Dennis Meadows: "Growth versus Development"
Posted by Gail the Actuary on March 1, 2010 - 10:25am
In the video, Dr. Meadows talks about growth, peak oil, and the possibility of collapse. Below the fold, you will find an approximate transcription of his talk, so you can read it if you prefer.
I was born in 1942, about here [marking on graph]. 96% of all the oil that has ever been used in human history has been used since I was born. Global oil use--and now we are here [pointing to graph], global oil use has been something like this. [Marking top of oil production curve] and this is going to come down, in some way, we don't know [making several dotted lines]. Recently a German think tank expected that by 2030, so about here, oil will be half of current levels. So something like this [marking on graph].
The Challenge: Peak Oil
Society expects this [extending graph of growing historical oil production linearly upward], but we are going to get this [emphasizing downward slope]. What policies do we have to take, in order to do this in a way so that this change is peaceful and equitable? It is possible if we prepare, but if we deny the problem, then we never will manage.
Growth versus Development
If you are a parent, and you have a child, then you will be very enthusiastic if for the first 18, maybe 20 years, the child becomes bigger, actually grows physically. It even is a source of happiness to you if your child is growing very fast. But after about 18 to 20 years, you don't want your child to grow any more; you want your child to develop--to become wiser; to learn foreign languages; to learn how to have important love relationships; to be a good parent; and so forth.
After 18 or 20 years, if your child continued to grow, becoming two meters, three meters, four meters, you would be very embarrassed, and actually you would be very worried about it. People would be quite amazed, and they would even laugh.
The Link to the Economy
Unfortunately, in the economy, we haven't made this distinction. There was a time in the rich Western countries when it was very useful to have physical expansion--increasing capital, increasing energy use, increasing consumption of materials, more and more buildings, and so forth. But we are far past that time now. Unfortunately, we got into the habit of doing things to cause physical growth, and we keep trying to continue those habits.
Development in Societies
We need to know how to convert the policies and the institutions which gave us physical expansion to ones which give us development--to the things that give us culture, understanding, peace, friendship, love, the things that are really important to society.
The Current State of Our Planet
Today there is a lot of worry and concern--you see it in the papers, you see it in the speeches of politicians--about climate change, about environmental damage, about falling water tables, about food and oil scarcity, and so forth. These are really not problems, they are symptoms. It is like your friend has cancer, and therefore has also a headache. The headache is a symptom. It is not in itself the problem. You can take care of the headache--you can give pain killers, or something, but if the headache goes away you don't imagine that the problem is solved.
Climate change, energy scarcity, these things are symptoms. Maybe we could solve them, maybe we won't. But even if we do, it doesn't eliminate the problem. The problem is physical growth, continued population expansion, continued increase in material standards of living, in a world that has finite limits.
The Danger of Collapse
Technically speaking "collapse" is a process where things go down, out of control. For example, if a building collapses, it falls down not under the control of anybody. Societal collapse is for the key indicators of our society--material standards of living, peace, trust in the government, and other things, to fall, without control.
Collapse is Near
The situation for us is kind of like living in a city which has earthquakes, let's say Tokyo or San Francisco. I can tell my friend in San Francisco that with 100% probability there is going to be another really big earthquake in San Francisco-absolutely, no uncertainty about it. But when, that is the question. And how big? These are really important questions. We don't have any idea when. It could be tomorrow; it could be thirty years from now. The same thing with collapse. I know that the current growth in population and in material use cannot continue--absolutely, with 100% probability, that it is going to stop. When? How? How seriously? We have no scientific way to make predictions.
The Consequences
The longer we wait to do social measures, like birth control, or voluntary simplicity, the more likely it will be that physical measures will cause this decline.
Shortages of Oil, Water, and Food
If you ask me as a person to make my guess, I would say that food will be an important factor because it reflects many of the other issues. Definitely the climate is changing now, it is changing very quickly, that is for sure. Climate change will reduce the possibility for food production in many areas. That will cause problems.
Probably global oil production has already reached its maximum, I think in 2006, but for sure in this period. When energy becomes more and more expensive, many of the so-called modern farming technologies will become impossible; that will reduce food production. For example, without cheap diesel fuel, you can't pump up water for irrigation. If you have to quit irrigating land, and start using so-called dry land agricultural techniques, productivity will go down--less food. So I think food production will be an important factor, but it wouldn't be accurate to say that it is the problem or even the only problem.
Prof. Dennis Meadows, im Gesprach mit Bert Beyers, Davos, Sept. 2009
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One issue that Dr. Meadows and "Limit to Growth" does not consider is the role of debt and our financial system. It seems like if that were considered, it would move up the possibility of collapse.
Another financial crisis will come when all that oversized, oil dependent infrastructure will no longer pay dividends.
You can't believe it, but Australia - thinking it has avoided the worst of the GFC - continues business as usual by wasting AU$1,65 bn for a brand new freeway in the Hunter valley, a gift for the coal industry:
1/3/2010
Hunter Freeway: yet another peak oil ignorant project
http://www.crudeoilpeak.com/?p=1203
Most of our cities have reached, actually surpassed the limits to growth. A sustainable = energy frugal city would not have more than 120 - 200 K population max. Half of its residents could walk or cycle to decentralized industrial estates and commercial centres. No buildings higher than 3 floors.
26/8/2009
Sustainable Cities Master Plan
http://www.crudeoilpeak.com/?p=412
Hi Matt ,
Your remark about no building higher than three floors intrigues me.Obviously very tall buildings need excessively karge amounts of steel and concrete , etc, in relation to the square footage. Just as obviously, three floors under one roof on one foundation occupying a third the same street frontage as a three single floors structures is a good deal.
It appears that there is a sort of sweet spot in construction that might result in the greatest overall efficiency , considering construction costs ,future energy cost estimates, etc.
I'm hoping one of the engineers or maybe an architect will chip in at this point and enlighten the ones of us in the dark in this respect.
I believe the maximum height pre elevators and steel was ca. 6 floors. Think old Paris.
I doubt they factored in embedded energy of construction, but the greenest city in the USA is said to be New York. I.E. the per capita energy consumption is much lower than the nations average. So it seems that taller buildings (I'd bet the everage in NYC is at least 20floors) are not such a culprit. They allow high density, which reduces distances, greatly reducing the need for motor transport -and moving much of it onto mass transit. So I suspect you are barking up the wrong tree.
New Yorkers do not consume much transporation fuel per capita for personal transport, but otherwise have a high ecological footprint. Practically zero of the raw materials that New Yorkers consume are produced in New York City - all of it must be imported by diesel trucks.
This high ecological footprint, multiplied by high population density, makes New York very ungreen indeed. The high population density is very "efficient" - at consuming enormous natural resources per square mile of housing.
This notion of high population density being "green" or "efficient" is an insidious example of doublethink, which can be very difficult to deal with in a rational plane.
Your position seems silly. Most of America is much less green than Manhattan by almost any measure, since practically all of the raw materials that ALL of us consume are transported in, and it is arguable (I could argue either way) that even a hunter-gatherer has a larger footprint, since he needs so much land to sustain him. Of course there are too many of us on earth, but Manhattan's population of 2 million is almost certainly much more "green" than the 2 million people around where I live. It's not only transportation fuel, btw--it's heating fuel as well, which here in the northeast is considerable.
You guys are confusing efficient with green. Green is an ideal, a catch phrase. Do New Yorkers consume more per capita than rural folks? Produce more waste?
If for the sake of argumentative tractability you assume a fixed population size, then the packed in like sardines ala NYC model uses less resources than the same number of say farmers.
I'm no fan of big cities, I live on a couple of acres of apple orchard. But according to the EIA use of energy in the US looks approximately like this:
Transportation 27%
Industrial 33%
Commercial 18%
Residential 21%
It seems that urban concentration has to improve at least three of these catagories. Large buildings have a high volume to surface ratio, reducing heating and cooling requirements. Having people live and work closer together reduces transportation costs. Grouping business in larger buildings closer together reduces commercial energy use.
So if you build your society around concentrations of cities of 100,000 to 200,000 with buildings no taller than 6 stories and have everyone either work in the town or on the nearby farms and forests I suppose you would be close to an ideal. And look a lot like Germany.
As it turns out, existing multi-family housing (mostly in urban areas) is less energy efficient, on average, than single family housing - perhaps because SFH is newer. Really, what's important is how you design your buildings, not where you build or whether it's multi or single family. If you insulate, use good windows, etc, that's what matters.
Similarly, it's less important WHERE you drive, and more important WHAT you drive. Drive an EV, and you can be anywhere.
I like the idea of limiting urban sprawl in order to create more wild habitat, but again, I'd guess that it's probably more important HOW you live, than WHERE you live: if you design things so that you don't kill things or destroy their habitat, your house can probably be anywhere.
Design matters.
Practically zero percent of the raw materials that suburbanites consume are produced in suburbia--all of it must be imported by diesel trucks. Suburbanites are housed in many more square feet per person, so their housing uses correspondingly more materials in its construction, and takes more energy to heat, cool, illuminate, and otherwise maintain. (Entire New York studio apartments can fit within the walk-in closets of some surbanite McMansions.) If suburbanites used their yards to produce food, that would be productive, but the vast majority instead have chemical and water sucking lawns that are a drain on the environment (something you can't accuse many New Yorkers of.) And of course, New York beats every inch of the US transportation-wise, hands down. So altogether, New York does have a much lower footprint than the rest of the US, and it's a very odd twist of doublethink to claim otherwise. Now as to whether New York is sustainable long term, that's another question. But it will probably do better than many, many suburbs.
