Sunday, October 28, 2012

Why the U.S. is NOT the new Saudi Arabia

Last week's energy news included a piece from the Associated Press with a headline reading: "U.S. poised to become world's top oil producer; may soon overtake Saudi Arabia." If the reporter had actually examined figures available from the U.S. Energy Information Administration (EIA) website carefully instead of simply parroting oil industry sycophants, he would have ended up with a headline more like this: "Marginal gains in U.S. oil production mean continuing high prices and imports for Americans."

As it turns out, U.S. crude oil production is averaging 6.2 million barrels per day (mbpd) so far this year compared to Saudi Arabia's 9.9 mbpd. So, how did the reporter and his sources end up with a production number of 10.9 mbpd for the United States?

The problem results from the deceptive redefinition of oil supply by the oil industry itself, one designed to obscure the true oil supply picture and one that, unfortunately, has been adopted by some government agencies. Within the last decade the industry began to count something called natural gas plant liquids (NGPL) as part of oil supply. Here's how I've explained NGPL previously:

NGPL are hydrocarbons other than methane that are separated from raw natural gas at a processing plant. They include ethane, propane, butane and pentane. The amounts vary. For example, raw natural gas extracted off the coast of Malaysia contains 11 percent ethane, 5 percent propane, 2 percent butane and about 2 percent of something called natural gasoline or drip gas, a low-octane fuel that is used today primarily as a solvent. Raw natural gas from the North Slope of Alaska contains a higher percentage of methane and correspondingly smaller percentages of ethane (7 percent), propane (4 percent), butane (1 percent) and other components including carbon dioxide and pentanes (2 percent). In these two cases you can see that ethane makes up about half of the NGPL, propane makes up about a quarter, butane makes up 10 percent of Malaysian NGPL and 7 percent of Alaskan slope NGPL.

As you will note, these products all come from natural gas, not oil. While it is true that propane and butane are used as vehicle fuel in a very limited way, most of the volume of NGPL cannot easily be used as a substitute for oil. And, it is doubtful that either propane or butane could become major vehicle fuels since they make up only a small fraction of natural gas and are limited in their supply by the amount of natural gas extracted. Some NGPL are used as feedstocks for chemical production, just as petroleum is. But the likelihood that NGPL would significantly displace oil in this market as it is currently configured is small.

Also included in the definition of oil supply are biofuels, namely ethanol and biodiesel. While these are direct substitutes for oil, they make up only a small fraction of total liquid fuel, about 1.9 mbpd as of 2010 in a world that consumed 86.8 mbpd of all liquid fuels the same year. In the United States biofuels production reached 0.9 mbpd in 2010. But, there is little reason to believe biofuels will be able to substitute in a big way for oil-derived transportation fuels. Here's how I've described the situation previously:

As for biofuels, America is already approaching the current limit of its ability to absorb the supply of ethanol. Most cars can only run with a 10 percent mixture. Above that engine parts in the vast majority of vehicles start to degrade. Of course, we could continue to increase the ability of automobiles to burn ethanol. But the scale problem is the deciding factor. In North America it would take 1.8 billion acres to grow enough corn to supply enough ethanol to run the North American vehicle fleet. That's four and one-half times the amount of arable land available. And besides, corn ethanol takes more energy to produce than it provides. It's not an energy source so much as an energy carrier. Similar limitations apply to biodiesel which is made from vegetable oil.

If biofuels or NGPL were good substitutes for petroleum-derived liquid fuels, the United States would not still depend on petroleum for 93 percent of its transportation fuel. And, keep in mind that copious amounts of petroleum are needed to grow the crops used to make biofuels. Petroleum products run the farm machinery, are used as feedstocks to make the herbicides and pesticides sprayed on the crops, and power the vehicles that transport those crops to the refinery. Natural gas and coal are typically used to power biofuel refinery operations. And so, biofuels might better be described as a way to transform fossil fuel energy into liquid fuels using crop materials as a medium.

So, what is the real situation in the United States, if it is not as the reporter and his sources describe? First, recognize that the EIA defines crude oil production as "crude oil including lease condensate." Lease condensates are very light hydrocarbons that turn from gases into liquids when released from the pressure of an underground reservoir and are "recovered as a liquid from natural gas wells in lease or field separation facilities and later mixed into the crude stream (my emphasis)." The importance here is that these are the only liquids from natural gas wells that become part of the crude oil supply. NGPL, on the other hand, are separated at natural gas processing plants and therefore do not become part of the crude oil stream.

