'Peak Oil Demand,' Yes... But Not the Nice Kind: Why There Will Be No Recovery
Posted by Prof. Goose on March 16, 2010 - 10:36am
When oil crossed $120 a barrel for the first time in May 2008, oil cornucopians knew they were in trouble...
Prices had quadrupled in just five years, yet had failed to bring new production online. Regular crude had flatlined around 74 million barrels per day (mbpd). The case for peak oil was looking stronger with every new uptick in crude futures.
The following month, prominent peak oil critic and cornucopian Daniel Yergin of IHS-CERA changed his stance: The peak oil threat would be neutralized by peak demand. Gasoline consumption had peaked in the U.S. and Europe, he argued, due to the combined effects of increasing efficiency, biofuels, and the recession.
In 2009 the peak demand story seemed confirmed, as prices stabilized around $70 in June, and U.S. consumption remained well off its previous high. Most people thought the nearly 2 mbpd decline in U.S. petroleum demand from 2007 through 2009 owed to efficiency and people driving less.
In reality, only about 15% owed to reduced gasoline demand. The other 85% was lost in the commercial and industrial sector: jet fuel, distillates (including diesel), kerosene, petrochemical feedstocks, lubricants, waxes, petroleum coke, asphalt and road oil, and other miscellaneous products.
Very simply, when oil got to $120 a barrel it cut into real productivity, and forced the world's most developed economies to shrink. At $147, it wreaked serious damage.
As I explained in "Investment Themes for the Next Decade," the new normal will be cycles of bumping our heads against the supply ceiling, falling dazed to the floor, rising back to our knees, then finally standing... only to bump our heads against the ceiling once more.
Scooters Will Kill SUVs
Two interesting news stories crossed the wire this week, which portend badly for the world's #1 net importer, the U.S.
The first was a Reuters report that the last quarter of 2009 had "wiped out" the equity of Mexican state oil monopoly Pemex, leaving it $1.4 billion in the negative. Falling crude output, falling refining margins and a burgeoning dependency of the state on its revenues had squeezed it to death.
Not only did the report offer further confirmation that the oil export crisis has arrived, but it also confirmed my growing suspicion that the oil production everyone has assumed will come online in five to ten years might, in fact, fail to materialize. Negative equity companies have a hard time raising capital for new exploration.
The second was a Bloomberg report that Saudi Arabia had agreed to double its oil exports to India, to some 866,000 barrels per day. India indicated separately that its onshore production of oil may peak this year.
This adds to the pressure on Saudi Arabia's exports, whose oil shipments to China have been growing at a rate of 11%-12% per year and now stand at roughly 1 million barrels per day (mbpd). China has eclipsed the U.S. as the primary bidder for Saudi oil, while U.S. imports from the Persian nation have fallen to a 22-year low.
The last two years have seen the marginal buyers of oil shift decisively to the non-OECD countries. A gallon of fuel delivers so much value in China and India (think peasants on scooters), that even at $120 a barrel, remarkable economic growth rates are possible.
In major oil exporting countries like Saudi Arabia and Venezuela — where subsidized gasoline still sells for under 25 cents a gallon — the appetite for fuel grows steadily every year with little thought given to efficiency.
It's a different story in the U.S. For debt-laden consumers, an extra $50 or $75 to fill up the tank on an SUV every week sharply reduced discretionary income and starved the economy of its most fundamental driver: consumer demand.
The Real Meaning of Peak Demand
The most promising effort I've seen to quantify the role of efficiency in peak demand was a report in October of last year by Paul Sankey of Deutsche Bank entitled, "The Peak Oil Market." My initial excitement quickly gave way to disappointment as dug into it, however, as I realized that its confident assertions were unsupported by the data.
I applauded the effort enthusiastically — and I hope to see more serious work along the same lines — but it fell far short of proving that energy transition can be accomplished under the status quo of economic growth, let alone its optimistic twist on "The end is nigh for the age of oil."
The fact is that peak demand in the OECD is not merely a function of efficiency gains and biofuels substitution, aided by a temporary recession...
Instead, peak demand will be the result of a permanent state of increasing depression in which non-OECD countries not only more than make up for the loss of OECD demand, but outbid them for the marginal barrel.
As we enter the post-peak phase of global oil supply sometime around 2012-2014, the price that heavily import-dependent countries like the U.S. would have to pay for that marginal barrel will become increasingly intolerable. In a weakened economy, $100 a barrel (or less) could be the new $120.
The true import of peak oil, therefore, may not be sustained high prices, but economic shrinkage. Demand will be destroyed long before oil gets to $200 a barrel, but it will not be destroyed by improved efficiency.
From where we stand today, it's hard to make an argument for economic recovery. Persistently high unemployment rates, broken state and federal balance sheets, and an inflationary depression will continue to cut into petroleum demand.
We spent the last several decades offshoring the fundamental value-adding sectors like energy production and manufacturing, and now our FIRE economy — finance, insurance, and real estate — rests entirely on real value created elsewhere.
The reason is simple: Energy is the only real currency.
Every dollar of fiat currency or GDP was ultimately derived from cheap energy. Trying to print your way out of energy decline is like prescribing ever-higher doses of aspirin for a headache caused by a brain tumor. Yet those at the levers of monetary policy are, by all appearances, completely ignorant (or in willful denial) of this fundamental fact.
The vogue prescription for the sovereign debtors at greatest risk of default (see a Top 10 list) is "austerity measures." The theory is that a period of belt-tightening will stanch the fiscal bleeding until economic recovery puts everyone into the black again.
Yet, if primary energy supply is declining, and the rising star of developing economies is inexorably cutting into the supply available to developed and indebted economies, then there can be no recovery.
I have joked on Twitter that I'm expecting an "M-shaped recovery," where we're now on the second hump. A more accurate image is slow strangulation.
Two Questions for Recoveryistas
Those who would argue for economic recovery must answer two intractable questions.
The first is: Where will the energy come from, as more of the world's net exporters become net importers?
Britain, Argentina, Indonesia, and others have become net importers in recent years. Mexico and Columbia are expected to follow suit within a decade. Clearly, we can't all be net energy importers.
There is also the obstinate fact that aggregate net energy — the energy you get in return for investing energy in its production — has been dropping steadily. Oil net energy dropped from 100 in the early 1930s to 11 or less today. Net energy for natural gas is now in decline. We don't have adequate data to know yet, but coal's net energy is probably in decline too. Meanwhile, the net energy of all substitutes is low: wind, 18; solar, 6.8; nuclear, 5-15; all biofuels, under 2.
It is not surprising that a study of the Herold database (Gagnon, Hall, and Brinker, 2009) showed the amount of oil and gas produced per dollar spent declined between 1999 and 2006.
The second question is: If the creeping infection of sovereign default continues to spread to more countries, where will the money come from to bail them out?
The answer has been, and continues to be, more aspirin. Without more cheap energy, monetary tactics to play the game into overtime will not only be futile, they will only draw us closer to the edge of the net energy cliff.
All of which begs a final question: If the answers are transition to renewables, and rebuilding our infrastructure for high efficiency, then where will the money and energy to do it all come from? And lastly, how long will it hold out?
Without cheap energy to fuel the growth that is hoped to pay off the accumulated debt, austerity will become an everyday reality — not a short-term fix. A reality that slowly sinks in for the rest of our lives, as net importers become progressively poorer.
The peak demand argument is a good one... but not for the nice reasons.
Until next time,
Chris
'Peak Oil Demand,' Yes... But Not the Nice Kind: Why There Will Be No Recovery
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'Peak Oil Demand,' Yes... But Not the Nice Kind: Why There Will Be No Recovery
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Or as I have been saying, the 21st century will be one long exercise in giving up things.
Well, that sounds promising. Civilizational enlightenment. Thank-you for beginning the commentary on a hopeful note.
We have to look our risks and future prospects squarely in the face. Yes, scooter populations will fare better than ones clinging to SUVs and related BAU (and will likely surpass them). At some point, when recession drags our economy down again, there is little to stop China from waltzing in with their tremendous financial reserves and cherry picking any highly devalued companies they want.
A complete transition needs to take place, and those who recognize this are making changes, as are hundreds of cities/towns/counties via the Transition Initiative process. We've recently started one in our county, and I'm impressed with the progress to date.
You appear to assume that this means BAU continues. It does not, therefore predictions about the future are fraught with likelihood of error. The more specific the prediction, the greater the likelihood of error, at least in relation to large scale systems involving human beings.
For example, the Dutch government's response to the Tulip bulb mania was simply to alter the entire nature of those contracts. Problem solved. Of course there had already been a large scale transfer of wealth but the problem was solved and those holding the contracts did not get paid what they had expected to get paid.
For the US, there are already calls to nullify the bonds sold to China on the grounds that China has engaged in nuclear weapons espionage and other acts of war against the US. While these are currently seen as extremist positions, there is no guarantee that such thinking will remain at the fringe of the political debate. There are also extremely protectionist pieces of legislation in Congress already appearing. Going down the protectionist road, China might be barred entirely from owning property or businesses in the United States. Again, these are minority positions in the US at the moment, but there is no telling which way the political winds might blow in the future.
"You appear to assume that this means BAU continues."
Anything but! I see BAU slipping away now. There may be a clinging to BAU approaches to business, lifestyles, and wants by some as a perceived entitlement, but the availability of such for most of the population that enjoys them now will become a receding horizon. The 3rd stanza of the song "Time" by Pink Floyd comes to mind.
I have no doubt that the massive debt we owe China will not be easily repaid. The road will be rocky.
Read the Transition link I provided and you'll see that it is anything but BAU.
Yes,indeed,David.I believe that free trade and globalization are dead ideologies walking.There are hard times ahead and national governments,if they are to survive,will adopt measures to protect their own people.
The Chinese,with their rapacious mercantilist behaviour, are not in a strong position with regard to getting a return on bonds or any other foreign investment.When push comes to shove they will be told to go eat cake and in the current geopolitical situation there is not much they can do about it.Cupidity + stupidity = self-inflicted injury.
On the contrary, with respect to the bonds that China holds. The Chinese are heavily loaded with bonds due in the next few years. All they have to do is NOT renew their holdings and their exposure to US debt will drop quite quickly.
The main result of a gradual sell off of US bonds by China will probably be that we end up paying higher interest for everything from credit cards to mortgages.
They have this situation well in hand. The US doesn't.
All they have to do is NOT renew their holdings and their exposure to US debt will drop quite quickly.
But they buy dollar-denominated debt to keep the yuan low. If they stop, won't their exports slow down?
They have been buying dollar denominated debt partially to keep their goods competitively priced and to provide a currency reserve I think that the latter purpose was more important.
The reason that China has not dumped large amounts of US dollar denominated assets all at once is that they do not want to destroy the value of the assets and they do not want to disrupt their exports to the US. Their might well be trouble finding buyers for $800 billion of Treasury Bills all at once.
On the other hand, if they gradually sell off the assets (or better yet just let the Treasury bonds expire so that they collect the bond's face value) the market disruption and devaluation of the assets that they continue to hold would be much reduced.
There is little evidence that China would have trouble selling goods to the US if their currency appreciates a bit under these conditions. As a matter of fact, they are starting to suffer an asset price bubble and significant inflation because the Yuan and their interest rates are too low. As there would be fewer parties bidding for Treasury bonds if China stopped buying, bond prices would drop and interest rates for the US would increase. China isn't sitting owing trillions of dollars in debt that will need to be refinanced over the next few years. They can handle the fall out. An extra per cent or three for the US might be a bit harder for us to handle.
We should be grateful that they are showing forbearance.
The Chinese still remember the devastation visited on Southeast Asia during the 1998 crisis. For this reason they keep large foreign currency reserves. They have other options than holding US dollar denominated assets for this purpose. China is a major gold producer. They could hold gold. They could stockpile scarce resources (oil perhaps?), they could hold other currencies.
After all, didn't Will Rogers say that in tough times investors should worry about return of their capital rather than return on their capital.
I think what was said by "eating cake", was to actually refuse to pay back outright (the bonds come to maturity, the Chinese come to collect, and they are told to "eat cake", to stay polite).
Of course, this is pretty much the economic equivalent of the H-Bomb, but right now, the Chinese are pissing off quite a few people (eg: the Chinese commerce minister hinting that Chinese state owned companies owning foreign companies could ask those foreign companies to hand over critical and sensitive patents).
They will have to learn to play the market game properly. Of course, the US should definitely learn to play the international law game properly.... but that's for another blog.
Just like old age is one long exercise in giving up body mass, until, of course, you are back to a single-cell organism, which then neatly dies. All nice and symmetric.
That beautifully sums up the idea of "Collapse". However, it is not a one-on-one comparison since most bodily cells cannot "learn" to become generalists. However, humans can - atleast some of them can. We don't really need perfection - nature only selects what works... that of course, hinges upon the assumption that Planet Earth doesn't get reformatted by it's masters. Somewhere down the lane, we forgot to solve the problem of "Meaning of Life, Universe and Everything" and instead started cruising to DcMonalds.
"Looks up from his Subway Cold Cut sandwich"
Huh?
More like a young rock star who suffers from early burnout and dies from a drug overdose at a young age.
We are not in this for the long haul.
I should have used sarcanol tags in my original response.
There is still abundant yet non-functioning and collapsed body mass when someone dies of old age. There isn't going to be a long haul, and it's not going to wrap up all neat and symmetrically.
It's official. Reuters and CNBC are government outlets for misinformation. The uglier the truth, the bolder its disguise.
"global oil use will eventually peak and start declining—and "oil-less growth" may not be far away."
http://www.cnbc.com/id/35890963
Right. If oil is the energy source in decline (which arguably hasn't even started yet), and your economy is dependent on oil, then your economy declines. The only solution would be to replace oil (and this, just to "stay even," forget raising living standards for an increasing population).
...and then the oft-repeated refrain of "there is no comparable replacement for oil". We could build nukes and replace our ICE fleet with electrics, and replace the grid infrastructure while we're at it, if we weren't deep in a debt-hole already.
Or we could simplify, while its still voluntary.
I always enjoy a bit of humor to start out my day. We cannot simplify voluntarily without telling the people the unvarnished truth. Truthtellers have a rough life and as Cassandra found out rarely listened to. Thus we will simplify when we have no other choice and thus it WILL be one loss of lifestyle after another all the way to whatever bottom we reach. Of course some people have discovered that simple is better. Very few in the US have simplified down to where we might be headed, but if everyone could simplify some we would extend the good times. Of course that might crash the economy - Catch 22?
"Or we could simplify, while its still voluntary."
It's not that simple. Any proposed change in social structure has to be evaluated in a number of ways that most people do not even consider on a day-to-day basis. If you have actually read Tainter, then you understand the issue is not just complexity. The issue is complexity required to achieve a specific EROEI in order to maintain a particular civilization. Worse, when there are multiple civilizations in competition with one another, any civilization whose EROEI falls below that of its competitors becomes a candidate for conquest in some form. So the US cannot change by itself. A complete changeover in energy sources would leave the US self-sufficient but with a somewhat lower EROEI than oil based societies (at least for the present time). This would make it a candidate for conquest by other nations. Note that conquest does not have to occur militarily. It can occur in other forms as well.
If the rest of the world would leave the US alone, then the US could do this but they won't just as the rest of the world doesn't leave energy poor countries alone now. They get pulled into the economic spheres of influence of greater powers and then subjugated for exploitation of their other resources.
Transitioning through this energy collapse successfully requires industrial civilizations to do things they have never demonstrated any propensity for doing in the past - namely accurately assessing the current situation as a civilization (not just a few individuals) and then implementing long term plans to address this changeover while still maintaining independence during the period of lowered EROEI. Now yes, you can state that if we can get there we will eventually have a better EROEI than those nations that never adapt, but the problem is in getting there in the first place. It is not just a simple engineering problem as so many engineer types think. It is a social problem and requires social solutions in addition to the engineering solutions.
Very good points David.
...and not even possible, if you are talking about simplifying someone else's life or set of problems, or if you are talking about solving the problems of a whole civilization, of course its impossible. Telling other people what to do is often a way of avoiding doing things oneself.
I think you have that exactly right daxr
I quoted the line about scooters here at TOD the other day because it changed my outlook as much as the ELM did. Here is what I wrote in the first post on my new doomer blog:
I've been reading about our increasing population and our increasing use of resources for years but that line really jumped up and bit me. I'm your average US-centric guy and so pretty well feel like the top of the heap but it is becoming more and more obvious to me how hard it is to stay on top that it won't be getting easier.
Think for a minute about the chinese guy who putts and peddles to work at the factory in the morning, hauls home his groceries at night and maybe takes a little joy ride in the country with his sweetie on whatever day is his weekend. He sounds just like US J6P (Joe Six-Pack) except he gets better gas mileage.
Pedal assit scooters can get 200-250 mpg. When it comes around to $4 gasoline again or $10 or wherever it goes next, while it will still be a hardship, it won't make him park that putt-putt because he gets so much more utility out of a gallon than you. Consider the fact his 2-wheeler weighs in at only a couple hundred pounds, just right to carry him and his sweetie on a picnic. The average US vehicle on the other hand, weighs in at 4,000 pounds, costs $25,000 and gets 17mpg to carry the average of 1.3 people.
The average person in China used the equivalent of 460 pounds of oil per year and the average American used 6,280 pounds as of 2005. To look at it another way, one person in China uses about the same amount of energy per year (gasoline, electricity, heating, everything) as the average American refrigerator.
"So what?" I can hear you mumble, "I make 8 times what that guy makes." That could be, but you also use 14 times the energy. What is more important is that our economy is much more dependent on cheap energy, in case you've forgotten what happened in the US when the price of oil reached $147 in July '08. GDP growth dropped to minus 3% – in China, GDP growth was an incredible 9% that month and for the whole year while ours was 1%! So the guy in China still has a job to ride his scooter to, while millions of J6Ps are riding the couch.
I'm just using the poor guy in Beijing as a whipping boy, the fact is people all over the world want our Way O' Life and are getting it shipped to them direct thanks to offshoring. That's the problem with being by far the largest consumers on the planet, we have a hard time competing with hungry, motivated people willing to work for a few bucks. They've already taken manyof our blue collar jobs and are working on the white collar jobs now. I can attest to the fact that graphic design in an open marketplace like the online "freelance" websites goes for somewhere around $2 an hour, one study concluded 25% of all jobs are offshoreable in fact.
So while we here at the top of the heap are outbid for work because we demand higher wages (in part to pay a hugely wasteful energy bill) people who can get by on less will also outbid us for energy because they get so much more utility from it than we do.
What I'm trying to say is our Way O' Life better start being negotiable or it is gonna be offshored.
All good points. As a minor addition, I would note that electric boost bikes and scooters would fall into the same category, though are not impacted at all by rising oil prices.
Caution - fact checking in process I agree with the main thesis regarding US consumers being outbid by consumers at much lower levels of energy intensity but I was so startled by the fridge comment that I checked. It's way too high.
The average Chinese use is 1,433 kg of oil http://www.google.com/publicdata?ds=wb-wdi&met=eg_use_pcap_kg_oe&idim=co...
The conversion from kg of oil equivalent (oe)to kWh is 11.628 http://timeforchange.org/prediction-of-energy-consumption which translates to the Chinese per capita oe consumption of 16,662 kWh (more than the average US home)
Even at the 460 kg (the 2005 number provided) this translates to 5358 kWh. Post 2001 fridges use 500 Kwh. Pre 2001 it was 1400 kWh http://michaelbluejay.com/electricity/refrigerators.html
One reason I love TOD is that it's focus is on being reality based. Apologies for the nitpicking...
To truly run this to ground, we would need to know how much energy is focused on exported products. That would undoubtedly drop the Chinese per capita energy consumption significantly.
A significant share of China’s industrial energy is embedded in all of the products it eventualy exports. In 2004 this was estimated to be 28% of the total energy consumed in the country (World Energy Outlook, 2007)
Thanks raz, I'll fix that.
Hey Pops,
I had some heated arguments with JD about scooters 4 years ago at peakoil.com. Spent a lot of time trying to find data on US sales, finally digging up some basics on Google answers. He is correct, a lot of gasoline consumption could be obviated by lighter vehicles like these.
About 70% of that could be serviced by NEVs in most instances. Commuting is still often long distance for many, but 70% of 2009's 8985 kb/d of US gasoline consumption is 6,289.5 kb/d. Mull over that, CAFE could sit in place; new vehicle sales could be down to a handful of millions, available petroleum imports could be contracting by 400kb/d per year, and if scooter/eBike sales were replacing autos 1:1 by, say, 10 million/year, things would be as seamless as JD was always insisting.
Barring that we have conservation measures, carpooling, telecommuting, etc. Peak oil is still worth warning people about; moving over to rideshare and electric bikes will still be a bit jarring for most Americans. Also the nigh unto universal assumption that we'll be taken care of will almost certainly catch the markets we're depending on unawares; here's the link I dug up lo those many years ago: Google Answers: Size of Market for Motor Scooters
Dunno how things have evolved in years since. Sales went down, obviously; even hybrid sales peaked in 2007.
But about 21 million eBikes are sold in China every year. That's a lot of tread. We in the US would be more than satisfied with them, barring the occasional Snowmageddon.
If you want contemplate something consider that Chinese guy not on a scooter but on that e-bike vs an American on a an SUV.
I have one of these e-bikes. Mine gets the equivilent of 600 mpg. 2 kw hours will take you 60 miles, though I don't need to go that far. So for less than 10 cents I go to work and back every day. It's not fast but neither is traffic downtown, so I get to work as quickly as the guy accross the street in his SUV.
How far does the SUV go on 10 cents?
600 mpg vs 18 mpg?
That's part of what you are up against.
I don't see it as being "up against" anything in particular, more of a potential business opportunity actually. Car registrations in the US were flat for '07, likely have gone down since; we are oversupplied with vehicles - more cars than registered drivers. Scooter/eBike/Bike sales went nuts in mid '08, all that needs to be done is to market them in sufficient quantities. MT usage went up with the price spike as well, but bumped against total capacity.
The very attractive aspect of these fuel sipping or E forms of transport is that purchase is a one time event, no desultory credit plans needed. I consider this essential in moving en masse away from the traditional automobile; also their low mass means production can be ramped up all the more faster when the market gets the undeniable signals of scarcity and/or shortage.
There is collateral damage along the way, of course: Eco-cars go by, gas stations go under : Business : DAILY YOMIURI ONLINE (The Daily Yomiuri)
This is the sort of unintended consequence I've been writing about for years - usually to little notice. When EVs have displaced 15% of the auto fleet what happens to the prospects for gas stations or car dealers or oil companies?
What kind of insane society allows people to make and sell hummers and SUVs???
This country reminds me of a rock star who drinks heavy, and is always drugged up, then burns out and dies young.
We just aren't in this for the long haul.
I'm having trouble figuring out what downside you are pointing out.
Gas prices go up. People adjust their consumption to use less gas. The economy has to adjust to selling less gas so less gas stations survive. The resources being used to run the gas stations are available to run other ventures.
This is the way that things should work.
This would primarily be hard on rural people, although lack of competition in urban markets will drive prices up as well. But small towns in the countryside often only have the one gas station, or have a bit of a drive to get to one in another town; such was the case in the dinky wheat farming town where I grew up. The solution found was to open a keylock station in another smaller town 9 miles up the road; this was done in contravention of Oregon's no self serve laws. A further 9 miles up the road and you have the county seat, with a bona fide station or two; also the only hospital in the area. People in these kind of areas are dependent on the car and don't have much money, increase the cost of living enough and they will flee to already crowded cities, making it all the more attractive for larger ag consortia to run the show.
Some cousins of mine farm for people who are too old or incompetent to hack it anymore; perhaps that's a way forward for family farmers, although I doubt you'd want to sell this idea using terms like "collectivism." Also CSAs. Many rural people resorted to measures such as vanpooling when the price spike hit, too, so there's that.
But I suspect the pace of oil being dropped like a hot potato will surprise many, just as we were surprised at how fast the price crashed. Investors are the very embodiment of willy nilly, after all; and margins are very thin in many of these businesses; gas stations, in the US anyway, are actually venues for selling DingDongs and radioactive hot dogs that sell fuel as a bit of a sideline. They don't rake in the cash. Also, as I stated above, competition keeps the price down; the 2nd highest gas prices in Washington state are kitty corner to the 4 refineries near the Canadian border. Lack of competition trumps short transport costs.
KLR,
EXACTLY. This is what I have been saying when I have written (to great derision usually) in prior TOD posts that most people concerned about peak oil seem to fixate on the issue of what happens if cannot confront it relatively successfully.
But...what if we can? Let us just try to play this out in our brains for a few moments, and I assure you that success in migrating away from oil would be just as, how should we say, "dislocating" as failure.
And remember that your projections of declining gas stations is based on relatively current technology, in other words that alternative energy technology development essentially "freezes" in development about now. Does anyone really believe that is going to be the case?
Even if we stopped technology development today (completely impossible, but if) and simply applied the alternative technology we already have, the results could be catastrophic for oil consumption, gas stations, oil companies, the remaining employees in the oil patch, etc. I will say once more...look at 1982.
All we did then was reduce vehicle weight and incorporate modern fuel injection and improved drivetrains and oil consumption collapsed. This time we will see even more advanced drivetrains, PLUS plug hybrid vehicles, full electric vehicles, switching to natural gas based fuels, switching to recaptured methane, use of business and residential CHP (combined heat and power), wind, solar, geothermal (and not the big glamour stuff that creates earthquake, but far more cost efficient lower tempeture types) and logistical changes, all at the SAME TIME. It is happening NOW. I know folks here absolutely refuse to see it, refuse to read about it, but it is happening NOW, the only way it can happen, one building at a time, one house at a time, one car at a time, one change at a time, one person at a time.
I speak for myself...my gasoline consumpton is some 12% to 15% of what it was 2 years ago...simply by relocating, and my overall energy consumption is down even more, simply by living in a tighter and smaller apartment. That's an 85% drop in less than 2 years...and I AM NOT the only person doing this. I have seen friends move, have seen co-workers turn down jobs based on the increased travel costs, have seen for the first time the use of telecommuting in smaller towns and cities in the south, people are planning differently NOW. I cannot say too much about this because much is based in proprietary market research, but the changes ARE happening NOW. Two years ago I said that I could get by okay on gasoline prices of $4.00 to $6.00 per gallon. I can now make that $10.00 to $12.00 per gallon.
But of course, I would never be idiotic enough to pay those kind of prices. I (like most people) could afford to migrate to almost ANY alternative if the prices got that high...electric, natural gas, propane, etc. Give that I now live 1.2 miles from where I work, and the same distance from my doctor, utility company and major stores, I could even walk or bike if I had to. I might not like it, but for now while my health holds at all, I still can. And while Chris Nelder may be incorrect in many of his underlying premises (and I can deal with that seperately, because it would take even more space than this post would), he is CORRECT in his important one, the BIG one.