Yes, of course suburbia is even worse than a city. We didn't have suburbia until cheap fossil fuels came around, and we probably won't have it after cheap fossil fuels are gone.
Cities are focal points for mass consumption of the natural environment and mass excretion of waste products and pollution. Arguments about their greenness are silly to me.
The hunter-gatherer lifestyle is quite green, because it doesn't consume enough of the environment, or produce enough waste products, to quickly destroy everything (when done right.)
But I've always wondered, if suburbia is even worse than a city, why is it that it is so much more expensive to live in a big city like New York than it is in a suburb?
Perhaps at least part of the answer is in the question of distribution of food and other supplies. In both places, they are distributed by diesel trucks. Where I live, in a suburb, the loading dock at Walmart (and at most other stores) accommodates articulated trucks carrying perhaps thirty tons of products in a single load.
In my few visits to NYC, I don't recall seeing any large trucks at all, nor much in the way of off-street loading docks. The quaint little corner stores appear to get the products they sell from trucks parked (or double-parked) on the street, and these trucks don't appear to have a load capacity greater than about five tons.
Not only are the large trucks used for distribution in the suburbs much more efficient in dollar terms, they are also much more efficient in fuel. An 18-wheeler carrying thirty tons does not use six times the fuel used by a mid-size truck carrying five tons. It probably uses less than twice as much.
I agree with you that suburbia (especially as we know it now) will collapse under its own weight. I think you're underestimating the long term endurance of cities. Let me throw a couple ideas at ya'll:
1) Cities existed (typically) as centers of trade and communication. Even with a much reduced population by 2100, trade and communication will still happen. Given the questionable survivability of the internet, much of that trade and communication will have to follow old patterns. Thus cities were a center of mass distribution prior to the oil age.
2) While cities are the focal point of mass consumption now, they don't have to function that way. First, as recycling goes from being a luxury (rolling eyes) to a necessity, cities will be great place to trade the 'table scraps of the 20th century.' Additionally, many companies and construction firms are producing goods designed to break down through natural processes, and offering buyback programs for old durable goods to recycle them (I believe Apple has a program like that in place now, but don't quote me on it). William McDonough wrote an article (from the PoV of a practitioner) about making the built environment, as well as goods, function more like an ecosystem than a digestive tract called "Design, Ecology Ethics and the Making of Things).
3) The assumption that a hunter-gatherer lifestyle is more green, while true in the past, does not have to be true in the future. I think its very possible for humans to create living spaces that act in concert with the ecosystems they inhabit, and have a high quality of life than we do today. Of course, we have to make that choice, so there's that...
I don't know .... it would be interesting to see energy use per capita NY vs. elsewhere in the US. NY would probably do well. Here in the suburbs we don't produce anything we consume either (maybe packing material?), everything comes on a truck to a store, and back to the house in a car, housing is much more wasteful, etc.
Of course this would change if we start a Molybdenum mine in our backyard. Or a goat dairy.
A building with a cubical shape maximizes volume and minimizes construction materials and surface area (which reduces heat loss). Placing elevators, stairs, common restrooms and storage rooms in the center and habitable rooms against outside walls, probably makes the optimal height between 10 and 15 stories tall depending on the size of the apartments.
Sounds like a great place to live, if you are a Borg... :)
Um, I believe its the sphere that actually fits that bill. Which is why I recommend thinking outside the multi frequency tensegrity icosahedron, rather than just the plain old orthogonal box ;-)
Just getting back to practicalities:
Considerations like these will limit both the height and width of buildings which are practical for residences in the future.
More than thirty years ago I took up a position in the Philippines, and found that my predecessor had leased an office in Manila on the fifteenth floor of a building without a backup generator. At that time (and for all I know it's the same today) the electricity supply in Manila rarely worked for more than about six consecutive hours. So I never even tried the elevators: too many people got stranded in them for hours. Fortunately, the stairwell had opening windows, so it was lighted during the day and no hotter than outdoors. We got out of that lease as soon as we could.
Hi Ird,
I'll leave it to the engineers to debate the technical efficiency of a NY City configuration for housing versus a small/medium village configuration.
What about the scarcity or shortage of lots of stuff? Why do I have this feeling that life in NY city in 30 years might not be a very pleasant experience? NY City residents use lots and lots of taxi cabs to get around - what is the taxi business going to look like? Food is trucked in from quite a distance - how comfy is it to think about those supplies if folks 50 miles out of the city are competing for food supplies? What happens if waste systems deteriorate?
Like you, I worked in India in the early and mid 90s - intermittent electricity, overpowering air pollution, garbage piled everywhere - well, the good news is that I lost 35 lbs on my first stay.
I just don't think I want to be anywhere near a really big city if things start going south - just the sheer number of people that depend on a fragile infrastructure is pretty scary.
Yes, a sphere, but the goal is not really to minimize surface area per unit volume, but rather to minimize surface area per unit area of usable floor space, which is often quite a different thing. While great for certain applications, like maybe large movie theaters, or storing road salt, dome / sphere shapes often have a lot of wasted volume when used to build housing.
And of course that's only 1 of the constraints in the matrix of a good buildings design problem. Insofar as they are one of the ways of allowing natural light, ventilation, and views via windows or other openings exterior wall area can be a good thing. See "A Pattern Language, Towns - Buildings - Construction" by Christopher Alexander et al
We chose an apartment for our retirement, mostly on these sorts of energy and long-term sustainability grounds (and many other reasons too, of course). A blocky cubic modern concrete building, of ten floors ... we bought on the fifth floor, which was the lowest level that is above most traffic noise, above all mosquitoes, does not induce vertigo, and also afforded a bit of ocean view. Its windows and main balcony face just south of east - the coolest direction in Australia - especially on the east coast in the sub-sub-tropics 28°S (other than due south, which can be wind-prone in winter).
The 5th floor also allows you to walk up and down if there is a power failure. One issue is always water and sewerage - are they delivered/removed just based on gravity feed/pressure of the city-wide system, or is water pumped in, and waste water pumped out? The climate is humid and wet Mediterranean - long warm/hot summers and short fairly mild winters - and you could happily live there all year without turning on the aircon, for either heating or cooling. It is a city of less than 300,000, with high rainfall, and good regional water storage.
We'll see how we go ... the basement carpark is almost at sea level - I hope sea level rise doesn't occur too soon! But we don't plan to have a car in any case, just a small boat.
OFM - As recently pointed out to me by an engineer at Dalhousie (Halifax, NS), a building of three stories has adequate roof space on which to install solar panels that could generate e- for its occupants' basic needs. The ratio is vastly less favourable in a 20-story building. Better ratio for rainwater harvesting, too. These will surely be factors in calculating a post-peak architectural "sweet spot".
But elevators are probably a more important reason to eschew the high rise. Maybe the existing ones could be retrofitted with insta-fire back-up ff generators, on a pay-per-use scheme?
I've seen a suggestion in multiple places on the Web that about four floors is the most energy-efficient height. Probably depends a lot on the local climate and weather extremes, but four floors seems good to me.
Indeed. It's been a long time since William Catton (among others) pointed out the inevitability of collapse because of ecological limits, but few people have tried to predict when exactly this collapse might take place. (I suppose R. Duncan did, whether he was right or even in the ballpark, we'll find out very soon.)
Right now it seems to me that a lot of us doomers feel collapse is more or less imminent precisely because the financial system has stretched to a breaking point. Then again, many of us have underestimated the resilience (or inertia) of the system so far.
Gail -- Being a geologist you can imagine how uninterested I might be when it comes to bean counter thoughts. But your reminders can't help but focus my views on the subject. Let's face it: the lack of capex for home building, retail expansion, airline growth as well as all other business hit by the sub-prime melt down and recession shouldn't be a surprise to anyone. But how do we understand the lack of capex in the FF extraction business. Let there be no misunderstanding: current oil/NG prices are more than sufficient to justify drilling conventional resources. Even some of the previously hammered shale gas plays are looking more attractive. Yet the money is not flowing back into the oil patch.
I mentioned a couple of weeks ago my partners attended a prospect sellers expo in Houston. As we saw last August there were hundreds of not only viable but economically very attractive drilling deals available. And again, very few buyers. But recently an even more telling situation has come to light. Assume for a moment the drilling risks, though truly manageable, are the hindrance to more aggressive investments. But how do we explain a production acquisition deal we're currently analyzing. Production acquisition was never a part of our biz plan: why pay a premium for proved producing reserves when we can drill up similar volumes for less than half the cost. Under normal circumstances producing resources will sell from 3.5 years to 5 years payout (payout = purchase price - net income). We almost passed on reviewing this acquisition due to the low potential price we were told was in play: 12 months payout. Who would sell a revenue generating asset for what could be netted by holding on to it for just 12 months? Yet that does appear to be the deal. And in addition to the production there are a couple of viable drilling opportunities thrown in. The seller is a good sized independent who is supposedly in great need of additional funds to follow through on other drilling projects. If we close on the targeted price it will truly represent a fire sale the likes of which I've never seen in 34 years. The acquisition will run around $35 million. No bank would lend more than $8 or $10 million on the project due to a concentration of value. And so far no one appears willing/able to make up the balance out of their own equity position.
