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Chapter 2 Deteriorating Oil and Food Security. Yen Ha & Jessica Hallenbeck CORE: Human Population. Part I. Crude Oil. The Demand For Oil. Our society has become an oil-based civilization Cars, trains, planes Urbanization: cities, suburbs

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Chapter 2 deteriorating oil and food security

Chapter 2Deteriorating Oil and Food Security

Yen Ha & Jessica Hallenbeck

CORE: Human Population


Part i

Part I

Crude Oil


The demand for oil
The Demand For Oil

  • Our society has become an oil-based civilization

    • Cars, trains, planes

    • Urbanization: cities, suburbs

  • There has been an annual increase of about 1% for the world’s demand for oil

    • 2005-2006= 0.77% increase

    • 2006-2007= 1% increase

    • Third straight year that annual growth is less than 2%

  • The world currently consumes 85.7 million barrels/day in 2007

    • The leading country: United States

    • 1972- 1 bushel of wheat= 1 barrel of oil

    • 2007- 8 bushel of wheat= 1 barrel

http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption


Top 25 countries of oil consumption
Top 25 Countries of Oil Consumption

* http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption


Annual growth rate of oil
Annual Growth Rate of Oil

  • United States

    • Unchanged within the past three years with an average of 20.7 million barrels/day

  • China

    • 5.5% increased from 2006-2007

    • Currently consumes 7.7 million barrels/day

http://wolf.readinglitho.co.uk/mainpages/consumption.html

The huge increases in Asia and China over the last four decades are very clear.


Available oil
Available Oil

  • Estimated 2 trillion barrels of oil are available in the world

  • However, 1 trillion has already been harvested

    • Easy oil: close to shores, near the surface, large reservoirs

    • Tough oil: off shores, deep underground, difficult to find

  • Energy Information Administration of the U.S. Department of Energy estimates that there still are 1.28 trillion barrels of oil reserves available in the world


Available oil cont
Available Oil Cont…

  • Cambridge Energy Research Associates (CERA) have found in 2006 that there is an estimate of 3.74 trillion barrels of oil remaining in the world

  • This could raise questions of new technologies, geopolitical conflicts, and economics to find these new frontiers

http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=8444


Measuring the decline of oil
Measuring the Decline of Oil

  • Computer Models

  • Analysis of Reserves and Production Relationship

  • Separate the World’s Oil Production Countries into 3 groups


Computer models
Computer Models

  • Projects future oil production and prices based on the past

http://www.eia.doe.gov/steo

http://www.eia.doe.gov/steo


Reserves and production relationship
Reserves and Production Relationship

  • Look to see future production trends

  • M. King Hubbert (US Geological Survey) predicted the production peak based on the time between new discoveries

    • Used the information that the US had new discoveries in 1930

    • Estimated that the US oil production would peak in 1970

http://tonto.eia.doe.gov/dnav/pet/hist/mcrfpus1a.htm


Separating the world
Separating the World

  • Group 1: Falling production

    • United States, Venezuela, United Kingdom, Norway

  • Group 2: Rising production

    • Russia, Canada, Kazakhstan, Algeria, Angola, Brazil, Nigeria, Qatar, United Arab Emirates, Libya

  • Group 3: Verge of a downfall in production

    • Saudi Arabia, Mexico, China


Separating the world cont
Separating the World cont.

  • The predictions for many of the countries are true

    • Countries that have already peaked (US, Venezuela, UK, Norway)

  • BUT how about…

    • Saudi Arabia, Mexico,China, Libya

  • For the most part, categorizing these countries are inaccurate at the true representation of their oil production

http://www.worldoil.com/INFOCENTER/STATISTICS_DETAIL.ASP?STATFILE=_WORLDOILPRODUCTION


Problems with discovering new oil
Problems With Discovering New Oil

  • 95% of the oil in the world has already been discovered

    • Due to the lack of exploration and new discoveries suggests that oil companies are agreeing to this fact

  • Husseini (former head of exploration at Aramco) claimed that it’s impossible to discover enough new oil reserves to compensate for all the oil demand

    • Need enough to cover the 2 million barrels/day increase of oil demand each year

    • Also need enough new oil to cover for the declining 4 million barrels/day from old oil reserves

  • International Energy Agency (IEA) claims that the demands of 2007 (84.75 mbpd) cannot even reach the oil production of 2006 (85.01 mbpd)

    • Currently, 2007 has produced 85.7 million barrels per day

  • 18 of the top 20 oil reserves were discovered in the 1970’s

    • None of the new oil reserves found within the past decade made the top 20

  • However, if the CERA is correct in its claims about the 3.7 trillion of oil that still remains means that we have NOT discovered most of the oil available on this earth

  • Plus, the annual increase of oil consumption has not increased 2 million barrels/day within the past 3 years


Hubbert s peak
Hubbert’s Peak

  • Utilizes a bell-shaped curve to predict the oil production for the future

    • Use the patterns seen from 1992-2006 to predict for 2006-2020

    • 1992: 67 million barrels/day

    • 2006: 85 million barrels/day (18 mbpd increase)

    • 2020: 67 million barrels/day

      • Would require a 21% drop within this 14 years period

      • Nevertheless, with an increase of 1% oil consumption annually, we would need to produce 106 million barrels/day to meet the needs of consumers


