While DoE is complacent, DoD worries about Peak Oil

Last Sunday the Guardian carried a review of a recent report by the United States Joint Forces Command in which, hidden on page 29, lies the statement:

By 2012, surplus oil production could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 mbd.

The report bases this conclusion, in part, on the poor discovery rate that has been achieved in finding new oilfields to replace those that are beginning to run out of oil. Looking at the alternative sources of energy, it is not convinced that they provide a viable short-term alternative, given the rising levels of capital cost required for their installation at considerable scale, and thus notes and concludes that:

A severe energy crunch is inevitable without a massive expansion of production and refining capacity. . . . . .Fossil fuels will very likely remain the predominant energy source going forward.

It also notes that if the energy problems drive the world into another Depression, that this might lead, as it has in the past, to the rise of totalitarian regimes that sought prosperity by “ruthless conquest.”

The caveat that I have between these two statements is that, grim as they are, they don’t really recognize the totality of the problem. Simplistically energy has two major uses, one is the creation of electric power, and the other is to provide the motive fuels for transportation. The two uses are disparate, and while oil can be used to generate power, in large measure this has been left to coal and natural gas, while oil has been transformed into the various liquids that power cars, trains and aircraft. At the moment there is not a significant volume of world transport that uses coal and natural gas to drive their vehicles. Nor realistically, apart from the campaign by Boone Pickens, is there much move to change the situation.


As some influential parties in Britain perhaps begin to understand that world oil supplies are finite, and beginning to run short, this does not yet appear to affect the Departments either in the UK or the US whose job it is to be concerned and to find ways of answering the problem.

Gail Tverberg’s review of Secretary Chu’s remarks at the Energy Conference in Washington last week, identified that there is no concern in the Department of Energy over coming shortages, and thus the Department can:
a) rely on the market to solve any problems
b) continue to be more concerned about addressing the climate change issue and
c) invest in longer term research which might provide answers in a decade or so.

The Department of Defense does not live in such a world. And it has heard rumblings of concern from earlier reports by the JASON group about rising costs, given that the Department can purchase up to 101 million barrels of fuel a year, and 145 million barrels of total petroleum products as noted by a recent Congressional Research Service Report. When the price of fuel rises, then the officers in charge have to re-adjust their budgets to cope, sometimes at the cost of the overall objectives. New technologies take years, even decades, to implement, and thus answers cannot be left to “blue sky” thinking alone. And older technologies may not be able to muster enough of an answer to meet the demand. I have seen nothing that yet convinces me that the world will be able to produce more than 90 mbd of crude oil and associated fossil liquids. Thus the projection that the world will need over 118 mbd by 2030 reinforces the implication that we’d better start looking for serious answers with a lot more intensity than we have to date.

There is at least some signs that people are beginning to pay attention, recognizing that there is a risk that there may not be enough jet fuel, the Air Force has begun to check out new fuel sources. Next week is Earth Week, and the Green Hornet, an F/A-18 Super Hornet, will be flown with a mixture of 50% regular fuel and 50% biofuel from camelina. The Navy is intent on moving the program forward.

The 'Green Hornet' initiative supports Mabus' energy reform targets, which will increase warfighting capability by reducing reliance on fossil fuels from unstable locations and reducing volatility associated with long fuel supply transport lines. The secretary's energy reform targets include:

- By 2016, the Navy will sail a "Great Green Fleet" composed of nuclear ships, surface combatants with hybrid electric power systems using biofuel and aircraft flying on only biofuels.

- By 2020, at least half of the DoN's shore-based energy requirements will come from alternative sources and half of total DoN energy consumption will come from alternative sources.

"[The flight] will demonstrate that our systems can work on biofuel," Mabus said in his remarks at a recent energy forum at the Johns Hopkins Applied Physics Lab in Laurel, Md. "After it is successful, and we are absolutely confident that it will be; we will move to expand biofuel testing to our marine gas turbine engines and to the engines of our tactical vehicles."

The problem may be in ensuring an adequate supply. As I noted in the earlier review of camelina, it is not getting rave reviews from the farmers that will have to grow it, nor from the State Agricultural Departments that must approve farmers growing either it or canola.

