World Energy-Economy scenarios with system dynamics modelling

Carlos de Castro, Luis Javier Miguel, Margarita MediavillaUniversity of Valladolid

Spain

Oil extraction

GDP per capita

Population

+

+ Technology+

Geological Effort

-

Mental models…

Oil extraction

GDP per capita

Population

Geological Effort

Technology

+

+ +

-

“economic world”IPCC, WEC, IEA…

“geophysic world”ASPO, Laherrère…

Feedbacks!!!

Hubbert: If there are not demand constraints, World oil peak before 2000But there are demand constraints always!If ASPO are right the economic consequences of a declining oil extraction will cause feedback on the decline oil extraction

IPCC: We have plainty of resources.

But there are geophysical constraints in any case. World is not flat

We must consider feedbacks

Oil extraction

GDP per capita

Population

+

+ Technology+

Geological Effort

-

Net Energy

++

Rest of energies

+

Hypothesis “Hirsch”

Economic constraints

+

Energy lost

Oil extraction

GDP per capita

Population

+

+ Technology+

Geological Effort

-

Net Energy

++

Rest of energies

+

Geophysical constraints Reserves

Extraction

+

-

Hypothesis “Hubbert”

Hypothesis “Hall”

Oil extraction

GDP per capita

Population

+

+ Technology+

Geological Effort

-

Net Energy

++

Rest of energies

Hypothesis “UN”

Hypothesis “Ayres”

Net Energy

Rest of energies

Rest of energies

Non renewable energies(Coal, non-conventional oil, natural gas, uranium)

“optimistic scenario”:Renewables without economical or technological feedbacks. (Ad hoc)EROEI = ∞

Future energies(fusion…)

Renewable energies(biomass, hydro, rest)

World "renewables" energy production (Gboe/year)

0

10

20

30

40

50

60

70

80

90

100

1985 1995 2005 2015 2025 2035 2045 2055 2065 2075 2085 2095

biomass

hydroelectricity

rest_of_renewables

fusion

Linear projection

Following population

Technical maximum (Zerta)

Needed to “not stop” growing

Model Hypothesis

• Hypothesis UN: World population following UN median estimations.• Hypothesis Ayres: technological innovation (Technology).

Technology = Min (b· TIME, 0.03)• Hypothesis Hubbert: Geological effort.

Effort = C · Annual extraction/Reserves• Hypothesis Hirsch: GDP-Energy relationship

GDP per cápita = A(t)· oil extraction + B(t)· energy production

Oil extraction = population + GDP percapita + Technology - Effort

time

Technology

3%

1985 2015

1

0

0.5

1985 2005 2035

B(t)

A(t)

year

Oil dependency

Energy dependency

World primary energy production (Gboe/year)

0

25

50

75

100

125

150

175

200

1985 1995 2005 2015 2025 2035 2045 2055 2065 2075 2085 2095

biomass hydroelectricityrest_of_renewables fusioncoal extraction natural gas extractionnc oil extraction oil extractionuranium extraction Total production

“optimistic” scenario

World primary energy production (Gboe/year)

0

5

10

15

20

25

30

35

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

biomass hydroelectricity rest_of_renewables

fusion coal extraction natural gas extraction

nc oil extraction oil extraction uranium extraction

Total production

World per capita GDP (1985 = 1)

0

0,5

1

1,5

2

2,5

3

3,5

1985 1995 2005 2015 2025 2035 2045 2055 2065 2075 2085 2095

If there were a feedback from economy to technology and from economy to renewables?

Pessimistic scenario

Energy lost

Oil extraction

GDP per cápita

Population

+

+ Technology+

Geological Effort

-

Net Energy

++

Rest of energies

+

+

+Hypothesis “Meadows”

Technology = T0+Ln(GDPpercapita)

Renewables production = a + b· GDP percapita

+ +

Pessimistic scenario

World primary energy production (Gboe/year)

0

10

20

30

40

50

60

70

80

90

100

1985 1995 2005 2015 2025 2035 2045 2055 2065 2075 2085 2095

biomass

hydroelectricity

rest_of_renewables

oil extraction

nc oil extraction

natural gas extraction

coal extraction

uranium extraction

Total production

Are “pessimists” pessimists or optimists?