Production of crude oil including lease condensate has, in fact, been growing in the United States. The key fact, however, is that U.S. production only just recovered last year to levels not seen since before 2005 when Hurricane Katrina badly damaged many offshore oil production facilities in the Gulf of Mexico. This year production has grown further to an average of 6.2 mbpd through June. But that's a far cry from the 10.9 mbpd quoted in the article which includes NGPL, biofuels and something called refinery processing gain--which is the result of the well-known fact that the total volume of products made from crude oil such as gasoline, diesel and kerosene always exceeds the original volume of the crude oil used--hardly something to write home about.

The EIA projects that production of U.S. crude oil (using the proper definition) will rise to 6.7 mbpd by 2020 and begin a gradual decline thereafter. It's certainly possible that the EIA projection is too conservative. But it is worth keeping in mind that U.S. consumption of finished petroleum products this year has averaged 14.1 mbpd. U.S. oil production would have to more than double to meet U.S. needs.

In two previous pieces--"The Oil Industry's Deceitful Promise of American Energy Independence" and "Oil and Gas Industry Uses Deceptive Energy Independence Message to Push U.S. Exports"--I explained why the oil industry wants Americans to believe that we are in the midst of an oil boom that will somehow free us from imports and bring declining average prices for petroleum products. But continuing high prices for crude oil and petroleum products across the world demonstrate that small gains in American production are no match for worldwide depletion which has kept crude oil production range bound between about 72 and 74 mbpd from 2005 through 2011. One should keep in mind that oil is a worldwide commodity that can always be shipped to the highest bidder. So, it is worldwide supply and demand that ultimately determine prices (once transportation costs are taken into account).

The media have become unwitting accomplishes in an oil industry propaganda machine that seeks to soften up the American public for an orgy of drilling--one that will only drain America's limited oil resources more quickly while achieving neither energy independence, nor lower prices, nor an urgently needed transition away from finite petroleum, a transition that would free us from the tyranny of oil and the companies that control it.


Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he writes columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin, The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, October 21, 2012

Canadians could free themselves from oil imports, but will they?

You are not alone if you think it's odd that Canada--the world's ninth largest exporter of crude oil and petroleum products and the main supplier of oil imports to the United States--is itself a longtime oil importer, importing more than 40 percent of its oil needs this year.

The situation results from historical pipeline development which has left Canada without a major east-west pipeline to bring the huge surplus of oil produced in the western provinces--now primarily from tar sands--to the eastern part of the country. The country's provinces from Ontario eastward currently import a little more than 60 percent of their oil needs from overseas. That may be set to change.

Winston Churchill once said, "You can always count on Americans to do the right thing--after they've tried everything else." It seems he could have been talking about the Canadians and their oil predicament. Earlier this year TransCanada, a major pipeline company, proposed expanding the current pipeline system known as Keystone to carry more western Canadian crude to America's Gulf Coast. But, the pipeline giant was rebuffed by the Obama Administration in an election-year gambit to satisfy environmentalists concerned about the impact of tar sands development on climate change and water quality. Enbridge, another Canadian pipeline company, has proposed the so-called Northern Gateway pipeline route from the tar sands to the British Columbia coast. From there the oil would be exported to satisfy growing Asian demand. But practically everyone along the Northern Gateway route has lined up against it including the British Columbian premier.

Now, yet another route is being considered, one that would allow TransCanada to live up to its name. The company's latest proposal would take an east-west natural gas pipeline which is now being underused and convert it into an oil pipeline to bring western Canadian crude to currently import-dependent eastern Canada. The plan, which will require regulatory approval, may not face the stiff opposition that the other two projects faced since this pipeline is largely complete. It would require only some additional work to convert it and link it to refineries and storage depots.

The result would be a flow of up to 1 million barrels per day of oil to eastern Canada, more than enough to displace all of Canada's current imports and possibly allow for exports of crude oil from the eastern seaboard. Canadians would still be subject to world oil prices since oil would remain a global commodity that can be shipped to the highest bidder. But, the country would no longer be vulnerable to supply disruptions from abroad and would be in a position to prevent exports if a national emergency warranted it.