There will be NO RECOVERY in oil consumption, not in the U.S., Japan or Europe. If they are smart, the Indians and Chinese will be right behind us on this, and the Chinese show signs of getting in front of us. The Saudi's had better be safely banking that Chinese and Indian money NOW. You can blame it on lack of supply, you can blame it on lack of demand, you can blame it on lack of money, you can blame it on changing economic attitudes, you can blame it on carbon release concerns, on and on and on, but it JUST DON'T MATTER. THE OIL AGE IS OVER, THE DREAM IS BEGINNING. THANK GOD. Yes, we will lose some gas stations, and yes we will lose some oil companies, probably some big ones...and there will be serious dislocations for industries who have made their existance on oil. All the same things could have been said when the external combustion (steam) and internal combustion (petroleum piston and gas turbine) engine replaced the horse and sail. No one seemed to cry for the saddle makers, harness makers, horse cart and wagon manufacturers, blacksmith and farriers and horse breeders. The change is coming. We knew it had to. We knew it would. We made this situation harder by putting it off far to long.
I am constantly amazed by people who say, "We MUST get off oil", and then with their next breath go into a panic and say "Oh the horror, oil sales are dropping!" Look, it has to be one or the other, we cannot even begin to construct a viable future where both yes and no are unacceptable answers, it makes no logical sense whatsoever. We must choose one path (either we are going to get off oil in hugh volume, or we are going to stay on the depletion chase and pray that we will keep finding more oil...and more...and more... and by the way live with the massive carbon release that would entail). Either path we take we will have to try to live with it.
Will we be wrong? Yeah, either way we go we will not find perfection, but we must choose one path or the other, if not, events and conditions will choose one for us. MAXIM: If oil consumption is to drop, oil production and oil sales MUST drop. If the Indians and Chinese see their future as trying to outbid each other for what we all agree is a declining and increasingly expensive last puddle of oil, LET THEM. We in the U.S.,Japan and Europe should already be off into the future and far beyond that by then.
Where will the energy come from, the same people ask again and again, and again, and again...well, I know how you folks love charts...
http://en.wikipedia.org/wiki/File:Available_Energy-4.png
I know, I know, it "can't be done". But as my dear old dead daddy used to say, "can't never did shit". Saying it "can't" is not a comment on physics or the larger reality of the universe. "It can't be done" would be a comment on human intelligence. To say that we cannot make use of the amount of energy raining down on us everyday, and to say that we can be wallowing in an ocean of hydrogen and carbon but we are to starve for lack of hydrocarbons? To say that is simply to be calling humans stupid beyond belief. Indeed we may be, but I assure you, you will win no supporters by beginning with the premise that humans are stupid. We may be, but we will refuse to admit it to the bitter end. If you call humans stupid to my face, I will have a reply: "Speak for yourelf."
RC
Actually US consumption for 2009 was at 89.40% of its 2005 peak, which isn't too swift. Contrast this with the similar 1978 peak; by 1982 we were at 74.02%. This is why the recent study from Leeds University concludes that, for overall oil consumption, little remains in the way of fat to be trimmed in the OECD. Gasoline last summer was already up YOY, with commensurate rise in VMT.
As I said above responding to poobserv we don't really know how fast people will give up on the FF industry as an investment, or viable business model. How fast did coach and buggy makers fold under Henry Ford's onslaught?
I keep a close eye on roll outs of new vehicle tech, but these take a long time to saturate the market, as Hirsch pointed out. It helps that people place an inordinate degree of interest/faith in things like the hybrid vehicle, and little interest in one's personal cost benefit for such a purchase. I suspect if we were as interested in a Drake style electrification of railroads as we are in the Volt we'd save a lot more oil in the end, but that's not how people work.
In the face of shortages people will respond panic style initially; that will result in inventories being drained, then, after we sober up, markets responding. My personal crystal ball guess is that we'll hear plenty of grandiose schemes for offshore drilling, CTL, oil shale. While we wait forever for the pols to stop arguing (never mind the waiting for these techs to actually show results) people will want some kind of personal non-oil transport, and want it now. That's why I'm very rosy about the prospects for simpler forms of transport like scooters; it's within the grasp of anybody, simply requiring the manufacturing to be there. They can be distributed most anywhere, not requiring dedicated showrooms and lots as is the case with cars. And they perform most of the services currently being met with autos more than adequately.
little remains in the way of fat to be trimmed in the OECD
If fuel prices double, why not just buy a Prius (which will reduce fuel consumption by 50%)? Or, if Priuses are suddenly back-ordered (because everyone else has the same idea), put in your order and carpool with one other person (which will reduce fuel consumption by 50%) until it comes??
If they double again, put in an order for a Volt (which will reduce fuel consumption by another 80%), and carpool in your old vehicle with 3 other people, or your Prius with one other person until it comes.
Carpooling isn't inconvenient, but it gets you to work.
I suspect if we were as interested in a Drake style electrification of railroads as we are in the Volt we'd save a lot more oil in the end
Sadly, I think that's not the case. Passenger rail is 1) no more efficient than personal electric vehicles; 2) takes a lot longer to build, and 3) can only help with 50% of VMT without a truly massive (and very expensive and time consuming) buildout. Transit-oriented development would also help, but that would take even longer and cost quite a bit more.
I say sadly, because I like passenger rail - that's how I travel most of my VMT.
The Drake plan is incontestable in terms of freight efficiency. If you add in street maintenance cost versus simple vehicle and energy costs TOD is stronger. IMHO, there is place in the transition plan for all the above - electrified freight, EVs/PHEVs, and TOD.
The Drake plan is incontestable in terms of freight efficiency.
I agree. Freight is very different from passenger rail.
If you add in street maintenance cost versus simple vehicle and energy costs TOD is stronger.
I'd be interested in seeing the comparison. I would note that TOD requires a long rail building program, combined with rebuilding roughly 50M housing units in urban areas where land costs are much, much higher.
Finally, I think most people will want both passenger rail and personal transportation, so I don't see a large street maintenance cost savings from passenger rail - just a lifestyle improvement. For example, I want both - most of my VMT is by electric rail, yet I very much need a personal vehicle for a few things. Even Alan Drake still has a car, for a few things.
Prii are 48.12% of US hybrid sales but only 1.34% of the total for 2009. Toyota are Considering Cutting Production too, even with long waiting lists in Japan. It's a bit of a tip off that the world's #1 auto maker is having trouble ramping up production of these things.
Initial run of Volts are 60k, Leaves 200k, that will bump the number for hybrids up to ca. 3.5% of market share. I'll repeat here the numbers I've calculated for MPG improvement of hybrids by class:
The # for cars is skewed by the Prius's 52.41% and Insight's 60.00%, and aren't weighted by sales volume either, but you get the idea. I know how PHEVs promise to divorce their owners entirely from using FFs but we await real life examples to prove that this is feasible, or won't require going up a learning curve to iron out kinks, to say nothing of the usual issues with sourcing lithium etc.
I'm not denying that people can't stave off the day of reckoning by carpooling etc; but there are a whole host of actions they can take which are much less pleasant in nature, too. This would be a permanent state of affairs, unlike price shocks and temporary shortages of the past; we can't fall back on historic examples for guidance here, or not in their entirety anyway.
Toyota is considering reducing Prius production due to their fear of lack of demand, because of recent quality problems. That has nothing to do with production capability - if you read the article, you'll notice the Texas Prius plant, which is ready to go.
This would be a permanent state of affairs
Just put in your order for a Volt, or a Leaf, and carpool till then. If you're afraid of waiting too long, put in your order now.
Or, buy a Prius, and convert it to plug in. Cost: $3.5K to 10K, depending on range and battery chemistry.
we await real life examples to prove that this is feasible
EVs have been around for 120 years - we know they work.
He meant Mississippi, not Tennessee, or Texas as you wrote. If you read the link you'd know that
He also refers (with links to past articles) about the constantly delayed/canceled Prius plant in MS. This is awfully non-committal behavior from the world's #1 automaker. From 2007: Green Car Congress: Toyota Has Sold Almost 1.2 Million Hybrids Worldwide Since 1997; Prius Accounts for 72% Has a cumulative sales chart. 2009 was 139682 Prii for the US.
You didn't catch the gist of my post - people are going to be very angry about rationing or shortages, they're going to want solutions now. They're not going to want to carpool for 5 years, or however long it will take.
What conversion - lead acid? - costs $3.5k?
Model T was an FFV that got better mileage than modern US LDVs, too. What has been achieve by hobbyists or in labs isn't the point; I'm talking about real life conditions for PHEVs, intense charge cycles, ensuring that owners charge during non-peak hours to not overload the grid, possible issues with maintenance, etc. They're a whole different breed.
Can lead-acid batteries even hold enough charge to get you any place? I don't see lead-acid batteries powering anything other than glorified golf carts.
A couple of GEMS (lead acid NEVs) in my neighborhood.
http://www.gemcar.com/
Of course, I am:
1.1 miles from the French Quarter
1.2 miles from One Shell Square, a 51 story office building
2 (nearest edge) to 3 miles (far edge) from the Medical Center
2.7 miles to Loyola, 2.8 miles to Tulane
0.5 miles from the official WW II Museum
0.7 miles from WalMart
0.4 miles from Office Depot
0.25 miles from my favorite corner grocery store (Zara's)
A half block from an excellent coffee shop, half mile of two world class restaurants (Commander's Palace & Emeril's Delmonico), 7 blocks to both a dairy and a world class bakery etc. etc. etc.
So yes, lead acid batteries can get you places; if you start from the right place.
Best Hopes for TOD (the other one),
Alan
How about diesel submarines? That's a high performance, very high-reliability and safety demanding environment.
He meant Mississippi, not Tennessee, or Texas as you wrote.
True. Prius production was originally planned for Texas, the plant was built, and then sales plateaued due to the recession and the plant was put on hold.
people are going to be very angry about rationing or shortages, they're going to want solutions now. They're not going to want to carpool for 5 years, or however long it will take.
I agree. Still, that's not the end of the world.
What conversion - lead acid? - costs $3.5k?
Yes. http://www.3prongpower.com/
What has been achieve by hobbyists or in labs isn't the point; I'm talking about real life conditions
Sure. The thing you have to realize is that EVs are old and well-tested. EVs were commercially successful before ICE's. Jay Leno has a Detroit Electric from 1909 that's still running on the original battery. GM sold thousands of electric trucks from 1912 to 1918. These were commercial, on the road vehicles, not a pilot or a prototype. All of the car makers have designed many other EVs and hybrids over the years. The fact is that electric drive trains are very, very simple. Heck, I built electric motors and EVs from wire and wood when I was 11 (try that with a gas engine!).
There are far more electric motors in the world than ICE's. They're in your washer & dryer, your food processor, your electric toothbrush, your fridge and A/C, the sump pump in your basement, etc, etc.
There are millions of EVs on the road around the world, they just aren't highway legal: forklifts, golf carts, etc, etc.
The electric drive train in diesel/battery submarines, around for 90 years (in a very high-reliability and safety demanding environment), is identical to that in a Volt. The drive train of a diesel freight train (sold in large numbers by GM's Allison Chalmers division) is very similar. The largest container-ship in the world uses 80MW electric motors.
The design and construction of electric drive-trains like those used in the Volt and Leaf are very, very well understood. There is nothing experimental or unproven about them.
people are going to be very angry about rationing or shortages, they're going to want solutions now. They're not going to want to carpool for 5 years, or however long it will take.
The question is if carpooling is ever necessary. I still cannot imagine that the economy doesn't go on the ropes with oilproduction declining.
Yes, but why, why then they keep on telling that there is a long way to go. What is the difference between 100 years ago and now. Are the cars more heavy ? Is it the convenience ? Probably both. And what if you (most people) live in an apartment/skyscraper on the third floor or higher ? Still easy to charge at night ? Besides I read about cost, range, lifetime, reliability and safety cosiderations (0,1% fire is unacceptable) regarding the battery.
This is not a fair comparison. Most of those things are connected to the grid. Electric toothbrush is light, doesn't have to climb hills/mountains and operates very short times.
The thing you have to realize is that EVs are old and well-tested. ...Yes, but why, why then they keep on telling that there is a long way to go
Well, "they" are mostly journalists who are repeating misinformation from other journalists, or competing car companies. Toyota, for instance, would like to extend the life of it's hybrids as long as possible, so it "disses" the competition. Of course, that's only some journalists. Others will tell you that EREVs like the Volt are entirely ready - mostly the ones that have actually driven it. And, of course, there are people on TOD who just aren't ready to accept the idea that there's a simple solution to PO.
more later...
Nick, take a look at that link you posted.
http://www.3prongpower.com/products.html
$12,699.00 for something that makes your Prius go at most 52mph and only lasts 5 years. That is not capable of highway speeds or even the speed limit on state roads here. So on top of the $24,000 for the car itself assuming you get the entry level model, you need to buy the battery system. Who is going to pay roughly $38,000 with tax for a car that can only go 52mph? If you want one of the newer Prius models this could cost nearly $45,000 with the battery kit. The problem is lithium is going to remain VERY EXPENSIVE because it is difficult to extract and there isn't that much of it.
The more conventional batteries are even worse, golf carts will not maintain business as usual.
$12,699.00
You chose the most expensive model. If you want to optimize for current gas prices you'd go with something smaller.
for something that makes your Prius go at most 52mph
No, that's the top speed for EV mode. You start burning some gas along with your electricity to go at highway speeds.
and only lasts 5 years.
The batteries will last much longer than that. Yes, the website gives 5 years as "expected life", but they're being extremely conservative. Take a look at A123systems' website for more info.
The problem is lithium is going to remain VERY EXPENSIVE
How could it "remain" expensive, when it's cheap right now?
it is difficult to extract
It's actually pretty easy.
there isn't that much of it.
There's an enormous amount out there - see http://energyfaq.blogspot.com/2009/02/could-we-run-out-of-lithium-for-ev...
The less expensive models aren't even fast enough to go on two lane roads here. Is it worth it to invest that much money in the 50 mile battery model when the prius gets 48 miles per gallon in the city?
What would the price of gasoline have to be for the battery to be competitive with the Prius? At $3.00/gal, the battery is equivalent to 4200 gallons, that's 210,000 miles driven assuming 50 miles per gallon. An average car is driven about 15,000 miles a year. So really, the Prius can only be expected to drive on average 75,000 miles in it's lifetime of 5 years. But 75,000 miles driven only uses 1500 gallons worth of fuel or $4500, so that lithium battery would only be competitive with gasoline when it's about $9.00/gal. That would require oil to be some where close to $300/bbl, I don't see too many businesses surviving that.
The less expensive models aren't even fast enough to go on two lane roads here.
Yes, they are. We're talking about a speed limit for the pure electric mode, that's all.
it's lifetime of 5 years
Have you looked at the A123systems' website for more info?
Cars are generally not kept for more than five years. These batteries do not make economic sense when you can purchase 4200 gallons (210,000 miles or 14 years of normal driving) worth of fuel at $3.00/gal for the price of one. You can't run the numbers with the weaker batteries because they lack the utility required to transport the vast majority of people, it's akin to comparing a bicycle to a car.
Cars are generally not kept for more than five years.
Higher MPG will raise resale value.
You can't run the numbers with the weaker batteries because they lack the utility required to transport the vast majority of people
You do understand that an upgraded Prius plug-in has all of the speed capability of a regular Prius, right??
For mathematical purposes, assuming battery only is better. If I were to assume the battery was even less effective and still used gasoline, the economics would be even worse. Judging from the descriptions, it's going to optimize usage between the battery and gasoline, but even $3000 will purchase 1000 gallons of fuel, or nearly 50,000 miles traveled in a Prius. If the cheaper battery added say 5mpg more efficiency, the cost savings would not add up. These are not good investments at all.
Let's say you commute 30 miles each way with $3 gas, and can charge at night (the national average night rate is about $.05/KWH) and at work on your employer's dime. Let's say you also use it on the weekend, but half as much. The $4,699 option would raise your MPG from 45 to 85, and save you $500 per year: that's a 10.7% ROI.
Not bad.
Nick, can you explain how people living in apartments (above 2 stock) and skyscrapers
could charge at night ? Imagine hundreds of long electricity cables out of open windows. That can't work. I think there have to be a lot of stations where you can change batteries.
Yes, apartment and condo dwellers will need chargers at public parking places. In the US, more than 50% of drivers have their own garages, and 90% have some form of private parking (many apartment dwellers don't have cars).
Chargers at public parking places can be in parking garages and at parking meters. This is already done in Canada, where extreme cold makes engine pre-heating necessary.
10.7% return on investment won't even pay back the initial investment for 9 years, long after your battery has gone kaput. Also, consider the initial upfront cost of the battery; that needs to be financed. So you are going to be needing a significantly higher return on investment than stated and a bit of luck finding that credit.
Also, what's the use of burning marginal natural gas to create electricity to power our cars when we could just burn natural gas in our cars in the first place. If we burn NG in a typical power plant there is about 40% efficiency, losing ~10% of what's left in transmission and losing 14% of what's left in "grid-to-motor" leaves 31% overall efficiency. A gasoline engine has ~30% efficiency , so I imagine with further engineering a NG engine could have a similar value??? Then of course there is that extra cost of the battery, perhaps $.08/mile according to a report from Deutsche Bank. BTW, a 55 mpg Prius runs at $.08/mile when gasoline is at $4.40/gallon.
long after your battery has gone kaput
The battery will last much longer than that - look at the A123systems' website for more info.
A gasoline engine has ~30% efficiency
They range from 12-25%, the Prius being at roughly 25%.
No doubt, if you're confident that gas prices will never go up, and you assign no value to the external costs of oil (climate change, oil wars, trade deficits, great recessions, etc, etc), then there's no need at all for the plug-in upgrade.
Yes, mostly.
Some points.
Strickland has done some real world sampling and a fully loaded Prius is 280 pax miles/gallon and urban rail is an equivalent 2,000 pax miles/gallon, electric commuter rail is 650 pax mile/gallon equivalent (more structure in commuter rail).
http://sites.google.com/a/strickland.ca/www/
You have to download the file.
The indirect savings for urban rail induced TOD are greater than the direct energy savings typical car > urban rail. DC Metro saves a bit over 100,000 b/day in the DC area. In a high oil price environment, this savings (and TOD) should grow faster.
The quickest and cheapest response to post-Peak Oil is bicycling. However, apparently a relatively low upper limit.
Electrified and improved freight rail is next. "Relatively" cheap (several AIGs) and quick (7 years to crash electrify mainlines). If pax service on same lines is not counted, upper limit on savings of about 2 million b/day (min 20 years to get that much IMHO).
Urban Rail is more $ invested per barrel of oil saved, takes longer (build plus wait for TOD effect) but a massive effort has very high potential savings. One scenario, 5 million b/day. Other scenarios even more.
Hope this helps !
Best Hopes for all of the above,
Alan
Strickland assumes fully loaded. That's not really very useful, as a real mass transit system has to operate at much lower utilization. Actual operating averages are much, much lower.
I like bicycling, but I prefer a train or a car for most travel.
Electrified and improved freight rail is certainly great - we seem to be moving that direction fairly quickly.
Urban Rail is more $ invested per barrel of oil saved, takes longer (build plus wait for TOD effect) but a massive effort has very high potential savings. One scenario, 5 million b/day. Other scenarios even more.
Yes, to get a TOD effect, the $ invested and the time required is very, very large. I like the idea of serious urbanization to improve human quality of life and preserve wild habitats, but that's very, very expensive given the cost of building new housing, and the rising cost of land.
Not every Prius goes around with a driver and 3 passengers. Full compared to full.
Existing Suburban housing will require major repairs in the next couple of decades. So building more efficient TOD housing (fewer sq ft, shared walls for many) is an economic alternative to repair (and fewer feet of water & sewer pipe to maintain per house, less transmission infrastructure because energy use is less and closer together).
The utility savings alone may make TOD housing attractive.
It took just 20 years to discard almost all the prime commercial property in the USA (known as "downtowns") and many well built, well located established neighborhoods (known as "inner cities"). Why should it take longer in reverse ? Especially with the impetus of post-Peak Oil ?
Best Hopes,
Alan
Boy, we've had this same discussion a number of times, haven't we? It seems to me that the bottom line is that passenger rail is a great idea, and helpful for energy savings, but very slow and expensive such that we have to see HEV/EV/EREVs as a more important public and private strategy.
OK, details:
Full compared to full.
Transit systems have very, very low average utilization, due to rush-hour peaks, "deadheads", and 24/7 operation. The actual average energy per passenger for commuter rail is around .35KWH/passenger mile, which is comparable to HEV/EV/EREVs.
In fact, energy is a small % of the costs for transit systems, and not that large as a % even for personal vehicles. Further, it's easy to reduce energy consumption for both: how many rail systems use good aerodynamics and regenerative braking on the one hand, and HEV/EREVs will provide the same functionality for the same lifecycle cost on the other. The bottom line: both are "good enough" in terms of energy efficiency, but rail is a lot slower (and more expensive, if we're focusing just on energy).
Rail systems take many years to build. TOD does too. Further, if we really want to remake our national housing, we're talking about building 50M housing units at a cost of at least $5 trillion.
Existing Suburban housing will require major repairs in the next couple of decades.
I think you're relying on anecdotal data. That appears highly unrealistic. Have you seen real data for this?
Remember that your perception was that existing urban multi-family housing was more efficient than single family housing? You felt strongly about that, and yet....that was incorrect. Existing urban multi-family housing is less efficient than existing single family housing.
building more efficient TOD housing (fewer sq ft, shared walls for many) is an economic alternative to repair (and fewer feet of water & sewer pipe to maintain per house, less transmission infrastructure because energy use is less and closer together).
If suburbanites want to save money, it's a lot cheaper to improve efficiency of their existing housing, or even to relocate to smaller housing units in the suburbs. The cost savings of shared housing are not significant - much, much easier just insulate and replace windows where you are. Or, build new: single family housing can be zero-energy, or as close as one wants.
The utility savings alone may make TOD housing attractive.
If you run the numbers, you'll see that this is highly unrealistic.
It took just 20 years to discard almost all the prime commercial property in the USA (known as "downtowns") and many well built, well located established neighborhoods (known as "inner cities"). Why should it take longer in reverse ? Especially with the impetus of post-Peak Oil ?
As far as I can tell, we didn't really discard much of them, it was more a matter of a change in who lived there. Sure, we demolished some housing, but most of it was still occupied, just by someone else, perhaps of a different color.
Further, we just had a building boom - we're overstocked with housing. Why would we build a lot more? Finally, I don't think you thought that what happened during that 20 year period actually made sense -why would we do it again? Would it really make financial sense from a pure energy standpoint???
It may be a day or two till I can respond properly.
One key point.
Commuter rail is just a subset of Urban Rail. The characteristics of commuter rail do not flow to subways, light rail and streetcars.
Alan
Well, I don't think it's a productive use of your time going into detail regarding the energy efficiency of electric rail (either commuter, inter-urban or urban) - I'm confident that it's "good enough", just as are EREV/EVs.
I think the bottom line is that Americans will not be able to afford to buy new HEV/EV/EREVs, and they will not be able to afford to keep their current vehicles running in the foreseeable future, so they will be stuck. I was going to say that they will end up staying home and being unemployed, but I just realized that isn't true - they are more likely to end up unemployed and homeless.
I would point out that those are American conditions. In the rest of the world, ridership on transit systems is much higher, and consequently capital costs and average energy use per passenger is much lower. Americans may have to change their life-styles to be more like the rest of the world. The alternative is the "unemployed and homeless" option mentioned above.
You should have started 40 years ago when US oil production peaked and started to decline. However, in the ensuing 40 years, the US economy has gone in exactly the wrong direction, building bigger houses on bigger lots in farther-flung suburbs and forcing people to undergo longer and longer commutes with no option other than cars and big SUVs. Rational planning would have limited urban sprawl, stopped freeway construction, and built rail transit everywhere. Starting now is very late and you no longer have the money to do it. A lot of that far-flung surburban housing is just going to have to be abandoned - the suburbs will look much like Detroit.
Note that I'm looking at this from an outside perspective. In Canada, we have 2 or 3 times the per capita transit ridership despite the fact we have 10x as much remaining oil for 1/10 as many people. At this point in time Canada is exporting more oil and oil products to the US than it is consuming itself and this is only going to grow. Note that we also export large amounts of electricity, but I don't expect you to be able to afford to buy enough electric vehicles to use much more.
Canada will have 1/10 the population of the U.S. up until the point things really deteriorate and you get a few million uninvited guests from South of the border. I don't think the suburbs would look like Detroit, they could burn to the ground though. But so would the cities. The further away from the cities the better you'll be.
In the rest of the world, ridership on transit systems is much higher, and consequently capital costs and average energy use per passenger is much lower.
I'd be curious to see documentation of that. I think you'd be surprised by what you find.
Rational planning would have limited urban sprawl
And dramatically raised land and home prices.
Pops, do could you provide a link to your blog?
Thanks again raz, I should have stuck with oil for my example - too many numbers gums up my little brain! So my new blah...
"In '06 the Average American Joe used 24.8 barrels of oil per year and the average Chinese Joe used 1.9 bbls - the difference could supply a British Joe and a French Joe with some "Joe" left over!"
http://en.wikipedia.org/wiki/Petroleum
dohboi, it's http://darkersideofblack.blogspot.com/ for the new doom blog and http://mygrandkidsfarm.blogspot.com/ for what I'm doing about it...
A farm is what I would give my children if I could. You are a wise man. Looked at the blog. Have you thought of trying smaller cows - maybe Dexters? I can't help but think that there will be a market for them on smaller plots of land. (Industrial farming just can't last.)
Razrmon,
You are correct in stating that 1kg of oil contains about 11.6 kWh of chemical energy - but this is not the same as electrical energy, often denoted kWhe.
To turn your kg of oil into electricity you have to go through an inefficient combustion and gas turbine or steam turbine process. Power plants and the electrical distribution network result in 30% to 45% overall energy conversion efficiency from the hydrocarbon fuel to electricity.
Your kg of oil is really only 4kWhe.
So the average Chinese citizen is using the equivalent of just 1433 x 4kWhe = 5732 kWhe.
Perhaps you'd like to recheck your figures and sources in the light of these indisputable laws of physics.
Interesting to look at the energy consumption of the average Indian and Haitan when next on Google Graphs.
Thermodynamics can be a real bummer at times....
2020
Ah entropy - the clever thief that dissipates all of our efforts...
