Oil Peak, Facts and PoliciesSept. 25, 2012

Gary Flomenhoft, Fellow Gund Institutehttp://www.uvm.edu/giee

0%

20%

40%

60%

80%

100%

1850 1870 1890 1910 1930 1950

Fuel

DomesticatedAnimals

Labor

Work Done in the U.S. Economy, 1850-1970

0

25

50

75

100

1800 1825 1850 1875 1900 1925 1950 1975 2000

Composition of U.S. Energy UseComposition of U.S. Energy Use

wood

animal feed

coal

oil

gas

electricity

Per

cen

t o

f to

tal

ener

gy

use

Energy Densities of Fuels

Fuel Energy Density (Mj/kg)

Peats, green wood, grasses 5.0-10.0Crop residues, air-dried wood 12.0-15.0Bituminous coals 18.0-25.0Charcoal, anthracite coals 18.0-32.0Crude oils 40.0-44.0

WORLD

ENERGY

2004

75.9% fossil fuel

Net Energy

Wind ~20:1

US Oil Extraction

US Oil Extraction

Hubbert Oil Cycle

Marion King (MK)Hubbert

The Epoch of Fossil Fuel Exploitation(after Hubbert, 1969)

0-5 -4 -3 -2 -1 +1 +2 +3 +4 +5

Iron inMiddleEast

StonehengeBuilt

Parthenoncompleted

Pyramidsconstructed

Mayanculture

Inquisition

BlackDeath

Magellan'sCircumnavigation

Steam Engine

100

200

300

Tri

llio

n k

wh

per

yea

r

World Oil Extraction

World Oil Extraction

Oil Reserves

Source: Boyle, et al, Oxford Press

Second Prophecy: 1974

OIL AND GAS LIQUIDS ASPO Scenario

Net Energy from Oil and Gas Liquids

World Oil Extraction

World Oil Extraction

World Oil Flows

Oil Producers: 98 countries

www.lastoilshock.com

Oil Producers: 64 from 98 in decline, 60 terminally

www.lastoilshock.com

http://www.theoildrum.com/node/3087

Oil Watch Monthly: October 2007

Business As Usual-EIA

Business As Usual-EIA

1960-1980 Predictions

1975-1983

Predictions

Real Price of Oil 1869-2007

(Money/Debt)

(Oil)

Third Prophecy: Cultural Crisis

(Compound Interest)

US Energy Use

(and agriculture)

2001 Vermont Own Load Electric Energy Supply

Nuclear

36.3%

Renewable

4.9%Hydro

6.9%

Hydro Quebec

34.9%

System

14.4%

Oil

1.6%

Gas

1.0%Coal

0.0%

(61% FF=8.8%FF)

8.8+1.6+1= 11.4% Fossil Fuels

How VT Heats

86% Fossil Fuels

Fuel oil, kerosene

60%Bottled gas, LP

14%

Utility gas (nat gas)

12%

other fuel

wood9%

Coal or coke0%

electric5%

solar energy

no fuel

86% Fossil Fuels

How People Move-USEIA

Jet Industries:

Citi-Car(Beaumont)

Electricar Lectra

1980’s 2nd Wave of EVs

“Better batteries 10 years away”

Source: EPA

WHAT TO DO? Provide incentives Ex: Germany

Policies, Market-based Instruments:

1. 1999 Tax & Rebate on Fuel (tax cut): Diesel/gasoline $1.79-2.48/gallon Funds rebated to payroll taxes-89%, efficiency, and RE

2. 2005 Cap/trade for CO2-powerplants and industrial heat

3. 1991 Feed-in Tariffs: Wind=$.1149, PV=$.6385, hydro=$.1055, biogas=$.1551

• No costs to government

Results:

• PV Industry: 2715 MW installed, 52% of world total, 40,000 employed(US has 360 MW installed or 13% of Germany)

1. Wind Industry: 22,247MW, 28% of world total, 82,000 employed (United States 16,818MW)

2. Biomass sector 95,400 employed

Total: 217,000 employees in RE

~107,000 FF & nuclear

WHAT TO DO? Reactive or Pro-active?

WHAT DO WE HAVE TO WORK WITH?•Trees•Farms•Cows•Land•Wind•Sun•Big and Small Hydro•Smart People•Indigenous Energy Industry•Entrepreneurs

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 45

Energy taxes in Germany increased by 55 percent, additional increase in 2005

through truck toll

FINANCIAL EFFECTS OF ETR IN GERMANY (IN BILLION EURO)

Energy taxes 2003/2005

Energy taxes

18,7 bn €=

55% in-crease

Electricity (0 → 2,1 cents/kWh)

1998

6,5

5,0

1,8

16,0

22,8~ 34

2005

Road toll for trucks

+ 3,0

Fuel oil (4,1 → 6,2 cents/l)

Diesel (31,7 → 47,2 cents/l)

Petrol (50,1 → 65,6 cents/l)

Natural gas (0,2 → 0,6 cents/kWh)

ETR

~ 53 3,0 Road Toll (0 → 9-14 cents/km)

~ 56

Total green taxes almost 90 Bn (incl. tobacco, land etc.)

