Ireland’s Response to the Looming World Energy Crisis

1. Ireland’s Response to theLooming World Energy Crisis by Colin Campbell ASPO

2. Background 1951-7 Studied geology at Oxford • PhD on Connemara geology That started a long love affair with Ireland 1958 - Joined the oil industry • Exploration geologist in Latin America • 1972- 90 Executive, Europe, Norway • Pioneered Irish exploration venture 1972-76 1990 Retired - if that is the word

3. On a mule in Colombia in 1960

4. Outline • Geological background • “You have to find it first” • Depletion is easy to grasp • Why and how self-evident reality has been concealed and confused • A Devastating Realisation • Ireland’s Response

5. News Flash $53 New York October 11 But may crash with Recession

6. PETROLEUM GEOLOGY in3 Minutes

7. Extreme Global Warming gave excessive Algal Growths 90 & 150 million years ago Organic debris

8. And then came the rains Trough filled by sediment Chemical reactions converted organic debris into oil when buried & heated

9. North SeaOil GeneratingTrends-Where oil is and where it is not

10. Migration of Oil 2. Escape Surface of the Earth 3. Oilfield 1.Dissipation 2 3 1 Oil generation at 2000m depth Source

11. Critical Temperature 60-120 0C

12. A Fixed Quantity • Oil was formed in the geological past • You can’t “grow” more • Running Out? – Not the main issue • We started running out with the first barrel • The last barrel is far in the future • But production begins to decline when half is gone - THAT IS THE ISSUE

13. Why we need to know Oil & Gas now dominate our lives • 40% of traded energy is oil • >90% transport fuel is oil • Trade depends on transport • Much electricity from gas • Critical for agriculture • fuelling the tractor • synthetic nutrients and pesticides • pumping irrigation

14. Why were n’t we told? • Oil companies reported “financial reserves” to meet strict stock exchange rules • They under-reported & revised upwards over time • A comforting but misleading image of steady growth • No conspiracy, just simple commercial prudence • Those days are over - the Shell debacle • OPEC over-reported as they competed for quota based on reserves • PUBLIC NUMBERS - VERY UNRELIABLE

15. OPEC Reserve Revisions Change From Remaining Reserves To Total Found

16. Reality and Illusion Illusion Inflexion due to falling Discovery Reality

17. US-48 Peak to Peak 40 years

18. Egypt Peak to Peak 30 years

19. Indonesia Peak to Peak 32 years

20. Russia Peak to Peak 27 years

21. United Kingdom Peak to Peak 25 years

22. Real Discovery Trend Past discovery by ExxonMobil Past after ExxonMobil

23. Draining the tanks - Regular Oil 150 Yet-to-Find Surprise Filling at 3.75 p.a ? 920 Produced 1700 DISCOVERED 780 Remaining Emptying at 22 p.a. Billion barrels One in - Six out

24. Where is it?Regular Oil

25. All Oil & Gas All boundaries fuzzy

26. The Devastating Realisation So, oil will soon be in terminal decline • Gas follows a few years later • Colossal Impact • Economy - stockmarket crash inevitable • Society • Politics • Environment • We are totally unprepared

27. End of the First Half of Oil Age • First half lasted 150 years, stimulating • Industry • Transport & trade • Agriculture & people • Growth of financial capital • Second Half dawns, meaning decline of oil • And all that depends on it • Including Financial Capital • Spelling Recession - Depression

28. Population ? First Oil Well

29. But World begins to wake up • This has been evident for years but denied • We faced malign influence of Economists with outdated principles and practices • Now at last, high prices force admission by • World Energy Council • International Energy Agency - obliquely • Even BP (long bent on denial) now confesses • US prefers military conquest of oil to cutting excessive demand

30. What this means for Ireland Small population but high per-capita oil use • USA- 27 barrels a year per person • Ireland- 15.6 • Europe Average- 13.1 • India- 0.9 Gas - critical for electricity • Slim chance of finding more oil or gas

31. Ireland’s Electricity • Priority in the early days of the Republic • Shannon Hydro-electric scheme • Rural electrification by ESB • Electricity came to Ballydehob in 1951 • It was a NationalPriority • But then the CELTIC TIGER stalked in by dead of night & sold out to the Market

32. Ireland’s Electricity fuel Gas Coal Oil Peat Renewables 85% Imported !

33. Gas Supply • At first, Kinsale Head field supplied enough • Then tapped into the UK hypermarket • UK over-produced and prices fell • But the Celtic Tiger could easily afford it • Now we plan to half-privatise the ESB • stimulating yet more consumption • The Regulator tries even to cut costs to consumer • But without a thought for the future.

35. Gas - the unexpected cliff Hidden Spare Capacity No market signal of cliff Production Plateau

36. Ireland’s gas balance UK net export ends At HighRisk Kinsale + Corrib **With flat demand**

37. Where will gas come from ? • Britain becomes a net importer - from • Norway • Siberia • Central Asia, Middle East, N. Africa……. • Many hungry transit countries in between • Ireland at the end of the line • Will Britain re-export to Ireland ? • When she needs all she can get • and at what price?

38. A Grave Crisis in the Making • This is a major crisis in the making • the lights will go out unless something is done • An economic recession affecting everyone • The Government seems blissfully ignorant • Misplaced faith that the market must deliver • Relies on bad advice form IEA, EU • It needs to use the short time left to prepare • Everyone needs to know and contribute

39. Plan of Action • Fund a small office to study properly • Launch a programme of public education • Don’t wait for Brussels • It is an investment giving Ireland a strong competitive edge • Take a lead in a World Depletion Protocol • Back the 2005 Lisbon Initiative

40. Solution-1 : Stop waste Domestic and industrial energy audits • Charges to penalise waste & reward savings. • A modest cheap ration but high price for excess • Better insulation & industrial heat recovery • Disallow energy costs as a charge against tax • Stop tax-free aviation fuel • More public transport

41. Solution-2: Turn to Renewables • A solar collector on every roof • Capture massive tidal and wave energy • Wind-power and hydro-power • Biomass - wood pellets from forestry • Geothermal • Heat pumps & modern light bulbs • Even nuclear ? (New small fail-safe plants)

42. Solution-3: Secure sources • Don’t close coal power - clean it • Negotiate with Norway (and other places) for privileged access to oil and gas. • Ireland’s needs are modest and could be met • Pay premium to-day for security tomorrow • might still be time to buy into oil and gas fields • Fill the tanks on Whiddy Island • Build terminal for Liquefied gas

43. Consequences - Silver Linings • A new regionalism • Local markets • New attitudes : return to the land • People live in better harmony with • themselves • each other • the Environment in which Nature has ordained them to live

44. The Celtic Fox thrives in Ireland: The Tiger belongs to the Zoo