DrumBeat: January 4, 2009
Posted by Leanan on January 4, 2009 - 9:51am
Canadian oil-sand mines stuck as crude price plummets
Canada's once booming oil sands industry is cooling fast as the plunging oil price undermines investment. More than US$60 billion (£41 billion) worth of projects to extract oil from the bitumen-rich sands of northern Alberta have been delayed in the past three months, according to a study of industry figures by The Times.A string of companies, including Royal Dutch Shell, Petro-Canada and SunCor, have been among those that have frozen multibillion dollar projects - in some cases indefinitely.
Fall in oil price may trigger UK deflation
The recent slump in the price of oil could help boost the UK economy, but too much of a further fall could reverse the good done, said a study backed by accountancy firm Ernst & Young.
Russia kindles flame of hope in Bosnia refinery
BOSANSKI BROD, Bosnia (Reuters) - A flare at the top of a 50-meter high tower in the Balkans shows Russia building political capital in a notoriously fractured part of Europe.The flame in late November marked the restart of operations in Brod, Bosnia's sole oil refinery which had been out of action since 2005 after being seriously damaged during the 1992-95 war.
Blue laws and fuel conservation
During World War I, auto dealers supported closing gas stations on Sunday to forestall government rationing of fuel. The most restrictive blue laws in North America in Bergen County, New Jersey came about to limit traffic congestion caused by massive retail development. Can Blue Laws be used today to manage traffic, conserve fuel, moderate fuel price increases, and help air quality?
It is the mission of nearly every mainstream economist to overcome the pessimism of those who study the natural world and who don't see how the human endeavor can continue on its current course of endless exponential economic growth. "Now, now," these economists will say to the natural scientists, "you are being alarmist just like many before you. Let the marketplace work its wonders and let economic prosperity come to all parts of the world and this will enable us with our newfound wealth to address the many environmental problems we need to face."Such arguments seem like mere nonsense to any scientist who believes that endless economic growth is the cause of those problems. But the difference between these two camps may be less than it appears. Enlightened economists do acknowledge the need to treat the environment which sustains us with more care. The main issue appears to be timetables.
Czechs are latest casualty in gas dispute
Russian natural gas supplies dropped by 5% to the Czech Republic. Turkey also seeing reduced flow. Emergency meeting called for Monday.
Tar sands refinery projects face sticky future
US refineries are expanding operations to process oil from Canada’s tar sands just as efforts are building to limit the use of the more polluting fuels.
Saudi Arabia hikes February light prices
Dubai: Saudi Arabia raised its official selling prices for February for light crude oil to customers in the United States and Asia, state oil firm Aramco said on Sunday.Buyers of Saudi oil had expected the price to rise as the kingdom cuts supply under an agreement with the Organisation of the Petroleum Exporting Countries (Opec).
Low crude prices stifle growth of Saudi Arabia's foreign assets
A steep decline in oil prices sharply depressed growth of Saudi Arabia's foreign assets in November after recording their highest increase in the previous months of 2008 because of a surge in its petrodollar income.
Iraq Production, Conservation Could Keep Oil Price in Check for Years
I’ve always said that the apparent peaking of the global oil supply at about 86 mb/d that was seen during 2006 - 2008 in the face of rising demand was only partly due to the Peak Oil concept of rapid decline rates in old fields and the eventual inability of new fields coming on stream to overcome that. The other important constraint to growing the oil supply was above-ground issues of war and violence, primarily in Iraq and Nigeria. I’ve always maintained that if either or both of these countries manages to turn on their oil spigots as rapidly as nature would allow, the global oil supply could grow substantially from here and Peak Oil would be pushed off for some years....All of this suggests to me that when global growth resumes the price of oil will have some immediate rise but it is not likely to be a robust and rapid increase to and beyond $100 for some time. The exact time will depend on when global growth resumes. If we are lucky and that happens in 2010, then perhaps we will see the oil price reach and exceed 2008 heights around 2014 - 2016.
Gunmen seize oil services vessel off Nigeria: sources
LAGOS (Reuters) – Gunmen hijacked a vessel belonging to French oil services group Bourbon off Nigeria's Niger Delta on Sunday as it traveled toward a Royal Dutch Shell offshore oilfield, security sources said.The vessel was carrying four expatriates from Cameroon, Ghana and Lebanon when it was attacked near the Bonny Fairway buoy, a major shipping route for the Nigerian oil services industry, one of the sources said.
Russia toughens stance in gas dispute with Ukraine
MOSCOW: Gazprom, Russia's gas monopoly, said Sunday that it was raising the price it wants Ukraine to pay for natural gas, hardening its position in a dispute that has decreased supplies to Europe.
India’s oil companies have had a record of failing to pull off big acquisitions overseas and have often lost out to the Chinese in the race for oil. A week ago, the man at the helm of India’s “global” oil company — ONGC Videsh — pulled off the country’s largest acquisition in the oil sector, bang in the middle of a financial slowdown.
Israel: Oil Refineries beats import threat
In recent months, the fuel companies had been in talks to import fuel products, especially from Indian refineries.
Cut oil sales to Israel backers - Iranian commander
TEHRAN (Reuters) - An Iranian military commander called on Islamic countries to cut oil exports to Israel's supporters in response to the Jewish state's offensive in Gaza, the official IRNA news agency reported on Sunday.IRNA, giving only his last name, quoted commander Bagherzadeh as saying oil was "one of the powerful elements of pressure" on the Jewish state's Western backers in the "unequal war" faced by Palestinians in Gaza.
"Pointing at Westerners' dependence on the Islamic countries' oil and energy resources, he (Bagherzadeh) called for cutting the export of crude oil to the Zionist regime's supporters the world over," IRNA said.
Groceries are the top item on which US consumers are spending their savings from lower gas prices, ahead of putting the money in savings, holiday gift-buying, and paying off credit cards, according to research from retail analytics firm Precima, Retailer Daily reports.Of the 3,013 consumers who were asked to choose from a list of ways they use money saved on gas, 48% said they’re spending it on groceries, followed by saving (42%), holiday gift-buying (37%), paying off credit cards (30%), entertainment (10%), and other (14%).
Russia-Ukraine: A Market Dispute
Are the Russians and Ukrainians simply fated to go to the mat every year about this time, causing grief to their neighbors? Or is something else at work in their antagonism?The philosophical answer is that, while it’s hard to imagine these two former Soviet states living as friendly neighbors any time soon, the current dispute is a separate matter.
Aide says EU faces tougher Russia if does not help Ukraine
The European Union must help Ukraine solve its gas row with Russia, which has led to a supply cut, or face a tougher stance from Moscow on energy security and other issues, a Ukrainian presidential aide said on Sunday. Skip related contentOleksander Shlapak, First Deputy Chief of Staff of President Viktor Yushchenko, also said Gazprom's proposal that Ukraine pay $418 per 1,000 cubic metres is "utter nonsense."
Growth of China's energy imports slows in Jan.-Nov. 2008 but value soars
BEIJING (Xinhua) -- China imported 240 million tonnes of major energy commodities (oil, refined products, natural gas and coal) in the first 11 months of 2008, up 3.7 percent year-on-year, according to a report released on Sunday by the General Administration of Customs.
Move to Increase Logging on Oregon Land
The Interior Department announced a controversial decision late Wednesday to double the rate of logging on 2.6 million acres of federally owned forests in southwestern Oregon. In doing so, it brushed aside the objections of the governor and two federal agencies charged with guarding the quality of the area’s water and the health of the fish that depend on it.
Error Seen in E.P.A. Report on Contaminant
The Environmental Protection Agency failed to follow its own guidelines and made a basic error in evaluating how a toxic contaminant in rocket fuel harms human health, according to a report by the agency’s inspector general.The contaminant, perchlorate, has been found in significant levels in drinking water in at least 400 locations; scientific studies indicate that perchlorate blocks the necessary accumulation of iodide in human thyroid glands. Iodide insufficiencies in pregnant women are “associated with permanent mental deficits in the children,” the E.P.A. said.
Every year, New Year’s revelers are warned about the risks of drunk driving. But what about drunk walking?
Looking Forward: Anticipated Production Start-Ups for 2009
Looking beyond oil and gas prices for the coming year, there is a number of anticipated production start-ups planned for 2009. Spanning the globe -- from the deep waters of the Gulf of Mexico to the harsh conditions of the North Sea -- the following projects are scheduled to commence production this year.
Saudi May Lead Price Hikes, Volume Cuts
SINGAPORE --Middle East crude oil producers led by Saudi Arabia are expected to raise official selling prices next week as a prelude to volume reductions, potentially keeping Asian refiners on the defensive.
Pakistan: President’s directives about loadshedding fall flat
PESHAWAR: Despite directives by President Asif Ali Zardari to end the prolonged power and natural gas suspension, people faced immense hardships as the problems persisted on Saturday.The frequent hours-long electricity breakdown and gas supply-drop and low pressure coupled with severe winter due to downpour have made life miserable for the residents of Peshawar and adjoining areas.
Pakistan: Protest turns violent, leaves dozens injured
FAISALABAD: Thousands of textile workers took out violent rallies in different parts of city on Saturday and police fired in the air to disperse the protestors. Angry mobs burned tyres in the streets and pelted police with stones during a day of protests. More than 30 people were arrested and two dozen policemen were injured. The protestors set on fire many vehicles in various parts of the city. Windowpanes of a branch of UBL bank were smashed by the protestors located in front of Govt. Islamia College, Sargodha Road.