Oregon officials in 2005 restricted canola-for-oil production in the valley to protect the valley's high-value vegetable seed crops. Officials recently announced they are going to renew the prohibitions.
"I would like to grow canola, but the state interferes with that, too," Van Leeuwen said.

Fears are canola will attract insect pests common to canola and brassica crops and that canola will cross pollinate with cauliflower and broccoli, lowering seed purity and eventually driving vegetable seed contractors out of the valley.

There has, however, been a recent MOU between the UDSA and Navy and the Commercial Airlines Alternate Fuels Initiative to examine the potential of camelina as a crop, though there are already some concerns

Preliminary results from Sidney, Mont., suggest that current camelina varieties use about as much water as spring wheat, so growers would still need to leave land fallow in alternate years to build up water or accept possible yield losses for wheat grown in rotation. However, with appropriate breeding and selection for uniform, desirable agronomic and oil quality characteristics, camelina has potential to be a good oil seed crop for planting during fallow years.

In the face of potential problems for any solution, it would appear wiser for those who should be looking to solve this problem to take their collective heads out of the sand and start to be a bit more constructive in their thinking.

Camelina - a relatively new US biodiesel source

So what the heck is Camelina? Until I read that it was used as the greater source of the biofuel component for the test flight of the Japanese Airlines plane in February I must confess I had never heard of it. So since it has obviously got some legs (there was a greater percentage of it than of the algae derived fuel) herewith some thoughts picked up as I wandered through some Web pages, seeking more information.

Camelina in a Montana test plot

Apparently it came to the United States out of Europe, though it started out in Central Asia and the Mediterranean. In Europe much of the early cultivation of the crop has been replaced with canola fields, and it appears to compete with it as a crop. It arrived in Montana in about 2004 where it appealed both to farmers – as a source of omega-3 fatty acids, and to researchers who were looking for a source of biodiesel. The early work suggested that it could be sold more cheaply ($2 a gallon in 2005) than soy-generated biodiesel ($3 a gallon), but a cheaper price is hardly guaranteed to induce farmers to grow it. The oil has historically been used for cooking, with the meal fed to animals.

Recent interest in the plant was spurred by the omega-3 content

there is renewed interest in Camelina for its oil which is rich in the omega-3, alpha-linolenic acid (ALA).Ironically, this quality had contributed to its decline, due to difficulties with hydrogenating the highly unsaturated oil for margarine. Linseed (60% ALA) and Camelina (45% ALA) oils are by far the richest plant sources of omega-3.Rapeseed has lower levels of ALA (10%) and sunflower almost none. Camelina oil is more stable than linseed, due to its natural antioxidants, which also have health benefits in their own right.

It is a branch of the mustard family, and has the benefit over canola in that it is resistant to flea beetles, which are a problem for canola in Montana. Like canola it prefers cooler climates;for greatest yields being planted before the 15th – 20th March in Montana with harvesting in Late June to late July. (Similar dates hold for planting and harvesting in Wales.) Thus in 2006 there were somewhere between 7,000 and 20,000 acres planted in Montana, in 2007 this grew to 24,000 acres. It also has the benefit, over canola, of being able to survive drought and spring freezing. Further there is a winter variety that can be grown in areas with mild winters. The report from Montana State describes the oil content as:

Camelina oil has unique properties. The oil contains about 64 percent polyunsaturated, 30 percent monounsaturated, and 6 percent saturated fatty acids. Importantly, camelina oil is very high in alpha-linolenic acid (ALA), an omega-3 fatty acid which is essential in human and animal diets and has important implications for human health. The oil also contains high levels of gamma-tocopherol (vitamin E) which confers a reasonable shelf life without the need for special storage conditions.

In comparison to canola (rapeseed) which produces some 127 gal/acre camelina is reported to produce in the 62 to 100 gal/acre range.

Field trials of production showed a wide range of results from 330 to 1700 lbs of seed per acre, with oil content varying between 29 and 40%. There are however a significant number of varieties of the plant and thus tests have been carried out to determine which might yield the better crop given the Montana growing conditions. Optimal seeding rates seem to be in the 6-8 lb/ acre range, because the small size of the seed (400,000 seeds per lb.) apparently make it more difficult to ensure germination and achieve an optimal plant density of around 9 plants/sq. ft. It does apparently grow better when the ground nutrients are supplemented with nitrogen up to levels of 80 lb/acre.