Don't underestimate the part of the higher wages here in the west that are immediately drained off not to support a higher level of consumption, but the much higher tax loads we're shouldering AND the much, MUCH higher insurance loads we're also shouldering. I doubt that very many scooter riders in India are paying $1,500/year for government mandated auto insurance. I doubt that many members of the rising middle class in the emerging markets are paying another $1,000 for homeowners insurance, either. Not to mention another maybe $1,000 to $3,000 per year out of their paychecks for "Employer Provided" health care (like me at $2,650/year).
Just pointing out that a lot of money we're ostensibly earning here in the west doesn't go at all toward some sort of regal lifestyle, but simply goes down the drain to fund parasitic loads which are, in some cases mandated by government, and in other cases mandated simply on the basis of practicality, to avoid financial disaster.
Jabberwock, it is true we have a lot of wages siphoned off for auto insurance - on the other hand when we have a wreck we get some compensation. In India if your scooter wrecks I would guess you are out one scooter period. We consider house insurance pretty important despite the risings costs. My neighbor's house just burned to the ground and they are grateful for the insurance which will rebuild a house and is paying rent for up to a year. No house insurance and your house burns, you are out the price of your house. When I was in Haiti I don't know if any health care was paid by the gov't, I think not. Perhaps the wealthy had insurance, I am sure most did not. I do know that you had to bring your own sheets and food to the hospital. If your family couldn't bring you food you didn't eat which isn't very conducive to healing.
Our insurance may be overpriced, especially health insurance, but we do get benefits from it. If you don't have insurance you can go bankrupt in a heart beat. One accident, one smoldering match, one illness and you are in deep trouble, if not homeless.
But not to worry, a decade or two and you wont' have to pay insurance. Of course you may not have a job, health care, car or house so lack of insurance shouldn't be to bad.
If your scooter wrecks in India, there is a pretty good chance that you will be out the damage to the scooter plus the cost of repairing yourself and any passengers.
Scooters use a little bit of energy to move people..., SUVs waste energy moving themselves.
http://www.youtube.com/watch?v=sMH_bk1Wdd0
jmygann, that is so primitive...here is the way to do it, imagine this with a couple of electric hub motors...
http://www.youtube.com/watch?v=GCJp4tU4TE4
Now we're getting somewhere!
Question to all:
I have seen photographs of Asian traffic, with large numbers of what appear to be three-wheeled motor scooters/cycles with sort of a plastic shell over the driver. Often no doors, just windshield, roof, and back window. These would at least provide some protection from the rain. They must be pretty cheap to buy and to operate. I have seen none of these here in the US, although I do know that ZAP sells an electric version. What do people know about these? Are they available in the US?
There are some showing up
Street legal probably would add a windscreen
Some of the other Chinese models
I've done 5 of the electric bikes from scratch and it would be easy to add a fairing.
I'm sure we agree that a lot will be done when the time comes. We have to all slow down and get out of the everloving cars. Your and my new 'boots on the ground'. As long as the window stays open long enough for transition that is. My stoker and I are nigh on 57 yr. ea. and we are doing 60mi per ride now between running and soon to get to 100mi on a long day. No motors.
My observation is that this addiction does indeed run deep. The poll today on MSNBC had 50% saying they would change when $3 gal got to the US. (with 25% saying they don't care how much it costs) This makes my stokers blood boil :) Both b/c the 50% are probably lying and the 25% are probably telling the truth.
Honestly ditching the car as much as possible is one of the best things we have ever done. I sure hope enough people find it soon enough.
Thanks. I can't imagine why the enclosed three-wheelers haven't caught on yet in the US, especially in areas that get a lot of rain.
Yeah the scooter enclosure would extend the season a bit. For the small scooter and NEV's in general near as I can tell around here it's still a problem of differential size and power. The problem of having two vehicles one NEV or small engine type and one open road type. Lot more of a 'mix' on the roads most other countries I've seen. The small trucks they highway we govern and restrict. (BTW yeah I think the MC types skate the airbags but are still helmet required where applicable)
I am appalled at how many jumbo sized 4WD's are needed in the PNW just to haul one person loads around at 65-70mph on undivided highways. Scary environment for transitioning to bikes, scooters and electrics. I must confess to being a bit eager to seeing some negotiation beginning.
NEVs aren't freeway vehicles by definition. Having them on main arterials would likely be coordinated with large speed limit cuts to conserve fuel, another world in other words.
How about piling a bunch of NEVs onto the back of a flatbed truck to gain freeway access? Would require go-ahead from munis to avoid being a black market jitney operation, of course; would still save an awful lot of fuel and extend transportation possibilities greatly.
I did include small engined vehicles and scooters and mentioned undivided highways. In other worlds or rather in other parts of the world vehicles co-exist on many roads which cannot in the US. Some b/c of safety and some HP rules. I can buy a small truck from S. Korea, China or Japan which would be able to drive between most any two towns in much of Asia, Africa, or south America which ,upon being sent to the US would have to have it's speed governed and relegated to city or neighborhood licensing.
It's part of being (speed and power) car centric. Which also includes lack of sidewalks, crossings and foot/bike paths. Also speed limits on undivided roads of 60mph where most drive 70 are insane. When the frost hits even the 4wd SUV's flip regularly. A frequent killer b/c of the false security deal but I digress.
Where I lived in the Netherlands it was possible to travel between major cities on dedicated paths by small scooter, bike, or foot as well as there being electrified rail service just about everywhere. But we probably don't have the time or money for real solutions now...and we have these darn big distances which we're so used to covering. Ad hoc Cuba-style schemes like you suggest and I foresee are probably what's coming. And there may be a few rules bent or altered in the process. If we get a real wage/fuel crunch or a shortage I would hope that something like drastically lowering the speeds on many undivided roads would be considered in order to expand use by NEV and small engine types. It does not have to be every road as long as there is a route. Out here a farmer can move equipment with a slow vehicle placard and use the shoulder of a road. That's another thought.
An e-bike ,even a 3 wheeled one, can operate most anywhere except freeways w/o a license under 20mph today. They can be built up pretty stout with the new batteries and have range. I'm not saying these are the best solutions I am trying to get at what folks are likely to do if the liquid stuff should be siphoned off elsewhere. Carpooling would certainly be in the mix. It would be better if we had planned or changed earlier, but what is unthinkable today in our world may be necessary in tomorrows' reality.
Hi WNC,
When I worked in Bangalore, India, auto rickshaws were ubiquitous. They were cheap, fast and convenient. Although, I understand there have been some issues with some of the operators - but, my experiece was always good - that is if you can ignore overpowering air pollution! I understand that some Indian cities have converted auto rickshaws to LPG and this has helped the pollution problem significantly.
1. Where will the energy come from, as more of the world's net exporters become net importers?
This question is disingenuous. The net importers have become so because it was cheaper to import energy than to replace their energy supplies. Once imports of energy reach a critical level of cost, the motivation for seeking alternative sources of energy production should increase. I think a more pertinent question is 'Will the net importers be able to replace the current imported energy with new internal sources during a period of supply decline?'
2. If the creeping infection of sovereign default continues to spread to more countries, where will the money come from to bail them out?
Short answer, hyperinflation. Print, print, print, and inflate the problem away on a global scale. Effectively cancelling all meaning of wealth in the affected countries - which means that those countries who don't have to hyperinflate will become the powerhouses of the new global economy. I suspect most economic policy advisors are aware of this, which is why unpalateable containment measures for places like Greece are being implemented with relatively little objection. The Sovereign debt risk is definitely the one to watch for the next 12-18 months.
Are you serious? Did the US of A, once a net energy exporter, become a net importer because we found it cheaper than to replace our energy supplies? Replace them with what?
Well, no doubt Japan is a net importer. Exactly what "new internal sources" of energy do they have? What about South Korea or Taiwan, or Singapore? China is building two new coal power plants per week, should they build four per week? Or perhaps they should grow enough corn or sugarcane and turn it all into ethanol. If they turned all their arable land int ethanol production they still would not have enough ethanol to replace all the oil they consume. And a side effect of that great project would be that their entire population would starve to death.
So called "new sources of energy" are a myth. There are no new sources that will make even make a tiny dent in replacing petroleum.
Ron P.
He can't be talking about oil..., can he???
everyone on this site knows the U.S. peaked in around 1970..., right?
While not a direct replacement for petroleum, Japan is a big importer of plutonium. I assume their fast breeder program to produce electricity is somewhat connected to being the HQ of the only large scale HEV manufacturer (toyota) soon to be the only large scale PHEV manufacturer.
Japan thinks strategically.
You gotta be kidding.
Japan has one MOX reactor and just built a second one.
MOX, 5% plutonium + U-235 fuel provides 2% of nuclear energy worldwide. The US has a program of disposing of atomic bombs by removing the plutonium and mixing it with U-235 to make MOX for burning in certain approved reactors such as Palos Verde. MOX is actually bigger in Europe than in Japan.
Fossil-fuel poor Japanese and South Koreans are scared to death of being cut off from nuclear and have both embarked on
'cutting edge' technology schemes. The Japanese are trying to restart their tiny breeder reactor 280 MW Monju(closed after less operating than a year in 1996) and the South Koreans have been building heavy water reactors--both ancient technologies.
What could cause someone to view failed or marginal technologies as 'strategic thinking'?
Answer: Nuke fanaticism
Singo said,
"This question is disingenuous. The net importers have become so because it was cheaper to import energy than to replace their energy supplies."
I'm sorry Ron, but I think he is exactly correct on this. I well remember the late 1970's and early 1980's. The technology was available to massively reduce energy consumption. Most people now do not realize that the first "plug hybrid" (although they did not know then to call it that, because they assumed ALL hybrids would be plug in those days) was built by Briggs&Stratton
http://www.motortrend.com/features/editorial/112_0412_technologue/index....
http://www.jsonline.com/business/29448164.html
There were also developments in the 1970's of hydrualic hybrids and full electric vehicles.
Something else that is starting to be reconsidered from that period was Compressed Natural Gas (CNG) vehicles and there was a cottage industry in converting cars to propane.
Now, 30 years later, Toyota is beginning the process all over again, with first lease cars to be released in Japan:
http://green.autoblog.com/2009/12/14/toyota-officially-launches-plug-in-...
Volume production of Diesel automobiles by the U.S. industry was began in the 1970's, but was never properly developed and later essentially abandoned.
Streamlining spoilers added to the top of over the road tractor trailer trucks have saved millions of gallons of Diesel fuel and proved the validity of aerodynamic design, but further advanced development stalled after 1982.
We would ask what happened to all the techncial gains made in the last major energy crisis...but we do not have to because we know. When the U.S. began recieving vast volumes of cheap North Sea and Arab oil, developing technology in the U.S. became untenable.
Of course we could get into more controversial areas...for example the virtually abandonment of the nuclear industry based on Three Mile Island, supposedly due to "safety concerns". But we had never allowed safety to stop a major industrial program before...there was not one proven death from Three Mile Island, but thousands from the chemical accident in Bhopal India, but we certainly did not abandon the chemical industry.
We could mention that China has held up windmill construction because they are suffering from "stranded wind", i.e., they are already producing more wind than their grid can carry, and they have not even began to really tap the vast wind potential of the Gobi Desert.
It is now all but forgotten that the first concentrating mirror solar thermal plants were built in the 1985 (the SEGS system in Kramer Junction and then followed by the Harper Lake installations in the Mohave Desert of California) and here's the story no one will tell, they have been producing electric power ever since! Astounding to thing that the most "pie in the sky" energy source has been proven to be dependable year on year.
Again, here is what Singo said:
"The net importers have become so because it was cheaper to import energy than to replace their energy supplies."
I think history proves him not only correct, but as close to absolutey correct as any statement I have seen on TOD in a long time.
And in a way, Ron, what you said is correct too:
"So called "new sources of energy" are a myth. There are no new sources that will make even make a tiny dent in replacing petroleum."
Exactly, if we refuse to implement the technology, they will always be a 'myth', despite systems that have been operational for 25 years. And as long as imported oil stays cheap, we will refuse, and oil, when you consider what it can do, what it is costing us in carbon release and the amount of logistical effort, military effort, financial effort and technical effort it takes to get it is essentially giveaway cheap right now. And if the sellers cannot find some way to get demand back up fast, there may be a real danger of a complete price collapse. That demand thing...but oops, that's where I came in...:-)
RC
I am sorry Roger but you are wrong here. Of course we can conserve and make our oil supply last a little longer. But this debate is not about conservation, it is about replacing crude oil. Simply using less oil does not replace oil. And conservation can only go so far and will take at least a decade after we begin in earnest, but we have not yet begun in earnest.
All those gas guzzling cars are not only still on the road but they are still being manufactured and sold. Cars last longer these days. Those new cars sold this year, and in the next several years, will last 15 years. Plug in hybrids are less than one tenth of one percent of cars sold, and their sales are not exactly booming either.
Wind and solar energy are fine as far as they go... but they sure as hell don't go very far. In the next two decades wind and solar combined will not likely supply more than 10 percent of all energy consumed. And I would be shocked if it even comes close to 10 percent. And the manufacturer of biomass fuel will not only rape the landscape of forest but it will rob the people of food as well. Well, that is if they actually try to make enough of it to make a difference.
Within the next three of four years it will be discovered, by the mainstream media and the financial world, that those massive Mid Eastern oil reserves are a myth. It will be discovered that most OPEC nations are about to go into a steep decline. Of course most non-OPEC nations are already in decline and the rest will be in decline soon. That five year plateau we have been on is about to become a cliff. All hell will then break loose.
Ron P.
Again, we need to be clear: we have two separate problems: climate change, and liquid fuels, not a general problem of peak energy. If wind and natural gas are inadequate, we have more than enough coal to keep the lights (and whatever else we want to power with electricity) on during a transition (for better or worse). See Are we running out of coal? and Are we running out of coal? - part 2
Cars last longer these days
50% of VMT comes from cars less than 6 years old.
If fuel prices double, why not just buy a Prius (which will reduce fuel consumption by 50%)? Or, if Priuses are suddenly back-ordered (because everyone else has the same idea), put in your order and carpool with one other person (which will reduce fuel consumption by 50%) until it comes??
If they double again, put in an order for a Volt (which will reduce fuel consumption by another 80%), and carpool in your old vehicle with 3 other people, or your Prius with one other person until it comes.
Carpooling - the horror.
As always Nick you see problems as separate and not interconnected. Thus you can find a "solution" to a problem and never have to look at how that solution might impact some other facet of life or the economy. Of course trying to look at life and civilization and our modern global economy is difficult if not nigh unto impossible. Still it is worth trying. If you isolate a problem enough (say not look at how a crashing economy effects our ability to upgrade the grid or build replacement EV car, or look at the rising price of energy and how that effects the economy) you can come up with wonderful solutions that solve that problem. But if you don't integrate your problem solving with related problems your solution is just pie in the sky.
And of course you always fail to input the problem of what people will do vs what you think they ought to do. If what they ought to do is important to your solution you should go find some politicians to pass a law forcing them to do it, because people cannot be trusted to do what is rational if the problem is far off and not immediately apparent. Whether or not you think people should carpool (I think they should as well) what is important is WILL they carpool and if not voluntarily what will make them carpool. They should buy high mpg cars or EV's too but will they and if not what will make them do so. Oughts and shoulds don't save energy, actions do. What is your solution to that problem?
Wow, so many conflicting opinions about the same question;
""This question is disingenuous. The net importers have become so because it was cheaper to import energy than to replace their energy supplies."
I think Singo is correct here, BUT, only if you replace the word "energy" with "oil".
Oil (and a small amount of nat gas) is the only "energy" that the US imports, and that is true of many other countries too.
But using the US as the example, it was known then, and still is, that there are large amounts of oil in oil shale - but insanely expensive to extract. The technology for coal to oil is well know, as is the coat of producing it- around $100/bbl. Canadian oilsands are really only worth it at more than $50/bbl.
Britain became a net importer of oil as the north sea declined, because the finding more became so expensive that it was cheaper to just buy. They still have lots of coal in the ground, but it's cheaper to just buy. S. Africa had to go to coal in the Apartheid days, as they could not buy oil period, once the embargo lifted they started buying and scaled back CTL. They have kept CTL ticking along in the hopes of selling it to other countries like China, and that is now happening.
As with all these discussions, using the blanket term "energy" can be very misleading, and, think, should be separetd to oil/liquid fuel, and electricity, as they are not interchangeable. The US is not short of energy sources for electricity, it is just short of oil. Same is true for China, Australia, Brazil, and many other oil importing countries
So, yes, in regard to oil, it was, and still is, cheaper to just buy it on the market. That does not mean this will always be the case, but it has been up until now.
you see problems as separate and not interconnected.
First, I find it useful to tackle things one at a time. If we can find consensus on those, we can move on to other areas where info is harder to find.
2nd, I disagree with your premise - I see no reason to expect our economy to crash.
So, it's useful to look at what's possible, before we look at what's likely. Are we agreed that there are affordable, available, effective solutions to our energy problems??
During declining oilproduction a lot of different things have to be tackled at the same time.
The problem is that not even on coal is consensus. You use the USGS as source, but others would disagree. And about wind the Chinese vice minister says:
Even is this turns out to be false, his (and some others) way of talking won't help to develop wind as quickly as a lot of people hope.
I'm not sure I agree. Most important factors against it are 'human nature' (in the sense of what oxidatedgem wrote: And of course you always fail to input the problem of what people will do vs what you think they ought to do), overshoot and increasing water shortages.
During declining oilproduction a lot of different things have to be tackled at the same time.
I think you're talking about something different than I was. OTOH, I agree with you, and we can talk about them one at a time, and then talk about their interactions and feedbacks.
not even on coal is consensus.
Well, there is outside of places like TOD. The analyses that doubt that consensus are based on very weak analysis, basically looking at production curves and trying to fit a Hubbert logistical curve to them.
You use the USGS as source, but others would disagree.
Have you looked at the detail I provided? It's really not a matter of having to trust an authority.
Chinese vice minister says: - 'China's current wind power generation park are by large only for show,'
Command economies don't always work that efficiently - it requires a lot of good management in a small circle of bureaucrats. That requires a lot of local talent, and a lot of good luck.
Are we agreed that there are affordable, available, effective solutions to our energy problems?? - I'm not sure I agree. Most important factors against it are 'human nature
That's different. I'm trying to get consensus on one question: are there technical solutions? Then we can move to the social factors...
overshoot
Of what? When people talk about overshoot of economic or population growth, often they're really talking about PO - when you look into their models, it turns out energy is the majority of the resource modeled, and oil is the major energy item that's facing limits.
increasing water shortages.
Where? The US and Europe don't really have problems large enough to cause some kind of collapse. We might have to stop farming rice in deserts....
Nick wrote'
"overshoot
Of what?"
and
"increasing water shortages.
Where? The US and Europe don't really have problems large enough to cause some kind of collapse. We might have to stop farming rice in deserts...."
I think you are spot on with both of these statements. Population overshoot is NOT a problem in any OECD countries, most of which (other than US) are slow growing or even declining. US is only increasing because of immigration.
AS for water, same applies to OECD countries, they are all able to live quite well within their water supplies. And, by and large, they have done a good job of protecting their water quality (for drinking water, anyway).
Too many people and not enough water are problems of developing countries, and neither of these are really related to oil usage. If anything, you would draw a broad generalisation and show that the average population density and growth of major oil using countries is lower than developing ones. There are some exceptions (Japan, Britain), but the average will hold true.
Peak oil is the developed world's problem, peak people and water is the developing world's problem, and solving one will not solve the other.
The US and Europe don't really have problems large enough to cause some kind of collapse. We might have to stop farming rice in deserts..
Paul since much of our food production comes from the Great Plains and relies on pumping groundwater the state of the reservoirs there is vital to the production of our food. Some refer to this a fossil water as it was laid down eons ago and has a very small recharge rate. In other words if we use up that which we can pump we are in trouble. And we are doing that. An energy crisis would exacerbate that as fossil fuels are use to provide the energy to pump what we can still reach.
http://academic.evergreen.edu/g/grossmaz/WORMKA/
much of our food production comes from the Great Plains and relies on pumping groundwater
My understanding is that about 1/3 of US food production is irrigated - I haven't been able to find my source - does that sound right to you?
If irrigation continues to draw water from the aquifer at the same rate, about 6% of the aquifer will be used up every 25 years
That sounds like a real problem, but hardly an imminent crisis that will cause a crash of food production in the next 25 years.
Here's a comment I saw once: "Desalinisation shouldn't be started before water conservation policy has been implemented, technologies exist and are operational in countries like Israel where most of used water is recycled and dripping is used to water agriculture.
As a french I am profondly shocked that all the winland are irrigated in Napa and Sonoma Valley. In France irrigating the whine is strictly prohibited even in the south east of the country where rain precipitation are even less than in north California, and it doesn't prevent France to produce more wine than French people can drink."
How much could water useage be reduced by midwest farmers with recycling and drip irrigation?
Here's a comment by dipchip on December 21, 2009 - 11:17am
"The greater part of Nebraska is already grazing land.
Nearly all of the aquifer in Nebraska is stable or rising in the past three years. The largest amount of irrigation is drawn in the counties that have the highest rate of recharge or rise.
The aquifer in Nebraska has been stable or rising for the past 30 years. The greatest part of the aquifer storage is under grazing land. My family has several wells in the highest withdrawal counties and the formation thickness is monitored for their and the states benefit. During the past few years very little irrigation was used."
http://www.theoildrum.com/node/6063/572075
Yes, and when oilproduction goes in decline interactions and feedbacks will begin (have begun allready). Some feedbacks positive, some negative. One can say: there is coal, wind, solar, rail,carpooling, EV's. But saying because of that it will work out well is impossible. Maybe it works good, maybe not.
That is your belief is my conclusion. Let's look at this:
You use the USGS as source, but others would disagree.
For me it is a matter of trust:
I don't know what you want to say here regarding wind-energy. Point is that that kind of talk may harm the development of windfarms in the future.
Yes, there are technical solutions. But that is not the same as 'easy' (in the way of availability and no need for batteries and back-up) and cheap energy.
Peak gas is also a serious issue.
Problems don't have to lead to collapse. Last year a ship with water was send from Marseille to Barcelona, because of water shortages. In Asia some rivers are running dry, or are so heavily polluted that the water cannot be used anymore for irrigation. Watertables are falling. I read that also in the U.S. this is the case in some places. Also water can lead to resource wars, without having to cause a general collapse.
Nick,
First, problems are always interconnected since everything in the universe is interconnected. When problems are small lots of the interconnections are irrelevant. The more they concern core problems the more we need to deal with all the interrelations. If I cut my hand I have bandages on hand and they don't cost much so cost and availability are small problems. If I get cancer and you think you have solved my problem by recommending a treatment you haven't solved the problem at all. The availability of that treatment and the status of my insurance or bank account also relate to whether or not the treatment recommendation solves the problem. All the more so when dealing with fossil fuels.
Second, do you really think that even we on the oil drum can reach consensus? If so, would it matter, ie will it change any policy that might matter? Has the oil drum changed any policy in any country? I am sure it has changed individual lives but not necessarily in the same way - ie people have different beliefs about the (sometimes) conflicting information presented and make what choices seem right to them - buy a prius, buy a donkey; stay in the city and walk to work, buy land in rural area and garden; etc.
Third, of course the economy is going to crash. It has already crashed, it is just going to crash more. Greece, Spain, Latvia, Iceland are previews. This interactive map of unemployment goes for 2007 thru 2009 - a nice visual of what is going on. http://www.slate.com/id/2216238/ Of course for those who still have jobs things seem OK. If you once lived in a nice house and now live in a tent city, well you know how bad things are. Bernanke and Geitner can only hold their fingers in the holes in the dike for so long.
Fourth, what is possible for humans is what humans will do which is ruled largely by their unconscious reptilian brain. That can be overcome, but it takes work and the populace at large is too busy working at keeping up with the lives of movie stars. But no I am not agreed that there are affordable, effective, available solutions to our energy problem EXCEPT for conservation. Forced conservation will buy us time but at least in the US there is no political will for that.
problems are always interconnected since everything in the universe is interconnected.
Of course. Let's deal with the parts as best we can, then deal with the systemic interactions.
do you really think that even we on the oil drum can reach consensus?
Sure. Even if we don't, it's useful to work in that direction. If you don't think anybody learns anything from each other here...why do you stay??
of course the economy is going to crash. It has already crashed
I don't know - I think your definition of a crash is different from mine. The US GDP dipped by only about 5% at its worst, and it had 6% GDP growth in the last quarter of 2009.
I am not agreed that there are affordable, effective, available solutions to our energy problem
So, tell me: apart from your belief that the economy is going to crash and make everything hopeless, why aren't HEV/EREV/EVs affordable and effective?
Let's deal with the parts as best we can, then deal with the systemic interactions.
I am a system. If you deal with my parts without evaluating the whole system you may have a dead body. For instance if I have blood poisoning in my arm and you cut it off without also cauterizing the wound you may cause me to survive the poisoning while bleeding to death. So if we put all our energy into producing enough solar and wind energy to power a world of Prius cars and don't have enough resources to upgrade the grid or supply charging stations we have wasted our remaining fossil fuel resources.
Sure. Even if we don't, it's useful to work in that direction. If you don't think anybody learns anything from each other here...why do you stay??
Your idea of consensus seems to be to get everyone to agree with you, which they don't. Even the editors post differing opinions. I always read a push for consensus as the pusher wanting everyone to agree with them. If there is a real consensus evolving it doesn't evolve by asking for consensus but by the discussion and facts becoming so powerful that consensus is reached. I learn a lot here from people who are gardening, not from people pushing the Prius (I keep getting the feeling you are working for Prius you mention it so much). I don't expect consensus on one way of gardening over another. What works for me might not work for someone else but I gather ideas that I might use or modify. I am also here just because I find the Oil Drum more interesting than the mainline news. We humans are wired for curiosity eh?
US GDP dipped by only about 5% at its worst,
Oh my, once our GDP meant something when we were producing lots of stuff. Now we have become the service economy and the GDP includes manicuring nails, serving food in restaurants, creating movies, etc. 6% GDP growth in the last quarter? My you do believe in government fictions don't you.
Please check out http://www.shadowstats.com/
So, tell me: apart from your belief that the economy is going to crash and make everything hopeless, why aren't HEV/EREV/EVs affordable and effective?
