Never $50/barrel ever again. Iraq is not actually dropping last month. I've written a post about that coming soon....

Halfin's argument is that we can't predict the future. That's it, that's his story and he's sticking to it. That is a very safe position to take. Can't we be a little more prescient than that? OK, I'll admit to uncertainty as things progess but the bulk of the evidence say we're in trouble, as you point out.

Total stocks are building but its very inemic http://www.poten.com/ have a good article on stocks But this is with everyone pumping flat out. Spooky. I think this winter is going to be very interesting crunch time. What price is it going to to take to trash the economy that is the multimillion dollar question.

http://www.engineeringtalk.com/news/frw/frw150.html

Excellent peak energy slide presentation:
http://www.google.com/url?sa=t&ct=res&cd=12&url=http%3A//www.worldenergy...

This, in reference to the first link above:

"SASOL, which has operated CTL (coal-to-liquids) plants since the 1950s, reckons that its technology is competitive with oil at $ 40/barrel. The SASOL conversion process also yields chemical by-products (such as olefins and alcohols), carbon dioxide and surplus electricity, and, if these are optimised, the technology might be able to compete with oil even at $25/barrel. However, $40 is a safer benchmark.

Converting coal into oil using the Fischer-Tropsch process was first done on a large scale by Hitler in World War II, when Germany was cut off from global oil supplies. South Africa in 1950 created SASOL for security reasons, to reduce its dependence on imported oil by converting its abundant coal reserves into oil. SASOL steadily improved the technology, but produced costly oil at well above global rates, justified only on security grounds. However, today the price of oil is close to $60/barrel, so SASOL's plants are highly profitable."

http://www.bsnl.in/business.asp?intNewsId=52361&strDisplayStyle=block&in...

Michael Robinson
You described the pdf presentation about energy as 'excellent' I would describe it as a waste of time and 'pie in the sky'.
Keep reading these PO forums, this coal topic will come back up again and you might change your opinion of the future of coal. When oil goes up, profits go down even for CTL plants because they depend upon oil product support.

Or you could go back thru the archives at http://groups.yahoo.com/group/energyresources/messages
http://groups.yahoo.com/group/EnergyRoundTable/messages

Found this hydrogen ... lamp, I guess, on Gizmodo:

http://www.heatnglo.com/products/fireplaces/aqueon/aqueonhome.asp

Needs 220V to make a flame.

Oil Trader -

My guess?

At around $75/$80 per, the economy begins to shake. At $100, it is toast. Why? Because the inflation adjusted equivalent price to the 1970's is around $95 per. We were in a slow, no-grow recession then. If you use 1980 methods to calculate inflation, GDP, stocks, etc. instead of the new methods Greenspan uses to hide shit, you see we are basically in the same damned boat - poor economy, no jobs, etc.

Although caused by different issues, the state we are in is pretty close economically. What is actually worse is the total debt load - taking that into account, if we hit the same spot price we hit in the 1970's, it will probably crash the entire house down.

Dave -

it is extremely important for Halfin to be right. He lives in a very black and white world apparently. I agree, nobody can predict the future, yet many fortunes are made and lost by exactly that. I am not going to be the guy standing there with my house around my ankles, saying, "Look! I was right!" I believe it is better to be over prepared for something bad than totally unprepared and count on something good. For some reason, my 50 years on the planet have led me to NEVER expect good from corporations or governments.

Trends are what every engineer uses to work on current things when there is no reliable historical context. I draw trend graphs and try to predict things I cannot see all damned day. In the end, I take the best I have and go to work. I adjust from there.

Surgeons do the same. No two bodies or patients are alike, even though the general layout is close. I assume economists do as well. A pipefitter, on the other hand, requires something very concrete and black and white. Teachers seem to also require black and white to get a point across. We are all working with bad data and trying to make educated guesses. The only time real data will be available is when this period is actually history.

I am too worried and distrustful of my future being controlled by others to simply sit and wait. And I am not all that worried about being wrong - it is a small price to pay in case I am right. Eating crow will taste very nice in the event I am wrong. It will mean I have worried for nothing, and my kids will not have to!

Your figures on oil imports are confusing, because you seem to have used the European-style comma in place of the decimal point for some figures (unless the U.S. really imports 1000 times as much oil from Mexico as from Saudi Arabia).

It's pretty ironic that Spooky accuses me of seeing things in black and white terms, when my position is that I don't know if there will be a Peak Oil crisis soon! I guess people read what they want to read.

I respect other people's views. When I try to understand a controversial issue, I look first at the opinions of people putting their money on the line as reflected in market prices; second at the scientific consensus in the area; and third at the overall opinion of the general public (more savvy than they are usually given credit for). All three of these indicators seem to me to argue against a short term PO crisis. The markets don't show it; professional geologists don't see it (granted, a very few, very vocal minority does); and the general public isn't worried.

All this makes it hard for me to take PO too seriously in the short term. Nevertheless I continue to educate myself on the issue. This blog is an excellent source of information and I want to thank you all for keeping it going.

FYI, the Natural Gas contract intraday hit a new record high for this contract. Normally prices in this range are not found in the summer but in the winter and only in peak demand years.

We talk a lot about peak oil but "peak domestic gas" is another reality too. We depend a lot on natural gas for everything from heating homes to chemical production to fertilizers. Guess what, "conventional" NG is in serious decline.

Crude closed above 62 again and is not far from the contract high.

Future months continue to trade higher - December contract is > 64.