Xinjiang Becomes China's Second Largest Crude Oil Producer
The western Xinjiang Uygur Autonomous Region became China's second largest oil production base in 2008 with an output of 27.4 million tonnes, up 1 million tonnes from 2007.According to Thursday's Chinanews.com., Xinjiang overtook Shangdong Province, the previous second largest.
It's too late to fix Iraq before the pullout date. All U.S. troops can do now is keep trying to slow the killing and get out. They call it 'Iraqi good enough.'
Venezuela's PDVSA Tripled Net Profit to $12B
Venezuelan state oil company Petroleos de Venezuela more than tripled its net profit in the first nine months of the year, taking in billions of dollars in additional gains due to record high oil prices.Petroleos de Venezuela's, or PdVSA, net profit through Sept. 30 stood at $12.145 billion, a 225% increase from the $3.734 billion in the same period in 2007, according to the company's latest financial report posted on its Web site.
Pipeline manager suspended over oil crisis
Kenya Pipeline Company has suspended a senior manager for allegedly stopping pumping of petroleum products inland from Mombasa.
Aspirational Futurism, Uncertainty and Resilience
One of the secondary effects of the latest set of crises to grip the world is the rise of essays and articles from various insightful folks, laying out scenarios of what the future will look like in an era of limited resources, energy, money, and so forth. Most of these follow a similar pattern: a list of reasonable depictions of a more limited future, and at least one item that seems completely out of the blue.The best example has to come from James Kunstler’s description of the world to come in his “non-fiction” The Long Emergency and his explicitly fictional World Made By Hand. Along with his schadenfreude-soaked claims about the end of suburbia, automobiles, and all things superficial, he comes in with stark assertions that we’ll all be making our own music and acting on stage for each other, instead of listening to that damnable recorded “rock-roll” music and the disco and suchlike.
On Dec 15, 1935 , a High Point woman wrote President Franklin D. Roosevelt about her underwear.She didn’t have any. Neither did anyone in her family.
“Please give my children and myself some underclothes or we will freeze to death (in) this cold weather,” the woman pleaded. “We cannot make it.”
The family also needed money for rent, food and fuel.
The woman said her husband made only $6.75 a week, not enough to feed and clothe a family of nine .
A Cleaner Way to Keep the City Running
A new building with affordable rents in the Bronx will be powered partly by 10 wind turbines, which should cut its utility bills for common areas in half.
Urban Singapore Prepares to Gobble Up Its Last Village
The country’s last rural village has been designated for demolition and redevelopment, a final step in one of the world’s most extreme national makeovers.
Ethanol innovator driven to replace oil
"There is not a shortage on the means to produce food and fuel on the surface of Planet Earth," he says, tapping his fingers for effect on the conference table in his spacious, yet spartan, office. "There are those out there who would have you believe there's a problem out there. There is not a problem out there."
Energy demand is down sharply – and could stay that way
People worldwide are driving less, flying less and using less electricity — but for how long?Less gasoline. Less jet fuel. Less crude oil. Less natural gas. Less electricity.
At the end of 2008, Americans were getting downright stingy with their energy use. Between wildly volatile energy prices and a deepening recession, Americans are curtailing their renowned reputation for energy consumption in what some believe could be a long-term trend.
The economists’ term for it is "demand destruction." This year’s poster child is driving, as the number of miles driven is showing the biggest drop since the federal government started keeping the statistic.
Is 2009 going to be an exciting year for oil? Institutional investors don`t think so. Their estimates are very similar - much of Wall Street expects oil prices to average about $50 a barrel in 2009. Some of the firms and their specific forecasts:
Project aims to increase oil, gas kept in salt domes
About a half-mile from the marker of the original Spindletop gusher — a flagpole next to a lake and marsh — AGL is drilling into a salt dome that stretches 30,000 feet below the surface to carve out the first of two cylindrical natural gas storage caverns taller than two Williams Towers.The $310 million project aims to increase storage capacity for gas used by power generators and marketers so they can park the gas when they don’t need it and get at it quickly when they do.
Canada's Africa Oil stops Somali exploration:staff
DHAROOR, Somalia (Reuters) - Canadian oil and gas exploration company Africa Oil Corp has stopped exploration in Somalia's Puntland region for lack of funds, local staff and contractors said on Sunday.The company had started seismic mapping in a region it believed had strong prospects of holding rich oil deposits like those in geologically similar Yemen, a neighbour across the Gulf of Aden.
"Africa Oil Corp has failed in its objective ... due to lack of funds," Ahmed Ali, a local staff member, told Reuters. "We have not received salaries for three months. Foreign staff have already flown out and the company has stopped its operation."
The Peak Oil Scam Controlling Oil Prices
Fifty year ago, experts stated that Peak Oil would be reached by the year 2000. Now, most experts [Oilempire.us] say that this number will probably be in the year 2020. If you knew you were being told that a product would soon be in low supply, and you believed it, you could raise prices on a whim.US Mineral Management Services (MMS) reveals that natural leakage of oil from the ocean floor is 620,500 barrels per year around North America alone. Considering that the world ocean area is over ten times that area, it can easily be extrapolated that at least 6 million barrels per year leak out into the world oceans.
Tehran to reform subsidy scheme for oil products
TEHRAN: Iran will begin deregulating the heavily subsidised prices for oil products in three stages in the year starting in March.Deputy oil minister in charge of planning Akbar Torkan said it was part of President Mahmoud Ahmadinejad's economic reform plan that includes increasing energy prices and paying direct subsidies to the needy people instead.
Iran Budget to be Based on Oil Price of $37.5: Report
TEHRAN (Reuters) - Iran's 2009-10 budget is expected to be based on an oil price of $37.5 per barrel, a "logical" level in view of last year's price fall, Oil Minister Gholamhossein Nozari was quoted as saying on Sunday.
Nigeria's foreign exchange reserves fall by $6 bln in December
As the global credit crisis takes its toll on the world economy and further depresses oil prices, Nigeria 's foreign exchange reserves fell by 6 billion U.S. dollars or 8.2 percent in December last year to 52.7 billion dollars.
Agip pipeline sabotaged in southern Nigeria: army
LAGOS (AFP) – A pipeline belonging to Agip, a unit of Italian energy giant ENI, was blown up with dynamite in restive southern Nigeria, a military officer said Sunday.There were no casualties in the explosion which happened on Friday night, General Wuyep Rimtip, the military commander in charge of the southern oil-producing states of Bayelsa and Delta, told AFP.
Ukraine accuses Russia of sabotaging Europe's gas
KIEV/MOSCOW (Reuters) - Ukraine accused Russia on Sunday of deliberately reducing gas flows to customers in Europe as they face freezing winter temperatures.Poland, Hungary, Romania, Bulgaria and Turkey have reported drops in supplies after Russian state-controlled gas export monopoly Gazprom cut off Ukraine on New Year's Day in a dispute over prices.
Ukraine Seeks EU Involvement in Resolving Russian Gas Dispute
(Bloomberg) -- Ukraine sought assistance from the European Union in resolving its dispute with Russia over the pricing of gas supplies as OAO Gazprom increased natural-gas deliveries to Europe via three alternative routes.
Customers told dispute could affect gas supply
KIEV, Ukraine (AP) — A top Ukrainian official warned Saturday that European customers could see serious natural gas disruptions in about two weeks if the energy dispute between Russia and Ukraine is not resolved, and the Russian gas monopoly Gazprom accused Ukraine of boycotting contract negotiations.
Governors ask Uncle Sam for $1 trillion
PHILADELPHIA (Reuters) -- Governors of five states urged the federal government to provide $1 trillion in aid to the country's 50 states to help pay for education, welfare and infrastructure, as states struggle with steep budget deficits amid a deepening recession.
China seeks cure for Spring Festival rail travel headache
BEIJING (Xinhua) -- For many Chinese who want to nab railway tickets home for the annual Spring Festival migration, the government's promise of having a better system by 2012 is just a distant hope.Starting Friday, the first day to book tickets for the travel rush expected to last from Jan. 11 to Feb. 28, long queues appeared at ticket booths in almost every major railway hub.
Release Stranglehold On Domestic Oil
It's going to be another cold winter in many parts of the country. Staying warm will likely come at a high cost, with heating bills expected to jump by as much as 25 percent. Those bills may become even steeper during the next few years, if Congress pursues any of the counterproductive energy solutions that lawmakers and candidates have recently touted in their campaigns.
The longer I study economic phenomena, the more I learn two truths. The first truth is how little I know. This is very humbling. There is just too much information out there for any one human being to process. The second truth is that this abstract thing we call "the market" can and does do what no human being or computer can - it does process all the pertinent information.
Hey! Who’s stealing my country anyway?
As an award-winning agrologist, Holm focuses on food and agriculture. She sees the SPP as a direct threat to Canadian farmers (who would lose the protection of supply-management regimes) and Canadian consumers."Canadians have not put a priority on farm and food policy because as a nation we have never gone without," Holm writes. "Embarrassingly, Canada remains one of the few nations in the world that does NOT have a national food policy. But things are quickly changing, and community discussions around peak oil, peak food, food security, food safety, food miles, food sovereignty and food democracy are moving that change forward."
Under the SPP, such discussions would be pointless. Canada would lose the right to create or enforce national policies in areas like food, energy and investment. Removing that right is precisely the objective of the SPP.
Hamas holding Natural gas discoveries off coast of Gaza hostage in 2006?