World total oil extraction (Gboe/year)

0

5

10

15

20

25

30

35

40

1980 1990 2000 2010 2020 2030 2040 2050 2060

optimistic

pessimistic

ASPO

Laherrère

World cumulative CO2 emissions (GtCe)

0

500

1000

1500

2000

2500

1990 2010 2030 2050 2070 2090

World - A1 ASF World - A1G MESSAGE

World - B1 MESSAGE World - B1 MINICAM

"optimistic model"

Optimistic scenario. Estimations of CO2e emissions. The estimated emissions are similar to the more optimistic emission predictions of the IPCC. We represent 4 of the most representatives but extremes SERS scenarios (IPCC2001). IPCC is only CO2 (not CO2e) but include CO2 from cement manufacture and other industrial process. Our CO2e is more or less the same as IPCC CO2 emissions from 1990 to 2005.

Dangerous level(including non fossil related emissions)

World per capita GDP (1985 = 1)

0

0,5

1

1,5

2

2,5

3

3,5

1985 1995 2005 2015 2025 2035 2045 2055 2065 2075 2085 2095

Pessimistic

Optimistic

Point of bifurcation, Now!!!

The end of present civilization

Our models show similarities with Chaotic systems

• References:

• ASPO2008: R. Koppelaar (2008). “Oil watch monthly”. ASPO-Netherlands. 24 January 2008.• Ayres2005: Ayres RU and J van den Bergh (2005): “A theory of economic growth with

material/energy resources and dematerialization: Interaction of three growth mechanisms” Ecological Economics 55(2005):96-118

• EWG2006: Energy Watch Group: “Uranium resources and nuclear energy” (2006). Germany. • EWG2007: Energy Watch Group: “Coal: resources and future production” (2007). Germany.• Farrell2007: Adam R. Brandt & Alexander E. Farrell (2007): “Scraping the bottom of the barrel:

greenhouse gas emission consequences of a transition to low-quality and synthetic petroleum resources”

• Hall2005: Hall C. and C Cleveland: “EROEI: definition, history and future implications”. ASPO-US conference, November 2005.

• Hirsch2008: R L. Hirsch (2008): “Mitigation of maximum world oil production: Shortage scenarios” Energy Policy 36 881–889

• Hubbert1956: MK Hubert: “Nuclear energy and the fossils fuels”. Spring Meeting (Texas) of the American Petroleum Institute.

• IIASA1998: “Global Energy Perspectives” Edited N. Nakicenovic, A. Grübler y A. McDonald. IIASA (Internacional Institute for Applied Systems Analysis).

• Laherrere2005: J. Laherrère (2005): "Forecasting production from discovery” ASPO-meeting. Lisbon May 19-20, 2005

• Meadows 2002: D. Meadows, J Rangders y D Meadows (2006): “Los límites del crecimiento 30 años después”. Galaxia Gutenberg y Círculo de Lectores.

• Meadows1972: “DH. Meadows et al.: “Limits to Growth: A Report for the Club of Rome's Project on the Predicament of Mankind”, New American Library, 1977

• WEO2004: World Energy Outlook. Internacional Energy Agency.• Zerta M, et al. “Alternative World Energy Outlook (AWEO) and the role of hydrogen in a

changing energy landscape”. Int J Hydrogen Energy (2008), doi:10.1016/j.ijhydene.2008.01.044

Hubbert Hypothesis

Ayres Hypothesis Hirsch Hypothesis

United NationsHypothesisMeadows Hypothesis

Non_discovered_resources Reserves Cumulative_production

Annual_discoveries Annual_producction

Former_annual_production

Effort

GDP_percapita_variation

Population_variation

Natural_demand_variation

Technology

Producction_variation

GDP

Hubbert Hypothesis

Non_discovered_resources Reserves Cumulative_production

Annual_producction

Producction_variation

Effort Former_annual_production

Natural_demand_variationnatural_discoveries_variationDiscoveries_variation

Former_annual_discoveries

Annual_discoveries

Effort_

hypothesis Hirsch: This hypothesis establishes the relationship between the energy production and the GDP and we base it on the conclusion of Hirsch (2008) who states that world oil production growth and world GDP growth are strongly connected.

