EU Commission's Energy Strategy for Europe

The hydrogen and ethanol powered car

[Editor's note, 10:30 UK Tuesday: Andris now has 44 excellent comments to contemplate (up from 10 on Friday). All are well worth reading. If you feel strongly about this then please leave him a message.]

Riots won’t bring oil prices down. Andris Piebalgs blog entry from 6th June. My emphasis added.

Last Tuesday I was a witness of a very sad episode. Belgian riot police employed force against a group of French and Italian fishermen marching to the European quarter to protest violently against high price of fuel. A car crash occurred as a consequence of the riots. The frustration of the demonstration is easy to understand, but certainly demonstrations and street fights are not the answer to this problem. Oil prices are high and will go higher. No demonstration can change that.

In the past, periods of relatively expensive crude, were followed by periods of cheap oil due to temporary factors like the first Gulf war. Currently, as well, there are temporary factors that are influencing oil prices, like the boom in commodities markets, geopolitical situation in several key producing areas, the weakening of the dollar or the turmoil in global financial markets.

However, the real drivers of oil price escalade have a structural nature. You all know the offer and demand law. If offer decreases, price increases. If there is a growth on demand, there is also a growth on price. If, at the same time offer decreases and demand increases then, price skyrockets. This is precisely what is happening in oil markets.

In year 2000 China had 4 million cars. In 2005 - already 19 million cars. It is expected that in 2010 the Chinese car fleet will be 55 million and 130 million in 2020. India is following a similar trend, and the economies of the United States and Europe continue to devour oil in large quantities. More and more people compete for an increasingly scarce commodity. We all know that oil will run out some day. The exact date is certainly under discussion, but there is a fact that nobody can deny, getting oil out of the earth is now much more difficult and expensive that it used to be.

The easy sources of oil are already in use. Oil companies are currently exploring in deep seas or in frozen and inaccessible regions. Geopolitical uncertainties reign in oil producing areas, while there is a growing tendency among producing countries to nationalise their resources, or make foreign investments more difficult. There is a growing shortage of highly skilled working force and exploration and production of oil is becoming a high tech activity, extremely expensive.

We all know the consequences. The barrel is currently around 130$, 300% more expensive than only 3 years ago. Experts are talking about prices of 200$ per barrel for next year only. At this levels, even non-conventional oil sources, such as heavy crude or tar sands become attractive, despite its awful CO2 foot print and high energy consumption.

So what is the solution? Well, we have to move away from oil. This is what the European Energy Policy is all about.We need to reduce demand with more efficient transport, industry and housing. We need to promote alternative fuels, like biofuels, electricity or hydrogen; we need to change to cleaner and more efficient transport modes like rail, short sea shipping, or public transport. And in the meantime, we need to continue our dialog with oil producers to encourage them to produce more and to supply the markets better. On 24th of June, I will meet ministers of the OPEC countries to discuss with them on this issue.

The era of cheap and easily available oil is over. We need to move away from black gold and put our efforts in a low carbon economy. The sooner we do that, the better.

My reply

Dear Andris,

This entry is the most appalling muddled mess - which is a direct reflection of EU energy policy. There are shafts of sunlight mixed in with utter rubbish.

Each time I have left an entry here I have told you that we are in the early stages of a full blown energy crisis. It is a great pity that you have waited until oil hit $130 per barrel and for French fisherman to riot before realising that this is indeed the case. Of course if you and your team were up to the job, you would be able to study the oil supply and demand data published by the IEA, the EIA and BP and conclude that an energy crisis is on the way in advance and put in place effective strategies to mitigate for this. But no, your approach is reactive, well behind the curve, wrongly focussed and without a substantial re-writing of the EU Energy policy, it is destined to fail. The riots in Belgium and Iberia are partly your fault. You are the EU energy commissioner, pipe dreaming whilst EU energy security drains away.

It is encouraging to see that you finally understand that demand for oil, gas and coal are rising whilst supply for oil at least is static. Rising demand against static supply is controlled by escalating price, encouraging conservation and pricing poor Europeans out of the energy market. You should by now understand that when poor people get priced out of the energy market they riot.

The next thing you need to grasp with some urgency is that oil supply will not stay static for long. IT IS GOING TO GO DOWN ONE DAY VERY SOON. (2012±3 years) And then the problems we are experiencing now will get worse by a factor of 100 or more. WHAT ARE YOU GOING TO DO ABOUT THIS?

The EU and the OECD in general has absolutely no control over raising global oil supplies. You seem to think that OPEC does, BUT YOU DON'T UNDERSTAND THAT OPEC ARE PUMPING FLAT OUT. The IEA data shows that their reserve capacity is near zero. So the only control OPEC has would be to reduce supply in order to conserve their dwindling reserves for future generations.

Thus, the only part of the equation that the EU can control is demand. The EU needs to introduce with some urgency measures to reduce demand for oil and natural gas. And here I believe you make some good points. We need solid, urgent plans to radically transform our transportation systems. To be blunt, cheap air travel for all will not be part of this future. Shipping, canals, and electrified mass transit and electric cars are the future. We need someone with vision to stimulate pilot V2G projects across Europe.

Energy conservation and energy efficiency must be vital cornerstones of the EU energy policy. I believe you understand that but you don't seem to understand what energy efficiency means. (hence you drive one of the least energy efficient cars ever produced). Producing H uses more energy than can be recovered. It is an energy sink, a waste of energy and a waste of time (apart from in some isolated special cases). Ethanol consumes almost as much energy as it produces and falls into the same category - a waste of time and precious energy. You are converting Gold (nat gas) to Lead (ethanol - anecdote borrowed from Matt Simmons). As a guiding beacon if the eroei of an energy producing system is less than 7 then it must be ignored. It does not produce sufficient net energy to run society - and so pursuing the twin follies of H and ethanol will drag Europe off the net energy cliff.

In essence what you have done in this blog entry is to re-package the wholly misguided EU energy policy that is predicated on climate change and trying now to sell this rubbish as a solution to the emerging energy crisis.

From here there are two ways forward. You either have to admit that the current energy policy is a shambolic mess, tear it up and start over - but this needs to be done urgently, within a matter of months. Or you need to resign and let someone else do this vital job.

Euan Mearns BSc PhD
Editor The Oil Drum Europe

PS I wholly endorse tonyw's comment up thread - if you want to reduce demand for oil today we need pan-european speed limits and legislation on gas guzzlers. Let these fine German engineers turn their attention to efficiency instead of speed and power.

If you feel strongly about EU energy policy then please leave a comment on Andris Piebalgs blog on the thread - Riots won't bring oil prices down

The EU Commission contemplating driving Europe and all its citizens off the net energy cliff. The Oil Drum's geologists, chemists, physicists, economists, bankers and engineers are in pursuit, trying to stop them. Will they get there in time?

Pictures from Thelma and Louise who were having a great time on a girls night out until they made a mistake. And one thing lead to another....

First Mate: Captain the barometer gauge seems to be broken.

Captain: Does it? Indeed the gauge seems to below the lower mark, but it is probably working fine.

First Mate: How could it? Pressure cannot be that low.

Captain: Yes it can. He have the mother of all Hurricanes approaching.

First Mate: (gulp) Should we set course to the archipelago sir? Twenty miles away, we should get there in a couple of hours.

Captain: No. Just set full sail and keep the course to high sea.

First Mate: (gulp) Aye aye Capt'n.

Captain: No wait a minute, get some tape and tape the arrow to "fine" - that way we avoid the storm.

First Mate: bbbbut Captain!

Capatin: Are you doubting my competence?

Captain: Shut up, Get some red tape and Bureaucrazy and there'll be no storm.

Just to show nowt has changed in political life, a couple of verses from WS Gilbert's HMS Pinafore, Sir Joseph Porter KCB describing his ascent to high office.

Verse 4: Of legal knowledge I acquired such a grip they took me ito the partnerSHIP, and that junior partnerSHIP i ween was the only SHIP i ever had seen, but that kind of SHIP so suited me that now i am the ruler of the queen's navee

Verse 5: I grew so rich that I was sent to a pocket borough into parliament. I always voted at my party's call and never thought of thinking for my self at all. I thought so little they rewarded me by making me the ruler of the queen's navee

Verse 6: Now, landsmen all, who ever you may be, if you want to rise to the top of the tree, if your soul isn't fettered to an office stool be carefull to be guided by this golden rule
Stick close to your desks and never go to sea and you all may be rulers of the queen's navee

Perhaps similar words can apply to our energy ministers of today!

IEA Chief Economist Fatih Birol, recently interviewed by International Politik, the Journal of the German Council on foreign Relations:

"We are discussing and checking the situation [the impending decline in overall oil production]. The next important step will be the WEO 2008. In 2009 we will invite to a ministerial meeting and and I expect the energy security to be among the most important issues alongside climate change. But again: It is up to the governments to take actions now. We have warned them."

(Emphasis added). The full interview is published in English at Transition Culture.

Half Empty - thanks for posting this link - I think the whole thing needs to be posted on TOD. So I have Piebalgs 10 to 15 years behind the curve (we're all dead in water) and Birol maybe 3 to 5 years behind and on a steep learning curve:

Birol: Exactly 12.5 million barrel a day are still missing, about 15 % of the global oil demand (the current global oil consumption is 84 million barrel a day, note from the editor). This gap means that we could face a supply shortage and very high prices during the next years.

Birol: There are only three ways out of this dilemma: First of all we have to increase energy-efficiency drastically, we have to build more economical cars, trucks and airplanes, to slow down the incline in oil consumption. Secondly we have to use more alternative fuels in the traffic sector. If you take a look at how little governments are doing to help higher efficiency, though, I have little hope that there will be such a change of policy. The third thing is that we need many more oil production projects, especially in the key countries in the OPEC.

Like Andris he has a very mixed bag here of positive things mixed with garbage. Basically anyone who doesn't grasp the concept of net energy immediately upon first reading needs to be removed from any position of responsibility.

Funny Euen, In the past I have asked the odd question about net energy but as I never received much of a response so I felt that I must not be asking in an understandable manner. One question in particular was merely a simple one as to how the world total consumption was totalled. For example, using the figure above of 84mb/d, is that net or gross? If net what does the gross total? If gross what was the total less that needed for production. (maybe no quantified answer to that but I think a 'gross' view would still be 'one' into the 'net' of greater general understanding)


Its a good question. I suspect there is no universal answer. The UK and Norwegian governments publish stats that provide some indication of the energy used to produce fuel.

But relating these stats to the ones we normally use from IEA, BP et al is not straight forward. The data exists, but there is a PhD research project in there accessing it, untangling it and interpreting it.

The chart shows UK nat gas used in energy industries - actually declining as our energy industry has declined. Measured by off shore installations being decommissioned.

Not very satisfactory I know.


Uean, thank you for your response and for considering the question a good one ... so much for me considering it a simple one though.

But on a truly simple item, today my son came up from the basement to tell me that the unused, for two years, dehumidifier was still up and running. I guess it has been dehumidifying like a trooper all that time and then automatically stopping when full and then evaporating till... and etc. for two years! Good thing we haven't invented the energy conservation police yet.

Nice article...which I see has just been published on AP's blog (posts there have to await moderation). ERoEI >7 eliminates many of the 'straws' which many clutch at - oil shale, tar sands etc.

I keep coming back to this same issue but there's a total lack of joined up thinking at UK Gov't level as well at EU level. Look at the contrast between this report today Oil prices force Treasury inflation re-think and House of Lords Transport Debate, Nov 2007. The Treasury is considering the short term implications of oil price exceeding $100/bbl whereas for long term transport infrastructure planning Gov't appears 'locked into' the (absurd) forecasts that oil price which was $65/bbl in 2006 will fall to $53/bbl by 2030.

To many of us on this forum the question we are asking is not 'why is there no joined up thinking?' but rather 'is there any meaningful thinking at all?' The discredited nature of future Gov't oil price forecasts account for a large extent to the continued efforts to make us even more oil dependent by continuing with major highway and aviation expansion, a planning system which approves numerous out of town business parks, and an abject failure to apply road fuel levels (or any level) of taxation to aviation fuel or VAT on airplanes.

It gets worse - in Scotland there's a 'route development fund' to encourage new air routes which the market does not consider 'economic'; as well as international routes such subsidies have also been applied to short internal UK routes which already have rail connections. In other words we are using taxpayers' funds to help make us more dependent on imported oil!

The saying 'whom the Gods want to destroy they first make mad' springs to mind.

Chris - I've posted this many times now - it should be abundantly clear that society as we know it cannot run if 20 to 30% of the workforce and resources are devoted to producing energy.

Chart is not zero scaled running from 50 (left) to 1 (right).

What is happening now is that high eroei fuels (that are fast depleting) are being used to subsidise production of unsustainable fuels - temperate latitude ethanol in particular. The tar sands are marginal.

What must happen is that we invest the high eroei fuels in a sustainable energy infrastructure, that includes wind, solar, hydro and most likely unavoidably nuclear.

What needs to happen with some urgency is that all major infrastructure projects built around burning liquid FF are abandoned - or at least no new ones are begun - and all these resources need to be poured into power generation and electric transportation projects. The shear stupidity of what is going on right now in the UK with road building and expanding airports is difficult to comprehend. And painting a line down the side of a road and calling it a cycle lane, is mind numbingly pathetic - especially since the paint wares off after a couple of years.

The government must legislate on energy efficiency at energy production and consumption stages so that all inefficient practices are discontinued with some urgency - this will mean closing or upgrading all our coal fired power stations so that all the 65% + waste heat is recovered and used.

I don't know who it is that posts the sayings in top right corner - either Kyle or SuperG - but I was looking for the one that said we cannot expect to solve problems with the thinking that created them - couldn't find it but came across all these wonderfully perceptive quotes whilst I was looking.

