Energy Secretary Chu provides an optimistic view of our energy future at EIA conference

Energy Secretary Chu gave a talk at the EIA/SAIS Energy Conference on April 6-7. I want to share a few highlights of it, and give my impression. Both the Powerpoint slides and audio can be accessed at this link.

My general view of the talk is that Chu is extremely optimistic, in terms of what he thinks can be done. He also fails to tell listeners what our real problems are.

Slide 2

Wow! Slide 2 indicates that Chu thinks America has the opportunity to lead the world in a new industrial revolution. How does he think that is going to be done?

The first industrial revolution was during a time of increasingly available energy, because of the new use of coal. That is very unlikely in the future, both because of peak oil, and because of hoped-for constraints on fossil fuel use because of climate change issues. Net energy available to society is likely to be going down, not up! It is hard to understand an industrial revolution under those circumstances, unless it is a retooling to a much lower level--but later slides make it clear that is not what he is thinking of.

Slide 4

Yes, as Steven Chu says on Slide 4, the Recovery Act does make a $80 billion down payment on a clean energy economy. But it is nowhere near enough to do the whole job (for example, to create a smart grid). It is also temporary. Once the funds run out, the whole investment must be made by others with funds.

Slide 10

Slide 10 shows energy densities--it is one of the better slides that Energy Secretary Chu showed. The top fuels from an energy density point of view are diesel and gasoline (near the top, right side of the chart). Kerosine, used in jet fuel is also near the top, as is human body fat. The lithium ion battery, as currently produced, is down near the very bottom left corner (worst!) in terms of energy density.

Chu indicated that there is work being done to perhaps produce a battery at the red star location. If this can be done, the battery will have five times the current lithium ion battery's energy density.

With this huge disparity between what batteries can do and what fuel can do, in terms of energy density, one gets the distinct impression that it is unlikely that electric vehicles will be ramped up any time soon. So on the next slide we see:

Slide 11

Slide 11 talks about responsible expansion of offshore oil and gas exploration. One could get the impression that there are huge amounts of oil and gas to be found in the offshore locations being opened up, but this is fairly unlikely. An article by Gary Luquette, President, Chevron North America Exploration and Production Co. says:

The good news: the OCS [Outer Continental Shelf] has significant potential. Over time, it could add 1 million more barrels of oil and natural gas equivalent a day--potentially representing a fifth of the current total U.S. oil production. Advances in technology could increase that amount dramatically.

One million of barrels a day of production would be good in many ways (jobs, balance of payments, 20% of U. S. production) but it wouldn't save the world from peak oil. In fact, it would amount to a little over 1% world production--and even if it can be ramped up a bit from 1 million barrels a day, it still isn't huge. The amount available in the area recently announced off Virginia would likely be only a small fraction of this--probably less than 100,000 barrels a day.

Slide 12

In Slide 12, Secretary Chu seems to take credit for Department of Energy (DOE) research benefitting coal bed methane and shale gas production. (Both of these are forms of natural gas.) I can believe DOE's research may have been helpful in coal bed methane production, since production started not long after funding ended in 1982. I am less convinced that it played a manor role in the development of shale gas, since there seems to be more of a lag in production after funding ended. Perhaps a reader has more information on this.

Secretary Chu says that DOE is investing $64 million in early-stage research in for methane hydrates (another potential source of natural gas). The Oil Drum has published several posts on methane hydrates, most recently this one by Jean LaHerrere. The deposits have been known for a long time, but all indications are that they are extremely difficult to extract, and pose a risk from a global warming point of view if the gas escapes during extraction. I would expect that if natural gas from methane hydrates does get produced in quantity, it will be at least 15 years from now. Since it would be natural gas, it still would not directly replace oil, which is what we need to run our vehicles, and is now in limited supply.

Slide 14

Slide 14 shows the learning curve in crystalline silicon and thin-film technology. The problem is that total costs don't go down nearly as quickly as the cost of high-tech pieces do. When on looks at a Berkeley 2009 report on the Installed Cost of Photovoltaics, the graph of the total installed cost is much different.

Graphic from Installed Cost of Photovoltaics report, not Steven Chu presentation.

On a total installed cost basis, costs have been up in the $8.00 per Watt level, and not dropping quickly. So the $1.00 Watt level shown in Chu's slide doesn't necessarily translate to low cost for the consumer. Cost of other components and of installation on individual roofs is still expensive.

Slide 15

Carbon capture and storage (CCS), mentioned in Slide 15, has many issues. One of them, according to Jeff Wright of the Federal Energy Commission at another talk at the same conference, is that it is likely to require increased use of fresh water--something which is in increasingly short supply. This by itself could be a deal-killer.

Another issue is the huge weight of carbon dioxide gas that will need to be transported long distances and reinjected. Carbon has a molecular weight of 12 while carbon dioxide has a molecular weight of 44. Thus the gas to be transported and reinjected has considerably greater weight (and vastly greater volume) than the coal it was created from, making the energy requirements for transportation very high. This means that the total amount of coal that needs to be burned (considering the CO2 weight to be transported) will need to be considerably higher with CCS than without--so there will be more pollution to deal with, and coal supply is likely to run short sooner.

Commercial deployment in 8 to 10 year sounds like a pipe dream to me. Maybe in 20 or 30 years, but even then, I wonder. If the carbon dioxide escapes, it will form a low lying cloud and smother whoever gets in its way. How many communities will want to be located near a CCS storage facility?

Slide 16

On Slide 16, Chu talks about small nuclear reactors, which might be used to replace an individual turbine (coal or gas) within an existing power generation plant. This approach would keep costs low, partly because the units could be produced in quantity, and partly because they could just be substituted where transmission lines are already in place. This is something in Obama's budget request, not something for which funds have already been appropriated.

I can see several issues with these. We still have no nuclear disposal site, so the many facilities with these new small reactors will be faced with dealing with nuclear disposal "on their own". Also, power plants which have in the past had very limited security issues will suddenly need to deal with the security of having a nuclear reactor on site.

