The one thing you need to know about the president's plan to address climate change

The one thing you need to know about President Obama's plan to address climate change is that the most it will accomplish is slowing very slightly the pace at which the world is currently hurtling toward catastrophic climate change. Having said this, his plan is nonetheless a brave and even historic move in a country whose political campaigns and public discourse have been utterly poisoned by the science-free propaganda of the fossil fuel industry.

I would be more enthusiastic about the president's baby steps if the devastating droughts and floods and swiftly melting ice in the polar regions and mountain glaciers weren't telling us that drastic action is necessary right now. Nature doesn't really care about the timetables of politicians or about what is politically feasible. Nature doesn't negotiate, and it doesn't compromise. The laws of physics and chemistry cannot be repealed or altered by the Obama administration, the United States Congress or any other body. And, these physical laws are deaf to complaints about the negative economic consequences of addressing climate change--consequences that will be far worse if we do nothing about climate change.

But let me return to the goal announced by the president and put his plan into perspective. Using existing executive powers--mostly through the U.S. Environmental Protection Agency which the Supreme Court affirmed in 2007 has the power to regulate greenhouse gases--the Obama Administration will endeavor to reduce the RATE of greenhouse gas emissions in the United States to 17 percent below the RATE in 2005 and do this by 2020. It's a relatively easy target because half the reduction has already taken place. In recent years electric utilities have been changing from coal to cheaper and cleaner-burning natural gas to fuel their plants, and drivers, stung by unemployment and high gasoline prices, have reduced their driving.

I've put the word "RATE" in all capitals above because this one word gets to the heart of the matter. The plan does NOT propose to reduce the absolute concentration of carbon dioxide in the atmosphere, the major greenhouse gas which recently topped 400 parts per million (ppm). Instead, that concentration would continue to rise--even though it is increasingly evident that we must now reduce that concentration (some say to below 350 ppm) in order to avoid the worst.

The proposed decline in the rate of U.S. emissions would only reduce the overall rate of world emissions by just 1.6 percent based on 2011 emissions figures (using carbon dioxide as a proxy for all greenhouse gas emissions). Of course, other countries will have to do their part if we are to succeed as a species in addressing climate change. But it is worth noting that while the United States is home to just 4.5 percent of the world's population, it currently produces 16.8 percent of the world's carbon dioxide emissions. (The 2011 emissions were 5.49 billion tons for the United States and 32.58 billion tons for the world.)

I often refer to climate change as a rate problem. By this I mean that the rate at which we are dumping greenhouse gases into the atmosphere exceeds the rate at which the planet can remove them. Because the rate of emissions has consistently exceeded the rate of absorption by the Earth since the beginning of the industrial revolution, the absolute concentration of greenhouse gases has steadily risen. (The oceans, the forests, and the weathering of rocks are responsible for almost all of the carbon absorbed from the atmosphere. Were it not for these, the atmospheric concentration of carbon would be about twice what it is today, and we would long ago have have passed into a planetary emergency.)

Now, logic tells us that the only way we are ever going to get the absolute concentration down is to make it so that the rate of emissions falls below the rate of absorption by the Earth. And, that would require a drastic cut in the rate of emissions by more than 50 percent. But if we are to avert catastrophe, we must go much further so that the concentration can be brought down before a permanent new climate regime gets established. In other words, human survival depends on avoiding the tipping point in climate change that would render any human action ineffectual.

(Keep in mind that time is of the essence because climate change lags by 25 to 50 years the emissions that cause that change. We are only now experiencing climate change caused by greenhouse gases emissions between the early 1960s and the late 1980s. Even if all emissions ceased today, we would be in for another generation or two of warming.)

The oft-used phrase "tipping point" in this case refers to self-reinforcing loops in Earth processes that once started cannot be stopped by human action. Perhaps the most troubling example is the release of carbon dioxide and methane in the Arctic from the permafrost. The permafrost is now melting at an alarming rate and releasing greenhouse gases from the decay of dead plants formerly immune to such decay because they were frozen. The amount of carbon contained in the permafrost is nothing short of stupendous, twice as much as is currently in the atmosphere. The methane portion of any release is at least 20 times more potent than carbon dioxide in warming the planet .

Once this vicious cycle gets going, it will be unstoppable as warming temperatures melt more permafrost which then releases more greenhouse gases which then increase the temperature which means further melting and so on until the globe reaches a new stable climate that is much, much hotter than our current one.

But this isn't the only self-reinforcing loop that imperils us. Another is the declining albedo or reflectivity of the Earth at the poles as snow and ice disappear more frequently from larger and larger land and water surfaces as a result of rising temperatures. Snow and ice have high reflectivity and return much of the Sun's light to outer space. But land and water absorb much more of the light and turn it into heat which then melts adjacent snow and ice which creates ever larger areas of heat-absorbing open ocean and exposed land surface.

It's no wonder then that many scientists are calling for an 80 to 90 percent reduction in the rate of emissions by 2050. It's not simply about slowing warming. It's about stopping and possibly reversing it so as to stay away from climate destabilizing tipping points.

I haven't even touched on a subject which seems almost taboo, even among policymakers who are eager to tackle greenhouse gas emissions from utilities, factories, homes and vehicles. Meat production is so energy intensive that it is estimated to contribute about 18 percent of all greenhouse gas emissions each year. Telling people to reduce their meat intake, however, could prove to be even more unpopular than telling them to drive less or to lower their thermostats in winter.

And, deforestation--primarily in the world's rainforests--contributes nearly as much as meat production each year to climate change, about 15 percent of world greenhouse gas emissions. Felled forests cease to absorb carbon dioxide and instead emit it as the waste wood and other dead biomass left behind decays.

The application of nitrogen fertilizers, essential to the so-called green revolution around the world, releases copious amounts of nitrous oxide, a potent greenhouse gas. Today's large human population would not have been possible without nitrogen fertilizers which played a leading role in raising crop yields. It is thus going to be difficult to reduce nitrogen fertilizer use.

Then, there are several industrial gases. These compounds are extremely long-lived in the atmosphere--one lasting up to 50,000 years--and they are very potent, three of them exceeding the warming potential of carbon dioxide by more than 10,000 times. Some have been banned. Others are still in use. While their small concentrations in the atmosphere means that their contribution to climate change remains small, they are nevertheless worth addressing.

So, any credible climate change response must also address these other sources of emissions as well. The president's plan does touch on deforestation, but only briefly. The word "meat," however, does not appear anywhere in the report. In fairness, the president of the United States does not control world forests, nor can he change American farm policy--let alone American eating habits--single-handedly. While hydrofluorocarbons--used to replace now banned ozone-layer killing chlorofluorocarbons as refrigerants--are mentioned, nitrous oxide, a major greenhouse gas, is omitted. Yes, agricultural practices are mentioned, but the use of nitrogen fertilizers is THE major agricultural practice alongside meat production that generates climate warming gases.

