Bill Reinert Describes What the Future of Energy Looks Like to his University of Colorado Audience

April 2012 – Conference on World Affairs – University of Colorado, Boulder
On the left is Dr. Jan Kreider, on the right, his friend Bill Reinert.

When an audience member at the April 2012 Conference on World Affairs at the University of Colorado asked Bill Reinert what he would do if he were in charge of energy policy in our nation, he retorted, “Aren’t I?”

Spoken in jest, his answer wasn’t all that far from the truth. Reinert was the coordinator of Toyota’s research, development and marketing activities related to alternative-fueled vehicles and emerging technologies, and the former Prius product planning team leader. He continues to be one of the company’s foremost futurist thinkers, now working on fuel cell vehicles, electric vehicles and other technologies which will help to define future transportation in America and the entire world.

As he showed us slides and gave his talk, he told our CWA audience that we would not be able to find better information anywhere, including from government agencies, about the decline in the spare capacity of global liquid fuels.

Joining him for the talk was his long-time friend Dr. Jan Kreider, electricity and biofuels expert and engineering professor emeritus, University of Colorado. Dr. Albert Bartlett, the CU physics professor who is famous worldwide for his talk on exponential function, was in the audience and Dr. Kreider acknowledged him and pointed out that both he and Reinert had been highly influenced by him when they were students at CU 35 years ago, leading them to do the work that they do today.

For those who aren’t familiar with Bill Reinert, he’s not your typical corporate representative spokesman. Indeed he can shock an audience because of his candidness. It rather appears that he only represents himself and Toyota pays him anyway.

While only the biofuels subject in this presentation directly focused upon agriculture, everything in the presentation focused upon agriculture indirectly.

The talk began by explaining that we are into the second age of oil extraction, the economically and otherwise difficult to extract age. Although oil extraction remains easy in the Middle East, the geopolitical tensions prevent Middle Eastern oil from being an easy source. This also means that other liquid fuel types are beginning to compete with oil.

We were challenged by Reinert’s question asking us which nation is the biggest threat to the status quo for the global oil supply at present. He explained to us that it is Japan, because they will end nuclear electricity production this summer resulting in 350,000-500,000 barrels of new global oil demand per day.

He told us that it’s all about excess capacity and when excess capacity falls below 2-5 percent, the oil price skyrockets according to the law of supply and demand. According to their research, the year 2025 is the year that there will be a dramatic fall off of spare capacity, although it will leave its comfort zone by approximately 2021. See next graphic.

Chart from CWA talk used by permission of Reinert/Kreider

Because of changing oil demand conditions and political unrest, he predicts there will be new orders coming together in the Middle East, such as Syria-Iran, and Turkey-Saudi Arabia and that new borders may be drawn. He and Kreider are extremely concerned about the Middle Eastern geopolitical situation. In the Middle East, the oil risks are above ground. Saudi doesn’t mind what our nation wants, they just stick to their long term prescribed twenty-year plan which dictates what production they bring online and when.

Enhanced and improved oil recovery and development of discovered fields and exploration will extend OPEC’s plateau, with an estimated sharp decline in 2037-2050. Between now and 2040, the largest production by OPEC will come from Saudi Arabia, Iraq, Iran and Venezuela, followed by UAE, Nigeria, Kuwait and Libya.

All of the new wells being brought into production today are small and expensive to drill. Fracking wells have a very short production life. There may be large fields remaining very deep in the ocean, some as deep as 15,000 feet under water. Away from the Middle East other fuels are becoming more important. The non-crude liquids such as biofuels, oil shale, and tar sands are replacing light sweet crude. Peak liquid production of 98-105 million barrels per day is expected between the years 2017 and 2023. Liquid natural gas will be important and by the year 2040 there will still be a lot of oil. Natural gas has the potential to offset a great deal of oil demand. These statements are represented in the following graphic.