An unexpected energy windfall on Israel's doorstep promises to resolve Israel's energy security concerns for years to come. Unfortunately for Israel, it is the Palestinian Authority that controls the licensing of these reserves. So, as Operation Summer Rains washes away the administrative and political structures in the occupied territories, has Israel decided to use Hamas as an excuse to dismantle the PA and seize its energy assets.
China violates accord with Japan over disputed gas field: report
TOKYO (AFP) – China has violated an agreement with Japan and continued developing a gas field in a disputed area in the East China Sea, a press report said Sunday.
The Iranian hostage crisis prompted Jimmy Carter to look for a home-grown alternative to Mideast oil. Cornell University scientist David Pimental began studying the concept. He added up the energy used in manufacturing ethanol and compared it to the amount of energy the fuel produces. There was a net loss, he decided. But the farm lobby succeeded in winning tax breaks and subsidies for the fuel."We're actually importing more oil to produce ethanol," is Pimental's assessment. "It's not making us oil-independent, and it's costing us a lot of money."
Solar Panel in a Most Unlikely Place
Browsing through this set of photos of one man's trek through the Caucasus mountains in the eastern European country of Georgia, I was awed by the sight of a solar panel on a home that resembled a centuries-old stone barn.
Soot reduction 'could help to stop global warming'
Governments could slow global warming dramatically, and buy time to avert disastrous climate change, by slashing emissions of one of humanity's most familiar pollutants – soot – according to Nasa scientists. A study by the space agency shows that cutting down on the pollutant, which has so far been largely ignored by climate scientists, can have an immediate cooling effect – and prevent hundreds of thousands of deaths from air pollution at the same time.
Global Warming May Become the Instigator of World War IV
Global warming is the cause of a number of damaging effects to the earth and its inhabitants, such as climate change, glacier retreat, rising sea levels, and now we may have a new threat on the horizon... world war! According to the 2007 CNA Corporation report, there is clear indication that as the tensions of global warming continue to heat up, so may the possibilities of war.
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Re: Oil market lessons
Along with his glowing praise for financial markets, the author states:
Well, according to Colin Campbell, the claim that "most of the planet has yet to be explored" is incorrect. Campbell claims just the opposite. I don't know whether the author is referring to areas covered by oceans, but, geologically, the land areas and continental shelf areas which were formally land, are the most likely areas to produce. The surface areas have been extensively investigated, as has much of the undersea shelf, though there are still "above ground factors" which limit access to development of some promising sites.
E. Swanson
The definitive academic rebuttal to this sort of market worship--to Hendrickson's assertion that "the oil market has been completely rational"--would have to be Benoit Mandelbrot's The (Mis)Behavior of Markets. Mandelbrot often compares markets to the weather--turbulent, unpredictable, wild.
Katrina gave us the perfect metaphor of where the blind adherance to market theology leads us. Mandebrot published his book in 2004, well before Katrina or the market meltdown of 2007-2008. But the devastation wrecked upon those who ignore, or deny, the nature of either weather or the markets, and fail to prepare for either of them, is extreme:
Downsouth - Is this book heavily mathematical? I've long been interested in chaos theory on a philosophical level, especially its relation to societies and economies (and I was planning to try to find out if there's such a thing yet as "Chaos and Peak Oil" or some such; maybe even take a stab at writing such an essay myself :) ).
Anyway, I don't have non-linear math, and I've heard Mandelbrot's books are mathematical to the extreme.
Quite the contrary, Russ.
There is a deliberate avoidance of the use of equations in the book so that it is easily understandable to a large readership.
Thanks. I'm going to check it out.
Have you read James Gleick's book on chaos theory?
Yup, that's the first book I read (recommended to me by my college statistics professor).
I'd recommend it to anyone as the best introduction to the subject I know of. I also find that its philosophical implications repay repeated readings, even when you're familiar with the basics.
This has been my experience as well, though I happened upon it through luck.
Yeah right!
Drowning New Orleans: Scientific American
In a harrowing prediction of what would become the future, this 2001 feature notes that a major hurricane could swamp New Orleans under 20 ...
www.sciam.com/article.cfm?id=drowning-new-orleans-hurricane-prediction - 67k -
That Seeking Alpha article summarizing top economists predictions for oil for 2009 is gloomy. They ALL forecast higher prices - Morgan Stanley up to $85/bbl. While this sounds completely reasonable to me on the surface, I know the consensus on oils direction from Wall St has been wrong 8 of last 9 years. Which suggests to me, people are still underestimating the recession/depression and that this force will outweigh dollar 'printing' and ongoing decline - at least for 2009....(which of course is bad news for a)future decline rates and b)future 'increase' rates of renewable substitutes.
Well, for an alternative contrarian point of view, I thought that it was interesting that a recent CNBC poll--I'm not sure if it was analysts or viewers--had zero respondents predicting a 2009 oil price over $75.
BTW, I assume that the $85 pick was for the highest price in 2009, which could easily translate to an average price of $60 or so for 2009, which would be an annual price decline rate of about -50%/year, relative to the 2008 average price of about $100--so the overwhelming consensus opinion is that there is not a chance in hell that the average price in 2009 will exceed the average 2008 price of about $100.
I had posted a summary of Canadian oil producers guidance. The last 2 weeks have seen a further downgrade. Connacher oil which is a very very small producer has cut volumes by 50%. The net size is just 5000 barrels per day but the supply cuts are looking ominous now. If world demand does not fall by at least 6% in 2009 we are going to have shortages at this rate.
I just posted an article up top by Steve LeVine (who has occasionally posted here). He's the author of The Oil and the Glory, and has long studied the politics of oil and Russia. He thinks the current gas dispute is basically a disagreement on what the price of oil will be this year.
I guess he need to find complex explanation for simple things to earn some interest in his articles.
Current dispute is a very one. Disputes like that happens all the time over the world. Ukraine does not want to pay for it's 2009 contract and does not want to pay anything close to market price for 2009 gas deliveries. It's as simple as that. The desire to pay as little as possible is rather natural and common. I also do not want to pay market price for anything, but I unlike Ukraine's current terrible government luck blackmailing material.
Nassim Nicholas Taleb in The Black Swan delves into this subject of making predictions.
There is scant little empirical evidence documenting the accuracy of the forecasts and predictions made by economists and finance industry "experts".
But what little evidence there is suggests they do a bang up job. In fact, their predictions are almost as good as those made by NY city taxicab drivers.
As Taleb says, empiricism is not something that is highly valued in the world of economists and finance industry "experts".
This from the article 'Ethanol innovator driven to replace oil.' The rest of the article is basically about Broin. He's a family man, donates to both parties, been doing this for years. He likes the domestic auto industry - they like him too.
Something smells funny. Where does he get those figures and what of it is true?
Edit: how does one save us between 40 & 60 billion? Which is it? I'll take the 20 billion difference just to balance things out.
"how does one save us between 40 & 60 billion? Which is it? I'll take the 20 billion difference just to balance things out."
I can't figure this out either. Using 12 billion gallions of ethanol in 2008 saved us at least $40 billion? Sounds like the guy is just making things up as he talks. Broin's statement means us "consumers" saved $3.33 for each gallon of gas we bought that had 10% ethanol. He must figure without ethanol the gas price would have average $6.00 per gallon in '08 instead of maybe $2.50 per gallon. So when all the gas is displaced by ethanol the price should be $0.00, according to his logic.
The theory is that "Prices are Made at the Margins;" and since ethanol removed the "Marginal" demand for 9 Billion gallons of gasoline (which would be what, about 200 Million barrels of oil) that affected the price of gasoline by about $0.30 - $0.40 gal.
The reason for the spread is: while common sense tells you that there would be an effect from the removal of this much demand, it's impossible to know just how much effect.
This theory was first postulated by the analyst (Bianchi?) from Merril Lynch who came up with $0.45 to $0.50. It seemed reasonable so the ethaphiles just kept using it.
Correction to my post.
Current Ethanol mandate is 9 billion gallons for 2008, blended with 90 billion gallons of gasoline to make 99 billion gallons of product. Savings from use of ethanol claimed by Broin is $40 billion or $0.40 per gallon. We did not save anything because for much of the year ethanol was more than the price of gas and it lowers the btu's of gas by 3%. Gas stations in Missouri were refusing to put ethanol in gas in the second half of 2008 due to the price being $0.75 more than gasoline and they would lose money on selling it, even after the $0.51 subsidy.
I still want to know how Broin figures ethanol saved us "consumers" at least $40 billion or $200 per auto driver.
Now, I remember. It's from this Ia State Study
In it they determine that gasoline prices were reduced between $0.29 and $0.40, depending on the region of the country.
That part about ethanol prices being, at times, twice as high as gasoline is incorrect. Only for a couple of months were ethanol prices sometimes a few pennies higher than gasoline.
What that should really mean, is that the individual who bought ethanol to avoid using a gallon of gas, didn't gain from that decision. But, if the decreased demand for gas reduced the market clearing price of gasoline, then the purchasers of gasoline reaped a benefit from his decision. Essentially the effect on the price of gasoline on conserving/consuming an extra gallon is NOT factored into the price the consumer pays, but can be considered to be an externality (price/benefit which accrues to other members of the society).
Now I remain unconvinced that Ethanol has really helped. Wasn't deisel demand by corn farmers greater because of the extra demand for corn. This may cancel out the reduced demand for gasoline. And we are in a situation where diesel demand may be more critical to the formation of the oil price than demand for gasoline.