The public needs to understand that the sources of greenhouse gas emissions are far more varied than most realize. And, the public also needs to understand that declines in the rate of emissions--unless very steep--are likely to be too little, too late. That's because it is the absolute concentration of greenhouse gases in the atmosphere that largely determines the climate. And, this concentration needs to start falling soon if we are to make certain that we avoid a climate catastrophe.

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.

Will Israel's rush to export natural gas turn out to be a mistake?

As the United States contemplates exporting natural gas to the rest of the world, previously energy-poor Israel seems about to jump on the export bandwagon. The current government is seeking approval to export about 40 percent of the production from its newly discovered offshore natural gas fields.

In an era of high volatility in energy prices and supplies and in a country surrounded by unfriendly neighbors, one would think that Israel would want to keep this valuable energy prize all to itself. Current estimates suggest that the remaining 60 percent of production will allow Israel to supply all its needs for 25 years.

My question is: What will the country do after that? Presumably it will need natural gas after 25 years. And, what if estimated reserves turn out to be too optimistic and the supply doesn't last that long? No one really knows what's in a reservoir until it is actually produced.

What if the current steep rise in the rate of natural gas consumption continues for a number of years? Estimates stated in years of supply are usually based on the current rate of consumption. But if the rate of natural gas consumption continues to accelerate, the 25-year supply will shrink to a fraction of that number and the inevitable peak in production from these fields will occur even sooner. Moreover, additional supplies are unlikely to come--at least at favorable prices--from any of Israel's neighbors.

Wouldn't Israel benefit from maintaining a lower rate of natural gas production in line with its domestic needs so as to stretch out supplies as long as possible? Of course, it would. The country's energy security would be greatly enhanced if its natural gas supply could be assured for, say, 40 years instead of 25 (though the period is likely to be quite a bit less if consumption continues to rise).

So, who benefits from overproducing natural gas for export? The private companies involved in the drilling and extraction of the gas, of course. It is in their interest to produce as much as they can as soon as they can in order to reward their management and stockholders. As if to put an exclamation point on this interpretation, Bloomberg reported that one of the partners in the project, Delek Group Ltd., is swimming in debt and desperately needs the extra sales that exports represent to make its debt payments.

Though the Israeli Parliament is expected to act on the proposal to export natural gas, it could just as easily pass legislation that would restrict flow rates from these reservoirs. For a country as sensitive about its security as Israel, it is surprising that no apparent consideration has been given to this approach.

There are dissenting voices. But my guess is that the interests of the private companies involved in natural gas exploration and production will be given precedence over the long-term security needs of Israel. And, I expect this to happen very shortly.

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.

Results may vary: Beware of kaleidoscopic vision in the oil and gas industry

If you've ever looked at the elements that create the images in a kaleidoscope, they are unremarkable: pebbles, beads and bits of colored glass, all mixed together. But when seen through the viewing end of the device, this mixture creates the illusion of pleasing, colorful and multiple identical designs where, in fact, there are none. It's done with mirrors; and the illusion is convincing to the eye as it looks through the narrow tube that connects it with the mirrors and the colored items on the other end.

Like children looking through a kaleidoscope who are unaware of its actual workings, the media and the public have been misled into believing that early production results in the shale natural gas and tight oil formations in the United States will be repeated again and again across the United States and the world. This has led to exuberant forecasts of energy independence for the United States, an end to the dominance of OPEC in world oil supplies, and fossil fuel abundance for decades to come.

Two important trends cast doubt on this naive view. First, in the United States, home of the hydraulic fracturing "miracle," domestic natural gas production has been flat since January 2012. The shale gas revolution may well be over in the United States as the current production level becomes increasingly difficult to maintain in the face of ferocious decline rates for shale gas wells--rates that range between 79 to 95 percent after just three years according to a comprehensive survey of 65,000 oil and gas wells in 31 U.S. shale plays. This means that at least 79 percent of all shale gas production must be replaced every three years just to keep shale gas production flat! With shale gas making up more than 34 percent of all U.S. production in 2011, merely keeping overall domestic production stable will be a formidable task and, given these decline rates, one with no historical precedent.

Further undermining the abundance narrative, U.S. crude oil production has gone almost flat since October 2012. This is not a long enough period to indicate anything definitive about the trajectory of domestic crude production. But, it comes at a time when reports from newer tight oil plays in Ohio and Colorado have proved hugely disappointing. Ohio pumped just 700,000 barrels of oil from its tight oil fields for all of 2012, an amount being pumped daily from the same kind of fields in North Dakota. In Colorado several years of development of tight oil have only been able to raise production statewide by about 100,000 barrels per day.

The U.S. Energy Information Administration recently fanned the flames of exuberance once again with a recent reassessment of the potential for shale gas and tight oil production worldwide. Inattentive readers, however, might miss that this report referred to "technically recoverable" resources, ones that are thought to be recoverable using current technology, but not necessarily profitable to recover at current prices. In addition, the EIA was careful to point out that its estimates are highly uncertain and subject to change once actual drillbits provide better information where little currently exists. Beyond this, it is important to remember that "resources" refer to sketchy estimates of what might be in the ground whereas "reserves" are what can be extracted profitably at today's prices from known fields using existing technology. "Reserves" are and always have been only a tiny fraction of "resources." Hapless journalists often fail to understand the difference as they did in this case.

A discreetly placed disclaimer reading "results may vary" often appears in television commercials showcasing people who've made millions following the investment advice being touted or who've lost scores of pounds using the exercise machine on offer. A more conspicuous "results may vary" warning ought to come with every new piece of information about the potential of this or that new shale gas or tight oil play.

If the U.S. experience is supposed to forecast the world, then the evidence so far suggests a boomlet followed by frantic efforts just to keep production level. But in some cases, such as Poland, the results have been far worse as heavily touted prospects have turned out to be duds.

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.

Taking a break -- No post this week

I've been traveling all week and so am taking a break from my regular Sunday piece. I plan on posting again on Sunday, June 16.

'Mad Men', energy and the culture of want

The name of the popular American television series "Mad Men" comes from the nickname given to those who worked in New York City's advertising agencies in the 1950s. The nickname came from the advertising profession itself whose members felt that one had to be a little mad to work on Madison Avenue, the center of the advertising business.

But, there is nothing particularly mad about the role of advertising in society, and it should really be looked upon as the logical conclusion of the long process of rationalizing modern economic life--a type of economic life which arose simultaneously with the widespread use of fossil fuels.

