In this post I will attempt to present the ground breaking research by the Hills Group who are a group of mining engineers and project managers who published a paper in December 2013 entitled “Depletion: A Determination for the world’s petroleum reserve: an exergy analysis employing the Etp model.” A second version was issued in March 2015 as an update with extensive graphs, data sets and equations explaining their methodology and that is the version I will refer to. This report can be obtained as a 65 page monograph for a modest price from their website.I believe their work is a uniquely original Nobel Prize quality effort to look at oil production and depletion from an entirely new perspective far different from the work previously performed by economists, oil executives and corporations, energy organizations and journalists , analysts and geologists. The traditional approach has involved cataloging oil resources and reserves worldwide with production history and estimates of future supply and demand. Their metrics have included cost, volumetric and quantitative considerations primarily. Interestingly, depletion of world energy supplies has been to date a lesser consideration. Some analysts have looked at the energy side of things employing concepts like EROEI, that is energy return on energy invested stating an obvious point that to obtain energy, you will need to expend energy. But to my knowledge no one has looked at oil production, processing and distribution from a strictly energy and cost analysis perspective attempting to show energy flows into the petroleum industry and energy flows into our industrial society. Energy flows are exceedingly important in all manner of fields from ecology, astrophysics, meteorology, and economics and as it happens oil production. The Hills Group went outside the envelope and decided to use physics and thermodynamics to see if depletion could be estimated more accurately than previous methods. They also wanted to look at how the energy flows might influence and predict cost and availability of oil going forward. It’s my guess that when they started their work developing their hypotheses they had no idea what they would find and the impact of their conclusions. I should say at the outset that their report is highly detailed and complex employing a myriad of equations, graphs, and data sets and the serious reader will need at least a college level understanding of physics, mathematics and calculus to truly understand their approach. I have that background but found that I had to go back and refresh long forgotten concepts of thermodynamics to plow through the paper which I have read and reread. What I find extraordinary is that I have not seen any peer reviews or criticism of their work anywhere outside of a few excellent energy bloggers and YouTube videos. The silence has been deafening and I continue to scan the Net for commentary on their work. If necessary I will contact energy analysts with whom I am acquainted urging them to study the work of the Hills Group and see if they can spot flaws in their reasoning. My understanding is rudimentary at best but so far I find their conclusions largely accurate but I would urge caution totally accepting their grim conclusions without additional study and research. I have a few quibbles with some of their work. For example they use scientific notation which clutters their rather crude graphs. Their explanations involving thermodynamic principles could be improved and their use of for example the BTU as their preferred unit of energy seems inappropriate given that the Joule is in most respects the more standard and useful metric. I have redrawn many of their graphs to improve readability for myself. They don’t state in their paper that energy consumption by the petroleum production system should be the energy of the marginal barrel although that is implied in their work. They also seem reluctant to address the greater implications of what their work might mean to an energy dependent Industrial civilization which could be profound to say the least. I have little doubt they are unaware of the impact of their preliminary conclusions. Their work by my understanding seems to predict the imminent demise of the International Oil companies. They don’t say that oil production will cease. They just say that when the energy cost of oil extraction matches the energy delivered that oil production could cease. They don’t mention that oil production could continue if subsidized by another energy source. But of course this is already being done on a large scale in Alberta’s tar sands using natural gas as an input to tease out the bitumen. There are some uses of oil that have no realistic substitutes. They also didn’t emphasize the overweening importance of oil energy to the rest of the worldwide energy infrastructure. For example The BP report of 2016 states that oil as a primary energy source supplied 32.9% of the world’s primary energy in 2015 but the fact is that oil underpins and subsidizes to a huge extent the production from all the other energy sources. Most importantly for the world industrial economy, oil is literally the driving force of everything that moves, and without oil almost nothing would move, no trucks would deliver goods, few mines would function, industrial food production would cease and the automobile transportation system would largely collapse. These possible scenarios are whoppers. Now I’ve saved the worst for last. The Hills Group shows their Etp curve hitting a wall as early as 2030 or 2031! More on that conclusion in a future post after I have tried to describe in detail the methodology of their work. I will also address policy implications for the economy and society in general and my native Jackson Hole region in particular.
Published by Rendezvous Mountain Farm
I was born in Montana and raised in a dozen Air Force SAC bases. I attended Holy Cross,West Point and UNC in Chapel Hill(MD"71). Army doc in the last years of the Viet Nam fiasco. My wife and I live in a log cabin I built from local timber in Wilson Wyoming in 1976 . I've done a dozen different jobs including construction, boat building,magazine writing and commercial fishing and retired from the Emergency and Operating Room in 2004. We manage a small diversified organic farm including leased land which totals about 50 acres in the beautiful alpine setting of the Jackson Hole valley. We raise a variety of livestock which includes some rare and diversified breeds of animals and poultry. We grow most of our food and forage. Our land is irrigated from Lake Creek and the Snake River and we raise and bale our own organic hay. View more posts