Source: Dr Peter Wells
Chart from CWA talk used by permission of Reinert/Kreider

According to a chart he exhibited from Peter R.A. Wells, from the non-crude oil liquids category which includes oil shale, other liquids, biofuels, coal-to-liquids, gas-to-liquids, Canadian tar sands, and NGLs, the only three categories still gaining momentum in the year 2070 will be Canadian tar sands, biofuels, and oil shale. Production of all types of non-crude oil liquids will peak just prior to 2030. See below.

Source: Dr Peter Wells
Chart from CWA talk used by permission of Reinert/Kreider

The next quote by Reinert already looks prescient given that it was made on April 11, 2012.

“By the year 2013 we will see very low oil prices again.”

He compared oil prices and GDPs to a seesaw, showing that high oil prices are followed by economic slow-downs repeatedly. “Oil prices are starting to drive GDP’s across the world.”

It has been no secret for quite a number of years that Reinert doesn’t hold much hope in a future transportation system built upon electric cars. He says that you can’t compete electro-chemically with the energy density of oil or gas.

Fifty mile per gallon IC (internal combustion) cars are ideal, because at sixty miles per gallon and above, you get diminishing returns of the necessary investment. He rather enthusiastically stated that they have made phenomenal advances in IC engines that are near maximum theoretical efficiency.

When asked by an audience member what he would do if he were in charge of policy, he answered that he’d do what Steven Chu did.

“I’d set a standard for synthetic gasoline with an octane number quite high, about 104, that allows advanced engines to work. I’d also set a diesel standard quite high and I would give a carbon rating to the fuel with a descriptive specification and let the wonderful world of technology and the market work its magic. That’s what I’d do.

He painted a picture for us, of the environmental destruction involved in tar sands production. First, he said the entire ecosystem is erased starting with the burning/removal of the trees. Strip mining at the rate of about an acre per hour is done with massive equipment capable of hauling 300 tons each, which operate 24/7. The tar sands process is that of steaming and cleaning to produce a bitumen-like product which can then be used in synthetic crude processing plants, a process with enormous emissions. These operations dot the landscape about every ten miles. The water used becomes contaminated forever.

Sludge entering a tar sands tailing pond in Alberta

One of the world’s largest earthen dams in the world is restraining a giant reservoir filled with toxic sludge from processing tar sands into oil and he pointed out that because it is already, at 300 feet high, ten times higher than it was intended, it is only a matter of time before this tall dam falls into the Athabasca River which runs into the Arctic. (Much seepage occurs already into this largely water boreal forest ecosystem. These tailing “ponds” grow with added sludge 24/7 and are toxic enough to kill birds that happen to land nearby.) Steam cannons are fired often to scare migratory birds away.

Trying to bring reality closer to home for us, he predicted that we will be watching as this type of scenario takes place near Rifle, Colorado for oil shale extraction. Then, he reminded us that China is currently the biggest investor in Canadian tar sands and oil shale here in the U.S. The Keystone XL pipeline is to carry the tar sands product to synthetic crude processing plants in Oklahoma, only to be exported out of this country for sale and use abroad.

Truck hauling 36-Inch Pipe to build Keystone-Cushing Pipeline (Phase 2) south-east of Peabody, Kansas. Photo by Steve Meirowsky July 2010.

He pointed out that there is a big difference between the shale rock used in hydro fracking from which process some real oil is obtained, and the oil shale of Colorado which is kerogen.

Both Kreider and Reinert warned that water will become a huge issue in the future as all energy water needs are huge and polluting. He urged us to consider what would happen if the Colorado River faces the demands of California and other states versus oil shale, agriculture, and other uses. He stated that the shale companies here already own enough water to proceed with production and that shale oil will be competitive with Canadian tar sands.

As far as the future of global liquid fuel demands, Reinert predicts that China’s use will level off eventually since their population is expected to peak in 2030. The opposite will happen in India, however, where the younger demographics will demand more and more, and coal use will continue, most likely contributing a greater share of greenhouse emissions from that nation.