“The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In its place we are entering a period of consequences…” —Winston Churchill, November 1936

“Data always beats theories. 'Look at data three times and then come to a conclusion,' versus 'coming to a conclusion and searching for some data.' The former will win every time.” —Matthew Simmons, ASPO-USA conference, Boston, MA, October 26, 2006

“First they ignore you. Then they laugh at you. Then they fight you. Then you win.” —Gandhi

“The infrastructure of suburbia can be described as the greatest misallocation of resources in the history of the world.” —JH Kunstler

“No civilization can survive the physical destruction of its resource base.” —Bruce Sterling

“What people need to hear loud and clear is that we're running out of energy in America.” —George W. Bush, May 2001

“I'd put my money on solar energy… I hope we don't have to wait til oil and coal run out before we tackle that.” —Thomas Edison, in conversation with Henry Ford and Harvey Firestone, March 1931

“It's difficult to get a man to understand something if his salary depends on him not understanding it.” —Upton Sinclair

“We have only two modes—complacency and panic.” —James R. Schlesinger, the first energy secretary, in 1977, on the country's approach to energy

Today's new road building and airport expansion would be comical if it wasn't so deadly serious.

“We can't solve problems by using the same kind of thinking we used when we created them.” - Albert Einstein

Temperate latitude ethanol is not only stupid, it's contributing to the energy pain being experienced by Europe's poorer citizens by being partly responsible for big rises in food prices. Higher food costs effectively lower the threshold when one enters the 'fuel poverty zone'. We might say that the 'dash for ethanol' has contributed to Europe's fuel riots.

I can partly understand the dilema that politicians face - we only have to look in today's P&J letters column to see demands for a 'modern transport system' which, unsurprisingly the correspondent defines by yet 3 more major road schemes! Any sympathy I had for politicians however is fast evaporating due to their abject failure to communicate the seriousness of the EU energy situation. A large majority on this forum clearly see the need for urgent and dramatic policy changes and I suspect many others would to....if only the politicians and MSM would start to do their job and properly inform people that we cannot possibly continue on the present course.

I personally find it appalling that various (completely unpaid) individuals on this forum can come up with such comprehensive analysis and action plans and yet EU and Gov't officials with multi-billion dollar budgets (paid for by us!) either come up with nothing at all or what amounts to dangerous complacency and nonsense. It's also not hard to imagine that when things go badly wrong (which they will, and soon) most of these key officials will simply leave and take gold-plated pensions (again which we've paid for) and leave others to sort out the mess.

On a more positive note I'm seeing that 'energy depletion' and 'peak oil' are showing up more and more in the online comments sections of press articles including the Daily Mail and Daily Express - it thus appears some are getting the message despite lack of political leadership. We write to our MP's and councillors but, so far, it's not achieved much. The oil price, however, is doing more than anything to spread the word. When shortages start to appear the whole subject of energy will ramp up yet further and just maybe will force politicians to take action but by then, of course, it will be very late in the day.

“It's difficult to get a man to understand something if his salary depends on him not understanding it.” —Upton Sinclair

“We can't solve problems by using the same kind of thinking we used when we created them.” - Albert Einstein

Those who think they know everything are anoying to those of us that do!


"The sudden -- and surprising -- end of the fossil fuel age will stun everyone..." - Jay Hanson

I wonder how much of Prof Odell's '30 Gbbls yet to be extracted from UK N Sea' has ERoEI >7? I'd hazard a guess that it's less than 5%.

Nice comment but I'm not sure about the EROEI needing to be greater than 7. For example, if your chart stuck at EROEI 6, or possibly even 5, it wouldn't look so bad. And I don't get that 20% of the workforce would be devoted to energy production at EROEI less than 7. I've a feeling that there was a post on this, some time back. Do you have a link?


Excellent post and excellent retort to the blog.

One minor quibble: I think you blunted your message significantly by effectively calling the guy an incompetent idiot. (Though he is indeed)

It's my experience that when dealing with decision makers/policy makers, their ears slam shut to your arguments (even if they are unassailably logical) when this happens.

My 2c: take it how you will.

Point taken Dan, I concede I was a bit harsh. However, the context is that we've run about 6 of these articles covering Andris' policies and its not at all clear he or his cabinet has read, understood or considered a word that has been written.

OK - so we can't expect the EU to U turn on policy overnight. But I think "they" do desperately need to start dialoguing in some way - if they want to run a blog.

"Sticks and stanes can brak yer banes but names can never harm you"

I fear Andris and colleagues will be confronted with rather more of the former if they don't take some urgent action.

Its Mervyn King and Alasdair Darling to get the TOD treatment tomorrow.

is there any meaningful thinking at all?

I sent a semi-rant to Pielbags.

These ppl - energy ministers, gvmt types, fawning advisors - are stupid because they think that decrees, administration, slight adjustments to the present state of affairs, seen as somewhat abstract, working thru representation, symbols, or paper fiddles (e.g. tax, by-rules, tariffs, technology, research funding, etc.) will suffice. Jackboots for the rowdy and too-demanding are part of the conventional picture as well. That is the charitable view - the confident role of the administrative class, from Sumer to the US today.

It is possible that their belonging to the 'ruling' class inures them to any real life problems - me no worry, big desk, big salary, best contacts, lovely second wife, big car, etc. Being amongst the ‘top’, (high paid flunkeys, like the medieval steward) in a cosy circuit of contacts and discussions of like minded people, all reassuring and stroking each other, blinds them absolutely.

Lastly, perhaps the ‘chosen’ and the ‘elected’ in democracies are so precisely because they aren’t too bright, caring, educated, ambitious or perspicacious.

Perhaps EU bureaucracy is in a state of collapse and chaos because they had no 'plan B' for use in case the Irish rejected the referendum ;-)

Is there anyone there? Any replys to emails? Are the telephones answered?

Why have a real energy policy when you can blame it all on "resource nationalism"? Warmongering is so much more gratifying than changing one's habits.

Harsh, but needs to be said.

The only consolation Europeans should have is that the USA's non-policy is even worse.

Its not much consolation.

In Europe we are doomed, but in USA they are more doomed ?

Yes, we are. Thanks to low fuel taxes (among other things) the US has double the per capita fuel consumption of Europe.

I don't see why this should be a consolation. In fact, the US has a policy, securing foreign supplies of oil, in which Europe also participates, and pushing to boost biofuels, which Europe also does. Neither policy is helpful and in fact both are harmful, but that is not the same as having no policy at all. It is worse.

The US may have an advantage in policy in that it has an oil rationing plan available through the DOE, something that the EU, as a whole, likely had not developed. The US could force a large drop in the price of oil within a few months while the EU would likely take years to pull such an action off and by then it would be too late.


Dear Todsters,

I came to the conclusion over the weekend, almost a year after first “stumbling” across the doco A Crude Awakening, that the peak in Hubbert’s Curve (as far as world supply goes), may not eventuate. Rather that the current plateau of around 80mbpd will continue for perhaps another thirty or forty years, before reaching the so-called “cliff”. Just a feeling, I guess; but three stories in the past 24 hours have convinced me…

1. The open-day yesterday of Australia’s most expensive new section of road (toll-way) was attended on a fine but cool winter’s day by over 100,000 people (myself and the family included). Bike rides, fun runs, a longish walk through its twin tunnels. It seemed (to me) acceptance for the “new corridor for Melbourne’s eastern suburbs” was overwhelming. A 47km time-saving option for motorists; how wonderful!

2. A Sixty-Minutes report last night on Canada’s tar sands (and Australia’s “yet to be tapped” oil shales) suggested to me the current mining operation was not only now worthwhile to its investors, but was going great guns. And while the tip-truck drivers alone earned six-figure salaries – and the environment came a distant second (and folk “down-under” and elsewhere don’t give a toss where the oil comes from, so long as it comes) – supply from Canada would continue to ramp up as long as the price per barrel doesn’t drop. Little I’ve read lately suggests it will.

3. The lead news story this morning (papers, radio, TV) revolves around a poll proclaiming 80% of the public believe our Prime Minister should make petrol cheaper; and doing so should be a top priority. People want oil (and need it – well, at least think they do!), but will only pay so much for so long and no doubt the oil guys still want (and need?) us to buy.

It feels as though (to me at least) that we’re near the bowser-limit that is manageable for most – perhaps $180 a barrel may be the final straw – and it will stay there (in relative terms) for some time yet. That the extra 200,000 humans born daily into the system will only help stabilize demand, as more and more people start using less and less… That is, a flat-line consumption rate until recoverable supplies disappear altogether. The question is, by 2050 (I’ll be in my eighties – strewth!), with a population of around 9 billion – and when the recoverable crude does indeed “run out” – will there be a scalable alternative? This final crunch, I’ve reasoned to myself, is the real worry.

Regards, Matt B – Melbourne, Australia

At the moment, I just don’t see man’s ingenuity coming to the rescue on the scale that is needed for the coming decades; as long as the oil guys continue to make a profit. And being an Average Joe unable to do squat about anything (apart from try and look after my immediate family), I guess all I can do is keep enjoying Tiger Woods-type moments while the history lasts. Go Tiger!

1. Why does that convince you the world is going to have 85 million barrels per day for 40 years?

2. Oil sands and oil shale production may be ramped up significantly but there are huge limiting factors that get in the way of their production exceeding certain figures. For instance Canada cannot destroy the entire Athabasca river just to mine the tar sands. Also think of it this way, How in the hell do you expect to get the same production levels from solid rocks of oil shale/sands from something that can be gotten from the ground in liquid form. There is a huge difference between drilling for liquids and turning rocks into liquids. Also remember the term Energy returned on energy invested. Lets say you need 10 units of energy to power your car. Conventional Oil and Gas will give you an EROI ratio of 20 to 1 or more, which means for every 1 barrel of energy they put in, they get 20 or more barrels out. Now, For Oil Shale/Sands this ratio is much smaller perhaps 2 to 1 or so. Now Lets say you have Oil and Gas and you want your 10 units of energy for your car, you put in ~.5 units of energy and boom you have 10.5 or so units minus the initial .5 to give you 10 units for your car. Now to do the same thing with Oil Shale you need 10 units of energy to get 20 units of energy to have the 10 left over to power your car. That means that oil shale/sands require an Initial Investment of over 20 times more than conventional oil, that means if it takes one unit of infrastructure in place to get oil and gas, it takes 20 times the infrastructure to get it at the same rate. Thats fancy talk for rocks ain't the same shit as oil...

3. Oil is too inelastic of a good for 180$ oil to stop demand, their is a point when after people cut their frivolous driving ect where they have to pay for oil for agriculture and transportation.

I'm going to bed, but matt keep up the research and try to get rid of your unquestioning trust in the status quo. Look at history is a guide, we as people are no different from the people of 900 years ago, empires collapse, people struggle, life goes on, this is nothing new. It's to late I'm going to bed.

Good luck,

"1" was part of 2 & 3; "2", because the fellow being interviewed seemed pretty confident and I haven't heard any reports about massive Canadian environmental disasters here in Australian MS media. And "3" (180 is a guess) because at some point people won't be able to afford to buy "as much" fuel, but they'll still have babies.

So I'm more confident of a plateau/plunge (BAU for a few more decades, 'cause that's where the boys with the big toys seem to be headed) rather than a peak/decline. But, that's just me!

Sleep well and regards, Matt B

Does it really matter which way we get to zero?

Does it really matter which way we get to zero?

It isn't going to zero that is the problem but the rate of decceleration to zero - the sudden stop is what kills you in a car crash.

Just beacuse a world production plateau sounds easier to cope with than an actual decline doesn't mean it will be.

A plateau is almost as bad as a peak since the world needs 2% more each year for BAU - a plateau for the world means less 'net exports' and if the likes of ChIndia actually grow their share of the 'net exports' your economy will probably have to try and achieve BAU with much less oil - so a plateau for the world is most definitely NOT a plateau for you!

If you live in an oil exporting country neither peak nor plateau will be a problem!

I thought the running into something solid is what kills you! The question is, whether Big Business in the future will have the right kind of air-bags; out of the fog, can we survive a sudden impact?

Regards, Matt B

The running into something solid IS the sudden stop - and airbags won't always save you, check the road death statistics if you don't beieve me.

Bear in mind that NOBODY knows what the future will be - the people in charge of big business are paid take the risk that the future will be better than today, in reality, bankruptcy figures show that they are frequently very wrong.

If your guess that we have a plateau is wrong (and I don't know whether your guess is correct or not) and peak oil is now what 'airbags' are there that will keep BAU? What airbags do you have to save you personally? Or is your guess about the future what 'has to be' for you to survive intact? ... eg: a faith in others and hope that they are correct? If so I suggest you lurk and read a lot more TOD, you might change your mind.

Matt/Joe Average,

"...I haven't heard any reports about massive Canadian environmental disasters here in Australian MS media...

You may not have heard much in the Australian MS and I bet the Canadians have not heard much about any Australian problems in their MS media either... The issue is that environmental problems are not "immediate" enough for the MS media which are good at reporting up to the minute news such as plane crashes, shark bites man...

Take a look at

and download the report "Canada's Toxic Sands: The Most Destructive Project on Earth", it's currently at the bottom right of the page.

"...I'm more confident of a plateau/plunge (BAU for a few more decades..."

Fatih Birol recently said "...we see a sharp decline in production from the existing oil fields.....Even if all those projects which are already funded will be implemented, the overall capacity they can bring for new oil production is too little...Many people will come to new conclusions about this...All these are examples on how we are ringing the alarm bells, and we are ringing them loudly.

Tony, I agree completely that it's dispicable what Man is doing to Planet Earth. And yes, the alarm bells are surely sounding.

But the guys with the money selling the oil don't care.
And most of us Joes and Janes don't care either... Or rather, don't care enough.

I just believe, from the relatively little I've seen and read these past few months, that we'll keep on going until the crude runs out. I'll concede that perhaps the 40 year plateau I mentioned may tilt down a bit, but not much.

Regards, Matt

I've been a lay student of this for ten years ever since I read the first article "an end to cheap oil" in Scientific American in 1997.
I almost had a heart attack a couple years later when I came across Jay Hansen's site

The reason was that at the time, he was right: there was no alternative to oil and almost everything had an EROEI that wasn't worth it.

That has changed gradually and started to accelerate around 2003. Most all the renewable sources of electricity have EROEIs in a decent range.
We also, since around two years ago have the technology to build practical electric cars and trucks.