Through burning fossil fuels we are unlocking extremely dense forms of accumulated ancient sunlight. It may not seem like we have an almost completely "solar-powered" society today; but, we do if you count the ancient solar power stored in oil, natural gas and coal. These fuels come from microscopic sea life and plants which were pressurized, heated, and then transformed underground or under the seabed over tens of millions of years very long ago during what is now referred to as the Carboniferous Period. We are quickly drawing down the Earth's stored solar energy in the form of fossil fuels at a rate that is thought to be anywhere from 100,000 to 1 million times their rate of natural formation. For this reason fossil fuels are on any human time scale finite.

Returning to the mad men of advertising, we find that they are only the culmination of a process which evolved to deal with something rarely seen in human history--persistent and rapidly growing surpluses of basic resources such as food, fiber and minerals and the manufactured goods they make possible. These surpluses were in turn made possible by persistent and growing surpluses of energy, energy derived primarily from fossil fuels. After all, nothing gets done without energy, and growing energy supplies allow more and more to get done.

Historically, the process of handling these surpluses began with the rationalization of production, the organization of working men and women into large coordinated work groups in vast industrial complexes. A steel mill is a good example. This form of organization was a radical change from the decentralized craft shops which had dominated handicraft production for centuries.

The new form of production came from the necessity of matching human intelligence with new energy-hungry machines that performed repetitive tasks without the need for rest. The resulting production was prolific and allowed mass production of identical items for households and businesses--items that were increasingly affordable to an ever larger number of people. This was the rationalization of production.

Next followed the rationalization of distribution. Mass production in central locations necessitated an elaborate new system of distribution which the railroad made available. Only by the middle of the 20th century did the newly-built interstate highway system in America and other similar systems elsewhere enable truck freight to eclipse rail freight for long-distance transport. Such systems would not have been possible without cheap supplies of fossil fuels.

The rationalization of distribution also took the form of department store chains that standardized offerings from city to city. In addition, there were catalog sales, most aptly illustrated by the introduction of the Sears catalog, an innovation that allowed rural residents to purchase and have delivered to their homes many of the same kinds of merchandise which America's city dwellers could buy at department stores. The Internet has simply put the catalog online.

Finally, the persistent surpluses of the fossil fuel age necessitated the rationalization of consumption. So much could be produced by the industrial infrastructure and delivered by the modern rationalized distribution network that customers needed to be prompted to buy not just necessities, but also what were formerly considered luxuries. Beyond this, many new gadgets were becoming available as well. How could all this be sold?

Enter the rationalization of consumption. In its simplest terms, it meant getting people to buy things which they didn't need or, at least, which they didn't yet know they needed. An entire profession emerged to engender want--engender it in a society in which fewer and fewer people were experiencing anything which could be characterized as genuine want. The solution was to invent wants and communicate them through the mass media to the consuming public in an effort to stimulate consumption. Most of these wants were linked to various forms of status seeking. The excess production made available through the rationalization of production and distribution could now be sold to an increasingly insatiable consuming public.

The traditional farm economy lives on a yearly solar energy budget. The wants of inhabitants of such an economy are bounded by that budget in the form of the crops its produces, the wood it makes available, and animals it feeds. But the industrial economy knows no such bounds. Its inhabitants do not think in terms of limits but of limitlessness. The modern industrial economy trades on dreams of ever more.

Long ago Aristotle noted a similar difference in attitudes about commerce between farmers and merchants. Today that difference has been obliterated as farmers have been brought into the industrial economy through something which, not surprisingly, we call industrial farming. In a way we have all become merchants, selling our skills and what we produce to someone else rather than consuming what we make.

The puzzling thing about this process is that the resulting plenty does not seem to have increased human happiness commensurate with the increase in consumption. In fact, major measures of human well-being level off at about 100 gigajoules of energy consumption per person per year. For context, each American consumes about 330 gigajoules per year.

It turns out that human happiness is more elusive than merely meeting basic wants and then meeting them over and over again at higher levels. How much food can one person eat without becoming sick? How many cars can one human drive? How many homes can one person actually live in? An individual can own a lot more than he or she could ever actually use and enjoy and may do so for status reasons. But, the rush of displaying of one's superior status only lasts so long and must be renewed by additional purchases as others obtain goods that confer status equal to one's own.

Which brings me back to "Mad Men" the television series. This is a story about people who have everything materially, and yet they are miserable. And, these very same people peddle a story of satisfaction through accumulation even as they themselves seem to achieve very little lasting satisfaction.

The television series is a tragedy not only about American life--which has advertising at its very core--but also a tragedy about capitalism, a system that has created so much wealth, while proportionately creating so little happiness to go with it.

The work of the "mad men" of advertising is utterly rational in its purpose: Get consumers to soak up the excess production that capitalism inevitably creates. But, the work of these men (and women) may be mad in the sense that it contributes in a highly visible way to a system that is neither ecologically sustainable in the long run nor delivers the human happiness it promises in the short run.

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.

Life, energy, the universe and everything

In Douglas Adams' science fiction series, The Hitchhiker's Guide to the Galaxy, a computer dubbed Deep Thought discovers the "answer to the ultimate question of life, the universe, and everything." After seven and one-half million years of computation, it spits out the answer: 42. The story goes on to explain that the answer is inscrutable because the beings who programmed Deep Thought didn't know what the ultimate question was.

That seems a fitting place to begin exploring my slightly expanded version of Adams' question, namely, the answer to the question of life, energy, the universe and everything. It is, of course, hard even to know what question is being asked. But, for me it is a question about the structure and purpose of life in the universe. Adams discusses (humorously, of course) the ultimate question in one of his later novels. Here is the Wikipedia version of that discussion:

In Life, the Universe and Everything, Prak, a man who knows all that is true, confirms that 42 is indeed The Answer, and confirms that it is impossible for both The Answer and The Question to be known in the same universe (compare the uncertainty principle) as they will cancel each other out and take the Universe with them to be replaced by something even more bizarre (as described in the first theory) and that it may have already happened (as described in the second).

My point is that attempts to answer ultimate questions often devolve into nonsense, sometimes humorous nonsense and sometimes just boring nonsense. Let's see if I can at least avoid the boring nonsense.

From a purely physical point of view humans, and in fact, all life, are ideal mechanisms for collapsing energy gradients. An energy gradient is simply a span of space in which the heat content is higher at one point than another. As you might surmise, the universe is chock full of energy gradients, and they can be exploited to do work for us: to grow crops, mine minerals, manufacture goods, transport those goods, and provide the myriad comforts that constitute modern life.

The energy gradient most important to humans is the one spanning the distance from the Sun, a giant thermonuclear furnace, to the Earth, a coolish, rocky planet. With a universe of countless stars and planets, this example suggests that life is likely to be quite prevalent across the cosmos. In fact, the Second Law of Thermodynamics--the one that tells us that entropy is moving us toward a universe of less and less order and thus one seemingly less and less amenable to life--actually favors the formation of life because life itself depends on the energy gradients which are the basis of the Second Law.