My belief that the economy is going to collapse is the main reason that I feel they are not going to ever take over. I have discussed with you before why I think solar and wind will never replace fossil fuels. No consensus there with you although I have consensus with others on that issue. Hopeless? in a sense life is always hopeless as (almost) every living thing tries to keep living but fails. But one can enjoy one's time here. You just seem to think one can't enjoy their time here without some form of BAU even though countless generations of humans did just that with only donkeys and horses for transportation and some with no domestic animals for transportation. In fact many in the world do that now. I have a hope. I hope that our global civilization collapses before we cut down every tree, kill the sea life beyond recovery, etc etc. even tho the repercussions for myself and my family are dire. Ever since we saw the first picture of the world from space we had to marvel at its beauty. Shall we destroy it all for BAU? Your Prius won't save the planet, solar and wind won't save the planet, because as long as we can keep up some form of BAU we will keep doing all the other things, like overpopulating, that are death to the wonderful, beautiful, interconnected planet we live on. Yegads I am sounding almost religious there. Well if ever there should be "spiritual" feelings it should be for the world and atmosphere that sustains us and fills us with wonder.
I am a system. If you deal with my parts without evaluating the whole system you may have a dead body.
Sure - eventually you have to treat the system. But...doctors research one body part at time, in order to understand it. Medicine is a classic example of "analysis", which originally meant breaking down something into it's parts in order to understand it. Obviously, reductionism has it's limits - we have to put the system together eventually - but you have to start with it's parts. If you don't, you really can't understand the system.
if we put all our energy into producing enough solar and wind energy to power a world of Prius cars and don't have enough resources to upgrade the grid or supply charging stations we have wasted our remaining fossil fuel resources.
You're suggesting that manufacturing wind/solar might use so much resources that we wouldn't have enough to upgrade the grid or supply charging stations? OK, that's a reasonable question. The answer: we have more than enough energy to do both. First, manufacturing (of solar panels, wind turbines, grid equipment or charging stations) mainly uses electricity, and we have plenty of that from coal (see how useful it is to deal with things one at a time?), if needed. 2nd, wind has a very high E-ROI, meaning that it will pay for itself. 3rd, HEVs don't need grid upgrades or charging, and the grid is just fine as it is for a pretty large buildup of EREV/EVs.
more later...
Yes, in a healthy body. When something is seriously wrong not anymore. After a severe myocardial infarction or stroke you go to intensive care, where bloodpressure, heart rythm and other things are checked. They make an ECG and EEG. Even in some less serious conditions more things are checked at the same time.
The world now is far from healthy.
Well, I posted some doubts about coal. That are the studies that you deny, because you believe in what the USGS publishes. So you can only come to a consensus in this if everyone believes in 'your' view.
Yes, in a healthy body. When something is seriously wrong not anymore
No, I'm talking about basic research. Medical science tries to figure things out a piece at a time. Someone at John's Hopkins working on heart failure doesn't try to work on diabetes at the same time - they'll work on one thing at a time. In fact, they won't even work on the whole heart - they're likely to figure out one enzyme or valve at a time.
I posted some doubts about coal.
Well, I'll try to circle back and answer those. But, I have to ask: have you read the links I gave? Have you read the USGS reports, and the Energy Watch Group study? Have you looked at Rutledges' work?
you believe in what the USGS publishes
Not at all - I look at the detail from the USGS, the EWG, Rutledge, industry reports, etc, etc. Ultimately, I find that there really isn't disagreement on the facts, just the interpretation. Those who see coal as peaking are looking at demand for coal, in the context of cheaper and better alternatives.
That is why I answered that regarding the world situation (Peakoil, Climate Change; rivers dryinp up and watertables running low in many places)now we have to do with a sick body. So basic research they could do 100 years ago and then do a prevision what would be the situation now.
Yes. But I find it strange that you write that you looked at the details from EWG. Because yesterday I gave this comment from EWG:
That is not my conclusion from what EWG says above.
Maybe sometimes EWG (and others) forget their argument, just like CERA, EIA and IEA 'forget' things for the sake of BAU.
So basic research they could do 100 years ago
Basic research also has to deal with serious illness. We're not trauma doctors, forced to do an assessment in 30 seconds - we have the time to figure things out in detail.
That is not my conclusion from what EWG says above.
Yes, EWG does specifically address that point. But look at how they do it: not by detailed analysis of individual coal beds, but by looking at how countries have changed their reserve reporting. That's a very superficial approach. And...it's wrong. Just because the UK decides that a particular coal bed is never going to be developed, because there are cheaper competitors, doesn't mean that coal disappears. The UK is a very good example: production peaked in 1914, and is very low today. The UK has officially downgraded their reserves, and yet they still have very, very large amounts of coal - they've just decided that they won't ever be "economic".
Heck, Alaska has between two and five trillion tons of coal - but it's unlikely that more than .01% will ever be produced, because it's more expensive than more easily accessible coal. There's an enormous amount of "shale oil" that could be easily burned like coal, if necessary. We will never run out of things to burn...
I would say that now, with world at Peakoil, yes some very good trauma doctors are needed. Instead we have governments who listen to EIA and CERA.
Nick, it was you who wrote that EWG did detailed analysis.
And in fact they say the to me logical:
In that case i would go for the expensive coal.
As long as it is affordable for 'the economy'.
it was you who wrote that EWG did detailed analysis.
Well, what I said was this: "Not at all - I look at the detail from the USGS, the EWG, Rutledge, industry reports, etc, etc. Ultimately, I find that there really isn't disagreement on the facts, just the interpretation. "
What I meant was that I look at whatever supporting detail they provide, if they have it. In fact, EWG doesn't have it. Instead, they're guessing based on changes in national reserve reporting. Using national reserves reporting might be ok, actually, but they are misinterpreting it by not taking into account the changes caused by changes in the meaning of "economic reserves".
Part of the problem is that one of their premises is incorrect. They say " Over time and with coal prices increasing more and more resources will be converted into recoverable reserves. ". The problem: coal prices haven't been rising consistently over long periods of time. Spot prices rose temporarily during the oil price spike due to fuel arbitration, but they've since fallen back, and contract prices haven't risen in the same way (unlike oil, most coal is sold on long-term contracts).
We will never run out of things to burn - As long as it is affordable for 'the economy'.
Burning oil shale would be cheap, as long as you didn't take into account the environmental costs...
I don't understand. If they say that with rising coal prices more resources will be converted to recoverable reserves than they say the same as you. Instead they say:
They challenge the conventional view.
Indeed, such as the use of water. And EROEI is low. Also flow rates are low. It would take massive investments to get a few mbod. IMO this won't get started seriously. When oilproduction goes down it can become a messy situation with a difficult choice in which projects to put tremendous amounts of money.
EWG is saying that coal prices rose, but reserves didn't rise. They argue that is proof that coal reserves are really smaller than we thought.
The problem with that logic: coal prices didn't rise.
Burning oil shale would be cheap, as long as you didn't take into account the environmental costs...Indeed, such as the use of water. And EROEI is low. Also flow rates are low.
I'm not talking about turning "oil shale" into oil. I'm talking about just burning it, like coal. That's very different, and much, much more practical.
I'm not suggesting that's a good idea, but it's doable.
In that case EWG is publishing lies about a simple fact. However I read last year that, at least in China, coal price was soaring. This EWG statement would be based upon a lie:
If it was so obvious that this cannot be concluded because coal prices never rose significantly, wouldn't they have corrected it ? All those energy agencies want to give an optimistic view about reserves of fossil fuels.
Strange is also that some countries decreased their reserves with 99%. And EWG believed it. It resembles what CERA,EIA, etc did when OPEC increased their reserves with the diffence that the coal situation view became much more pessimistic.
Right, my error. Still I don't think it will happen soon because coal has at least a few decades to go before it peaks (because of above ground factors).
In that case EWG is publishing lies about a simple fact.
Yes, I'm puzzled. In part, I think they've been fooled by short term variations. In part, I think this was simply a superficial analysis.
I read last year that, at least in China, coal price was soaring
China is unusual - their coal consumption is soaring, and their reserves are not in proportion. I'd like to get more info about Chinese coal - it seems to be hard to find. What have you seen?
Strange is also that some countries decreased their reserves with 99%.
Those countries simply concluded that domestic coal mining was a thing of the past - that natural gas and imported coal were cheaper.
Still I don't think it will happen soon because coal has at least a few decades to go before it peaks
I agree. It's just a theoretical exercise to remind folks that we're not going to run out of stuff to burn to generate electricity.
Maybe, or lack of demand. But then the analysis is indeed superficial, figurative and literally. In fact incredibly superficial.
Don't remember details, only that coal price have risen a lot.
Can be, but it seems different:
Possibly "proven recoverable" has a lot to do with economics, but it remains to be seen IMO, especially in the light of possible increasing financial turmoil.
Possibly "proven recoverable" has a lot to do with economics
Yes. It has to do with current pricing, competing supplies, and changing perceptions of the acceptability of coal mining and burning. These things, of course, would change if we really had a real threat of a true electrical power shortage.
For instance: "Germany: In 2004, without explanation, downgraded its estimate ".
Well, if EWG really wanted to, it would be easy to research this change. They could talk to the regulators, they could talk to the industry. This is sloppy work.
Similarly, the UK still has an enormous coal resource - it's the local mining industry that's in danger, due to cheaper natural gas, imported coal, and an aggressive miner's union that was targeted by a conservative Thatcher government.
Medical science tries to figure things out a piece at a time.
Thanks for illustrating my point. When antibiotics were discovered they thought they had solved many diseases. But that was because they looked at just one part, the invading organism. Now we know that resistance is important too, but the focus is still on treatment. Some scientists have also found that keeping children too healthy may lead to asthama and auto-immune disorders because their body is primed to fight disease and when no disease is present the immune system turns on itself. Still vaccines and drugs are the focus BECAUSE we medical science looked at only one part, fixed (they thought) that one and stopped looking.
I think that may be a sort of metaphor for trying to fix the "energy" problem without looking at the "humans living in a life give ecosystem problem". Your fixes may create more harm than the problems we have now. But if you only look for the fix you fail to look for how we live in harmony with the world that birthed us. We have plenty of examples of the failure of looking at each piece separately.
When antibiotics were discovered they thought they had solved many diseases.
Actually, they had. Death rates fell, life expectancy rose.
Your fixes may create more harm than the problems we have now.
Medicine isn't a good metaphor for this argument: people are inarguably much healthier and longer-lived because of medicine.
Now we know that resistance is important too, but the focus is still on treatment.
Sure, because doctor's payment incentives are for treatment, not for prevention. That illustrates one of my main contentions, which is that PO isn't a technical problem, it's a social problem. We don't replace ICEs with EREV/EVs because it would hurt too many careers and investments.
We have plenty of examples of the failure of looking at each piece separately.
I said we should look at the parts first, then put them together. That's different.
Yes Nick I well know death rates fell. But now we are breeding super bugs with strong resistance to antibiotics. MRSA for instance is on the rise and not something anyone would like to get. It didn't exist or didn't thrive before antibiotics wiped out the competition http://www.google.com/hostednews/canadianpress/article/ALeqM5h_UkbAI3KGg... It has become dangerous to go to some hospitals.
Right now people are healthier in some ways because of vaccines and antibiotics. However it may be that the rise in autism is related and as I noted before many think the rise in auto immune disorders are on the rise. But again you think narrowly. The increase in population is related to our temporarily being on top in the battle between us and diseases. The increase in population very few people especially on this site see as a good thing. It could be argued that bypassing the culling of humans by disease is resulting in a population that is more vulnerable. For instance the conquering of small pox leaves us with a human population that has not been selected for small pox resistance and are no longer being vaccinated. That leaves the world very vulnerable to an attack using small pox, a mistake in some lab, or the re-evolving in nature of human small pox. So take a snapshot of humanity at this moment in time and it looks like the pluses out weigh the minuses of modern medicine but the signs are there that the minuses are catching up. Had science looked at resistance as well or things like why does the placebo effect work and how can we make it work for us, had science looked at general health and promoted healthy eating and exercising back when they first started antibiotics we might be in better shape. But in fact that points out what your idea of solving the parts first does. When humans solve a part they often stop as they did with medicine for a long time. now some are looking at the whole human rather than the disease. How much better if they had looked at the whole from the beginning.
But with energy it is even more of a danger. We have just so much high ERoEI oil left. Before we invest it in EV's we better look at the whole. If you had a set amount of money left for you to spend in your life, wouldn't you be better off taking a long hard look at how best to meet your needs for your expected lifespan instead of spending it on something that seems to solve your immediate problems and then find it it doesn't and whoops you have nothing more left to spend.
Peak oil is a social problem, and the problem you note is true. But worse is the problem of people with your view that having personal vehicles is the solution as long as they are EV's. But as you note careers and investments are at stake regarding EV's which one, but only one reason, why I believe they will never increase exponentially. Thanks for helping me make that point.
But now we are breeding super bugs with strong resistance to antibiotics.
Boy that's really looking at the glass as .1% empty, instead of 99.9% full. Even if all bugs became multiple-antibiotic resistant, we'd just be back to where we were before antibiotics were invented.
Right now people are healthier in some ways because of vaccines and antibiotics.
They're a lot healthier!
The increase in population very few people especially on this site see as a good thing.
Again, all I can say is wow!
the conquering of small pox leaves us with a human population that has not been selected for small pox resistance and are no longer being vaccinated.
Again, you're seeing the .01% glass empty, instead of the 99.99% glass full.
the signs are there that the minuses are catching up
No, they're really not. Perhaps the glass is going from 99.99% full to 99% full.
Before we invest it in EV's we better look at the whole.
Well, if you see specific potential problems, I'd be delighted to discuss them.
as you note careers and investments are at stake regarding EV's which one, but only one reason, why I believe they will never increase exponentially.
I didn't say they'd never increase exponentially. Indeed, they already are. I just said they've been held back much longer than they should have. EREV/EVs are now here.
Now, they would grow faster if we did the things we should, like start a stiff carbon tax, but they're here, and growing reasonably fast.
I agree with oxidatedgem: healthier in some ways. In the past there was hardly high blood pressure and diabetes. 50-100 years ago much less people with overweight, in general more excercise: more people (in %) were feeling healthy and less people with depression. Probably you can imagine this as biker yourself. I feel the difference between a few months regular biking and a few months not. Now a lot of people spend many hours before a computer screen and t.v. and take the car even for very short distances.
Before we invest it in EV's we better look at the whole.
Floridian is allready discussing this with you. I'm not sure which side to choose.
50-100 years ago much less people with overweight, in general more excercise:
I agree - we could do better. Nevertheless, people have much less disability at all ages, and are living much longer. In 1900 the average US lifespan was about 40 years, now it's about 80 years.
Nick, I think you are a bit naive. Why do you suppose several gov'ts keep smallpox instead of destroying it? Same reason several countries all have nukes. Do you not know that there have been releases of dangerous germs from secure bio facilities. It wouldn't take much of a release (accidentla or on purpose) to wipe out a fair portion of humanity. Look what it did the the people of North and South America when Europeans arrived. As bad as small pox was in the end it might have been better to let the little germ force humans to keep up their immunities.
I am clueless as to why you use the empty/glass full description of your view of my statement as if it were some sort of argument. It is not, it borders on being an ad hominen. Should we humans never ever look to see if there might be any downsides to anything we do? I am glad for many aspects of modern medicine, but that doesn't stop me from seeing its downsides and dangers. And it especially doesn't keep me from seeing how we could have managed these new gifts better if we had assessed those dangers earlier. Its not as if no one knew about evolution and how it worked, its just that antibiotics were working so well no one wanted to see the problem. So they slapped every human, and worse yet domestic animal full of antibiotics and duh they antibiotic resistant superbugs. They could have used the antibiotics more responsibly. They didn't and even now they STILL don't. Just the little picture, solve this one problem here, don't see any downsides, don't see this as part of a larger picutre. Just solve the pieces we can look at the big picture later. That thinking is what keeps solving us into bigger and bigger problems.
Perhaps you should read Nassim Taleb's book on Black Swan events. http://en.wikipedia.org/wiki/Black_swan_theory Events that are highly unlikely do happen sometimes and if they are earthshaking events well then the earth shakes.
PS I am old enough to have been vacinnated for smallpox and likely have some residual protection. I would guess you are not. You will note here http://en.wikipedia.org/wiki/Biosafety_level#Biosafety_level_4 that we have level 4 biolabs at Ft. Detrick. You know the lab at which someone got out the highly refined anthrax that was released just after 9/11
I'll try to answer later.
Promoting 'healthy living' won't work for most people: they don't listen. I see here a role for the government, not for science. Junkfood, junkdrinks, sweets, etc. should had been prohibited. But governments are in some way mirrors of society, so most won't never do that.
I also think EV's cannot keep BAU going. But a growing population with a declining economy is for good reason not considered a healthy option. That is the dilemma. Heinberg sees a not growing economy as interesting and challenging. But it means hard times are ahead, unless a few billion people disappear. Unfortunately there are some factors (water,energy,war) that could do that.
Promoting 'healthy living' won't work for most people: they don't listen. I see here a role for the government, not for science. Junkfood, junkdrinks, sweets, etc. should had been prohibited. But governments are in some way mirrors of society, so most won't never do that.
Well you have a point there Han. However declining energy will promote more physical work and less junk foods, even less foods period (which is good up to a point)
I think the future is really out of our hands. Heinberg works hard a being positive, yet those who find hard times a challenge and even exciting will probably not jump of bridges when times get bad.
Every one of us is going to disappear (ie die). To get the total numbers on planet earth down could be done with serious birth control, but we probably don't have the time and will for that. So what will happen is that births will go down some and a bunch of people will die earlier. Its not a question of IF it is a question of WHEN. HOW enters in, but I spent many years visiting nursing homes and I can tell you that a good number of people in 1st world countries die long, painful, lonely deaths now, so perhaps the HOW is not from good to bad but rather just earlier and different.
I always read a push for consensus as the pusher wanting everyone to agree with them.
Well, please try not to - that would be a mistake. Heck, I don't think anyone here thinks that anyone else can coerce them into agreeing with them. Well, I suppose a few try to intimidate others into agreement with flaming and ridicule, but when have you seen me do that?
If there is a real consensus evolving it doesn't evolve by asking for consensus but by the discussion and facts becoming so powerful that consensus is reached.
You don't think I was foolish enough to think that I could get consensus by asking for it, do you? You asked a question, I was explaining...
pushing the Prius
Well, it's an obvious way to reduce fuel consumption by 60%. It's here, it works, it's less expensive than the average new car, what's not to like? It can even be converted to a plugin fairly cheaply. If someone wants to say there are no solution to PO, the Prius has to be exhibit A for a disagreement.
once our GDP meant something when we were producing lots of stuff.
If you think manufacturing is the only "real" GDP, then I can see why you despair of many things, like our reducing our resource/energy consumption, or of life getting better in non-material ways.
Please check out http://www.shadowstats.com/
Oh, I have. Even if you agree that official stats are inaccurate (which I don't), we still have to use a consistent measure. By that measure, the economy is not crashing. Heck, even the shadowstat stats don't begin to say that.
I hope that our global civilization collapses
Wow. I'd say that's the key to your approach to things here.
Let me just say - collapse of our society is the worst thing that could happen to accelerate the current great extinction. If things go south, and we have a human "die-off", humans will consume everything around them before they leave, leaving the planet rather like a cueball. Our best hope: that we become more affluent, so that we can become responsible stewards of our biological heritage.
Less expensive not in Holland and I guess not in most other European countries. Let's say in the year 2020 5% cars on the road worldwide are Prius or something similar. How much fuel is saved then ? And this is mostly about gasoline, much less about diesel and kerosene.
Less expensive not in Holland
That's a matter of taxes. OTOH, a lot of European countries are planning to give special tax exemptions to pure EVs.
Let's say in the year 2020 5% cars on the road worldwide are Prius or something similar. How much fuel is saved then ?
What if it's much higher?
much less about diesel and kerosene.
There are other strategies for them: moving freight to rail, especially.
10% ? 15% ?
I agree. Concern is that only in the U.S. millions of people earn a living in making all those things that burn fossil fuels.
What if it's much higher? 10% ? 15% ?
Toyota is at 10% right now. The US CAFE will rise sharply by then, requiring a large % of HEV/REV/EVs: we're likely to be at 30%.
Concern is that only in the U.S. millions of people earn a living in making all those things that burn fossil fuels.
I agree. OTOH, they can only hold back the tide for so long. Already GM and Toyota have acknowledged PO.
We were writing about % on the road.
Let's say it is 15% in 2020. It is fair to look also at how much more ICE cars there are in China and India on the road then. And in some Middle East countries, especially KSA and Iraq. In the not too distant future they expect 500 million people living in the Middle East region.
Why then GM continues or started again to produce big cars ? Their actions go against what they acknowledge. BAU and profits are always more important.
We were writing about % on the road.
Yes, but keep in mind that cars less than 6 years of age account for 50% of VMT.
It is fair to look also at how much more ICE cars there are in China and India on the road then.
True. OTOH, China is moving to HEV/EREV/EVs also - electric bikes outsell ICE's about 2.5:1.
Why then GM continues or started again to produce big cars ? Their actions go against what they acknowledge. BAU and profits are always more important.
True. OTOH, the US CAFE is rising sharply. Things are changing. Not as fast as we need to prevent some economic stagnation and pain, but they are changing.
ok, but then in 2014-2015 a very important part of cars sold worldwide has to be PHEV/EV's. And that I don't see to happen. Less if oilproduction stays on plateau until 2014.
Let's say 800.000 cars sold in China per month (much more than 90% ICE's). So about 2 million electric bikes sold per month. Still a lot of people left who are going to buy their first car. In India and China the cheapest car is an ICE. Anyhow, I think a lot of people in China have to quit driving when the Chinese economic bubble bursts.
It is to hope that during stagnation the positive feedbacks are stronger than the negative ones.
in 2014-2015 a very important part of cars sold worldwide has to be PHEV/EV's.
Well, part of the point here is that newer cars are used more - cars less than 1 year old account for about 10% of VMT. And, of course, that could rise if we really push towards HEV/EREV/EVs (say, with fuel taxes), or are pushed by oil prices.
It is to hope that during stagnation the positive feedbacks are stronger than the negative ones.
Yes.
duplicate
You must mean durability. That is contestable as well. The median age of vehicles is increasing:
Only one PHEV is on the market, sold in China by BYD; its sales have been fairly awful, in the hundreds. But hybrid sales were 2.71% of the US market in 2009, a figure that is slowly increasing; with Volts and Leaves coming to market soon this figure should increase a bit as well. They are retaining their proportion of sales, even though overall hybrid sales peaked in 2007.
Now, their overall contribution to conserving gas isn't too spectacular as of yet, since many models are SUVs etc. My tentative figure for their improvement over similar models on the market is:
Ilargi (and Stoneleigh) would disagree with this, I think. They have an informative post (by a guest contributor)
todayyesterday that addresses this very point.From Ilargi:
My opinion is that Ilargi and Stoneleigh have made a compelling case about this for some time. Add to it the helpful articles/comments from Gail (and many other TOD-lers) and I think its difficult to say that hyperinflation will have any effect in the near term.
Of course, defaulting on the debit, by not having a government anymore will make the debit go away too. Hyperinflation is probably easier than that, but that really depends on what kind of government you get. And, by the way, by the time the governemnt starts inflating fast enough, deflation will have run its course; that's by definition, but tells you nothing about timing.
Anyway, your FED as any monetary authority dealing with fiat money can inflate at any time. It just needs to print and put the money in circulation by lending it to the government, instead of the banks. It looks like the FED is doing that, altough there is no formal recognition of it, even then, it is not fast enough to create hyperinflation, at least yet. I recognize that the FED may not want hyperinflation now, but I seriously doubt it will prefer currency stability over government stability.
Inflation will win.
1. First comes cost push (versus demand pull inflation). Article in Baron's two weeks ago talks about very steep cost curves for commodities (oil,gold,copper). The article says oil has the steepest cost curve. As we use up the lower cost oil, the cost will have to go up because that is what it will cost for new extraction.
Then,
2. The higher cost oil will pass though the system and cause other basic costs to rise (food, transportation).
This will also change inflationary expectations.
For a strong example as to the above look at the very high inflation rates that already occured in the oil crisis of the 70's. The Govt. just cann't control cost push inflation.
If that isn't enough, I agree that the Government will either have to default on the debt or hyperinflate but the argument that they can just default won't work...because they still will have promised untenable staggering amounts to retirees and other welfare benefits (medicare, social security, Fed. govt. pensions, State pensions) that they will not want to default on.
Foreigners are not stupid and will not lend us money for ever. They will and probably do see this coming already (the Chinese have been reducing their purchases of treasuries in the last few months). Then the Govt. will be faced with trillions in debt (12.5 now and arguably on the hook for 57 trillion and lots of off the balance sheet obligations).
Last month the govt. took in $2000 less per American Family then they spent (that's $24000 a year per family). Foreigners stop or reduce lending and Fed and State Govt.s will have two options (assuming they don't want to leave retirees without income or health benefits or welfare recipients without welfare). 1. Tax... which leads to slower economic growth, unemployment and ultimately inflation when demand for goods exceeds supply or 2. Hyperinflate to monetize the debt.
The Govt. will absolutely be forced to do both (trillions are a lot) because there isn't enough tax money to collect. First of all there just isn't that much to collect anyway and second the Laffer Curve shows when you raise tax rates the Govt. does (or certainly can) actually collect less tax revenue by stiffling economic growth and changing peoples behaviors (ie. some people will not work as hard at high marginal tax rates--work less hours- or retire- or not hire one more employee- or not expand the business). That is why when Reagan lowered marginal tax rates from 70% to 38% there was a huge increase in both tax receipts and Employment (yes there was also a large increase in the deficit but that is because of even higher increases in spending - we were already on our spending spree). Common sense should dictate that when tax rates go to exorbitant marginal levels, people do not produce as much at the margin.
Also, the Govt. is already printing exorbitant amounts of money and buying back our own debt (the Fed buying treasury debt) this year by printing more money. The extra debt and money will ultimately reduce the value of the dollar and cause even higher commodities inflation in the U.S..
Finally, the Fed can print enough both electronically and physically to hyperinflate and monetize. Here is a new dollar bill that should help.
{$50,000,000,000,000.00). There I did it! (and I didn't even cause inflation!) Now I just hope someone will cash it.
Best.
I'll let the posts from Ilargi and Stoneleigh speak for themselves.
But, I did want to address one thing that you wrote:
The Laffer Curve has been debunked countless times. Here's a recent article in Time about it:
A laffer curve is just that, a curve. There is an optimum tax rate that yields the most revenue.
Yes, and that optimum tax rate is almost always higher.
I'll let Mr. Laffer speak for his curve.
From the Time article:
You cited Time which means nothing to me as they are typical mainsteam media that Just Makes Things Up and have absolutly no journalistic integrity.
The Time article (please click on the above) clearly portrays that it is established that tax cuts decrease revenue. They have all kind of cites and statements like economists are in agreement
Except...Tax receipts went up Every Single Year after the Reagan tax cuts were enacted and phased in in 1983(by $20-$80 billion per year each year) and the following year after he left office. During that period GDP went up 35% (more than pre or post Reagan) and 16 million jobs were created.