There is also the issue of whether there will be adequate nuclear fuel available when the time comes for these units to need it. Russian nuclear bomb material which has been down-blended and used as supply in recent years will be in smaller supply after 2013. Alternate uranium supplies (nearly all imported) may or may not ramp up, depending on such things as uranium price, oil price, and capital availability.

Slide 17

Slide 17, and as we will see in a bit, Slide 18, deal with the issue of how we can get around the problem of investments in new technologies not being profitable, because burning fossil fuels is cheaper. In this slide, we see that Chu says "Market opportunities are structured by policy."

Dr. Phil Sharp, a former member of congress, was another speaker in the plenary session. With respect to this topic, he noted (when he spoke later in the plenary session) that the new energy sources would require $100s of billions of investment in the next few years, and would be a drag on the economy. In Sharp's view, "We cannot subsidize our way out of this situation."

Slide 18

In Slide 18, Chu seems to be arguing that if Europe can make changes in its mix of energy technologies, the US can also.

I would just note that it is much easier to ramp up generation from renewables when the world economy is in a growth mode than when it is already declining, or at best, flat. Putting a drag on the economy when it is in growth mode will likely put it in a lower growth mode. Putting a drag on the economy when it is already declining is likely to cause worsening recession, and may even cause collapse. So one is dealing with a very different situation.

Slide 20

Slide 20 shows Chu's sales pitch for cap and trade. According to Chu, if it worked for acid rain (and in fact came in below cost projections), it can work for carbon.

The catch is that with the acid rain cap and trade program, there was an easy technical solution to the sulfur dioxide emissions. An electric power plant had the option of installing a scrubber, and thereby clean up its emissions, or it could buy pollution allowances.

The problem with carbon is that (despite the CCS discussions), there really isn't any good way of cleaning up carbon emissions, other than through small increments from increased efficiency (and even there, Jevon's Paradox says that since the product will be cheaper, more can afford it, and demand will go up). One can get the Chinese to do the heavy manufacturing, and import the finished products from them, but that doesn't reduce the world's emissions, just those of the US. One can buy a certificate saying that a some trees will be planted because of the certificate, but there is a significant chance another plot of trees not too far away will be cut down instead. Wind and solar can act to extend our natural gas supply, but don't really substitute for oil. Perhaps some of these issues can be dealt with, but I have yet to see evidence that this is the case.

So it seems to me that there is no comparability between the acid rain cap and trade program and a carbon cap and trade program.

Slide 22

Slide 22 looks to me to be a politically acceptable way of describing our short supply of oil.

"The cost of oil and other forms of energy will rise in the coming decades," sounds better than, "There will be a shortage of oil and other forms of energy in the coming years."

In the second bullet point, I think the point Chu is trying to make is, "We will live in a carbon constrained world." If Chu knows about our energy shortages, he can be sure of this statement, whether or not any climate legislation is passed.

With respect to "China, EU countries and others see economic opportunity and are moving aggressively," there may be a small economic opportunity component (especially for China selling wind and solar to the world), but even more there are other concerns--perhaps shortages ahead, perhaps climate change, and perhaps just plain pollution from coal (especially for China).

Slide 23

Slide 23 was Energy Secretary Chu's final slide. It is hard for me to see that what Chu is proposing will really solve our problems. For one thing, there is really no solution to our liquid fuels problem. What he is looking at is more natural gas production, and better ways of handling the carbon from coal, and more electricity from nuclear, and ways of saving electricity through more efficient appliances (sorry, I skipped that slide). While some offshore drilling is planned, it is likely to yield only a small amount of oil, and only after several years, so is not likely to be much of a solution to our liquid fuel problems.

The solutions which are proposed will take years, and will give us more natural gas and electricity. Assuming they work, we will still need to convert our vehicles to natural gas or electric, at very significant cost. These conversion costs will come in addition to all the cost of new electric generation. None of this proposal plans for the reduced lifestyle we are likely to have ahead. Instead, Chu is proposing that we attempt to continue Business as Usual, even though it is no longer possible. I am afraid the train has already left the station for this approach.

Yeah, business as usual. Profits driving policy. I have not reviewed the article (Hirsch) lately, but there used to be a general assumption that deep water off-shore field were going to supplant needs through 2015.

That hasn't even begun to happen.

More Carp Fishing on Valium.

Great synopsis, Gail. In private company development of the stated 1 mbpd off shore, there is no such thing as 'foreign oil'. World prices and supplies will still drive the process unless there is nationalization.

Even if the oil is found, it still might be easier to import supplies to other parts of the country and export the new stuff. The Govt won't decide unless they hire a Chavez type as energy czar, or some such nonsense.

It sounds like it was feel good lunch entertainment for the BAU folks.

Thanks Gail, for this overview.

Commercial deployment in 8 to 10 year sounds like a pipe dream to me. Maybe in 20 or 30 years, but even then, I wonder

10 years is the time NASA climatologist James Hansen gave coal in his recent lecture on his book "Storms of my Grandchildren"

NASA climatologist James Hansen at Sydney Uni: "Australia doesn't agree now that they got to stop their coal, but they are going to agree. I can guarantee you that within a decade or so because the climate change will become so strongly apparent that's going to become imperative"

What kind of surprises are waiting for us can be read in this explanation of the recent snow storms: it's the disappearance of the Arctic summer sea ice!

My worst case scenario which I presented during Hansen's Q&A session: by the time the world wakes up what global warming really means, declining oil production will have damaged our economy and our financial system to such an extent, that this weakened economy can no longer generate the surplus funds to finance the projects to reduce CO2 and get away from oil.

Just to give an idea how quickly crude oil will decline now:

Australian crude oil production to decline 85% over the next 10 years

So that will have an impact on:

Alternate uranium supplies (nearly all imported) may or may not ramp up, depending on such things as uranium price, oil price, and capital availability.