Me-thinks traders smell blood. Its rather funny that some on the floor of the NYSE have taken to calling any post 2:30 time frame rallies the "Ostrich Rally" or "Ostrich Bounce" - once Crude and NG close regular trading for the day we often see the general market move.

For many months CL has had an impact on the direction of stock index futures ... that its been institutionalized now with catch phrases tells you just how different these days are from say 2 years ago.

>> The markets don't show it

Actually, they do. CL at prices > 62 is not there because of "speculators".

At 40$ oil OPEC said it was speculators and they were prepared to act to bring oil down to "reasonable" numbers.

They said the same thing at 45, 50, 55, 60.

They aren't saying much right now.

Secondly, the oil industry is not making tens, ultimately, hundreds of billions of dollars of new investment in unconventional oil projects (oil sands for example) because they want to... its because these represent some of the few remaining big plays out there. There are other reasons - security of supply (Alberta) is one, hedging bets is another, but the primary reason is because they see it difficult to bring on sufficient new supply in a big enough way to offset field declines and increasing demand.

Thirdly, its a certainty that the stock market has been impacted by oil prices but to the casual observer you would not know it. I am not a casual observer, I'm a futures trader - got into the game 7 years ago, have been focussed on energy investing/trading and futures trading for most of the last 5 years.

Each time oil lurches to a new significant level, the market has trouble digesting this news. But, while the general wealth and productivity of western nations continues to deal with the impact of higher prices, the market eventually adapts and has been able to rise despite oil rising. True, the market has been able to deal with rising energy prices but it hasn't been a smooth ride. And it may be able to continue to do so but clearly its unreasonable to expect this ability to persist forever at the current pace of change.

This ability to look past higher and higher energy prices will not go on forever.

With Natural Gas up 400% since 2002 - and in the summer no less - you are going to see an impact to businesses and consumers this winter even if its only an average winter. Look out if its a cold one. Prices are at levels generally only seen in the dead of winter... today.

Crude is threatening to make 60 a new level of support and perhaps even 62. December crude is > 64 already. Unless crude fails its test of top here in the coming few days I suspect you'll see the market pull back rather substantially.

Disclaimer, I'm short the Russell 2000 since Tuesday and Dow since yesterday early in the am:

09:30:48 Mike: morning F67 selling YM aggressive
09:31:46 Mike: Didn't expect to be stopped out on YM and hold ER yesterday, interesting. Was yesterday PM a last gasp?
09:38:56 Mike: raised YM to 10669
09:40:37 Mike: 10672

That was 100 points ago on YM (Dow 30 futures) and about 25 points on ER (Russell 200 futures). These are just warning shots across the bow so far, but I think you'll find that unless the market gains some support from a Greenspan initiated catalyst (unlikely - Tuesday FOMC meeting) or sharply falling crude, we'll likely see the Dow pull back 10450 next week, and open up the possibility of unwinding the rally from early July (implying it would be time to put your Dow 10K party hats on again).

I'm not calling a top here in the recent rally but am suggesting the preconditions for a top are in place as of today. Much will depend on whether markets can regain the ranges that have been drawing out since early-mid July.

With earnings reporting winding down for another quarter, high chance of more rate increases from the Federal Reserve, the only near term catalyst that I can see having a "positive" impact on the market is crude oil prices.

Unfortunately for some, that's also the likely catalyst for a lower market too.

What does this have to do with peak oil? Not much, except that I think we'll see, this year in the markets, a small taste of what could happen in an oil panic.

The first panic will be a good buying opportunity for the nimble, but not guaranteed to last.

I agree that when I say the markets don't show it, actually being at 60+ does show something. But I meant in comparison to the real doomers like Simmons predicting oil at $100 this winter. The markets sure don't seem to see that coming. Whose crystal ball is clearer?

As far as the equities markets, Michael, wouldn't you look to commodities for a play based on oil prices? Or are you worried about other sources of downside risk for stocks besides oil, and covering those bases too?

I didn't take peak oil seriously until I learned many of the countries we import oil from had declining production. Too bad that rarely gets mentioned when the news media talks about oil prices.

Regarding CERA and the EIA..."My guess is that they are being covertly subsidized by public money in an effort to generate a counter-narrative. The purpose of this counter-narrative is to exploit the lack of transparency in the Middle East to create a rationalization for business as usual. This is seen as necessary to prevent panic in the financial markets. The possibility of a mass exit, a meltdown of the markets exists because of the herd mentality that is so prevalent. We would be entering uncharted territory. The whole system could crash or react in unpredictable ways. Therefore it is important that no matter how far-fetched, there needs to be some authoritative set of data that allows a rational person to continue on the present course. This is the purpose of the latest EIA report that projects $35 per barrel oil in 2025 and it is the purpose of the CERA report that predicts an oil glut by 2015. When the captains of industry meet in their board rooms to look at the next twenty years and they are considering the energy situation, they will hear someone say that Matt Simmons and the ASPO are predicting that global oil production is going to peak soon, but then they will hear that, on the other hand, the EIA and CERA are predicting an oil glut by 2015. You see, it is a wash. You may as well just do whatever you had intended to do all along".

"and the general public isn't worried"

I wouldn't be too sure. Take a look at http://www.pollingreport.com/energy.htm

ALso, http://www.csmonitor.com/2005/0407/p01s01-usec.htm

These questions mostly focus on gasoline prices, but clearly, most Americans are feeling the pinch. ANd they are, in fact, quite worried.