1999 +4,3

2000 +2,5

2001 +3,0

2002 +2,5

2003 +4,3

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 46

Almost 90 Percent was recycled to citizens in order to reduce labour cost

GERMAN ETR: RECYCLING OF THE RETURNS

Decrease in pension costs = 16 Bn relief for employers, employees and pensioners

Pension system

Environment Projects • Renewable Energies• Less CO2 in buildings• Tax break bio-fuels

Our Comment:

• Great idea, in principle

• Less than perfect execution

Economy

Govt.

Social Security

Budget use

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 47

First Results of Ecological Tax Reform

POSITIVE EFFECTS ON NATURE, INNOVATION AND LABOUR

Fuel consumption (-16%)CO2-emissions (2-2,5%)Pension costs (-16 bn)Costs for industry (-1 bn)Empty truck travelImported fossil fuels (-13%)Overall tax burden (-4 %)

Tax share of NatureCar sharing (+70 %)Public transport (+5 %)Energy saving technologiesEnergy efficiencyGas-powered cars (x10)Bio-fuelled cars (x2)Job creation (≈ 250.000)Renewable energiesLess

More

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 48

The development of CO2-Emissions is very unequalCHANGES IN CO2-EMISSIONS PER CAPITA IN TONS (BASEYEAR 1993)

Reference: DIW 2005

Fuel Duty Escalator 1993-1999German Ecotax 1999-

2003

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 49

Ecotaxes can reverse the trend in transport emissions

INCREASE IN GHG-EMISSIONS IN TRANSPORT (IN PERCENT)

Changes to baseyear 1994Reference: UNFCC 2005

Ecological Tax Reform

Oil price

shock

2001

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 50

While the US increased their oil imports by 26 percent, Germany reduced it by 13 percent

TOTAL CHANGE IN OILIMPORTS FROM 1998-2005 IN MILLION BARRELS PER DAY

-0,3822,4852,867Germany

2,58912,3539,764USA

Absolute

Change Change in percent20051998

Saving energy perhaps less costly than fighting wars for oil...

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 51

Future ecotax campaigns should not stress dangers, but innovation,

benefits and future jobs

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 52

More jobs in RENs than in our heavily subsidized problem energies

25000

50.000

20000

10000

64.00044000 38000

6000

Renewable Energy coal nuclear power lignite Source: BEE 2005

WaterGeothermal powerSolar

Bioenergy

Windpower

REN: 150.000 jobs

JOBS IN THE ENERGY SECTOR IN GERMANY 2005

Problem energies: 107.000 jobs

WHAT TO DO? Heat

• All-fuels efficiency/ weatherization

• District heating and co-generation

• Biodiesel heating fuel

• Wood and wood chip/pellet heating

• Building codes requiring passive solar, thermal mass, window

insulation, Solar hot water

• Wood stoves

• High Performance Schools Energy Program

• Cap/dividend on carbon-heating fuel

WHAT TO DO? Electricity

•VT Yankee = 550MW CT River Dams-567MW.

•Dams = $160 Million/year revenue.

•Buy the dams. Use eminent domain if necessary

•Fast-track small hydro-up to 400MW

•Approve more wind farms

•More Wood chip plants

•Etc.

WHAT TO DO? Heat

• All-fuels efficiency/ weatherization

• District heating and co-generation

• Biodiesel heating fuel

• Wood and wood chip/pellet heating

• Building codes requiring passive solar, thermal mass, window

insulation, Solar hot water

• Wood stoves

• High Performance Schools Energy Program

• Cap/dividend on carbon-heating fuel

WHAT TO DO? Transportation

•Hybrids

•Plug-in hybrids

•Electric vehicles

•Alternative fuels, ethanol, methanol (flex-fuel), biodiesel

•Trains

•Public transit-Jitneys

•Bike/pedestrian paths

•Tax/rebate on fuels

•Cap/dividend on carbon-vehicles

WHAT TO DO? Agriculture

•Don’t turn food into fuel

•Biodiesel: waste oil, algae, non-food crops

Methane digesters: “Cow-power”

Crisis or Opportunity

We will shift from Fossil Fuels.

Will we be Pro-active or reactive?

It’s up to you.