North American Natural Gas Production and EROI Decline

[phantom power]

Discussion is here:
http://www.theoildrum.com/node/3673

[phantom power]

1. I was going to add, this is a scary fast drop.

[NickB79]

2. Dropping almost as fast as my jaw

:wow:

Hold me, I'm scared.

[phantom power]

3. I have to go through the five stages, like, two or three times a week here.

[hunter]

4. Soon we will know the minimum EROI required to sustain this civilization.

Past that we plunge over the falls.



What's your barrel look like?

[phantom power]

5. I was sort of hoping to find out some other way.

Oh well. Here's my barrel:

[profgoose]

6. I wish there were another way...

but no, we can't be wise. we have to wait until the last minute, which is always the best way to solve any problem...

*sigh* for hunanity's shortcomings.

[phantom power]

7. Expensive knowledge. Let's all plan to take good notes.

[Dead_Parrot]

13. Good. I hate mysteries.

:)

[GliderGuider]

8. This is one of the most terrifying articles I've read in the last year.

Speaking as an urban Canadian who relies on NG to stay alive through the Ottawa winters...

Peak Gas, Peak Oil, Peak Food, Peak Finance. I said a while ago I thought the world had only 15 years until it was in the center of the maelstrom. Who would have suspected that I was a starry-eyed optimist? I hereby lower my time line to 5 years.

Say goodnight, Gracie...

[phantom power]

9. you pollyanna.

:rofl:

[pscot]

10. I never expected to be around for the end times

but my mother turned 89 last month, and to my dismay, I seem to be keeping pace with her, so I'm not so sure. That graph looks like something even Senator Inhof might be able to grasp. This slope we find ourselves on is slicker than snot. Our descent is accelerating, and we don't seem to be able to pull the brakes. Lately I've been wondering what's the better legacy investment, silver coins or 4000 rounds of 5.53 ammo from Cabelas.

[NickB79]

11. I went with the 5.56mm ammo route

Then I can just take all the silver coins I want :evilgrin:

[Dead_Parrot]

14. Don't forget to buy a gun, too

:silly:

[hunter]

12. Half the North American economy is about to fail.

The chart the doctor holds is grim.

So when do we tell the patient he's about to have his legs amputated?

I'm looking at the presidential elections in a new light. I won't be smiling when I vote.

Which candidate is the best surgeon?

:scared:

[GliderGuider]

15. But the other half will be OK?

Sorry, just kidding. That reminded me of a line the CEO of a company I used to work for was fond of:

"It's OK, my end of the ship isn't sinking!"

[hunter]

17. Nah, the patient will still die, just not as quick as he would without the amputation.

Civilization as we know it is circling the drain.

It's time to build a new civilization, or we will go down the drain with it.

[GliderGuider]

19. We will build a new civilization, no problem there.

The problem is, we won't start on it until we're finished with this one. That introduces a large set of, um, constraints into what and who will be available for the next go-around.

[CRH]

22. This is a bit off topic Guider, ...

but I just ran across some natural gas deposits marked for future exploitation in Africa. I don't know how this will fit into your data for the future finances for African food stocks, or if you have already included it in your economic projections. It is possibly insignificant, but maybe not.

http://www.eia.doe.gov/oiaf/ieo/nat_gas.html

~~ snip ~~

Africa and non-OECD Asia (excluding China and India) are expected to be important sources of natural gas production in the future. For each of the two regions, natural gas production in 2030 is projected to be some 10 trillion cubic feet above 2004 production levels. The two regions combined accounted for 14 percent of the world’s natural gas production in 2004; in 2030, their combined share is projected to be 21 percent. A significant portion of the production from both regions is exported. In 2004, 26 percent of the natural gas production from the countries of non-OECD Asia (primarily from Brunei, Indonesia, Malaysia, and Myanmar ) and 50 percent of the production from African countries was for export. In 2030, the export share of production from non-OECD Asia is projected to fall to 10 percent, as domestic consumption takes precedence over exports, whereas the export share of Africa’s production is projected to increase. Several pipelines from North Africa to Europe are under consideration, and LNG export capacity in West Africa continues to expand. 

~~ end excerpt ~~

Consider the source, the EIA has been overly optimistic before.

[hunter]

24. What do starving brown people need natural gas for?

I mean it's not like they're using it.



http://www.irinnews.org/report.aspx?reportid=60811

[GliderGuider]

25. I agree the EIA tends to be overly optimistic, especially IEO2007

There may not be the volumes they're praying for, and the infrastructure issues -- especially for onshore development -- will be more and more daunting as the next couple of decades unwind.

But the real question is where the profits from that gas would end up. I expect a significant bout of "Disaster Capitalism" to be played out in in Africa as TSHTF between now and 2020. That will probably result in these resources ending up in the hands of transnationals, with most of the profits going offshore. For these reasons, I discount the possibility of this gas driving a miraculous turnaround, or even a significant alleviation of Africa's problems.

One thing that could change the picture is if Africa finally gets fed up with how they're being treated, and a number of revolutionary nationalist movements rise to power. That could result in more of the profits staying in the continent. On the other hand, the Disaster Capitalists are experienced -- they have neutralized the ANC once already, so dealing with such movements is already part of their playbook.

On balance I'd have to say that I don't think it will affect the outcome that much. Remember, we're at the end of this inning of the game of civilization here - a few trillion cubic feet of gas aren't going to change the trajectory for long.

[CRH]

26. Disaster capitalism seems the most likely, ...

And I agree, even if the technology needs could be met for the infrastructure to drill, pump, and transport natural gas, Africa like everywhere does not have a history of using such revenues for the benefit of the many. At best one should expect a few well bought native middlemen, with multi national corporations reaping the cream.