With this change Canada would move closer to true energy independence. It currently exports electricity to the United States and imports only a tiny amount of U.S. electricity due to historical infrastructure or regional rate differentials. Canada is the world's second largest producer of uranium, providing 17 percent of global supply in 2011. Therefore, the country does not need to import any for use in its own nuclear power plants. In 2011 Canada was the world's 14th largest producer of coal and exported about 30 percent of its production. Some imports were recorded. The long border with the United States, a major coal producer, sometimes makes U.S. imports more economical depending on the type of coal and the shipping distances. When it comes to natural gas, however, Canada's National Energy Board reports that while the country produces 70 percent more than it needs, it still imports the equivalent of 31 percent of its consumption--even as it exports the equivalent of 100 percent of Canadian consumption to the United States. As with oil, historical pipeline infrastructure dictates this unusual arrangement. But that is a story for a future piece.

The oil industry has been working on a way to get growing volumes of oil out of western Canada cheaply for some time. And, the cheapest way is via pipeline. Producers have been suffering steep discounts to world prices with Western Canadian Select crude oil futures trading in New York at a discount of about $20 per barrel compared to American Light Sweet Crude which itself has been trading at approximately a $20 discount to Brent Crude in Europe. So, the total discount to prevailing world prices for western Canadian crude is currently around $40. It's easy to see why the industry is anxious for a pipeline that will allow it take advantage of higher world prices.

With opposition running strong against the two alternatives, the oil industry may be forced to consider the TransCanada pipeline conversion proposal to ship oil to eastern Canada, a proposal that happens to coincide with Canada's national interest. But don't expect to hear industry executives whistling "O Canada" at their desks just yet. It's not clear how much support the project will find among those executives.

That support will be critical because the current Canadian government, which must approve the project, has shown itself congenitally incapable of distinguishing between the national interest and the interests of international oil companies. Therefore, the government isn't likely to force the project on the industry even if the pipeline would be a good idea for Canada as a whole. However, if the oil industry ends up embracing the project, the Canadian government will almost certainly rubber-stamp it. And thus, the government and the industry may inadvertently end up doing what has for a very long time been within Canada's grasp and in its best interest, namely, to free the country from imported oil.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he writes columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin, The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, October 14, 2012

Oil and gas industry uses deceptive energy independence message to push U.S. exports

With gasoline scaling $4 a gallon recently, plans announced last week by international oil giant BP to export U.S.-produced crude oil ought to have Americans howling. For such a plan to be good energy policy--rather than merely profitable for the oil industry--the United States would have to be producing more than enough oil to meet its own needs. But the country produces nowhere near that amount. Nevertheless, the industry's deceptive campaign to make the public and policymakers believe that the United States is on the verge of energy independence seems to be succeeding--a push that is really just a smokescreen for selling the country's oil and natural gas to the highest bidder.

So far this year the United States has produced 6.2 million barrels per day (mbpd) of crude oil plus lease condensate (which is the definition of oil) versus daily net consumption of 13.6 mbpd of finished petroleum products. The country is a long way from being free of oil imports, and as I'll discuss below, there is no realistic prospect that we'll ever produce enough oil domestically to satisfy our needs at the current level of consumption.

That's why to date, except for minor sporadic shipments to a few countries and regular small shipments across the Canadian border, the U.S. government has allowed no other domestic crude oil to be exported. The BP request is presumed to be an attempt to bring oil produced in North Dakota to Canada's refineries on its east coast. The oil produced in North Dakota trades at a $20 discount to oil currently being imported from Europe by Canadian refineries.

Analysts believe BP can ship the North Dakota oil by railcar or other means to Canada and beat the European price. All things being equal that would tend to raise the crude oil price in the United States. The irony, of course, is that Canada exports much of its crude oil production to the United States, making it America's single largest supplier of imported oil. Nevertheless, differences in oil quality and oil transportation infrastructure appear to favor what BP is proposing.

Perhaps of more concern to American consumers is an export license request from a Swiss trading firm, Vitol, which presumably wants the ability to ship U.S. crude anywhere in the world it can get a good price for it. If that request is granted, it's open season on American domestic crude oil supplies.

