A GEOLOGICAL PERSPECTIVE A GEOLOGICAL PERSPECTIVE ON:ON:

Global WarmingGlobal Warming

Global & US Energy Global & US Energy FuturesFutures

Global Free MarketsGlobal Free Markets

. . . WHAT WE CAN . . . WHAT WE CAN DO NOWDO NOW

Peter R. Rose Past President,

American Association of Petroleum Geologists

Peter R. Rose Past President,

American Association of Petroleum Geologists

!!

1. Influence of Anthropogenic Global Warming (AGW) NOT a settled scientific issue.

2. Alternative Energy Sources will BEGIN to replace conventional fossil fuels.

3. Robust, trustworthy Free-market Economy ESSENTIAL to the coming Energy Transition.

4. Effective Remedies we can agree on NOW.

OUTLINE

MEDIEVAL WARMING

LITTLE ICE AGE

Earth temperature history from Greenland ice core data

Earth temperature history from Greenland ice core data

LESS ELLIPTICAL

MORE ELLIPTICALSHAPE OF EARTH’S ORBIT

W. Soon, 2010

W. Soon, 2010

Insolation Temperature Track

C02 Doesn’tTrack Temp.

380 ppm

H. L. STEWARD 2008

CO2’s HEAT-TRAPPING CAPACITY DIMINISHES LOGARITHMICALLY

(Uncertain) Role of Clouds(Uncertain) Role of Clouds

• 95% of Greenhouse Gases = Water Vapor

• Influenced by Cosmic Rays

• Verifiable Feedback to Greenhouse Effect

– IPCC allies assume most feedbacks (+)

– Lindzen & Soon find many feedbacks (–)

SIGNIFICANCE OF “CLIMATEGATE”:SIGNIFICANCE OF “CLIMATEGATE”:1. Corruption of Climate Science

Academic and Government Scientists (U.K. & U.S.)

Destruction/Alteration of “Inconvenient” Data Abuse of Peer-Review Process Non-engagement with other Pertinent Science Influenced by Social Philosophy -- Politics;

Government Funding, Media Publicity, Financial Interests

2. Discredited UN IPCC3. Bad Science → Bad Policies

4. Wasted $, Lost Time

5. Public Loss of Confidence in Science

HUBER 2005

HUBER 2005

US ENERGY-SUPPLY CRISIS:

Convergence of Global Oil Supply & Demand

Approaching Plateau in Global Oil Production

Mortgaging of US Assets to Feed US Motor-fuel Addiction

Crude Oil as a Geopolitical Weapon

Oil price vs OPEC spare

capacity

Oil price vs OPEC spare

capacity

Source : IEA, September 2005

OIL & GASA changing environment for future production

OIL & GASA changing environment for future production

2002 2010 2020 20301971 1990

World oil demand Mb/dWorld oil demand Mb/d

+ 1.6% / yr+ 1.6% / yr

77

90

107

121

50

66

TransportTransport

PetrochemicalsPetrochemicals

Non-energy useNon-energy use

HeatingHeating

ElectricityElectricity

A growing world oil demand

driven by transport fuels

A growing world oil demand

driven by transport fuels

Reduction of spare capacities

Spare capacity Brent price

Hc prices keeping high for long term

0

1

2

3

4

5

6

7

8

1990 1992 1994 1996 1998 2000 2002 20040

10

20

30

40

50

60Mb/d $/b

Mb/d

RESERVES

CUMCRUDE

20082008

““How many US dollars went How many US dollars went overseas during 2005-2009 to pay overseas during 2005-2009 to pay for motor fuel burned in the US?”for motor fuel burned in the US?”

““How many US dollars went How many US dollars went overseas during 2005-2009 to pay overseas during 2005-2009 to pay for motor fuel burned in the US?”for motor fuel burned in the US?”

5 yrs x 365 days/yr x 21M bbl/day x 67% x ~$90/bbl–

GREATEST TRANSFER OF WEALTH IN HISTORY?

0

100

200

300

400

500

600

700

800

Ru

ssia

Sau

di A

rabia

Iran

Iraq

Ku

wait

Ab

u D

hab

i

Qatar

Ven

ezuela

U. S

.

Rest o

f Wo

rldReserves

DISTRIBUTION OF KNOWN RESERVES*DISTRIBUTION OF KNOWN RESERVES*

67% OF KNOWN RESERVES ARE IN 9 COUNTRIES 43% OF KNOWN RESERVES ARE IN 7 MAJOR OPEC COUNTRIES

2.1 TBBOE2.1 TBBOE*Gas converted at5.6BCF = 1MMBOE

BBOE

BBOE

PetroconsultantsPetroconsultants

Tinker, GCAGS DPA Keynote, 2004

QAd3931x

40

30

20

10

0

1775 1800 1825 1850 1875 1900 1925 1950 1975 2000

Qu

adri

llio

n B

tu

QAc8506c

U.S. Energy Consumption

Biomass

Coal

Petroleum

Naturalgas

Hydro.power

Nuclearpower

EIA, 2000, Annual Energy Review 1999, Appendix F, Tables F1a and F1b.

Up, up, up and away….