I followed the UN links you provided the other day, and there is an unmistakable correlation between the past hot spots of conflict, levels of famine, child mortality, and the chaotic migrations that follow. Indeed a recipe for future disaster capitalism, after years of intentional neglect and a significant population die off.

The charts and graphs also show south east Asia in a similar situation, and one wonders how far behind Africa their crisis will be, or if the two will be nearly simultaneous. The populations, economies, lack of infra structure, the famine, and the high proportion of GDP spending needed in the future for food imports, paint a grotesque future for both.

[GliderGuider]

16. This again raises the question of renewable electrical generation

In the USA, 20% of electrical power is generated from NG, and of course NG provides most of the peaking capacity. If the NG supply starts to break down over the next 5 years, the potential for grid instabilities will soar. Can the USA install enough wind capacity in the next 5 years to take up 10% of the grid load? This is what I've meant all along when I've said that the time line might be too short to permit renewables to build out enough to prevent problems.

I may have even been too optimistic in this analysis:



If the energy gap begins to open up as a result of NG shortages rather than oil, the situation will go critical very rapidly. If the first problem out of the gate was oil, it would be straightforward to conserve on transportation. With NG as the leading problem it may be more difficult because critical urban infrastructure like elevators, HVAC and water pumps are electrical. I suspect rolling blackouts will become the norm in the USA as they already are in other parts of the world.

[hunter]

18. The codependencies of wind and natural gas are frightening.

I'm skeptical that we will have the resources to make wind power sustainable.

[NickB79]

23. Texas power grid narrowly averted rolling blackouts (the wind stopped blowing)

http://www.star-telegram.com/state_news/story/500595.html

We're already closer to rolling blackouts than most people realize.

Oh, this is going to be a FUN century to live in, yes indeed.

[CRH]

20. Actually this article is only factually confirming, ...

What Matthew Simmons and ASPO were saying in late 2002 and 2003. That after the suspicion is confirmed, that the US natural gas production has indeed peaked in 2001, and Canada shortly thereafter, that the consequences of rapid decline would be an economic catastrophe beyond imagination. That there was no plan 'B' and still lots of denial. It appears Simmons was prophetic, and this article just confirms and adds to the citations.

The powers that be can juggle all the heating oil and natural gas supply numbers they want, very soon people in colder regions will have impossible heating and electricity bills. The summers in New York and DC will be a tempest brewing, without air conditioning. One wonder what will cause more deaths, the temperatures or the tempers.

[CRH]

21. Consider the source for this article, but imports appears to be the US future.

Keep in mind these are government figures, and projections and plans of the same corporations and institutions that have missed the timing of peak oil by 40+ years. This article was written in 2007


http://www.eia.doe.gov/oiaf/ieo/nat_gas.html

~~ snip ~~

Historically, the United States has been both the largest producer and the largest consumer of natural gas in North America, and Canada has been the primary source of U.S. natural gas imports. In 2004, Canada provided 85 percent of gross U.S. imports of natural gas. Although Canada’s unconventional and Arctic production both are expected to increase over the projection period, and LNG imports into Eastern Canada are expected to begin by the end of the decade, those supply increases are not expected to be sufficient to offset a decline in conventional production in Canada’s largest producing basin, the Western Sedimentary Basin. Gross U.S. imports of LNG are projected to exceed gross pipeline imports from Canada after 2015, and Canada’s share of gross U.S. imports is projected to decline to 25 percent in 2030. 

Rising natural gas prices are expected to make it economical for two major North American pipelines that have long been in the planning stages to come online. The first, a Canadian pipeline to transport natural gas from the MacKenzie Delta, is expected to become operational in 2012. The second, an Alaska pipeline, is expected to begin transporting natural gas from Alaska to the lower 48 States in 2018, contributing significantly to U.S. domestic supply. Alaska’s natural gas production accounts for all of the projected growth in domestic U.S. conventional natural gas production from 2004 to 2030, with flows on the Alaska pipeline increasing to 2.2 trillion cubic feet in 2030. As a result, Alaskan production is projected to account for 22 percent of the increase in U.S. natural gas supply in 2030 relative to the 2004 total. 

~~ snip ~~

By far the largest source of U.S. incremental natural gas supply (50 percent of the increase in 2030 relative to 2004) is expected to be LNG. Currently, the United States has five LNG import facilities in operation with a total peak capacity slightly above 5.8 billion cubic feet per day. Four additional facilities are under construction in the Gulf of Mexico. When completed, the four new terminals will more than double U.S. LNG import capacity. Peak annual U.S. LNG import capacity in 2030 is projected to reach 6.5 trillion cubic feet, with actual imports of 4.5 trillion cubic feet (Figure 46). 


~~ snip ~~

Mexico has significant untapped reserves of natural gas, but the Mexican government does not have the resources needed to develop them and to date has been relatively unsuccessful in attracting foreign capital. Currently, only the state oil and natural gas company, Pemex, is allowed to have any ownership interest in Mexico’s oil and natural gas reserves, which makes participation in the development of Mexico’s oil and gas resources unattractive to foreign investors. 

~~ end excerpt ~~

Now think about the recent comments about re negotiating NAFTA. Now read the above paragraph again, and think what a panic Mexican politicians and Pemex will be in in 2012 when oil export revenues disappear along with 42% of the money for social infrastructure.

How does the North American Union play into this as possible access for pipelines?

Will American firms finally be able to move into the Mexican market, and the will the economic migration to the north be delayed for a few years? All thoughts to consider as the future unfolds.