The problem we face, in my opinion is that though you are correct about the plateau, you are wrong about when the plateau will end.
Due to the massive decline rates of fields using up to date extraction rates we could possibly be seeing a loss of 5 million barrels per day within five years.
Unfortunately tar sands will reach (at BEST) 10 million barrels per day sometime late next decade. This is also assuming that both Venezuela and Canada can find some high EROEI inputs to provide the energy subsidy to refine the bitumen or heavy oil to syncrude.

As for oil shale: only shell has a process that (may) be capable of producing oil in any quantity but to be honest it doesn't look hopeful: they have to construct a massive wall of ice around the oil shale and heat up the ground inside it to get liquid, hoping that the ice wall will not melt and allow the liquid to escape.
I can't help but think that this has to be even worse for energy return than the oil sands and would have to be heavily energy subsidized by higher EROEI sources.

The stark truth unfortunately is that there is no easy way to avoid a liquid fuels crunch.
It's coming whether we want it or not and likely by early next decade.

The only possible mitigation strategy we have is electrification and efficiency.
That means electric cars, trucks and rail.

We have no other realistic choice.

they have to construct a massive wall of ice around the oil shale and heat up the ground inside it to get liquid, hoping that the ice wall will not melt and allow the liquid to escape.

They can't make a freeze-wall around the bottom.

Oil shale will burn.  What stops Shell from injecting oxygen to burn some of the organic matter to generate heat to crack the rest, driving off fuel as gases and vapors?  If fire-flooding works in oil reservoirs, maybe it will work in shale (expansion and other physical changes notwithstanding).

If the underlying decline rate is 4.5%, as CERA thinks, that's 3.8 mbpd of new oil production that has to be found each year, to keep that plateau going. Canadian oil sands are forecast to maybe hit 5 mbpd by 2030 (I think). By 2030, oil production from existing fields will have dropped by 55 mbpd. It is nigh on impossible for oil sands and oil shale to provide 55 mbpd of net oil to the markets, or even more in your projected 30 to 40 year time frame.

Building a time saving road in Australia isn't going to help keep demand at 85 mbpd, with China heading for a 300% increase in car numbers by 2030, not to mention India and other rapidly developing nations.

I may be wrong, but it would take a lot more than your three points, Joe Average, to convince me that oil production will remain on a plateau for 30 or 40 years. If it did, that still represents a huge deficit on what the world thought it would need in 30 to 40 years. It would still be an effective decline, even if, by some miracle, production plateaued for that long.

Probably why I don't ring radio stations with my thoughts; fear of being blasted out of the water as new numbers are tossed at me. I guess the points I'm trying to make (and perhaps I'm using bad examples), are...

1. Big Business is collectively spending billions, if not trillions on a future that apparently (according to you guys and gals) won't be there for much longer (the new road mentioned above cost 2 Billion - that's a lot of years of tolling to recoup). Why spend the money?

2. These corporations are run/financed/whatever by people in the business of making a decent profit. They're not stupid people.

3. CEOs and GMs of these corporations (thousands of them?) go "on record" to state we have decades left of BAU.

So to my way of thinking, you are saying they are either liars or delusional or both. I'm sorry, but this simply doesn't sit with me. If they say we have forty years left, I'm inclined to believe them. If the guys in charge of the Canadian efforts say they can get 50mbpd (or whatever), why not?

Why does Big Business keep spending Big Money on long term investments?

Now I'm off to watch "Top Gear" with my 11-yr-old son, who's trying to invent a small, nuclear-powered battery that will hold a charge for 100 years!

Regards, Matt B

For the record, I'm a fan of replacing all gas-guzzlers with electic golf-carts and scooters. Life at the moment is way too pacey!

1,2,3 - the powers that be, outside of a few, do really appear to be that clueless. Outside of the oil industry, I very much doubt that that CEOs are in any way peak-oil aware. Business has operated a certain way for the last 200 years - based on steadily increasing fossil fuel usage - and they simply expect that it will continue to do so. It's what they were taught in school and none of their experiences have prepared them for anything different. I work in business, and I can tell you that trying to talk to business people about this is a complete waste of time. They don't understand physics (especially that energy != technology) and they don't care at all to hear anything that challenges their mental picture of how things should be.

The "guys in charge" of the Canadian efforts think they can get to 5 million barrels a day, by 2030. With hundreds of billions of dollars in investment (including probably 8+ nuclear reactors to replace the natural gas inputs that have themselves been in decline since 2001).

ASPO shows a probable conventional production peak around 2010, with a plateau out to maybe 2015. That disregards the export problem, and is probably the the most optimistic remaining case. That still doesn't permit BAU (constant 2-3% economic growth), but it may keep us eating. After that, all bets are off. I think the export problem will bite hard before then, though (it already is).

Joe Average,

I think you confuse ignorance with knowledge. The fact is, no-one knows how much oil is recoverable, how much oil will be recovered, how the recovery rate of that oil will change with time. It's a bit like climate change. Since no-one knows with certainty when oil will peak or how it will peak and decline, then most assume that someone will think of something that will allow business as usual to continue for as long as necessary to see them into comfortable retirement.

Call it stupidity, ignorance or just plain human nature but I don't think any anecdotal evidence that you come across will prove that the plateau will continue for as long as you hope. Of course, that length of plateau (being continually behind demand) will, in itself, have serious repercussions and could feed on itself to produce the kind of collapse that some attribute only to a decline, since it will be an effective continuing decline.

1. Big Business is collectively spending billions, if not trillions on a future that apparently (according to you guys and gals) won't be there for much longer (the new road mentioned above cost 2 Billion - that's a lot of years of tolling to recoup). Why spend the money?

Disclaimer: I've done (and am still doing) work associated with that road.

If the pricing of oil-driven vehicles goes up, then drivers are less sensitive to toll costs.

ConnectEast is currently set up around the idea of increased volume (I don't think that's giving away any trade secrets) but if it's a lower volume of bigger, slower vehicles paying higher rates it doesn't really affect the overall business model.

Anyway they want lightweight battery powered cars to use EastLink. Lighter cars do less damage on the road, so require less maintenance. They could even give a discount for battery-powered vehicles, look very environmentally friendly and still make higher per-vehicle profits. (This last sentence is obviously not a company-endorsed statement, it's just my opinion.)

Joe - your satire and innocent questioning are much appreciated.

This is modified from a presentation by Roscoe Bartlett dated around 2004. I can't find the link - it used to be on the old ASPO site.

We have 2 key variables of supply and demand. And as you rightly point out, ever rising population is a demand driver in itself. So even with static supply, which is pretty much where we are right now, demand goes ever upwards. Production of course (supply) is static so the strain is absorbed by price.

The concept is mind numbingly simple - so it is somewhat surprising that so many government agencies, civil servants and politicians just don't seem to get it. This failure on their behalf to do so is one principal reason that the oil price is over $130. By building roads and airports they are stimulating demand, the exact opposite of what they should be doing.

Thanks Euan for being gentle with me.

I simply get the impression that the current rate of consumption must level out soon, as things are getting so darn expensive (fuel, food, whatever). And I can't believe governments and Big Business with all their Big Spending are that stupid.

Regards, Matt

Hi Joe,


1. clever
2. smart
3. cunning
4. intelligent
5. wise

are all not stupid - but they aren't all going to lead to the same outcomes. Boxed in by the needs to maintain their power- base, reward their supporters and outflank their political and business opponents, the horizons that most 'powerful' people operate within are much shorter than we like to assume. There have been posts here sometime back on the discounting rate for human decision making, which explains how people can ignore the health warnings on cigarette packets yet be frightened of flying, and that same innumeracy applies to political decision making.

Some historical perspective. The initial two year Lower 48 decline was pretty low, -0.8%/year. The initial two year world decline, relative to 2005, was -0.3%/year (EIA, crude + condensate). While we have some monthly EIA numbers above the 5/05 rate, we don't yet have the annual 2008 data, and worldwide we now are getting some unconventional production that the Lower 48 did not have.

Deffeyes modeled conventional crude oil production when he predicted a worldwide peak between 2004 and 2008, most likely in 2005. We don't yet know what the 2008 annual data will show, but it does appear that conventional crude oil production, even on a monthly basis, is probably below the 5/05 rate.

ExxonMobil put the decline rate worldwide from existing wells at between -4%/year and -6%/year, and some sources put it higher, e.g., -8%/year. If we take the middle case, -6%/year, and simply use the Rule of 72, from 2005 we would have to find about 37 mbpd of new crude oil production by 2017, just to maintain flat production.

And then we have the Export Land Model (ELM). My guess is that total net oil exports worldwide in 2031 will be down by at least 75% from their 2005 rate. Europe, like the US, has emerging problems with fast declines from Proximal Petroleum Producers, Norway & Russia for Europe, Venezuela & Mexico for the US. Our middle case has Norway & Russia approaching zero net oil exports in about 17 years.

Consumption has to fall--as importers bid for declining net oil exports.

Um... So the crude, including tar sands, deep-ocean fields and all the other marginals, gets used up as fast as it's produced?

In post peak regions, we don't stop finding oil, but we can't fully offset the declines from the older, larger oil fields, thus we see net decline rates. IMO, the unconventional stuff will just slow the rate of decline of total crude oil production, and they didn't exactly set the world on fire last year--when both Venezuela and Canada showed lower net oil exports, relative to 2006.

However, while producing regions can be modeled as showing a relatively smooth exponential (approximately fixed) decline rate, e.g., -4%/year for Texas, -4.5%/year for the North Sea, our simple mathematical model and recent case histories show accelerating decline rates for net oil exports from post peak oil exporters.

WT.. You could have also said ..

'YES. It WILL get consumed as fast as it's produced, and then some.'

I do appreciate your explanations and your clarity. But don't forget to lead with the most readable answer, if possible. (Not my strong suit, either.. just my goal)

I'm trying to figure out what Joe is asking in this thread..

I have to say that your guess at a 40-ish year plateau is presented fairly. My concern is that it seems like a 'you don't have to do anything' wish-fullfillment. If your case turns out to be right, then you're set, and you can go about your business without worries. If the OTHER case turns out to be the right one, are you prepared for that? To me, this is the essence of our 'confronting peak oil' discussions. Do we have to do anything to be ready for the worse-case (not even 'worst'case) scenarios, or should we carry on, and assume we'll be alright on present course.

I don't swear up and down that we're at peak. I just tell people that the likelihood seems a lot higher than it used to, and that preparations take some time, so get started. Please.

Bob Fiske

(From Rural Western Maine, where they used to say 'East Stoneham ain't at the End of the World, but you can see it from theya..' oooh! ahhh! fraught with very subtle implications... but they STILL haven't run out of stones!!)

Thanks johuhl. I said down thread, I'm a little slow on soaking up the basics such as Energy Return, so probably would have used the term "declining plateau", if there is such a thing. And I use the 2050 date because that's what I keep hearing in MS.

My problem of course, is one of final exceptance and while I keep leaning toward a "we still have time" type arguement at the moment (crossing the fingers and therefore any preparation for something else is rather slack - though I am doing the motorbike test course next month, which I guess is something), I'm still watching and listening to the media closely for those horrible, end-of-days (as we know it) words...

"The World Is Running Out Of Affordable Oil".

Regards, Matt B

I'm nearly with you, just not quite.

The problem is that the maximum output from the oil sands (Canada) and heavy oil from Venezuela is likely to be about 10 million barrel per day at the most, compared with a decline of 40-50 million barrels.

It's not enough to maintain our current liquid fuels based fleet.

We also don't have enough time to just switch over to electric either because the production capacity is not there.

For a smooth transition, in the USA for example, we need to replace 150 million vehicles with electrics to cover a 50% drop. Disregarding the very real problem of upgrading the grid and building extra electrical supply (unfortunately likely to be coal fired), we have a problem that worldwide production capacity of electric vehicles is less than 100,000 units per year. Obviously we can't do it in time.

Thanks Dan. As a newbie to this, with forty years living in the MS system (believing for the most part, that such things as missions to Mars and pills that let us live for 200 years will one day be the norm), it's a very hard thing to readjust the thinking to the alternate future PO advocates present.

I agree with everything you say, but very reluctantly. At this very moment, even after ten months of reading here and elsewhere, I simply don't want to believe it! Because it sounds pretty crumby and I have three kids to bring up in a world that barely whispers the end of BAU may be near...

Regards, Matt B


Don't worry too hard. I have come to the conclusion that the worst case scenarios won't happen unless helped along by stupid government policies (i.e. blocking solutions and big wars). Though we are involved in wars I think we are involved in "small" wars that the powers that be think we can win. It's only if they start a big war thinking it will stay small that I think we need to consider the extreme doomer scenarios as being plausible.

My 2c for what it's worth are these:
We now have technical solutions to enable an electrified version of business as usual to continue. We lack a critical mass of these solutions to avoid a partial collapse/depression/recession. What I *expect* to happen is this:
We get a big recession during which people move closer to work (those that actually have work). *Real* wages will fall across the board. Much of the middle class will be demoted to poor working class. Hardly anybody will be able to drive gas or diesel powered vehicles.
Products will be much more expensive. Disposable income will be hammered. Road trips and foreign vacations will be an upper class thing only. Flying in airplanes will be an upper class thing only. Most people who commute will be taking the bus.
I think our leaders will eventually reluctantly stop blocking mass transit and this will partly re-enable the suburbs but in the meantime the fastest solution to our transportation problem is likely to be buses, bicycles, walking, a sprinkling of electric cars and a (slightly) larger sprinkling of short range electric trucks combined with rail and shipping for long distance movement of goods.
In the longer term I think we are looking at electrification of transport whether it be trains, trolleys/streetcars, subways, electric trucks, electric cars/bikes.

I hope it takes less than a decade to get there but I suspect it will be a full generation.
Your kids and my kids will be our age before things get better and it will be their children who will reap the rewards of our suffering.

we have a problem that worldwide production capacity of electric vehicles is less than 100,000 units per year.

What's the bottleneck?  Chassis?  Bodies?  Steering gear?  Wheels?