Again, we're not talking about a half empty shopping mall or a subdivision with 300 empty lots. We're talking about proved producing oil/NG assets unable to find capex in the face of improving prices as the ultimate effects of PO loom even closer. And these projects are going begging in the equity market? This seems to emphasize more than anything else your concerns about our debt situation. If oil/NG capex isn't readily available where will the rest of the economy find the funds needed carry on?
Dennis Meadows in his previous talk talked about lack of capital likely being the limiting resource, acting to bring about the decline shown in Limits to Growth scenarios.
If we think about it, debt is the source of a whole lot of investment now, and if it is debt that cannot continue at current levels, then we see that the amount of funds available for investment must drop.
A lot of this is related to adequate availability of net energy to society. This is getting more and more squeezed, and is going down hill. With increasing debt, we could disguise this lack of net energy needed to finance future investments. Once debt starts declining, we are stuck with the lack of real net energy (to a significant extent reflected in cash flow available to those doing drilling) showing itself for what it really is. For example, If natural gas drillers were all getting a huge positive cash flow from their investments, there would be no problem with capex. Similarly for those investing in wind turbines.
Gail -- I suspect you're right on about the cash flow situation. With current oil/NG prices cash flow isn't too far off where the more realistic had projected. But the debt burdens which were run up are consuming so much of the CF there is little left for capex. Add that to the view of the bankers that the huge unwind of oil/NG debt will continue to consume (if they are lucky) most of the revenue stream. Would seem to be the same view they have of wind power: holding their breath waiting more to see if they get their capex returned than what the return on investment might be.
And in both cases they can easily remember getting sucked into the hype. Next round there may not be enough hype to lead them to open up their pocket books to the same degree again.
By the way, there is a bunch of new wind power data saying that Operations and Maintenance costs are way higher than projected, especially as wind turbines age. The new report is very expensive.
According to one summary,
An "increase of 253% over the 20 year life of turbines" would seem to mean that O&M costs in the 20th year are 3.53 times as much as they are in Year 1. If most wind turbines have been built recently (and many are still under warranty), one would wonder if current cost estimates adequately reflect the full mix of Operation and Maintenance charges over the life of the turbines. So Operation and Maintenance costs may average more than 2.7 cents per kWh over the life of the turbine.
So how does that compare to maintenance costs of oil rigs and other equipment for getting oil from say offshore drilling and production platforms? I guess that's much less expensive.
From the summary:
Compared to the cost of downtime on a typical off shore production rig that might be a bargain.
That would be pocket change I imagine. Oh and lets not forget to bill the oil companies for the environmental damage and suddenly wind is no longer so expensive is it? Shall we add a hefty carbon tax to bill?
I guess we are running out of *CHEAP* energy.
As I've posted before, these are solvable engineering problems. There is nothing inherently unreliable about wind energy. Think of how much more reliable automobiles are than they were 30-40 years ago. Also, maintanence cost should be expected to increase as units age, the same way they do with cars. Nothing unique about this. TVA is announcing that it expects to draw down most of the upper tier lakes in the next decade to refurbish hydro plants and rework some of the dams/spillways (at great cost and loss of production). Lake Blue Ridge, in North GA, will be drawn down soon (second time in 20 years,IIRC). At least with wind farms they can repair individual units OAAT, reducing capacity only a few percent, at most.
Gail, Rock ... (sounds like a wrestling team!)
Without going into the entire argument about high prices stranding infrastructure of all kinds (that require cheap energy to be profitable) ... it seems the oil refining business is at the threshold of being stranded. When this business is stranded, the game is over.
This is a part of the 'credit effecting production' where production is considered to be bringing finished goods to consumers.
Oil just backed off $80/bbl today so expect more noise from Greece and UK with regards to deficits and defaults along with plunging euros and sterling. The highest price for this bull market in crude has been about $84 which was a few weeks ago. I don't think that high will be tested. We are too poor ... and get poorer by the week.
We are watching the collapse in real time.
Just today in Drumbeat we read, Shell to Sell Assets to Fund $28 Billion Spending, FT Reports and ExxonMobil Funding Exceeds Cash Flow. When the majors aren't generating enough revenue for capex, we have a problem. How are the little guys with all the debt going to do it?
From Exxon- Mobil:
Here's Valero's and Sunoco's problems:
More bad news from Total: (France):
As fuel retail prices rise the amount of fuel sold diminishes placing an upper bound on refinery returns.
Here's a shocker!
There you have it, the Great Economic Meltdown in one sentence:
"Major ______________________ see __________________ margins shrink on higher (real) crude costs, lower (real) product prices!"
Refineries process fuel directly so the shrinking margins and declining profits are clear. All businesses process fuel in some form or other and the rising input prices cause profits to vanish. No profits, no business. When crude processing margins shrink sufficiently more refineries will close and there will be shortages.
Coming to a gas pump near you!
More and more shut-down gas stations near me---
fantastic, love it!
Don`t care whatever the future brings as long as there is grass growing in the cement of those abandoned gas stations.......
6-digit years worth carbon released into the atmosphere in a meagre 3-digit years.
Is it inevitable that a significant part of the remaining oil be produced, burnt and further heat up the planet or if the collapse will send us back to stone-age, allowing the vegetation to take over? Will humans remain? I can't wait to see that day!
But much before that, our world view will shrink. To me, there is certainly a day when theoildrum.com will cease to exist.
I just hope I'd manage to "survive" to witness the grass coming back - its worth one's life, isn't it?
Cars and many of our other manufactured products are not part of the basic raw material extraction process. They are really luxuries.
Given how distorted our financial system is by debt we really don't know if our basic industries are fundamentally viable. I don't think anyone disagrees with the concept that as a resource declines EROEI declines. Regardless of how you measure it EROEI intrinsically declines for a resources thats in decline. The simple example is a water well drawing water faster than the aquifer is refilled the food energy produced from using that water for agriculture is pretty much constant but the energy needed to extract that water increases.
The key is at some point EROEI makes a system unsustainable at any price as your return on investment does not justify the expense.
This result flies in the face of simple economics which claim rising prices will spur development and curb demand leading to a new equilibrium price.
Whats left out of course is that these rising prices may not result in short term profits high enough to justifiy expansion using cash flow or profits alone especially if the true long term profitability of a process was mistaken and too much past cash flow was treated as profit. The simple case of the water well where the farmer does not save to drill ever more and deeper water wells eventually of course he does not have the cash to do so. His total water production and thus food production declines and the next year he has even less money. Perhaps food prices rise because of falling food production but unless its enough to allow him to drill enough wells to overcome his earlier declines and expand then it does not help. This is important because since we assume he did not save for a dry day then he needs a huge increase in prices simply to get back on track.
Now this is of course bad and you can see its a precarious situation and of course obviously longer term depletion remains a problem however we do have magic spells that allow us and out.
The magic is called banking and the bankers come riding to the rescue. They take a cursory view of the situation see the cash flow and offer to lend the farmer millions of dollars to expand his water wells. A bunch of new wells are drilled prices of course moderate a bit but production expands more than cover the fall in prices and everyone is happy. Problem is of course the farmer is not really making any more money and certainly not saving because he is now paying his loan to the banker.
Perhaps later on before the first loan is payed of the situation becomes problematic well no problem more loans more wells and everyone is happy of course the outstanding debt is even larger. Heck maybe he does it too or three more times.
The problem is EROEI and money are easy to understand only in the case of no debt. The financial world is tightly coupled to the real world and even if mistakes are made it just means prices increase until the system rebalances. At some point it becomes obvious that depletion is and issue and true substitution and or demand destruction via famine balance the system.
However once you throw debt into the picture things get very murky and the relationship between the basics of staying alive and money get complicated. On top of this the Banker does not just lend money to the farmer he also lends money to the towns people to buy food or start other businesses say a water well drilling company to buy eventually buy food. Rather obviously by lending money to both consumers and producers he keeps prices higher and thus inflates ensuring his loans are paid off eventually. And hopefully just as obvious as long as people are willing to borrow he is willing to lend for a price.
At this point everyone is so used to working with bankers they don't even know how to do basic math. They literally cannot do the simple math required to see if a basic industry is viable without debt. If its not viable then its not viable no matter what tricks the bankers play.
Eventually of course the banking tricks fail but at this point the system is so far from equilibrium there literally is no path back or forward. In the case of the farmer he has so depleted his water supply that when the debt starts defaulting either with his customers starting or himself then the system collapses.
The situation with oil is obvious however wind is less obvious. The reason is of course wind projects are piggy backing on the financial system designed to support cheap energy flows from oil i.e they are leveraging our oil based banking system and fiat debt.
The only real way to create a new basic industry is via vertical integration and cash not a single bit of debt is used. Then you can do the fundamental accounting and see if it cash flows for real. If it does it does if not then it does not. Since you manufacture every single part you control all the input costs of money and energy.