Here is the wholesale price of ethanol this year.
http://charts.aghost.net/popup/agonlineCharts.cfm?key=65FAF51F-85D4-43A9...
The retail price is usually within a few cents of wholesale due to the $0.51 tax credit. At least at the more aggressive E85 Retailers.
As you can see it was well below gasoline for most of the year.
Enemy, farmers account for, probably, less than 8% of the diesel sold, and they farmed about the same number of acres in 08' as 07'. I'd say the acreage farmed might be up 1% (2 million acres vs. 250 million acres.) Yields are increasing about 3.5%/yr, and there's always a little give and take between corn, beans, and wheat.
All tolled, you might have seen an increase in diesel demand of .08% due to farmers, and an increase in "Oil" demand of .0032%. Virtually, too small to measure.
Re: Energy demand is down sharply – and could stay that way
There's a fair amount of anecdotal evidence of demand destruction in these parts, especially as it relates to home heating oil (a combination of reduced usage and fuel substitution). On a personal note, my two business partners and I now heat our respective homes with heat pumps and this has eliminated roughly 7,000-litres/year from our collective fuel oil demand. I can also think of a half dozen friends, neighbours and clients who have done likewise.
My contacts in the hearth industry tell me their local dealers can't keep wood and pellet stoves in stock and that they could easily double or triple their stove sales if they could only get their hands on more product. Note that for every 40-lb. bag of wood pellets burned, another 75 to 80 kWh of electric heat or 9 to 10 litres of fuel oil won't be needed.
In partnership with Nova Scotia Power, Canadian Tire is upgrading the lighting in six local outlets and in the process will reduce their electricity usage by over 1,000,000 kWh/year (see: http://www.nspower.ca/about_nspi/in_the_news/2008/12032008.shtml). The potential savings in this one area alone are truly enormous and, until recently, largely ignored.
Cheers,
Paul
Meanwhile, a 600MW New York power plant last month switched from NatGas to Resid Oil. That's 1.9 billion BTUs per hour at $8 per million for about the last 1000 hours and counting.
Unfortunately, my math puts them using about 7000 liters every 15 minutes.
I lost the link, but it was in reference to many East Coast power plants were switching.
Never mind, I found it.
http://www.platts.com/Oil/News/6044486.xml?src=Oilrssheadlines1
They still built 500,000 new homes last year despite the downturn to house the 3 million new US citizens and equivelent.
Hi jteehan,
The key difference in the examples I mention is that this reduction in demand is almost certain to be permanent. In 1990, 14.3% of Canadian homes were heated by oil and by 2006 that number had fallen to 7.2% -- that percentage has steadily declined over the past thirty-five years and there's no indication that this trend will reverse. With respect to consumption, in 1990, Canadians used 165.7 PJ of fuel oil for residential space heating purposes and by 2006 that had shrunk to just 70.0 PJ, even though total floor space during this period increased by more one-third (from 1,203 m2 to 1,607 m2). Likewise, in 1990, we used 20.7 PJ of fuel oil for DHW production and by 2006, that had declined to just 12.3 PJ.
Natural gas and electricity continue to chip away at oil's market share, and when fuel oil hit $1.42 a litre in July, those who heat with oil were thrown into a state of near panic. Prices have since come down, to the great relief of many, but the shock will most likely accelerate the shift away from oil as consumers seek other alternatives that offer better overall value and greater price stability.
Additional background can be found at: http://dclh.electricalandcomputerengineering.dal.ca/enen/2006/ERG200604.pdf
Cheers,
Paul
Remember when coal was going to run out?
Peak coal in the UK was in 1913. They produce an almost token amount of coal from less than a handful of mines today.
Imported coal (Australia, South Africa AFAIK) is largely what is burned in their power plants. And NG and nuclear.
Not too bad an estimate for 1865.
Alan
Europe produces half as much coal as they did in the 1980's. It has nothing to do with the environmentalists.
The entire increase in world coal production since 1981 has come from four countries: China, India, Australia and Indonesia.
In an article describing the recent study on limited coal reserves by David Rutledge, it was noted that British coal production actually peaked in 1913 - around the time that Churchill decided to convert the Navy to petroleum. One might argue that oil came in like a deus ex machina, to save the day (and "god help us" if we don't find another fuel to do the same). On the other hand, the availability of oil reduced demand and thus production of coal - much like wind is doing in the NG article you cite below, and alternatives that Dave cites in Halifax. A good bit of firewood in most of Canada, even here in the denuded forests of S. Ontario.
BBs are all we have for brakes as we slide over the peak. It's worth celebrating them (and planting a few trees for the grandkids).
sm
The US is swimming in natural gas thanks to new drilling technology and the development of wind turbines that compete with natural gas for market share. We need to start exporting it.
Natural gas glut weighs on prices
U.S. Edges Out Germany as World Wind Power Leader
"The US is swimming in natural gas thanks to new drilling technology"
Maybe you are correct in this statement, but please explain why natural gas is $6.00 ber million BTU now and four years ago is was half that. Why hasn't the price gone back to the historically low level we had in the 1990's and early 2000's?
Nope. I can't explain this.
I think the current "glut" is temporary. The unconventional and smaller gas reserves now being tapped will have short lives and steep declines. Natural gas companies face the same financing problems the oil companies do, so producing new reserves, LNG, etc., are going to be impacted by the financial crisis.
The only question is whether demand will drop faster than supply, due the Greater Depression. Think about all those factories closed or idled. All that mall retail space that's going dark. All those empty houses for sale or foreclosed.
In any case, I doubt there will be much interest in exports. If the economy recovers, that will take care of our "extra" natural gas. If it doesn't, nobody will able to pay for new infrastructure.
I think the US natural gas glut is long-term. Each shale gas well has a shorter life but collectively a field like the Marcellus has tremendous amounts of gas. In the case of the Marcellus shale, the infrastructure is already built, the land bought and the drill rigs in place. The drillers must be scratching their heads because even with all of this, they are being squeezed by wind power of all things. Wind power, solar power and geothermal power are only going to get more efficient so the US should start exporting liquified natural gas to places like Europe that will pay for it.
I think you're wrong. I think the natural gas cliff looms.
I agree with Leanan, if gas goes into glut, unconventional drilling activity will goe way down, then within less than a year production drops off substantially. If only a relatively high price will support the production of the marginal cubic meter, then the equilibrium price will be relatively high. Whether we have an instability in supply/price is a different issue. I.E. if high prices lead to a lot of drilling lead to low prices and then drilling cutbacks lead to shortages... The stability question revolves around whether the oscillation damps out with time.
That depends on what caused the oscillation: is the system under-damped, and simply ringing from being knocked by an impulse, or did the transfer function shift to create instability? I fear the latter, and that ongoing changes worsen the instability rather than reducing it.
Don't forget the destabilizing effects of time delays...
E. Swanson
I totally disagree with this for reasons I have listed often of late and on GPM interview. The glut will last 4-5 more months but a cliff looms, especially if rigs go sub-1000. But there are many that agree with you. (NOTE: I was the one dissuading you from Pacific Ethanol 3 years ago on these pages.)
btw, do you know what happened with gpm interview? I couldn't listen at it live, but I can't find it there either.
The price will also be affected due to the deflationary forces at play. Gas might be considered "cheap" but if the US economy were to experience 20%+ unemployment and as Denninger suggests a 30%+ drop in GDP, than even that "cheap gas" will be considered expensive as people's incomes will fall drastically.
The economy isn't going to recover anytime soon, credit crunches tend to last and linger for a long time. And if the debt binge doesn't knock the economy out, than peak oil will. Hopefully people will learn to live with much less in the coming years and adjust accordingly. A prolonged depression could see a lot of people begin to garden, create their own local communities, create local currencies, learn useful practical things and save money. All things that will be very useful in the future.
A couple of relevant articles...
The dark side of falling energy prices
And then there's this...
A Death in the Oil Patch
Or start importing the European turbo diesel cars and convert them to run on a combination of natural gas and diesel.
http://www.cleanmpg.com/forums/showthread.php?t=6245
http://www.autobloggreen.com/2006/11/20/diesel-natural-gas-dual-fuel-ret...
"The Peak Oil Scam Controlling Oil Prices"
Articles like this are like a flea that distracts me from all else and sends me in search of an extermintor. Does anyone have any idea where this nematode came up with such a statement?:
"US Mineral Management Services (MMS) reveals that natural leakage of oil from the ocean floor is 620,500 barrels per year around North America alone."
I certainly can't find it at the MMS website and would ignore except that someone will undoubtedly ask me about it.
natural leakage of oil from the ocean floor is 620,500 barrels per year around North America alone."
That is 1,700 barrels/day.
At $40/barrel, worth $68,000/day if you could figure out a way to collect it.
A potential million barrel a day Bakken type field in Texas?
http://www.bigoilfields.com/index.html
Eagle Ford Shale
I think someone needs to go back to his geology text books or buy/get a better one. though here is a hint. shale != oil. to make shale oil one needs to reproduce the conditions that nature did for free to cook it into oil. for us as a energy source this is non viable because it costs us more energy to replace nature on a human timescale to make the oil then what we get out of it.
The Bakken Shale is thermally mature, and the Eagleford Shale zone is almost certainly also thermally mature. The problem is that the recovery factors in shale for oil are vastly lower than for gas.
