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Now, on to today’s article.
One cubic mile of oil would put Manhattan under 150 feet of oil.
It would fill one thousand sports arenas.
It’s equal to 1.1 trillion gallons of oil.
And it just happens to be the amount of oil the world consumes each and every year.
Now, I didn’t come up with this concept myself. This idea stems from the keynote address at Greentech Innovations, given by Ripudaman Malhotra, Associate Director of the Chemical Science and Technology Laboratory at SRI International.
But the contents of the presentation, and the concept of a CMO, is something I felt was worthy of sharing. I think you’ll agree.
So a CMO is equal to 1.1 trillion gallons. But that amount of oil is also equivalent to:
26 billion barrels of oil
6.4 billion tons of hard coal
153 quadrillion BTU and
15.3 trillion kWh of electricity
To put these gargantuan numbers into perspective, one kilowatt hour (kWh) is equal to doing eight solid hours of cardio on a stationary bike. Do that 15.3 trillion times, and that’s how much energy the world consumes each year just in oil.
Not all liquids. Not including natural gas. Not with the massive amount of coal.
Just in oil!
Per the IEA’s World Energy Outlook last week, annual decline rates will increase in 800 of the world’s oil fields from 6.7% today to 8.6% by 2030. Some major fields, like Cantarell, are declining much faster than that.
Certainly our demand isn’t decreasing as fast, and oil is finite, so quite literally we’re living off an oil inheritance.
Global Energy Consumption: Living Off Our Oil Inheritance
Think of it like this: Oil, along with coal, natural gas, and nuclear, is an inherited resource.
Renewables, including solar, geothermal, wind, and hydroelectric, are considered income sources.
So we’ve been making constant withdraws from our energy inheritance for years, and will continue to do so, but eventually, that bank is going to run dry.
Renewables, on the other hand, are akin to making deposits. We can use them this year. And again next year. And the year after.
If we consume one cubic mile of oil every year, when taking into account all energy use, we use the equivalent of three cubic miles of oil.
Here’s a breakdown of where it all comes from, in terms of cubic miles of oil:
Reduced down to one sentence, 2.63 cubic miles of our total energy use come from exhaustible resources every year. That’s 88%, meaning only 12% comes from renewable resources, or income sources.
So we better stop making withdraws and start making deposits, or our inheritance is going to run dry with a lot energy spending yet to do.
If we (the world) continue at our current energy demand growth rate of 2.6%, we’ll need another 270 cubic miles oil in total energy by 2050.
Where is all that energy going to come from?
Fun With Energy Numbers
According to the most recent oil and gas reserve numbers, there are about 46 CMOs of recoverable oil and about 42 CMOs of natural gas. Those 88 CMOs come way short of the necessary 270, and that’s if we can recover them fast and cheaply enough.
The next logical option is coal, of which there are 120 CMOs of reserves. But the problem with coal isn’t the reserves, it’s being able to use them. And with growing limitations on carbon emissions, coupled with long lead times on building coal plants, it doesn’t look like coal is going to make up the difference.
To actually get one CMO of energy from coal would required building 2 coal-fired power plants a week for fifty years. That’s just for one CMO. We need 270. So coal is out as the savior.
To get one CMO of energy from nuclear power would require building 1 nuclear plant a week for 50 years. We need 270. Nuclear’s out, too.
Those are our inheritance sources. What about income sources?
The sun offers 22,000 CMOs of energy per year—more than enough to satisfy our requirements. But, like coal, the problem isn’t in the amount available, but in the amount we can actually put to use.
Getting one CMO of energy from solar would require 250,000 roof-top systems to be installed everyday for 50 years, perhaps even more infeasible than the previous options.
What about biomass? Surely we can grow our way out of this mess using alcohol fuels, landfill gas, and wood and crop fuel.
But getting just one CMO of energy from biomass would require 85 times the current one-year production of soybeans. Remember, we need 270 CMOs in a worst case scenario, so biomass potential looks grim as well.
Wind power? One CMO of energy means installing 1,200 turbines a week for 50 years. Ain’t gonna happen. And again, that’ s for just one CMO.
We’re clearly not going to be able to alter the supply side to solve the energy issue. Let’s see what the demand side has to offer.
Take compact florescent lights, for example. We can install 100 billion CFLs to reduce energy demand by one CMO. At an average cost of $2.25, we need just $225 billion to get one of the 270 CMOs we need.
The situation is unrelenting, to say the least.
The Way Forward
First of all, we need to start planning in 40 year cycles instead of 4. We’ve seen how long it takes just to get one CMO of energy from a single resource. Planning needs to commence now, across a variety of technologies, to get us where we need to be by 2050.
But with a decades long energy transition comes a decades long profit opportunity.
Not just in renewables, which will double in use several times over, but also in energy efficiency technologies, smart building materials, innovative ways to use natural gas, and yes, even in new ways to explore and exploit our remaining oil and coal reserves.
As we’ve seen, there is no one energy savior. Many technologies will be used, and used well. And you can not only reap their energy dividends, but their financial ones as well.
We don’t have to make a choice of using and profiting from oil or renewables. The operative word here is and.
That’s what Energy & Capital, and our host of sister publications, are here for. . . to help you profit from oil and natural gas and renewables and energy efficiency.
The energy road will be long and arduous, but the path to profits doesn’t have to be.
For just one example of how to turn the energy solutions of tomorrow into the energy profits of today, check out this report.
Call it like you see it,
Nick