All well and good then. We could stop here and announce that the overarching cosmic purpose of human beings is to collapse energy gradients by dissipating the energy they provide, energy that allows us to live and conduct our daily business. We need only eat and then burn the calories by walking to get into a vehicle which in turn burns more energy and then go somewhere to buy something produced by a factory that is busily collapsing energy gradients for a profit. We could also just sit at home burning calories at our basal rate of metabolism--perhaps with the furnace or air conditioning on--in order to get similar results. We are mere agents of the Second Law of Thermodynamics, remorselessly carrying out its dictates to move the cosmos continuously toward a more and more entropic state--one that will end with the heat death of the universe in which all energy is evenly distributed, meaning no energy gradients exist. Without the gradients, essentially nothing happens, nothing changes.

(For a full and captivating account of the relationship of life to energy, I recommend reading Into the Cool.)

At the other end of the spectrum, humans are considered the vessels of consciousness, perhaps the only living beings to have self-awareness including an awareness of their own inevitable death. We know thoughts exist because we have them. And yet, they are dimensionless abstractions, objects without weight or substance.

Our purpose in life, according to many contemplative traditions, is to ponder the universe in order to understand it and in order to commune with it in some profound way. Some traditions, however, seek to manipulate the universe to our liking. The scientific method is a contemplative tradition of sorts that seeks to apply what we learn about the workings of the universe in order essentially to speed up the degradation of energy gradients in pursuit of greater control over our environment. This presumably leads to better lives that come from that control. On the other hand, the mystic religious traditions seek to gain a direct apprehension of the mystery of the universe, one beyond words and thus inexpressible except through the changed attitudes and behaviors that result from such enlightenment.

The description of these two paths is a bit more inspiring than the description of humans as mere agents of the Second Law of Thermodynamics. But, both depend on that law and our role in collapsing energy gradients.

What is being called into question today is not our basic need to live on the energy gradients available to us on Earth. No humans can exist without such gradients or be blamed for doing what nature designs humans to do, namely, to seek out those gradients wherever they are and use them to enhance our survival and our ability to propagate. This innate drive actually forms the basis for what we call culture: art, architecture, music, and literature. Without high degrees of energy dissipation, such cultural emanations would not be possible for we would all have to live close to the land and eke out a bare existence.

As it turns out, surpluses--that is the extra energy that farmers produce in the form of food and fiber and that which those who extract energy-bearing minerals such as coal, oil, natural gas, and uranium produce beyond what they need for themselves--are the basis of civilization. Surpluses have allowed at first a few and now a huge number of people to carry on livelihoods that merely consume the surplus. The ancient Romans achieved a complex culture and empire powered by the Sun in the form of surplus wheat and Mediterranean winds for sail transport. Today, of course, we've built our complex civilization using energy-dense fossil fuels that vastly enhance our production of food and that power a worldwide mining, manufacturing and logistics system.

What is being called into question today are both the rate at which we are exploiting the Earth's available energy gradients and the sources of those gradients. In practical terms, this means the rate at which we are consuming the nonrenewable energy resources mentioned above and the rate at which the fossil fuel portion of those resources is spewing climate changing gases into the atmosphere.

In part, it is a question of goals. Our avowed goal these days is to grow continuously the rate at which we collapse energy gradients. This gives us what we call wealth and is believed to increase our well-being. The second assertion is the object of hot dispute and the center of our inquiry here.

Alan Watts, the great interpreter of Zen to the West, liked to point out that we don't sing a song or dance a dance to get to the end. These pursuits are enjoyable in their process, not their completion. The arts are often characterized as the highest fruits of civilization, and yet, they represent pursuits which are good in and of themselves, and not for some purpose outside of themselves. We enjoy beauty for itself, not in order to get something done. Beauty is the end, not the means.

The huge amounts of work which we can get done by exploiting the energy gradients available from fossil fuels and uranium have caused us to become overly concerned with means. We can now accomplish so much that we spend very little time contemplating what is worth accomplishing. Almost everything becomes an instrument to accomplish something else, all in the service of raising the rate at which we collapse energy gradients which is thought to lead to wealth which, in turn, is thought to lead to well-being.

The argument which we are now engaging in and will be forced to engage in for a long time is this: What rate of exploitation of the Earth's energy gradients is sufficient for a good life? Our answer for the past century and a half has simply been "a higher rate." And yet, on its face this answer has no qualitative component. That higher rate has included devastating pollution and destruction of the natural landscape; the possibility of catastrophic climate change; vast economic and social inequality and the social and geopolitical tensions and violence that go along with them; and endemic illness borne of degraded diets poisoned with chemicals that are said to reduce crop loses from weeds and insects. The list is very long indeed. Many of the tasks we do, which use up some available energy gradient, seem to make things worse for us, not better.

So, is there some optimum rate of energy gradient exploitation? Again, it depends on one's goals. If the goal is to extend the continuity of the human species far into the future, then the answer is a rate far below the current one--a rate commensurate with the rate at which renewable energy can produce power. If the goal is to throw the biggest, most energy-intense party ever thrown, then the rate must be increased. But the consequence of that will be a far shorter reign for humans, or at least for the technical civilization we've built. That civilization remains almost entirely dependent on nonrenewable fuels that must someday start to decline and take our current civilization with them--unless, of course, we drastically restructure our civilization before that day by, for instance, greatly reducing our rate of energy use.

But, moderation has gotten a bad name in the age of fossil fuels and uranium-235. We imagine that moderating our consumption will leave us poor and unhappy, partly because a century of advertising has convinced us of this. But moderation and even asceticism have long and venerable histories. There are, of course, the religiously-inspired ascetics who report that living simply actually increases one's happiness. Essentially, what they are saying in energetic terms is that lowering the rate of exploitation of energy gradients is good for the soul.

Moderation has a nonreligious heritage, too. Epicureanism, first and foremost, refers to an ancient Greek school of philosophy that, contrary to popular understanding, proposed moderation in all things in pursuit of a pleasurable life. It preached that overindulgence can lead to pain and suffering and thus the opposite of a pleasurable experience. (For a contrasting Greek school of philosophy, see the Cyrenaics who emphasized the intensity and immediacy of physical sensation as the primary avenue to a pleasurable life.) Epicureanism is thus another form of lowering our rate of exploitation of energy gradients, but in this case, in order to heighten our pleasure--for the long term, of course.

I offer these last two ways of thinking about our energy use to suggest that the idea that humans are evolutionarily designed ONLY to seek out ever more energy gain may be flawed. Clearly, there is a portion of humanity that understands that maximum energy gain does not necessarily coincide with maximum happiness. Indeed, excessive energy use may actually reduce one's happiness suggesting that perhaps OPTIMUM energy gain would be a better goal.