The Oil Shale in Colorado (really a lacustrine marl deposit I believe) is not thermally mature, and has to be "cooked" either in situ or at the surface. In some areas of Europe I think that they burn high quality thermally immature oil shales as a poor quality boiler fuel.
This is a web page about Estonian oil shale mining and usage:
http://www.kirj.ee/public/oilshale/Est-OS.htm
This issue has been discussed here on TOD over a year ago. So, your "news" are not that "new" anyway. When I read your posts, it seems to me, that you think you are always ahead of everything posted here on TOD. But you are completely wrong. Almost everything, what you mean is "new" has been discussed here ages ago!
Please go to the archive and have a look.
...and you'll find an archive here (in the process of being brought up-to-date, but still rather extensive):
www.postpeakliving.com/blog/aangel/best-oil-drum-index
This is a great source. I was unaware of it. Many thanks for the reminder.
Don
even simpler is look at the stocks of companies in Bakken (like Continental, CLR, etc.) If oil was cheap to produce, these stocks wouldn't be at 20% of their peak values -now production costs way higher than commodity. I'm quite sure there will be many such finds in the future. And when oil again peeks above $100 per barrel, how affordable will it be?
Go to Chris Nelders website http://www.energyandcapital.com/ and discuss your problem there.
I'm sure, that Kohl, which seems to be the propoganda minister of the shale plays will welcome you. Happy investing!!!
I would like to complement Leanan for posting the article about Poet which has a plant about 14 miles from my house. Jeff Broin is the unquestioned leader in ethanol. He seems to be able grow while others fall by the wayside. I hope it is all for real.
The article slams ethanol because of the failure of Vera Sun, another nearby producer. But Vera Sun's failure was not due to ethanol but incompetent hedging in the corn market in which they lost close to $100 million by betting on rising corn prices at the top and not taking a loss quickly when the corn market went against them.
The other ethanol article nicely balances the first. It is more of the the same anti ethanol clap trap so often posted on TOD. If New Jersey doesn't want ethanol, don't buy it. It is not surprising that NJ with little farm land is against ethanol.
I don't know if New Jersey leads in any thing. As near as I can figure out it sucks off NYC's tit and stumbles around looking for government bailouts even more than the ethanol industry.
BTW, you have the NYC-NJ relationship backwards.
I think you might find Poet is reliant on grant money for their cellulosic research and have not solved the problem of low EROEI for corn ethanol. Corn ethanol may be classified as non-renewable in as much as phosphate and potash reserves are finite and non-renewable, the high corn harvest yields Poet is depending on are contingent on phosphate and potash in fertilizer as well as natural gas for the production of nitrogen. Natural gas is another non-renewable energy needed by Poet. In addition the corn ethanol distillation process is currently dependent on coal or natural gas as energy inputs. The ethanol industry used large amounts of water and was reliant on government subsidies.
"I don't know if New Jersey leads in any thing. As near as I can figure out it sucks off NYC's tit and stumbles around looking for government bailouts even more than the ethanol industry."
I've lived here for 55 years, and I believe that NJ contributes nothing, to anyone, except the entrenched political crime famalies.
I'm voting with my feet this month, before the scummy claws of the rat-bastard gov't tries to claim some of my retirement $$$.
Is gluttonous greed really going out of style?
People will always be glutinously greedy. However, in the near term, they will learn to not to display their glutinous greed so obviously. $100 dollar bills to light $100 dollar cigars will be done in the privacy of one's mega mansion.
This link was posted at EB today:
I would guess the conventional thieves would be very pissed off at Madoff if they truly understood how much he has personally shrunk the luxury burglary market for them. If so, I would guess they would happily drag him behind a fast getaway car with the police and local tv helicopters in hot pursuit. Displaying lethally sharp 'stop-sticks' and photos of asphalt-induced road rash on the office walls of Wall Street may be more effective than any proposed SEC regulations at preventing executive-level, getaway crime.
The day isn't far when the pros will start stealing bags of NPK...
And then when will it be that people get mugged for their excrement? :-)
Actually, in Japan human manure was so valued in the past that you could rent accommodation in exchange for your urine and excrement. Or at least so I read somewhere in Alan MacFarlane's "The Savage Wars of Peace".
http://www.amazon.com/Savage-Wars-Peace-Alan-Macfarlane/dp/1403904324
The civilised Japanese drew the line at doo-doo mugging, though.
Found the source (page 158 of TSWOP):
Some of these urban legends may be full of shit, though :-)
Yet more, from Alan MacFarlane's website (section: THE EXCREMENTAL CHAIN):
http://www.alanmacfarlane.com/savage/DUNG.PDF.
So it appears the Japanese DID actually fight over a load of shit.
Ericy, the future is the past played over again.
Great info! This now makes it easy to understand the historical background context of the typical slumlord phrase: "If you don't pay your rent, then I will have to beat the crap outta you".
I think this MacFarlane Dung.PDF, linked above, adds great credibility to my speculative O-NPK recycling and SpiderWebRiding proposals. As I have posted before: We will do Anything to get the Elements NPK. Consider from page 4 of 29:
----------------------
With the long sea-coast, fish manure was another obvious way to try and meet the [O-NPK] deficit. Fish were rotted down and spread on the fields. Griffis in the 1870s described how 'Millions of small fish lie drying along shore, to be used as manure.'18 Morse noted how 'a great many cargoes of fish manure are brought from Hakodate.'19 Hayami notes that 'Sardines caught and dried in the fishing villages of eastern Japan could be transported more than 500 kilometres (300 miles) to Osaka to be used as fertilizer for cotton cultivation in the surrounding villages.'20
The extreme shortage of fertilizer as well as the sophisticated marketing and transport system is described by Totman. 'By the mid-eighteenth century, for example, fish caught off Tohoku were being brought to shore, unloaded, dried, baled, reloaded aboard coasting vessels, shipped south to Choshi, transferred to river boats, hauled up to the Tone to its south fork, sent down to Edo, punted over to riverbank warehouses, unloaded and stored, sold,
reloaded on boats to go out into the Tama region, punted down the coast and upstream, unloaded, hauled overland to villages, and finally carried out to the fields and applied.'21
Yet fish and green manure combined could supply only a small part of what was required...
--------------------------
I think it would be safe to assume that back then: these Japanese did not have outboard motors on their small fishing boats, the coastal cargo ships were sail-powered, the river boats were either rowed or probably man-hauled with ropes upriver, railroads were mostly Unobtainium, and easy-rolling rubber-tired wheelbarrows and/or geared cargo-bicycles on smooth, paved roads were virtually non-existent [they probably used baskets on their backs]-->yet they still found it profitable to go to great lengths and exertion to move O-NPK.
Thus, massive bi-directional I/O-NPK and foodstuff movement by the combo of Alan's standard gauge ideas and narrow-gauge SpiderWebRiding seems a worthy postPeak civilizational goal. Although I am not a human biometric expert: it seems very plausible to me for most humans to easily move 200 lbs of cargo 25-50-100 miles/day on an efficient, smooth riding SpiderBike. Even further if they can have a small ICE or batt/motor for any uphill grades.
Just having really low-geared, but high torque pedaling Spiderbikes to pull river boats upriver sure beats blistered hands and aching backs from yanking on a rope as you struggle upstream:
http://www.nps.navy.mil/library/yangtze/riverropes.gif
------------
Old photo of river-ropers on the Yangtze
------------
IMO, it sure is difficult to get people interested in moving towards Optimal Overshoot Decline and their innate territoriality instincts.
I got a laugh out of description of the people [page 6 of the PDF text] who refused to go to the bathroom until they got back to their own neighborhoods--a true understanding of territoriality instincts--great examples of the most advanced agro-ERoEI thinking I have come across!
And it was all reported to the SEC years ago via a very compelling letter detailing exactly how impossible it was for Madoff to generate the returns he did:
http://online.wsj.com/documents/Madoff_SECdocs_20081217.pdf
I don't think that statement reflects proper accounting practice. The losses cannot be greater than the amount Bernie and company were able to siphon off. Mostly investors gave him money, which they thought according to his financial reporting was now worth much more. The $50B figure reflects mostly money that never existed.
And Paulson, Greenspan and the like - our run of the mill politicians and business leaders? Obama and his crew incoming? How many generations of conventional thieves?
From the top links, Democratic governors want $1 Trillion. That's not The Onion, is it? And it will all go down the rabbit hole, leaving future generations and nature to pick up the tab. Except that we cannot default on Nature and Nature will not roll the debt over. Flatline.
Where's my Onion?
cfm in Gray, ME
Ethanol and Octane
I've read a lot of comments about ethanol. Personally I think it will prove to be a loser in the long run, but it may be a bridge to whatever future there might be.
One of the comments that pro-ethanol types have thrown out is the octane rating. So I went looking around. Octane rating is basically the ability of a fuel to be put under pressure and not self ignite (knocking). Ethanol at 103 can handle more pressure than the 100% iso-octane which is the basis of the rating. Read more here: http://en.wikipedia.org/wiki/Octane_rating
Anyway what this means is you can use Ethanol in a higher compression engine, MUCH higher as I found out than even that usually used for diesel engines. Now comes the good part, this has been done to great success. And just like has been said many times thermodynamics cannot be overcome. The efficiency of the engine approaches that of a diesel, BUT the fuel consumed is much higher due to the energy content differences.
http://gas2.org/2008/04/15/scanias-ethanol-diesel-engine-runs-on-biodies...