Now whether or not people are worried about oil prices going higher and staying higher (due to the inability of production to meet demand). Well, I am not sure if that question is being asked.

SW, just a word of advice, conspiracy theories are not a good sign of a valid belief system. You really don't want to go down that road.

Tedman, that CS Monitor article is pretty ironic really. Written in April when gas prices had just hit $2.30, it predicted $2.50 a gallon by the Memorial Day weekend. "We won't see the peak until the Memorial Day weekend," according to the expert they quoted.

In fact if you look at http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_ho... you can see from the chart that gas prices in fact peaked right when this article was written and then fell to a low of $2.10 by the Memorial Day weekend, exactly the opposite of what the article predicted. Since then gas has climbed back and is now at... $2.32, almost exactly where it was when the article was written forecasting higher gas prices through the summer.

Years ago I worked on financial forecasting software, so we subscribed to the Wall Street Journal and kept all the old issues around for reference. There was a big stack by my desk of two month old newspapers. It was amazing how often this kind of thing happened, a big fuss over some issue, something that was bad and was predicted to get worse, but since then the trend had reversed and there was no mention of it at all any more. Must be tough to be a journalist or analyst because it seems like as soon as you make a prediction, events prove you wrong. Even so, there is always a market for predictions, people will fasten onto anything they can get even if the track record is not so good.

In this culture. labeling something a conspiracy theory is one of the surest ways to cut off a line of inquiry. But the fact of the matter is that history is full of efforts to influence events behind the scenes. We have organizations that are chartered for just such purposes. And they are not inherently evil. There are real national interests involved.

Halfin's argument in a nutshell.

1) An "expert" made a prediction in April that there would be a price spike on Memorial Day weekend.
2) He was wrong.
3) All predictions by petroleum geologists, oi industry analysts, bloggers at The Oil Drum concerned about Peak Oil and prices are wrong.

QED

But, it's worse than that; it "must be tough to be a journalist or analyst because it seems like as soon as you make a prediction, events prove you wrong".

Therefore, all predictions are wrong all of the time. Deaf, dumb and blind, we stumble into the future....

Monty Python used a similar kind of logic (that is, FALSE) in The Holy Grail from which I quote:

BEDEVERE:
Exactly. So, logically...
VILLAGER #1:
If... she... weighs... the same as a duck,... she's made of wood.
BEDEVERE:
And therefore?
VILLAGER #2:
A witch!

Read the whole thing, it's hilarious....

George: "Keep reading these PO forums, this coal topic will come back up again and you might change your opinion of the future of coal. When oil goes up, profits go down even for CTL plants because they depend upon oil product support."

You're right, that argument comes up again and again, but people just throw it out as an article of faith, and nobody ever puts any numbers or math behind it.

Because they can't. SASOL developed their technology precisely because they had no secure access to petroleum. The output of CTL is used to produce the coal which provides the input to CTL. It's a petroleum-free production loop.

Right here, right now, with crude at $60/bbl, SASOL is making CTL at $40/bbl crude-equivalent. No matter how high the cost of crude goes, CTL fuel is available at that price, which drives the coal production at that price, which makes the fuel available at that price.

It's not a hard concept to understand.

I know the governor of Montana is serious about it. But of course the moment that we start talking about using coal as a transportation fuel, our vaunted 60 years before peak production starts to deflate rather rapidly. Still, I understand the appeal. We will use all our fossil fuels. That's just the kind of monkeys we are.

SW said "We will use all our fossil fuels. That's just the kind of monkeys we are".

Sigh. That's so true, I wish it weren't so....

So OK, Michael Robinson, liquids from coal is the miracle petroleum product of the future, is that right? That's going to save us, then? No worries?

Michael Robinson

"You're right, that argument comes up again and again, but people just throw it out as an article of faith, and nobody ever puts any numbers or math behind it."

Tell me some numbers...how much liquid is SASOL producing or have you ever seen any numbers of what CTL can do country-wide ?

Gregson Vaus hopes to have an indepth report coming soon about this coal promise and I get the impression it does not promise much. He did the study for the DOE and from his posts over the years at other forums, I think he is very knowledgable about the coal situation in north america. The numbers have been presented in the past and you will find them in the archives.

Will the amount produced have a calming effect on the market when the Saudi oilfields go into deplection ?

George,
living where the pedal is on the floor and no-one (that I know of) sees the factual cliff dead ahead.

Thought I'd jump in here. About 4-5 months ago I read an article about the coal liquification to oil process and while I don't have the link to it, I'm almost sure that it said that with ramped up production they could produce in the range of 30,000 bpd. Certainly not enough to fix a future supply crisis. Though I do remember the costs being relatively cheap and current projects were profitting quite well. However in the near future it's definately a mere drop in the bucket.

"We will use all our fossil fuels. That's just the kind of monkeys we are."

To be honest I think comments like these are what often make POers look fringe and hypocritical. I'm going to make the safe assumption that all of us on these boards use our fair share of fossil fuels (automobiles, air travel, coal plants which provide over 50% of US electricity) because like all humans we seek live with a certain level of comfort. Coal will certainly play a major role in the future, not as a petroleum product, but as a source for increased electricity production which will be needed as EV transportation begins taking the burden of decreased oil production. The million dollar question is whether oil production will fall off a cliff in the near future (making our transition to post-petroleum world extemely difficult) or merely retreat slightly from its lofty levels. In the past we have seen oil production in the US decline at a less abrasive 2-3% but production declines in the double digits have been experienced in the North Sea and Cantrell. I'm not sure any of us are qualified to make an assessment as to future declines, because past predictions of oil fields have been known to be wildly erratic. Peak oil is either here or around the corner but we really don't know how steep the slope is going to be.