We humans are by our very nature energy dissipating structures. As it turns out, the rate of energy dissipation that makes for a good life is a persistent question in philosophy--just not put in those terms. Our age is now obliged to face quite directly what rate offers maximum happiness or at least maximum satisfaction--taking into account the broadest meaning of those words including the desire to belong; to love and be loved; to experience the full range of physical, emotional and spiritual experiences available to humans; and even the desire for meaning itself.

I don't suspect you've been laughing at my exploration of the issue of ultimate meaning as you might at Douglas Adams' fictional and facetious quest for the same. But, I hope you have at least been entertained. I can't help but focus on my role as a dissipative being. It's really what I write about every week. But in the end, that focus is too narrow to capture the experience that is being human. In fact, I don't think there are any words or concepts that can easily summarize what it is to be human and what constitutes a good life. The universe and our place in it remains as ever unfathomable.

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.

Will the International Energy Agency's oil forecast be wrong again?

The famous Danish physicist Niels Bohr once humorously observed, "Predictions are very difficult, especially about the future." And so, as the world considers yet another rosy oil supply forecast, this time from the Paris-based International Energy Agency (IEA), it is worth reviewing the agency's record.

Back in the year 2000, the IEA divined that by 2010, liquid fuel production worldwide would reach 95.8 million barrels per day (mbpd). The actual 2010 number was 87.1 mbpd. The agency further forecast an average daily oil price of $28.25 per barrel (adjusted for inflation). The actual average daily price of oil traded on the New York Mercantile Exchange in 2010 was $79.61.

(The IEA included in its 2000 supply projections not only crude oil plus lease condensate, which is the definition of oil, but also natural gas plant liquids--only a small fraction of which can be substituted for oil--and refinery processing gain which is the result of applying energy to break oil into its components, causing the final volume to expand. The agency refers to the resulting number as "oil" supply. But, clearly this number is not really just oil supply, and this practice continues to confuse policymakers and the public.)

So, what made the IEA so sanguine about oil supply growth in the year 2000? It cited the revolution taking place in deepwater drilling technology which was expected to allow the extraction of oil supplies ample for the world's needs for decades to come. But, deepwater drilling has turned out to be more challenging than anticipated and has not produced the bounty the IEA imagined it would. This is not to say that it hasn't been a critical adjunct to world oil supplies. It's just that deepwater oil production hasn't been able both to make up for declines in production elsewhere AND grow supplies beyond that--something that has resulted in a bumpy plateau for world oil production (crude plus lease condensate) starting in 2005.

Now, the IEA tells us that a "revolutionary" new technology called hydraulic fracturing--actually, a newly deployed variant called high-volume slick-water hydraulic fracturing--is going to cause what it calls a "supply shock" that spells ample and rising oil supplies. But, despite years of such drilling in the United States--which the agency says will be the center of this "shock"--world oil prices remain near all-time highs as measured by the average daily price. And, world oil production (crude plus lease condensate) has only occasionally bounced above 75 mbpd in the last seven years before retreating downward.

Perhaps the IEA means that using these new techniques to unlock so-called light tight oil deposits beyond the United States will bring about this supply shock? Nope. The report states specifically that over the forecast period through 2018, the IEA does not expect significant development in other countries of these deposits using the new type of hydraulic fracturing.

Perhaps the agency noticed the withdrawal of ExxonMobil Corp. last year from Poland. The company said it could not find commercial quantities of hydrocarbons in what had been billed as Europe's most promising shale gas deposits. Shale gas, of course, is extracted using the same fracking techniques as tight oil. And, both oil and natural gas tend to appear together in such deposits.

And then, just prior to the release of the IEA's latest forecast, Talisman Energy Inc. and Marathon Oil Company pulled out of Poland as well for similar reasons.

The point is not that there is no exploitable tight oil or shale gas outside the United States. Rather, the quality of those resources varies far more than the industry has led the public to believe. At first, the oil and gas industry portrayed such deposits as subject to what it called the "manufacturing model." The notion was that a company could drill anywhere within known deposits and extract commercial quantities of oil and/or natural gas.

The reality is far different. Even in the United States--the center of the putative boom--drillers have ended up focusing on a few "sweet spots" that yield commercial quantities of oil or natural gas. These can represent as little at 15 percent of the total area of the formation.

The IEA seems to be unaware of certain key information that is publicly available or doesn't understand the significance of that information. And, the agency doesn't seem to remember what it said in its last forecast. Here is a sampling:

• The production decline rate of hydraulically fractured tight oil wells is around 40 percent PER YEAR in the two most prolific plays, Eagle-Ford in Texas and Bakken in North Dakota. This means that drillers must replace 40 percent of last year's production capacity EACH YEAR before they can increase the overall rate of production from their tight oil wells. The average annual production decline rate for existing wells worldwide is around 4 to 5 percent. Essentially, the IEA doesn't appear to understand that it is expecting oil extracted from wells that decline at a rate 10 TIMES FASTER than average wells worldwide to make up for worldwide declines elsewhere AND provide significant growth in world oil supplies. But, the agency apparently did not look at publicly available well data from each state to determine annual decline rates and their implications for future supply. The IEA seems simply to have taken self-interested industry forecasts on their face--forecasts made with an eye toward engendering confidence among investors and lenders and thereby pumping up the value of lucrative stock options held by company insiders.

• The IEA expresses concerns about adequate infrastructure for the tight oil producers. Yet, the agency does not seem to be aware that the oil producers in the Bakken play refused to support a pipeline that would have given them their first pipeline access to major oil centers, preferring instead to rely on rail transport. Contrary to their public pronouncements, could it be that the oil producers don't really believe they have enough oil in the long term to support a pipeline and therefore did not want to make long-term shipping commitments to a pipeline company? Perhaps the oil companies would rather saddle the railroads with the capital costs of new tank cars so the oil producers won't be on the hook for any long-term infrastructure costs associated with transporting their oil.

• The IEA talks about a surge in U.S. natural gas production. Yet, it seems unaware that natural gas production in the United States has been flat since January 2012 even as domestic gas prices rose from $1.82 per thousand cubic feet to above $4 today. The so-called shale gas boom has ended, and we are now finding out just how costly it will be to bring that gas out of the ground. Correspondingly, the rate of extraction will not be so great as promised either.

• In just a few months time, the IEA has dramatically altered its view about the trajectory of world consumption of liquid fuels. Its 2012 World Energy Outlook released in November prophesied that world demand would reach 99.7 mbpd by 2035. The more recent report mentioned at the beginning of this piece, the Medium-Term Oil Market Report, now projects that world demand will reach 96.7 mbpd just five years from now, implying a growth trajectory far in excess of that projected in the agency's 2012 report.

• The IEA says it does not forecast prices and then tells us it uses the futures prices for its model. What its model implies is continuing high prices for oil and oil products. The IEA makes no attempt to understand the effect that high prices have on the world economy and its ability to grow under such circumstances. Nor does it address the dampening effect of high prices on demand, calling into question its projection of rapid increases in demand.