The mainsteam media twists the facts that the deficit increased to prove that they didn't work (which has nothing to do with revenues). In fact, the reason the deficit went up is that their was a massive increase in cold war spending. This was part of an intentional and historically stated strategy to get the Soviets to fold. Reagan knew the Soviets were staggering economically and couldn't keep up with an expansion in the U.S. military budget and also with an expansion in spending on missile defense (which liberals mocked at the time as "fantasy" and "Star Wars" but which is now used technology)(and the Soviets folded).
Furthermore,
The Kennedy tax cuts
President Hoover dramatically increased tax rates in the 1930s and President Roosevelt compounded the damage by pushing marginal tax rates to more than 90 percent. Recognizing that high tax rates were hindering the economy, President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation).
According to President John F. Kennedy:
Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.
The Laffer Curve is absolutely clearly debunked...A subscription to Time...I do not think so.
(PS Mankiw cited above was a liberal Keynsian economist who opposed the Bush tax cuts when they were enacted and well before. and...PS2 While Bush did cut taxes, Congress and Bush couldn't make enough hard decisions on where to cut Federal spending (sound very familiar) ...so they dramatically cut Federal State grants ...which caused the States to very dramatically increase State tax rates...arguably to an extent that they totaly offset the entire Federal cut...But in any case the rest of the evidence above appears very clear and certainly not as the Time portrayal.
Regarding: "Tax receipts went up Every Single Year after the Reagan tax cuts were enacted and phased in in 1983(by $20-$80 billion per year each year) and the following year after he left office."
I don't have the time to further your education very far, but I do have enough time to point you to the actual data, so that you can see with your own eyes: http://www.gpoaccess.gov/usbudget/fy10/sheets/hist01z3.xls :
Here is what happened in the real world from 1980-1989:
But this exactly proves the point -- the tax cuts DID bring in more money, only Congress successfully spent every penny and more! That's the real crux of the Reagan time-frame, and most periods since then -- way too much borrowing and spending.
Those who complain about the Reagan deficits ignore the tax growth...those who compliment the tax cuts ignore the deficits.
To me the better question is, why did we suddenly discover the wonders of deficit spending in the '80s?
The data shows that:
1. Receipts increased from '80-89.
2. Outlays increased from '80-89 at a faster rate than receipts.
3. Receipts increased each year from '55-'59, 60-64, 65-69, 70-74, and 75-79.
4. Outlays did not increase each year from '55-59, 60-64, 65-69, 70-74, or 75-79 at a faster rate than receipts.
Sure, this proves the point that "the tax cuts DID bring in more money", but it is a meaningless statement. Every year of the presidency of Eisenhower, Kennedy, Johnson, Nixon, Ford and Carter also brought in increased tax receipts (even when the top brackets were much higher), while not increasing outlays at a faster rate than receipts (for every year).
The manner in which you equate those who complain about Reagan deficits and those who compliment the Reagan tax cuts appears to be disingenuous to me, because of what the data easily shows.
To repeat Paleocon's point. This does exactly prove both points.
The Mainstream Media and Time are totaly unreliable, incompetent and blatently biased!
and the Reagan cuts brought in much more revenue!
Those who depend on the mainstream media, just go back and forth between Time (a supposedly credible source) and the figures above. Ask yourself what if most, much or almost all their reporting is this disingenuous and incompetent???
I recommend the NY Post, Fox News, Barrons, the Wall Street Journal. I don't always agree but at least they have much more journalistic integrity (and the American people have also shifted heavily that way because you cann't fool all of the people all of the time).
I think we will just have to agree that we will never have an agreement or an understanding on this matter.
I prefer to look at the actual data and see what it says, even if the facts disagree with something I might believe.
The data you presented yourself is Crystal Clear and 100% (not even 99.999999). After the tax changes Federal revenues went up. This is your own data, actual data and you put it on the website. You are doing the opposite of what you said, the data says revenues went up and you are choosing to believe the data shows the revenues went down.
Revenues are what the Federal Govt. brings in. After the tax cuts the revenues increased. NO OPINION available here on the increase in revenues.
I would suggest, although qualitatively rather than quantitively) that this is 100% a perfect example of how corrupt the mainstream media and Time really is. Keep going back and forth between the article and the actual data and start asking questions like if this is typical mainstream media quality how can I rely on that?
Where did I write that I believe that the data shows the revenues went down?
I presented the data to challenge what you wrote:
"Tax receipts went up Every Single Year after the Reagan tax cuts were enacted and phased in in 1983(by $20-$80 billion per year each year) and the following year after he left office."
Yes, tax receipts went up each year for Reagan. The data also shows that tax receipts also went up each year for every president going back to Eisenhower (an arbitrarily chosen cutoff point).
Therefore your statement about Reagan's tax cuts bringing in more receipts (because of the Laffer curve) is a meaningless statement, because EVERY president for 30 years brought in more tax receipts each year.
To me, the important part of the data is the deficits that Reagan created with his tax cuts.
I am looking at the data and seeing what it says. I never wrote that Reagan's tax cuts brought in lower tax receipts each year.
I'm done talking about this now, since you don't seem interested in a dialog.
I do apologize for continuing the dialog but that is not correct either. There have been many decreases in revenue.
Title: Federal Receipts
Series ID: FYFR
Source: The White House: Office of Management and Budget
Release: Fiscal Year Budget Data (Not a Press Release)
Seasonal Adjustment: Not Applicable
Frequency: Annual, Fiscal Year
Units: Millions of Dollars
Date Range: 1901-06-30 to 2009-09-30
Last Updated: 2010-03-08 3:04 PM CST
Notes: Dates represent the end of the fiscal year. Fiscal year series are
updated with official OMB figures in January or February. In October,
the latest fiscal year is updated with figures from the Treasury
Department (September figures from the Treasury's fiscal year to date
series).
DATE VALUE
1901-06-30 588
1902-06-30 562 decrease
1903-06-30 562
1904-06-30 541 decrease
1905-06-30 544
1906-06-30 595
1907-06-30 666
1908-06-30 602 decrease
1909-06-30 604
1910-06-30 676
1911-06-30 702
1912-06-30 693 decrease
1913-06-30 714
1914-06-30 725
1915-06-30 683 decrease
1916-06-30 761
1917-06-30 1101
1918-06-30 3645
1919-06-30 5130
1920-06-30 6649
1921-06-30 5571 decrease
1922-06-30 4026 decrease
1923-06-30 3853 decrease
1924-06-30 3871
1925-06-30 3641 decrease
1926-06-30 3795
1927-06-30 4013
1928-06-30 3900 decrease
1929-06-30 3862 decrease
1930-06-30 4058
1931-06-30 3116 decrease
1932-06-30 1924 decrease
1933-06-30 1997
1934-06-30 2955
1935-06-30 3609
1936-06-30 3923
1937-06-30 5387
1938-06-30 6751
1939-06-30 6295
1940-06-30 6548
1941-06-30 8712
1942-06-30 14634
1943-06-30 24001
1944-06-30 43747
1945-06-30 45159
1946-06-30 39296 decrease
1947-06-30 38514 decrease
1948-06-30 41560
1949-06-30 39415 decrease
1950-06-30 39443
1951-06-30 51616
1952-06-30 66167
1953-06-30 69608
1954-06-30 69701
1955-06-30 65451 decrease
1956-06-30 74587
1957-06-30 79990
1958-06-30 79636 decrease
1959-06-30 79249 decrease
1960-06-30 92492
1961-06-30 94388
1962-06-30 99676
1963-06-30 106560
1964-06-30 112613
1965-06-30 116817
1966-06-30 130835
1967-06-30 148822
1968-06-30 152973
1969-06-30 186882
1970-06-30 192807
1971-06-30 187139 decrease
1972-06-30 207309
1973-06-30 230799
1974-06-30 263224
1975-06-30 279090
1976-06-30 298060
1977-09-30 355559
1978-09-30 399561
1979-09-30 463302
1980-09-30 517112
1981-09-30 599272
1982-09-30 617766
1983-09-30 600562 decrease- + Reagan tax cuts completed phase in this year
1984-09-30 666438 Note very large increases and percentage increase following; Revenue goes from 66-99;
1985-09-30 734037
1986-09-30 769155
1987-09-30 854288
1988-09-30 909238
1989-09-30 991105
1990-09-30 1031972
1991-09-30 1054996
1992-09-30 1091223
1993-09-30 1154341
1994-09-30 1258579
1995-09-30 1351801
1996-09-30 1453055
1997-09-30 1579240
1998-09-30 1721733
1999-09-30 1827459
2000-09-30 2025198
2001-09-30 1991142 decrease
2002-09-30 1853149 decrease
2003-09-30 1782321 decrease
2004-09-30 1880126
2005-09-30 2153625
2006-09-30 2406876
2007-09-30 2568001
2008-09-30 2523999 decrease
2009-09-30 2104995 decrease
You wrote "the Laffer Curve "is debunked countless times", you put up a Time article that was a perfect example of mainstream media bias, You posted the figures to disprove the Laffer Curve and defend the Time article which did exactly the opposite and you then tried another spin by very incorrectly implying there were only increases for 30 years . OK don't admit you are wrong by even might be. I just wish every economic liberal on this site would compare the Time article against our dialog and start questioning whether they have been misled throughout their lives by the mainstream media and generally very liberal educators.
So you're saying that Reagan was the only president who managed to lower tax receipts in any year between 1972 and 2000? Then Bush was able to repeat this feat with his 2001 tax cuts? What exactly were you trying to prove?
The other 85% was lost in the commercial and industrial sector: jet fuel, distillates (including diesel), kerosene, petrochemical feedstocks, lubricants, waxes, petroleum coke, asphalt and road oil, and other miscellaneous products.
What do think is the best source of info on that? The EIA info seems not all that detailed about I/C consumption.
If the answers are transition to renewables, and rebuilding our infrastructure for high efficiency, then where will the money and energy to do it all come from? And lastly, how long will it hold out?
We need to be clear: we have two separate problems: climate change, and liquid fuels, not a general problem of peak energy. If wind and natural gas are inadequate, we have more than enough coal to keep the lights (and whatever else we want to power with electricity) on during a transition (for better or worse).
See: http://energyfaq.blogspot.com/2009/02/would-eliminating-coal-be-difficul... and http://energyfaq.blogspot.com/2009/02/are-we-running-out-of-coal-part-2.... .
During a transition to what? Simply uttering the word "renewables" means nothing unless one explains what renewables, how long it would take, what would be the cost of both producing those renewables and converting everything that now uses oil to use those renewables. And don't forget to add in the cost of all those batteries and inverters. The wind doesn't blow all the time and the sun shines only in the daytime. Batteries must store such energy and inverters must turn DC into AC.
But what about biofuels? If we turned all the earth's forests into plowed ground we might produce enough oil to replace 10 to 20 percent of the petroleum consumed. But in the most populated areas of the world water tables are dropping by meters per year and many rivers no longer reach the sea. Turning plants into oil would only make that problem much worse.
But what about coal to liquids? Coal-to-liquids: Can fuel made from coal replace gasoline?
Ahhh we always see those three little words, "at current use" But if we started turning enough coal to liquids to replace all the liquid fuel used today, then current use would multiplyed several times. We would have enough coal to last a decade perhaps.
Ron P.
During a transition to what?
Wind would be the biggest, with (in rough descending order) nuclear, solar, hydro and others.
how long it would take
However long we choose - we could do it in 20 years if we want, or we could do it in 50. 50 years would be no more expensive than BAU, but terrible for AGW mitigation.
What would be the cost of both producing those renewables
For wind: about $7/average watt capex, giving about $.07/KWH wholesale cost, or about $.12/KWH retail. That's a little more expensive than old, dirty coal plants, but it's competitive with any form of new generation (including coal even without sequestration). We can see in Germany and Japan that $.12/KWH is more than cheap enough to support a strong economy.
converting everything that now uses oil to use those renewables.
Very little, if we did it through attrition. An EREV like the Chevy Volt will cost about the same as the average new US vehicle, with large volume production, and reduce liquid fuel consumption by 90% (that's the range that biofuels can scale to, as you pointed out).
add in the cost of all those batteries and inverters
Like the Prego commercial, that's in there.
The wind doesn't blow all the time
Actually, it does, somewhere. It just takes some geographic diversity to take advantage of that fact, and a moderate amount of long-distance transmission.
the sun shines only in the daytime.
Isn't it convenient that's when we use the most?
Green cornucopian.
Good luck with that.....
That's not a very specific argument...
Indeed leduck, writing 'green cornucopian' is neither an argument nor a challenge.
Wind would be, in theory. But most countries will choose for coal and/or nuclear.
the sun shines only in the daytime.
With a lot of EV's, electricity use in the night will increase considerably.
I feel that people who are convinced that during an energy-transition BAU can more or less continue miss something, have some 'blind spots'.
If Peakoil is now, or more accurate if oilproduction starts to decline within 5 years, certainly the transition started too late. In 2 decades from now wind and solar aren't going to provide much electricity worldwide. The hope is for the biggest part in oilproduction not declining fast, say 1% per year. But with all those 'super straw' extraction methods that is used in a lot of fields, the decline could be much more. Whatever the decline percentage is, the price of oil will explode, followed by a worldwide recession or worse. Then the problem of 'not understanding' or 'ignored' continues: 'the price spike was speculation'. So human nature is going to make this, maybe in theory possible, energy-transition very difficult.
With a lot of EV's, electricity use in the night will increase considerably.
Yes, and that's a good thing. Wind is a touch stronger at night, on average, and EVs will soak up excess wind and nuclear night-time generation.
In 2 decades from now wind and solar aren't going to provide much electricity worldwide.
Sure, they are. Wind provided 42% of new generation in 2009.
The hope is for the biggest part in oilproduction not declining fast, say 1% per year. But with all those 'super straw' extraction methods that is used in a lot of fields, the decline could be much more.
Aleklett's middle-of-the-road projection for total liquids is a 11% decline by 2030.
the price of oil will explode, followed by a worldwide recession or worse.
We've already had something somewhat like that recently. Wind, solar and HEV/EREV/EV growth continued - it only slowed down a bit.
Is that in 'all the countries together'? It is however better to talk about total energy, not only electricity, since EV's have to run on electricity.
Nick, in another comment you wrote (which contradicts the one above):
Means, not to worry about gas and coal supply.
Let's hope that is close to reality.
Yes, also that ICE's sales still are growing more than PHEV's and EV's. Maybe not in percentage, but surely in absolute numbers. And what if sales keep on slowing down when 'the road to recovery' turns out to be an illusion ?
Wind provided 42% of new generation in 2009. - Is that in 'all the countries together'?
That's for the US. For the world, I think it was about 35%.
It is however better to talk about total energy, not only electricity, since EV's have to run on electricity.
I'm not clear what you mean. I'm trying to point out that electricity and liquid fuel have very different dynamics - electricity doesn't have a realistic supply problem.
Means, not to worry about gas and coal supply.
That's correct - we have more than enough coal for a transition to renewable electricity. It would be much better for the world if we didn't burn all the coal we can find, but the point is: we aren't going to have a shortage of electricity.
Yes, also that ICE's sales still are growing more than PHEV's and EV's.
I'm not sure. World car sales probably declined from 2007-2010, while PHEVs grew. EV's, of course, are just getting started.
what if sales keep on slowing down when 'the road to recovery' turns out to be an illusion ?
That' won't happen as a result of energy problems. If worse comes to worst, and all free market economies freeze up due to panic, we'll return to a command economy, as we did in WWII.
If liquid fuel is going to be replaced by PHEV/EV's a lot more electricity is needed.
I wrote gas and coal. Gas is expected to peak not much later than oil.
About coal you write:
Isn't that the same USGS who has an optimistic view about world oil reserves and 'yet to be discovered' reserves. Not that it can't be true or possible (though the latter is unlikely), but be careful from which sources you draw the conclusions. I always read different sources and then think that reality is mostly somewhere in between.
Maybe USGS cost estimates about coal is the case with about $50 oil, but what when oil (and gas) is double that price, or triple ?
If liquid fuel is going to be replaced by PHEV/EV's a lot more electricity is needed.
Not that much. If we were to replace all of our 230M vehicle fleet with EVs we'd only need about 17% more electricity generation. If we do it over 25 years, that's only .75% growth per year.
Gas is expected to peak not much later than oil.
I think that's an old projection.
Isn't that the same USGS who has an optimistic view about world oil reserves and 'yet to be discovered' reserves.
Yes, but oil reserves are a different thing. Coal is much , much easier to analyze. There's really very little question, for instance, that the Illinois Basin has well above 100B tons of coal (100 years of US consumption).
Maybe USGS cost estimates about coal is the case with about $50 oil, but what when oil (and gas) is double that price, or triple ?
Again, that's in the discussion I provided above. Here it is:
"A $100/bbl increase in the cost of oil would increase the cost of transporting a ton of coal by $100/bbl x 1bbl/42 gal x 2 gal/ton** = $4.8/ton. That's a 2.5% increase in the cost of electricity, which means that railroads will be easily be able to out-bid other potential users, like trucks.
Coal transportation by rail can also be converted in a relatively straightforward manner to use electricity instead of diesel, meaning that reduced oil supplies are highly unlikely to have a significant direct impact on the ability of the US to transport coal."
**Rail transportation is about 440 ton-miles/gallon on average, and coal is at minimum 500 tm/gallon (Coal trains are probably even more fuel efficient, because the ratio of load to tare weight is greater than most other rail freight (particularly intermodal). 600 tm/g might be a good guess). Low-sulfur coal in the US travels roughly 1,000 miles before being used. Dividing these tells us that transporting US coal requires roughly 2 gal/ton.
For Holland I read the number 40%. OTOH refineries use tremendous amounts of electricity, so closing down some frees up a lot.
Gas is expected to peak not much later than oil.
I think that the new projection is mainly with unconventional gas included. I read at least 5 problems with that type of gas.
1. economic
2. steep decline rates, most times after only a few years of production.
3. infrastructure
4. use a lot of water
5. toxic waste.
ad 4 and 5.
A losing battle. Of course: money and BAU is what counts. That is an important interaction and negative feedback. Because this is another finite resource. It will help when trucks are converted to gas, but with massive transition to gas that estimated 100 years of supply maybe lasts only a few decades. Let alone the problem of infrastructure and decline rates.
Yes, however
I think there is enough reason to decrease the use of coal, but again it is BAU that goes above everything else.
For Holland I read the number 40%.
Take Holland's VMT, divide by 4 miles/KWH, then 8,760 hours per year to get average power needed. Divide that into the overall average generation for Holland. I bet it's a lot less than 40%.
I read at least 5 problems with that type of gas.
Sure. Nevertheless, the overall natural gas supply situation has changed dramatically in the last several years.
gas that estimated 100 years of supply maybe lasts only a few decades.
That's enough.
I think there is enough reason to decrease the use of coal, but again it is BAU that goes above everything else.
I think we will eventually, but I'm not hopeful that we'll do it very quickly.
I'm not familiar with this type of calculations, but I presume that the Dutch writers of the book have done their 'homework'.
The question is what happens if one chooses for a 'gas-transition'. I don't know if you read comments from Rockman and others about the problems of unconventional gas on Drumbeat. IMO the steep decline rates are a big problem. And in second place the infrastructure.
gas that estimated 100 years of supply maybe lasts only a few decades.
This is not true. If a massive gas-transition is done that reduces reserves to a few decades, this means that cars also are driving on gas. So then there is no or little conversion done to PHEV/EV's. That makes the situation not better, but worse. Gas or PHEV/EV's also won't change nothing regarding kerosene shortages.
I presume that the Dutch writers of the book have done their 'homework'.
Sadly, you can't make that assumption - you have to check detail like this. This is a good example of what I mean by not just following an authority's opinion.
I can step you through the calculations if you like. You just need to research Holland's personal-vehicle Vehicle Miles Traveled, and total KWH's generated per year.
The question is what happens if one chooses for a 'gas-transition'.
I agree - a 'gas-transition' as our only strategy would be a big mistake. Fortunately, I think that's very, very unlikely. In fact, I think we won't even use as much nat gas for transportation as would be optimal.
Lessee ... just some general remarks about some of the comments above ...
First of all, I've been all over the eastern part of the US from New Orleans to Providance, RI and in between and I see very little (as in extremely little) transition away from ordinary fossil use. There are few Prius' and not much else. No solar panels, no windmills (although I had a nice conversation with an engineer who built the foundation for ONE on the Rhode Island coast.) Rail, highway, traffic, busses are more or less the same, except the ongoing state/municipal financing (Peak Oil) crisis is removing city busses and bus routes from streets all over.
Good thing, too! We all know how horrible it is be stuck behind one of those!
Formula One season just began!
Like the rest of the world, the F1 cars under brand new rules cannot refuel during 'the race'. This sucks because one of my favorite parts of any F1 race is when the car rockets off after a pit stop with the fuel hose still attached, streaming burning fuel down the pit lane ... with all those little dudes with their helmets and overalls running and waving their arms at the runaway fuel hose.
Now, a team risks running out during the race if they miscalculate fuel consumption. How embarrassing! At the same time, there is more reality in fantasy Formula 1 than there is in the rest of the fuel consuming world which believes the fuel hose will be connected forever! Good grief!
http://www.oilprice.com/article-debunking-the-myth-of-peak-oil-why-the-a...
http://www.oilprice.com/article-debunking-the-myth-of-peak-oil-why-the-a...
Hyperinflation is a term bandied about by folks who don't understand it very well. First of all, there is ordinary inflation which represents a more or less graphic descent of a currency unit's purchasing power over time. This purchasing power decline is an artifact of commerce. As commerce becomes more successful, two things happen. One is there are more varied products offered and purchased. This makes pro forma currency unit purchasing power irrelevant. The second outcome is that credit and money creation expands with commerce. More commerce means increasing volumes of currency which devalues each currency unit as the overall supply is diluted.
Consider the first part; the gold- backed hard dollar of Andrew Jackson's era had much greater purchasing power than the dollar of the now as gold bugs point out over and over and over. So what!? What could Andrew Jackson buy with his valuable bucks? A car? No, A helicopter? No. A shot of penicillin? No. A shot of Jaegermeister? Well, maybe but certainly not a Bud Lite or a lavalamp or a Gibson Les Paul Custom or a Beatles record (any of them) or town house in San Francisco or a horde of other goods and services. What Jackson's hard dollar bought instead was arguably the most profound economic depression ever in the history of the country!
But, that's beside the point. What isn't is that the change of products available over time defies any constant means of purchasing power measurement. It's what a dollar buys that matters, not now many dollars total and/or how many dollars per good.
As for the second part, the increase of business would allow for an increase in the means of its furtherance regardless of what 'official' means is offered. Without dollars or euros or francs, people would make paper receipts on their own. The more business, the more trades and commerce, the more receipts. It is true, more receipts in total does mean that each receipt measured against the whole of them is diminished. So what? The question is abstract, what matters is the commerce, not the receipts.
What matters even more is the QUALITY of commerce, more than the simple fact of it. Food and education/civilization commerce is more valuable to society than machine gun/whore/narcotic drug commerce.
Inflation cannot be turned on and off like a light switch. A central bank cannot 'print' enough cash currency to create it, much less hyperinflation if the credit multiples are shrinking as they are now. It is people activity that creates inflation, the accelerated buying of goods and services. Inflation represents an increasing level of commerce. In general, what passes for increased GDP is usually inflation and the different rates - GDP/CPI - usually correspond, as they do currently.
During hyperinflationary periods, people do nothing all day but buy things; they collect available funds for each day and spend them as fast as possible.
Hyperinflation requires certain conditions to exist in addition to inflation before the 'hyper' part can take place. One such condition is large amounts of currency in reserve that can be put into circulation in an instant. That means savings or bank reserves.
People suggest that the large reserves in banks' own accounts will be turned out at once. I don't agree, the amount of bank savings (reserves) is a lot less than the overhang of bad loans the banks also carry. It is NET savings that matter. Also, I suspect most bank reserves - at least in the US - are IOU's, not real cash. The cash was lent- swapped - sold to the banks by the Federal Reserve under suspicious terms. That is, as Non- recourse transactions meaning, there is no harm to the bank if the funds are not returned to the Fed.
"Why not," says on banker to another, "simply keep the funds to ourselves?"
"Why not, indeed?" says the other, "I've got mine! How about you?"
The Fed has 'printed' a (meager) $trillion since the crisis began in 2008. Where is it? The Fed sez they want it back! Let's see how successful they are in retrieving it. The last time they tried back in 2009, they failed! Why? Simplest answer is because the money wasn't there! Why? Because it was stolen. With no cash money available in reserves, the reverse repo operation to recover funds had nothing to return.
With the reserve funds in question waiting patiently in bank accounts in Antigua, Channel Islands, Curacao, Liechtenstein, Singapore, Abu Dhabi and other interesting places, it is very hard for them to be turned out into circulation to chase a diminishing pool of goods which is another way of describing inflation.
With no savings to turn out there is no fuel for inflation and with many Americans (and Euronauts, too) underwater, they have little incentive for non- plutocrats to purchase goods and services. Since the plutocrats already own everything they need already, they aren't going to buy, either! Ordinary citizens are too broke! This means less (no) inflationary pressure.
Despite what the Powers That Be would like to have happen. Remember, rising prices don't always indicate the depth of inflation, they include higher costs to produce a good or (moe likely) monopoly or gate- keeping power on the part of the seller. Think medical care and college education, both inflationary bubbles, amplified by the monopolies that control access to these services.
When the transition to 'Clean Coal' or backyard Thermo- nuclear or Rubber Band Powered Vehicles (RBPV's) arrive, I'll start taking them seriously. Otherwise, they are irrelevant to real life, like Formula One.
Thank you for making a pretty inclusive case, Nick. Only one caveat, I would stay away from biofuels completely...as you point out, if we have a rolling fleet of efficient plug hybrid vehicles, the amount of onboard fuel can be very small and consumption can be very low...there would be enough recaptured methane and then natural gas and propane available to handle the load in the early years of the transition, and then when we have off peak wind, hydro and solar, we can use that to produce small volumes of hydrogen and combine it with captured carbon for methanol...it is essentailly a chemistry exercise, one the remnants of the oil refining industry would be masters at...they aren't interested right now of course, and allow me one brief shout, because OIL IS SO DAMN CHEAP!
RC
Thank you for making a pretty inclusive case, Nick.
You're very welcome!
I agree, synthetic liquid fuel from hydrogen and atmospheric carbon is certainly feasible. OTOH, it probably costs about $10/gallon now, and conversion efficiency problems will probably always make it 3x-5x as expensive as corn ethanol.
