Ireland

1
Irelands Response to theLooming World Energy
Crisis

• by
• Colin Campbell
• ASPO

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Background

• 1951-7 Studied geology at Oxford
• PhD on Connemara geology
• That started a long love affair with Ireland
• 1958 - Joined the oil industry
• Exploration geologist in Latin America
• 1972- 90 Executive, Europe, Norway
• Pioneered Irish exploration venture 1972-76
• 1990 Retired - if that is the word

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On a mule in Colombia in 1960
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Outline

• Geological background
• You have to find it first
• Depletion is easy to grasp
• Why and how self-evident reality has been
  concealed and confused
• A Devastating Realisation
• Irelands Response

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News Flash
53 New York October 11
But may crash with Recession
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PETROLEUM GEOLOGY in3 Minutes
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Extreme Global Warming gave excessive Algal
Growths
90 150 million years ago
Organic debris
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And then came the rains
Trough filled by sediment
Chemical reactions converted organic debris into
oil when buried heated
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North SeaOil GeneratingTrends-Where oil is
and where it is not
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Migration of Oil
2. Escape
Surface of the Earth
3. Oilfield
1.Dissipation
2
3
1
Oil generation at 2000m depth
Source
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Critical Temperature 60-120 0C
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A Fixed Quantity

• Oil was formed in the geological past
• You cant grow more
• Running Out? Not the main issue
• We started running out with the first barrel
• The last barrel is far in the future
• But production begins to decline when half is
  gone - THAT IS THE ISSUE

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Why we need to know

• Oil Gas now dominate our lives
• 40 of traded energy is oil
• gt90 transport fuel is oil
• Trade depends on transport
• Much electricity from gas
• Critical for agriculture
• fuelling the tractor
• synthetic nutrients and pesticides
• pumping irrigation

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Why were nt we told?

• Oil companies reported financial reserves to
  meet strict stock exchange rules
• They under-reported revised upwards over time
• A comforting but misleading image of steady
  growth
• No conspiracy, just simple commercial prudence
• Those days are over - the Shell debacle
• OPEC over-reported as they competed for quota
  based on reserves
• PUBLIC NUMBERS - VERY UNRELIABLE

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OPEC Reserve Revisions Change From Remaining Rese
rves To Total Found
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Reality and Illusion
Illusion
Inflexion due to falling Discovery
Reality
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US-48
Peak to Peak 40 years
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Egypt
Peak to Peak 30 years
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Indonesia
Peak to Peak 32 years
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Russia
Peak to Peak 27 years
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United Kingdom
Peak to Peak 25 years
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Real Discovery Trend
Past discovery by ExxonMobil
Past after ExxonMobil
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Draining the tanks - Regular Oil
150 Yet-to-Find
Surprise
Filling at 3.75 p.a
?
920 Produced 1700 DISCOVERED 780 Remaining
Emptying at 22 p.a.
Billion barrels
One in - Six out
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Where is it?Regular Oil
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All Oil Gas
All boundaries fuzzy
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The Devastating Realisation

• So, oil will soon be in terminal decline
• Gas follows a few years later
• Colossal Impact
• Economy - stockmarket crash inevitable
• Society
• Politics
• Environment
• We are totally unprepared

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End of the First Half of Oil Age

• First half lasted 150 years, stimulating
• Industry
• Transport trade
• Agriculture people
• Growth of financial capital
• Second Half dawns, meaning decline of oil
• And all that depends on it
• Including Financial Capital
• Spelling Recession - Depression

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Population
?
First Oil Well
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But World begins to wake up

• This has been evident for years but denied
• We faced malign influence of Economists with
  outdated principles and practices
• Now at last, high prices force admission by
• World Energy Council
• International Energy Agency - obliquely
• Even BP (long bent on denial) now confesses
• US prefers military conquest of oil to cutting
  excessive demand

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What this means for Ireland

• Small population but high per-capita oil use
• USA- 27 barrels a year per person
• Ireland- 15.6
• Europe Average- 13.1
• India- 0.9
• Gas - critical for electricity
• Slim chance of finding more oil or gas

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Irelands Electricity

• Priority in the early days of the Republic
• Shannon Hydro-electric scheme
• Rural electrification by ESB
• Electricity came to Ballydehob in 1951
• It was a National Priority
• But then the CELTIC TIGER stalked in by dead of
  night sold out to the Market

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Irelands Electricity fuel
Gas
Coal
Oil
Peat
Renewables
85 Imported !
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Gas Supply

• At first, Kinsale Head field supplied enough
• Then tapped into the UK hypermarket
• UK over-produced and prices fell
• But the Celtic Tiger could easily afford it
• Now we plan to half-privatise the ESB
• stimulating yet more consumption
• The Regulator tries even to cut costs to consumer
• But without a thought for the future.

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Gas - the unexpected cliff
Hidden Spare Capacity
No market signal of cliff
Production Plateau
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Irelands gas balance
UK net export ends
At HighRisk
Kinsale
Corrib
With flat demand
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Where will gas come from ?

• Britain becomes a net importer - from
• Norway
• Siberia
• Central Asia, Middle East, N. Africa.
• Many hungry transit countries in between
• Ireland at the end of the line
• Will Britain re-export to Ireland ?
• When she needs all she can get
• and at what price?

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A Grave Crisis in the Making

• This is a major crisis in the making
• the lights will go out unless something is done
• An economic recession affecting everyone
• The Government seems blissfully ignorant
• Misplaced faith that the market must deliver
• Relies on bad advice form IEA, EU
• It needs to use the short time left to prepare
• Everyone needs to know and contribute

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Plan of Action

• Fund a small office to study properly
• Launch a programme of public education
• Dont wait for Brussels
• It is an investment giving Ireland a strong
  competitive edge
• Take a lead in a World Depletion Protocol
• Back the 2005 Lisbon Initiative

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Solution-1 Stop waste

• Domestic and industrial energy audits
• Charges to penalise waste reward savings.
• A modest cheap ration but high price for excess
• Better insulation industrial heat recovery
• Disallow energy costs as a charge against tax
• Stop tax-free aviation fuel
• More public transport

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Solution-2 Turn to Renewables

• A solar collector on every roof
• Capture massive tidal and wave energy
• Wind-power and hydro-power
• Biomass - wood pellets from forestry
• Geothermal
• Heat pumps modern light bulbs
• Even nuclear ? (New small fail-safe plants)

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Solution-3 Secure sources

• Dont close coal power - clean it
• Negotiate with Norway (and other places) for
  privileged access to oil and gas.
• Irelands needs are modest and could be met
• Pay premium to-day for security tomorrow
• might still be time to buy into oil and gas
  fields
• Fill the tanks on Whiddy Island
• Build terminal for Liquefied gas

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Consequences - Silver Linings

• A new regionalism
• Local markets
• New attitudes return to the land
• People live in better harmony with
• themselves
• each other
• the Environment in which Nature has ordained them
  to live

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The Celtic Fox thrives in Ireland The Tiger
belongs to the Zoo