• The IEA then tells us that so-called oil production "capacity," the basis of which is never described, will grow faster than demand. This would imply falling prices as excess capacity overhangs the oil markets. But that would mean that the high prices which it agrees are needed to extract tight oil profitably would disappear. So, how would this allow tight oil volumes to grow dramatically if extraction is unprofitable or only marginally profitable? This contradiction is never addressed.

• Burning all the known reserves of fossil fuels would put us on a path to a climate catastrophe, something the IEA acknowledged in the executive summary of its 2012 World Energy Outlook saying, "No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2°C goal, unless carbon capture and storage (CCS) technology is widely deployed." CCS technology is not being widely deployed, nor is it likely to be. By contrast the agency's most recent forecast reads like a promotional brochure for the North American oil and gas industry. How does that square with the agency's concern about climate change?

It's not unusual for government-sponsored organizations such as the IEA to be given contradictory directives, in this case, to promote adequate energy supplies and also to warn about climate change. There has been little mention of this contraction in the media because the media has focused on what it perceives as sensational news about oil and natural gas supplies in North America.

Given that focus, it is troubling that neither the agency nor the media have bothered to revisit past forecasts. It turns out such forecasts fail so often that it's puzzling that the media, governments, corporations, and the public put so much faith in them. Those whose plans were based on the IEA's 2000 forecast were completely blindsided by developments just a few years later.

We would be much better served by looking at what we know right now from publicly available figures about actual trends. It's not as exciting as dramatic predictions about a future of plenty--or one miserable from want. But it's a far firmer basis for sound policy.

UPDATE: Not surprisingly, it is the foreign press which is reporting signs of fatigue in the tight oil boom in America. The American media has been thoroughly bamboozled by the industry. See "US shale boom starts to fade" in the Australian publication The Age.

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.

Why the renewable energy industry ought to support U.S. natural gas exports

U.S.-based industries and utilities that consume a lot of natural gas have been trying to figure out just how to respond to proposals in Congress to allow expanded natural gas exports, a move that could significantly raise the price of one of their chief inputs.

But, there is one segment of U.S. industry that ought to be cheering for such an outcome--though I doubt that its leaders will be offering their support in anything above a whisper. The renewable energy industry would benefit from higher natural gas prices--and higher coal prices, for that matter--since, as these fuels for electric power plants become dearer, renewable energy sources become more competitive. The costs for renewables are in the production and installation of the solar panels, wind towers and dams; the fuels--sunlight, wind, and water--are essentially free.

But it would seem almost unpatriotic to cheer for higher energy prices in America. Higher prices--all things being equal--tend to depress economic activity. And, higher energy prices also tend to make American goods less competitive on world markets by increasing the costs of many inputs. Hence, my observation that the titans of the renewable energy industry will probably stay largely mum in the fight over expanded exports of U.S. natural gas.

But there are good reasons for the American public to shoulder the burden of higher energy prices now to help build a more secure future. First, climate change is already on course to destroy the way of life that Americans say they want to preserve. Second, there is no chance, NONE, that fossil fuels can sustain American society and the world in the long run. Only renewable energy can offer the promise of essentially perpetual supplies.

This second reason tells us that we must make an energy transition at some point. And, given the uncertainties about fossil fuel supplies and the wars and conflicts they engender, it would be wise to make that transition as soon as possible. In addition, history has shown us that energy transitions can take two generations. No one can say for certain whether fossil fuel supplies can continue to grow or even remain stable for 50 years to see us through such a transition. And, we will need to use fossil fuels to build the renewable energy economy. If we use them instead simply to have one last energy orgy, there may not be enough left to build the renewable energy infrastructure needed to replace them.

But the first reason, climate change, tells us that we must embark on the needed energy transition now. We cannot wait to see how things turn out. The melting of sea ice and the tundra tells us that time is up. Extreme droughts and floods--predicted by climate models--have already arrived and are the cause of soaring food prices and extensive property damage. Since the effects of warming lag by about 40 years--because the oceans take so long to warm--we are only seeing the effects of greenhouse gas emissions through the early 1970s. Even if we stopped emitting all greenhouse gases today, we'd still have 40 or so more years of warming ahead of us.

The best and most precise way to encourage energy conservation and a renewable energy buildout would be a steadily rising carbon tax. But, in the absense of sensible energy policy, it might now be time for those concerned about the ongoing delay in building the renewable energy economy to embrace world prices for all energy here in the United States.

Coal and oil already trade at world prices in the United States since they can be shipped to the highest bidder worldwide. (Even though crude oil exports from the United States are restricted, we produce far less than we consume and the effect is the same as if we had no restrictions.) Natural gas is essentially trapped on the North American continent because there are currently no operating export terminals that can liquefy the gas for transport by special liquefied natural gas carriers. Some export terminals are planned, however, and one is actually being built now in Louisiana.

There will be a fierce battle fought over just how much natural gas should be allowed to leave the United States for more profitable markets in Europe and Asia. And, that battle might be fought against the backdrop of rising prices as current wells deplete rapidly without adequate drilling to replace them.

Some will say that rising natural gas prices will cause utilities to switch back to coal. But, a switch back to coal en masse by utilities seems unlikely given the emerging regulation on greenhouse gas emissions. Instead, utilities are increasingly likely to favor renewables to help  them to comply with those regulations.

In whatever manner higher prices are achieved, they will be better for America in the long run since they will hasten the day when the country can say goodbye to fossil fuels as its main energy source and reroute them to more valuable and critical purposes. Those include making fertilizers, pharmaceuticals, fabrics, industrial chemicals, and plastics of all kinds, all of which are far better uses of oil and natural gas than simply burning them and wrecking the climate in the bargain.

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.

Patient contrarians: The natural gas market isn't what it seems

Maybe it's the gloomy Seattle weather that has made investment manager Jim Hansen and his son and partner, Kevin, at Ravenna Capital Management immune to oil and gas industry hype about the supposed U.S. shale gas "revolution." More likely it is thorough research focused on making their clients money and keeping that money out of harm's way.

The Hansens are patient contrarian investors whose time horizon is generally several years. They can't help you if you want advice on next week's or next month's natural gas price. In fact, they're not sure anyone can reliably help you with that. So they focus on much longer-term trends, and they think they've spotted one in the U.S. natural gas market.

About a year ago when domestic natural gas prices hit levels reminiscent of the 1990s, they began to move their clients into natural gas related investments. Amid the media hype about cheap natural gas for decades, they saw a different reality.

They believed that high production decline rates in shale gas wells--which now provide about 40 percent of U.S. production--were combining with rapid reductions in the drilling of new wells in a way that would eventually cause falling production and sharply rising prices. They weren't exactly clear on the timing. But, with their patient strategy, they just needed to sit and wait for what they felt was the inevitable.