The easiest way to figure all this out is to skip to the punch line or bottom line whatever you wish to call it.
There is only one single source of energy on earth thats fundamentally viable.
Wood Charcoal.
I leave it to you to connect all the dots and do the study required to understand this. It does not mean that other approaches don't have roles but the intrinsic long term basis of energy for society is wood charcoal. Nothing we do changes this.
Whats really funny is the discovery of fire at the dawn of humanity even before our own species came into existence is what differentiates us from all other living creatures but what we fail to understand is its all that does. There is no other discovery to be made once we learned to control wood fires we were done. Eventually I won't be the only one that understands why this is true.
I sure do enjoy reading your posts memmel. This was a really good one.
I think I intuitively understand and agree with your wood charcoal statement however would love to hear you expand on it some day.
Cheers.
Cars need to be serviced every 5000 miles or so. So that is roughly every 100 hours or thereabouts. And that is for a product which has been through a 100 year or so development cycle.
Things break. not rocket science.
WeekendPeak
Cars need to be serviced every 5000 miles or so.
They really don't. They need preventive maintenance, which is very different from the mean time between failure. Further, the intervals can be much, much longer than that.
FWIW, EV's need much less maintenance: Jay Leno's Baker Electric is still running 100 years later, on the original battery.
When Mack and Catepillar start building the gear boxes they will be essentially trouble free.
This company ChapDrive is jumping to the next level - NO gearbox for WTs
Best hopes for Gearbox-free nacelles.
More American style of thinking from Norway -
There is given a concession for test turbine in Øygarden (western Norway)
The Sway-system discussed on CNBC
These people have ChapDrive beat: http://www.northernpower.com/
They already have commercial direct drive (gearless) turbines in the market, and are scaling up: http://www.northernpower.com/utility-wind/the-product.php
(you should see the size of the magnets!)
Rock, do you think that the small independents will survive? Will we see only the NOCs and the major IOCs (with excess capitol) survive the next few years, with the few remaining little guys relegated to very small plays and stripper wells? What effect will this have on domestic production?
Ghung -- I suppose it's at least a multi-part answer. In the US the very small PRODUCTION operators will last until their wells completely deplete. These guys do very little if any drilling. They keep the stripper wells commercial by sweat equity for the most part. A well breaks down during a low price period they just let it sit. Prices run up and they get it back on line if possible. This group depends upon acquiring new "old" fields from the next level up the food chain. Thus as their existing wells peter out they need more marginal producing fields to perpetuate themselves. They may be small individually but they are the backbone which allows the US to be one of the largest oil producers in the world.
Now let's jump up the food chain one level: small DRILLING operators. Basically like us and most other players who aren't public oil companies. Our survival falls on two factors: availability of prospects and capex. While there are fewer and smaller domestic fields left to find, they are still out there. We can find them if prices are right. Won't change PO to any significant degree IMHO but the effort does add significantly to our economy. But the lack of capex seems to be the big threat at the moment. As I mentioned elsewhere given the current price of oil/NG and the large number of quality drilling projects available we should have a much higher rig count today IMHO. As I mentioned to Gail all I can imagine is that the general lack of capital is holding the oil patch back. Though we're one of the few companies aggressively drilling there's not one operator I've talked that doesn't want to be in the same mode. Oddly enough the smaller drilling independents may be seeing a premature ramping down not from a lack of drilling opportunities or attractive oil/NG prices but from a lack of capex.
I offer the public oils separately. The integrated majors, like ExxonMobil, exist by shear momentum. Can't describe it any other way. There are very limited opportunities for them to do better or worse in the short term. The big public independents, like Chesapeake and Devon, exist in a very strange world. Look at their evolution in just the last few years. Modest growth and then BOOM! ...Devon makes a big splash in the Deep Water GOM. And now they have to sell those properties just to keep the lights on. Chesapeake is just coasting along and then BOOM!... they get all fired up in the shale gas plays. Now they're chocking on debt and the CEO is being sued by shareholders over excessive compensation.
NOC's : might seem simple but again I'm not sure. Yep...they've got the grease. But they also have a pile of debt, a growing and ever hungry population and a potential for political instability. Brazil probably has the cleanest slate. But they have a huge capex requirement as well as a domestic population looking for more gov't support. Mexico probably has little chance to recover. And one can paint any extreme future for Hugo and Venezuela you like. But one can't postulate the future of any NOC without considering future involvement by the Chinese. Again, paint any good/bad picture you want in this regards.
I can't really offer a confident picture of how such companies go forward as we slide deeper into PO. Other folks will offer all kinds of predictions. But I would question them as to how they had predicted the last 5 years or so. All I can think of is the old Chinese curse: "May you live in interesting times."
Rockman: I'm not a geologist or a financial guy, but I have an idea to throw into the mix:
As I understand it, capex is real money that can be transferred by electronic funds transfer to a demand account where it can be spent by the managers of a project. As such committing funds to an oil/NG project competes with paying premiums on credit default swaps (CDS) to make a killing on the impending default of Greece. The competition for your example project is not other oil/NG projects but a pure financial play. Those also require 'real' (electronic) money which is in very short supply, apparently.
Moreover, anyone holding real money and not involved in the Greek financial play is surely waiting to see how that unfolds before making a commitment to anything.
As I write this, I'm coming to believe that the Greek play won't be the end of it. There will be a great deal of money lost by some in the Greek play and the winners will create another financial play. It will all proceed until Goldman Sachs has -all- the real money and everyone else has debt on which they must pay interest to GS. (Why GS as winner? They are front running everyone else.)
gekk -- If I follow you, yes, I agree. Oil/NG potential capex is heading elsewhere. Not sure where though. But if a viable industry with multiple finacially attractive opportunites in a world of diminishing energy resources can't compete for this capex how can the other industries that fuel our economoy complete and acquire those funds? That's the scary question in my book.
The money is there, it's just not being invested because of fear.
Welcome to the twilight zone where the financial economy and the real oil burning one have decoupled.
Where GDP can grow even as real unemployment levels increase.
Where banks can make huge profits while not only being insolvent but bankrupt.
Unless you worked in the upper echelons of Enron then this may be new to you.
But one has to suspect the Enron guys have to be a little bit pissed that the US Government stole their playbook
and are using it without compensation.
In 2008-2009 a popular saying was
We are all subprime now.
For 2010-2011 I'd like to propose we adopt.
We are all Enron now.
For 2012 - 2013 I propose
We are all hungry now.
And for 2014 onwards to show a new upbeat out look on our new society I propose a few different possibilities.
Cannibals are people too.
Cannibals are humans from humans for humans.
Or perhaps a golden oldie.
Soylent Green is people.
Goldman Sachs is plump, succulent, nutritious people, nhom, nhom, nhom...their babies are even tastier.
Yeesh. I hate the fatty necks and having to spit out those gold fillings.
Let's say I offer you one heck of a deal. A 50% return on investment! The one catch is that the investment will take EVERYTHING you have in your possession now and all the money that will come in over the next year.
As attractive as the ROI is on this investment, you'll probably have to pass it up. Not eating for a year is not going to be a feasible option, and there are probably some other expenditures you are going to want to maintain in order to have a halfway tolerable lifestyle.
This little thought experiment provides the answer to your question. Attractive as capital investment in FFs may be, as an economy shrinks the marginal utility of sustaining other essential demands, like eating, still exceeds the marginal utility of the gains that can be had from the capital investment. National economies can be thought of as a pie, and various slices of the pie get allocated to different things. The sizes of the slices can change, gradually, to some extent, but the larger that one slice - like FF exploration and development, for example - becomes, the more the other slices get squeezed. The harder they squeeze, the harder they resist further squeezing. At first, the easy fat gets squeezed out, but eventually, you start getting close to life-or-death issues, and continued squeezing becomes very hard to do.
Attractive as capital investment in FFs may be, as an economy shrinks the marginal utility of sustaining other essential demands, like eating, still exceeds the marginal utility of the gains that can be had from the capital investment.
The world economy is still growing - even the economies of oil importers are growing, though slowly.
The scenario above requires that the economy shrink by, oh say, 50%, so it doesn't explain the lack of investment in oil drilling discussed earlier.
Nick -- As a specific example in the mid 80's with the world suffering a huge recession with $10 oil and $0.90/mcf NG I drilled a shallow NG program in S. Texas that returned over a 100% ROR. Two reasons: hit 23 out of 25 wells. And drilling costs were very low.
So back to my basic question: With multiple good drilling deals readily available and oil/NG prices more then sufficient to provide very attractive returns why aren't there more rigs running?
Because people are afraid to invest.
We just had a major bank panic, and banks and other investors are still nervous.
There's a classic investment dictum that you should invest when others are scared, when "there's blood running in the street".
One of the reasons oil shocks cause recessions is that they scare people, and people wait to invest (in new vehicles and other things) until things seem more stable. Pure fear, not E-ROI, or resource limitations, just fear.
You have an investor for your current operations whose smarter and braver than most...
We're very lucky: we have an owner who has made a very good living from knowing how folks react to the scares you mention. Rather predatory but such is life.
Rather predatory but such is life.