Corn ethanol could get it's distillation process heat from solar, and return it's ash to the fields, making it sustainable.
The competition between biofuel, food and wildlife habitat is certainly a good reason to limit biofuels, but again, they're likely to be used if they're needed to prevent serious economic problems.
I have said this many times to friends and family members. They won't listn, though, Ron. They hear the there is enough NG to last a hundred years, yet when I try to explain that is at the current rate of use, they don't comprehend. How to get across that, if you convert your entire ICE fleet to NG from gasoline, NG use will explode (no pun indended). They just point to the WSJ article, or even one in the NYT that the shale gas will get us through to 2200, and whine, "See?"
::deep breath::
This is one of the best posts lately on this subject... most TODers get it, and comments have been excellent. The problem is our petulent population, hiding their heads in the sand and refusing to listen; even becoming hostile.
There is no solution to the situation we face; how do we better get through to sufficient people to motivate the idiots in charge?
Craig
There is no solution to the situation we face
I agree that CTL won't work very well. HEV/EREV/EVs will work quite nicely.
http://tonto.eia.doe.gov/dnav/pet/pet_cons_psup_dc_nus_mbbl_m.htm
For "asphalt and road oil" Consumption has fallen from 200 million barrels per year in 2005 to 130 million barrels per year in 2009. That's a third of "demand" gone.
I've added the preliminary data from 2009 monthly reports to the annual chart which hasn't been updated yet with the 2009 figure.
1978 US Energy Mix:
2009:
Finished Motor Gasoline
Distillate Fuel Oil
Liquified Petroleum Gases
Kerosene-Type Jet Fuel
Propane and Propylene
Residual Fuel Oil
I'll try to add to this later. Mostly I've examined how long peaks in times past lasted, before bottoming out and then rebounding, and complete data series for the 70s are only in the above sectors. One has declined ever since: 2009 Resid consumption was 16.98% of its 1978 level.
At the EIA the Annual Energy Review is where you go for longer term data series. Go to "Petroleum Products Supplied by Type, 1949-2008." I haven't summed up all the minor products but wonder about Chris's conclusion regarding their importance; lubricants, for instance, seem to have wobbled around 130 kb/d for the past 40 years. Like the Leeds paper says, the big kahuna in the short term was resid. Wouldn't be surprised if its short term impact 30 years ago obviated more demand than waxes and aviation gas have in the interim.
I suspect that part of the change came at the refiners end. They discovered they could make more money by refining what would have been asphalt into higher valued products. At the same time, the shortage of asphalt sent the price of asphalt up.
Roofing shingles use a lot of asphalt and that demand is obviously way down.
By the way, aluminum roofing can last 100 years or more. It cost twice as much but lasts 5 times longer. If properly installed, it never leaks and is much more windproof. In energy saving colors metal roofinc can reflect up to 70% of sunlight and lowers air conditioning bills.
@Nick - You can find the data on the EIA's site, but Jim Hansen did a nice job of summarizing and charting it in his newsletter here.
Can't view that report in any browser - will try registering to Windows Live. NB, it's not Jim Hansen from NASA; not sure if he's associated with the Master Resource blog, who are a bunch of rabid cornucopian Julian Simonphiles.
Haven't quantified the drop from the recent peak in "Other Oils" as the EIA calls it; have made a graph though:
Data is in the EIA's U.S. Weekly Product Supplied series. They don't have monthly or annual numbers summarized as they do for weekly. "Other Oils":
Here is a busy graph of the recent activity in these small fry:
People have no idea about how we consume oil, indeed are focused on quite the school of red herrings. Residual Fuel Oil demand contracted 101 kb/d in 2008; this is 2.06 times the gain we saw in that year from all that much ballyhooed increased crude production from the Bakken and ND.
OK, recent peak for Other Oils (6 month running average) was Oct 27, 2006 at 4123.33 kb/d; for Jan 29, 2010 was 2797.17 kb/d, a drop of 1,326.16 kb/d. In '06 they were ca. 33% of total demand.
Ah, had to download the Hansen report, then fix the file name (remove "_" at the end), to open it with Acrobat. That's excellent work, I'm going to keep an eye on his reports.
I actually have gasoline declining for '09, 4.42 kb/d, this derived from summing up monthly figures; Jim's using the STEO data which apparently shows a 1% increase. Close enough in either case.
I will find out why that blank space was added to the file. In two weeks the report will be available on a new web page that will open the pdf in a browser window. If you wish to have he data behind the graphs let me know. Oh yeah, I am not the James Hansen of NASA, if only I could have the same impact on Peak Oil as he has had on climate.
That'd be great, Jim. Will your work email listed at Windows Live do?
Am I correct then in assuming that you're not affiliated with the MasterResource blog? The thinking there is diametrically opposed to us resource limitations types. I sometimes read the op eds there if I find myself in need of some staggering hubris.
I am about as far from the inmates at the MasterResource blog as you can get. If you would like to subscribe to the report please use the one at the end of the last page. Hope you find it interesting and I know you will find the new web page arrangement much better. I through this together at the end of each week based on my research and reading, some weeks it is better than others but it serves well as a way for me to formalize my thinking and what I have learned and have some fun doing it. Thanks and any feedback is always appreciated. Jim
Thanks - takes a bit of time to read...
Actually, the transition target has to not only be vastly scalable, but cost less than existing energy sources, else the effort to switch alone will cause significant disruption. Any transition to more expensive energy, which is the only reasonable expectation, will cause significantly greater pain.
There is no easy way out from here. Without cheaper energy, growth must stop (as it will eventually anyway -- we're probably past Liebig's Minimum in several important areas), and without growth, most economies must collapse.
We can argue about how fast we'll collapse, and how far, and how bad every facet will get, but I can see no path for the US that doesn't include debt default, pension collapse, stock market crash, entitlement collapse, and much constrained options going forward.
America needs a motto that truely fits...,
LIVE HARD, DIE YOUNG.
Actually, the transition target has to not only be vastly scalable
Which wind is.
but cost less than existing energy sources, else the effort to switch alone will cause significant disruption.
Not if the transition is long enough. We could transition over 30 years, and that's more than enough time to amortize the capex of existing generation. Personal vehicles, of course, last a much shorter time: we can replace about 10% of VMT per year with no pain at all.
Any transition to more expensive energy, which is the only reasonable expectation, will cause significantly greater pain.
A little, but we see in Japan and Germany that electricity twice as expensive as that in the US can easily support a strong economy.
In terms of the overall US vehicle fleet that would be tantamount to selling ca. 25 million vehicles/year, which is 1.5 times the all time record of 17.2 million. What do you have in mind here? Not all of the fleet is critical, of course, nor do we need to replace it with more autos.
How could we replace about 10% of VMT per year?
The thing you have to keep in mind is that some vehicles travel many more miles than other: Commercial vehicles like taxis drive much more, and newer personal vehicles drive more. Vehicles less than 1 year old account for roughly 10% of US Vehicle Miles travelled.
An aggressive transition to electric would accelerate that tendency, both in terms of sales and in terms of preferential usage of new vehicles. After all, what difference is there between current new vehicles and those from 50 years ago, when automatic transmissions were introduced? Sure, electronic stability control and ABS are nice, but 95% of new vehicle sales come from a desire for the latest fashion - that's part of why people can so easily defer purchases during times of uncertainly, like the last 2 years.
Do you have a source for this? Stating it on one's own blog while simultaneously stating it here doesn't count. ;) It jibes with what one would expect, but that isn't evidence; the only info on vehicle age I've seen is median age from the Transportation Energy Data Book; they also have VMT by vehicle type.
I know about publicly owned vehicles (1.7% of the total) and fleets (3.5%). Haven't seen any numbers for how much harder they're driven than the norm, I'm more confident about that info being out there.
Vehicle age US Vehicle Miles travelled - Google Search
Vehicles less than 1 year old account for roughly 10% of US Vehicle Miles traveled. - Do you have a source for this?
A very good question. Sadly, I can't put my hands on it instantly. At the Transportation Energy Data Book I found:
http://cta.ornl.gov/data/chapter8.shtml Table 8.9 "Average Annual Miles per Household Vehicle by Vehicle Age" ,at
http://cta.ornl.gov/data/tedb28/Spreadsheets/Table8_09.xls , we see:
Vehicle age 2001
(years) self-reported
Under 1 15,500
1 14,300
2 14,000
3 13,100
4 12,500
5 12,000
6 11,800
7 11,600
8 10,900
9 10,800
10 and older 7,400
All household vehicles 11,100
So, that's a pretty good indication.
Good catch! I suspected it must be in there somewhere, also figures that data would have to be conducted via survey; you can't assay data like that with automated counters...I hope...sounds more than a bit Orwellian.
Summing it all up and applying percentages you get:
Looks like your statement is still slightly skewed. Luckily we Americans refuse to improve gas mileage or it might portend something! ;)
Sales as a % of the overall fleet are slipping, too:
So it will take that much longer for newer more efficient vehicles to make a difference, although contracting the size of the fleet itself "helps."
Yes, if sales slow down, it will take longer to phase in better vehicles.
OTOH, sales are down because people are choosing not to buy. Most people have the buying power, they're just being more careful. If they see a reason to buy a new vehicle (say, because they like the idea of an EREV, or because of a shiny new carbon tax), sales could jump very quickly.
Wind is scalable with sufficient investment....we're not to the point where wind growth can keep up with oil decline if ELM 2.0 is correct. Money for new turbines plus money for EVs plus money for efficiency upgrades is going to be hard to come by. Couple this with more money for energy in general and debt service skyrocketing (and it's already high even with low interest rates) is a recipe for broad default.
We might get back up to a new normalcy eventually, but it won't be a pleasant 30 years, and you can't amortize capex without a loan for the capex...which may not be available.
Is generation twice as expensive in Japan and Germany, or end-user cost? If generation efficacy (due to EROEI, conversion efficiency, or whatever) makes production twice as expensive per watt is a completely different situation than if we use nukes and they use nukes but they tax it 100% to cover eventual disposal and we hand-wave it away to keep power closer to "too cheap to meter".
If the average American doubles what he spends for energy, including gasoline, electricity, nat gas, and the energy fraction in meats, other foods, and all products, all such aspects of society are going to have to massively transform (meaning, crash like rocks and be reborn in a leaner, less expansive form). Excess capacity is recessionary, and we're going to have that in spades. Your 30 years will likely be a long recession punctuated by bubbles, spikes, and collapses of various markets.
If we're started 30 years ago it could have been a smooth transition perhaps. Maybe shale gas will buy us another chance. Reminds me of my tech startup days, "God, please give me one more boom. I promise I won't piss this one away like the last several." Chances are good we've missed the last good opportunity, and even if we haven't we're not doing anything substantive yet anyway, so we'll still miss it.
Price for electricity in Germany is approximately EUR 0.22 kWh (USD 0.30 kWh). This includes approximately EUR 0.02 to support renewable energy. Because of high electricity prices they use about half of the average American.
The EUR 0.02 supports all kind of renewable energy sources.
we're not to the point where wind growth can keep up with oil decline if ELM 2.0 is correct.
Wind's growth rate doesn't matter - as I pointed out, we have plenty of conventional electricity.
Money for new turbines plus money for EVs plus money for efficiency upgrades is going to be hard to come by.
A conversion to wind won't cost any more than BAU if it's done over a long time. Conversion to HEV/EREV/EVs can be much, much faster. In the meantime, perhaps we'll carpool a bit more...
Excess capacity is recessionary, and we're going to have that in spades.
Not if we replace it with new industries manufacturing wind turbines and HEV/EREV/EVs.
At some point in the distant future, there will be a peak natural gas, if it hasn't peaked already, and peak coal.
a peak for all hydrocarbons or peak energy.
I don't know when..., but it will happen.
Renewables will not be able to make up the difference.
Renewables will not be able to make up the difference.
There's at least 5x as much easily usable wind resource as we need, and 1,000x as much solar.
And there is more elemental hydrogen in the universe than any other element, but this does not make the hydrogen economy any closer.
Really, I think these renewables have an important role to play, but a great acceleration would be necessary to cover even a significant fraction of the current energy use.
What role do you see conservation, efficiency and simple doing without playing in your future scenario?
And there is more elemental hydrogen in the universe than any other element, but this does not make the hydrogen economy any closer.
You know this doesn't really relate, right? I was answering a question abou scalability, and wind does scale.
a great acceleration would be necessary
That's the thing - it wouldn't. First, wind is already "here" - it provided 42% of new generation in the US last year. 2nd, we have enough coal to cover any transition (unless, of course, we want to do something about climate change, as we should - but that's a different problem).
What role do you see conservation, efficiency and simple doing without playing in your future scenario?
Well, an investment of about $2.6k in wind power per vehicle could provide all the "fuel" needed for personal transportation (13k miles per year/4miles per KWH/8760 hours per year x $7 per watt = $2,597). It will be easy and cheap to power EREV/EVs (either bicycles or Volts). As this article stresses, that's the big kahuna.
Really, we haven't converted to a renewable electricity economy already because it would hurt the careers and investments of too many people. When we get to the "tipping point" where the overall society demands solutions to AGW and PO, we'll move very quickly to EREV/EVs and wind power - there will be some temporary personal conservation on the way, but that won't be the primary thing.
Heck, why do without when you can just buy an EREV/EV?
There is no solution that allows for BAU and continued growth in population and consumption.
period.
Saying it doesn't make it so. Give us some specific arguments.
OECD fertility rates are already at or below replacement.
I think you're missing a capacity factor for wind as well. Maybe 10-20% for most on-shore locations? But $7 is high, so the result would be in the middle somewhere. Would make the capital cost maybe 5x more....still 'doable', just more expensive.
$2/watt nameplate, at 30% capacity factor, gives $6.67 per average watt.
New US wind installations in 2009 averaged 35% capacity factor.
Nick -- Don't take this as a hard knock but I have to ask you the same question I ask folks who say we have 100 years of NG in the shale gas plays: at what price do we have that much wind or solar potential? Obviously we can't produce that 100 years of NG at prices below $5/mcf. Likewise we can't expand wimd or solar without adequate return on investment either. So at what price of electricity can we utilize all that wind and sun?
I would add that I believe (but nobody on this website has voiced an opinion I have seen) that we might be able to produce shale at $6-$8 mcf (but some do argue for $10 or even $12). A transition to wind and sun or even nat gas for more transport would be a long and likely expensive process (requiring much higher oil prices as an incentive) but it is possible. This is another reason why oil prices and eventually nat gas prices are very likely going up because they will have to go high enough to incent alternative energy options.
wallstreet -- I don't have much direct contact with the SG players today but what I hear is that some plays, like the Marcellus work OK to a degree at lower prices. But some will take prices north of $8. But there's a trick part of that answer. SG drilling and leasing is a lot cheaper now then it was in the summer of '08. So even with lower NG prices the economics aren't as poor as some might think. But if activity picks up so will drilling costs. Another developing issue is the environmental impact of frac'ing especially in the Marcellus. I'll be surprised if we don't see increased environment protection take a bite out of activity. The locals are up in arms and, perhaps, rightfully so. My sense is that local regulators were ill prepared for dealing with all this new activity.
An investment of about $2.6k in wind power per vehicle could provide all the "fuel" needed for personal transportation (13k miles per year/4miles per KWH/8760 hours per year x $7 per watt = $2,597). For 100k miles, that's about $.03/mile, much less than gas or diesel. It will be easy and cheap to power EREV/EVs (either bicycles or Volts). As this article stresses, that's the big kahuna.
That assumes $2 per nameplate watt, at 30% capacity factor. The US has more than enough of that, at that price, to supply 200% of our current electricity consumption. Heck, either N. Dakota or Texas alone could provide 30-50%.
Thanks for the numbers Nick. To replace 100 million vehcles thaty would take $260 billion. That doesn't sound undoable if spaced over 10 years or so. The bigger question is who will spend the necessary capex to build the turbins? Those folks will not only need a profit margin but also some confidence that the needed prices will be there when they start selling. Likewise there won't be factories built to produce the new cars or turbins without another huge capex investment. And those folks will not only need an profit margin as well as some assurance that those cars and turbins will be bought. Imagine making such a huge investment and then run into a recession like we just had. Such timing could throw a company into bankruptcy in a heart beat. And everyone knows that.
And that sums up my position on the alts: there's a lot of things that could be done but they won't unless someone puts the money on the table and takes the risk. Without that component the alts are just another solution that won't be applied.
Actually that was just for the optimistically-priced wind power to charge the vehicles. If you paid $20K for each new EV you'd have to come up with $2T more. Even that might be possible, if it were a #1 priority, but it's not in the top 10 right now.
optimistically-priced wind power
Less than $2/watt was the actual industry average in 2009.
If you paid $20K for each new EV you'd have to come up with $2T more.
That's much less expensive than BAU (the current new vehicle average is $28K). We're building about 12M vehicles per year right now - why can't they be HEV/EREV/EVs?
who will spend the necessary capex to build the turbins?
Utilities. They have the cash flow, and they're spending that capex on conventional generation right now. It's just a matter of regulators requiring it.
Heck, we're already doing it: wind was 42% of new generation in 2009.
Both diffuse, with low net energy.
Rooftops for photovoltaic systems are distributed and local power lines are already installed for distribution which fit nicely with diffuse sunlight.
If energy becomes more expensive, then people will stop wasting vast quantities of it. Double the price, half the consumption, and the net cost remains unchanged. This could continue until reaching the minimum operating level for society. Change does not equate to collapse. Because it has many uses, I think global peak natural gas (maybe around 2040) will be more likely to cause collapse than peak oil. Global peak oil means an economic depression: soup lines for the homeless, increased home occupancy and decreased birth rates in developed countries (like Russia) decrease energy consumption.
The belief that a depression is self-reinforcing all the way to zero economic activity is ridiculous. In a world in which the supply of other fossil fuels can increase, the belief that no one will do anything as crude oil become expensive or scarce is ridiculous. Since equipment is constantly being replaced as it wears out, the energy that would have been used for conventional replacements is available for alternative replacements. Combined with decreasing consumption a conversion to a lower level is probably possible. The dominant issues are political: will we convert to something sustainable? Will we control pollution? Will we control resource consumption before some critical tipping point is reached? Will we decrease population? Dolores García's calculations using her New World Model based on the Limits to Growth Model produced the most optimistic outcome by the year 2100 when a rapid transition to renewable energy is initiated now.
I don't think anyone here has ever seriously debated whether it is technically feasible to be able to run the planet off renewables. It clearly is with the right tools.
What people debate, as you say, is the political will and social change. Which is not moving in any optimistic direction at all. And even assuming the energy/exergy crises are solved, it doesn't address the underlying problem either. If anything, it makes it far worse.
I don't see why we should be trying to mortgage our future more with a different energy source when the limits are still there. If they don't hit us with regard to cheap energy issues, then it will be water, topsoil, living space etc. And to change the course requires a fundamental paradigm shift in our model of economics and the acceptance of smaller families as a way of life globally.
Admiral -- Just guessing but the technical feasibilty hasn't been debated because there's no debate. It is technically within our grasp IMHO. But so is recovering millions of onces of gold from sea water. Unfortunately the gold recovery isn't financially feasible. And that seems to be where the debate is on alts. We can have all the political will and social change you can imagine but until some one is willing to invest the trillions of $'s to do so on a major scale we're stuck where we are.
Although the finances work out favorably for drying cloths on a cloths line compared to purchasing a machine, electricity and natural gas, the majority of Americans choose the machine. That is an attitude problem that will be adjusted by an economic depression related to peak oil. Since the automobile is more important than the drier, the drier will be sacrificed freeing up resources. With high unemployment and increasing occupancy, there will likely be someone home during the day to do the chores in exchange for room and board. Adapting to a depression will reduce expenses and resource consumption allowing money and resources to be used for more important things, even if they are more expensive. People lack the desire to change proactively, not generally the technical nor financial ability.
And before someone declares that buying a cloths line rather than a drier would depress the U.S. economy, realize that a foreigner would lose his manufacturing job and an American his retail job. Less money would flow out of the country and fewer resources would be needed to manufacture and transport the cloths line. That is a step toward localization.
So start your local clothes line manufacturing plant today!!
the gold recovery isn't financially feasible. And that seems to be where the debate is on alts.
Those two things are completely different. Wind power and HEV/EREV/EVs are no more expensive than $80 oil.
You completely missed the point Nick. It doesn't matter if you and 99.9% of the global population believes your claims. What matters is the investment world. Hell...lets assume all the alts are equivalent to $20 oil. It doesn't matter. The capital is not being invested today. I see no indication of any sort of major capital infusion in an time frame that will significantly change the situation. Could it happen? Sure. Is it happening now? No.
And that's my point. I'm not argueing anyone's assesment of any alt expansion feasability. My point is very, very simple: it isn't being done today to any significant extent. We could fill the pages of TOD with hundreds of equally feasable ideas that would greatly improve life for mankind. But all that matters is what is being done. And what isn't. We can talk woulda, coulda, shoulda till the cows come home and pat ourselves on th back for being so clever. But IT ISN'T HAPPENING at a rate that will change the future significantly IMHO. The American public and our political leaders are expending most of the energy and verbage supporting BAU.
US energy policy has only two modes, complacency and panic
One day, the USA will panic. At that time, we can waste our limited time and resources on bad ideas (corn ethanol comes to mind) or do something effective.
That is what I am working for ATM.
Best Hopes for Your Back,
Alan
Alan - that's why I appreciate your pig-headed stubborness on the issue: you know exactly how the system is stacked against your ideas.
OTOH, isn't that also the definition for insanity? Also, sorry I didn't make it to N.O. to pick up my olive salad. Came off the rig both times in the wee hours of the morning. Maybe next trip.
The capital is not being invested today.
Sure it is. 42% of new US electrical generation in 2009 was wind power. Wind is here, and it's real. Should we do it faster, and start replacing coal? Sure, but there's no danger of the lights going out.
The Prius, Volt and the Leaf are here, too. Will demand ramp up as quickly as needed for the best health of this country (trade deficit, oil wars, etc)? Probably not - but the HEV/EREV/EVs are here, ready to ramp up.
Nick -- again you miss the point. First, I never even hinted at any concern about the lights going out. Redirecting the debate to a non-issue is a poor response IMHO. And I don't care if 100% of all new e generation came from wind. All that could mean is that no new ff fired plants were built and one 100 watt mini-turbin was put in place. The statistic that matters is how much of our current ff fired e generation has been replaced by wind or any other source. An easy answer = ZERO. If I missed it please point out specificly which NG, fuel oil or coal e plant that has been shut down due to alt replacement. That's my point: regardless of what minor gains have been made in alt generated power we are at least as dependent upon ff for for energy today as we were 5 years ago. And possibiley more so. That is THE ISSUE IMHO.
First, I never even hinted at any concern about the lights going out.
No, that's where I started this discussion - see http://www.theoildrum.com/node/6281/600871
Redirecting the debate to a non-issue is a poor response IMHO.
I'm glad you agree that running out of electricity is a "non-issue" - but the author of the Original Post is arguing differently.
And I don't care if 100% of all new e generation came from wind. All that could mean is that no new ff fired plants were built and one 100 watt mini-turbin was put in place.
It could, but it doesn't. 10GW of new wind in the US last year. It may not be in your backyard, but it's there.
The statistic that matters is how much of our current ff fired e generation has been replaced by wind or any other source.
No, it really doesn't. Nobody's retiring generation at the moment, unless it's seriously functionally obsolete. People often get confused by that point, but it's a red herring.
Further, look again at where I started this comment: there is a difference between having enough power, and decarbonizing our power. We should decarbonize our power, but that's very different from the premise of the Original Post, which is that we're running out of energy.
we are at least as dependent upon ff for for energy today as we were 5 years ago. And possibiley more so. That is THE ISSUE IMHO.
That's the issue for decarbonizing. But it's not the issue for our economy running out of power, which is the thesis of the Original Post. We have plenty of coal - enough to bake the planet. Will we do so? I'm afraid there's a good chance we will burn enough additional coal to seriously increase climate change...but we won't run out of electricity.
"Ready to ramp" means "not available in any reasonable quantity". There is little demand because the individual analysis says ROI is not yet there.
Anybody can read Edmunds. Hybrids are still not cost-effective, and EVs less-so. When they are (partially due to decreased product costs, mostly due to increased energy cost), there will already be massive energy-driven effects on the economy. Today, $4 gas just about hits the break-even point.
As for power generation, capturing new generation is the first baby step. Replacing existing capacity is the much larger need, and that will come with new infrastructure costs as well. And peaking plus intermittency will still be issues.
I think that's the only reasonable path to take, plus nukes, but it will take a long while and a LOT of money. And since we don't have a long while or a lot of money the pain will likely be extreme.
I'm glad there are true-believer evangelists pushing for renewables, but here in the choir loft the tune sounds rather cornucopian. Sometimes it's fine to know "this is the best we can do", even if it's not terribly good.
There is little demand because the individual analysis says ROI is not yet there.
Only because the external costs aren't included, like, say oil wars.
$4 gas just about hits the break-even point.
I'd say $3.
Replacing existing capacity is the much larger need
I agree.
it will take a long while and a LOT of money.
No, it's one or the other. If we do it slowly, it doesn't cost much more than BAU - new coal, gas or nuclear are all not cheap.
we don't have a long while...the pain will likely be extreme.
Yes, from climate change.
Sometimes it's fine to know "this is the best we can do", even if it's not terribly good.
Sure. OTOH, it helps to know precisely what the obstacles are. In this case, the obstacles are industries in which careers and investments would be hurt.
I don't think anyone here has ever seriously debated whether it is technically feasible to be able to run the planet off renewables.
Oh, boy. I wish that were true. If that were true it would be enormous progress.
the acceptance of smaller families as a way of life globally.
OECD fertility rates are below replacement. To get the rest of the world, you mostly need to give women education - the rest will follow.
Yes, but in KSA and Iraq they are close to 4.
It depends. When things are deteriorating people might well start to go back to the church (moskee) again.
in KSA and Iraq they are close to 4.
Yes, there are some countries that still have high fertility rates. Fortunately, they're the exception, and even there rates are falling.
When things are deteriorating people might well start to go back to the church (moskee) again.
Education is more important than income.
Unfortunately, KSA and Iraq are oil-exporting countries. In Russia living standards and average age of living is rising.
In general I don't expect much from education, but I know what power religion has on a lot of people. Recession has a birth control effect, but that can change. Besides some (economists) think that higher birth rates could prevent future economic problems, especially in countries with (soon) a high percentage of people above 65 years of age.