George: "Tell me some numbers...how much liquid is SASOL producing or have you ever seen any numbers of what CTL can do country-wide?"

Here are some numbers (source: http://www.engineeringnews.co.za/components/print.asp?id=58298 )

Cost of plant: $3-4 billion
Capacity of pant: 70,000-80,000bbl/day
Breakeven production price: $40/bbl
Annual profit at $60/bbl: $511-584million
Capital payback at $60/bbl (less financing): 5-8 years

Of course, the worse the petroleum situtation gets, the better the CTL numbers get.

Dave: "So OK, Michael Robinson, liquids from coal is the miracle petroleum product of the future, is that right? That's going to save us, then? No worries?"

It's going to save us from imminent huddle-in-the-dark economic catastrophe--i.e., long enough to improve energy efficiencies and transition to nuclear.

Here are a few more numbers to put those in perspective:

Cost of war in Iraq to date: $186 billion
Cost of 62 SASOL CTL plants: $186 billion
Production of 62 SASOL CTL plants: 4,340 kbd
Pre-war Iraq oil exports: 2,100 kbd
Current Iraq oil exports: 1,693 kbd

Michael Robinson

If CTL is so good why don't we build some more plants on our way to nuclear?

Our Cold Turkey approach to energy change will not allow a transition to other forms of enegy to save us from imminent huddle-in-the-dark economic catastrophe.

washingtonpost.com

Saudi Oil and the World Economy

Matthew Simmons

Author, "Twilight in the Desert"

Thursday, August 4, 2005; 3:00 PM

Saint John, Canada: Given that there is a well understood technology for
synthesizing other fossil fuels into oil (mostly coal) do you believe it will be
possible to offset the production declines from conventional oil wells by
increased coal liquefaction? How environmentally destructive is that process?

Matthew Simmons: I don't understand the environmental impact of coal
gasification. Almost every single aspect of using unconventional oil, whether
it's coal or Canadian tar sands or oil shales are all incredibly energy
intensive, so they use a lot of energy to convert them into usable energy, and
they don't come out of the ground at high amounts. So it becomes a daunting task
to begin offsetting oil coming out of a highly pressurized oil field. which can
come out at a rate of 5-10,000 barrels per day per well with unconventional oil
sources which are energy intensive and come out in small amounts.

Matt Simmons could not answer the environmental question but I sure would not like SASOL in my backyard.

Keeping on reading and you will get the big picture.

George

Matthew Simmons says: "[coal doesn't] come out of the ground in high amounts."

I think that pretty much establishes the limits of Matthew Simmons expertise. According to the DOE, U.S. coal production in 2003 was 22.311 quadrillion BTU. The highest U.S. production of crude oil, ever, in history, was 20.401 quadrillion BTU, in 1970.

Source: http://www.eia.doe.gov/emeu/aer/txt/ptb0102.html

Coal doesn't come out of the ground at high amounts. What nonsense.

And, as for the environmental impact, no one wants to live next door to a coal mine. However the CTL plants themselves are at least as clean as a conventional crude oil refinery, if not cleaner, and because the CTL catalysts are poisoned by sulpher and other contaminants, the necessary pre-processing ensures that the final product is far, far cleaner than current petroleum-based motor fuel (the cleaning is in large part why the process is uncompetitive at under $40/bbl).

"Keeping on reading and you will get the big picture."

The more I read here, the more blatant and easily refuted mistatements of fact I encounter. It's embarrasing.

Maybe the reason people say that peak is further off than most think on this site is because they expect demand to go down. I know that people here look at the projections for increasing demand from China and India but maybe this is wrong because growth there is unsustainable in the near and mid terms. The export-only growth in these places is dependent on U.S. imports which in turn is driven by consumer spending which has caused large debts and all this is based on the HOUSING BUBBLE. Once this bubble deflates then say goodbye to rapidly increasing oil demands from China and India. Not a nice ending but at least the oil peak will be pushed further into the future.

You know, I think the most conservative response to Peak Oil would be one constructed out of previously deployed technologies. CTL has been deployed (a half century ago, and more recently), and works. Simple electric cars (like the Saturn EV1, the electric Ranger, etc.) have been deployed, and worked.

These things were considered failures only because they did not compete with cheap and powerful oil-powered vehicles of the day.

Pfft, nothing competes with cheap oil. We know that, we're talking about "after."

(I disagree with EP on a wrinkle here. I don't think electric vehicles will be as good as gasoline is/was ... but I totally agree with him that the technologies are completely workable. When the alternative is something like that last genearation of electric vehicles or $10/gal gas ... I think people are going to LOVE electrics. Any improvement over that last generation (and there will be some improvements) are just gravy.)

waking up ... the reason i talk about CTL and electrics together ... I anticipate CTL on a scale to support trucks and heavy equipment, and electrics for personal transport.

"I anticipate CTL on a scale to support trucks and heavy equipment"

Aviation. Don't forget aviation.

Michael, I'm publishing my comments in two parts since this Haloscan piece of shit won't let put it altogether (it says I have too many links).

Cost of war in Iraq to date: $186 billion
Cost of 62 SASOL CTL plants: $186 billion
Production of 62 SASOL CTL plants: 4,340 kbd
Pre-war Iraq oil exports: 2,100 kbd
Current Iraq oil exports: 1,693 kbd

Its hard to argue with that. Other thoughts on CTL.