He may seem predatory, but chances are good he makes life better for everyone. You see, when people panic and sell at the bottom (whether it's oil ventures, homes or stocks), they sell at the very worst price. "Vulture" investors provide demand, and raise the prices that panic sales sell for.
Rather than "vulture", think angel investor...
Not to worry -everything will be all fine- it only takes some willpower....
Norwegian Jorgen Randers, one of the authors of "Limits to growth", was chairman in "The Norwegian Commission on Low Emissions (2005)" and they concluded that at the cost of 1% of GDP you can use existing technology to avert climate change
This 1%_of_GDP claim was taken more or less at face value in Norway at the time and no one challenged it ... sample link in English
So- this Climate-issue is a non issue , all in all. For every 100 monies that passes through your fingers- throw 1 in the Green Box- case closed. The only thing you have to sacrifice over time is that your Porsche Cayenne has to be switched for a Tesla Roadster or a Hydrogen Monster yet to be constructed.
Frankly I think Mr Meadows had a much more realistic view on the future than his Norwegian fellow, who never impressed me in public appearances in Norwegian media.
I can't see much possibility of technology averting climate change, especially if we are dealing with debt unwind and crash at the same time. I think the 1% of GDP ratio is just fantasy.
Agreed- My stance on the 1%-thing is also Fantasy Wonderland. I'm not sure if that came across- I probably forgot some Bolded Snarkanol tags there.
"Green fuels cause more harm than fossil fuels, according to report"
http://www.timesonline.co.uk/tol/news/environment/article7044708.ece
Not only that - German biodiesel plants face closure on low sales
... alot of bad bio-news in that article.
Wasn't Randers the doomer of the 3 who wrote Limits to Growth?
Gail, there was some discussion yesterday on Nate's post regarding Credit Default Swaps and Credit Derivitives. I posted this:
http://www.money-zine.com/Investing/Investing/Credit-Default-Swaps/
While it is hard to understand these "financial instruments" and getting real numbers is even harder, the consensus seems to be that outstanding OTC CDS totals and derivatives have ballooned to perhaps over a thousand trillion dollars. This bubble is clearly hyper-inflated and it seems to me that if/when it bursts, it's game over for credit, globally. Any thoughts?
We have problems even without CDSs. Add them to the mix, and we have a choice of what goes bad first.
Gail, I don't say you're wrong. But there is a good case to be made for keeping a separation between the strictly physical and the financial sides of the issue.
The physical side draws a box around what's possible, but it doesn't say what will happen within the box of the possible. A large part of the uncertainty certainly arises out of the financial.
Longer term, the rising price of oil, and it will rise because it cannot be drawn out of the ground (for very long) at below cost, devalues the entire infrastructure of industrial society. Massive debt, and the massive amplification of that debt thru derivates, guarantees financial chaos on a scale we cannot perhaps yet imagine. That I believe, is already baked in.
But even there, there is the military side of the equation which drowns out the already great uncertainty on the financial side. When who owes whom ['how' edited out] what starts to overwhelm, it then becomes who grabs what and can hold on to it. And this could even override what I said about the cost of oil. Some oil might be drawn out of the ground at almost whatever cost in an acto f desperation. Think of Germany and coal-to-diesel (or whatever it was) in WW2.
Anyway, a good little video.
Let's see, Dave:
Climate change: baked in.
Resource depletion: baked in.
Financial chaos: baked in.
Over-population: baked in (for now).
Political impotence/disfunction: baked in.
By golly, that's one helluva doomer cake.
Can I get a slice of that a-la-mode with some resource war ice cream?
A little Black Swan icing perhaps?
More financial doomer porn:
http://www.economyincrisis.org/content/will-us-economy-recover-time
Dave,
Thanks for the best 'food for thought' I've had here for a long time.
Smart stuff.
Actually, Gail, in the original Limits to Growth (and in Jay Forrester's System Dynamics that the models were based upon, the financila system was considered in a very broad way as capital investment.
As I recall, no form of capital investment could "save us" and, in fact, served to make the situation worse, not better. In 1972, the original documents suggested that steady-state conditions could be achieved with a number of actions, one which was reduction of capital investment by approximately 40 percent (if I recall correctly).
Of course, in 1972, just as in 2010, that would seem laughable to people committed to the growth of everything including the capital and financial system. We may reached "natural" limits which, according to the various model runds resulted in fast and slow collapse scenarios. Like "resources" (oil was not singled out but was part of the resources pool), the issues surrounding finance and debt may have reached a limit envisioned in a different way than the very generalized manner of the original approach.
The LTG model assumes a hard limit to resources.
In that model, the faster the growth the faster the crash. In that case, the higher the capex, the faster the crash. That's just built into the model
The LTG model doesn't really tell us much about the real world, where resources have fuzzy limits, and a wide variety of substitutes, and where some resources, like solar energy, iron, aluminum, silicon, carbon, etc, have no practical limits at all.
The limit is determined by how much people are able to pay for resources, which is really a demand limit based on how much benefit the resources supply, and how much "overhead" needs to be funded to keep society going.
People just think the price of resources can go up indefinitely--it is not really true--there really is a price limit. We have managed to circumvent this price limit by borrowing to keep demand up, but now this artificial demand is going away, and we will be finding out that the price limit is lower than we thought.
Or much higher depends on how things go. I disagree that borrowing kept up demand. I don't think thats true. A simply example borrowing has declined dramatically over the last year but oil prices have risen therefore as of now this statement is wrong. At the minimum simply to simplistic of and explanation. As far as I can tell there is no real limit to oil prices. They can rise until the civilization itself collapses. I don't consider that to be a price limit simply the collapse of the civilization from loss of a critical resource.
Its no different from say a regional famine where the price of food can skyrocket till financial transactions for food simply break down and the region falls into chaos. After that in general the price for food is often your life and the life of your family which is effectively infinity for the individuals on the losing side of the transaction.
People just think the price of resources can go up indefinitely
I don't anybody is suggesting that.
We have managed to circumvent this price limit by borrowing to keep demand up
What do you mean "we", White Man?* Just because oil importers are borrowing from oil exporters doesn't really say much about overall debt.
This whole idea of borrowing to circumvent physical limits doesn't make sense to me. If you run out of energy, no amount of "borrowing" will help. Debt has gone up, no doubt, but one needs to look at who is borrowing from whom. Much borrowing is by governments from their citizen's): debt is related to Keynesian fiscal strategies, not energy.
*This is an old joke based on the US "Lone Ranger" radio/TV program: the Lone Ranger and Tonto are surrounded by attacking Indians, and LR turns to Tonto: "We're doomed, Tonto". Replies Tonto: What do you mean "we", White Man?
It seems to me that there is a big difference between earned capital and debt-based capital. What they didn't consider was debt based capital.
To me - this has been the biggest reason for taking AGW seriously. The reason a lot of people don't think of CC as a serious problem seems to be that MSM keeps talking about inches the sea is will raise because of CC. It is hard to take that seriously - afterall the waves are many feet in height at times. If we want people to act on CC - we should keep talking about water & food problems that CC will bring.
To me, it really depends on how bad the crash is, and how soon it is. If there aren't many people still around, does it really matter if sea level rises? The wild animals can move to an area more to their liking, with much less interference from roads and other infrastructure than today.
Also, what makes us think we can reduce usage by more than a crash would result in reduced usage anyhow? Perhaps if you are imagining a very slow decline, then we could somehow engineer a faster decline, to save on CO2. But this assumes some fairly optimistic views of what the future might be like, in the absence of mitigation.
The real problem is that isotherms are moving about 30 miles per decade (poleward) and the fastest that species will move to a new permanent habitat is about 4 miles per decade. That means that a lot of species will go extinct as soon as they can no longer cope with the climate that's around them.
Past warming events (like the Paleocene-Eocene Thermal Maximum) happened less than 1/100 of the speed that our current warming is happening. As a result, it's likely that instead of many animals/plants benefiting from new habitat, they will go extinct.
Huh? That depends mightily on the species. For instance it is my understanding that earthworms are moving north about 1 mile per decade. OTOH we've seen many invasive species move tens of miles per year.
I'm having trouble coming up with any vertebrates except _maybe_ box turtles that would not easily migrate 30 miles per decade. It would be a problem for some plants I agree. Others, like the ones whose seeds travel inside birds, also not an issue.
Absolutely correct.
The range in adaptation rates essentially defines the relative abundance of species as I wrote in a recent TOD post. http://www.theoildrum.com/node/6255 Things will shift but not in real time.
This is a fascinating topic.
Aren't new species going to evolve to take the place of the ones that were lost?
I thought current thinking was that some of the past changes in climate took place pretty quickly.
"Aren't new species going to evolve to take the place of the ones that were lost?"
No.
The place of the ones that were lost is not taken, because it is no longer there.
Yes, new species are always evolving. And basic speciation can happen fairly quickly. But major radiations of groups generally takes millions of years, even in instances of "explosive" radiation. It isn't anything that that is measured over the span of a few human lifetimes or even over many human lifetimes.
The average "life span" of a vertebrate species is approx. two million years. There are species that go bust well before this amount of time and there are "living fossils" which have changed very little for hundreds of millions of years e.g. the coelacanth.