To be clear, the price of oil in the United States is already based on world prices. This is because oil can be shipped using the world's ocean-going tanker fleet to wherever the price is highest. This tends to equalize prices across the globe once transportation costs are included. But, because the infrastructure in the interior of the United States is inadequate for cheaply moving the oil now being produced there to oil ports, the price of this oil trades at a discount to world prices. So, whenever companies or trading firms believe they can reduce transportation costs such as those from landlocked North Dakota, they will try to move oil that is underpriced to more profitable markets.

Natural gas is another matter. There is not yet an integrated worldwide system for moving natural gas wherever the price is highest. In North America natural gas is essentially a regional product. It can be moved via pipeline between the United States, Canada and Mexico, but there it stops. For that reason the glut of natural gas caused by overdrilling of newly available shale gas deposits has brought prices down dramatically, from $13 per thousand cubic feet (mcf) in mid-2008 to just above $3 per mcf today.

The glut has the industry saying the United States will soon produce all of its own natural gas. In practice, it's not working out that way. With supposedly vast supplies of natural gas now beneath their feet, Americans imported 14.2 percent of their natural gas needs in 2011, almost all of it from Canada, according to the U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy. For comparison, annual U.S. natural gas imports from 1990 through 2010 averaged 16.8 percent of total U.S. consumption. Progress, but not exactly energy independence.

The EIA projects, however, that U.S. domestic natural gas production will grow sufficiently so that the United States will become a net exporter of natural gas by 2022. Still, some analysts have cast doubts on such forecasts. In fact, claims that the United States has a 100-year supply of natural gas have been widely refuted. First, the claim was based on estimated resources. As I am obliged to remind people again and again, resources are what is thought to be in the Earth's crust based on sketchy evidence at best. Reserves, on the other hand, are what the drillbit has shown can be produced using existing technology at current prices from known fields. Proven and probable reserves of U.S. domestic natural gas add up to only 22 years of supply at the current rate of consumption.

Second, the refuted 100-year figure assumes that we will continue to use natural gas only at the current rate. But that forecast was being quoted by industry boosters who foresee vast new applications such as natural gas-powered vehicles which would greatly increase the rate of consumption and dramatically shorten the time to exhaustion. Here's how I explained the problem in a previous piece:

Simple spreadsheet calculations will tell you what you need to know about what happens to such claims under the pressure of a little exponential growth. At 2 percent per year growth...the 100-year U.S. domestic natural gas supply is exhausted in 56 years. If we assume that production peaks when about 50 percent of the resource is exhausted, this puts the peak within 35 years. Think about it. Even if the optimists are correct, with a production growth rate of just 2 percent per year, the country reaches a peak within 35 years! What will we do after that?

The picture gets acutely worse as the rate of production growth rises. A 3 percent rate implies exhaustion in 47 years and peak in 31 years. A 5 percent growth rates means exhaustion in 37 years and a peak in just 26 years. Now consider that domestic supplies are probably going to be less than claimed, and you'll see why shale gas simply cannot solve our energy problems. (emphasis added)

Third, EIA's estimates of technically recoverable shale gas resources in the United States have fallen dramatically from 827 trillion cubic feet (tcf) to 482 tcf. And, this says little about whether those resources would be economically recoverable. In any case, the previous larger estimate formed the basis for the widely refuted 100-year claim. Fourth, annual production decline rates for U.S. natural gas wells are now running about 32 percent. That means that with no drilling, production would fall by one-third over the next year. So, we now must drill furiously just to maintain, let alone grow our supplies. And, shale gas--which the EIA thinks will make up 49 percent of U.S. domestic natural gas production by 2035--shows decline rates reaching 65 percent in the first year and 80 percent by the second year. It will be difficult to drill enough wells each year to replace lost production if half of all production comes from shale gas deposits.

Regardless of what the future level of natural gas production turns out to be, if U.S. domestic gas is made available on the global market, then American consumers will be forced to bid for it against the rest of the world. Here's how that might look:

Processing plants cool natural gas to approximately -260 degrees F where it becomes a liquid. It is then loaded on liquefied natural gas (LNG) tankers which ship natural gas worldwide. Until recently, however, the United States was an importer of LNG. With the unlocking of vast deposits of shale gas, LNG import terminals have had little business. But one import terminal owner, Cheniere Energy Partners, L.P., has received approval to build an export terminal next to its import facilities. Many others hope to follow suit.