He doesn’t hold back on his cynicism and hopelessness in the area of politics. Related to an audience question about government doing the right thing, he quipped “I don’t know what right means. I’ve been through seven administrations and haven’t seen it yet. … then quotes Lily Tomlin, “No matter how cynical I get, I just can’t keep up.” And when asked a question related to our government taking an appropriate action, he responded, “If you are estimating political will to be at zero, you are overestimating.”

Dr. Jan Kreider studies the cradle to grave emissions of all the fuels, with a special interest in how much energy is consumed when making each type of fuel. He stated that natural gas in a hybrid vehicle is the cleanest of all the practical vehicles and we have the technology available today. The following chart by Kreider and Associates provides a great deal of information useful in assessing future fuel efforts.

Chart from CWA talk used by permission of Reinert/Kreider

Reinert then explained that to use natural gas in vehicles, a $5,000 carbon fiber tank is used to store the natural gas, and they have to redesign the rear suspension, and accomodate a safe rear child car seat, but that it can be done.

When asked why diesel isn’t used in cars here like it is in 60 percent of Europe’s cars, he said that it comes down to taxes. Though he likes diesel, he said that it would be difficult for California to get its low emissions if it used diesel. But, he said, “It’s coming.” Gasoline engines are becoming very high compression and look more like diesel engines and diesel engines are becoming low compression and looking more like gasoline as we get higher octane requirements. He said we need higher octane fuels containing zero percent sulfur because sulfur poisons the advanced catalysts.

Kreider studies how much land and water are required to produce fuels, what their energy ratios are, and what their greenhouse emissions are. He gave the example of corn ethanol having twice the greenhouse gases of gasoline and requiring a lot of diesel to make the product. He believes that water is about the most important consideration, even more so than the hydrocarbon aspect of future fuels. Then, he said that it would take ten Colorado Rivers to make enough ethanol to provide one-half of the liquid fuels that we use in the United States …. ten Colorado Rivers running continuously all year long.

“Water is a huge concern for every fuel.”

Reinert added that Toyota has cars in their research center from which “you can breathe the exhaust”.

In final comments, Reinert reminded us that the price of oil doesn’t go up forever because you get demand destruction, economies go into recession, and competition from other products come along.

“Conceptually, peak oil is not an accurate description.”

Oil prices are driven by the amount of spare capacity and perceived geopolitical risk.

“Liquid fuels and advanced I.C. (internal combustion) engines will be here many decades to come.”

A late audience question challenged the team for insights that they might have from race cars. Interestingly, in the answer, they admitted that they are both Formula 1 race “nuts” but that “to maintain costs, race cars are less exotic than your street cars are today. Quite a bit less.”

That marked the end of their presentation.

My favorite Reinert quote that I like to parrot quite frequently was from his talk two years ago, “You ain’t seen noth’n yet when it comes to the environmental degradation that we will see when we go after the remaining fossil fuels.” He didn’t say those words this time, but it was an underlying theme of nearly everything that he talked about. I think he assumed that his audience was smart enough to make the connection, especially by pointing our attention to our own backyard of Rifle, Colorado. Methinks he was challenging us with a greater question.

Folks, our world is not facing an energy depletion problem, but because of our insatiable human desire for energy, it is facing a future environmental problem, water problem, and climate change problem on a scale that is unimaginable to us.


A special thanks to Bill Reinert and Dr. Kreider for generously allowing me to publish the above slides from the presentation.

Further reading: To see my write-up of Reinert’s 2010 CWA talk go here.

7 thoughts on “Bill Reinert Describes What the Future of Energy Looks Like to his University of Colorado Audience

  1. Rob M

    So if prices will leave the comfort zone around 2020 and may skyrocket after 2025, how does that comport with the idea that “by 2040 there will still be plenty of oil”? Does that mean it will be there but only at $200/barrel, or it will be there but at $10/gallon for gasoline?