"We are long-term investors and include investments that allow us to get paid to wait," Jim Hansen said, referring to securities that generate regular payouts to holders.

A year after their call, they have seemingly been vindicated as natural gas rose from a low of $1.82 per thousand cubic feet in April 2012 to over $4 currently. Prices might dip again, Jim Hansen added, but for long-term investors the trend still looks good.

What clues led the Hansens to their contrarian views? Kevin explained in one phrase: Look at what the industry does, not what it says.

While hyping the future of natural gas, the industry was doing the following:

1. Organizing their natural gas gathering systems into master limited partnerships and selling them to investors.

2. Selling producing acreage to foreign investors who, believing the hype, generally overpaid.

3. And when gullible foreign investors got wise, selling land packages at rock bottom prices when many companies were desperate to raise cash to meet their debt obligations.

Despite industry protestations to the contrary, all these things told Kevin Hansen that the industry "could not have been profitable." His views were eventually verified by none other than Rex Tillerson, CEO of ExxonMobil Corp., who told an audience in late June last year, "We are losing our shirts [on natural gas]."

Just recently one chastened industry executive, Matt Fox, ConocoPhillips' executive vice president of exploration and production, let slip what price level might entice companies to increase U.S. natural gas drilling again. During an April 25 conference call with analysts he had this exchange with analyst Blake Fernandez:

Fernandez: Okay. Great. Secondly, I guess it's on the natural gas side, I always view Conoco as having probably more leverage than peers do, U.S. Natural Gas, and certainly that creates some optionality. Obviously, we haven't heard anything on increased activity just yet, but is there a certain price that we should ear-mark as say, $5 [per] MCF where maybe you would begin to increase activity there?

Fox: We do have a lot of potential there, to invest. But we're really focused in on investment now on the liquids-rich assets [oil wells and also natural gas wells that yield large amounts of higher value ethane, propane, and butane] and of course we get associated gas [gas associated with oil wells] with that so we benefit from the gas price there. I would say that I wouldn't see us redirecting any capital towards gas assets until it's significantly north of the current prices. (emphasis added)

Apart from the awkward geographic analogy so popular on Wall Street these days--"north" simply means "higher"--it's not clear what "significantly" means. But since the questioner already offered the figure of $5, both Hansens believe Fox meant higher than that.

The general problem that Kevin Hansen sees is that oil and gas companies are going to continue to prefer to drill oil wells as long as the price of crude floats near the $100 level. They will be reluctant to redeploy drilling rigs to natural gas fields until higher gas prices have been sustained for quite some time, perhaps several months and maybe longer.

But with the rapid production decline rates in shale gas wells already bringing storage down below the 5-year average and more than 30 percent below year ago levels, both Kevin and Jim Hansen expect production to undershoot and prices to overshoot, perhaps dramatically, before a ramp up in new drilling begins in earnest. That means very high volatility in the U.S. natural gas market in the not-to-distant future.

Add to that any of the obvious pulls on natural gas supply--a very hot summer (electricity demand from natural-gas-fired power plants), a very cold winter (heating demand) or a hurricane (damage to gas production in the Gulf of Mexico)--and you have the makings of a true crisis in supply. Even absent any of these, they expect prices to jump significantly in the coming two to three years.

So, what do things look like after we pass through the crisis? Kevin explained that he expects the natural gas price to settle at levels much higher than today. And, those prices will bring out the supply needed to meet demand. The exploitation of the country's large shale gas resource will then proceed in a more orderly fashion for several years.

But, dreams of vast, cheap supplies, say, at around $3 or $4 per thousand cubic feet, will be gone, and, with it plans for many new natural gas export terminals. Kevin believes that most of the export terminals now on the drawing board will never get funded. The math works like this: Export terminal operators generally work under cost-plus contracts. If the U.S. benchmark Henry Hub natural gas price is consistently at or above $6, then it won't be particularly competitive in Europe, an obvious market for U.S. liquefied natural gas (LNG).

After purchase it costs about another $6 to liquefy the gas, ship it and then regassify it. With European LNG prices currently running around $12 that would make U.S. imports only just competitive. Will buyers want to commit themselves to long-term cost-plus contracts with U.S. suppliers when prices have shown themselves to be so unstable as he believes they will be in the coming supply crunch?

Other pie-in-the-sky schemes that depend on cheap natural gas are likely to whither as well. He cites South African energy and chemical giant Sasol's dream of building a so-called gas-to-liquids plant in Louisiana, one that would turn natural gas into diesel and other products.

Given the high production decline rates, he believes that once U.S. shale gas resources are tapped out, "it's 2005 all over again." The country will be faced with declining natural gas production as it was in 2005, but this time with no relief in site. And unlike the industry, he doesn't think that scenario is decades away. Take the "s" off of decades, he says, and you'll likely be closer to being right about the timeline for America's next rendezvous with persistently falling domestic natural gas production.

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.

The only true metric of energy abundance: The rate of flow

Okay, I'm going to give you the shortest course ever in energy abundance: Energy abundance depends entirely on the RATE of energy flow. Let me say it again: Energy abundance depends entirely on the RATE of energy flow.

Now, here is what it does NOT depend on: supposed, but often unverified, fossil fuel reserves in the ground; hypothetical, sketchy, guesstimated, undeveloped, undiscovered resources imagined to be in the ground by governments or by energy companies and often deceptively referred to as "reserves"*; claims about future technological breakthroughs; mere public relations puffery about abundance in the face of record high average oil prices.

Why is the rate of flow the key metric? Because in order to function the global economy depends entirely on continuous, high-quality energy inputs. We cannot shut down the world's electric generating plants for six months or even three months without crashing world society into a state of irretrievable chaos and decline. We cannot shut down the world's shipping fleet for even a few weeks without doing irreparable harm. Modern global society has become like a shark. It either keeps barreling forward or it dies.

Fossil fuels that are actually proven to be in the ground are by definition not currently being used, whatever we may consider their potential. Fossil fuels that are hypothetical and undiscovered by definition cannot be used. Technology is NOT energy. Technology runs ON energy. Energy first, then applied technology. The ancient Romans designed and built small steam engines and used them to animate children's toys. But, the Romans lacked the dense energy sources needed to make steam engines practical as a mode of transportation or of power for manufacturing.

Now, why am I making such a fuss about all this? Because this week we have yet another entry in the ongoing energy misinformation derby, this time from the usually sensible Atlantic Monthly magazine. In fairness, the headline on the magazine's cover which reads "We will never run out of oil" was probably not chosen by the author for it does not really respect the nuances found in the piece which inside has the only slightly less disinformational headline: "What If We Never Run Out of Oil?" The subheading makes the astounding claim that fossil fuels may not be finite making me believe that the editors didn't actually read their own story.