1) From Dirty Oil: the West's Saviour, the Greens' Worst Nightmare: "CTL would only really make economic sense at $40 oil [as you said], making it far too risky an investment for a private company to pursue without some kind of guarantee from the government. But this could be something governments with huge coal reserves and worries about energy security - namely the US, China and India, are willing to do". Oil prices will not go down significantly, certainly they will never be in the $40 range ever again. The cited article was written with oil at $60/barrel. So why in hell does a private company need government subsidies and guarantees to go forward with CTL?

2) It appears that SASOL is ahead of the US in CTL technology. Clearly China is ahead of the game here. The question is whether CTL will ramp up to large scale production. Their current deal with SASOL appears to be a test case. China is taking risks the Americans won't. Of course, everything is subsidized n China.

3) My source here is Strategy for an Energy-Starved World: Go Coal! The SASOL (a third generation Fischer-Tropsch) process on the environmental side looks like this:

On the plus side, sulphur and other pollutants such as ash and mercury are removed – the sulphur can be sold as a byproduct - and CO2 is segregated and can be injected underground. If hydrogen is needed for fuel cells, these plants can also provide it. In the near term, the gasoline and diesel produced are high grade and clean, meeting even future “clean diesel” requirements of the US.

The problem, as in conventional coal-fired plants, is the CO2. I assume you're sensitive to the climate change problem since you mentioned nuclear above.

My previous comment continued....

4) Ahhhh, Nuclear. How soon people forget Three Mile Island, Chernobyl. Never forget about the "human element" -- I will never believe this is a safe technology. As has been pointed out, nuclear plants are juicy targets for terrorism and the more of them there are, the easier those sort of attacks are. Talk about WMD! Radioactive fallout without the need to build a bomb. And, the nuclear business has always been subsidized, it has never been cost-effective. And the waste! From Environmental groups oppose U.S. subsidies to nuclear power

“A few nuclear reactors wouldn’t stop climate change,” said Michael Mariotte of the Washington-based Nuclear Information and Resource Service, which signed the statement. “It would take hundreds, thousands around the world at a cost of thousands of dollars.”

There are currently 440 nuclear power plants worldwide, according to Mariotte, and 1,500 would be needed to make any difference. “It’s absurd to think the world could even build these in time to do anything to stop global warming.”

On the issue of waste disposal, he added, “We would need a Yucca Mountain every three or four years.”

Yucca Mountain, the proposed site for a permanent national nuclear waste storage facility in Nevada, is also an unsettled issue.

“Scientists and engineers have lied about the safety of storage,” said Tara Smith, Southern Nevada Conservation organizer for the Sierra Club. “Even the simple hint of an accident will destroy Las Vegas.”

Smith pointed out the dangers of transporting nuclear waste across the country to Yucca Mountain as well. “There is not a safe way to transport it, and there is not a safe way to store it,” she said. “Any measure that increases nuclear power produces nuclear waste.”

Mariotte said energy efficiency standards are the most common-sense approach. “It’s the cheapest source of electricity at this point.”

Aurilio agreed. “You can replace growth with efficiency for sure,” she says. “We’re half as efficient as Germany and Japan.”

And there are even worries over uranium supplies. But on energy efficiency, we are in total agreement.

Have a good one.

I think Halfins real point is that there isn't going to be a big meltdown anytime soon. OK, fine. Things seem to point that way, and I am very happy about that for the immediate future. But it simply doesn't alter the outcome, but rather stretches it out over a longer period. Which is good, as it gives us time to switch to something else. But I do think we will see quite a jagged line drawn by oil prices over the next few years, and this is very bad for every economy. I still think if we hit up near $80 we will start seeing economic effects relatively soon, especially in smaller countries. And the ride here will not be smooth either. With all the other issues hitting us right now, energy could easily knock the pins out from under us economically. It will eventually trigger a recession if prices continue to climb.

So, business as usual or do something to get ready? Or simply take profit where you can and keep right on spinning the wheel?

Robinson - switching to coal is simply switching to another depletion curve. The same is true of uranium. In the end, these resources and their concentrated energy cannot be replaced without eons of time. And the environmental impact of both is highly consequential.

So, we do as we have always done? Deplete and put it off on future generations? Force our own offspring to deal with this as their resources to respond become more scarce?

I and many others feel that we are at or near a fork in the road. We can do the right thing and switch to sustainable energies or we can jump from depletion curve to depletion curve, and let our kids worry about how to sort it out. We will be dead, so why worry?

Which, I imagine, is exactly the path the Romans, Olmecs, Easter Islanders and other cultures took...the road to ruin.

Maybe it will take a subculture movement, maybe disaster - who knows? But the roads we are discussing this thread all end in the same cul de sac of resource depletion. And isn't that inherently stupid? Isn't it totally irresponsible to lay this off on our kids?

HEADLINE NEWS:

DEFLATING HOUSING BUBBLE DELAYS OIL PRODUCTION PEAK INTO 2020!

Dave: "The problem, as in conventional coal-fired plants, is the CO2. I assume you're sensitive to the climate change problem since you mentioned nuclear above."

I'm sensitive to peak coal. Climate change is regrettable, unavoidable, and overrated. It's a dislocation, not the end of the world.

Dave: "How soon people forget Three Mile Island, Chernobyl. Never forget about the "human element" -- I will never believe this is a safe technology."