It would not be far fetched for the young to see what happens to the childless elderly when the entitlements can no longer be funded and decide to have more children. Additionally, fertility would naturally rise if contraceptives are not available as easily as before. I imagine most "education" just makes the women able to earn more money and thus more materialistic. When children are not an opportunity cost there will be more of them.
It would not be far fetched for the young to see what happens to the childless elderly when the entitlements can no longer be funded and decide to have more children.
That depends on expecting the kids to stick around and support them. That only works well on the farm. When people move to cities, that breaks down. Plus, of course, you're assuming economic decline, which isn't proved.
fertility would naturally rise if contraceptives are not available as easily as before
That assumes total economic collapse.
When children are not an opportunity cost there will be more of them.
I'm not sure what that means.
One only needs to look at the state of the U.S. since the 70s to see economic decline. Take a look at the gargantuan unfunded liabilities "developed" countries have, these simply cannot continue. Assuming strangers in the cities will support you is a fallacy, if you are not a blood relative the vast majority of the people really do not care about you.
Take a real look into EV batteries, good luck getting the stuff out of the ground fast enough to ever build a large fleet.
One needs to only look at the support of parents by children.
My observations are if the children are conservative Republicans, the parents wasted their time, money and energy in raising them for old age security. They would have been better off without children in many cases. No false hopes or unfilled expectations.
OTOH, the gay community takes quite good care of their older friends. Perhaps because they do not waste so much time and money on children, they are there for their friends.
Best Hopes for Bleeding Heart Liberal Children,
Alan
Diffuse? By what measure?
There are 500,000 oil wells in the US, and probably another 2M capped wells. There are 70,000 abandoned coal mines. How much land do they take up?
low net energy
Nah - wind's E-ROI is around 50. Even the most skeptical, like the Arch-Druid Greer accept that wind has a decent E-ROI.
Theres a couple of potential problems with wind power in relation to climate change. The first is that wether patterns may change reducing output of existing farms. The second is that if a tipping point is reached with the ocean currents and they slow down and stop, which has happened several times in the past, then wind strength worldwide decreases. This decrease has been estimated at approximatly 75% during past occurancies of Canfield oceans.
Could you provide sources?
"Renewables will not be able to make up the difference."
They won't. You will.
Only if there is enough additional food to power the extra manual labor. With an exponentially increasing population, a political drive for biofuels, fresh water constraints, peak phosphorus looming and the relentless destruction of arable land, I would not rely on an ample supply of food.
exponentially increasing population
OECD fertility rates are below replacement. Even world growth rates aren't exponential - at best they're arithmetic (straight line).
fresh water constraints
Only about 1/3 of US farm production is irrigated. Seen any data for the rest of the world's %?
The U.S. population is also affected by immigration.
Population: The Elephant in the Room
World population looks like it is exponentially increasing to me. Perhaps it is just after the inflection point on the rising edge of the bell curve (first derivative of the logistic curve) because the curve is close to linear in that range.
Irrigated or not, increasing food consumption from a sedentary lifestyle requiring a diet 2,000 calories to one based on manual labor requiring 3,000 to 4,000 calories requires increased food production and water use. I am doubtful that is possible in a peak oil environment in which biofuels are competing with crops for agricultural resources. Conservation of energy: if one substitutes manual labor for crude oil while holding population constant, then food production must increase to provide the energy for the additional manual labor. If population decreases, then food production may not need to increase.
Perhaps it is just after the inflection point on the rising edge of the bell curve
Yes, you need a more detailed chart of the last few years.
Re: calories - most people get too many calories as it is - worldwide, obesity is a larger problem than under-nourishment.
if one substitutes manual labor for crude oil
I can't imagine why anyone would do that - as I've noted, electricity will not be limited. Heck, even PV powered portable devices will beat manual labor anytime.
It is of course true that when peak oil supply is reached, peak oil demand will also come to pass. We can't consume more than we produce (apart form a brief period, perhaps, of running inventories down). And the question is indeed one of "why" oil demand will peak rather than "when". Will it be, as Chris states above, because prices will crush the global economy and reduce economic activity, or will it be because of improved efficiency?
My issue relating to this article is that it is not necessarily an either/or question. I think while the peak oil community has been very thoughtful in addressing the supply side of the equation, the mechanics of demand adjustment have been skated over rather too lightly.
I'd highlight the difference between OECD and non-OECD countries as paramount, and very much in line with Chris' analysis here. It is the non-OECD countries we have to watch - OECD countries are simply not the problem anymore. But I would argue that Chris understates the change in the OECD, and does not adequately consider how non-OECD countries may react to future crises. Put very simply the hypothesis in this article is that yes, OECD demand may have peaked, but it is because of economic collapse brought about by excessive debt attributable to higher energy prices. This same fate is awaited by the non-OECD countries as they pursue western, car-oriented lifestyles. The pattern for the future is of a global economy constantly banging its head against the supply ceiling time and time again. I admit, I'm quite pessimistic about human nature, but I think there are reasons to believe something will change.
First off - OECD oil demand peaked well before October 2008. Demand began to contract in Q4 2005 - back in the heady days of $65/b oil. Since then it has contracted every quarter on an annualised basis. That means OECD oil demand was contracting during the period of highest economic growth in the global economy over the past decade. That must surely mean greater efficiency? We used more oil in 2004 than we did in 2007 - but generated far less wealth. Surely that means some improved efficiency? And I suspect this was partly a response to higher oil prices.
The fundamental reason for the decline in OECD oil demand is a combination of vehicle ownership saturation and demographics - two things which absolutely do not apply to the non-OECD - but it also illustrates the frequently derided demand elasticity of price. Consumers have clearly taken some measures to reduce their exposure to price - whether it's buying less SUVs, making fewer journeys or travelling less by air. I agree much of this post 2008 is connected to the financial crisis, but the fact is that these processes began long-before Lehman Brothers went down. Policy driven change is occurring in Europe and Japan, where pro-active efforts to reduce urban car use (through congestion charging, support for cycling and improvements in public transport) are all having an effect. There remains massive scope for similar improvements in the US.
In the non-OECD you rightly say that even with prices in excess of $120/b we still saw massive growth in demand. This is true, but you fail to mention that consumers continued to pay $40/b for oil from 2004-2008. Government subsidies meant that costs were not passed through to consumers. By the summer of 2008 this situation was becoming untenable because it was costing national governments far too much to keep domestic prices steady - we were on the cusp of seeing governments pass costs on to consumers when the bottom fell out of the market. We never truly tested non-OECD demand elasticity to price.
Of course since then we've seen Chinese demand keep rising, but how much of this is being affected by rampant monetary and fiscal stimulus supporting excessive capacity? If the demand form the west does not come back, China has some serious thinking to do. But this is more of an aside, the point here is that we should not expect non-OECD countries to blithely continue consuming at current rates. If prices reflect a tightening market, consumers are likely to respond and businesses which can supply greater utility for a lower cost will do so.
That's not say we don't have problems ahead, and the current issue of debt is a real problem. But we also need to consider that a cap on supply is not necessarily the end of the argument, and people have proved themselves adept at adapting. Peak oil will strain that skill to the very limit, but we do need to remember that behaviour will change.
I agree that non-OECD demand growth won't continue forever, and there are increasing indications that China's growth in particular is looking a little bubbleicious. The question is when it levels out, or declines. My guess is it will take another 10 years or so. But I haven't found any quantitative way to get a handle on that.
China coal production, which accounts for a large percentage of its energy needs, is due to peak before 2020. This in combination with the world peak in oil, is going to be a major setback for their economy.
Have you seen a good analysis of this?
I've seen a number of analyses of US, UK etc coal production that were badly flawed - they were based on economic coal reserves, not resources available at a somewhat higher price - wee Are we running out of coal? and Are we running out of coal? - part 2 .
We would have to examine any forecasts for China very closely.
The question is: what is 'somewhat higher' ? In the light of:
That's answered in my second link. I guess that's a reminder that people don't really like going to links - it's often better to copy in the whole article. So, here's the relevant part:
A new report by the US Geological Survey ( here )looks at the recoverable reserves of the Gilette field in Wyoming, currently the largest producer in the US.
It found that at current low prices, about $10/ton, that only about 6% of the coal in the field could be economically produced.
On the other hand, if the minemouth cost of coal rose to $30/ton, the retail cost of coal-fired electricity would increase only 10%*, but economically-recoverable coal reserves would increase six times. At $60/ton, 77 billion tons would become economic, enough to singlehandedly maintain US coal consumption for about 75 years. And, that's without Montana coal (Powder River), or the Illinois basin, which I discussed previously.
Given that Japan regularly pays $80-100/ton for thermal coal from Australia for electricity generation, there is clearly plenty of "upside in coal prices. Wyoming and PRB coal are cheap partly because they are low grade/high ash, and some distance from their market. But $10/ton it is incredibly cheap energy. Ignoring CO2 for the moment, one can easily argue in favour of continuing to use coal while building wind turbines etc, as to stop coal now, even at $60, $80/ton, would hurt the economy even more, and less wind turbines would be built.
Of course, the gov could always put a "turbine tax" on coal, basically a carbon tax, and use that for renewables, but the chances of that happening are slim to none.
So we have an energy crisis. Who cares? I was speaking with my granddaughter yesterday, who is in middle school, and I asked her if any of her teachers discussed crude oil depletion. She said one teacher told them the importance of crude oil and the many products that come from it but depletion has not been discussed. Children are taught how to use a condom but not what is likely to happen when this country faces another energy crisis. The oil embargo of the seventies scared me. I’ve worried about it happening again ever since. My son, now forty, doesn’t remember the oil embargo at all. He cannot believe that he will ever live in a world without all the energy he wants. Everyone talks about baby boomers being spoiled because they had it all. Wrong! Everyone born after 1960 has really been spoiled and it was the baby boomers that spoiled them. When we have another energy shortage the young crowd will go nuts and there will be hell to pay for everyone else.
hotrod
Before this teacher discusses oil depletion with his/her class, that person would first have to know something about the issue.
Take my word for it, most people either don't know, or don't want to know.
No one believes there will be a true energy crises, or entropy crises, they believe all energy spikes are artifical. Think, speculators.
I'm 43. I first stumbled on to Peak Oil from a book by Kenneth Deffeyes..., "Hubbert's Peak, the impending world oil shortage."
execellent book, by the way.
I remember those gas lines. I remember being in a long line with my dad waiting for gas. Jimmy Carter and the Dems felt it would be easier on the poor to not use price to ration gas. Republicans just prefer to let the price rise. We could have had gas lines when the price was just under $150.00 a barrel, but we simply chose to let the price rise.
Gas has been hovering around $3.00 a gallon for a long time. If the economy did recover, we'd have another spike. There's less money for discretionary spending. The economy is in the toilet. From were I'm standing..., we're still in a crises.
I'm not going to go nuts. I've none about peak oil since 2003. I think I've pretty much accepted reality long ago.
Maybe, if you allowed your son to read a good book on the subject...???
???
Most of my family don't want to hear it either. They are stuck in a left / right paradigm. Some are left, some are right (neocon)..., all but one think it's all about of conspiracies and stupidity.
Need a refresher course in Parenting, do we?
Your son, as a Parent, is the, and I repeat, the person, responsible for his daughters education. Whining about a government employee not teaching a kid, this that or the other thing, is a complete waste of time.
It is also, I might add, a reflection of your Parental skill, that your son, is unable, or unwilling to teach, that which is important to your family.
Turn off the TV and do what's right. Please. If you value your families survival.
Hi Chris,
I mentioned your article in a post I've submitted here on the same topic, vz., peak demand in the US; also mentioned the Deutsche Bank report, with which I'm taking exception right from the beginning, as they project 4.2% of US sales for this year to be of hybrids. My 2009 number was 2.71%, one of my sources agrees that sounds about right. (I can back all this up). DB were including EVs and commercial vehicles into the fold, but checking the data I see this is almost certainly BS - yes, BS, unless the EIA data is seriously out of kilter, or hybrids have made some stunning inroads since 2007, which is as up to date as that data is. They give 699 hybrid sales for commercial trucks; that's out of 537k sales, .11%. Even major gains will be obviated by Toyota's sales slump.
All this is to flesh out your central canard that peak demand will have to be seriously committed to long term, if it is to have any meaningful impact for society. Analogies with whale oil or coal are off the mark; you would better to liken it to the transition from horses to autos, if there were some virulent plague infesting the amount of hay available. I agree 100% that a transition away from oil will need to be towards complete alternatives, i.e. EVs or MT; attempting to crack the CAFE whip just doesn't cut it, population growth alone will obviate your gains. Look at Europe, one can plainly see how they've moved on to middle distillates from light ones, i.e., moved from gasoline to diesel; but the net is still increasing, and Europe is much more disciplined in these matters compared to the US.
Hope to get some comments from you when my post appears. Did you catch this new University of Leeds study? They're agreeing our tenant that little fat remains to be trimmed in OECD demand.
Thanks Gail ... I mean, Chris ... for a great article!
I agree, the supply constraints are impossible to get around with conventional, pro- growth/pro- consumption tactics. A new approach is needed, rather an old approach is needed.
- Put people back to work. Automation is the default position in developed countries. Why? Is there really something wrong with making 'stuff' by humans rather than 'smart machines'?
- Put people back to work in agriculture. In the USA there are lots of young people who would LOVE to be able to farm, but cannot because the money barriers to entry are so high. Why? Because of the perverse intertwining of interests between governments, (both subsidy for established players and regulations that support these) large agricultural producers, CAFOs, processors, seed/chemical companies and transport companies. Breaking up the 'bigs' and allowing more small farms, selling new farmers the knowledge tools required to allow them to succeed would reduce the energy inputs to current 'conventional' agriculture.
- Build traditional cities. Not an overnight task as it has taken 100 years to build the crap we are stuck with now. See Nathan Lewis' Blog. Lewis is in the Kunstler Kamp of those who despair of our current 'auto habitat' that is both economically untenable as well as soul- destroying.
- Put the real crooks in jail. One of the Peak Oil memes is social breakdown. This starts at the top, with the hogs at the trough stuffing their Swiss bank accounts with Fed- and taxpayer cash. For entertainment purposes I think about being in charge some day and ordering the fat cats to return their trillions in swag to the taxpayers ... and posting the FBI at all the airports arresting the (thousands of) swells as they attempt to leave the country to take up residence with their ill- gotten loot.
- Get off oil! Parking all the US autos would cut consumption in half, instantly. What would the outcome be? Complaints, sure. Saudi Arabia and other producers would be in crisis! Their cash flow would vanish and they would be put into a tremendous dilemma. If they accepted other currencies they would risk not gaining enough replacement flows and would be uncertain of the new country doing the same thing as America.
- Complete de- industrialization. Talk about a pact with the devil. Our workforce has become one of middlemen and store clerks. Americans have forgotten how to make things. Our country is largely de- industrialized. Let's finish the job. Most of what is a good in this country is either made overseas by cheap labor or is junk, anyway. A common refrain of the American manufacturing worker is, "who cares? Do you?" At the same time, our services - house cleaning, professional athlete/entertainer, graffiti 'artiste', pet manicurist, tax preparer, 'personal chefs/shoppers' ... are designed to boost the customers' egos while being wastefully frivolous. Our labor is valueless because our skill level has declined so rapidly, rendered 'obsolete' because of illusory money wealth. Part of re- localization is the re- establishment of a craft labor resource base or craftsmen and women who know how to make and do things.
- Improve education. Part of learning is understanding economics, learning how to make things, how to farm, how to conserve, how to think and analyze, how to relate to people directly rather than at a remove via 'hip' consumer goods. Improving education means destroying the obsolete industrial approach to teaching: children are conveyed into one end of the factory and morons are spewed out the other. Education is a craft and needs to be approached the same way.
- Remove monopolies and gate- keeping. See the item above about FBI at the airports.
The overall approach is to use human labor, hand and mind skills to make the human environment as pleasant and appealing as possible while jettisoning the 'engineering design' fetish that energy consumption has dictated to all of us. Make no mistake about it, our oil use is a form of time machine. We are all racing into the past faster than most are willing to concede. We can choose to plant our society in the nineteenth century with the benefits of sewers, communication and greater knowledge (and perhaps humility) or we can race back the the fourteenth century of endless wars, social breakdown, famine and pestilence.
BTW, I disagree with the concept that developing nations can somehow 'outbid' developed nations for fuel when they must first buy the developed nation's (USA) currency. The only ways developing countries can get currency is either by exporting consumer goods or by attracting hot- money capital inflows. Without these and assurance that more are sure to come, the outcome will be developing countries pauperizing themselves trying to outbid each other for the needed dinero. The 'loser countries' would simply return to poverty. The developing countries' labor cost advantage only matters in the greater context of high aggregate labor PLUS energy costs in competing developed nations. As developed nations cut energy expense their labor becomes more competitive with cheap labor 'tigers'. The outcome in developing countries is usually out- of- control inflation in the local currency meaning exploding fuel costs.
Don't underestimate the accelerating and self- sustaining gravitational effect of the dollar/crude peg. Dollar scarcity is self- reinforcing. Developing nations will be the first to lose their dollars as their dollar reserves are small. Less dollars will be available to developing nations because of competition with the dollar source. The only gain to the US economy will be dollar arbitrage. The oil will be available but the dollars to buy it will not. We are at the beginning of this process, but it is entrenched and intensifying.
When you say a nation looses their dollars are implying that they are at the end of their Hyperinflation run and can not buy dollars even with a tanker full of their printed currency?
I agree with what you are saying wrt oil and the $.and the bit about automation. There is a huge push in my area to ramp up robotics and automation companies as a solution to the unemployment situation. Can they not see how crazy this is? (the rest of your comment about what needs to be done is so pie in the sky as to be humorous).
Just about any resource that matters is priced in dollars. whether or not you are acquiring dollars then purchasing the resource, or are paying the dollar equivalent of your own currency doesn't matter a hoot cept chances are your foreign currency moves in the wrong direction you pay more so it is smart to purchase dollars when the price is right.
This means a strong dollar makes resources less expensive, and weak$ makes everything more expensive. So when the dollar is weak everybody buys dollars, when strong they buy resources. Either way the US wins right? Everyone is interested in this dynamic continuing right?
So they all allow US to debase the dollar. Can this go on for ever? Unless the world goes off the dollar I don't see how this can't go on forever.
Countries that trade with the US receive dollars in exchange. Since the dollars cannot be spent within the receiving country they must be bought by the countries' central banks for local currencies and traded for US securities or held as reserves. China, for instance, holds almost a trillion in US dollars that it buys from Chinese businessmen trading with the US.
These local currencies do not trade actively on international exchanges. The Chinese yuan only trades in China and a few other (obscure) places and only for Chinese imports. China cannot trade its currency for Middle East oil although it could if it opened up its currency to trade. Doing so is obviously too risky for the Chinese to contemplate as they have not done so already. Rather, the Chinese - as well as other export economies - buy fuel with the dollars they earn.
Since all economies are shrinking and buying less export goods there are fewer dollars in the hands of the exporting countries. Some, like Japan, can sell US Treasuries for dollars and buy fuel. China can spend some of its $trillion and is doing so - buying oil fields and making production deals with other countries like Venezuela. (ROCKMAN is right, but fuel gas producers should be pitching to Chinese investment!)
If a country needs dollars and cannot earn them it can either buy them on the foreign exchange markets. This creates a dilemma for both the country's establishment and its citizens. If it seeks a good currency price for dollars, the local currency will be in as short a supply as is the dollars. The result is an inadvertent form of austerity. The establishment instead creates more of the local currency than there are dollars available. The changing ratio becomes manifest as increasing local currency prices. In places where there is a 'dollar black market' as in most South Asian countries, the change in ratios becomes apparent quickly and is self- reinforcing.
As dollars become more and more scarce overseas - which ironically is where most cash dollars reside - the greater likelihood of inflation countries that trade with the US.
Resources are less expensive in dollars but the valuable dollars themselves become impossible to find or buy when they are found. In real terms, a low dollar price can actually be unaffordable. Conversely, when the dollar is weak, everyone wants to sell dollars and use the proceeds to buy something else. The strong dollar is a new phenomenon.
The 'olde truisms' like 'the dollar loses value every day' die hard. Another truism is that the central bank is printing too much money. They aren't in real terms as any money they print disappears. The 'finance money' (credit) isn't currency. Your Visa card or car loan aren't cash. Bottom line is there isn't that much real money in circulation. Don't believe me? Ask around. Nobody has any money. Even rich people are complaining! (They have 'net worth', not cash.)
I would argue that the solution (defacto future) for the US is the opposite. We should give up the idea of full employment and accept that we will have an economy 25% long term unemployment.
Many of the jobs created (and lost) in the last ten years were related to consumer overconsumption and intense energy use. Think homebuilding, especially oversized mcMansions; auto production, especially oversized SUVs and Pickups; anything travel related, all the furniture and everything that goes inside a home. Skiing, golf, snowmobiles, ski-doos, power boats, vacation homes, heated outdoor pools, Las Vegas, NASCAR, motorhomes; all is discretionary consumption and using lots of energy. All of these industries are in serious decline and are not coming back.
The US government stimulous goal of increasing employment is the wrong direction, with the possible exception of energy efficiency programs and alternative energy programs.
Instead of creating high energy consumption jobs; we need to give the unemployed a fixed stipend so they can stay home playing video games, stay out of trouble, and consume a minimal amount of energy.
Don't forget to put an end to all immigration.
Haha! There's a better chance that we'll end both Middle East wars and enact national health insurance in the next month, than we'll ever do anything to reduce immigration in the next 10 years.
It's so perverse, and it's true. Immigration will only end when the U.S. is so poor that there is no incentive for people from the third world to come here anymore. Any questions?
Mexicans are already starting to lose interest in crossing the boarder.
At some point, assuming serious declines in living standards do actually occur, immigration will definitely be halted.
Been looking over that site. Love it. Love the thing on real train systems.
It'll take forever to read through all those liks.
About raising capital for new exploration:
"Not only did the report offer further confirmation that the oil export crisis has arrived, but it also confirmed my growing suspicion that the oil production everyone has assumed will come online in five to ten years might, in fact, fail to materialize. Negative equity companies have a hard time raising capital for new exploration"
I agree, Cris,: new exploration is important question for energy problems. However, exploration results doesn't depend on "raising capital" only but from pre-drilling exploration efficiency mostly.
Let's see.
.However conventional exploration technologies have low efficiency. For example, MEXICO CITY, March 12 (Reuters) - Mexico's state oil company Pemex is learning the hard way why U.S. oilmen frustrated by failed multimillion dollar wells once dismissed the deep waters of the Gulf of Mexico as "the Dead Sea."
Where was 3D seismics if multimillion dollar wells were failed ?
It one more indidcates : conventional pre-drilling prediction needs modernization.
For example, there is an innovative technology for oil/gas pre-drilling detection. With the technology we could make up to three times more oil and gas discoveries than when using conventional technology. And the fact that new technology won't need more investments is also very important.
The technology is designed and successfully tested in the Barents and the Black Seas as well as in the Gulf of Mexico (see: www.binaryseismoem.weebly.com).
I don't see advanced 3-D seismic tech coming to Mexico without substantial reform of their constitutional barriers to foreign oil company participation.
Chris -- PEMEX can have state of the art 3d seis tomorrow if they wanted it. And could pay for it. Seismic acquisition companies aren't into drilling for oil/NG. They are simply another service provider available to anyone who can pay the invoice.
OTOH, if PEMEX can't afford to pay for the seismic then they are out of the Deep Water game entirely. There have been $200 million dry holes drilled on the US side using the best seis and personnel available. Without the 3d they have no DW drilling program. So if they require foreign equity partners to fund the seis they will have to amend their constitution.
In re: Pemex, don't miss the interview with Dave Shields linked in today's Drumbeat.
Read it KLR...thanks. Interesting but doesn't seem offer much more then we already know/suspect. It was a little odd how he framed one of Mexico's biggest problems: how do they get international oil companies to invest in Mexican oil development without offering them a share of the revenue in return? Does that question really need to be presented? Continue with the present laws and Mexico will own 100% of all that oil they may never have the funds to develop. Perhaps the best bet they might have is to cut a deal with the Chinese like Brazil has done on a right of first refusal. But I suspect the Chinese lack confidence in Mexico keeping true to the trade. But, OTOH, China is trading with Hugo so it might happen.
Do you believe failed multimillion wells were drilled in the Gulf of Mexico without pre-drilling 3D seismics? It is impossible.
The situation in the GOM is the same as around the world: the success rate for wildcats is 0 to 35% with "advanced 3-D seismic tech ".The exapmle from the GOM illustrates zero rate. Unfortunately I do not know : how many failed multimillion wells were drilled.
May be I am wrong and some reform can help now?
Mexico kicked out the Gringos during the revolution of 1910. The constitution was designed to keep foreigners out of the country. The reason they did this was because there were a small group of people at the top of the food chain, who just so happened to be decendents of the invaders, along with gringos who owned most the land and operated most the businesses and industries, while most people were peasants (serfs)working someone elses land from sun up to sun down. And things were moving in a more authoritarian direction, with the landowners increasing the size of thier ranches and the number of serfs working their land.
Most my ancestors enjoyed and supported the status quo. They had no reason not to.
However, the status quo was not acceptable to most Mexicans, so they revolted. Sorry ancestors..., a good thing for me they did, or I wouldn't be here...,
Mexicans in general remember that there was a war and what it was about. They are very unlikely to change that constitution.
They may actually prefer the idea of going down with the ship, I don't know.
I don't know how much that population knows about depletion, but any attempt to change that constitution may be seen as an attempt to return them to a state of serfdom. All that fighting and killing and generally speaking, the invaders (different people but same blood), are still running the show. The people are still poor, but they are no longer serfs working someone elses land.
These people are very bitter about their history, they are not going to be understanding or trusting about anyone tampering with the constitution. It's bad enough the richest man in the world is now a Mexican. Trust me, I'm sure in Mexico, that's a double edged sword. It's like social security or medicaid in America. It's political suicide to tamper with it. We'd rather borrow and spend until we collpase. Well, Mexico would rather collapse then let gringos back in.
Therefore, IMO, I expect Mexico to collapse first, before tweaking their constitution.
Thought provoking post Chris, thank you. Editing question though, I am wondering if where you said:
did you mean:
perhaps? My few Saudi Arab friends would be um... unamused to be called Persian(and vis-a-versa of course).
D'oh, how'd that slip by? Thanks, corrected.
This guy is a spammer. He has reappeared after being gone for a while.
I have been arguing this point ever since the oil price collapse. I thought oil would go to $200 and then keep on going even higher. I wuz wrong! However some people on TOD keep arguing that there is no price limit on oil, that it can, and probably will, just keep going higher and higher regardless of the effect on the economy. I just don't understand why some people can ignore the very dramatic effect very high oil prices has on the economy.
Ron P.