Homo sapiens is relatively young as species go. If we soon implode by our own doing or later, by "natural" processes, makes no difference to planet earth. Even mass extinction events are normal events, geologically speaking.
I was just reading about a spider that they found in China that is said to be over 100 million years old and looks/is almost the same as today's spiders that are found in the desert southwest. Looked like a tarantula type spider. They said that in the past these spiders covered a larger area then today. Must have a very good design to last that long!
Great. It's bad enough that cockroaches can self-reassemble while you're not looking, now we've got 100myo spiders. Why do the creepiest things on the planet hang around the longest?
Past changes that took place quickly on geologic time are still dwarfed by current rates of change. Ballpark figures are past rapid transitions were 1/100th to 1/1000th slower than current pace of climate change. For example, changing 6 degrees C in 10,000 years would be very fast change. If 6 C happens in a century...you get the picture.
When change on the order of magnitude and rate as we are seeing now has happened in geologic history most species go extinct and it takes 10s of millions of years for pre-extinction diversity to return.
The change imposed on agriculture is quite extreme too. Farming systems would need to adapt/evolve at tremendous rates, and it is difficult to comprehend the socio-economic system having a sufficient rate of innovation and diffusion to accomplish this. Many of the proposed technologies don't exist yet, such as plant species able to cope with scenarios for heat waves and water stress and still yield at double or triple current varieties. It is "wave the magic technology wand" and hope for the best at this moment.
This is why I focus on discussions on the "demand" side (I hate that term) and resiliency instead of pushing production ad infinitum. The production slack in the system is still theoretically massive, and alternative farming systems that synergize with, instead of abuse, nature have much greater resilience and still yield "enough" if we could wrap our heads around such a strange concept :)
I do suspect there will be human intervention to move seeds and animals northwards. I don't know how successful they will be. Its probably easy to plant new trees, and move the larger sized animals. But I suspect the real key are the vast numbers of little critters we ignore, such as soil bacteria, yeast, mold etc. Much of these probably depend upon the slow conditioning of soil chemistry. I can imagine dumping a few truckload of earth into a virgin (to that soils bugs/germs) region won't really do the trick.
I don't know what you mean by crash. I go with Greer's idea of slow catabolic decline rather than crash.
Crash doesn't give enough credit to the will of the entrenched governments and people all over the world to fight back and not just throw in the towel. I'd like to see scenarios developed using game theory that predict a hard crash, rather than a slow decline.
Don't be misled into thinking that Greer's theory doesn't allow for fast drops along the way down, drops that can be quite large indeed.
I think it's fair to say his thinking and mine are very close:
http://transition-times.com/2010/01/07/the-end-of-retirement
Dennis Meadows, I could'nt put it better myself..., though I've tried.
Dennis Meadows is a rare wise man.
I watched one of those 'foodie' programs at the weekend where the reporter was wondering through a Caribean market. Clearly the people where not wealthy but the food was fresh and bountiful and the presenter cooked a barbeque int he backyard for a large group who all looked pretty happy...
...and I was thinking we don't really need that much to be happy -good friends, clean water, food, a sense of purpose.
In our continous quest for growth we are depleting the planet of resources that will enable our children and their children these basics, piling on issues that are gauranteed to make life hard.
Nick.
The only real problem with being poor is medical care. The next big problem to some extent is if you wish to get and education.
Intrinsically I've never seen poverty to be that bad and I've lived in some poor areas. In general the basics are the same regardless of income level. If you own your land and or house even if its a mud hut and you have a means to feed yourself then lack of money is really not and issue except for medical/education. If your poor and pay outrageous rents and a lot on food then your not happy.
In general these days clothing is not a huge issue outside of say shoes depending on climate. My point is taking care of food/clothing/shelter is key to about 90% of happiness regardless of income level.
Obviously the more the poor need money for food clothing shelter the less happy they are. The poorest people by any measure are those who rely not only totally on money to survive but are also forced to take on enormous debts consisting of a big chunk of their income for 30 years just for shelter. These debtors are the most impoverished group.
So it depends on how poor you are and I suspect your starting to realize that many people who your think are poor because they are not debt slaves might not be that poor after all.
A large nice comfortable cage is still a cage.
"The only real problem with being poor is medical care"
I think its a little bit bigger problem than that.
"More than 1 billion hungry, UN agencies report"
http://www.wsws.org/articles/2009/oct2009/hung-o15.shtml
Well to some extent I was simply stating that advances in medical care and the green revolution are blamed for over population.
I'm not saying they are not but there is a lot more to the story. 1:6 for hunger is not too shabby given how our society works.
Actual medical care in most third world nations is almost non nothing for example in a lot of places with high populations.
Many places with "happy" poor populations are not big users of green revolution technology since they cannot afford the fertilizer.
Somewhere in our sweeping generalizations we have lost something.
And back to the point in the end the lack of medical remains the issue in poor regions that have not stressed their carrying capacity to the max. Certainly many places have other problems but if you could get decent medical and be poor then a lot of people would be very happy. Perhaps they don't have much but they are well fed and get decent medical care. Given time and the incentive most places eventually build decent enough housing although here as we know earthquakes are a big issue for many methods.
We are not talking about anything close to US affluence but your basic "happy" third worlder and a lot are if I was going to make a WAG at the number of content third worlders I'd have to guess 2 billion at least if not more.
But once you leave the extremes then it gets back to my original comment that Medical care first and thence access to education become the pressing issues not so much money etc. Very often the need for money can be traced back to trying to get it for ... medical care.
This video appears to be a fairly condensed edit of a longer interview- does anyone know if the longer version is available?
This is all I am aware of. It isn't very long.
He has a 47 min. video out on DVD, for $99:
http://www.pegasuscom.com/BookDetail.asp?BookQuery_Action=Find('ISBN','VONE003DI')
There is much evidence to say that we are already in overshoot.
And, sadly, our growth (impact and population) has not grown in a linear fashion, but exponentially.
"There is much evidence to say that we are already in overshoot."
Oh, I think we really need to study the issue a whole lot more. Discuss it, Model it, Think on it for another 10, 15, 30 years then maybe we will figure out if there really is a problem.
Sarc out.
Recently a German think tank expected that by 2030, so about here, oil will be half of current levels.
Is he talking about the Energy Watch Group?
"According to the report by Energy Watch Group (EWG), world oil production peaked in 2006, much earlier than experts had expected, and will fall by half as soon as 2030.
Its prediction that production will fall by 7 per cent a year comes after oil prices set new records almost every day last week, on hitting more than 80 dollars per barrel (dpb) on Friday.
...Global oil production, which is currently around 81 million barrel per day, was expected to fall to just 39 m by 2030. Significant falls were also predicted in gas, coal and uranium production as energy sources are used up.
Fell warned that the world had to move quickly towards the massive deployment of renewable energy and to a dramatic increase in energy efficiency. "If we did all this we may not have an energy crisis," he suggested."
http://www.arabicnews.com/ansub/Daily/Day/071023/2007102307.html
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How does that study compare with Aleklett, projecting a decline of about 11% in total liquids, adjusted by BTU? http://www.aspo-australia.org.au/References/Aleklett/20090611%20Sydney4.pdf page 40
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without cheap diesel fuel, you can't pump up water for irrigation.
Much irrigation does run off diesel, but some pivot systems run off the grid* and increasingly they're powered by photovoltaics. http://farmindustrynews.com/mag/farming_super_solar_pump/
*which, in the US, faces very little danger of energy depletion; uses very little oil; and is moving in the direction of wind, solar and nuclear power (from a slow start, but with increasing speed).
It seems likely to me that Dennis Meadows is talking about the Energy Watch Group report. My impression was that the Aleklett number was a "no more than" number--not so much a real estimate, as an estimate to box in future production, using a simple method that might be acceptable to skeptics, who thought no decline was likely.
I think if you look in most of the world, diesel predominates for irrigation.
My impression was that the Aleklett number was a "no more than" number
Look at page 42 of the presentation - we see that this projection is precisely in the middle - between the "Standard Case High End" and "Standard Case Low End".
Given that EWG was pretty far off on the peak (both amount and date), we have a good clue that they're unrealistic.
diesel predominates for irrigation
Sure, but PV is cheaper even now, and it's available and being installed. It seems unrealistic to suggest that rising oil prices will interfere in major ways with irrigation (of course, these modest investments will be harder for poorer farmers with less capital or credit - I wouldn't worry much about OECD or Asia, but Africa will have more problems..of course, Africa has pretty good light....).
Ultimately, of course, farmers are energy exporters: in an energy scarce world, they'll do fine.
That's a surprising statement. Many farmers are in debt up to their gills and have to work outside the farm to continue operating it. Farms and farmers are in bad shape. If a farmer loses his job, the farm won't be far behind. Plus, they were getting hammered when input prices were rising and extreme crop price volatility (2007/2008) was making financial planning difficult. They were trying to plan when to buy inputs and in many cases overpaid, sucking out any spare cash they had.
Farmers are not going to do fine. I suspect on the one side people won't be able to afford the food and on the other the farmers are going to go out of business in droves.
That's a surprising statement.
It shouldn't be.
Many farmers are in debt up to their gills and have to work outside the farm to continue operating it. Farms and farmers are in bad shape.