The editors are, of course, trotting out the tired canard that the opposite and urgent claim that we are running out of oil is made by those skeptical about oil abundance. But, the real claim from skeptics is that the RATE OF FLOW may begin to decline sometime in the not-too-distant future. Oil will be with us for a very long time, just not at these levels of production. If the rate of flow for oil declined by half in the next 20 years, we wouldn't be running out of oil at all. We'd still be pumping about the same amount as we were in 1967, a year of exceptional economic vitality. But, we'd feel the crunch because there are twice as many people on the planet now as there were then. And, the per capita consumption of oil has risen considerably since that year.

The Atlantic Monthly article does include some dissenting voices. But Charles Mann, the author of the piece, has missed the two most crucial points about the future supply of oil and natural gas. First, new unconventional sources of these hydrocarbons are more difficult and costly to extract than conventional ones. In addition, the unconventional well flows exhibit very steep declines in their rate of production--so steep that in the tight oil fields of Texas and North Dakota drillers must replace about 40 percent of their production PER YEAR just to maintain current output. The decline rates for shale gas are no more encouraging: 79 to 95 percent after three years according to a comprehensive survey of 65,000 oil and gas wells in 31 shale plays. Shale natural gas and tight oil drillers face a task similar to climbing up a down escalator. Each must replace enormous fractions of their current production frequently just to keep production flat. A path to persistently rising global production of oil and gas far into the future cannot be built on production from such fields.

Already, the shale gas production boom in the United States has ceased as natural gas production has been flat since December 2011 despite the more than doubling of natural gas prices from their lows in April 2012. World oil production has been on a bumpy plateau since 2005. Mann seems unaware of stalled natural gas production in the United States, and he failed to take into account the total picture of oil flows. Some 60 percent of current production flows come from aging giant fields representing just 1 percent of the world's fields, and as a group they are in decline. Production from all existing oil fields worldwide is believed to be declining at a rate of about 4 to 5 percent. We are trying to make up that decline from tight oil fields that decline around 10 times faster, and we are only just succeeding for the moment. Failing to understand the centrality of flow rates is such an elementary error that it is hard to believe that the Atlantic Monthly missed it.

But there's more. The affordability of hydrocarbons will also matter greatly. Gail Tverberg has outlined in detail on her blog Our Finite World how the high price of hydrocarbons tends to suppress economic activity which then leads to a downturn that then causes oil and natural gas prices to fall due to falling demand. That fall in prices makes unconventional sources of oil and natural gas uncompetitive leading to a slowdown in their production even as production from conventional sources continues to decline. As prices rise with economic recovery, we begin the same cycle again. This suggests that there is a limit to how much of the modern economy's financial and physical resources can be devoted to extracting energy without causing an economic contraction--something that the shark-like nature of the modern financial economy cannot withstand without the kind of severe repercussions we saw in 2008.

The Atlantic article makes one more misleading claim even as the author admits to a bias formed in 1998 while working on a previous energy article. He didn't correctly foresee the promise of experiments with hydraulic fracturing that led to the shale gas and tight oil production boom. Like a racetrack junky who bet on the wrong horse in the first race, the writer doesn't want to miss the next winner. But, he makes a faulty analogy between the new form of hydraulic fracturing and current pilot projects designed to harvest natural gas from methane hydrates, essentially natural gas trapped in ice crystals, most of which lie in deep ocean sediments. A successful test that produced natural gas from this source off the Japanese coast in 3,000 feet of water and 1,000 feet below the seabed has the energy optimists atwitter with talk of virtually unlimited natural gas supplies.

But, attempts to extract natural gas from methane hydrates should more properly be compared to the search for methods to extract oil profitably from the vast oil shale deposits in the western United States. After more than a century of trying, no one has been able to produce oil commercially from these deposits. It may happen someday at much higher prices and in very limited quantities given all the constraints. Not the least of those constraints is the water necessary to process what is not actually oil, but kerogen, a waxy, long-chain hydrocarbon that requires considerable energy and water to convert into what we call oil. Even the ever optimistic U.S. Energy Information Administration projects that by 2030 these deposits may produce only 140,000 barrels a day of what will essentially be synthetic oil. That compares to current world consumption of around 75 million barrels per day of crude oil plus lease condensate (which is the definition of oil).

As for methane hydrates, researchers have tried for decades to figure out how to extract the methane profitably and without causing the occasional explosion--a hazard encountered by companies drilling for conventional deepwater gas when they hit hydrates on their way to sought-after conventional reservoirs. As with oil shale, there are known methods now for extracting these gaseous hydrocarbons from methane hydrates. The remaining questions for both oil shale and methane hydrates are similar: How high must prices go before extraction of either will be profitable? So far, the answer is higher than what people will pay and therefore what the economy can stand. And, at what rate will we be able to get these resources out? Rate is the crucial question.

When it comes to oil shale, we know where it is. It's just that it costs so much to extract and process that we are not producing it commercially. When it comes to methane hydrates, however, we do not even know if the deposits are numerous enough or concentrated enough to make substantial commercial production possible. To pin our hopes on this has the makings of dangerously foolish energy policy.

I am not attempting here to address the climate implications of natural gas production from methane hydrates and shale, nor those of oil extraction from tight oil deposits or oil shale (kerogen). Needless to say, if the optimists somehow turned out to be right, burning all these hydrocarbons would lead to almost certain climate catastrophe. But, we are in bad enough shape as it is without compounding inaction on climate change with a misdiagnosis of oil and natural gas supplies.

Despite our best efforts, we have only just been able to keep oil supplies from declining in the last seven years. Despite (possibly exaggerated) claims that we have more oil reserves than ever, we need to remember that the rate of flow, that is, our daily consumption, has grown by a factor of eight from 1950 to the present. And, half of all the oil ever consumed has been consumed since 1985. The available reserves may be large, but they are being consumed at such a colossal rate that supposedly record reserves have been unable to lift that rate appreciably above a plateau that started in 2005. The result has been record average prices for oil worldwide for two years running. Rate is and always will be primary in evaluating our energy wealth.

While natural gas supply worldwide is likely to grow for a time, the cost of this new supply--especially if most of it comes from shale deposits and possibly methane hydrates--will be far higher than the optimists would wish. And, that has the kind of implications cited above for affordability and thus demand.

We seem to have hit a double wall that is both financial and physical when it comes to the flow of oil and natural gas. If we remain ignorant of the first principle of energy abundance, that flow rates are the key metric, then we will be doomed to bad energy policy and other serious consequences that flow from that ignorance.

*Reserves are properly defined as resources that can be extracted from known fields using existing technology and sold profitably at today's prices. Reserves are thus a tiny fraction of "resources," the estimates for which are actually vague, sketchy guesses about the amount of a substance present in the Earth's crust in a given area.

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.