The world makes many millions of multi-horsepower electric motors per year.  The world steel-rolling capacity could produce laminations for tens of millions of 200-horsepower induction motors, and the rest of the drivetrain can be a single reduction gear.  This takes less effort, not more.

The problem we're seeing in hybrids today is a lack of NiMH production capacity.  This is an issue because of the dependence on one particular battery type.  If we spread out and used e.g. reticulated vitreous carbon-based lead-acid and rechargeable zinc-air while waiting for high-volume lithium-ion, that bottleneck might look a whole lot wider.

And I can't believe governments and Big Business with all their Big Spending are that stupid.

Lack of natural selection at the bottom of society is well covered - Idiocracy, quite a few links on TOD and etc.

However what is going at the top is mostly hidden from our view, but things there might be even worse than at the bottom...

That's odd, because there are countless public and private projects that waste millions, and many get cancelled, or end up mothballed. I've worked on a few myself ;)

Governments and private companies are collectively quite a lot less smart than the people in them, and the people in them are generally average. They can achieve more from collective effort, but that doesn't mean they are smart.

The fact that million of dollars is spent indicates that people are willing to take a risk, it does not in any way provide guarantee of success.

I can understand your view, it is a common one - "they must know what they are doing". I fear such trust is quite misplaced.


If you really believe governments & business know best & have good reasons for discounting Peak Oil, take a minute to consider Britain & the North Sea fields.

Through the 80s and 90s they ramped up production and pumped it without restraint, happily selling it at $10 or $20 a barrel. Then in 2000 the fields peaked, and output has crashed year after year since.

From being a net exporter Britain now must import oil, with the exposure to supply problems, price shocks and a worsening current account deficit.

Did anyone in government or business say "hey, we're crazy building our economy on the basis of a never-ending stream of North Sea Oil"? Did they sit down and plan a reduced production rate to ensure it lasted longer? No. They pumped until it peaked, then they acted all surprised as if no-one could have seen it coming. Even today their energy policy is stuck in the past, and they seem to think they can boost production again by changing the tax rates or something.

The government and big business in Britain weren't stupid - but they sure did act that way. To me, that's hard evidence indicating the foolishness of trusting the big guys to know what's best.

Study the production and (crucially) exports data - there's been plenty of posts on those topics using data published by the US government (EIA), and make up your own mind from what the data tells you.

Btw, I always knew you could get a crowd of Melbournites to turn up to the opening of an envelope (or similar) :)



You put the peak at 'now' and it looks as though you are correct.

As a 'bottom-up' Skrebowskian empiricist rather than a 'top-down' Hubber Linearization theorist, I wonder what went wrong with the Megaprojects forecasts dated October 2005 (see here:

According to the Megaprojects reference scenario, peak would not occur earlier than 2010-12 (if I've interpreted the data correctly.

So does anybody know whether Skrebowski has provided any update on his October 2005 Megaprojects forecasts? I haven't been able to find anything more recent, probably haven't tried hard enough.

Carolus - my intention was to draw my arrow slightly to the left of peak. I don't think we are quite there yet 2012±3 years. But that is largely irrelevant as the cartoon from Bartlett shows.

On megaprojects, with all due respect to Chris, he struggled to track all projects. TOD has tried to build on this and maintain our own data base here:

This is mainly, Ace, Sam and Stuart who worked on this. The data base suggests that there is no supply problem - which we know is not the case (flat to slowly rising production). So either decline rate is higher than 4.5% or project delays mean that the list perpetually overestimates new capacity that is due on. I imagine there may be a bit of both. The latter I believe is what has led CERA into perpetual optimism.

The mega projects data base is one of the most important initiatives here at TOD because by the end of this year we will be able to look at all the capacity that was due to come on and ask "what happened to it".

Global crude + condensate + NGL + syncrude scenario based on TOD mega-projects database as of 27 May 2008. This is not a definitive forecast since there is uncertainty over decline rate, project slippage and there is no allowance made for small projects. Beyond 2012 there is a planning horizon for projects and so beyond that date is pure speculation based on 10% per annum decline in new production capacity - and this may contribute to the apparent peak at that time. The 4.5% per annum decline rate is based on a personal communication with Peter Jackson (CERA) who conducted a comprehensive study of oil field decline last year. This decline is applied also to new production.

From: Why oil costs over $120 per barrel

Thanks, Euan -- mea culpa. Don't know how I missed out on TOD's Megaprojects database.

Good ol' Chris is still of the opinion we are at the "foothills of peak oil" and we will hit the peak at c. 2011-2012. I see no reason to disagree, although even he agrees that political events may bring the date closer.

Listen to his latest interview by Julian Darley at Global Public Media.

Euan, great reply on AP's blog; I will add some ammunition too.

But I'm afraid that we can count on our governments, national or European, to fail us on energy policy. My guess is they will do a great job in their tax policies, though.

Demand going up, supply not going up, at any rate as fast - you have seen the stories on the news of the industrialisation of China and India.
As for our revered business leaders and politicians knowing what is going on, google sub prime mortgages,a nd check out how clever they were about that.
In 1936 most of the elite were convinced that there would be no war with Germany.
What they are good at is hanging on to their own personal power and money, and that often has nothing to do with the common weal.
Nothing difficult there, is there?

Production may be in a plateau, but net energy is already in relentless decline. The focus on production is misguided. We could be producing 850 million barrels a day, and it would do nothing if the EROEI were 1.

An understanding of the effect of declining EROEI is entirely missing from mainstream discussions and lacking even here at TOD. A million barrels a day of Canadian tar sands oil does NOT replace a million barrels a day from Cantarell.

Production has been flat since 2005, but the net energy available to run the world has declined, and the decline is picking up speed. Unfortunately, I know no way to quantify the decline. Some of the decline will be picked up in a decline in net exports, but not all of it.

I agree with Euan: if you don't "get" net energy, you don't get the problem.

I play a bit of golf; one week it's fantastic and I think, "I've finally got a handle on this!" Then of course, the following week, it all comes crashing down as I forget a couple of basic things.

I get that it's a waste of time burning a barrel of oil (or its equivalent) to produce a barrel. Just need the basics bashed into my thick skull until it sticks. Thanks.

Regards, Matt B

Unfortunately, it gets worse and not better. It's just like grabbing more and more sand from the beach and squeezing it harder each time this stuff.

Worse, it's not all that uplifting. Believe me, I had to tell 25 undergrads last fall about it for 16 weeks, I know.

Just be careful you don't fall into the trap of thinking that energy = oil, in other words, you need barrels of oil to get barrels of oil.

We can use higher EOREI sources to "subsidize" lower EOREI sources. What you get is an averaged down EOREI for the whole process.

An example of this is using higher EOREI natural gas to extract lower EOREI tar sands and the whole process has an average of less than the EOREI for extracting the natural gas.

We could also use high EOREI renewables as an energy input.

The obvious question to ask is: Why would we do that? Why not just use the renewable energy directly?

Liquid fuels can be convenient, and pretty well essential for some purposes.
AFAIK the only proposal to use renewables for extraction of oil from tar sands involves geothermal, but the front runner is nuclear energy, where concerns about EROI are pretty remote as there are plentiful supplies of uranium and thorium, which could also be used in the CANDU reactors under consideration, and costs are for uranium are low.


We could, in fact, use higher EROEI sources to extract oil which has an eroei of less than one as long as the resulting process has an average EROEI of greater than one.

That is how I think we are going to go in the interrim.

I wonder how long it will take before we realize it's better to just use the higher EROEI electricity directly?

Hopefully less than a decade.

I'm not one of those who thinks that tar sand oil production will ever be likely to be ramped to provide a substitute for anything like present energy use patterns.
For the nuclear option (actually, Hyperion nuclear batteries or microwave would seem better options, especially the latter if it can be made to work) you are looking at at least 10 years before it can be done on a substantial scale.
By that time peak should well an truly have hit, and the substitution of electricity for transport etc should be far advanced.
Most countries simply do not have the US and Canada's reserves of tar sands and shales in any case, so across the world there is little option.
For some uses though it is very difficult to use other than liquid fuels.
Pre-eminent amongst these is aviation, where there is no substitute for it's highly compact energy, and hydrogen production for the use is distant.
By that time though the aviation industry is likely to be a fraction of it's present size.
Other uses would be agricultural, again very difficult to substitute, although perhaps just about possible by the use of zinc energy cycles and bowsers to refuel during the day tough to do though, and we haven't got the engineering ready to go.

Yes I agree.

The aviation industry is likely to consolidate down to a fraction of it's size, along with a comcomitant increase in ocean travel and long distance rail for the rest of us.
I don't think it will die out altogether, however, since (although currently prohibitively expensive) fuel cells could be used for propeller driven aircraft and some kind of biofuels could be used for jet driven aircraft.
The price of airline tickets is likely to be prohibitive for all but the upper classes.

The wildcard is how long it takes the market and government to clue in to the mitigation path of electric transportation.

It seems that the automobile industry have pretty much all gotten the point.
To wit, the Toyota chairman announced that if his company doesn't go electric then it is dead.

It's a pity that the concept of an unavoidable liquid fuels crunch isn't higher on the radar of the rest of industry and government.

It soon will be.

Volkswagen said in the last few days that the future is electric.
They seem to think they have plenty of time though, and are concentrating on increasing the mileage of conventional vehicles at present.
It should at least mean they have advanced prototypes when the light dawns.
In Japan and Europe there is a lot more emphasis on pure electric vehicles rather than the hybrid approach favoured in America.
Distances travelled are usually shorter and for many an EV would be fine, supplemented by the occasional hire car.
It is worth keeping an eye on the compressed air car, which has finally got real backing from Tata and is due to start production in August:
BBC News video: Air Car out "by end of year," in Europe, for 3,500 Euros - AutoblogGreen

It uses more electric per km than batteries, around 3 times more, but that is still a lot less energy than for petrol, and the air tank is a bit bulky, but is quick to recharge and you save on the expensive batteries.
It would appear ideal for France, which has plenty of nuclear power, or elsewhere if charged off-peak.

There was an interesting comment on Piebalg's blog about solar botanics - something about artificial energy generating trees or something. Havent been able to dig up much about it on the web, anyone has more info?


The Solar Botanics project is either a spoof or belongs in the category of permetual motion machines. Read the hype:

Were are mimicking nature, by making artificial trees and plants from recycled materials, these trees and plants are fitted with Nano-leaves, combining the latest nanotechnologies; photovoltaic - thermovoltaic and piezevoltaic all united in a leaf design. Thus converting 3 free available energies SUN, WIND and HEAT into electricity.

These nano-leaves can also be attached to the promoters' TINFOIL HATS ....

Here is an e-mail I sent to the BBC in response to their asking what we would like to see covered in the news:

We are going to get very cold in Britain soon.
A lot of power production is getting old and will be retired, and there is no way it can be replaced in time with renewables, nuclear or coal.
We are relying on natural gas and LNG imports.
The price of these is going up and supplies are not increasing fast enough.
In Germany and the Netherlands houses use a third as much energy as in Britain to stay warm, as they are better insulated.
That means that they can afford to pay 3 times as much for gas as we can.
We won't be able to run industry and commerce much of the time either due to power cuts.
The BBC needs to investigate the world of power cuts and dark and freezing houses that we will shortly be in.

I wish I had joined the dots for them and said that there is no way we would be able to compete on price as the German's and Dutch only need a third as much oil and so could pay three times the price, so we would get very little.

Someone has to wake up, sometime

In Germany and the Netherlands houses use a third as much energy as in Britain to stay warm, as they are better insulated.

Is this true? Can you back this up with data?

This basically is my peak / post-peak Jevons hypothesis which states that in an energy constrained world, prices will rise with energy efficiency. And one consequence of that is the most energy efficient will be able to pay the highest price - since they are using less energy to perform the same task.

This leads to the conclusion that USA is currently screwed - unless their is a major behavior shift very fast. But I'd overlooked the negative impact upon UK home heating that stems from our totally crap building standards.

I think what you say here is very true.

A by product of this is that energy efficiency is the energy investors best friend since it will drive prices ever higher. Its kind of counter intuitive. You may think that using less energy would drive prices down - but in fact the opposite occurs.

This maybe then sounds contradictory to the message I'm sending Andris. The real issue is energy security and not price. High energy prices are a good thing. But if we don't become the most efficient users of energy among our competitors we will perish. And using energy wisely at high cost will guarantee that we have sufficient to power our society.

A major problem amongst all of this are the elderly and the poor who are likely the least energy efficient in our society and who can least afford high prices.


I think you are confusing a couple of things. Efficient use of energy boosts societies wellbeing, yes, but using a pricing mechanism to achieve this does not. The high price of oil pretty much guarantees that the overall efficiency of oil is going to go down since low value oil such as tarsands will be extracted in the high price environement. Overall, high energy prices are a bad thing if they are not primarly doing something about bringing prices back down. That is the distinction that Piebalgs draws when he say "structural". Further investment in oil reduces its EROEI from here on out. We should thus be removing any incentives to explore or drill for oil and only allow price to motivate renewable alternatives that we know will be getting less expensive with time. This is a place where rationing, and not just improved efficiency, can really help. It meets structural problems with a structured response. High prices are actually a bad thing because they encourage low EROEI energy sources first in this situation. We need to avoid that mechanism.



I think you are confusing a couple of things. Efficient use of energy boosts societies wellbeing because the energy-cost saved in energy consumption through efficiency is greater than the increase in price.

The good point you make is that price / energy efficiency works differently on whether we are talking about energy production or consumption.

My mind is almost settled on the concept that high energy efficiency for consumers will lead to higher prices but cost savings.

How this works on the energy producers is another matter. What you are saying is that high price may make inefficient energy production viable. Maybe. And that is not good. So efficient use of energy may spawn inefficient energy production.

I'm not advocating any of this as a solution but am merely observing what might happen.

Right now I believe that most efficient energy use will allow that country to bid more for energy than competitors (all else equal) and this would guarantee energy security for that country. Here I am talking about a net energy importer.