...and depending on diesel supplies. In Australia, the Olympic Dam Mine expansion (copper, uranium) requires diesel supplies to go up 16 fold.

What Chu forgets is the extremely limited timeframe we have now until we see some very disruptive events in the Middle East (OPEC's paper barrels)

This is what we need to do:

Emergency Public Transport Planning
Submission to the Inquiry of the Sydney Morning Herald

This year the sea ice in the Arctic returned to 2001 levels. That's NINE YEARS of reversal in the ice reductions in ONE YEAR. That could be significant.

Colder winter in the northeast than in years.

The level of GLOBAL sea ice now stands at the HISTORICAL AVERAGE FROM 1979-2001, that could be significant.

It will be interesting to see if the summer melts all that 9 years of ice or not...??? It will also be interesting to see if there are further builds next winter...??? It will be interesting if the mainstream media Ever reports it even if it doesn't melt...??? So far not even a mention on the websites of several.

I must put in the caveat that I still believe it is possible the planet is warming and possible but less likely that it is man made. My only firm belief is that the jury is still out and it does urgently require more independent unbiased study.

(Also firm that the majority of mainstream media is biased and has no journalistic integrity and seeks to influence the public rather than educate).

Hopefully others with more knowledge than I will respond, but it is my impression that the extent of the ice that has formed in any one winter is not relevant because it is the thickness that really matters when it comes to durability. Also, I live in the Northeast and I do not think it was the coldest winter in years by a long shot, this is a wicked tick season so far and the ticks die in a really cold winter; the number of heating degree days is below normal and the amount of snow was below normal the last I checked also. The end of season snowfall we had in the Berkshires was not enough to make up the shortfall.

Dream on.

And as for "melts all that 9 years of ice or not". Well what you are talking about formed in less than two months as we were pretty much at a record low in February. And it can go just as fast. Young thin ice.

Yes it can go just as fast and maybe it won't...and maybe more will form next winter. If you look at total global ice (not just the Arctic) we are back at the historical average. Maybe that will decline from here and maybe it won't.

If it All melts then I will be more convinced about global warming (but the planet has been changing for years-Time Magazine cover story a few decades ago about Global Cooling).

I went to Alaska last summer and the U.S. Park Ranger said that 300 years ago in Glacier Bay, where we were cruising, we would have been under a mile of ice. That wasn't since 1950 or 1900, that was 300 years.

Also, I am not convinced that an increase from 315 parts per million to 385 parts from 1958 to 2008 is that much. That's still under 40 hundredths of one percent in carbon with a total change of under 7 hundredths of one percent.

Revelle, essentially the creator of the CO2 Global Warming theory said before he died that much more study needs to be done before a conclusion is reached. Al Gore then said he was senile.

In January the founder of the Weather Channel said we have taken a dramatic turn toward Colder climate and that global warming is a hoax.

Enquiring minds really do want to know. It will certainly be interesting to track the ice in the next two years. If it does build, one thing I do predict is that it will never be thoroughly reported by a biased mainstream media. The story will just disappear.

No linkee winkee........ no believee weevee!

In January the founder of the Weather Channel said we have taken a dramatic turn toward Colder climate and that global warming is a hoax.

My plumber,who should know, said he is not only wrong but is a moron as well.


What jury is still out? Certainly not the one comprised of the relevant experts.

Of course nothing is completely settled, but a statement such as "the jury is still out" suggests a lot more uncertainty than actually exists.

Hopefully the Grand Jury.

Let's hear it for 3 or 4 more early retirements.

Come on, Antonin, wouldn't you rather be fishing or plucking ducks?

It's not nine years of ice. It's ice coverage. The details of the report are important. It's a bit of a fluke due to how the ice was pushed up against the bering strait. This ice will melt more easily as it is not thick.
Sea ice is coverage, not mass. Ice coverage is significant as it refects sunlight. But lets see where we're at at the end of the summer.

That's one of my points, we shall see soon enough.

(I was using the "9 years of ice" to argumentatively illustrate to those who can not even consider the possibility of no global warming to show that that is a lot of ice build did build up in one year...and if the same thing happens next year and it doesn't melt next summer...18 years of ice.)

It is a well known fact that human judgement is overly influenced by insignificant data points. You are an excellent example.

I must put in the caveat that I still believe it is possible the planet is warming and possible but less likely that it is man made.

There's that word again, 'believe'. Global warming is not a religion. It isn't about believing, it's about understanding the data being compiled by climatologists and their conclusions about where the increased energy is coming from, and their concensus is its from manmade emissions of CO2 and methane from various sources. Mankind uses oil, coal and NG which releases CO2 into the atmosphere increasing the CO2 parts per million and in turn raises worldwide temperatures, albeit more skewed to the upper lattitudes particularly the Artic.

The information on the artic ice extent which neared 1979-2000 levels was it consituted thin, temporary ice, vs. thick long term old ice. Old ice (over 5 years old) has been steadily decreasing for many decades now, and that is one of the leading reasons for so much melt taking place in the Summer of for example 07. But global warming is not occurring in a linear fashion, but rather in fits and starts, but the trend is angled towards warmer causing more ice to melt. No doubt, we will get a greater ice melt than 07 in one of these succeeding years, but when it happens the people refusing to 'believe' in global warming will use that as a base year, and when the following few years have less ice melt they will use that new base year as a way to claim the world is getting colder.

So untrue that there is consensus. 31,478 American Scientists including over 9,000 Phd's signed a petition saying that manmade global warming is simply not true.

THAT IS NOT CONSENSUS. That is not close to consensus. THAT IS Pretty much the opposite of consensus.
I'm the one who is open in my "beliefs". Go to "global warming scam" on the internet and you will discover this is not a clear issue and those like AGore who say it is fully agreed on are blatently obfuscating.

If the "new ice" doesn't melt" then it will turn into "old ice" soon enough and/or if more new ice forms next winter and that doesn't melt.