If the natural gas industry gets its way, all of us in the United States, Canada and Mexico will pay the world price for natural gas. In Asia the price has bounced between $13 and $18 this year. In Europe the price has range between $8 and $12. Both continents paid far more than $2 to $3 which those in North America have been paying this year. And, here's the key thing to remember: It won't matter whether the United States produces enough natural gas to supply all its needs. Once the North American gas market is linked to the worldwide LNG market, everyone in North America will be subject to the world price.

The United States is unlikely ever again to achieve oil production high enough to supply all its needs. The last time it did that was 1948. The EIA projects that the current miniboom in U.S. oil production will peak at 6.7 mbpd around 2020, and U.S. production will thereafter decline. While natural gas production may rise for a time, it's unlikely to rise enough to allow the country to substitute natural gas for oil in enough applications to make up for declining U.S. domestic oil production. In fact, if the skeptics are right, domestic natural gas production may never even completely cover domestic needs.

The oil and gas industry is run to serve up profit to its shareholders any way it can, not to help the United States or any country obtain energy independence. The industry is simply using the energy independence idea to get the public and policymakers to go along with increased drilling on public lands and sensitive areas as well as relaxation of environmental regulations. The industry's plan all along has been to sell any oil and gas it extracts to the highest bidder. If the industry were truly concerned about American energy independence, it wouldn't spend its time seeking permission from the federal government to ship oil and gas abroad.

We can look to Canada for an example of what happens when the oil and gas industry essentially determines energy policy. Canada produced 2.9 mbpd of crude oil in 2011. It consumed 2.3 mbpd of petroleum products. The country is the world's ninth largest exporter of crude oil and petroleum products. And yet, Canada imported 43 percent of its oil needs. That's because it's more profitable for the industry to ship Canada's oil--mostly produced in the western part of the country--south to the United States to be refined. Canada's provinces from Ontario eastward import 65 percent of their petroleum needs from overseas, meaning that a country that could easily be energy independent is subject to supply shocks from abroad.

The idea that we can ever truly achieve energy security based on commodities traded in worldwide markets is nothing but a clever deception--one designed to keep us from doing what we really need to do, namely, reduce our reliance on fossil fuels and vastly expand alternative energy production such as solar, wind and hydroelectric that cannot easily be exported across oceans.


Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he writes columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin, The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, October 07, 2012

How we misjudge the risks of oil depletion and climate change

This is the sixth of a six-part series introducing readers of The Christian Science Monitor to concepts useful in understanding the Resource Insights blog. Selected posts from Resource Insights are now appearing regularly on the Monitor's Energy Voices blog. To read the previous installments of this series click on the following: Part 1, Part 2, Part 3, Part 4, Part 5

Many people dismiss the risks associated with oil depletion and climate change--even many who accept the two issues as problems. They judge those risks to be small or at least manageable. Since no one can know the future, we cannot be sure whether they are right or wrong. But even if they are right, should we be so sanguine? As we examine this question, keep in mind that we are talking about probabilities and the level of risk, not absolute knowledge which none of us can have about the future.

One reason that so many people discount the risks of oil depletion and climate change is that their experience tells them to do so. We've had high oil prices and tight oil supplies before, and always new supplies and declining prices followed. For many we are just in another market cycle, and there's nothing to be worried about. And, when it comes to climate change, well, we've had hot summers before and even if the climate is warming a bit, we'll adapt.

Both these observations are subject to what's called the problem of induction. In a nutshell, we believe that because a certain event has reliably repeated itself in the past or because certain conditions have prevailed for a long time, we can always expect more of the same in the future. If that were true, there would come a point in our lives when we would never be surprised. But as it turns out, humans are continually surprised, which shows you that the problem of induction lives on.

The classic illustration is the statement: "All swans are white." The statement may be based on thousands, even millions of observations. But, this would not prove that it is true. This is because we cannot possibly observe all swans for eternity. And, it takes only one swan which is not white to prove the statement false. As it turns out, Europeans only realized that this statement was false when they landed in Australia and saw black swans.

So, just because high oil prices in the past have eventually led to low oil prices does not necessarily mean they will this time. Oil is a finite resource. At some point it will never be plentiful again. Has that point come? Is that even the question we should be asking? I'll elaborate below.