" high energy efficiency for consumers will lead to higher prices but cost savings."

Improved energy efficiency reduces consumption - even if there is some Jevon's type pushback, it won't replace 100% of the reduced consumption (more like 30%, according to economic research).

So, efficiency will tend to reduce prices. The reduction may be small, if the demand curve is such that someone else who is currently out of the market is ready to consume at that slightly lower price, but the reduction will happen.

More efficiency will produce more pressure towards lower prices.

Lets imagine country A that uses half the energy per capita for home heating than country B.

All else being equal, the share of family income used on home heating bills is half in country A compared to country B.

In a supply constrained world the energy saved by country A gets gobbled up and squandered by other countries.

Families in country B are really struggling to pay home heating and other energy bills because the price is high and they are using / wasting much energy.

Families in country A on the other hand, are very comfortable and are able to pay that little bit more for their energy and bid the price up on the international markets. price * volume = spend. And since their volume is half, they can afford to pay that little bit more and still be well ahead. Country B is going to the dogs as they are spending huge amounts on expensive energy that is wasted.

Its a working hypothesis - with very real consequences for the UK.

Euan, you need to frame it differently.

Ask yourself: where would energy prices be if country A wasn't energy efficient? Both consumption and prices would be higher.

Conversely, what would be the effect of an intervention that raised energy efficiency, in A or B? That would lower consumption and prices.

So, what is the cause and effect relationship between increased efficiency and prices? Efficiency lowers prices.

Now, in your example A will certainly be better off than B, and better able to cope with whatever price level they face. They may have room for a bit of Jevon's style bounce-back in consumption (though it's likely to be a small effect on the order of 10-30%, much too small to raise their consumption to previous levels). But, their efficiency never does harm, either to themselves or their neighbor B.

Hum, I think we a circling each other's meanings and coming close but not yet quite meeting. How about if I say scarcity boosts efficiency (in use) and sometimes that scarcity is accompanied by a price signal and sometimes it is accompanied by a rationing signal, but the innovation is driven by the scarcity rather than the type of signal?

On the other hand, a pricing signal of scarcity does encourage looking for expensive-to-produce oil (in efficient) while the rationing signal does not because there is no profit in it.

You are saying, I think, that in a purely price market (or supply cartel market) efficiency should increase price more than inefficiency because efficiency frees up the supply of money to devote to energy. An efficient (and smug) country can bid up the price. And, because it has become more efficient, it might use more energy than if it had not because this is profitable.

As Nick points out, you might be able to bid up the price, but your efficiency has reduced overall demand, so you may not need to bid up the price to still get your supply and you probably won't if you don't have to. I'm not sure just how Nick arrives at his figure, but I would guess that if you corner the market on efficient use of energy, then you just take a greater share of energy using industry rather than boosting overall energy use? Still, I think that the money supply idea is worth looking into further because that is another possible difference from the widget model of supply and demand where substitution is a well greased mechanism and prices can't rise to suck out all value in an economy.

I think that the overall effect of high prices is to build in low efficiency through the effect on the average quality of supply in the case of oil because we're no longer finding easy oil. If we encourage junk oil through price, even if it becomes plentiful, it won't become inexpensive because it has a high floor price. That floor price reflects the physics of low EROEI oil. In the end, geology wins and the only question is: do we allow the low EROEI of the other half of the oil erase the gains from the first half, or do we cut our losses quick and make the substitutions now that we would have to make in any case later when we are poorer owing to lost gains?


I think that the overall effect of high prices is to build in low efficiency through the effect on the average quality of supply in the case of oil

Not so.  If a lot of the investment required to extract oil is in the form of oil, the cost of drilling will rise nearly as fast as the price of the return.  That oil will never be produced.

One possibility is for e.g. floating wind farms to be used to power offshore oil rigs.  This use of "stranded wind" to produce liquid fuels could pay off handsomely even at a low EROI; if off-shore wind costs 10¢/kWh, you would achieve financial breakeven at 1:1 EROI and $164/barrel.

The real beauty of a floating wind farm is that it could be re-anchored somewhere else in a relatively short time if direct use started paying better than the liquid-fuel racket.

Huh? This is an efficient use of wind? I was thinking tar sands, which would not be produced without a high price for oil. These have low efficiency but could take over the oil supply if demand remains as cheap supplies are exhausted.


I was thinking of profitability, not efficiency.  If people are willing to pay several times as much per kWh of oil as electricity, using wind to produce oil could be a money-making proposition.

Embarrassingly, I can't find the reference. It was in one of the heavies over the weekend, and was commenting that increasing new build standards would do little to decrease consumption, and that it was poor standards in existing stock which caused the problems.
The nearest I have turned up was this:
So from that it sounds as though they were exaggerating, although the differences are substantial.
I omitted to bookmark but will continue to look.
Sloppy stuff.

This Roland Berger report does seem likely to be the one on which the newspaper item was based.
With a figure of 44% lower household energy use for Germany and given that the use on TV's etc is likely to be fairly constant, then perhaps the 3 times figure for heating energy use is not out of the question.
I haven't been able to access the report, so breaking down the figures any more is not possible.
Certainly form this if one looks at the best practise in Sweden, with it's far colder climate, then one gets a figure of twice the efficiency of energy use, and 3 times for the heating component seems probably - before one takes account of the harsher climate in Sweden.

An additional consideration is those areas, like Alaska, which need more fuel just because of the environment. Fairbanks (AK) is in a crisis right now because of the high cost of fuel; many people are saying they must leave because they can't afford heating oil. Thus the farther north you live (or south in the southern hemisphere) the more heat you need, the less competitive you can afford to be (all other things being equal). The average home in Fairbanks needs over 1,000 gallons of heating oil per year. In spite of being super insulated (8+ inches of insulation).

Other things are far from equal!
The report I referenced upthread indicates that Sweden uses stonking 100% less gas and electricity in the home than the UK, and far less than even Germany.
The problem is that with cheap fossil fuel they have not built sufficiently insulated structures in Alaska, or truly adapted to the climate.
Ground source heating is standard in new builds in Sweden.

A stimulating response that even made a futilitarian like myself enthuse!

In fact, I was so surprised that Andris even mentioned the possibility of an energy crisis that I felt in a forgiving mood -- so low are one's expectations after exposure to years of bullshit energy policy from the Commission that even a haggis like this that contains a glimmer of realism almost appears like a work of genius when compared with the rest.

Let's hope that TOD's 'invasion' of Andris's blog generates some kind of follow-up.

Carolus - you need to be careful with your derogatory use of the word haggis - which is very fine Scottish food - and if the EU has anything to do with it, its all we will be eating a few years from now.

Haggis is food?!?

In times of shortage, often made from captured Sassenachs, we hear!
Let's hear from Jamie Oliver!


It sounds like you have much less time for Andris than you did when he posted his first blog.

To point up, he's a politician, not some revolutionary reformer. If you are a politician, or in anyway involved in government decision making, there is a progress that leads to the result:

1) Some low-flying minion is tasked with finding out the data on oil supply. They go to official source, maybe do a few searches - then wrap up what they find in a pretty report (which nobody reads except the executive summary). Even on the off chance that they did find all the data on what we think is going on - would you want to be the bearer of bad news? The person you're reporting to has less knowledge than you, so will give you a hard time if you say the data foretells the end of the gravy train in 5 years. You're not paid enough for that. So you bury a few sentences saying something like "other commentators suggest there are discrepancies in reserve data", somewhere on page 85 and go home to watch TV.

That's the briefing that 'those with arts degrees and no idea what this oil thing is' have to go on.

2) Occasionally someone who has a clue what's going on will get through to talk to a highup. They will say all the things you will expect them to say, maybe even show a graph. The highup will get worried. They will call for another briefing paper, read what's been said before, try to look like they have covered it (and their a**e). However what's presented is a problem and no solution has been provided with it (highups are used to a problem being accompanied by three options for solution, with their place being to pick the most conservative). They are a bit at sea.

3) Industry and corporate contacts are busy trying to push the continuation of the gravy train for their industries (against budgets being 'stolen' for social welfare etc.). Anything suggesting that, say, investment in new aircraft types is wasted money gets met by loads of data suggesting otherwise. One may have a hydrogen or ethanol concern, and pushes that as a solution for the highups problem. Its grabbed gratefully.

4) Time moves on, the cycle repeats.

5) Eventually the problem becomes too obvious for anyone to ignore, its also too late for effective action, so instead the blame is deflected onto someone else (OPEC is being lined up). At no point is the appetite for change large enough to encompass the level of change needed at that point - so no serious change is made, or can be. Call it the general theory of bureaucratic inertia.

Its easy to bemoan these politicians, but to their ears they are hearing problem and no solution. You may be talking about efficiency and savings and cuts - but these ARE NOT SOLUTIONS as far as they are concerned. Nobody wants to be the politician that stands up and says "your toys are being taken away", particularly given the knock-on effects to growth and trade. The concept of an 'acceptable solution' is key. If its not acceptable, its not a solution because it will never get enacted.

That's why you hear ethanol and hydrogen, because they promise acceptable 'solutions' that make the politician look like they addressed the situation. They are good for trade, growth, and most importantly the politicians position.

Anything you push towards Andris has to similarly be an acceptable solution - otherwise there is no point suggesting it at all. Try reading your reply in this context.

I've said it before, but I'll say it again, there are two and a half potential ways to present changes that may find traction.

1) Present them as ways to improve the quality of life of the populous, reducing stress and 'hussle and bussle by, say, reducing commuting.

2) Present them as a ways to increase resilience of society to upheaval and threats (eg distributed power generation).

3) Tie them to climate change as a better alternative to reducing carbon.

At all times problem > acceptable solution options has to be the template.

I think this is a very important point - trying to do too many things at once such as rebuild how politics works at the same time as trying to prepare/adapt to energy shortages is asking for failure on all fronts.

Pick the most important thing and work within the system to achieve it, Right now we have to deal with the politicians we have and they all have to get reelected. Options that do not facilitate this at some level will be dismissed out of hand.

In a recent blog entry, Dmitri Orlov said,

"The best thing to do about national politicians is to completely ignore them and wait until they go away. This approach worked really well with the Communists in Russia."

I have some sympathy with this point of view. The Piebalgs of the world are making themselves irrelevant.

Gary - fair comment. But lets gets one thing clear. Andris Piebalgs is not a politician. He is an unelected, highly paid official. A Civil Servant. The school teacher from Lithuania has our energy future in his hands.

I agree entirely that solutions need to be offered, and I have in fact left a second comment with some pointers, that is still awaiting moderation.

You are right that when Andris started his blog I was enthusiastic. But it has developed into patronising preaching. If he doesn't change his tune very fast, there will at least be a public record of a one sided debate that took place that he chose to ignore.

If I sound angry that's cos I am very angry at the fact that our energy capital is draining away and being misallocated. The commercial opportunities rebuilding our energy and transportation infrastructure are vast - but spending vast sums on the wrong things right now may potentially be disasterous for us all.

DaveMart's comment amount energy efficiency and price I believe are spot on. I think things are going to get very bad in the UK - OK that's Gordon's fault - but they take this idiotic lead from Bruxelles.

If Andris wants to dialogue about solutions then he should dialogue, cos what we have right now is preaching from one side and the rest of us talking amongst ourselves - I email once a week, never get a reply. I wonder if anyone in his cabinet is reading this stuff?


If you look back to the first blog posting discussion, I warned that I didn't think it would go anywhere - the triumph of experience over hope where the EU is concerned ;-)

Two points:

1) You say civil servant, but the reality is a post like 'Energy' is always a political post. "Any sufficiently advanced civil servant is indistinguishable from a politician". Their room for practical manoeuvre is constrain by the 'acceptable' thing - they don't really hold much in their hands at all.

2) You are talking 'cutting' - and that will never get through. Look at it like this; you say that air transport will crash (something I regretfully agree with). You then go on to say there is a need for large investment in things like shipping and canals. Then look at what Andris said. I'd suggest part of the reason he talks about 'cleaner', 'more efficient modes of transport' is because there isn't a cat-in-hells chance the EU will zero investment in Airbus, even if it does make sense. They probably will only invest in areas where EU has a chance to build industry, so no canals and probably no shipping (can't compete against S Korea). New battery technology though, that might be a flier. Hell, couple nanotech ultracapacitor batteries with air transport and you could probably extract a few million in framework funding. It looks like a solution, it looks commercially viable, it smells like 'acceptable'.

The decline in usage will happen, but it WON'T be planned for, at least in public or on a blog. In private it will probably result in a rationing planning approach (which is a bad idea in my analysis). That's as far as a 'managed decent' will go.

Andris, like every politician, wants the appearance of dialogue, without anything more concrete or binding. Ask yourself the question, if he really wanted to talk, why wouldn't he be posting here.

First of all, the guy is from Latvia, not Lithuania.

Second, every eurocrat is politician IMO... I just dont see how it can be otherwise in Brussels.

I totally agree with you otherwise - this energy policy leads us nowhere. Yet it's a start... tune is changing as oil prices climb. I don't think one can deny that peak awareness is dawning upon politicians worldwide.


Unfortunately I agree with garyp, even if Andris wants to do something "his hands are tied by the system" it's similar to that quote about not understanding something that your job depends on not understanding that appears from time to time in the top right corner.

I also believe that despite his physics background Andris is an out and out politician and is extremely unlikely to rock the boat. Here's an earlier commissioner who's still clinging to the greasy political pole with all its benefits. Our very own windbag Neil Kinnock was was an MP from 1970 to 1995 then became UK Commissioner of the European Commission from 1995 until 2004 then Chairman of the British Council then became a life peer. His wife is also an MEP. His son Stephen was head of the British Council in St. Petersburg, Russia. His daughter works in the Political Office under Gordon Brown... So the whole family are in effect politicians and benefiting from fitting in to the "system":-(


You write about the way the Commission prepares its energy scenarios:

Some low-flying minion is tasked with finding out the data on oil supply. They go to official source, maybe do a few searches - then wrap up what they find in a pretty report ...

As a rule, the Commission works in a more devious way. It employs some 'high-flying' outside experts and publishes their report under the Comission's banner -- while at the same time disclaiming responsibility!