The co2 parts per million are truly miniscule compared to the million and may have no impact at all. Since the data I cited as a base was 23 years, your point about someone in the future pointing to a future single year for data seems an irrelevent point. So far the question is whether or not we are losing sea ice as compared to the 23 year base that very fairly started when the ice began to be measured on a systematic and regular basis).

Bottom line, nobody on this planet knows what will happen in the next two years or even this summer in terms of all that new ice.

31,478 American Scientists

Why no reference link? If that's that Oregon (ish) petition or whatever it was you're referring to, I looked it up and studied the first few pages of signed credentials when it first came out a couple of years or so ago. How about explaining to me why I should place any significant credence in the climate science opinions of a bunch of Medical Doctors, Dentists, Veterinarians. There were even a few Doctors of Divinity on the list! Complete foolishness.

Basically trolling. Starts out with the best-sounding though still inaccurate material pirated from the soundbite-providing denier websites, and ends up with total nonsense.

All you have to do to open your mind (I am not saying you particularly) and to type in "global warming scam" on yahoo search. You will find all sorts of major petitions by significant amounts of scientists and all sorts of potentially valid arguments.

Every time I have argued on the oildrum about global warming I have had to research it further and the more I learn the more I am convinced that this is definitely not concluded (time will tell). I have heard on the radio and read credible scientists and credible studies that could be valid.

Honestly, I ask anyone to spend a good amount of time searching "global warming scam" with a truly honest intellectual inquiry (not with the attitude every shred of evidence against global warming must be a lie). Pretend you are starting over and weigh All the arguments. Search "global warming scam" for 1/2 and hour.

Anybody else who says it's 100% I refer to the expression the only things in life that are certain are death
and taxes (and even those aren't really 100%).

What is your opinion on desertification of arable land?

All you have to do to open your mind (I am not saying you particularly) and to type in "global warming scam" on yahoo search. You will find all sorts of major petitions by significant amounts of scientists and all sorts of potentially valid arguments.

One could also google "The Earth Is really Flat"

Results 1 - 10 of about 7,740,000 for The Earth is really flat. (0.19 seconds)

Here's an excerpt from the first entry.

The Flat-out Truth:
Earth Orbits? Moon Landings?
A Fraud! Says This Prophet
The idea of a spinning globe is only a conspiracy of error that Moses, Columbus, and FDR all fought...

Copyright 1980 Robert J. Schadewald
Reprinted from Science Digest, July 1980

"The facts are simple," says Charles K. Johnson, president of the International Flat Earth Research Society. "The earth is flat."

As you stand in his front yard, it is hard to argue the point. From among the Joshua trees, creosote bushes, and tumbleweeds surrounding his southern California hillside home, you have a spectacular view of the Mojave Desert. It looks as flat as a pool table. Nearly 20 miles to the west lies the small city of Lancaster; you can see right over it. Beyond Lancaster, 20 more miles as the cueball rolls, the Tehachepi Mountains rise up from the desert floor. Los Angeles is not far to the south.

Near Lancaster, you see the Rockwell International plant where the Space Shuttle was built. To the north, beyond the next hill, lies Edwards Air Force Base, where the Shuttle was tested. There, also, the Shuttle will land when it returns from orbiting the earth. (At least, that's NASA's story.)

"You can't orbit a flat earth," says Mr. Johnson. "The Space Shuttle is a joke—and a very ludicrous joke."

That's pretty convincing to me! Its right out of a Science Digest written by a researcher. Since all climate models are based on the assumption of a spheroidal earth orbiting a star 8 light minutes away, the fact that the earth is flat proves that global warming can't be true. At the very least it should be "Flat Plate" warming...

Some of us prefer not opening our minds so much that our brains fall out.


Included in the list of "enviro-Nazis" and "left-wing loonies" who believe that Anthropogenic Global Warming is real and well supported by sound science:

* Exxon-Mobile, the largest oil company in the world has this public statement:

The risks to society and ecosystems from increases in CO2 emissions could prove to be significant, so it is prudent to develop and implement strategies that address the risks, keeping in mind the central importance of energy to the economies of the world.

* Chevron, a bit less non-commital, says:

At Chevron, we recognize and share the concerns of governments and the public about climate change. The use of fossil fuels to meet the world's energy needs is a contributor to an increase in greenhouse gases (GHGs) -- mainly carbon dioxide (CO2) and methane -- in the earth's atmosphere. There is a widespread view that this increase is leading to climate change, with adverse effects on the environment.

* 18 CEO's of Canada's largest corporations had this to say in an open letter to the Prime Minister of Canada:

Our organizations accept that a strong response is required to the strengthening evidence in the scientific assessments of the Intergovernmental Panel on Climate Change (IPCC). We accept the IPCC consensus that climate change raises the risk of severe consequences for human health and security and the environment. We note that Canada is particularly vulnerable to the impacts of climate change.

Go to "global warming scam" on the internet and you will discover this is not a clear issue and those like AGore who say it is fully agreed on are blatently obfuscating.

I went down that path once, and even got into a fierce argument with a troller much like yourself,
right here on the oildrum.

I didn't have to dig very deep to come to a very similar conclusion as "Lengould". The deniers have little to no credibility. What I discovered quickly after looking around a bit, is that "deniers" are really the ones that are "deliberately and blatantly obfuscating".

They are basically running a big disinformation propaganda machine, not unlike the campaign the Tobacco industry ran to confuse issues around the negative health effects of tobacco. In fact, some of the very same unscrupulous people behind the Tobacco disinformation campaign are now on the "global warming disinformation campaign" and they are using the very same tactics.