1%

% offeroilinchangeGDPofchange

World annual growth

-0,05

0

0,05

0,1

1970 1975 1980 1985 1990 1995 2000 2005 2010

GDP variation

Oil variationpercapita GDP variation

Percentual variation of the GDP, per capita GDP and oil production. Sources: elaborated from BP2007, United Nations, wikipedia and WEO2004

Oil extraction

GDP per cápita

+

Energy

++

+

GDP per cápita = A(t)· oil extraction + B(t)· energy production

Oil extraction = population + GDP percápita + Technology - Effort

Hypothesis Meadows: This hypothesis, which we only use in the “pessimistic” models, describes the relationship between the technological innovation and GDP. It is based on the ideas of Meadows (1972, 2002) that established that the capital available for the technological advance depends on the GDP and if the growth stagnated it will tend to grow more slowly.

Technology = MIN(b*(TIME+20),0.02)*(a+LN(GDP per capita))

Renewables production = a + b· GDP per capita

Year (2005 <=> 0)

Technology1

GDP per cápita growth2

-20 0 20 40 60 80-0,08

-0,07

-0,06

-0,05

-0,04

-0,03

-0,02

-0,01

0,00

0,01

0,02

0,03

1

2

1

212

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

1

2

Hypothesis Hall: We will lose energy for the production of energy (energy return on energy investment concept, Hall2005). Following Hall, oil invested in energy production increases quickly relative to net oil production; exponentially? “Exponential ELost”: For each unit of a non renewable energy we lose

energy proportional to energy production modulated by an exponential over time.

“Effort ELost”, “Reserves EROEI”: The energy lost of a resources j depends approximately on the Effort of the rest of energies.

n

ii

T

jjjL EffortbE

EEcE

1)()( ··

tdL eoilEaoilE ·)·(·)(

j

jjRcb

REROEI

·)(

Oil energy lost (Gboe/year)

0

0,5

1

1,5

2

2,5

3

3,5

4

1985 2005 2025 2045 2065 2085

"Effort"

"Exponential"

Next 10 years we will lose 0,5-1Gboe/year more than now

Year (2005 <=> 0)

oil EROEI1

nc oil EROEI2

coal EROEI3

natural gas EROEI4

uranium EROEI5

-20 -10 0 10 20 30 40 50 60 70 80 900

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5 12

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

5

1

2

3

4

51

2

3

45

1

2

3

45

  EROEI

oil 4

nc oil <2

natural gas 8

(LNG) 3

coal 17

uranium 2,5

MJCOupstream

MJCOusefulEROEI

/""

/""

2

2

n

iLost ijLj EE1

),()( E(j,i) is the energy of resource j to extract and process the resource i

c

Rb

E

EEE

iT

jiijL ··),(

n

ii

T

jjjL EffortbE

EEcE

1)()( ·· The more Ei the

more EL(j,i)

Proportional to Ej relative to ET

The less Reserves, the

more Energy to extract the resource i

j

jjRcb

REROEI

·)(

Energy intensity (Gboe/GDP)

Year (2005 <=> 0)

optimistic scenario1

IIASA min2

IIASA max3

pessimistic scenario4

0 50

0,002

0,003

0,004

0,005

0,006

0,007

0,008

0,009

0,010

1

2

34

12

3

4

• Hypothesis Hubbert : describes the idea established by Hubbert (1956): the discoveries of oil fields and the production of oil (the same apply to the rest of non renewable resources like non conventional oil, coal, gas or uranium) vary with the stocks of undiscovered resources and/or reserves respectively. Therefore the less stock there is to be extracted (discovered) the more difficult it is to increase the annual extraction of this resource.

URR (Gboe)

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

oil nc oil natural gas coal uranium

PessimisticScenario

OptimisticScenario

Annual discoveries and production (Gbarrels)

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

5

1.900 1.920 1.940 1.960 1.980 2.000 2.020 2.040

Model discoveries

Model production

Discoveries

D w ith technology

Production

P w ith technology

Testing Hubbert (+ Ayres)

USA (-Alaska) oil discoveries and production.