    If this is what is meant, then what are the implications for Western society and the US in particular? It seems Reinert does not go into these societal questions. When gas hit $4/gallon a couple of years ago there where many news stories of people in rural areas who had to drive 10 miles to work or the hospital suddenly found that their job barely covered the gas. The problem took care of itself when gas started to go back down. So again, what does society, especially one with a spread-out landscape like the US, begin to look like and function when gasoline starts nudging north of say $6/gallon? That is a question I’d be interested in Kreider and Reinart to offer their thoughts on.

    Thank you for a great article!

    1. K.M. Post author

      Thanks for your question. I think the answer is that this subject is so enormous that it cannot be covered in a 1.5 hr presentation. Obviously, there was much left unsaid and there will be pain and major adaptations necessary to American society as the world “shares” the remaining amount of oil.

      Today’s slack in the system will afford a lot of essential services to continue longer than many peak oilers may think. But, unfortunately a lot of government action will make wrong choices in the ways of mandates and subsidies that continue to waste the precious FF & economic resources & do great damage to our water and to the environment. Protectionism and major conflicts will emerge. Because our government continues to prioritize building roads and infrastructure for very large vehicles, we are squandering time, money, and FFs instead of preparing our society appropriately. Where’s the rail build-out? I happen to live in a town where people love to bike, myself included, because we have a wonderful trail system. Most towns don’t. Infrastructure is everything in preparing for these drastic changes to our society. Outlying commuters, for example, will simply have to move closer to jobs. When gas hits $5-$8 per gallon we will finally see more serious changes in the way people decide to spend their money. Government and “developers” will react by promoting high density living and public transportation but these things take an enormous amount of resources and time. The one person to a large SUV/Pickup on the road will eventually become a rarity.

      They spoke only of vehicle transportation. Other issues like electricity, economic implications, and food systems weren’t discussed because there wasn’t time. But, in my opinion, they presented a lot of extremely valuable information and we need to each figure out what we think the future implications will be and react appropriately.

  2. Jimmy

    Why not make cars lighter to achieve better fuel economy? A go kart with a plastic bubble over it would provide personal transportation at a low price.

    Said go-kart could also double as a oyster mushroom cultivator when not in use, creating a micro climate for mushroom growth.

    Said oyster mushrooms in go-karts would effectively create millions of mobile farms, which even if fuel is not available would provide vertical growing area for oyster mushrooms, even in high denisty urban environments.

    Out of 1 billion people in the western world, surely there are people. with the money, to make something like this and help our system cope with peak oil.

  3. RBM

    You may know that raw data on capacity figures are national security issues at KSA. TOD has occasional in depth discussions on that topic.

    I wonder if Reinert hints at this whatsoever in his public talks ? I certainly don’t see it, in text form.

  4. eugene12

    I’m with Lily, my cynicism can’t keep up. I figure we’ll ride the “there must be solution so I can maintain my lifestyle” to the bitter end. As a relative told me couple of days ago, “I don’t want to know”. I see the endless “if only, why can’t we, they should”, etc as we frantically run from ourselves. Everything I read in comments and in many blogs, totally focuses on driving. Ignored are the countless vital uses of petroleum. Also totally ignored is the social chaos that will result from the “transition” away from fossil fuels. The impact on employment, housing, lost evaluations on everything, etc will be massive. And, of course, we ignore the impact on America’s huddle masses of poor who are already feeling the full brunt of rising costs on everything. But we’ve never been adverse to sacrificing masses of people do drive our way to where ever. In the land of Christian values, I want mine first. I figure the joke is on us and it won’t be pleasant when the laughing stops.

    1. K.M. Post author

      Well stated.

      I continue to marvel at the lack of response from citizens concerning this most important subject and also, the lack of agriculture specialists in addressing it. Are we like colonies of ants all working together to achieve common solutions to our problems or has our complexity of systems created a disaster in the waiting? Like you said, this story is so much more than what a gallon of gas costs at the pump.


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