A good example is what experts commissioned by DG Transport and Energy were forecasting a few years ago. Here is what Europe's finest minds wrote in 2003 (European Energy and Transport Trends to 2030):

"World energy prices

Assuming the continuation of current world energy market structures and taking a conventional view on fossil fuel reserves, world energy prices develop moderately as no supply constraints are likely to be experienced over the next 30 years under Baseline conditions.

• Oil prices decline from their high 2000 levels over the next few years, but they then gradually increase to reach a level in 2030 no higher than that in 2000 (and 1990)"

(emphasis mine)


The Commission has certainly mastered the art of evading responsibility for documents bearing its own imprint but written by outside bodies (the report was actually prepared by masterminds at the National Technical University of Athens).

Page 2 of the study features the following disclaimer:

"The European Commission does not guarantee the accuracy of the data included in this report, nor does it accept responsibility for any use made thereof."

Cool hoors, as we say in Ireland.

Yep, I was simplifying it down.

Bringing in the "what answer would you like?" consultant is a mechanism that most politicians use when they want to be really sure of the answer. Bonus points if you can get a 'Professor' to do it - that really sounds good and does the bank balance of the individual concerned no harm at all. If it doesn't say what you want you reject it and don't pay until it does.

Investigating the reports from Andris domain over the past few months and its fairly obvious he's avoiding the whole area of peak oil and its impacts. Since he's roped in with transport that's not surprising - they don't want to look at areas that cause intractable problems.

Euan, you're being a bit unfair on Andris. His post certainly isn't "the most appalling muddled mess". Ninety percent of it is spot on and it's good to have a politician (no less than the European Commissioner for Energy) who is so well-informed. I particularly appreciate his comments about demand reduction.

It might be better to avoid using BLOCK CAPITALS; they aren't an effective means of communicating information. As a general rule if your post contains block capitals then it needs restructuring to deliver the point without them.

Otherwise, keep up the good work as always!

Your point about fine German engineers is good but misplaced. I attended last year's Frankfurt Motor Show, the official theme was Sustainable Mobility rather than speed and raw power. BMW's push for Efficient Dynamics has seen the revised 1-series (119g/km) and the Mini Cooper Diesel (104g/km). Volkswagen's Bluemotion theme has the Bluemotion VW Polo (99g/km) and Golf (119g/km). These are real cars that consumers can buy now, not concepts or greenwashing. Across the Maginot line we find the petrol-driven Peugeot 107 & Citroen C1 (both 109g/km). Given that the car industry tends to move at a snail's pace these recent developments are encouraging.

I agree that Andris's own choice of car is most peculiar....

[Edit: I've measured fuel economy in g/km rather than mpg to avoid the confusion between UK/US gallons. For reference, the Peugeut 107 emits 109 g/km CO2 and consumes 61.4mpg (UK), 51.1mpg (US), or 4.6 L/100km.]

Drewswater - I agree this piece is a bit harsh, BUT WE GOTTA AT LEAST TRY TO GET HIS ATTENTION;-))

The era of cheap and easily available oil is over. We need to move away from black gold and put our efforts in a low carbon economy.

And in the meantime, we need to continue our dialog with oil producers to encourage them to produce more and to supply the markets better. On 24th of June, I will meet ministers of the OPEC countries to discuss with them on this issue.

Had he said this:

The era of cheap and easily available oil is over. We need to move away from black gold and put all our efforts very urgently into alternative energy sources, energy conservation, energy efficiency and new low energy technologies.

Then I would at least get an inclining that he grasps the issue.

Hi Euan,

Yours is always good stuff.

Very few understand that the TOD is a highly Intellectual site. (Websters-- Intellect, the ability to "know" as opposed to hope, will, or wish (pray?)

Those damn politicians and the PO doubters had better realize that intellect is predictive and timeless and anybody that does not get it is doomed (and always surprised when it happens)

Intellectually I am not sure any democratic or elected government has the capacity to do what really has to be done. Pielbalgs is not even in the same hemisphere. If he actually believed, or ever told the truth of the situation they would tar and feather him.

The Olduvai Theory predicts we are headed over the cliff. Well, in my opinion, any solution which could effectively save us would have to be at least half as draconian as the cliff in the short term and then if possible, ease up where appropriate.

GM, Ford, and Chrysler are still talking of "phasing out" their doom machines. The politicians are still talking about "consulting, discussing, meeting, proposing" "Possible solutions"

The per capita energy consumption graph is steepening to the point of no return, and we are still talking gobbledy gook.

Intellectually I am not sure any democratic or elected government has the capacity to do what really has to be done.

I tend to agree that the grip of vested interests - farmers, motor manufacturers and oil cos - is very hard to break. And I am not optimistic that our efforts here will make any difference.

I was thinking that since the EU Commission is not elected that they may be better placed to provide a lead, but that would require true vision and strong leadership which seems to be lacking.

The thing that makes me really mad is that there are vast commercial opportunities in pursuing a different more sustainable path. Instead we are draining our remaining energy capital on activities that are totally futile.

Andris and the EU need to start by explaining to farmers that they are among the most important group within the EU and that a central pillar of EU policy is to ensure 100%+ food security whilst not abandoning N Africa to famine and whilst telling them (the farmers) that bio-fuel production will cease in 2009.

They need to explain to the population that food prices are going up and that the % of income used on food will rise - made affordable by that foreign holiday in the Canary Islands falling off the annual budget.

Thanks for you support here and the excellent comment you left Andris. And I wouldn't worry too much by the occasional insult thrown by those who likely have vested interests. They likely see their livelyhood threatened.

“It's difficult to get a man to understand something if his salary depends on him not understanding it.” —Upton Sinclair

EROEI is being used in ameture fashion to raise alarms about the future of energy production. I have news for all you armchair engineers that predict the end of civilization:


Coal, oil, natural gas and uranium mining all require energy to bring to market, and the reduction in the energy content of reserves as always greater than the energy content of the products.


The only industries that have a EROEI greater than 1 are biomass (ethanol, firewood, animal power), hydro, wind, geothermal and solar.

We drove off the EROEI cliff when coal replaced firewood over 100 years ago. Burning fossile fuels no matter how easy they are to extract returns no net energy. It all comes from stored reserves than took billions of years to accumulate.

A much more relevant issue is the RATE of EROEI. It is not useful to have a positive EREOI if it takes 40 years to realize the gains. Energy return can be reinvested the next year if the rate is high (biomass, and can thus be leveraged into even greater returns the next year. If the rate of return is low (solar electric) it can take 5-10 years to recover your investment.

Rapid expansion of low rate of return EROEI projects like solar can actually consume more available energy than the project produces.

Solar take an optimistic 5 years to produce a net EROEI of 1, which is similar to a 20% return on investment. If the industry expands at a 20% rate per year, it will never yield any net energy for the entire period of expansion.

Wooo-hooo! I now know 3 people that understand this. It's very difficult to get people to grasp that massive roll-out of Solar PV is going to be perpetually EROEI negative until the growth "peaks". All that is going to happen in a developed nation Solar PV boom is the polysilicon manufacture is going to boom in China (while they build 1 new coal power plant every week).

It's much "greener" to just build the coal power plant in California and have base load power. The Solar PV path causes China to build a new coal power plant, a new polysilicon plant and a new Solar PV plant and then ship the panels to California to have a intermittent power supply that may return the energy in a few years, but won't return the energy of the growth while the growth is occurring.

Thin-film technologies have a much better EROI.
Something like 6 months to a year, so if power is a constraint, which is unlikely as we still have plenty of coal and if ever there was a worthwhile cause in which to burn it it would be to replace it, for a time emphasis could be placed on thin-film technologies.
The same calculation can anyway be made for coal or nuclear or indeed gas plants, as all take time to repay in energy terms.
We would need to replace them in time in any case, so the relevant factors are how quickly the energy is paid back in the two different cases and whether overall energy use is being expanded.

Rohar1 writes:

The Solar PV path causes China to build a new coal power plant, a new polysilicon plant and a new Solar PV plant and then ship the panels to California to have a intermittent power supply ...

Thanks for exposing some of the PV hype. I fear that PV will go the way of biofuels as something that 'sounded like a good idea at the time' -- before people went to the trouble of thinking it through and, in particular, of investigating the problem of scaling up.

There are some very good articles on the limitations of PV (and wind power) to be found in the journal of the Optimum Population Trust (authored by Andrew Ferguson):

The book to read is:

The Solar Fraud: Why Solar Energy Won't Run the World

In fact, PV, even silicon, is doing well on energy payback time:

And silicon will be seeing some big improvements still as purification methods are optimized. It's EROEI is coming in well ahead of new oil resources and is ahead of coal and nuclear power.


Chris/Mdsolar, thanks for the references.

Now here is the punch line in the article entitled ‘Environmental Impacts of Crystalline Silicon’

Together with a number of PV companies an extensive effort has been made to collect Life Cycle Inventory data that represents the current status of production technology for crystalline silicon modules.

However, there is no guarantee that the amount of energy invested per module will decrease as production technology improves (as apparently assumed). PV is still a boutique industry and scaling up from 0.1% of energy production to 1% or 10% may have unforeseeable consequences:

To make PV cells of higher efficiency requires exotic materials, including germanium, gallium, antimony, indium, and cadmium, possibly with gold or platinum for conductors.

A study of the American Physical Society (APS) asked how much material would be required to produce 1% of the US electricity by the turn of the century. They found, for example, that 250 metric tons of germanium would be required, which is over three times the world’s annual production. It would require nearly twenty times the world’s annual production of gallium. Some 17 per cent of the US annual production of cement would be devoted to making the structure to hold the flat-plate solar collectors. Nothing important has changed since the 1979 APS report, save that we use 60% more electricity.

[Source: Howard C. Hayden, ‘The Solar Fraud’, pages 196-197]

The point is that while the energy output per PV module is relatively easy to determine (approx. 10% of irradiated solar energy, I gather), the energy input required is unpredictable, being a function of a number of unknowns. We just don't know how much energy input will be required when production is scaled up by one or two orders of magnitude. The Pay-Back Time calculations have the ring of the ‘reference scenario’ approach so beloved by the European Commission.

Not surprising, since it was the European Commission that funded it:

This research was conducted within the Integrated Project CrystalClear and funded by the European Commission under contract nr. SES6-CT_2003-502583.

You appear to be confusing payback time with efficiency. It is true that you can reduce payback time with higher efficiency and one way to do that is to go with multijunction technology that uses other semiconductors. But one can also reduce payback time by using less energy to produce panels with the same efficiency. That is the gist of what the article is about. Once those methods are established; one does not go backwards. People don't collect oil with buckets anymore, they use pumps. Your worries about rare materials are not well founded.

You'll also see, if you investigate a bit, that objections raised in 1979 have been pretty roundly put to bed. In particular, the amount of embedded energy in utility scale PV mounts is trivial, 3 to 5 months:

I would suggest that the source you rely on is too dated to be all that helpful.



Thank you for the clarification. I'm still baffled at the huge gap between energy payback time and monetary payback time, though. Normally the market cost of a product pretty closely reflects the quantity of energy required to produce it. Clearly, this isn't the case with PVs.

When you have a product that has hard energy inputs (like Solar PV or corn ethanol), there is competition in the field (like Solar PV or corn ethanol) and no one is able to sell the product at a low enough retail cost to come anywhere close to the marketing hype of energy payback and ROI... a simple formula may be used to understand the EROEI:

Ein + BS = Eout

There you have it folks, the mysterious BS factor! If the energy payback time of the hype, press releases and "scientific" studies were correct, then PV companies would install PV and sell the electricity to the consumers for pure profit after 3 years. They would use them to power polysilicon plants.

No one is doing that,I wonder why?

Besides the questionable hype on energy payback, even if it is a 3 year payback, the point I was making is that while growth is occurring society as a whole is running in an energy deficit. If the panels last 20 years and the growth continues for 20 years, we never get ahead and then it's time to start replacing panels.

What in the world are you talking about? Not all of the cost of a product consists of the energy input to produce it. Solar PV is darn expensive at the moment, but although some of that cost is due to the energy costs, chiefly of purifying the silicon, a lot of it is due to labour, to setting up the factory, and so on.
Your last paragraph about 3 year paybacks and the panel lasting 20 years and so on is entirely dependent on how fast the system grows.
If for easy of calculation you say the panel lasts 21 years, then on the figures you have chosen of a 3 year energy payback the energy return will indeed be positive, providing that the doubling time is greater than 3 years.
Very fast growth rates are being attained at the moment, but that is a characteristic of very young technologies, and will reduce as the technology matures.
In the early days it is not significant as it does not consist of a enough of the total energy generated by the society.

Dave, you are missing the point - if PV companies could make the panels and within a very short period just sell electricity to a grateful public at ZERO cost (enabling them to undercut all other sources of electricity) then they could borrow money and grow like topsy and dominate the world, since this is what we are desperate for.

The reality is completely different - PV is not COST effective for most people in the world and at high growth rates, in an attempt to produce green electricity, isn't energy positive either - a complete disaster, worse even than corn ethanol - in the short term the sort of dead end that only politicians could come up with.

BTW solar PV is NOT a substitute for oil as oil is primarily a transport problem ... and at present convienient transport mostly runs on oil not electricity.

ERoEI is Energy Returned over Energy Invested.

Energy payback time is the time for the PV panel to produce as much energy as was used to create it.

Payback time for the money spent manufacturing, installing and operating a PV system that outputs continuous power to run a manufacturing plant is a completely different value.

Energy payback time for a PV system may be as low as 3 years.

The payback time for the financial investment in a complete PV system is currently on the order of 20 years.

A PV manufacturer would have to secure a ridiculous amount of initial capital to construct a PV powered factory. They would have to install grid power initially because the PV panels must be manufactured before they could be used as the power source for the factory. With grid power they pay for electricity as they use it while revenue comes in from sales. Your criteria would require them to manufacture PV panels for some period of time to power the factory without any revenue from sales. What you suggest would be financial suicide for a cash strapped start-up company. One can not use the energy from PV panels to create the initial batch of PV panels. A different energy source must be employed. Think it through as though you are using your money to construct the factory. Energy pay back time is not the same thing as the time needed to pay off the initial investment.