Well, it really doesn't come down to what you believe, or don't believe, is it? It comes down to the laboratory, the marketplace, and the ballot box. France already generates 80 percent of its electricity from nuclear. Give people the choice between living in France or living in Kunstler's huddle-in-the-dark dystopia, and what will they pick?

With the third and fourth generation of cheaper, safer nuclear plants already in the pipeline, and higher baseline energy costs (due to peak oil, gas, and coal), nuclear is inevitable.

Uranium supplies are not an issue for generations. Once-through reactors are cheaper than breeder reactors if uranium is dirt cheap. If uranium is not dirt cheap, then breeder reactors are cheaper. The economics of supply and demand dictate a gradual transition to breeder technology, which extends uranium supply 100-fold over current once-through technology.

And once the uranium runs out, there's thorium, which will last well beyond any reasonable planning horizon.

Spooky: "I and many others feel that we are at or near a fork in the road. We can do the right thing and switch to sustainable energies or we can jump from depletion curve to depletion curve, and let our kids worry about how to sort it out."

First of all, if you do the math, there's not enough sustainable energy to switch to. Not with current technology and economics.

Given that, jumping from depletion curve to depletion curve "and let our kids worry about how to sort it out" is exactly the right strategy. Our great-grandchildren will have technologies--biotechnology, nanotechnology, materials technology--available to them that is unimaginable to us today. They will have much better conditions for developing sustainable energy than we have today. The best thing we can do for them is maintain economic stability and technological progress, and improve our energy efficiencies as much as possible.

I think Global Warming is a huge problem, but I think there are enough people to believe it is " regrettable, unavoidable, and overrated" that it will become so ... whether or not it is also " a dislocation, not the end of the world."

I mean, come on ... do you have any data on the GW "end point" with massive coal burning?

Humans, in general, are, two-legged animals living in a world of black box machines, created and maintain by a few who can solve technical problems, even type long posts on keyboards without really thinking too much about human emotional decision making.

CTL, nuclear, solar will not save the human societies of today because we will run out of water, food and patience with our neighbor - war, before the tecno-solutions have the time and money to be implemented.

I look at the time and money required to make a difference, look at our values/money system, look at the attitude/awarness of the general population and conclude the bottom of the gorge is the destination for MOST people.

Being aware of time/events and being prepared materially/physically/emotionally is the road I recommend and the reason to come to this forum ..... Not trying to convince my fellow human to change his personal/political/religious habits.

Watch out when using the $40/bbl break-even number. The existing CTL process uses coal gasification to produce synthesis gas, a water-shift reaction, a methanation step, and then Fischer-Tropsh synthesis to make a diesel oil. Note that all the hydrogen required comes from water; this process requires massive amounts of fresh water. The $40/bbl number not only requires equipment prices not available anymore but essentially free fresh water close to the site. If you tried this in the U.S. you could not get anywhere close to $40/bbl nowadays. It should also be noted that these things take 5-6 years to build, and that's if you have the skilled construction labor and engineering talent available, something that's problematic in the U.S. nowadays.

Tim: "The $40/bbl number not only requires equipment prices not available anymore but essentially free fresh water close to the site."

Show your math.

According to my math, an acre-foot of water is equivalent in volume to 7,758 barrels. The most expensive water I could find is high-cost desalinated, at $2000/acre-foot, or $.26/bbl.
Recycled municipal waste water goes for no more than $500/acre-foot, or $.06/bbl.

As far as I can tell, the cost of the water is lost in the noise.

And, as far as equipment costs go, that's a capital cost, not an operating cost, and is certainly incorporated into the figures cited above for the SASOL China project.

I'm starting to think innumeracy will kill off the human race before resource depletion will.

while you talk "innumeracy" there michael ... are you working on those numbers for a GW endpoint?

odograph: " while you talk "innumeracy" there michael ... are you working on those numbers for a GW endpoint?"

Carbon circulates continuously into and out of the atmosphere. Here's a pretty picture:
http://www.safeclimate.net/business/understanding/carboncycle.php

The "endpoint" is when humans run out of fossil fuels to burn and the global carbon cycle eventually returns to equilibrium.

If you're not happy with that answer, ask a more numerate question next time.

sorry i'm enough of a chemist to know how "innumeric" than answer is.

Regarding French nuclear production: one has to remember that the reason they have been so successful with it: it is extremely regulated government run utility, all plants are basically exactly alike, making building and administration of new reactors simpler and cheaper.

Obviously this kind of solution has no chance of success in the US for political and ideological reasons.

Michael -- I have studied the climate change problem for years, mostly reading peer-reviewed stuff from Science and Nature.

You said "Carbon circulates continuously into and out of the atmosphere...." Yes, there's a carbon cycle. What's your point? The increased CO2 in the atmosphere is anthropogenic (human-caused). Read the appropriate posts at Real Climate to find out how we know this. Currently, CO2 is running about 380 ppmv (parts per million by volume) in the atmosphere. This is about 110 million ppmv greater than pre-industrial values. C02 is a greenhouse gas, etc. Current studies show that at a doubling of CO2 in the atmosphere -- about 550 ppmv -- global mean surface temperatures will be about 3 degrees centrigrade higher than pre-industrial values. That's a huge increase and may be unprecedented in the timeframe we are talking about (a few centuries) in Earth's climate history. Unfortunately, carbon absorption by the oceans and the terrestrial biosphere will not offset our extra emissions and these sinks for carbon may even diminish in efficiency over time. The climate change situation could not be more serious.