The Montana report ends with the following

At this point there are many more questions than answers when it comes to camelina production and use. Early experience in Montana has shown that with good management, and timely planting, good crop yields can be attained. As a broadleaf cool season crop, camelina could become a good complementary crop to wheat, providing a needed break from cereals in wheat production. Crop rotation is a great way to reduce disease and insect pressure for any crop, and there are few good economic crop rotation options for wheat in Montana. Weed control is a major limitation to camelina production. Currently there are no herbicides registered for use with this crop, which means rescuing a field that becomes infested with weeds is difficult.

However varieties of the plant produces its own herbicide.

Data on crop production is still somewhat limited since the USDA did not start data collection until 2007, and the 2008 report was issued this April. Production in Montana in 2008 was significantly down (at 12,200 acres) over that of 2007. The average yield was 569 lb/acre, down 4.8% over 2007, though the range from 400 to 1000 lb/acre makes it unlikely that any conclusion can be drawn from those numbers.

The Welsh report comments on the current extraction process

Camelina typically contains approximately 35% oil. Cold pressing is not 100% efficient, the proportion of oil extracted being dependant on the type of seed and how well the press is set up.

As an example, a tonne (1000 kg) of Camelina will contain 350 kg of oil, of which the press will extract 250 kg. Cold pressing (400C) is required, because high temperatures will damage the antioxidants. Drought, lack of sunshine during seed formation, herbicide desiccation applied too early, and downy mildew infection may all lower the oil content of the seed.

In Wales they can get up to 1 t/acre.

Oregon is considering growing the crop after looking at trials in nearby states

Under dryland conditons in Montana, camelina is expected to yield 1,800 to 2,000 pounds of seed per acre in areas with 16 to 18 in hes of rainfall and 900 to 1,700 lb/acre with 13 to 15 inches of rainfall. Under irrigation, seed yields of 2,400 lb/acre have been reported. Three years of yield trials at Moscow, Idaho show a 2,100 to 2,400 lb/acre seed yield potential with 25 inches of rainfall.

. At present there are restrictions on the growing of canola in Oregon

Oregon officials in 2005 restricted canola-for-oil production in the valley to protect the valley's high-value vegetable seed crops. Officials recently announced they are going to renew the prohibitions.

"I would like to grow canola, but the state interferes with that, too," Van Leeuwen said.

Fears are canola will attract insect pests common to canola and brassica crops and that canola will cross pollinate with cauliflower and broccoli, lowering seed purity and eventually driving vegetable seed contractors out of the valley.

Camelina may overcome some of those concerns.

So my quick look suggests that it about on a par with canola (rapeseed) with some survival benefits over that plant as a crop, that it is only just being introduced into the United States as a crop and that, while it has potential, and there are some productive strains identified, it is still a little early in the game to know if it will pan out quite as well as the Biofuels Digest suggests.

The Changing oil supply perspective - opening lecture class note changes

It’s the start of a new Semester, and at the beginning of my Power class I spend the first lecture reviewing where I think we stand on the Energy supply to the United States. This has changed a bit since last year and so I thought I would run through some of the changes that I made to my lecture this year, in the same way as I did on TOD last September. Since the greatest impact is likely to come from the changing sources of supply that the US has had to go to, with the change in levels of production, I began with this slide:

Sources of Oil imported to the US in May 2009 (EIA)

It is interesting to see the relative amounts from Mexico, Saudi Arabia and Russia and the first thing to note is the decline in Mexican supply, brought about by the dramatic drop in production from Cantarell. (H/t Nate Hagens).

The peak and decline of Cantarell – where Mexico got most of its oil.

That drop has already shown up as a decline in Mexican exports to the US of over 800,000 bd. At this point I introduce them to the Export Land Model (ELM) of Jeffrey Brown, which basically points out that after a nation’s economy has grown (and oil consumption with it) during the high production years, then as oil production declines (as above) it is the export market which suffers more, as the country retains more of its product for its own use.

