the US to drop its consumption the necessary amount.

There are other energy headwinds facing us, too. Energy from domestic oil, while not taking the same nosedive as imported oil, is likely to contract due to declining EROEI, higher levels of condensate and NGLs in our oil supply, and the high depletion rate of fracked wells. (The Red Queen effect.) While I would like to think ethanol’s nonsensical EROEI will doom it, it is more likely Midwest drought that will make the ethanol mandate go away, maybe as early as this summer, but at least by 2014. (Ethanol right now is 17% cheaper per volume than gasoline, but has 34% less energy. In addition, it takes as much fossil fuel energy to produce as it replaces. As soon as the mandate goes away, corn-based ethanol goes away.)

Natural gas production is likely to fall slightly due to high well decline rates, falling EROEI, and to the boom and bust nature of the industry that is causing current natural gas production to lose money. (Natural gas needs to be at $5-$6 per 1000 cubic feet to break even. The current price is $4.) There are only 1/4^th the natural gas rigs drilling wells as there were four years ago. I figure we’ll see declines in energy from natural gas until well into 2015 unless the US gets really serious about getting rid of coal. This would cause natural gas prices to shoot up and drilling to begin again in earnest.

Right now I project coal to only decline at its current rate of about 10% per year, though its EROEI will be creeping up as well. However, the second China gets serious about its terrible air pollution and decides to cut back its coal burning, it will be in China’s best interest to put intense pressure on all coal-using countries to address the impact of coal on climate change. If China turns this corner before 2015, our coal use could decline 20 or 30% per year.

Let’s hope drought doesn’t permanently put our hydroelectric in decline and that all our nuclear stays on line. (I am not a big fan of nuclear power and don’t endorse expanding it, but for now, I would say we need what we’ve got.) If we build out solar and wind only at the rate we’ve been the last few years, we won’t have installed enough to make much difference to our energy picture by 2015.

Putting this all together with a mild 0.7 percent US population annual growth rate, by 2015 we get an overall BTU/capita rate (in million of BTUs) of 239 (a 21% drop), a BTU/capita after mining/refining of 217 (a 25% drop), and an oil BTU/capita of 24 (a 32% drop.) 

What could make BTU/capita fall even more dramatically over the next three years?

1)   A hurricane destroys much of the refining and oil-drilling infrastructure in the Gulf of Mexico.

2)   Revolution in Iraq, or Libya, or Nigeria takes a couple million barrels of oil/day off line.

3)   Revolution in Mexico as their oil exports decline and a huge source of national income goes away.  This would take half a million (and falling) barrels of oil/day off line, but that’s half a million barrels that right now are pretty much dedicated to us. (Not to mention all the other ramifications of instability in Mexico.)

4)   Venezuela falls apart and takes 1.5 million barrels oil/day off line.

5)   Revolution in Saudi Arabia takes 8 million barrels/day off line.

6)   Drought in Canada severely reduces tar sand production.

7)   Drought in US severely reduces fracking production. (Tar sands and fracking use lots of water.)

8)   A climate disaster of biblical proportions frightens world governments (including China) to end coal use and begin to limit oil use.

9)   Enough mild but costly climate disasters (on the order of Hurricane Sandy last November) occur that governments begin to negotiate a real climate treaty with carbon emission limitations for each country.

10)An earthquake in the US takes out a major nuclear reactor, creating nuclear contamination severe enough we would be panicked into shutting down all US nuclear reactors.

Granted, none of these are highly probable (although Iraq and Libya have already had their turns off line.) But when you put enough low probability events together, the odds of at least one occurring start getting good. And remember, we will have a 32% drop in oil energy without any of the above occurring. With any of the above, the change will be on the order of shock and awe.

What could keep US btu/capita from falling by 2015? 

1)   A new Saudi Arabia could be found to add 8 million barrels of oil to the world export pool. (Highly unlikely.)

2)   We could build out wind, geothermal and solar at 50 times the rate we are today, which would come close to producing enough BTUs to replace the fossil fuel ones we’re going to lose. (Possible, but unlikely.)

3)   A tidal wave could swallow half of Asia, which will allow us to scoop up their share of oil consumption. Or maybe a meteor could take out Europe. Or . . . or . . .

4)   That’s about it.

I know some people have their hopes pinned on thorium as the wonder nuclear pill the world just needs to swallow. I’ll just point out that not a single thorium prototype reactor has been built in the US, nor have any full-scale thorium reactors been designed and approved. Nor have any communities in the US agreed to host one. So it is impossible that even a single full scale thorium reactor will be on line by 2015, much less the 200 or so we would need to make a material difference to our near-term energy scenario.

So what does this mean for cities? We’ll look at that in part 2 of this post, The Disappearing Urban Car.