So, your remark "regrettable, unavoidable, and overrated" regarding climate change is ignorant bullshit. I tried to give you a thoughtful response to your CTL information -- which was welcome to me -- and you come back with this nonsense.

So, you can also cut out your remarks about "innumeracy" and "blatant and easily refuted mistatements of fact I encounter. It's embarrasing".

By the way, that last word is spelled "embarrassing". I wouldn't mention "illiteracy" if you won't.

Dave, I prefer your version to odograph's. It's much more substantive.

Unfortunately, there is still a blatant and easily refuted mistatement of fact to attend to before I get to the crux of the matter:

"Unfortunately, carbon absorption by the oceans and the terrestrial biosphere will not offset our extra emissions and these sinks for carbon may even diminish in efficiency over time."

Actually, carbon absorption by the oceans and the terrestrial biosphere is currently offsetting approximately 62% of net anthropogenic atmospheric carbon emissions, and the efficiency of the sinks has increased dramatically in the last 60 years:
http://www.whrc.org/carbon/missingc.htm

Pay particular attention to the relationship in the time series chart on that page between the dark green band (fossil fuel emmissions) and the dark red band (atmospheric accumulation). (Or, more to the point, the lack of relationship.)

Fossil fuel use is peaking, and, in the long run, all that carbon will eventually get sucked out of the atmosphere. So, the "endpoint" is that we end up right back where we started.

In the middle, there will be "peak CO2". There are two questions at issue: first, what will the peak level be, and second, what will the consequences of that level be?

"Current studies show that at a doubling of CO2 in the atmosphere -- about 550 ppmv -- global mean surface temperatures will be about 3 degrees centrigrade higher than pre-industrial values."

Let's just say, for the sake of argument, that that's the peak value. Is it then reasonable to conclude, "the climate change situation could not be more serious"?

I propose this as a measure of "serious": is it more serious than giving up meat? If the human race halted production of meat, we could bring atmospheric CO2 into balance almost immediately.

Would people give up meat to prevent "snowball earth"?
http://en.wikipedia.org/wiki/Snowball_earth

Of course they would. Would people give up meat to prevent a global mean surface temperature increase of 3 degrees celsius? Well, that's where it gets complicated. The most disruptive effects of such a change will be localized and difficult to predict. There will be winners (e.g., better local growing conditions) as well as losers (e.g., the Maldives).

It's not clear that, for the majority of humans, the effects of a 3 degree rise in global mean surface temperature will be, personally, more disruptive than eliminating meat from the diet.

In this discussion, of course, "meat" is merely an illustrative proxy for any combination of foregone economic utilities necessary to achieve a given "peak CO2" target.

Another way to look at the problem is the difference between the potential annual economic impairment due to global warming, and the potential annual economic impairment due to reductions in fossil fuel consumption, as a percentage of global GDP.

Unfortunately, it seems that the only people who undertake this analysis are what you might call "anti-environmentalists", and they do it with their thumbs on the scales. Even accounting for that, however, I've never seen any analysis that puts the difference between global warming and preventing global warming at more than a few percent global GDP (of course, I welcome any counter-examples).

So, we're looking at a difference of a few percent GDP, one way or the other, and yet in some quarters it is conventional wisdom that, "the climate change situation could not be more serious".

It is on that basis that I deem global warming "overrated".

On the other hand, there is absolutely no shortage of opportunities to reduce emissions without economic impairment (through increased efficiencies and substitution of fossil fuels) that will be passed by due entirely to ignorance, stupidity, and lack of motivation. It is on that basis that I deem global warming "regrettable".

But even if all available non-impairing reductions were undertaken, anthropogenic atmospheric CO2 would still continue to increase (albeit to a lower peak). It is on that basis that I deem global warming "inevitable".

Feel free to point out, specifically, the part that is "ignorant bullshit".

Re: "Feel free to point out, specifically, the part that is "ignorant bullshit"

This will be a multipart course in climate change and the carbon cycle.

Lesson 1: Start by reading How much of the recent CO2 increase is due to human activities?. When you have read and understood it, we'll proceed to Lesson 2.

Dave, you clearly did not "read and understand" the link I gave you:

http://www.whrc.org/carbon/missingc.htm

What percent of atmospheric CO2 increase is due to human activity? 100%

But that's not the point. The real question is this: what percentage of net anthropogenic CO2 emissions contribute to atmospheric CO2 increases? And the answer to that question is: approximately 38%.

The other 62% is going to carbon sinks.

Well, I see that you have failed Lesson 1, Michael.

At first I was puzzled by your Woods Hole page reference (I am familiar with that page, of course) and then I realized that you did not understand some basic stuff, like:

1) the ocean and terrestrial carbon sinks have indeed risen in the industrial age, as we would expect given the the large influx of CO2 into the atmosphere

and

2) you have undermined your own argument by saying that (roughly) 38% of anthropogenic carbon is winding up in the atmosphere.

How can I make this clear to you? These sinks will not be as efficient in taking up CO2 in the future as they have been because they will not be able to absorb that much more extra carbon as CO2 emissions grow precipitously in this century. The capability of the sinks will be overwhelmed in the short timeframe and so, a large part of this newly anthropogenically emitted CO2 will wind up in the atmosphere, as IPCC and everyone else knows, and this will cause an enhanced greenhouse. That's why most (actually, almost all) climate scientists (based on SRES scenarios) anticipate an almost certain doubling of CO2 in the atmosphere to 550 ppmv. If the ocean and the terrestrial carbon sinks were going to save us, I think the scientific community would have let us know by now.