I also found some more stuff that basically said that the results are better cost per mile than a "Flexfuel" running E85 but worse than a diesel.
That's an interesting note on Scania. I wonder what their actual fuel efficiency is? I just sent them a note asking. If they can consistently get 43% thermal efficiency, they could negate a large fraction of the BTU difference between gasoline and ethanol. I understand their focus right now is on buses and trucks, but it would be interesting to see what kind of efficiency they could get in a car.
Hmm, that's interesting. I caught all kinds of grief from some (you know who you are) when I posted This several months, ago.
I picked this up from Jay Hanson's website. Is the net-sej of Solar still negative? If so than solar is a dead end. I thought that solar had a EROEI ratio of more than 10:1.
Not only is this false:
as there are multiple viable technologies for various sorts of breeder reactors, thorium cycle, etc., but the market pricing just doesn't add up.
The referenced "analysis" was dated 1996. Rough estimated based on the power and cost says the collector price along was ~$30 per watt. Today, you can get ready-to-install panels for less than $4 per watt. Assuming that nobody is taking a loss on the production, that cost would seem to include all energy used in the manufacture. $4 worth of electricity is around 40kwh worth (at $0.1 per kwh). Energy payback must thus be faster than total value payback, which would be in 10,000 hours. At 5 hours per day, that would be 2000 days, or about 6 years -- a long time, but still far shorter than the design lifetime of 20-30 years (and they may well last much longer).
Elsewhere in the analysis costs were design, installation, wiring, and other costs. All of these are coming down significantly as elaborate one-off designs are now cookie-cutter, and size-related logistics issues get easier as efficiency grows.
Costs will continue to drop as thin-film and amorphous cells gain in market share, and logistics will improve as well.
What is the EROEI for solar? And how does Net-Sej fit into this? Is there a difference between EROEI and net-sej?
This is akin to what the ethanol proponents have had to put up with. Old out-dated data massaged to give the worst possible appearance.
When you're dealing with new, dynamic technologies you have to be very careful as to the "sources" you accept.
Back when I worked for a computer company, we saw a lot this sort sort of marketing distortions. Our (not yet available) product is so much better than XXX. Where if you dug deep enough it turned out that XXX, was a ten year old machine, and the test was deliberately choosen to make it look bad!
Jay has some brilliant references on that site - but he stopped updating it about 7 years ago so much of the technical info is dated.
So if you were made President, what steps would you take? Is there any way out of this mess or is "collapse" of the current system inevitable?
I think most of us agree that collapse is inevitable. How fast, how far, and a cushion for the bottom are active topics of discussion here.
If most on TOD agree that collapse is inevitable it certainly is a sign of the state of the credibility of this site.
You're right. This is a very credible site.
Its degenerated into a bunch of backslapping cynical misanthropic apocalypse fetish obsessives.
Its wonderful that you take it seriously, but don't try to imagine that its really that respected.
You must be great fun at human gatherings.
Look, denying that collapse is even possible makes you pretty dismissible. You may as well argue current reserves of oil are infinite or that you're a Betazoid from Beta Reticuli. Have you not read your history? Have you not read, or at least read of, Diamond's work? Or any of the other chroniclers of collapses?
If it seems to you more and more people are considering collapse in some form to be plausible, even likely, it is based on the data before them, not some silly notion of self-reinforcing bullocks. If you think some significant portion of people "get off" on the notion of collapse, you're just fooling yourself. I'm pretty sure some rather significant collapse is coming. I have a one year-old son. I do not relish the life he might lead if I am right.
Your kind of pejorative spewing is hypocritical. Do you understand why?
Class dismissed.
Cheers
I have children too, and wrestle with my psyche and my wife about the most plausible levels of collapse to prepare for in general, and to plan for specifically. It's not easy to take actions with long-term impacts, but we are (perhaps too slowly!). So far, once done, the regret is slight, as each ratchet-down actually relieves some stress. Hopefully that continues, but I think moving will be very hard on all of us.
I have now seen the word "pejorative" in three drumbeats this past week. TOD is good for the vocabulary if nothing else!
Collapse is part of the civilization life cycle. We are born, we live, and then we die. Same with civilizations. The only questions are when and how.
Personally, I hope BAU continues until 2067 (when I plan to die).
Feel free to refute this, or else offer a warranty against planetary ecosystem collapse:
http://energybulletin.net/node/47622
--------------------
No Second Chance by Kurt Cobb
-------------------
Dezakin,
This is not an argumentative reply but a desire for exchange. IOW, I am assuming your post is not trollish.
Let's get back to basics. If we agree that our growth is inherently exponential, and the system is finite, how can collapse not occur?
If you agree, then the issue is only when collapse occurs.
Given that exponential growth means that the time interval between x2 growth shortens exponentially as well, does the time frame matter that much?
In other words, whether that collapse occurs in "our" lifetime or not, does that really matter?
If you refute the premise that the system is finite, then the discussion has little chance of progressing.
If you can show to me that the resources are infinite, I will be firmly in your camp.
If your thrust is just changing the slope of the growth, but still >0 then you will likely have some opposition on this site.
I look forward to your views.
Cheers,
Bob
Its not. thats after the fact curve fitting and a clumbsy club of projection. It certainly appears exponention at times. At other times it appears hyperbolic, linear, or flat.
Yes; Given that we currently use maybe 1/10000th the solar budget and a similar radiative capacity of the earth, and that the earth itself isn't the limit to the system, we can meaningfully say that we can expect constant growth that we've experienced for the last century to continue for another couple of centuries before running into these limits if we naively assume constant growth. In several centuries its not going to only be resource extraction technology that will advance, but all aspects of society. It becomes meaningless to try to project the self governence of this future 'civilization.'
Why don't you understand that collapse doesn't necessarily mean the end of everything? It can also just be a transition - as that is often the case. Your cornucopian view is a problem in that you ignore the transition. Yes, renewable energies can power civilization, but the same one we have now? And with no period of transition that will lead to reorganization of socio-political structures? We can bring renewables on-line that quickly AND do so in such a way that there is little to no instability?
Not likely.
I suspect you are a climate change denialist, as well. It requires the same dismissal of evidence, the same faith-based belief that nothing bad can ever happen again because our great brains have overcome all limits to human potential. Given that a decade-long very fast climate flip alone would likely destabilize the planet's socio-political systems, denying a collapse is just hubris.
Cheers
I did look forward to your reply, but I would like to retract that.
Perhaps I could have been long winded and said that our economic and monetary system is inherently exponential but I assumed that you would know that. As for your Cornucopian comments about insolation, the figure, in gross terms is more like 1/8800 (and dropping fast) but ignores more issues than I care to discuss here. I have railed against this statement (usually proffered by PV Panel salesmen) more than once and I will not subject TOD to another tirade for your edification except to say that insolation that we are not using is somehow "for the taking" is misguided.
You are talking gibberish. Are you referring to albedo? If so, how does this matter except for ACC?
I have no idea what that means, and I am further confused as to how that relates to my comments assuming it means anything at all.
Please, say what you mean, and mean what you say, otherwise you are just wasting bandwidth just to pontificate. Some supporting data would be nice as well.
I could address other flaws in your post, but frankly I can't be bothered. Not because you are at odds with me, but because you appear have no interest in a rational discussion.
Good day
No; Your views are simply too diametrically opposed to mine for you to even attempt rational conversation aparantly.
What do you honestly think is going to happen with technological development over the next century? Everyone here seems to assume that it will remain static at todays levels or even decline. At best people assume that technological advancement is just more industrial development. Its not.
We're living at the end of human civilization, just before the beginning of the next.
Collapse is inevitable, because the mechanism is the same which drives death, which is also inevitable. This is not a fatalistic argument, it's a statement of fact. The only debatable issues are of how, when, where, with what, what happens leading up to it, and what happens next.
I'm sure people have played Clue when Professor Plum wasn't the killer. But you can't play Clue where no-one is the killer. It's a defining rule of the game.
Complex systems collapse. It is only temporarily avoidable, not indefinitely. And even after collapse, it is not "the end". The biological way of dealing with collapse is procreation, prior to collapse, starting anew with another generation.
The human way of dealing with collapse is the complex re-organization of ideas and social networks of support exchange. But the re-organization will only be successful if the ideas are in place before the collapse, and the infrastructure exists before the collapse for a new system of exchange support.
To put it another way, you and a partner can't have a child after you're both dead.
Perhaps you are intending to say that a fairly fast resumption of progress/dawning of a new age can only occur if the seeds were sown before? I essentially agree with you, but logically some of what you say is bullox if no time line is included.
1. Sometimes the same technology develops at the same time in different places.
2. Given enough time, and surviving intelligent beings, new technology will arise.
Etc.
Cheers
I think that your question is not properly posed.
What the developed world does today is the result of the historical availability of abundant, cheap energy, primarily oil. The "current system" as you call it can not continue after Peak Oil as the oil will not be available to power all the machines and systems designed to run on it. While some substitution is possible, the larger solution would likely involve different sorts of systems which are designed around the alternative energy sources which are available. The one size-fits-all system we have in the U.S. energy world will probably change such that differences between regions will become apparent.
Your first post in this thread looked at solar, as in photovoltaic electricity. But, PV is the most expensive way to capture solar energy, thus the analysis presents results which are skewed (and out of date). Systems have been available for decades which can provide low temperature thermal energy and the energy is already distributed widely. Solar heating and hot water systems could easily reduce the demand from present fossil sources and solar space heating is already less expensive compared with oil or electric heating, provided one does a life cycle comparison.