You say that PV is not cost effective for most people but neither are fossil energy sources if you account for the full cost which includes wars, pollution and climate change. The gasoline you put in your vehicle is subsidized by your grandchildren.

The manufacture of PV panels is not a huge consumer of oil either because electricity is no longer produced from fuel oil in the U.S. Your thinking on the "transport problem" is static. Electrified rail, battery powered electric vehicles and plug-in series hybrids would use electricity. There is a desire to eliminate methane and coal as sources of electricity before production of those resources peaks. Some of us do not envision transportable liquid fuels, hydrogen or dumping fossil carbon into the atmosphere as a viable future. To you the immediate price is paramount while disregarding sustainability and environmental consequences. If we do not go renewable, sustainable and environmentally friendly promptly, then we will be history. Distributed, grid-tied PV is part of that future.

Blue Twilight,

Great post and it explains succinctly the conundrum.

Quite simply, though solar voltaic has a pretty decent energy payback it is so expensive due to it's complexity of manufacturing and very high labor costs.

As a comparison: solar water heating is low complexity and thus less expensive.

Solar PVs need to become cheaper in dollar terms by a factor of 4 at least. When this happens, payback will be down to most people's normal time horizon of five years.

In the meantime solar would have to be subsidized and although I am a staunch advocate of free markets I don't really want to go through a decades long period of "creative destruction" otherwise known as a global depression with all the comcomitant problems such as government oppression, hunger and wars etc.

Personally I would rather pay higher taxes to get a boost to the renewables production capacity than suffer a huge drop in income and perhaps be unemployed and hungry for ten years.

At least according to this story:
We'll be installing 1.8 GW of solar this year in the US. More than I expected and I backed out that figure using these data:
Could be wrong, but that is likely more new capacity than nuclear power will provide in 2008. The cost reduction seems to be on track.


In the beginning of petroleum, the price was very high yet that was the easiest oil to get. At present the price is rising even though the contribution of hard to get petroleum to the overall market is still small. There is very little production capacity that would be unprofitable at $30/barrel. So, while I agreee that production cost usually has something to do with market price, it is not always the case. The plan for PV is to have it cost competitive with other sources of electricity by 2015.

That is about $1/watt of capacity, though that number is rising if the rising cost trends of other methods is sustained. In meeting that goal, costs of manufacture have been dropping very quickly while growth is manufacturing capacity has been large so that there should not be much worry about older and more expensive factories cause a drag on cost. A number of thin film manufactures are already meeting the 2015 goal. Silicon should be falling into place as better purification methods ramp up. Yet, the installed price hovers around $8/Watt
Why don't we see the progress in the reduced cost of manufacture? Well, perhaps we do. The larger commercial installation are often done as power purchase agreements and use thin film PV. They have lower prices (around $6/watt) which in part reflects the reduced cost per watt of doing a big deal, in part the reduced cost of installation using cranes and such and in part the dominance of thin film (currently the lowest cost method) in this sector. But, thin film is also reinvesting in capacity, so they don't sell all that close to cost since they want to expand their factories.

I would say that the present price of solar is similar, in a way, to the early price of oil. There is need to invest in future facilities so there is a need to charge more now. It is different in that early solar really was expensive to produce while early oil was probably the easiest to produce. Fortunately, with solar, the situation that we see today with oil, where costs must rise owing to depletion of the resource, can't happen. Solar can really only get less expensive over the next several centuries as recycling reduces costs further. The cost of purifying silicon is a one time cost. By 2050, I expect energy to be less expensive that during the mid-nineties and much of the contribution to the reduced price will be from solar power.


Many estimates for grid parity have been based on electricity prices rising by 3%pa.
Actual increases have often been around 20%, so where grid parity has not already been reached (California, Italy) then it is likely to arrive fairly soon.
Decreased costs have not yet fed into decreased prices though, as demand is high and likely to remain so, according to this article:
Solar future brightens as oil soars | Environment | The Guardian

I am less optimistic about true grid parity in northern latitudes, as you don;t get much power in the winter so it needs making up for - they are talking about average prices per unit throughout the year.
This is a separate argument though, and in vast areas of the world solar should shortly reach grid parity, in cost if not in price - but the difference will go to building more factories.


I think what you are saying about seasons only makes sense if you have seasonal rates in the grid. If winter power is much more expensive than summer power then this could shift the grid parity cost for solar lower. On the other hand, grid parity is not a stopping point for solar. It will drop substantially below that level in cost. One can see an end for cost reductions for wind but the room for technological innovation for solar is still pretty large. The thermodynamic limit for conversion efficiency, for example, is 80% and we are still only half way there in the lab. Self-assembly in thin film is still being explored and may be quite fuitful. So, the cost of solar PV may be headed towards $0.25/Watt or even lower. At one quarter or less of grid parity, there is really no problem using solar to produce methane for wintertime use, for example.

Just so long as costs continue to fall, and I think they will, there is really no place where it won't be worth using solar power.


Chris, my main point in this is that it is clear that a very high proportion of future power can and will be generated by using solar.
The issue of usage in northern Europe is very interesting for those of us who live here, but of limited relevance to most of the people on this planet.
My approach is more concerned with what can be engineered and presented as a project at the moment, as needs are urgent.
More extensive use and other applications are hypothetical until we get something working as grid-parity production at least for peak power.
It will then start to become clear what the real opportunities and costs of more storage etc are.
In this connection I am having some interesting discussions with a chap from this forum who lives in New Zealand and actually has the job of getting the go-ahead for energy projects.
For solar thermal, for instance, finance can't be obtained for Ausra's system, as there is little experience with the use of fresnel lenses.
Whilst I would fully support the financing of prototypes, and it is important to keep pushing the boundaries, it seems important to me at all times to distinguish between a proposal, which should always be firmly founded on current engineering practise and have the vast majority at least of its elements in a high state of development, and works in progress.
Which is a fancy way of saying: let's get solar working at large scale where we know we can do it, and see where we are after that.
That in any case involves ramping production as fast as it possibly can.


Not all solar goes as large projects. In the UK, rooftop solar might be the primary mode of adoption since the government is favoring wind (wisely). Ausra is finding financing so I'm not quite sure what lesson can be drawn from one example where they have not. I would suggest that if you are looking for projects that can be done now, you would do best to push on offshore wind for the UK. Solar will overtake this, but the UK will continue to use the wind while fuel dependent options will be shut down as solar takes over and current efforts will be wasted if aimed towards those. About the only thing that is justified right now other than wind is gas since the capital costs are low and the infrastructure might be reused with renewably produced methane. Other fuel dependent stuff won't see use to to end of its design lifetime.


With solar output in the winter in the UK unless it is an off-grid application paid for by themselves in which case it is there affair it is a costly distraction, and an expensive inconvenience to those actually charged with providing power.
As for off-shore wind, if you happen to have £99bn spare, great, send it post haste!
It is horse for courses, Chris, and whilst wind is a great idea in Texas renewable resources in particular are regional, not a one size fits all solution.
Anyway, I'm done here, my primary purpose in posting to this thread was simply to say that in suitable areas grid parity may be reached even faster than you had indicated, rather than to get involved in a discussion of whether and when hypothetically solar might be any use in very poor conditions for it.
Since I provided the link it was appropriate for me to point out that how much electricity could be produced in winter might be a better metric than grid parity in the case of Germany.


I guess I said as much in my original post. Sorry if it did not seem clear to you. Again, seasonal issues are not really important at the moment and so your distinction does not make a lot of sense unless there is an actual seasonal price difference.


Chris, David,

Does anyone have accurate, current figures of how many electrical kWh are needed to manufacture a 1kWp solar pV array?

In a good site in the UK, a 1kWp array can produce 750kWh p.a.

However, this is now being done primarily at the expense of burning Chinese coal.

A 30% efficient Chinese coal fired power station will produce at best 2500kWh from every tonne of coal burned.

The 1kWp array could easily be using 1 tonne of coal in its manufacture, with older technologies using up to 3 tonnes.


Here is the data I have:
The Oil Drum | The Energy Return of (Industrial) Solar - Passive Solar, PV, Wind and Hydro (#5 of 6)

As is argued in the TOD post, figures are far from accurate or precise.
I am not a great fan of EROI calculations, as boundary conditions can be difficult to determine, and unless you have blatant government intervention as in corn ethanol then the price usually shoots through the roof when EROI is really bad, so precise calculation is redundant.

Shortages of dopant materials may be of more concern, but it doesn't seem sensible to borrow trouble as solar production is only starting to hit it's stride.

In places where it actually makes sense to use solar power at the moment the incidence of solar power is a lot higher than the figure you use for the UK, 1500kWh pa or better, which obviously affects the EROI substantially.
The average figure for the US would be of this order, with 0.18 as average solar incidence.

I hold the view which some seem to find controversial that solar PV makes most sense where there is a lot of sunshine.


If you look at the fact it takes 100 units to yield 99 then yes you have a point and I suppose that is the crux of the problem. You are looking at it from a reserve perspective. The tar sands use 2 units of energy to yield 1 when veiwed from the reserve side.

However your argument falls down when looked at it from an extraction perspective, which is what has kept our economy going, but looking from your side is why we are going to run out.

If I deliver a fully charged battery to your door step and all you have to do is carry it into your house and use the energy, then you experience a high ERoEI, which to you does not matter, you have a bounty of free energy. I did all the hard work, charging it and delivering it for you. Its not replaceable though 'cos I aint charging it again, it was bloody hard graft.

Its an intersting point, but won't save us!

In fact, if you want to carry this a step further and look at it from a total energy perspective, the EROEI of everything is always 1, due to the First Law of Thermodynamics (Energy cannot be created or destroyed). Since this makes our calculations useless, we have to limit the scope of our EROEI analysis. We ignore the energy of the reserves, and only calculate the energy we can use. If you wish to include the energy of the reserves in your EROEI analysis, feel free, but you aren't talking about the same EROEI as we are. The problem for society is a decline in our definition of EROEI, so whether you define it another way is irrelevant, as it won't help us.


This is absolutely right and what counts is our ability to intercept energy flow as entropy increases. This is what living organisms do and create the illusion of "negative entropy" until the organism dies and the law of entropy wins over. What we define as high ERoEI is how much energy it takes to intercept the energy flow as entropy increases. This applies to fossil fuels as they will eventually be consumed whether by man or by nature. By mining them we simply grab hold of the energy flow that would otherwise be lost to space, even if it would take 'till the end of the life of the earth for that to happen naturally.
Its interesting how these discussions stimulate one's thought process!

"Solar take an optimistic 5 years to produce a net EROEI of 1, which is similar to a 20% return on investment. If the industry expands at a 20% rate per year, it will never yield any net energy for the entire period of expansion."

It sounds like you're looking at this without taking into account the effect of compound interest.

If the energy rate of return is only 20% then for every five solar panels you build, you get one free one.
If you use the panels to make more panels you get a compounding effect so that your base multiplies as you go, building more and more and more panels.

Here's the thing: the eroei isn't 20% for solar panels. It's more like 500%.

Drewster, Garyp et al.

Just some additional information on how the Commission works.

Commissioners come and go (as a rule after 4 years, if they’re from a small country). But Commission staff go on for ever - with ‘ever’ in the sense of give or take 30 years. A Commissioner arrives and finds a number of projects that have been running for several years. They were there before he came, they will be there after he leaves. He is handed a number of scripts and a calendar of appointments and events – visit to the eco-driving guys on Monday morning, prize-giving ceremony for ‘eco-aware schoolchildren of the year’ on Tuesday, meeting with the Kanachistan Transport Minister on Thursday. A busy schedule. Not much time for reading Georgescu-Roegen or Catton or Daly – or anything else other than the portfolios prepared by his senior underlings. Certainly no risk that he will be infected by ‘the vision thing’ or get any fancy ideas about how to run the show or upset the boat.

Still, I think we are entitled to expect more from an Energy Commissioner who is also a physics graduate than such junk as:

We need to promote alternative fuels, like biofuels, electricity or hydrogen.

Biofuels – a non-starter
Electricity – not a fuel, but a process
Hydrogen – not a fuel, but an energy vector derived from electrolysis of water, with negative EROEI.

I shudder to think of what he was teaching those kids in Latvia …

Carolus - thanks for the insight here. It does help to have Andris' position placed in context.

I also agree with the latter part of your post.

Bureaucratic inertia means that we are trying to rationalise in real time the average mad cap notions of bureaucrats from different points in time in the past?

Thinking of the immobility and general stupidity of the political elite/bureaucracy bring to mind the eve of revolutions in Russia/France where some people with blinders on ensconced in their own fairy tale world ignored reality to the last. My Russian wife reminds me of the saying sometimes that "A revolution happens when those above will not and those below can not". I tried to find the source for this but just found some others equally interesting:

Those who make peaceful revolution impossible will make violent revolution inevitable.
John F. Kennedy

The main effect of a real revolution is perhaps that it sweeps away those who do not know how to wish, and brings to the front men with insatiable appetites for action, power and all that the world has to offer.
Eric Hoffer

A great revolution is never the fault of the people, but of the government.
Johann Wolfgang Von Goethe

All successful revolutions are the kicking in of a rotten door. The violence of revolutions is the violence of men who charge into a vacuum.
John Kenneth Galbraith

A revolution does not last more than fifteen years, the period which coincides with the flourishing of a generation.
Jose Ortega Y Gasset

The main object of a revolution is the liberation of man... not the interpretation and application of some transcendental ideology.
Jean Genet

I think these guys expressed it quite well:-)

"...But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government..."

It's from the United States Declaration of Independence. Note the section above says it is our duty.

I've been posting comments on Piebalgs' blog since he started it and I'm glad to see the volume increasing. I think we have to give him credit for opening himself up to such criticism.

Having said that, I see little indication that he "reads" the comments. He may look at the words, but they have no impact on his understanding of the issues.