Anyone who's been "fooled" by this misinformation campaign, I'd highly recommend watching this excellent presentation. It's a real eye opener (was to me anyway, leaves no doubt in my mind how (not) seriously to take the "deniers")

Polls show that between one-third and one-half of Americans still believe that there is "no solid" evidence of global warming, or that if warming is happening it can be attributed to natural variability. Others believe that scientists are still debating the point. Join scientist and renowned historian Naomi Oreskes as she describes her investigation into the reasons for such widespread mistrust and misunderstanding of scientific consensus and probes the history of organized campaigns designed to create public doubt and confusion about science.

I wouldn't even bother replying to this "denier nonsense" anymore, were it not that

  • there is a remote chance that you are not just deliberately spouting disinformation and might actually take the time to watch this video and realize "you've been had" (like I was for some time I must admit and now I'm outraged about it)
  • more likely you really are just a troll delibirately spouting misinformation. You won't even bother watching the video. Instead you'll just spit out more disinformation trying to discredit it. Be that as it may, other genuinely open-minded people might might take your misinformation seriously. If they watch this excellent video, it may help them to put things into context and make up their own mind about how much credibility to give to the typical denialist rhetoric.


You know it, I know it. The trolls will never know it.

Have you heard of statistics and the idea of random variables?

A single data point is meaningless ...

Even if CCS were ready in 8 to 10 years, the percentage of carbon captured would be significantly less than 100%. So one would still have some CO2 from coal.

Last year at the EIA conference, Chu was talking about 4th generation biofuels and artificial photosynthesis. These are way off in the future, if they happen at all. This year's solutions at least have some possibility of happening, although they seem remote too. But they make a good story, for those who don't understand the story too well.

Also, even a low 1% leakage rate per year means all the CO2 is back in the atmosphere within 100 years.

CCS is a silly, silly idea.

First off, do I really need to give you a lesson in basic math and compounding? Reducing a principle amount by 1% a year does not result in zero at the end of 100 years.

Second, you just made up that 1% figure. This is how disinformation starts.

Third, carbon doesn't stay in the atmosphere forever. Holding some of it back for a century or more might have huge benefits.

The jury isn't out on global warming, but it is on CSS. Doubt we'll ever do it though.

Please, no lessons.

First, a 1% loss of the original amount per year will in fact mean it is all gone in 100 years, despite your desire to point out a different kind of calculation than I was doing. (Think depletion math, not decline math, if you are familiar with that from oil.) True, as the pressure eases the CO2 may escape more slowly toward the end but pointing this out hardly changes the point I'm making.

Second, of course 1% is made up. It's called modeling but it is entirely within the realm of values we should be considering. Injection well failure, new fissures that open under pressure, migration through cap rock due to the high pressure, dissolution into nearby water that then works its way out elsewhere, carbonic acid eating steel and concrete, possible catastrophic failures (also due to the pressure) and so on all mean that 1% is probably just the initial value and will rise over time.

Even one catastrophic failure would raise the average escape loss ratio tremendously. Do you honestly think there will be no catastrophic failures — anywhere in the world? My guess is that you haven't thought of it.

Third, the volumes of gas to be stored are astonishing and usually aren't generated where they can be stored, which means lots of money to build a pipeline. It's very energy intensive to handle all this gas with some estimates saying 1/3 of the energy of the power plant would be required, thus raising the final electricity price. During a credit contraction, like we are just at the beginning of, not many of these projects will be undertaken.

But really your assumption that the CO2 will be held back for 100 years is, in my view, not supported at all by the physics. We'll likely get some sort of normal distribution curve in which some projects do very well, others do horribly (perhaps due to poor quality work or geological features that weren't caught during the assessment stage) and the bulk of projects in the middle of the curve lose a significant portion of their gas before 100 years are up.

I'll repeat my view: CCS is a silly, silly idea. It is the mark of a desperate species that can't operate responsibly within its environmental limits.

"It is the mark of a desperate species that can't operate responsibly within its environmental limits."

Cold, hard clarity.

Am I the only one who thinks that no species operate responsibly?

And you are a silly, silly goose, AA.

CCS is happening now. Storing CO2 in oil and gas fields has been going on since 1980. Capturing CO2 in has been happening for a long time at gas processing plants and lignite at Beulah has been producing natural gas and capturing CO2 for a decade(and paying back the government guarantees).
CO2 is to be stored at EPA sites under 2000 feet of impervious rock.

All this denying leads me to conclude that you can't comprehend the science behind CCS.

I know that CO2 injection is being used in the petroleum industry. I invite you to get up to speed on the discussion of leakage rates in the climate change community because the question of leakage is far from settled, in my view, despite your intimation that this is an easy technology for us.

What happens when we try to do CCS on a massive scale and we move from using the best sites to the marginal ones, too? Are there enough good sites for all the carbon we would need to store? People advocating CCS use the very best results and extrapolate them, no different than what the unconventional natural gas companies are doing to raise money for their drilling. But we would be foolish to think that every CCS project will be well executed and will have good geology and everything will go swimmingly.


Clearly, leakage rates have to be much smaller than 1% for carbon capture and storage to play a large and meaningful role in meeting stringent climate targets. (If 1% of 600 GtC leaks every year, total emissions from leakage would amount to as much as 6 GtC/year, which is roughly equal to current total global CO2 emissions from fossil fuels.) For more details on the leakage question, see Pacala (2002) and Ha-Duong and Keith (2003).

From the referenced Pacala paper On Leakage from Geologic Storage Reservoirs of CO2, Lawrence Berkeley National Laboratory:

Large amounts of CO2 would need to be injected underground to achieve a significant reduction of atmospheric emissions. The large areal extent expected for CO2 plumes makes it likely that caprock imperfections will be encountered, such as fault zones or fractures, which may allow some CO2 to escape from the primary storage reservoir. Leakage of CO2 could also occur along wellbores.
Concerns with escape of CO2 from a primary geologic storage reservoir include (1) acidification of groundwater resources, (2) asphyxiation hazard when leaking CO2 is discharged at the land surface, (3) increase in atmospheric concentrations of CO2, and (4) damage from a high-energy, eruptive discharge (if such discharge is physically possible). In order to gain public acceptance for geologic storage as a viable technology for reducing atmospheric emissions of CO2, it is necessary to address these issues and demonstrate that CO2 can be injected and stored safely in geologic formations.

