Twin Peaks: The Fossil Fuel Edition -- Part I
In 1956, Texas oil geologist M. King Hubbert predicted that U.S. oil production would peak no later than 1970. Lo and behold, in 1970, oil production topped out at just over 9.6 million barrels a day (mbd) and began its decline. The predicted peak had been reached. Regarding the world oil supply – no worries. There were oceans of oil in Middle East deserts, particularly in Saudi Arabia. Additionally, new finds in the North Sea, as well as discoveries, largely offshore, of recoverable oil in other parts of the world, meant that the world was not running out of oil; just the United States was.
Domestically though, trouble was brewing on two fronts. For most of the century, U.S. oil imports were modest. Then, in the mid-1950s, oil imports reached 1 mbd and began climbing. From a consumer perspective, imported oil meant lower prices. But for domestic producers, cheap oil meant decreased revenues. To shore up revenues, domestic oil companies successfully lobbied the Eisenhower administration to impose import quotas on Mideast oil. Bad idea. In retaliation for those market restrictions, Middle East oil states formed the cartel known as OPEC – the Organization of Petroleum Exporting Countries. Now world …
Fossil fuels are reaching their consumption peak. By way of example, the United States has a surfeit of coal, but coal use is on the decline as natural gas and renewable resources replace the dirty fuel for generating electricity. Similarly, oil and natural gas are on the same decreasing consumption trajectory as recent data and modeling suggest.
Consider the following market facts that directly impact coal and reveal its consumption peak:
- In Europe, fossil fuels peaked when renewables reached 3 percent of the market.
- The majority of new electric capacity comes from solar, wind, and natural gas.
- Today, local wind and solar can replace 74 percent of the coal fleet, and by 2025, it will be sufficient to replace 86 percent of the fleet.
- Since 2013, 100 banks have restricted or left coal lending.
- In 2016, Peabody Coal, the nation's largest coal company, declared bankruptcy after having …