Having said that as well, I'd like to propose a challenge to current policy critics: assume you have his job, what would you do in his place? Remember you are constrained both by the limits of the power of his office as well as by the various forces which make any change of policy difficult.

You also can't suggest something which is impractical like having everyone bicycle to work or eat only rice and beans.

Perhaps someone would like to start a discussion where the aim is to solicit practical ideas for change.

I think the whole population is pretty much asleep and a price of 200 or more USD per barrel with its associated collapse of various transport industries is needed as a sort of electro-shock, otherwise it will be BAU. Luckily this is happening rather fast this summer. If it bcomes socially acceptable to speak out and say "we need change" at home with Piebalg to his wife and in the office or in the local restaurant,or social circles where he spends his time, as well as where all the rest of us are (we are isolated types who cannot say the truth to anybody for fear of being ridiculed) then I suspect change could happen fast, though in a sort of dream like state, as in a revolution, where everyday is uncertain, not knowing what exactly will occur, whereas now we are stuck in a horrible stasis, just knowing everything will blow up. I think th explosion will be a terrible relief to us PO aware folk.

I'd like to propose a challenge to current policy critics: assume you have his job, what would you do in his place?

Robert - I make take a crack at that.

step 1: rationing


step zero: reasoning?

I earnestly endeavor to keep a rational mindset when assessing peak everything and planning for my family's sustainment. Your clever use of the first photo, however, brought out an significant emotional response to the forefront that is sometimes needed to help get the point across (i.e., "A Crude Awakening"). You couldn't have picked a better picture to deliver the metaphorical punch, though I'm more than willing to see more in the future.

Meanwhile, are mass transit ramp-ups going to be implemented to solve the rail bottlenecks that are developing and will continue to deteriorate?

We can't immediately ramp up our bus service, so in the meantime we must get a little 'cozy';

And a return to draft animals can't be rushed, because they also have their own unique issues with overloading;

From the above pictures you will see why they will be keen to get their hands on a Tata Nano.

Think about this:

You cannot have modern economy with falling energy supply. This will inevitably lead to a global depression.
The current world economy is built on the idea of perpetual growth. We are hitting the hard limits of growth here.
I'm not only talking about oil here. Other forms of energy. Food production. All resources.

What needs to happen therefore is a transition to a more stable economic model.
It needs to happen five years ago.

If we keep the current economic model we will crash hard. All our efforts will be for naught if the underlying economic principle is to enforce a continued growth.

The difficulty is that modern capitalism is effective. It is more effective than other more stable economic models.
It will outpace other systems in the short term. But we need to look at things in a wider perspective.

And with a new economic model needs to come a new way of life. One that does not involve cheap air travel, cheap transportation in general, many imported goods, consumerism in general.

Both of these will be a hard transitions. Ones that I doubt will take place without a significant loss of life. The reason being: I consider myself an enlightened person and yet I find it really difficult to act on what I know to be necessary. I have trouble convincing myself. What hope do I have of convincing others? We are addicted to the easy life. We want to continue doing what is easy. Even when disaster is staring us in the face. And it is.

The difficulty is that modern capitalism is effective. It is more effective than other more stable economic models.

Yes -- just imagine a counterfactual China having opted for capitalism in, say, 1945.

Peak oil would have hit us way back around 1990.

The theory here would be that capitalism as an economic system is most effective at exploiting all available resources, but at the same time depleting the non-renewable resources at the maximum speed, far quicker than other forms of production, like communism, mercantilsm or decentralism,
precisely because those ways are so inefficient in the short-term.

It might seem that any system competing with capitalism that does not expand as rapidly loses the immediate competition for those available resources, thereby consistently getting selected away in the ecosystem of economic practices in the long-term.

So, our system emerges as the dominant one, and remains free of the possibility of any fundamental anti-capitalist reform or revolution until the resources begin to run out more quickly than innovative forces can increase efficiency, or until it loses too many wars against commies.

In summary,
Canibal Capitalism is probably the quickest way of forming a global empire based on finite resource exploitation.

The important difference from communism would then be that stability is mostly threatened by contraction of resource bases, and specifically contraction of energy, when the chance of upheaval and revolt is maximized.

(but this might also follow from the fact that all communist regimes thus far have also been oppressive, thus minimizing revolt)

( has there ever been a Capitalist revolution in a Communist country?
--industrializing China by Capital Competive Powers--)

when the Capitalistic system might lose its advantage against other systems, and eat parts of itself?

It would be selected away itself, but I cant see how Cap. would ever be at a disadvantage when competing for depleting resources.
( but there are no competing systems in the current
economic systems market...)

Thus, the purpose of life is to Make Profit!

any system will do,
as long as the right sorts of people
have the advantage for making profit,
and the maximum ammount of people gain illusionary benefit
of said system.

Perhaps one could say that under capitalism we will have had a better, but somewhat shorter, party than under the alternative economic systems. Indeed, under socialism there is normally no party at all because people are too busy queueing for their bread and butter.

The sun will continue to shine on the Earth, perhaps, almost as bright as today even after the extinction of mankind and will feed with low entropy other species, those with no ambition whatsoever. For we must not doubt that, man's nature being what it is, the destiny of the human species is to choose a great but brief, not a long and dull career.

(Nicholas Georgescu-Roegen, The Entropy Law and the Economic Process, 1971, p. 304)

Capitalism: great but brief

Socialism: long and dull -- or at least somewhat longer, somewhat duller.

Of course, there's always the possibility of nuclear fusion... :-)

No bread queues here in Finland for over 60 years. And we've had Social Democrats in government for about that long.
The queues are slowly starting to form now that center and right wing political parties are taking over.

There are other economic models in the world other than capitalism and socialism. And many variations in between.
We westerners tend to forget that there is life outside our economic circle. And that we destroy that life when we expand our domain.

My hope is that an economic model that has sustainability built in will emerge from the ashes of capitalism.

And nuclear fusion is not very sustainable now is it... unless you count the Sun.

Discovered on the net (hat tip: colleague at the EU):

We are now facing the so-called "peak oil" problem, i.e. the question when the world will reach its maximum oil production rate. In a single oilfield, oil production rate reaches its maximum when about half the oil has been extracted. The same applies to the global oil reserves - that is, once we have used half of the world's oil the annual production volume will inevitably begin to fall.

As I said, the oil is still far from all gone, but more and more estimates say that this "peak oil" will occur within the next 20 years. Some analysts even say that we are now at "peak oil".

We can just imagine what happens then. Until now, oil production was able - with some effort, as we have seen in recent years – to keep in step with demand. Once we reach peak oil production, the oil production rate will start to fall, while demand naturally will continue to rise.

Just as with climate change, there is nothing in our history to prepare us for the impact of such a development. You may remember the oil crisis of the 70s. But this so-called crisis was in fact a deficit between supply and demand of 5%.

The projections for development after "peak oil", on the other hand, tell us that we must reckon that each year the deficit between rising demand and falling supply will increase by more than 4%. In only 5 years we could have a deficit of over 20%.

It is difficult to imagine how this would impact the economy. I do not think we can take the chance.

[my translation of German original]

It's an excerpt from a speech given by none other than .... Andris Piebalgs

"Die Strategie der EU in der Energie- und Klimapolitik – Ist die Energieversorgung langfristig gesichert?"

at the Swiss Energy Congress
Bern, 14 January 2008

Full text in German available here:

I'll put a copy of this extract from Andris's speech on his own blog. Perhaps he'll be able to convince himself if he reads what he wrote himself. But I wouldn't bet on it.

He is clearly trapped by the system.
Politics is the art of the possible.

... and the art of claiming successes that weren't yours, denying the failures that were, and doing nothing that might add to either.

Carolus - if you get your hands on this let me know and I'll post it here:

"Andris Piebalgs on Peak Oil"

It is pretty clear that he is on the same side as us, but is limited in his powers to get things done in his position.
Perhaps his blog is and effort to begin mobilising opinion, to strengthen his position?
I can imagine that it is not easy having any impact at all on a vast bureaucracy, even if you are the head of it, and it must be borne in mind that his political masters are looking over his shoulder, and will replace him or sideline him if he is too far out of line.
If this interpretation is correct, then it may not be a good idea to highlight his writings too much, or he might be pidgeonholed as an eccentric, and no longer taken seriously.
To an extent, perhaps he can be regarded as 'our man on the inside', and accordingly should be kept 'undercover' - or am I being too fanciful?

You're right there, DaveMart. If he shouted any more about Peak Oil then other politicians would just dismiss him as a crazy extremist. Instead he comes across as rational yet very concerned. That's probably about as good as we can hope for, for now.

It is pretty clear that he is on the same side as us, but is limited in his powers to get things done in his position.

Perhaps his blog is an effort to begin mobilising opinion, to strengthen his position?

? - the jury on this is well and truly out

Within the narrow perspective of pumping oil out of the earth, you can assemble numbers that show highly positive EROEI ratios. Similarily I can siphon gasoline out of a car with a EROEI of 10000+.

The real issue is how to we leverage the reserve of fossil fuels to produce the most energy in a form that our economy can consume. Fossile fuels are not a continuous flow of energy that we can tap like with hydro or solar. It is a stock pile of high production rate energy that must eventually be replaced with nuclear, solar, and geothermal sources, and most important, demand destruction and the elimination of population growth.

Biofuels, even in the temperate zones have a EROEI above 1.2, while connvetion oil refining is about 0.9 and the tar sands oil refining is closer to 0.6. Biofuels have the added advantage of pinching discretionary consumer income, and boosting agricultural profits. For these reasons, biofuels will bring the global energy economy closer to equilibrium better than any other alternative.

Those still operating from a socialist, human rights based perspective will be understandably concerned about recent trends of food prices. I can offer nothing comforting, but I recommend meditating on the theory of evolution and natural selection in the human population.

As I said above your analysis describes the exact reason we're in trouble. We have been living on "draw down". Arguing about the interpretation of numbers won't change our predicament. We are where we are.

All this shows what a nonsensical concept EROEI is.

The rush to the electron economy (aka nuclear power on a vast scale--the EROEI is skyhigh!) will be a cost prohibitive joke.
Even Ulf Bossel says that biofuels will be needed for heavy trucks, ships and airplanes.
There's nothing foolish in looking for renewable replacements for fossil fuels, even partial ones. Your post doesn't even make any sense.

To the learned Mr. Mearns PhD,
you should really apologize to that apparently contemptible(?) public servant, Mr. Piebalgs ( I assume as much from your insulting tone).

If I were you, I'd say 'I was drunk when I wrote it'..or 'a rock fell on my head'.

Best Wishes for knowing our friends from our enemies!

All this shows what a nonsensical concept EROEI is.

Or rather, it shows that many people speaking about EROEI don't understand it. For example, anyone who speaks of "negative EROEI".

That people speaking nonsense and while speaking nonsense mention X does not mean that X itself is nonsense. It simply means that the people are a bit muddled.

No, I'm sooo sick of EROEI.

Firstly, nobody does the calculations according to an clearly established method, so it's scientific garbage.

Second, it doesn't differentiate fossil fuels from renewables. The idea that coal electricity with an EROEI of 10 is better than solar PV at 4 is garbage.
EROEI theory doesn't give any value to BTUs in the ground. As was pointed out--ALL fossil fuels/nukes are net energy negative in the thermodynamic sense. Ethanol is net energy positive. But depleting oil has a much higher EROEI. Therefore by the asshat logic of EROEI we should drill oil at 5 miles below the ocean instead of creating our own 'homegrown' energy.

Third, the arbitrary cutoff of EROEI=7 is idiotic.
Except wind and hydro all renewables are automatically
excluded on the grounds of thermodynamic gobbledygook.

Kiashu, wake up.
The sham theory of EROEI will put 'green' nuclear into play as a solution. It will make us drill for oil and gas under the Arctic Ocean and launch wars for the control of its sources.

All the kiddies are just waiting for their new electric go-carts or to fill our cities with electric trams so people can commute to their air conditioned office buildings. That will require 'reliable' energy.
Don't be a sucker.

Forget about 'energy profit', energy return on energy investment.

The whole idea of EROEI reeks of cornucopianism.

Forget about EROEI.

Why do people like EROEI? Because it is an amoral, 'objective' yardstick, build by an economist (Constanza) for economists.

My, my, we wouldn't want to make energy policy based on morality now would we?

I support ethical renewable energy. Fossil fuels should be treated as what they really are; Nature's energy storage device, something to be conserved.

You are confusing EROEI with the law of entropy. In any process we get less energy out than was put in. That's nothing against any particular way of getting energy, that's just a law of physics.

EROEI necessarily ignores that. It just, "Of the energy we care about, what is the ratio of output to input?" So for example when I hang out my washing to dry, I don't consider the energy the sun puts down in infrared and wind to dry the washing, I only consider the energy it took me to hang the washing out.

Likewise, when considering burning coal, we don't consider the energy from the sun on the plants and the energy of the Earth in crushing them into peat, and the energy of the bacteria in turning the peat into carbon, or the energy of the Earth in crushing that carbon into coal. We don't care about that, we only care about the energy it takes to dig the stuff up.

But whatever bounds you set to your EROEI assessment, EROEI can never be negative. If less energy comes out than went in, EROEI drops below unity (1.0000...); it never becomes negative.

EROEI is only one of the many things we need to consider when choosing energy sources. If you only consider one factor, you will get many undesireable outcomes, quite obviously. I've never seen anyone suggesting that only EROEI should be considered in choosing energy sources. So your assertion that EROEI will have us drilling for the last oil everywhere and going to war is nonsense. If only EROEIs were considered, there would be no resource wars, that's for sure.

People make decisions on things which include, but are not limited to, EROEIs. Especially when they actually understand what an EROEI is.

My Dear majorian,

Mr. Mearns (in spite of his PhD) contributes very high "Intellectual" content, which is what this site is all about.

Mr. Pielbalgs obviously has a high intelligence, but contributes very little "Intellectual content".

The difference between these two human attributes is easily confused.

With apology I say that your comment is totally devoid of any intellect whatsoever, which is a shame because I am sure you have valid opinions on EROI.