The price of a commodity does not just depend on its scarcity, but also on how important that commodity is to the population. Oil is still very important to humanity.
I think oil price will continue to rise, although with fits and starts, like we have been seeing. It will go up really high and then settle back down at a higher level then before.
http://futures.tradingcharts.com/charts/COM.GIF
You know, what I said to myself really clicked something in my head. Economists, and I say that having used to be an economist, calculate demand of oil on how many cars and how many people need to heat their homes, etc. Very static, accountable things. But that misses the DESIRE to have these things. In fact, I would say true demand for say heating oil is the person in the house and how strong of a desire that person has to keep the house at a certain temperature. So two people living in the same house can have a very different demand of oil. My girlfriend, for example, has a much higher demand for heat then I do and she is willing to sacrifice other things to use that oil. Her demand is unaffected by the price of oil.
And this thought leads to believe that as oil price rises demand can actually increase, or might stay the same.
We cut back on oil, but we still have a strong desire for it. In the past $3 gas was not a big deal because we could pay for it.
So, yeah, I think oil price will continue to rise.
Well thats the key really. If the price collapse was primarily the result of a number of events some probably not repeatable resulting in a short term surplus of oil then prices will rise. The real problem is not that prices collapsed but the nature of the underlying driver for the collapse. This of course comes all the way back to what the current real supply and demand picture is and how much you want to believe the official numbers.
My opinion is that the real supply and demand picture changed little as oil went from 140 to 30 and now back to 80. Other events having a lot more to do with simple timing of when oil supplied and what the demand was at the time it was supplied and the financial situation had far far more to do with the price change. The huge contango when oil was at its lows also points towards the lack of fundamental support for the price swing. Certainly forces outside of fundamental supply and demand can have and impact on prices over the short term however over the longer term the fundamentals certainly set the floor.
Despite the economic collapse this floor has been slowly rising throughout most of the recession i.e even as the US economy contracted the price of oil has risen.
There are more people unemployed right now then at the beginning of 2009 and oil prices are almost three times higher and in general the economy has shrank dramatically and they are still higher. Perhaps at the moment its flat to maybe slightly growing again but compared even to 2008 the absolute size of the economy is significantly smaller and prices are still rising.
At some point the elasticity of demand has to be questioned in the sense that most people seem to be assuming that demand has a lot of elasticity yet if one looks at the events it seems that the opposite is true indeed so far oil demand seems to have responded in a very inelastic manner if you use price as your key guide and VMT. But then of course your forced to seriously question the US claims about its oil supply situation so ...
So basically if you accept that the price changes where effectively one time events and that supply and demand did not change significantly over the longer term i.e a short term one time imbalance developed then your left with the 140+ price being the fundamental price with the probability basically 100% that the fundamental situation is quite different from whats being publicly claimed.
Of course this requires not a tin foil hat but a lead foil hat but hey if its time to where them its time. Sometimes putting on the lead foil hat is the truth.
If so then its pretty clear that the price of oil is probably substantially below its real balanced supply and demand price how much is tough to know what you do know is that eventually nothing will stop the market from correcting to balance supply and demand.
And last but not least if one considered us disscusing numbers like 140 for a barrel of oil or even 80 back ten years ago people would have thought you where insane. I suspect that the truth is these "low" numbers we throw around now will prove to be just as insane to people in the not to distant futures.
Well said. Many countries, such as Mexico, will look back 5 to 10 years from now as they become oil importers and wonder why did they sell their oil so cheaply - and by cheaply I mean $80.
An attack on Iran was discussed elsewhere today. That would double the price of oil overnight, but I suspect that will lead to even more dire consequences than just high oil prices.
Speaking of Iran, it was mostly Iran's exports that caused an oil crisis in the US in 1974 and the sole cause of the 1979 crisis. The US reacted by putting controls on oil and even natural gas usage. Had it not been for those controls, demand would not have been 'destroyed' as much as frequently quoted here (in a re-write of history). I don't see much evidence that demand for oil is elastic with price.
Just to give you and example of how lead foil hat things are these days.
I violently disagreed with the claims about our harvests last year. This guy has been systematically following it. Like me give the magnitude of the potential lie your left guessing what the truth is but I don't think he is that far off.
http://www.marketskeptics.com/2009/12/2010-food-crisis-for-dummies.html
Certainly he can be off by a bit just like I can when your dealing with seriously corrupted numbers guessing the truth is hard.
However its not just oil that may be suffering serious problems with government numbers the exact same issues apply for food as well.
Like I said I don't think I'm that far off on my estimates and his estimates for soybeans match pretty well with what I was thinking they should be.
Needless to say if we are both even close to right and the lies are this horrendous your about to see some serious stuff hitting the fan soon.
Whats interesting is I think the oil crisis and food crisis should for all intents and purposes overlap time wise. Somehow there is something very karmic about this as there is no real intrinsic reason for this coincidental overlap.
Again obviously we are both guessing but if the guess are reasonably correct they diverge dramatically from the public assertions and any errors are fairly small even given the assumptions you have to make. For example for oil I figure I could be off by 20 million barrels or so and I estimate our real storage levels are somewhere between the middle of the average five year range and the bottom falling at 2-5 million barrels a month. This gives you about a 2-5 month spread sort of averaging he errors if you will i.e I'm not both low by 20 million barrels and the decline rate is 2 million barrels a month.
So for both your looking at almost overlapping crisis starting really now but getting fairly intense from april-sep. The food could actually be really bad as even a bumper crop would probably not get us through the winter it would take another excellent harvest.
Of course with food as with oil a substantial amount of this is because of wasteful feeding of grain to animals but the current crops quality is so low its not even fit for animal fodder much less human consumption.
http://www.aragriculture.org/crops/soybeans/podcasts/number22_wmv.htm
Probably the poor quality is keeping prices down making meat cheaper as although its barely usable is fodder that all its good for.
So enjoy a few cheap steaks they could well be your last for a while.
Of course the paradox is if this is correct then people will be forced to slaughter there animals later in masse as soybean prices increase keeping meat prices relatively low for a while as grain prices skyrocket. But then its no meat and no grains.
It not my fault that these attempts to estimate the truth give such divergent results that just seems to be the way it is these days. Its basically to incredible to believe but that does not make it wrong.
I read that article before by market skeptics and I am not surprised by its conclusions. I literally expect that we will wake up one morning and the media will advise us that there is a shortage of some US grain crop that was suddenly discovered. However I don't know if that will occur this year, the next, or in two years, but is starting to come within the event horizon.
I this seems far fetched, just think back a year or two ago when a shortage of rice developed seemingly out of nowhere. The price of exported rice doubled in a short time, less than one month. Note that when a food shortage develops, countries no longer care much about export prices - they want to feed their country first.
The problem I see is that once we past the event horizon, we will be in a different universe where traditional terms - such as market setting world prices - will be set aside as direct deals or pressure is made to send (food and oil) supplies where demanded. So in that respect, the price of food or oil may not matter one day as much as it does now.
After peak oil is distant past, and decline rates accelerate a lot, we'll see oil much more expensive than it is today. It will probably oscilate with an ever increasing windowed average from now on.
It is just that your timing was based on a short lived peak on price, the average is slower. Your timing was wrong, but I belive your prediction was quite right. Afterall, oil will be priced so much that consuption will decrease by 99.9% when production declines by 99.9%.
Possible. Another possibility is that we never test $147 ever again. For the same reasons why we'll never again achieve the 2000 stock market high (inflation adjusted), and house prices will never recover to their precrash levels. All bubbles end, and when they end, they never come back.
And don't be overwise...by never I mean within a timeframe that has any meaning to us...it's sometimes hard to accept, but what happens on this planet 100 years from now is so unknowable as to be completely meaningless (and yes, I do accept global warming, and no, I don't think anything can be done about it).
We've just lived through a stock market bubble, a real estate bubble, and a commodities bubble. Thanks to your friendly neighborhood financiers. Gee, trying to turn money into more money sure is fun!
I can already hear the howls of protest. But peak oil is here - the supply is going to be going down, forever! Yeah, so what? Demand goes down with it (it has to). Consider this: as a last resort, government rations oil and makes whatever arbitrary rule it has to: nobody drives more than 100 miles on M-W-F. Take that for demand destruction.
You see, our political and economic structures will collapse long before we lose the ability to pay for oil. And then, the question isn't whether you can pay for oil or not. The question is do you have a plan for either defending yourself from or kneeling down to the warlord of your new local region.
I could be wrong about all of this. But after 2008, I refuse to accept, without questioning, the notion that the price of anything, even oil, can rise forever.
No, actually, I think you're absolutely right. There's a maximum value for the cost of oil, as real measurable substitutes do come on line at some point. I KNOW I could produce sweetpotato/papaya gasohol at 15 dollars a gallon very profitably and sustainably. This, this I know--of course there's not a market for it so better to drink it--LOL. But I'm tooled up to do it. . . Sure. The grand problem is that most of what we do isn't worth doing at even 6 dollar a gallon gasoline. For those who are first value producers, however, not a concern. If you're going to run a chainsaw, you'd pay 100 dollars a gallon and not blink compared to the alternative of whacking away elsewise.
Spent the day today making biochar and the experience is fresh in my mind.
I'm still waiting to hear an economist mention the price spike as a reason for this recession.
http://www.cnbc.com/id/35890963
""Coming Soon: Economic Growth Without Oil""
Gotta laugh at this one..hahahahahhahahaha
Is'nt that close to the same thing as...A LITTLE BIT PREGNANT???
When the oil goes, so will civilization. Then if there are any left, humans will start over.
With a real appreciation, for living with Nature and the flow of things that are more important, than Humans.
Some more quotes from the article. Sometimes the spin just makes me sick.
When I was still teaching last year I had my middle school kids study peak oil and do a major project on alternative energy options. I had a mother break down in the school parking lot when we discussed the ramifications. I don't know how valuable the exercise really was. People around here still seem to do BAU activities and will do so until their family resources simply give out. I am watching their finances and options shrink day by day and they still drive huge trucks and go to town for recreation shopping.
On a brighter note, I was waiting for the credit union to open this morning, (in a driving south-easter), and up pulls a scooter with a 20 year old young lady on it. Jeans and boots, fringed jacket, looks to kill for,....the new reality.
Thanks for the detailed numbers and facts, people.
You're lucky you weren't teaching evolution....
"Coming Soon: Economic Growth Without Oil"
Yes and it's called financial engineering, and we have already tried that over the last 6, 8, 10 years and we are now finding out that it can't be done.
1. Additional net exporters will arise (Brazil being the obvious example). There will be others.
2. Not all net exporters will see their net exports decline. Some will see them rise. Iraq, Angola and others come to mind. BTW I doubt your claim about Colombia.
3. Some net importers - such as the US - will see rising production. Really!
4. Last, but not least, economic growth is becoming less dependant upon oil. So even if you were correct and net energy exports declined, that says nothing about the ability of OECD economies to grow.
The thesis of your essay presupposes that us "recoveryistas" are unable to answer your first question. Since I have just done so, no reply is needed for this second one. That is, there will be no "creeping infection of sovereign default."
BTW, if you want to put your money where your mouth is, I'm game. We will not enter a permanent depression, the unemployment rate will go down, etc. I've already won one bet on this topic on the po.com forum, and am probably going to win another. Might as well add a third!
Get back to us in fifteen years, if we're driving around then I doubt it would be anything like today.
We mustn't forget that Indonesia also showed in an increase in net oil exports in 1998, after an initial net export decline in 1997, following their (apparent) final oil production peak in 1996. Their 1998 net export rate was about 9% below their 1996 net export rate, but at the end of 1998, only two years into a production decline, they had already shipped 44% of their post-1996 Cumulative Net Oil Exports (CNOE), a two year depletion rate of 29%/year. They became a net oil importer in 2004.
Sam's best case is that the (2005) top five net oil exporters are currently depleting their post-2005 CNOE at about 9%/year. My guesstimate is that the overall global post-2005 CNOE depletion rate is on the order of around 6%/year.
The ELM 2.0 thesis is that developing countries will continue to outbid developed countries for declining net oil exports. I suspect that the total remaining volume of global CNOE available to developed countries could have a current depletion rate of something on the order of 12%/year, or about 1% per month.
Brazil's consumption 2004-2008 increased on average 92.86 kb/d per year; production 117.54 kb/d. They have the 15th highest average rate of consumption growth back to '65, in the company of gluttonous OPEC members, Chindia, and dinky centers of capital like Singapore and Hong Kong. If they are your most obvious example of imminent growth supply side...
Just to drive some more nails into this coffin: net exports for UK 1974-1978, and Brazil, 2004-2008:
UK did a lot of importing before that period, of course. Actually Brazil was a stronger exporter 10 years ago, '99 to '03 was
50 193 43 181 134
So by making larger discoveries they are increasing consumption at a faster rate. Or production is declining so quickly the net gain isn't there. Perhaps Brazil will be exporting some in 5 or 10 years, but how will that compare to declines elsewhere?
In fact, TODers should know better than expect Brazil to produce the huge amounts of oil our government is anouncing it will get from the newely discovered fields. But I fail to see where WT said that, are you answering the right post?
Don't talk with this guy - its a waste of time
But he alluded to winning vague bets on an Internet forum and hand-waved away the second question after posting a CNBC link to the first, so clearly all your facts are incorrect and energy analysts are blowing smoke.
Very good summary Chris.
The UK now sees no need to raise taxes and cut expenditure further since it is forecast that the economy will grow by over 3% per annum, even though our indigenous primary energy production is in free fall and the financial sector will likely evaporate one night when no one is watching.
http://www.statistics.gov.uk/cci/nugget.asp?id=192
I think the stock market is heading for a lightning bolt, not an M.
Euan -- Perhaps that enthusiasm comes from the "stiff upper lip" thing I hear the English have. I tried that SUL thing once and all it accomplished was spilling coffee down the front of my shirt. Guess it doesn't work as well for the Irish.
Wow! someone else who sees that energy is capital. Which is why America cannot recover until it stops spending any capital it has on foreign wars, unless it gets control of more energy from those wars.
One needs a positive return on investment for military intervention and colonization--
So far, so good.
Civilization cannot exist without exploiting resources from beyond the cities and centers.
Eventually they all crash, and we are next.
Great article...just wanted to make a correction to a likely unintentional error...
Saudi Arabia is an Arab nation, unlike Iran (Persian). I'm not sure if the author here intended to say that Chinese, not U.S. imports from Iran (persian nation) are at a 22-year-low, but that wouldn't make much sense. I think he meant that U.S. imports from SA are at a 22 yr low.
Yeah, I caught that too. Perhaps he meant "Persian Gulf nation". Then again, to those in the KSA, it's the "Arabian Gulf".
Probably left out the word "Gulf" after "Persian."
Fixed per upthread comment - thanks all.
That's my favorite line from Chris Nelder's post. It sizes up the idea that we can't borrow our way out of dwindling net energy.
The new oil will come from Iraq. It's going to stave off the cliff for 15 more years.
One can see how new oil production in the North Sea affected total North Sea production, which peaked in 1999. If we look at North Sea oil fields whose first full year of production was in 1999, or later, these post-peak oil fields showed a combined production peak of about one mbpd in 2005, versus a North Sea peak of about 6 mbpd in 1999. These new fields helped to slow the North Sea production decline to about 4.6%/year.
In regard to Iraq, based on current consumption data they have to increase their production at about 2.2%/year, just to maintain their 2009 net export rate, which was down slightly from 2008.
I wouldn't buy all the hype on Iraqi oil increases to 12 mbd just yet. Let's see how it plays out.
I'm with you Earl. I was hit in the back with a chain this morning and it hurts so I'm not going to be my usual charming self. I'm flat ass tired of all speculation as to how much oil Iraq or anyone else will produce. The opinions offered don't change the dynamics of the system. Iraq, for example, produces X bbls of oil per day right now. That's all that matters. And what they produce in 1 year or 5 years will matter ONLY AT THAT TIME. It doesn't matter if anyone agrees that Iraq will be producing 12 million bopd in X years.
Don't misunderstand: I'm very impressed with all the effort by TOD contributors on fact based projections. But that's far different then speculation.
Rant off....getting some more ibuprofen.
Profgoose –
the fine article above has one small but very common error - it describes "biofuels" as having an EROEI of 2. This is wrong, due to the term's vagueness.
Agribiofuels may well have an EROEI that low, but Sylvibiofuels do not. They warrant consideration in their own right.
The firewood I fell with a chainsaw and bring home by tractor has an EROEI well over 40. This would be reduced a little, but not all that much, were I to load 20 tonnes of it onto a modern truck and deliver it 50 miles.
Moreover, given that wood gasification is an highly exothermic process, if used for the production of wood-based liquid fuels (methanol, biodiesel etc) then their EROEI is likely to be at least an order of magnitude higher than that of Agribiofuels.
In terms of the scale of Sylvibiofuels' usage, the figure for France (supposedly the exemplar of state-socialist nuclear power) is that wood supplies over 30% of that country's domestic heating. Wood is thus a mainstream under-recognized resource even in a highly technically advanced EU nation. Perhaps it is predictably overlooked by energy economists due to its patent inability to support endless exponential growth of demand. (Fossil fuels are so much more plausible in that regard).
One item absent from the article above, and AFAIK from TOD thus far, is an account of the relevance of Methyl Hydrates as regards PO. In case you missed it, Leanan reported a piece (13/3/10 ?) first shown on Xinhua news agency (7/3 ?) about China's aim to exploit large reserves of "combustible ice" on the Tibetan Plateau permafrost. (Physorg published a better description). The core points are that
a/. the onshore Chinese resource is around 35Bn tonnes of oil equivalent, and
b/. this is a very small fraction of what is predictable in Alaskan, Canadian and particularly Russian arctic territories, and
c/. that is a really small fraction of what’s available, but very unstable, offshore globally.
The relevance of that scale of onshore methane resource at shallow depths has to have implications for PO as exorbitant oil prices drain yet more vitality out of economic activity. So, given the ease of turning very pure CH4 into liquid fuels, maybe it is time for a TOD article on the issue ?
All the best,
Backstop
Backstop - Your point is a good one, but I don't think very may people would think of wood-based liquid fuels as "biofuels." Methane hydrates are also interesting. In both cases (plus algal biofuel and a few other substitutes) my response has always been: Let me know when its production gets to 100 kpbd. Because until then, it simply doesn't matter.
If you have any data on the production rate of wood-based liquid fuels, I'd be interested in seeing it.
Chris, I would suggest that a wood based liquid fuel absolutely fits the definition of biofuel. Here in British Columbia, the governments bioenergy plan, (we have a billion tons of standing dead trees that we are trying to do something with) defines wood based biofuels as something that can substitute for gasoline or diesel.
The catch is that no one is producing wood based biofuels, other than a few niche players doing pyrolysis oil, which can be used for boilers, but not engines. And if you are using it in a stationary application, it is often better to leave it in solid form as chips/pellets. You can do wood to liquid, same as coal to liquid, which is what some companies like Choren are pursuing, but it's doubtful if that will be any cheaper than coal to liquid, and that is presently uneconomic.
The use of wood as a fuel, in all it;s forms (firewood, charcoal, pellets) is quite large, and growing. Wood pellets is the fastest growing commercial forest product in N. America and Europe, and worldwide production is nearing 10m tons/year. On an energy basis that is 83,000 bpd, so it is close to your mark. Some of this is displacing heating oil, but none of it is being used as transport fuel.
So, as with many other renewables, it is a good energy source, but not a good transport energy source.
Paul - thanks for your response. I'd been wondering just what sort of tonnage of dead forest now stands at risk of wildfire, and thus of accelerating the forest carbon feedback loop. A billion tonnes, already, just in BC, is very sobering indeed.
With regard to its management, the goal should not be its clearance simply to prevent wildfire, but rather to achieve a seminal advance in forest produce utilization. BC could aim to gain world leadership with that resource needing processing ASAP.
Specifically, an organization called the International Biochar Initiative needs to get involved with technical consultancy on converting wood feedstock locally into charcoal for Biochar (an extraordinary soil fertility enhancer) and into coproduct liquid fuel from the gaseous outputs (presumably biodiesel).
These are both very well proven production technologies, and both products will attract sales, with the biochar having the extra value of sequestering carbon. Regarding profitability, I recall hearing a couple of years ago that wood-based methanol needed an oil price of $70/bbl to be viable, so I expect that, with official backing, the two products together could do very well, though the charcoal will need to be sold gradually as farm demand is developed in home and export markets.
Speed of conversion is of course of the essence to avoid decay, so for this and other reasons mobile plant that can periodically move a few miles to follow the damage front is probably going to be the best option.
Regards,
Backstop
Paul - You have reinforced my point. "no one is producing wood based biofuels" and of the wood being consumed, "none of it is being used as transport fuel." So that 83 kbpde doesn't really count, unless we switch contexts to total BTUs consumed, in which case wood is probably offsetting as much coal- and natural gas-fired electricity as it is heating oil. I don't see that as much of an argument against the general EROI picture.
As I said in the link to those EROI numbers I cited, they were from the following sources:
As I also said in that piece,
If anyone has an idea on how forest products can be massively scaled up from present levels, I'd love to hear it--particularly if they think wood-based biofuels can ever be a significant substitution for oil.
The only way out of the box that I see
1) Significant increases in energy efficiency
2) A shift in economic activity from high energy/oil consumption activities to low energy/oil intensive uses.
Fortunately, the two compliment each other.
My favorite, shift freight from trucking to electrified rail. 20 BTUs of refined diesel for 1 BTU of electricity. Couple of hundred billion in GDP invested. That GDP in building electric locos & electrification will use significantly less oil and energy than the same GDP in average US consumption.
Basically, investments that make renewable energy (or new nukes, pumped storage, HV DC) OR use energy more efficiently appear to almost uniformly use less oil & energy/$ GDP than does average American consumption.
So we should stay in a permanent recession @ consumption but restart our economy with a savings and capital intensive build out of renewable energy and long lived energy efficient investments. Buy fewer but better products (spend $200 more for a more efficient & longer lasting washing machine).
I am not sure how clear I am about what the entire thrust should be, but I can see a viable economy thriving with lower levels of consumption than today but a growing pile of viable capital goods and infrastructure. Decent employment levels too.
A balance sheet vs. an income statement recovery.
Best Hopes,
Alan
Assuming that locomotives last far longer than truck tractors, and train cars longer than truck bodies, you'd think that once the ball started rolling there would be continuing savings instead of costs with a roads-to-rails switch.
Done correctly, heavy but delay-tolerant products would move to rail first, while the delay-intolerant products would move to lighter, smaller trucks.
I've seen wind-turbine blades moving by truck and by rail. Hard to understand why trucking (with leader and follower vehicles, and 3 drivers) would ever be needed for interstate transport of those.
BNSF is actively going after the wind market.
But the same is true in many other areas. American consumption (2/3rds of the economy) is about the most oil & energy intensive way there is to make a GDP $.
Working on a paper from this right now.
Best Hopes,
Alan
Paleocon, it's not always that simple.
For the latest turbines, those blades are huge, and could run into problems getting around some railroad curves and through tunnels. This is what limits the diameter of the Space Shuttle solid boosters - they are as wide and long as they can transport by rail from the factory in Utah to Cape Canaveral. Same constraint limited the size of Sherman tanks in WW2 - they were as big as could fit through the tunnels form Michigan to the coast!
Of course, where the turbines are being erected is often some distance from a train, so you have to transfer at some point.
Finally, the railroads are carrying plenty of freight today, but the wide load trucking specialists that normally carry bulldozers, bridge sections, oilfield equipment etc, are hurting for business right now and will give a pretty good deal.
Thanks, that's what I was talking about.
I especially like this one - $2400 to $3000 (plus shipping, it is only FOB Tianjin), 55 mph max speed, and 59 mpg!
I do wonder if the reports of massive numbers of "cars" being built and sold in China actually include a lot of things like these?
Since they call this a "three wheel motorcycle", I wonder if it would be exempt from the requirements for airbags, etc. that would otherwise prevent something like this from being highway-legal? Would you have to wear a helmet in states that require them for motorcycles?
WNC,
Other than the fact it only has three wheels, that is just as much of a car as a Smart car. I am sure that many of the cars being sold there are "microcars". But, they are probably no smaller than a 1960's Mini or Fiat 500, and certainly bigger than the Isetta and the post war Messerschmidt.
The Chinese do not (yet) have the highway culture that we have, and many of them see these as an ideal "first car", though they may have upsizing ambitions later.
For that to be sold here, it should be defined as a "car", it cannot perform in any way like a motorcycle
If this is a large chunk of new car sales, they are making much better use of scarce oil than we are.
Deleted. Posted on wrong thread. Meant to post it on Drumbeats. Sorry.
There are actually other questions/problems for the Recoveryistas.
Debt & Energy are certainly two major factors, but also to be thrown into the dilemma are -
1) The Globally Aging Population.
2) The Total Global Population is set to Peak, within 20-30 years, before going into long term Decline.
3) Climate Change is set to significantly impact to Global Economy, notwithstanding the argument over its cause.
As I have said before, we are now in DEAP shit!
DEBT = All time Highs & Going Higher
ENERGY = Oil Production has Peaked, creating Economic stress points.
AGING POPULATION = Baby Boomer Bust is here, now
POPULATION TOTAL= Already Beyond the Planets Capacity, but set to Peak within 20-30 Years.
And of your factors in the DEAP foursome, one is coming with absolutely certainty, coming with absolutely assured precision in timing, and coming NOW, and that is the aging of the world population. I see that one issue as overwhelming all other driving concerns over the next 40 years, which, coincidentally, is the rest of the baby boomers lives. The one crisis that cannot be fixed, because for folks who think depletion and geology and thermodynamics are harsh mistresses, time is the mother bitch of them all.
RC
The primary solution to the problems caused by an aging population is to raise the retirement age. Easy, simple..except for resistance from those who, inexplicably, think they will enjoy not working.
The willful denial of the economic consequences of peakoil may be a good thing.
Denial of the coming recession may prevent total chaos.
What would happen if governements would tell us that we could never repay our loans and that we will lose all our wealth in the coming 20 years ?
Maybe a lot of people would quit their jobs and start stealing and luting.
In the movie "Deep Impact" US president Morgan Freeman announces that a comet will hit Earth in a years time. But he adds:
Maybe it is a good thing to keep the masses ignorant for as long as possible.
Hans, you must be the one who wrote on forumgroenlinks.
It won't happen, because governments never would believe that Peakoil could cause that.
And Peakoil is not by far as dangerous as a comet. But probably indeed in 20 years a lot of wealth is lost.
I'm not too sure about that. We will see Han.
Indeed Hans. Well, a big meteor would kill all humans. And even a crash scenario for oilproduction won't do that.