Later in the paper:

The mechanical energy of compression accumulated in a CO2 storage reservoir is very large, equivalent to approximately 1 megatonne of TNT for storing the CO2 generated by a coal fired plant of 1,000 MW electric power capacity over a period of 30 years (Pruess, 2006). If just a small fraction of this energy could be discharged in localized fashion over a short period of time, this would generate very serious consequences...Pneumatic eruptions remain hypothetical at this time, but substantial CO2 release events have been reported from CO2-enhanced oil recovery projects, where CO2 breakthrough occurred at production wells (Skinner, 2003). All of the CO2 discharge scenarios we have investigated so far have shown self-limiting features that prevented an eruptive release.

Here is the abstract from Zero is the only acceptable leakage rate for geologically stored CO 2 : an editorial comment, Climate Change, February 2009:

Leakage is one of the main concerns of all parties involved with the development of Carbon Capture and Storage. From an economic point of view, van der Zwaan and Gerlagh (2009) suggest that CCS remains a valuable option even with CO2 leakage rate as high as of a few % per year. But what is valuable is, ultimately, determined by social preferences and parameters that are beyond economic modeling. Examining the point of view of four stakeholder groups: industry, policy-makers, environmental NGOs and the general public, we conclude that there is a social agreement today: zero is the only acceptable carbon leakage rate.


Is carbon capture and storage (CCS) a valuable option even if the CO2 does not stay underground? For example, assuming that 2% of all CO2 stored leaks back to the atmosphere every year, would it be an optimal use of the technology to store underground 50 GtC by 2100, then dealing with a CO2 leakage of 0.9 GtC/year by storing even more, to keep the atmospheric concentration of CO2 below 450 ppm ?

Last, from wikipedia:

  • In 1986 a large leakage of naturally sequestered carbon dioxide rose from Lake Nyos in Cameroon and asphyxiated 1,700 people. While the carbon had been sequestered naturally, some point to the event as evidence for the potentially catastrophic effects of sequestering carbon.[23]
  • Capturing and compressing CO2 requires much energy and would increase the fuel needs of a coal-fired plant with CCS by 25%-40%.[2] These and other system costs are estimated to increase the cost of energy from a new power plant with CCS by 21-91%.[2]

Now, despite all the above, I re-assert that not much CCS will get done anyhow as I think the world financial system will fracture long before the technology is ready for mass deployment:

Sovereign debt crisis at 'boiling point', warns Bank for International Settlements

Your references Pacala 2006 just has totally general warnings,
and the CC 2009 both suggest that even 'significant leakage' would be acceptable and explicitly says the conditions of Nyos would not happen underground.

If CCS is vetoed without full vetting then AGW will not be even slowed, which puts carbonophobes in the same boat with the CC deniers.

The argument that coal plants will use 30%? more power ignores the fact that IGCC is more efficient than pulverized coal plants but what of it, the US has enough coal for 240 years at current rates we certainly will have enough coal and storage for 160 years (480 billion tons of CO2).

Your position is unscientific and sensational.

Sorry, are we in the same conversation still? Why are you bringing up IGCC when there are roughly 599 coal plants in the country and, if the numbers at the EIA are correct, only two them are IGCC plants?

I believe I've established that credible people have valid concerns about CCS and I also assert that it is a BAU solution that won't be implemented to any significant degree anyway.

I've gone as far as I'm interested down this thread. Thanks for the conversation.

"Why are you bringing up IGCC when there are roughly 599 coal plants in the country and, if the numbers at the EIA are correct, only two them are IGCC plants?"

Because CCS requires IGCC.

Thank you for making my point.

It seems Majorian that you have an agenda with CCS. Do you have a personal interest? Maybe you work in the coal industry? Who knows? I have the strong impression you are not being objective.

My own view is that CCS is garbage. Ignoring the issue of leaks, there is simply no possibility that the volumes can be stored. If 60% of CO2 from US coal fired electricity were stored under CCS the total volume involved would exceed the volume of gasoline usage in the US (Heinberg R, 2010). Then there is the issue of energy used. 1/3 on average of a power stations usage will be needed to drive CCS. This implies growth of 50% in coal fired power generation just to stand still (TOD, 2008).

It is a waste of time an money and we should be investing our time and money in moving away from coal in a myriad of different ways (coal is on average 6 times more CO2 intensive than oil per joule output). This will involve efficiency, massive investment in renewables, huge changes in our our living arrangements and significant dislocation. There may be a small window of opportunity to mitigate the worst impacts but if so it is closing rapidly.

A major leak will be the death of anyone in the area--since CO2 is heavier than N2 and O2, the other major components of the atmosphere, it will displace the oxygen in the short term and create a blanket of of suffocating gas that will quickly kill everything it covers until it is dissipated by wind and convection.

Most CCS schemes are indeed desperate and poorly thought out, at best.

We are collectively a man busily pouring large quantities of gasoline over his head while playing with matches. When advised to cease this activity, we say, "But look, I have this tiny sponge with which I will soak up a minute quantity of the gasoline, so I'm safe from any possible harm."

The sponge, obviously, is CCS. We have to stop massively UN-sequestering carbon before any kind of RE-sequestration can be seen as anything than a (transparently lame) excuse and rationalization for BAU burning of ffs that is toasting the planet.

dohboi -- I avoided the debate so far because of my expectations: We are going to increase coal burning in a effort to maintain BAU to the best of our ability. Don't bother to challenge my feelings: I have an unyielding faith in the American public to continue to make bad choices.

But while you're point about the dangers of CO2 release is valid it's equally valid with respect to the same catestophic release of NG. After H2S methane is one of the most deadly common gases. And it's all around us in both residential and commercial applications. At least the end used NG is odorized so we know when it's trying to kill us.