Critics of hubbert s peak
Critics of Hubbert’s Peak

  • Jerome R. Corsi:

    • Argues that we are constantly finding new oil reserves so the idea of us completely running dry of oil by 2050 is impossible

    • In September of 2006, ExxonMobil claimed that oil in place estimates to about 6-8 trillion barrels per day and 3 trillion barrels per day in oil shale deposits

  • Others

    • The peak of 2006 is lower than the oil production of 2008

    • Estimates of oil productions are expected to increase within the next years


Actual hubbert s peak
Actual Hubbert’s Peak

  • Hubbert’s Peak falls short of prediction

  • 2006 was not the peak of oil production since production in 2008 has surpassed it

  • This shifts the prediction curve

http://www.theoildrum.com/files/PU200808_Fig3b_0.png


Actual hubbert s peak cont
Actual Hubbert’s Peak Cont.

http://www.eia.doe.gov/steo

Furthermore, the United States is estimated to increase its production within the next two years according to Energy Information Administration

- This dramatic decrease in oil production after the peak of 2006 is yet to be seen


Other options for oil
Other Options for Oil

  • The remaining 5% of the oil is in the Artic

    • Which country controls which parts?

    • Problems:

      • Wars, environmental regulations, devastation to the ecological systems

  • Tar sands—products of oil shale

    • Canada has an estimate 1.8 tbpd but only 300 bbpd can be recovered

    • Venezuela has 1.2 tbpd but only 400 bbpd can be recovered

    • Problems:

      • Extremely hazardous to the environment: heating, need lots of natural gas, carbon-intensive

      • 2 tons of sand= 1 barrel of oil

      • Extremely costly: takes 2 barrels out of 3 barrels to pay for the costs


Other options cont
Other Options Cont…

  • Oil Shale: conversion of kerogen, an organic material, into oil and gas

    • Colorado, Wyoming, Utah

    • Problems:

      • Requires several barrels of water= one barrel of oil

      • Very costly, climate destruction, time


Problems with declining oil
Problems with Declining Oil

  • High demand and low supply

    • IEA estimates that by 2030, we will need 120 million barrels/day to meet our consumer needs in the US

  • We do not change

    • Industries still continues to make cars, airplanes, food, ect. as if the oil will continue to last

http://www.marktaw.com/culture_and_media/politics/GlobalOilImages/productionandconsumption.gif


Problems cont
Problems Cont…

  • Growth of modern cities

    • 400 cities, 20 mega cities with more than 10 million people

    • Requires lots of oil for transportation, operation of large buildings, new technologies, ect.

    • Garbage—needs to go longer distances as the cities grow larger which requires more oil and higher costs

  • Suburbs

    • People need to commute to work

    • Highly dependent in the US where most people still transport using cars rather than public transits

    • Shopping malls, Wal-Marts, roads

  • Bottom line

    • INC in oil prices= INC in cost of food= INC in everything else

    • Without oil, we will no longer be able to travel far distances, get fresh produces, and have our luxurious lifestyles


Reality of oil consumption
Reality of Oil Consumption

http://maps.grida.no/go/graphic/world_oil_consumption


Part ii

Part II

Food and Oil

Since 1950


Cheap oil boosts food production
Cheap Oil Boosts Food Production

  • World grain harvest quadrupled last century.

  • 1950-1972: 1 bushel of wheat =1 barrel of oil on the world market = $2

  • 2007: 8 bushels of wheat = 1 barrel of oil


"What is driving oil prices so high?", BBC (November 5, 2007).

  • When oil >$60, becomes cheaper to convert food crops to oil


World grain harvest
World Grain Harvest 2007).

  • 1950: 630 million tons

  • Now: 2 billion tons

  • Productivity (with little new land) tripled due to:

    • Tripling of Irrigation

    • 10 times more fertilizer used

    • High yield crops

      • Hybrid corn in US

      • Dwarf wheat and rice in Asia


World farmland
World farmland 2007).

  • According to satellite imagery, 15 million km2 of farmland in 2000.

  • New farmland has been created, but much farmland is lost to urbanization and overuse.


Food prices are going up to equal oil prices

2006: In US, 16% food crops to oil 2007).

In 2008, 30% use projected by Lester Brown

2007: According to the USDA projections the share of ethanol in total corn use will rise from 14% in 2005/06 to 31% in 2016/17.

Food prices are going up to equal oil prices



Grain exporters importers
Grain Exporters/Importers 2007).

Image from Theoildrum.com


Food vs population

Grain 2007).

1984: 342 kilograms grain/person

2006: 302 kg/person

Why was there no worldwide famine?

Soybean

1984: 68 million tons

2007: 222 million tons

Food vs. Population


Us agriculture energy
US Agriculture Energy: 2007).

  • 19% farm energy to pump water.

  • 2/3 of agriculture energy used by transportation.

  • 7% of agriculture energy used in packaging –more energy for packaging than the food contains.


Refrigeration
Refrigeration 2007).

  • Refrigeration uses the most energy in the food industry.

  • Energy Star models use 50% less energy than those made before 1993.

  • Up to 4kWh per day.

Image from wikipedia.com



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