As the fossil fuels run out, the switch to alternatives will begin to happen. If that change occurs rapidly, it might look like a collapse as the old is replaced with the new. If it does not happen fast enough, then one can expect that a real collapse will be the result, as there will be a point at which there won't be enough resources to keep enough of the old system working until the newer systems are in place. Given the massive ignorance of the U.S. population and the resulting economic and political inertia, I see little hope for an orderly transition.
E. Swanson
Exactly so far at least I've simply not seen enough action to deter me from concluding that we will see at the minimum a partial collapse of the old system.
I'll add that if you can see at least a partial collapse it becomes effectively impossible to predict the extent it could be worse chances are its not better.
By partial collapse I mean a minimum of a persistant global depression similar to the Great Depression. Finanically the game may be different i.e eventual hyper-inflation ala Germany as apposed to deflation since there is no long term reason for fiat currencies to deflate. Eventually we will print enough money to overcome debt deflation or effectively move the debt to the governments books then monetize it.
Couple the financial crisis with peak oil and a partial collapse is certain I just can't see alternative energy capable of have a huge effect in the 2-5 year timescale that we are looking at.
Without fully understanding the emergy paper (yeah, I sorta get the concept, "embedded energy"), it's hard to decipher the calculations in pv.htm. Was Hanson expecting the solar project to have a lifetime of one year? That wouldn't surprise me in Austin, it would be a graduate project for somebody's architecture doctorate and the next year no one would know what it was and they'd tear it down (remember the Intel building on 4th street? haha)
But, I think we've discussed it here before and all of the major solar technologies (thermal, thin film, silicon) have the potential of net-energy payback within a couple years. For one thing a lot of the costs mentioned in the paper are for concrete, rebar, etc., which may be omitted from or reduced in later designs. My DIYer plan would involve panels on every rooftop, made of string-ribbon cells from silicon won by Engineer-Poet's fluorosilicate reduction process.
It's possible a lot of future PV installations will resemble that stone house in the Caucasus. Sort of hard to calculate the "emergy" for that, but the guy who lives there is probably happy with it.
that most likely only powers a light bulb.
And they say that Caucasians waste resources...
There is something wrong here. This is how they calculated the "emergy" for solar. It seems that administrative cost is almost half the "emergy". This study was done in 1991 on a large scale solar farm. It appears that some of the information is the result of a conversation with the site engineer. This is an incredibly casual study on which to base any kind conclusion. It is anecdotal at best. It does not reflect the "emergy" for small scale grid tied installations (no admin costs, no concrete, no steel or steel buildings, much lower maintenance cost, no line loss etc...).
Administrative being half or more would not surprise me. One would have to know the rules for accounting. What's a fab plant? Administrative? What about NHK shipping? What proportion of a Dell computer is "administrative"? I bet most of it. [direct cost vs indirect] What about a can of Coke? Probably almost all of it.
It seems - intuitively - that a PV solar society could not bootstrap itself. Esp with degraded resources. There is a mechanism involved where falling below a certain activity threshold cuts off whole realms of possibilities - putting them beyond reach forever. Civilization gets one - and only one - chance.
“Any coward can fight a battle when he's sure of winning, but give me the man who has pluck to fight when he's sure of losing."
cfm in Gray, ME
After further googling, it appears that this plant was built in 1986 by the City of Austin and was operated for about 10 years (See this and and this this ) It was clearly an experimental one of kind plant. Odum
offers no details about it. Odum continues to use this example in later books. This is clearly cherry picked data. This is either bad research or he is pushing an agenda. Odum seems to care more about his model than his data. I can believe that solar is not a panecea, but this is junk science. Jay Hanson appears to rely on this data as well.
I'm all for realism, regardless of the political correctness, and using old data when there are so many recent solar installations -- large, small, and in between -- smacks of an agenda. Surely there is a well-documented recent example? Yet a quick Google yielded no quality case studies, and few that discussed ROI at all. My curiosity is piqued, as it is hard to believe there are not many fully-documented recent case studies available.
Note that some of the overhead items that you include in "administrative" would be double-counted, as the cost of fab plants and shipping should already be rolled-up in the panel cost. Indirect costs for the installation and operation of the plant are fair game, but they are typically accounted for under other cost areas than "G&A" and reflect upon the organization as much as the project, and the numbers in this project also reflect the relative immaturity of the product and the industry in 1996. Administrative costs can be very high in a high-salary R&D sort of organization, but assuming such may not accurately reflect operating costs in a highly competitive highly deflationary manufacturing environment in the future.
Intuition can be readily mis-calibrated, and it is precisely why hard data is absolutely necessary. Electricity is the most flexible of energy resources, and given a positive EROEI on generation (whether generated by PV, wind, oil, gas, biofuels, or whatever) bootstrapping would be possible. I guess the critical issue is to accurately assess lifecycle EROEI as the technologies get to decent scales......and that includes solar PV as well as Ethanol and nuclear.
It's called competition, I'd say. Yet, every study I've ever seen says cooperation is more productive.
Go figure.
Cheers
No, it can't. I believe that absolutely. If it can be mis-calibrated, then it wasn't intuition. Perhaps common sense, or ego or arrogance or mis-placed self-confidence, but not intuition.
Intuition, by definition, means knowing at a sub-conscious level based on what the mind can analyze below our awareness. It is not **guessing** at a sub-conscious level.
If you thought your intuition was telling you something, but it didn't turn out to be what you thought it was, then it wasn't your intuitive self you were responding to. That's a learning moment. Such moments are not cause to dismiss our intuition, but are opportunities to refine it.
My experience of intuition I liken to a pond with a perfectly glassy surface. It is quiet and calm. There is no disturbance. When I feel that, I know I can trust what I know in that moment. The problem is, sometimes the moment is fleeting, and even if it is not so completely transitory, it is still easy to be sidetracked by desire, whim, others' opinions, etc., etc., etc.
Acting on our true intuitive knowledge is actually quite a challenge, which is why most of us live pretty ordinary lives, I believe. If we were skilled at responding to our intuitive knowledge, we'd rarely make mistakes. We've all known people for whom everything they touch turns to gold. My theory is they are intuitive people. They inherently know themselves. (NOTE: intuition, in my opinion, is amoral. It is about knowing the self. Thus, some of the worst people the world has known have almost certainly been extremely intuitive people.) They make the right decisions because they **just know.**
There is no ego, nor is there arrogance, in what I say. Most of us fail miserably at listening to our intuition. I am no exception. I have failed to heed my intuitive self far too many times; sometimes to devastating consequences. BUT, what I can say is I have identified, for myself, those intuitive moments. If it is a universal sensation, then I can tell you this: such moments are moments of peace, of absolute calm, and absolute certainty. And they are most often fleeting. So much so that I often doubt, until results indicate ever so clearly, that the moment occurred at all.
So...
This is WAY off topic, and I apologize, but the comment resonated strongly, and I suspect intuitive knowledge will be of great importance in the future.
Cheers
That's a curious theory, that if we paid more attention to our intuition we'd rarely make mistakes. I suspect that I might make fewer mistakes - both omission and comission - but I don't know about the rarely. Ilargi made a comment on his learning and reading style, apparently he synthesizes the way I do, leading to what he calls more "intuitive" arguments.
In this particular case of PV, my intuitive argument starts with "in Nature nothing is wasted", that Nature has developed entitities and mechanisms to use all the insolation already and according to maximum power. At best we humans are shifting it around differently and we might define "better" differently - though we've not been showing such a good track record really. Pig shit on a farm isn't pig shit in an industrial lagoon. My intuition also tells me that PV at the scale of our use of fossil energy wouldn't work, but a panel on a stone house in the Caucuses is a different matter.
cfm in Gray, ME
Intuition is borne of experience and knowledge.
You cannot be afraid if you have not experienced fear and cannot experience optimism if your dreams have never been realized.
Intuition is not abstract or a sixth sense. We use it when we cook, hunt, play sport or chess or commit crime.
It fails us and rewards us, it helps with our choices in life.
My intuition tells me PV and other "renewable" energy dreams will eventually prove to be akin to a perpetual motion machine which eventually runs down, if we don't have the excess energy to fully rewind it, we will get diminishing returns, it will in time, fail us.
I don't think intuition is what either of you are talking about. You are talking about analysis, in which intuition plays a role. Maybe this could be said to be true: Intuition doesn't help you solve a math problem so much as perhaps help you discover a new kind of math.
Cheers
I think your point is spot on. Intuition IMO is an amalgamation of data that the brain processes in the background.
For example, Google Fourier and his "a-hah" moment with a hot poker in the fire. It wasn't the poker, or the fire. It was a stored collective that coalesced due to a event analogous to his mindset.
Similarly, there are "types" of people, but you have to live long enough to meet many people to discern repetitive patterns. Intuition is largely unconscious experience.
That is inconsistent with the Sandia study from about a year back. They had energy breakeven for cystalline solar cells at just under three years. If that is true, and all energy from PV were used to make more PV, we could exponentially increase the amont of PV deployed by roughly 35% per year. Thin film, and concentrated PV have much higher EROEI, so the payback should be within months, and sustainable (on energy only grounds) would be several times increase per year.
Odum's emergy factors seem unrealistic to me.. they've been brought up here a few times.