True. A large percentage of farmers have been under enormous financial pressure for centuries. Half of all farmers are doing above average, and half are doing below average - the 2nd half is going out of business. That's how we got from a country of farmers to a country where only 2% of the population is on the farm.
Farmers are not going to do fine...the farmers are going to go out of business in droves.
Farming as an industry will do just fine. It will continue to be a cutthroat competition, and some farmers will continue to go under.
I suspect on the one side people won't be able to afford the food
That may well happen, if there's a sudden push to biofuels. That will increase farm income much faster than farm expenses. That would reduce the % of farmers going under, but you'd still see a steady stream of farmers being forced out. That's how a mature industry works - it stops growing, and increased productivity means that fewer people are needed, and they get forced out. That, incidentally, is part of the reason food prices have been declining, well, forever, and why they're still very low, despite the recent bump upwards.
It seems that I am anticipating higher rates of change in the farming sector than you are.
Stuart Staniford's articles are useful here:
"I think the conventional peak oil community critique of agriculture (that it depends on fossil fuels and will fall apart in the face of peak oil for lack of fossil fuels) is almost certainly completely wrong. I think what is likely to happen instead is that growth in biofuel production will make agriculture more profitable not less, and that farmers will be able to outbid others for the inputs they need (fossil fuel and otherwise). So food prices will increase, but farmers will do better.
I made this case at length a couple of years back in The Fallacy of Reversibility, and intervening events have tended to strengthen my conviction."
http://earlywarn.blogspot.com/2010/02/food-security-challenge-of-feeding...
"The Fallacy of Reversibility" http://www.theoildrum.com/node/3481
You could be right. As a current small farmer and former organic farmer (though I've changed my methods little), it has hurt to question my basic assumptions.
Since the beginning, it has been an article of faith that industrial agriculture is going to collapse, to be replaced with something retro.
All it will take is a simple requisitioning program to ruin that fantasy.
Like hypovolemic shock in the human body, when the critical flow of fluids is breached, the goodies flow toward the essential parts--vital organs--to the expense of the extremities.
Existing industrial ag infrastructure = vital organs.
Small local outposts = extremities.
One can still learn to feed oneself, but one will get little assistance.
Now we just need electric combines (or natgas perhaps). It wouldn't hurt to invest more in grid upgrades and expansion.
Hi Ghung,
It seems to me that it might be just barely possible to build batteries that would run a combine by switching them out every hour or two-but i can't see it happpening anytime soon.Big machines like a combine need a big engine, and not just for acceleration, like a car, which may need a hundred horsepower to merge and only fifteen to cruise.A combine with a three hundred hp engine will be using most or all of those three hundred just about all the time.
Ng , if the tanks are quickly interchangeable , would work just fine.The truccks hauling the grain away could also shuttle the tanks from the field to a refill station.
But I don't think fuel for thier machines is what will ruin most farmers.
I don't know exactly what Aangel's thinking is, but in general he is right about fast change and not for the better on farms.
The easiest solution is to fuel the combine with RME or an equivalent biofuel.
A more roundabout solution is to lower the need for mobile motive power production by collecting all the straw in the field and move it to a fixed combine. This is the solution used before mobile combines were invented, the fixed combines were powered by a small steam engine or the farmers electrical motor that were moved around between the combine, sawmill, etc. If I remember right about this midway step in farm mechanization were the cutting and bindig machine technology imported from USA and the pulling of those machines and the transportation to the fixed combine were done with horses.
I agree with both and expect that more of farmer's time and energy will go into producing their own biofuels.
Statements like those Dennis Meadows give are easily countered as "conspiracies" and "doomsayer talk" by those who want to cover up the inevitable. There even are thousands of "optimistic Alis" who never believe this can happen (....a downfall after the peak?), and Daniel Yergin will of course know what to say in order to calm down the public: "No Peak in Our Time" (remember Chamberlain in -38?)
The one thing Dennis said that (I think) can counter all this was his example about California: We all KNOW with 100% certainty there will be a big earthquake somewhere along the San Andreas fault, but we do not know WHEN. The same is true for Peak Oil and peak everything else.
Still, the public, including your neighbours, collegues, friends, and closest relatives, will think you are insane if you point it out - evidence and all. They will look out on the street, and since there is no sign of chaos or collapse there, they simply will not believe it.
Yet China seem to be taking this seriously, and are preapring for the things that are coming:
http://www.chinadaily.com.cn/china/2010-03/01/content_9521265.htm
Yes, but it is not like most of us west coast dwellers are worried about earth quake. I don't know of anyone who even has earth quake insurance ...
Lucky you. Here in San Francisco, we had to have earthquake insurance as a condition of our mortgage. We've done sheerwall retrofits to reinforce our ground floor, and as we've remodeled over the years, we've had to have remarkable amount of structural engineering studies that resulted in various portions of our house pretty seriously overbuilt. We replaced our brick chimney with a metal one; our water heaters are strapped to the wall; we keep food and water on hand that will last us two weeks. Each year I sign forms at my kids' schools about what my children should do (walk home or wait at school for a parent) in case of an earthquake. It is something that is talked about and prepared for, at least to some extent.
I am absolutely sure there will be a large earthquake in the Bay Area in the next twenty years. How large? Where will the epicenter be? Will our earthquake codes hold up to it? These are the unknowns.
In San Francisco we are much better prepared for an earthquake than for peak oil.
In my experience most people instinctively understand that, as fossil fuels are non-renewable, we will run out sooner or later, possibly not that much later. It is just practically impossible for many to grasp how dependent we are on them. A lot of very intelligent and educated people I have talked to about these things believe technology will save us, i.e. "they'll think of something".
Come to think of it, only "professional cornucopians" seem to claim we won't run out at all, or that running out is not at least potentially a big problem. (And by running out I don't mean using every last drop but rather not having enough to sustain any kind of industrial civilization.)
We are the "they" whom we are waiting for; except "we" don't know it yet.
This whole thing was really good (I read the transcript; may watch the video later) but certainly not something to make me feel hopeful. One part in particular jumped out:
The longer we wait to do social measures, like birth control, or voluntary simplicity, the more likely it will be that physical measures will cause this decline.
Population control alone, at least of the extent needed, just seems like mission impossible. There are the people still having 7 kids or even the ones with 20 like that crazy family on the teevee. I know some of these people and I love 'em to death but they just don't have a clue that there's anything wrong with it and it's no use trying to point it out. This is so ingrained that by the time most people figure out something should be done, it will be way beyond too late.
I like reading this site and sometimes think I'm getting some good ideas. But I'm in my mid-fifties and often find myself feeling that I'm too old and tired to do anything worthwhile to prepare but too young to just give up. Lately, I've just been figuring or perhaps hoping that I'll be dead before things get really bad.
I like this quote from an interview:
When asked: "You don't have a recipe for saving the world?"
Meadows: "We don't have to save the world. The world will save itself, like it always has. Sometimes it takes a few million years until the damage is repaired and a new balance is established. The question is much more: How do we save our civilization?"
http://www.spiegel.de/international/world/0,1518,666175,00.html
Now you're starting to sound like a geologist Ghung. I know it sounds a little jaded but I've studied the fossil record where millions of species have gone extinct. So a few more go extinct in our life time. I've actually picked coffee beans growing in fertile soil that was once a roaring river of lava. I've stood on coral reefs in the Rockies Mountains that once grew in a warm shallow sea there. So some coast lines retreat inland a few dozen miles.
As you imply, Mother Earth just sits backs, smiles and waits. I don't ever worry about Mother. Our fellow earthlings...now that's another matter.
Yeah, Rock. That's one of the things that makes being human tolerable. I can look up at my mountain and realize there is nothing much we can do that will matter in 10 million years. Maybe then some smart creature (named Rockbug?) will dig me up and I'll be worth something.
"The planet is not going anywhere; we are!"
-George Carlin
http://www.youtube.com/watch?v=dyxuVFzKypU
Little known fact Jussi: George studied geology informaly and thought it was cool. He said something to the effect that anything that didn't give a crap about anything man did had great appeal to him. That's our George. Miss him a lot.
I seriously doubt that a pivot irrigator could run exclusively on solar power at affordable cost. A unit that draws deep groundwater and pumps some distance away at pressure could need 100 kw at $6 a watt with battery backup. That's $0.6 million. Think of loan interest as the fuel cost. Even with the low power solar pond pumping system in my vegie garden I needed to change from an impeller to a diaphragm pump to cope with changing pond levels.
High FF prices will seriously hurt big acre farming through the cost of tractor diesel, pump diesel, urea fertiliser and coal or gas fired farm electricity.
Re coal industry handouts upthread in Australia the aluminium industry has also just renewed contracts for dirty power out to 2036
http://www.heraldsun.com.au/news/victoria/alcoa-smelter-to-keep-brown-co...
Nice comment Boof but obviously you don't understand how we are going to solve the worlds problems.
1.) Reduce the problem to some well defined technical issue.
2.) Show that this company or that company has solved the problem.
3.) Finish by simply showing it then just a simple matter of making the required investment.
4.) The problem is solved. If needed and someone suggests its not go to step 1.
I'll help showing how your questiones are obviously meaningless.