Export Land Model (ELM) of Jeffrey Brown, showing the more rapid decline of exports, as production falls in a country, yet internal demand continues to rise.

While Mexico is the most dramatic example of this at the moment, it is important to consider Russia next. We used not to get much oil from Russia, but as the table above shows, that situation is changing. (Russia to the Rescue was the theme of a made for TV movie Oil Storm back in June of 2005, where they sent us a couple of oil tankers which “saved the day”. At the time $75 a barrel for crude and $4 per gallon for gas was considered to only happen if the US was damaged by a hurricane and the Saudi terminal at Ras Tanura was attacked.) Well now they are sending more and regularly, but the question relative to the ELM is how long can they keep this up.

Exports from Russia dropped 5.2% in 2008, but have crept up some 0.2% since January, with Russia exporting about half its production. The big question about that, however, is that a pipeline is going in at the moment that will start shipping 300,000 bd of oil from Russia to China and to Japan. Given that overall Russian production is expected to decline (one of their major fields at Samotlor is now producing at 750,000 bd, when at peak it produced 3.2 mbd, and now that it is 80% depleted the water cut is 90%.)

A well at Samotlor (TNK-BP )

So with increased amounts of internal consumption (it is using about 2.8 mbd internally it is becoming another example of the ELM.

Russian production, consumption and exports (note that according to Rosstat Russia is now exporting around 5 mbd) (from the EIA)

With both these countries exports declining, the question is becoming who will be the next to step in and provide additional oil for us. Saudi Arabia has dropped production to 8 mbd to keep the price up, and there are some questions about the future production – and I refer to the pictures from Satellite over the Desert that I have used before to question Saudi long term production ability. I also note that Saudi Arabia is now consuming 2.2 mbd of oil and demand is rising. There is, for example, this

Estimates on how much crude it is burning differ, but the kingdom's own data show it has risen in recent years, and it could be as high as 470,000 bpd of crude this year, up 62 percent from 2008, consultancy FACTS Global Energy says.

A Saudi source familiar with the kingdom's energy sector said the maximum it could burn at power stations would be 300,000 bpd, although another 120,000 bpd could be burned to power refineries and other facilities related to upstream production.

Aramco claim to have the capability of producing 12 mbd of oil, but again I remind the class that this includes the oil from Manifa, which cannot be produced until it can be refined and that won’t be until 2013 at the earliest.

And thus one comes to Canada, and so there is the quote from the Wicks Report that the Alberta oil sands will provide half of North America’s imports. The level of those imports is shown in the first table, and the oil sands are not now predicted to get to 2.7 mbd until somewhere around 2018, up from the current 1.3 mbd. So with the oil sands being the increasingly major supplier of oil to Canada as the conventional reservoirs deplete, it does not look as though Mr Wicks Report will prove realistic, and we will need to look elsewhere to make up supply shortages for ourselves.

At which point it is timely to point out that the UK will be competing with us for the remaining world supplies of oil, and that China and India, with their burgeoning car sales, will also be adding an mbd or so to their demands for oil next year.

The one bright hope that I end the oil section of the lecture with is that, with ethanol production at around 750,000 bd there is a new candidate supplier of jet fuel. The Japanese airliner that tested fuel this past winter used Camelina as the source for the jet fuel. It seems to have more going for it than corn or cellulosic based ethanol, at this point in the evaluation.

It is nice to end the section on an optimistic note, and the message from the above is that there are going to be jobs for the students when they graduate, and it will likely remain so for the length of their careers.

Jatropha, algae and camelina oils

If you had not gathered this before, then you should know that I have been favorably impressed with the potential of algae as a future source of biofuels. However I recognize that there is a considerable amount of research and business development and growth that will have to occur before such fuel makes a significant impact in the market place. Of the other alternative biofuel sources, I was also considerate of jatropha, which seemed to have some significant potential. The fuel comes from the nuts which the shrub produces, and since it can be grown on quite poor land, and in some countries is already in use a fencing plant I anticipated that its potential would be increasingly recognized. Well it has not quite turned out the way that I thought it would, at least not yet.