The NREL has reported embodied energy payback of PV as somewhere between 1.8 to 3 years, depending on the chemistry. Changing lifetime watt/hours to 'EmJoules' sounds like a neat way to put a finger on the scales when you need to reach a preordained conclusion.
It seems to me that a 25 year generator that returns it's engendering wattage in 3 should have plenty of time to give back, but I'd welcome hearing why the NREL's numbers might have missed such enormous inputs as they did.
http://www.treehugger.com/files/2008/12/1-gigawatt-solar-power-plant-pla...
Yeah, that's in Odum's "Environment Power and Society for the 21st Century". I do think it is an issue of DO THE MATH. I parsed Odum's analysis of algae pretty carefully - do the math again - and he seems to solidly refute the optimism in that field. PV is more complex, but the argument is similar.
Odum accounts for the fact that a sequoia is more than a pile of wood chips. Emergy, hierarchy and trophic levels seem to include the cost of Nature fairly well. I'm not convinced that we humans can do any better than photosynthesis - everything accounted for. Our failure to account for everything IS the problem; it's not something we can shortcut.
Thing is, "friction" - call it war, call it inequality, call it inefficiency - will certainly dwarf any margin of error in the calculations if they are even remotely close. Someone is going to have to completely debunk Odum's work, deliver the Rapture or the technological singularity OR we are going to have to settle for a whole lot more of LESS.
Fool Obama was holding these health care listening sessions. Single payer, apparently, HR676, was not on the agenda. Health care as a human right. In Brunswick Maine, the Kucinich people changed the agenda. Only one woman, older, voted against single payer and health care as a human right. I hear she said it would mean the oldsters sucking up all the resources from the youngsters and that it was past time for that to stop.
And the more I look at the way we mine this planet for everything, the better that a whole lot more of LESS sounds. If we humans ever figure out a new energy regime - short of transporters, warp drive and replicators - we will so totally destroy our nest it won't matter.
Maybe I've missed the point of the big stone heads. What if the Easter Islanders realized there was nothing else to do except build those stone heads? What if they knew they were doomed? Shute's "On the Beach" comes to mind. Let the Games begin. Build the stone heads. What better human competition than building big stone heads?
cfm in Gray, ME
OPEC may not be able to cut oil production by amounts agreed upon:
http://uk.reuters.com/article/oilRpt/idUKDAH44104720090104?pageNumber=2&...
I didn't really get that hint from the story rainsong. OTOH, we know we can't believe any statment from Iran(or any other member) when it comes to production discipline. I figure we won't know the truth about actual production cuts until well into February at the earliest. And even then it will still be a foot race between production cuts and demand destruction.
Quote of the day?
Hi, all. I'm going to be delivering a talk on personal preparation in two weeks as we roll out our Transition Town initiative and I've constructed a Personal Preparation Checklist. It's not meant to be exhaustive. (For one thing, I will be printing it out.) So I want it to include enough to get people started then send them off for further research.
As background, I want our initiative to focus on personal and family preparation because I've seen too many groups talk about everything under the sun but at the end of the day nothing material actually happens.
Could I get some feedback from y'all?
Did I miss anything big? Are the graphics effective in supporting the text?
http://www.postpeakliving.com/files/presentations/PostPeakPreparationChe...
Thanks!
Andre'
Hi Andre'
I found your Checklist, and in fact, the whole presentation to be great. I think everyone will have to adapt to the changing circumstances as best they can, and your suggestions and checklist are thorough. I think it goes to the purpose of alerting folks and asking them to prepare, and telling them how to start doing just that.
It is hard for me to comment on the effectiveness of the graphics - if you already know the story, you already know the story.
Personally, I have the disaster survival material and supplies, if needed, in excess. I have used a whole food diet for the last 32 years, half of my life. I just like it, and find it to be more healthful and satisfying. I haven't had any debt in a long time. I have an odd item of preparation - otherwise unsaleable gas off of a producing oil well, for home heat, and ground source heat pump for cooling, if the grid is up. Sort of secluded homestead, with a really good community, a CNG truck with an extra tank, kept topped off since it does not go bad over time. A garden and a four year old compost pile, more than I need for my small garden. A grey water system off a washer, shower and bathroom sink. A small solar set up, wanting to add more, but was hoping to hold out for the next generation PV solar. A solar hot water system, which is great for the winter, when I do not use the heat pump unless the gas line freezes up. Lots of trees, about 45 of the 80 acres, for a good source of both potential heat and barter material, but I do not have a good wood stove. And, I wish I was prepared.
The unsaleable gas is something I would like to see other people be able to take advantage of where there is stripper production, but it has to be set up very carefully. I do think it is an example of how ingenuity can change everybody's list of things to use for preparedness.
My greatest concern is that a lot of the folks around me are not prepared, and try as I may, I cannot keep everything totally secreted. For instance, the gas and the solar system I do have. When TSHTF, I will find more friends than I can accomodate. That will make enemies of the ones I cannot accomodate. Thus, I want my neighbors to be as prepared as they can, to "spread the wealth" of "friends."
My greatest weakness is a lack of honed hunting skills, although there are plenty of wildlife around here. Also, while I have a pond, it will not be enough in really dry periods, and the available well water in my immediate area is too close to salty to be really usable - it does not meet Oklahoma standards according to the drillers, who have to be licensed. I may drill my own anyway - I do have suitable equipment.
I think that once things settle out, most all be able to cope, but the early period of serious shortages will have a lot of impact on everything, which is why I have the disaster survival stuff. I sincerely hope I don't have to try to find a cave, since one type of wildlife around here is shakes - mostly copperheads, but some velvet tail rattlers, and not enough black snakes to get rid of them. I do have a couple of shovels I keep handy, and have never been bit, nor have I ever eaten one of them after killing it.
Sorry I am so late in replying, and I hope that this is reassuring for your talk. I looked over the rest of your site, and I hope the folks you present to will as well.
Chuck
Hi, Chuck. Thanks for your reply, it is good to get your feedback.
And I envy your setup :-). I have no land (live in a condo complex).
But this year that will change...I'm looking at Oregon right now.
Re: Depression (Not directly related to top link.)
http://www.marketoracle.co.uk/Article7996.html
There's a nice Q&A about the economic crisis, future oriented.
Real bear, but also says:
Cheers
Sasol has a project to turn coal into liquid fuel on fairly large scale in Indonesia. 1.1 million barrels per day by 2015 for 10 billion. The Sasol process would be about ten times cheaper than alternatives if they can hit 1.1 million barrels per day for 10 billion. The Indonesia project goes against clmiate change avoidance goals but addresses peak oil issues. Other carbon sources other than coal could be used with the Sasol process, but the cost would be different.
If the price of ten billion dollars for 1.1 million barrels of oil equivalent per day could be hit by 2015, then such a project would be competitive with the pricing and timescale of oilsand projects and deep water oil.
A recent MIT article and the MIT's Joint Program on the Science and Policy of Global Change indicates that based on an assessment of currently available technology and pricing (2007 prices and expected cap and trade or carbon taxes) that the two top methods out to 2050 are nuclear power and carbon sequestering for reducing human generated CO2 to 80% of 1990 levels. So the 2100 disaster would be avoided by 2050 even using a combo of existing technology and policy. The pricing policies mainly hit coal prices.
It seems to be a base level scenario where new technology fails to develop and wind, solar costs remain high but where the carbon reduction goals are still met by 2050.
http://www.technologyreview.com/energy/21835/?a=f
The current carbon sequestering is at the level of a few million tons and is mostly injection into old oil fields.
Novacem has cement which uses magnesium silicates which could be used with calcium carbonate (to avoid supply issues).
http://nextbigfuture.com/2009/01/novacem-making-co2-absorbing-cement-and...
Novacem's cement, based on magnesium silicates, not only requires much less heating, it also absorbs large amounts of CO2 as it hardens, making it carbon negative. Set up by Vlasopoulos and his colleagues at Imperial College London, Novacem has already attracted the attention of major construction companies such as Rio Tinto Minerals, WSP Group and Laing O'Rourke, and investors including the Carbon Trust.
Standard cement, also known as Portland cement, is made by heating limestone or clay to around 1,500C. The processing of the ingredients releases 0.8 tonnes of CO2 per tonne of cement. When it is eventually mixed with water for use in a building, each tonne of cement can absorb up to 0.4 tonnes of CO2, but that still leaves an overall carbon footprint per tonne of 0.4 tonnes.
Novacem's cement, which has a patent pending on it, uses magnesium silicates which emit no CO2 when heated. Its production process also runs at much lower temperatures - around 650C. This leads to total CO2 emissions of up to 0.5 tonnes of CO2 per tonne of cement produced. But the Novacem cement formula absorb far more CO2 as it hardens - about 1.1 tonnes. So the overall carbon footprint is negative - ie the cement removes 0.6 tonnes of CO2 per tonne used.
0.6 tonnes times 10 trillion tons is 6 trillion tons. The amount of CO2 generated by people is 27 billion tons worldwide and this could increase to 45 billion tons (based on some projections. So 6 trillion tons is about 200 years worth of CO2 storage.
I do not agree that the Marcellus infrastructure is built. Main pipelines exist but the laterals are not there and it is difficult to find financing. There may be richer shales in East Texas-North Louisiana region and interstate pipelines connecting these areas to the north and east.
The world LNG capacity is supposed to rapidly increase this year leading to lower spot LNG prices:
New Wave of LNG -- Oil and Gas Journal
Distributed \"Nuclear Batteries\" the New Infrastructure Answer?