When it comes to climate, the globe's warming temperature is an indisputable fact, something that even reluctant oil industry CEOs now accept. So the question for them and for us is whether we can adapt or whether we should try to stop the rise in global temperatures.

Even last summer's intense drought in the United States, dryness in the growing regions of South America and Russia, and wildly wet weather in Great Britain still seem not to have made climate change a priority. Food prices may well exceed their all-time highs of 2008. Yet, we humans are like the man plunging from a 100-story building who, when asked how things are going as he passes a 50th-floor window, replies: "Fine, so far."

This oft-cited illustration shows in a humorous way that we humans are frequently oblivious to dangers that are right in front of us, but which for some reason we cannot immediately sense or comprehend. We base our assessment of risk on the past (in this case the 50 floors from the top traveled so far). The result is that we assign a probability of harm that is too low.

But even if the probability of severe peril from a future ongoing, permanent decline in oil supplies or from climate change is actually small, should we ignore that probability? Let me provide another illustration which may be familiar to many. Let's say that you are offered a free trip to your favorite vacation destination. You are told that the plane arrives safely 95 percent of the time. The other 5 percent of the time it crashes. Pretty good odds, right? Of course, not. You would never board such a plane. You would decline the flight and gladly pay your own way on another safer flight, that is, if you still wanted to go.

So, even a 5 percent chance that you will die on a routine plane flight is too big a risk to take. Yet, the world's political leaders and peoples have been given convincing evidence that the chance that unchecked climate change will imperil the very stability of modern civilization is far more likely than 5 percent. True, it's not certain that this will happen, but then every forecast is uncertain. The question is: How do we handle this uncertainty?

Let me provide another illustration. When it comes to home fires, every sensible person knows how to handle the risk: purchase insurance and take steps to reduce the chance of a fire. At yet, fires that warrant the filing of an insurance claim remain exceedingly rare. So, given the low probability of such an event, why do we insure against it? We do so, of course, because even this very low probability event can have catastrophic consequences should it occur.

And, this frames the proper understanding of risk. Risk is not just about probability; the proper measure of risk is probability times severity. Measured this way, small probability events that are expected to have severe impacts become worthy of preparation.

Oil production will certainly start to decline some day. We know this in advance because oil is a finite resource. There are warning signs, an emerging plateau in world production since 2005 and persistently high prices. These are not definitive, but they are worrisome. Given that a rapid, unexpected decline in oil availability has shocked us before, and given that oil continues to be the central commodity of our age--supplying a third of our energy, 80 percent of our transportation fuel, and the basis for innumerable chemicals essential to modern society--given all this, can we not conclude that a persistent decline in oil supplies might be civilization-wrecking if we are not prepared for it?

We know that climate is changing. The record lows in Arctic sea ice are probably the most telling and troubling result. This ongoing warming at the poles affects weather patterns that already have and will continue to threaten crop yields around the world. We are almost completely certain--nothing is absolutely certain in science--that human activity is the main cause of climate change. It is not a leap to conclude that continuing on our current course has a definite, but not precisely calculable risk of undermining the stability of our society.

Whether you believe that severe outcomes are certain, merely probable or very improbable if our behavior does not change, you are forced by a proper evaluation of risk to agree that at least something ought to be done; the possible outcomes include ones that are simply unacceptable.

We never make policy or even personal decisions based on absolute certainty. Instead, we do formal and informal assessments of the risks of any given path based on the information we have at the time. No one--not you, not me, not the pundits, not the oil industry, not the government, not the world's scientists--can have certain knowledge about future oil supplies. The same applies to the future of climate change. We can, nevertheless, describe the severity of possible outcomes. From a policy and preparedness point of view, benign outcomes need not concern us much. In the case of oil supplies and climate change, however, the possible outcomes include some which are truly alarming.

There are too many variables and unknowns to calculate precisely what the chances are for an irreversible decline in oil production starting, say, by 2020. There are too many variables and unknowns to calculate precisely the course and exact severity of climate change. But our understanding of the possible extreme outcomes should tell us that we need to do a lot to address both problems and soon.

Even if we could calculate that the chances were merely 5 percent that one or both problems might result in civilization-shaking outcomes, it would behoove us to take steps to head off possible disaster--just as we would step off a plane that we know has a 5 percent chance of crashing before it reaches its destination.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he writes columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin, The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.