This is really basic stuff, are you really that stupid? You don't seem to think so.

Did you even fucking bother to read the Real Climate post I cited? But, nonetheless, look at all the papers I cite on climate warning and especially read The Oceanic Sink for Anthropogenic CO2.

That would be Lesson 2 but since you did not actually manage the meaning of Lesson 1, I am doubtful about your future education.

In fact, I think you're hopeless and I will give no more attention on this subject unless you ask for instruction.

"you have undermined your own argument by saying that (roughly) 38% of anthropogenic carbon is winding up in the atmosphere"

I really don't think you understand what my own argument actually is. My argument is that global warming is, among other things, unavoidable. How is this undermining my own argument?

"These sinks will not be as efficient in taking up CO2 in the future"

And this conclusion is based on what data, exactly? Or is this just a conjecture? Or is it a conclusion based on the same scientific models that are unable to account for a full 50% of current carbon sinks?

"as CO2 emissions grow precipitously in this century."

And where is this precipitous growth in CO2 emissions going to come from? Isn't "precipitous growth" in CO2 emissions incompatible with "peak oil"?

"That's why most (actually, almost all) climate scientists (based on SRES scenarios) anticipate an almost certain doubling of CO2 in the atmosphere to 550 ppmv."

And a 3 degree rise in mean global surface temperature. In fact, if you read my earlier message I conceded that point.

But, so what?

That's the "global warming is overrated" part of my argument, and the part you've failed to address. It's not a simple question.

Here's another question for you. What part of the following is wrong:

peak oil + peak coal = peak CO2

Michael:

Michael:

And a 3 degree (centgrade) rise in mean global surface temperature. In fact, if you read my earlier message I conceded that point.

But, so what?

That's the "global warming is overrated" part of my argument, and the part you've failed to address. It's not a simple question

As George Burns used to say, "Good goodnight, Gracie". And she would say "Good night, George".

"But so what?", you said? Have it your way. You win, OK?

Goodnight, Michael, and God Bless.

Actually, George Burns used to say, "Say good night, Gracie", and she would say, "Goodnight, Gracie".

But anyway, this is my favorite quote about global warming:

Michael Glantz, a senior scientist at the National Center for Atmospheric Research in Boulder said among climate scientists there seems to be "a big search for 'dread factors'" -- things that can focus the issue of climate change down to the personal level.

For example, Glantz said, people began to take notice of the polar ozone holes when they began relating them to the likelihood of increased cancers.

"With global warming," Glantz told UPI, "they haven't figured out how to bring it to the individual, how to make it personal.

http://washingtontimes.com/upi-breaking/20040503-112414-5762r.htm

Top atmospheric scientists need your help, Dave. Make it personal.

Fascinating how some people do not understand why a 1-2 degree increase for a body of H2O residing at 31 degrees F does not make all the difference in the world.

I gave up way back at the line:

"The 'endpoint' is when humans run out of fossil fuels to burn and the global carbon cycle eventually returns to equilibrium."

talk about an answer with zero useful information content, numeric or otherwise.

I can think of six questions right off:

- how soon a CO2 peak, in years?
- how high a CO2 peak, in concentration?
- how great an effect will that have on world agriculture?
- how great an effect will that have on human health?
- how many years before the cycle returns to equilibrium?
- will that equilibrium match the pre-industrial levels?

... all not answered, certainly not with numbers.

Actually I think those questions are unanswerable at this point, but way back, a statement was made which implies the answers are known:

"Climate change is regrettable, unavoidable, and overrated. It's a dislocation, not the end of the world."

... so I just call BS, until numeric answers to those six questions are provided.

"Actually I think those questions are unanswerable at this point"

Exactly.

"Actually I think those questions are unanswerable at this point, but way back, a statement was made which implies the answers are known: Climate change is regrettable, unavoidable, and overrated. It's a dislocation, not the end of the world."

The statement doesn't imply answers to the questions you pose. The statement does imply an answer to this question, however: will the cost of global warming significantly exceed the cost of avoiding global warming?

The reason why your questions are unanswerable is same reason why this question is answerable: human agency.

We know human agency is producing some 8.5 PgC/year net CO2 emissions, which only results in a net 3.2 PgC atmospheric accumulation. We also know that over the past 150 years, net environmental carbon sinks have largely kept pace with growth in fossil fuel emissions (land use changes accounting for the bulk of net atmospheric CO2 accumulation).

What this tells us is that anthropogenic atmospheric CO2 accumulation is neither irreversable, nor absolute. (In contrast to fossil fuel depletion, which is irreversable and absolute.)

If it was worth it, anthropogenic CO2 emissions could be reduced by 3.2 PgC/year next year, capping atmospheric CO2 at current levels.

Obviously, it's not worth it, and it's not going to happen.

As fossil fuel depletion drives up extraction costs, the net direct economic benefit of consumption declines, as does, by definition, the direct economic cost of foregone consumption. As the economic costs of global warming increase, the (currently negative) total net value (direct and indirect) of foregone CO2 emissions increases.

At some point, the total net value of foregone CO2 emissions reaches zero, approximately, and atmospheric CO2 peaks. At no point does the cost of incremental global warming significantly exceed the incremental cost of prevention.

Ergo, climate change is regrettable, unavoidable, and overrated. It's a dislocation, not the end of the world.

Funny how you can prove "overrated" without specifying peak CO2 levels, or the specific damage they will cause.