I’ve alluded in a few previous posts (America’s Oil Addiction and The Hypocrisy and Illegality of the Nuclear Deal Between India and the U.S.) that the Bush Administration is very much aware of the fact that Peak Oil will happen and that it’s imminent and instead of speaking honestly about this event and attempting to educate the public, the administration (as well as the news media) talk around the issues (e.g. “tight supply”, “America is addicted to oil”). The Hirsch Report was commissioned by the U.S. Department of Energy (“DOE”) and initially released in February 2005, although it received little attention from the news media:

(July 2005) …Yet, half a year after release, discussion of the Hirsch report is conspicuously absent from the press and the halls of Congress. For months it has been archived, in PDF format, on a high school web site (http://www.hilltoplancers.org/, Hilltop High School in Chula Vista, Calif.). It now can be found on a few other sites as well (including http://www.energybulletin.net/ and http://www.projectcensored.org/)-but why must citizens search for an important government-sponsored report on private web sites?If the content of the Hirsch report is to be believed-and there is every reason to think it should be-then this is a document that deserves the close attention of every leader of government and industry in the US. Newspapers and news magazines should be running excerpts and summaries. Instead, there is nearly total silence. (Richard Heinberg)

It was also noted that the report recently disappeared from the DOE website.

I’ll be adding additional posts to discuss the details of the Hirsh report (it’s 91 pages long!) because I think it’s important and I think people should know more about it. For now, the following is a list of conclusions listed in the report, as a result of Robert Hirsch’s analysis:

1. World Oil Peaking is Going to Happen
World production of conventional oil will reach a maximum and decline thereafter. That maximum is called the peak. A number of competent forecasters project peaking within a decade; others contend it will occur later. Prediction of the peaking is extremely difficult because of geological complexities, measurement problems, pricing variations, demand elasticity, and political influences. Peaking will happen, but the timing is uncertain.

2. Oil Peaking Could Cost the U.S. Economy Dearly
Over the past century the development of the U.S. economy and lifestyle has been fundamentally shaped by the availability of abundant, low-cost oil. Oil scarcity and several-fold oil price increases due to world oil production peaking could have dramatic impacts. The decade after the onset of world oil peaking may resemble the period after the 1973-74 oil embargo, and the economic loss to the United States could be measured on a trillion-dollar scale. Aggressive, appropriately timed fuel efficiency and substitute fuel production could provide substantial mitigation.

3. Oil Peaking Presents a Unique Challenge
The world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary.

4. The Problem is Liquid Fuels
Under business-as-usual conditions, world oil demand will continue to grow, increasing approximately two percent per year for the next few decades. This growth will be driven primarily by the transportation sector. The economic and physical lifetimes of existing transportation equipment are measured on decade time-scales. Since turnover rates are low, rapid changeover in transportation end-use equipment is inherently impossible. Oil peaking represents a liquid fuels problem, not an “energy crisis” in the sense that term has been used. Motor vehicles, aircraft, trains, and ships simply have no ready alternative to liquid fuels. Non-hydrocarbon-based energy sources, such as solar, wind, photovoltaics, nuclear power, geothermal, fusion, etc. produce electricity, not liquid fuels, so their widespread use in transportation is at best decades away. Accordingly, mitigation of declining world oil production must be narrowly focused.

5. Mitigation Efforts Will Require Substantial Time
Mitigation will require an intense effort over decades. This inescapable conclusion is based on the time required to replace vast numbers of liquid fuel consuming vehicles and the time required to build a substantial number of substitute fuel production facilities. Our scenarios analysis shows:

• Waiting until world oil production peaks before taking crash program action would leave the world with a significant liquid fuel deficit for more than two decades.

• Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.

• Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period.

The obvious conclusion from this analysis is that with adequate, timely mitigation, the economic costs to the world can be minimized. If mitigation were to be too little, too late, world supply/demand balance will be achieved through massive demand destruction (shortages), which would translate to significant economic hardship. There will be no quick fixes. Even crash programs will require more than a decade to yield substantial relief.

6. Both Supply and Demand Will Require Attention
Sustained high oil prices will stimulate some level of forced demand reduction. Stricter end-use efficiency requirements can further reduce embedded demand, but substantial, world-scale change will require a decade or more. Production of large amounts of substitute liquid fuels can and must be provided. A number of commercial or near-commercial substitute fuel production technologies are currently available, so the production of large amounts of substitute liquid fuels is technically and economically feasible, albeit time-consuming and expensive.

7. It Is a Matter of Risk Management
The peaking of world conventional oil production presents a classic risk
management problem:

• Mitigation efforts initiated earlier than required may turn out to be premature, if peaking is long delayed.

• On the other hand, if peaking is imminent, failure to initiate timely mitigation could be extremely damaging.

Prudent risk management requires the planning and implementation of mitigation well before peaking. Early mitigation will almost certainly be less expensive and less damaging to the world’s economies than delayed mitigation.

8. Government Intervention Will be Required
Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic. The experiences of the 1970s and 1980s offer important lessons and guidance as to government actions that might be more or less desirable. But the process will not be easy. Expediency may require major changes to existing administrative and regulatory procedures such as lengthy environmental reviews and lengthy public involvement.

9. Economic Upheaval is Not Inevitable
Without mitigation, the peaking of world oil production will almost certainly cause major economic upheaval. However, given enough lead-time, the problems are soluble with existing technologies. New technologies are certain to help but on a longer time scale. Appropriately executed risk management could dramatically minimize the damages that might otherwise
occur.

10. More Information is Needed
The most effective action to combat the peaking of world oil production requires better understanding of a number of issues. Is it possible to have relatively clear signals as to when peaking might occur? It would be desirable to have potential mitigation actions better defined with respect to cost, potential capacity, timing, etc. Various risks and possible benefits of possible mitigation actions need to be examined.

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Robert Hirsch Bio
The Hirsch Report