As far as environmental harm from future potential what? This would be a release of a portion of the CO2 that would have been produced to the atmosphere anyway. I would hope that a side benefit the increase in costs from seqs. to the consumers would be to induce more conservation.

Thanks for the point about NG. We've had a series of events recently where a house suddenly exploded because of an undetected gas leak. On the other hand, while asphyxia is a risk in enclosed space, isn't methane lighter than other atmospheric gasses so less likely to form asphyxiating blankets of the landscape?

I share your faith in the American public, hence my general sense of doom.

(Though my deeper doom has to do with the NG now escaping from Arctic seabeds, probably in an unstoppable feedback which will rapidly alter the basic nature of the entire planetary system, making our concerns about future power sources and CCS... totally pointless and silly.)

Tsk, tsk Rockman.
I expected a more informed from you. CO2 has been safely stored in Texas since 1980.
These dopes don't understand the technology or the fact we are sequestering 45 million tons of CO2 per year today in the USA for oil recovery.
This would amount to about 45 Twh or 7.5 Gw from coal fired plants(IGCC)--(15) 500 MW plants--and almost all of the CO2 comes not from polluting fossil fuel plants but instead from subterranean caves.

If CCS is a good idea,Rockman, have the guts to support it before the fickle wind shifts in the interests of geologists.

Alright, I only know about the general terms of this debate on CCS, but I just saw the weirdest ad on TV. I don't have TV at home, but I am on a trip to NH and was watching a NOVA special on astronomy when an ad for Exxon came on where I heard statements like "natural gas contains impurities such as CO2..." and "We have [a process] that will remove the CO2 from the natural gas..." Etc. I mean, what's with that?? It was the strangest damn thing I ever heard. Thoroughly confusing to me if I had no understanding of... of... well, if I had stopped learning in grade school. I just can't get over it. It's a kind of culture shock. I should have kept it tuned to the Red Sox. God, I am glad I don't watch TV!

an ad for Exxon came on where I heard statements like "natural gas contains impurities such as CO2..." and "We have [a process] that will remove the CO2 from the natural gas..." Etc. I mean, what's with that?? It was the strangest damn thing I ever heard.

What's strange about that? Natural gas as it comes from the ground contains impurities such as CO2. They have to remove most of the CO2 from natural gas or it will not meet sales specs. Usually they just vent the CO2 to the atmosphere.

On the other hand, there are some fields in Texas that produce nearly 100% CO2. Oil companies produce the CO2, pipeline it to nearby oil fields, and inject the CO2 into the oil fields to improve the oil recovery rates.

Rocky, I try to learn everyday, so you've made my day. This was something I did not know. I knew abut injection, but I didn't know that there was CO2 itself in the gas as it came out of the ground, nor that some wells produce nearly 100% CO2.

What's strange about that? Natural gas as it comes from the ground contains impurities such as CO2.

What is disturbing about the advertisement is that they make it sound as if they are the good guys in the fight against Global Warming. It's sort of like the cigarette companies claiming they are in the fight against lung cancer because they produce a more pure and "smooth" tobacco product.

(I know. Don't tell me. Someone from upthread is going to come down here and claim there are 1,235 PhD scientists who signed a petition saying cancer from ciggies is a giant hoax and scam. Note how the fabricated value of 1,235 is so much more convincing than 1,234. But then again, who am I to question the faceless 1234+1 'scientists'? Ah, the amazing power of the FUD factor.)

It's actually 1233.9999 scientists...the missing 0.0001 of a scientist is probably just one of them having a brain fart!

I've also seen figures from a Japanese energy company stating that the gas wells in Indonesia typically produce 50% CO2 alongside the natural gas, which CO2 is simply separated and released to the atmosphere. Don't go counting on that imported LNG to be more eco-friendly than your local coal mine.

which CO2 is simply separated and released

Which of course, gives carte blanche to the PR people to claim that they have "removed" those nasty GreenHouses gases from the oh so "natuu-ral" methane (CH4) they are hawking.

Attempting to store a CO2 as a gas is a bizzare idea.

Why not simply coppice trees, then make charcoal for soil improvement? It's even energy positive.

Such has been suggested here on TOD and gotten little traction.

While *I* think its a fine plan, the processing would have to be "local" and some kind of furnace for doing it would have to be built. A stove along with some kind of "premium" on the made carbon strike me as a path.

(You don't need to burn trees-as-wood even. Things like pine needles could be used and converted from something not-good as compost into carbon)

Attempting to store a CO2 as a gas is a bizzare idea.

It's less bizarre when you realize that oil companies have an ulterior motive - they want to inject the CO2 into oil fields to improve the oil recovery rate. It's a tertiary recovery technique called CO2 miscible injection.

It's not really that hard to understand the basic concept. The oil companies want the government to subsidize the collection, delivery, and injection of the CO2, while they collect the profits from the sale of the oil.

Why not simply coppice trees, then make charcoal for soil improvement?

I'll just mention this because I've noticed that an important development seems to have been missed by everyone here. Burning charcoal in third world countries has become a major contributor to global CO2 emissions. Of course, none of it is monitored because third-world countries are exempt from CO2 controls, but there is an awful lot of CO2 coming from undocumented sources.

The trouble is that first-world countries have become focused on their own emissions, while ignoring the fact that developing countries are getting to be the largest source of global emissions. China has replaced the US as the #1 source of CO2 emissions, in case some people here haven't noticed.

Calling for a new industrial revolution is delusional. The industrial revolution was all about reducing manpower, first with water powered machines, then with steam power and finally distributing mass produced electricity. The potential of mass production and goods distribution to lower costs began to be exhausted in the 1960’s and 1970’s, about the same time that electricity production began an asymptotic approach to the 40% level (although 60% is attainable using combined cycle natural gas).