Tinker, GCAGS DPA Keynote, 2004

QAd3931x

U.S. Energy Consumption

0

20

40

60

80

100

120

1845

1870

1895

1920

1945

1953

1958

1963

1968

1973

1978

1983

1988

1993

1998

Qu

ad

BT

U

Renewable Energy

Hydroelectric

Nuclear Energy

Natural Gas

Oil Imported

Oil Produced

Coal

Wood and Waste

QAd1023QAd1023

U.S. Consumption

I ask kids about

renewables…

Data: Annual Energy Review 1999 (EIA, 2000)

Tinker, GCAGS DPA Keynote, 2004

QAd3931x

Net Energy = Energy Produced - (Energy to Create + Energy to Operate)

U.S. Energy Comparison

Back to oil and

gas

A Healthy Fossil-fuel Industry will buy us time to make a safe transition into a Sustainable, Alternate-Energy FutureA Healthy Fossil-fuel Industry will buy us time to make a

safe transition into a Sustainable, Alternate-Energy Future

WHY WE MUST EXPAND U.S. NUCLEAR POWER NOW:

WHY WE MUST EXPAND U.S. NUCLEAR POWER NOW:

• Only Dependable 24/7 Alternative Energy Source

• High-volume Source of Electric Power• Re-cycling Spent Fuel Eliminates Nuclear-

waste Storage Problem• Operational Incidents Causing Nuclear

Power-station Accidents Can be Eliminated• No Toxic Emissions• Experience of French Nuclear-power

Industry

H. L. STEWARD 2008

Causes:AgricultureMedicineEnergy

SALVADOR 2005

WORLD POPULATION PROJECTIONWORLD POPULATION PROJECTION

REQUIREMENTS FOR SUCCESSFUL TRANSITION TO SUSTAINABLE US ENERGY

SOCIETYRealistic National Energy Policy: Absent for 30 years

Constructive Industry-Government Relationships: to Optimize Planning, Prioritization & Support of R&D

Massive Investments: Requires Robust, Trustworthy Free-market Investment Sector

Stable High Energy Prices and/or Government Support: to Encourage Conservation and Long-term Investments

Accelerated Construction of Nuclear Power Plants: Expanded Electric-power Generation

Maintain US Fossil-fuel Industry: as “Bridge to the Future”

CONSERVATIONCONSERVATION The quickest, cheapest way to reduce U.S.

Energy Consumption Translate “Green Activism” to country-wide

“Energy Frugality Ethic” For motor fuels, reinforce by gradual increase

in gasoline & diesel taxes dedicated to alternate energy development

(1978-1990) History: U.S. became much more Energy Efficient, then wasted it on SUVs, “McMansions”, Frivolous appliances., etc.

Problem: How to make Energy Frugality a Permanent National Value

CAVEAT TO ENVIRONMENTALISTS:

CAVEAT TO ENVIRONMENTALISTS:

“The Adoption of Proactive and Sustained Environmental Programs Depends Upon a Healthy Economy”

We Must Stop Getting Stampeded by Ill-founded, Apocalyptic Scare TacticsWe Must Stop Getting Stampeded by

Ill-founded, Apocalyptic Scare Tactics

GOOD NEWS IGOOD NEWS I -- --

I. Transportation:• Lighter-weight vehicles & higher MPG’s• Battery-powered autos & reduced speed limits• Higher taxes on motor fuels & heavier vehicles• Natural-gas powered trucks, buses & autos• Shifting long-range freight to railroads • Efficient ethanol production (NOT CORN!)

We don’t have to accept Anthropogenic Global Warming to support many measures needed NOW for a healthy US Energy Future!

GOOD NEWS IIGOOD NEWS II -- --

II. Other Sectors:• Improved Energy Efficiency -- Residential, Commercial,

Industrial

• Upgrade National Power Grid

• Gov’t support of Alternative Energy Sources -- R&D

• Maximize US Oil & Gas Exploration & Production

• Re-invigorate Nuclear Power

• Educate Energy Workforce

We don’t have to accept Anthropogenic Global Warming to support many measures needed NOW for a healthy US Energy Future!

GOOD NEWS IIIGOOD NEWS III -- --

U.S. Natural Gas Recoverable Resources have Increased by about 35% since 2006, a Current 100-year Supply at Present Consumption Rates.

- - “Now, How to Gain Access - - “Now, How to Gain Access to Gas-productive Lands?”to Gas-productive Lands?”

GOOD NEWS IVGOOD NEWS IV -- --

Development of Alternative and Diversified Energy Sources can Provide Fruitful new Investment Opportunities to Revitalize the US Investment Sector.

BAD NEWSBAD NEWS -- --

Proposed “Cap and Trade” or Carbon Tax measures to restrict Energy Use are unnecessary and self-penalizing to the recovery of a robust economy -- especially since Developing Nations will exempt themselves.

DEALING WITH LONG-TERM NATIONAL ISSUES

1) FREE-MARKET OPTION: Problem: Free market Capitalism is ineffective in dealing with long-term problems (discounting of future cash flows assigns little or no value to cash flows beyond 15 -20 years. U. S. markets focus on short-term results).

2) GOVERNMENT CONTROL OPTION: Problem: Global experience of 1950-1990 showed that "Planned Economies" do not work.

3) NATIONAL POLICY OPTION: Solution: Non-partisan consensus can allow an informed democratic society to deal with important long-term issues such as Energy (prior U. S. examples -- Space program; Clean air/water acts; Smoking; Civil rights). Requirements: Communication of facts and consequences, Education; Open dialog; Shared sacrifices; Real bipartisan political leadership; Continuity of policy.

Ingredients for Future Recovery• Communicating the problem

(education)• Trustworthy free-market economy• Informed leadership and media• Insistence on responsible politicians• A new national purpose and character• Sharing the pain of Conservation

WE CAN DO THIS!WE CAN DO THIS!

Future generations depend on us to make good decisions.

Future generations depend on us to make good decisions.

A GEOLOGICAL PERSPECTIVE A GEOLOGICAL PERSPECTIVE ON:ON:

Global WarmingGlobal Warming

Global & US Energy Global & US Energy FuturesFutures

Global Free MarketsGlobal Free Markets

. . . WHAT WE CAN . . . WHAT WE CAN DO NOWDO NOW

Peter R. RosePast President,

American Association of Petroleum Geologists

Peter R. RosePast President,

American Association of Petroleum Geologists

!!