And so some comments on what has, and has not happened. Jatropha seems to have its own slogan “Soil to Oil” with a Center for Jatropha Promotion & Biodiesel located in Rajasthan in India. Jatropha curcus is a shrub or small tree that can grow on poor to marginal land in tropical parts of the world, growing to a height of perhaps 15 ft. It produces a nut in clusters of around 10, and the nuts contain seeds which are about 37% of an oil that will run a diesel engine without further refining.

Thr oil has been used in a 50:50 blend with jet fuel to power one engine of an Air New Zealand 747 on a 2-hr flight last December 30th. The oil has a lower freezing temperature than jet fuel, and has been estimated to cost around $43 per barrel. This flight was followed, on January 7th by a Continental Airlines flight which used a 737-800, and a mix of oil from jatropha and alga. The flight saw a 3% gain in fuel use by the engine using the biofuel. The algae oil came from Sapphire Energy the jatropha came from Terasol Energy. The biofuel was mixed 50:50 with jet fuel, and there were no modifications made to the engine.

The success of the test has encouraged Sapphire, who are now predicting that they will be able to produce 1 million gal/year (65 barrels/day) of diesel and jet fuel, rising to 10 million gallons (650 bd) by 2018 and 1 billion gallons (65 kbd) by 2025. Sapphire is based in San Diego.

Terasol supplies both oil and feedstocks, concentrating, at the moment, on jatropha and castor bean oil.

Japanese Airlines carried out their own test on January 30th. The Japanese flight, an hour-and-a-half long, used a mixture of 84% camelina, under 16% jatropha oil, and under 1% algal oil.

Camelina, (or wild flax) incidentally looks as though it deserves more investigation, since it grows on poor ground and has twice the yield of soy. Further it also has a low gell temperature.
The spent biomass is recognized as a good animal feed, and it grows in places like Kansas and Montana, perhaps alternating with wheat, in which combination it apparently increases the wheat yield by 15%, and gives 100 gallons/acre of oil.

Dr. Bill Schillinger at Washington State University recently described camelina’s business model to Capital Press as: “At 1,400 pounds per acre at 16 cents a pound, camelina would bring in $224 per acre; 28-bushel white wheat at $8.23 per bushel would garner $230.”

Returning to jatropha, the President of Terasol recently answered some questions for Scientific American. He noted that the main problem the fuel now faces is one of scale.

the main obstacle is the lack of research and practice in large-scale commercial cultivation, as well as mechanized harvesting. Currently most jatropha and castor are grown on smaller, independent farms. The second obstacle is yield and unit of input. Research in plant breeding needs to continue in order to improve the quantity and quality of oils being produced.

They see commercial quantities of the jatropha being available in 3-5 years.

The optimistic view of jatropha’s future is becoming less common, even as it is projected as a fuel of the future. There in fact some doubts

Not only was the cultivation of jatropha supposed to absorb more CO2 from the atmosphere than it released, but the miracle tree could also stabilize and restore degraded soils. That’s surely why Scientific American in 2007 called jatropha “green gold in a shrub,” a plant that “seems to offer all the benefits of biofuels without the pitfalls.”

Fast forward a couple of years. By 2009, governments from China to Brazil, along with several major biofuel companies, had planted — or vowed to plant — millions of acres of jatropha. In India alone, the government has announced plans to subsidize an intensive program to plant jatropha for biofuels on 27 million acres of “wastelands” — an area roughly the size of Switzerland.

The problem, again is one of scale. With the average farm being around 12 acres (at 2-300 gal/acre/year) the current gains come mainly from local use, rather than collection to meet larger national goals.

For example in Mali the nation has some 10,000 km of jatropha hedges that yield about 1 kg/meter/year. If all the nuts were collected and processed this would yield around 5 million liters per yr of oil (85.8 bd). Typical village hedge lies between 2 & 15 km, making oil generation very much a local enterprise. It is growing because there has been a move to provide local women with engine powered grain mills, to start small businesses. But the fuel cost was prohibitive. Collecting and processing the nuts can not only provide the needed fuel, but also inject about $3,800 on average, per village per year. As a result local hedges are growing in length, though somewhat slowly (from 5 – 15 km in 8 years.) The projects have also benefitted from development of a shelling machine for the nuts.

But while the growth is commendable, it is nowhere near working at the scale needed to have a significant market impact.