1.) The problem is of course the energy used by the pumps and the amount of water for pivot irrigation.
2.) Obviously you use drip irrigation and I have this link to some startup that has a new pump design that uses a 10th of the energy of traditional pumps.
3.) We would simply have to move away from center pivots to advanced drip irrigation. Once food gets just a bit more expensive the investment money will flow into drip/organic holy agriculture.
4.) Obviously I can solve any possible problem assuming its a limited technical issue that needs "investment" do you really want me to continue ? Keep it up and I'll hex you by calling you a doomer then I don't even have to rebuke your questions with ridiculous assumptions.
DOOMER !!!!
:)
Did you check into a variable sped drive for your centrifugal pump. And do you use a level controller?
Boof, here's how solar irrigation works:
PV panels are connected to high eficiency dc pumps via an MPPT controller. The water is pumped to a tank on a hill or, usually a tower. This happens whenever the sun shines. The stored water is then used for irrigation. Gravity supplies the pressure and the pressure is determined by the hight of the tower. It works the same as the old wind powered pumps.
Our tank is buried on a ridge above our house. Two 80 watt panels power a small pump and on a good day will pump @350 gallons (much more than we use on average). Gravity supplies our pressure, 24/7.
Large scale systems use inverters and grid connect with large a/c pumps. Portable tanks are used to compensate for clouds. One company doing this: http://www.sunenergy.com.au/irrigation-solar-solutions.php
A unit that draws deep groundwater and pumps some distance away at pressure could need 100 kw
How did you calculate that?
Around here centre pivot irrigators pump under a road from a river (Derwent River, Tasmania) then 100-200m up the side of the valley. The ICE powered pumps are about compact car engine sized thus 100 kw but a link above cites 600 hp or 450 kw. The engine size depends on the flow required, the elevation and the over ground distance to the irrigation. I'll leave the calculations to others. Incidentally a river frontage property nearby recently sold for $A8m comprised of $3m for the land and $5m for the water rights.
As it happens just today I'm installing a slightly elevated 8 KL water tank for the vegies. A tank to act as pressure buffer for commercial spray irrigation would need to be larger and sited well above the fields, either a hillside or tower. Perhaps a hybrid/wind solar pumping system is better that pumps both day and night. This is a major expense. The solar panels and elevated tank would change the look of a farm as well as incurring major debt. More likely in Australia's case they will subsidise diesel pumping by extending the fuel tax break.
An ICE-powered pump running at 100kw is going to use quite a bit of fuel! 100kw is basically flat-out for a small car engine, and I reckon you'd be lucky to use less than 12L/100km (if it was in a car).
12L/hr is 288L/day, which in turn is $360 (assuming fuel at $1.25/L), and ends up being $131,400/year.
The interest bill on your $600,000 Solar PV pumping system is $48,000 (assuming 8% interest rate).
It takes about seven and a half years for the Solar-powered system to break-even compared to burning fuel, without and government subsidies (which you can probably get), and without any change in the affordability of fuel.
The difference is that a SPV system requires money up-front (but you then get reliable power for 30+ years), whereas the ICE system requires very little money up-front, but you take your chances with fuel pricing, availability, and affordability.
If you use an elevated tank (or, more likely, a dam) for gravity feed, you could install a micro-hydro setup in the outflow, and recapture up to 70% of the energy you used to get the water into the dam in the first place.
Are you effing serious?!? It's a farm, not a quaint English garden. :D
He is technically correct - at some combination of flowrate and head, you will need 100 kw to pump it.
http://xkcd.com/703/
Thanks Boof, that's good input. Fortunately I'm kinda into rain, myself, why I'm where I'm at, but I looked at Tasmania hard before buying property on the Big Island. How long have you been there?
Since late 2004 ex southern NSW. The weather certainly is weird. Last year we had 1500mm or 60". In the first 2 months of 2010 hardly anything, way less than desert bound Alice Springs which has had 300mm I believe this year as contrasted to to 77mm in 2009. That's why I think even places with historically reliable surface water need to look into groundwater and water storage. Climate change could already be bigger than we think.
I'd move closer to the South Pole (not NZ) but it's all ocean from here.
Aren't you Big Island folks under drought, which is what the US Drought Monitor reports? I had my fill of Hawaii in the 1980s and 90s and chose the Oregon coast instead. But good luck and master da kine.
What I heard for the first time was "voluntary simplicity" stated in that manner. This is the model track we're on--modest acerage, pasturage, fish ponds, wind powered hydroponics for the winter and dryland during summer, passive solar homestead with heat pump and wind with batteries. And a copse for the woodstoves. The plan hires a few and feeds many. And we'll be providing a model for the many small landholders in our region and hope to convert as many as we can.
Why bother with battery backup? Simply pump when the sun shines. Or more likely connect to a wind turbine, and pump when the wind blows. We've been using those ubiquitous old farm windmills for over a hundred years, and they only pump when the wind blows. The crops can get by without contnuous watering -just as long as the downtime isn't so long the soil drys up. Now $6 watt sounds a bit cheap (at least with present technology after balance of system issues, but its not all that far off. And if diesel becomes very expensive the farm prices are likely to rise high enough to allow somewhat more expensive pumping.
A link please to a agricultural solar water pumping unit ?
what crops ? acreage ??
the unit talked about above ...
1.7 kW ... 20 kWh battery bank
"Avg. 200 gallons (757 liters) per minute
24-hour operation from a head of 10-feet or less. The unit can pump from a deeper depth with reduced output."
Some farmer friends saw them at Tulare, but I was told that they are not moving
maybe some day ??
http://www.worldwatersolar.com/2-mobilemaxpower.html
At least a better idea than solar tractors
Panels take up space ... more power needed ... more panels
some units going in next to me ... but are grid tied
http://www.pvtrackers.com/gallery.html
In 'The Century of Famine" just posted on Culture Change, Peter Goodchild focuses on the essential consequence of petroleum dependence and growth: die-off. Losing five billion people in the next few decades seems inevitable. The full report is at http://culturechange.org/go.html?610
Excerpt: "Famine caused by petroleum supply failure alone will result in about 2.5 billion above-normal deaths before the year 2050; lost and averted births will amount to roughly an equal number."
The Culture Change article is pretty superficial - it just assumes that electric motors can't replace fossil fueled tractors, that high-fertilizer crops are essential, that electrolysis can't produce hydrogen for ammonia fertilizer, etc, etc.
Stuart Staniford's articles are useful here:
"I think the conventional peak oil community critique of agriculture (that it depends on fossil fuels and will fall apart in the face of peak oil for lack of fossil fuels) is almost certainly completely wrong. I think what is likely to happen instead is that growth in biofuel production will make agriculture more profitable not less, and that farmers will be able to outbid others for the inputs they need (fossil fuel and otherwise). So food prices will increase, but farmers will do better.
I made this case at length a couple of years back in The Fallacy of Reversibility, and intervening events have tended to strengthen my conviction."
http://earlywarn.blogspot.com/2010/02/food-security-challenge-of-feeding...
"The Fallacy of Reversibility" http://www.theoildrum.com/node/3481
Stuart did not, if I recall correctly, handle the impact of a buckling financial system on the farmers. Nor did he look at volatility of input prices and crashes in commodity prices. He also made only a superficial calculation that may be true when looked at in isolation but it will not be the only factor impacting farmers.
All businesses are going to whipsawed by the economy, and commodity producers may get it a bit worse than average. Perhaps you are looking at some time in the future when "things have settled down," many farmers have gone under and the debt has been worked off or written off.
Stuart did not, if I recall correctly, handle the impact of a buckling financial system on the farmers...volatility of input prices and crashes in commodity prices.
Perhaps not, but then there's very little sign of that happening. Yes, we just had a serious bank panic and a serious recession (from a BAU POV, of course - from a "collapse" POV it was trivial) where there was a risk of even worse - OTOH, it was a classic business cycle and bank panic (to which oil imports contributed indirectly, it's true), and the world economy (and the US economy) is clearly recovering. There's no good reason to expect a "buckling financial system".
You're simply assuming that PO is going to crash the economy. We've had this argument before - there's really no good evidence supporting the PO = crash theory.
This presentation by Meadows is a good example: he misuses a clearly flawed EWG study, and simply assumes agriculture will crash - the one argument he makes for it (that irrigation will be impossible due to an imminent scarcity of diesel) is clearly incorrect.
Another good example: Stoneleigh predicted a sustained collapse in oil and other commodity prices after the recent oil price peak, and deflation. It didn't happen: prices of oil and other commodities recovered. Oil is at a pretty stable midpoint around $75. There's no sign of deflation.
I agree that PO is a serious problem, and a serious contributor to temporary economic stagnation, but a "buckling financial system"? No, there's no evidence for that.
It seems incredibly arrogant of Meadows to assume he can predict the peak to mankind's growth, especially since his group failed the last time around. His only claim to fame is that he had a hypersimplified model that could be used to illustrate some pre-ordained points. Why is OilDrum allowing this to be published?
I think many people don't understand how simple the model is, or that the result (collapse or gradual decline) is built into the model in a way that has little to do with the real world.
The Club of Rome didn't predict anything in LtG. They outlined scenarios.