Real energy prices started rising several decades ago with rising oil costs and the cost of scrubbing flue gas from coal fired plants. Also, the cheap conventional natural gas is gone, being replaced with higher cost unconventional gas. We are no longer able to maintain the old production model of ever decreasing manpower and energy costs. At best we will be able to find higher cost alternate energy, but this does not make a “new industrial revolution”.

Calling for a new industrial revolution is delusional.

Yes, but it's also probably the only way to get everyone on board the energy transition train.

In 2006 when I was doing work in the climate change arena, I was part of a business delegation that went to Sacramento to lobby for the passage of AB32, the Global Warming Solutions Act. I played a very small role but the other representatives were from large and very well-known businesses in California who understood the need to act on climate change (including most of the Silicon Valley tech companies).

The message that we went with was exactly the one Dr. Chu is using: get out in front of this transition or the California economy will be left behind. It did the job because we were told afterward by his office that without the "cover" provided by those businesses Schwarzenegger would not have signed the bill.

In response to the California Chamber of Commerce, which only knows how to say "this will kill jobs" repeatedly and in answer to every question, including "How's the weather today?", he was able to respond with something like, "Embracing this challenge is going to be good for California business. Ignoring it means we let the Chinese and Europeans have this new market. I won't let that happen."

In a BAU context, this is actually a very powerful message that makes even business people who doubt the climate science line up behind the plan because they can see the direction the world is moving. It stops them short when someone asks, "So you think we should buy all the equipment from other countries as we move off fossil fuels?" Of course there is no good answer to that other than "no, we should have a domestic industry building that equipment."

I'm not defending what Dr. Chu is saying, I'm simply saying that in the arena he is operating (the one that will acknowledge only climate change but not peak oil), I understand why he is saying what he is saying.

Dr. Chu should be calling for a restructuring of society, which will inevitably occur, butt less painfully if it were well thought out and the public was informed about what changes were likely to take place. What cannot continue will not: high consumption lifestyles with an ageing population, high wage developed countries buying from nations that pay workers $1 per hour, slightly over one automobile for every licensed driver.

The structure of society will change just as streetcars created suburbs, automobiles created distant suburbs, canned, frozen and convenience foods plus household appliances freed women from 70 weekly hours of housework and allowed them to enter the labor force. Individual will figure it out and make the necessary lifestyle changes that will allow them to cope, and hopefully to adapt positively. We can have a historically luxurious lifestyle with much less energy consumption.

From the industrial revolution onward, we were able to produce more and more, for each unit of manpower. Now it looks like we will be able to produce less and less for each unit of manpower (because there is less energy leveraging, and growth in efficiency won't offset), so people will be poorer and poorer.

I am not sure that adding more higher cost alternate energy is necessarily helpful. If it has high front-end capital cost, but doesn't really last as long as advertised (due to other problems, perhaps with the world financial system), it could be a big source of capital outflow, for very little return.

" Now it looks like we will be able to produce less and less for each unit of manpower "

Maybe this is a "good news/bad news" type of thing. The good new is this will lead to a return to Full Employment as we are forced off of our fossil fuel diet. Global Village Goes on Diet leading to healthier Global Body Mass Index?

You beat me to to the punch.

What replacement, that is renewable, has the energy density and transportability of oil?

I don't see anything we can do to maintain BAU....

I don't see anything we can do to maintain BAU....

Les is quite correct that BAU is unsustainable. Where I differ from the doomers, however, is that I think a good civilisation (in fact, a better one) is possible that is most definitely not BAU. Sure, it will have to operate on a lower energy budget than currently, but when one considers the vast amount of energy wasted in unproductive and positively harmful activities, the technical feasibility of it is quite plain. What is required is social and political change.

The necessary social and political change will become easier, I believe, when the cornucopians are shown to be talking rot. Peak Oil will do that (though with a delay), by imposing large scale changes that do not conform to their dogma. Society will still have large stocks of other non-renewable energy sources, however, to act as a transition bank and prevent collapse while a shift is made to a sustainable economy.

Majic - via the tears of babies.

You have the myth of zero point energy, cold fusion or of things like the EESU. If you dig around on the Internet there is a group claiming the have given the cold fusion plan to Chinese and its in production all the time while claiming the cold fusion should be Free to Mankind. (I have not written the people who are making the claim that they have these things asking for the plans under the Open Source model because, well, I don't believe plans exist. Perhaps others of you will)

If "we" can't ship mass produced stirling cycle engines - I'm not hopeful in the powerplant of Romulan ships.


The economy is driven by technology change. Oil and coal per se did not create the industrial revolution. It was the development of technologies that used them as fuels.

The Apocalypse Now Crowd have two big faults. First, they assume no changes in technology even as the relative or real price of oil rises. Highly unlikely. They also underplay the role of substitution.

The second fault? The world is just like America ...

The world is not. Go to Japan or visit Paris.

American energy efficiency is dismal, and yes, America will suffer the most during the transition away from oil ...

You're right. Clearly the mass industrialisation of north-west England, then the world, had nothing to do with fossil fuels. They were just convenient in replacing the, uh... oh.

Also, you should've mentioned the UK. Our energy efficiency and security isn't much better, and there are plenty of other nations outside Europe with a brute force approach to things too, not that anything like Jevons' paradox exist, of course.

The economy is driven by technology change.

R. Beck,

You are probably well intentioned in your use of this kind of language.

However, it appears that you are blinded by the dazzle of buzz words like "economy" and "technology" without truly appreciating what empowers these things.

Wealth is about improving the "well being" of citizens of the community. Much of the well being that we currently enjoy depends inextricably on the use of fossil fuels to power farm equipment, to move produce to market, to get patients quickly to a hospital emergency room, etc. I would strongly recommend looking at chapter 1 of this power point:

Those who don't know better use the "technology" word as a substitute for "magic". Unfortunately, real world technology must abide by all the laws of Mother Nature. Throwing a buzz word at Mother Nature does not move her.

BTW, any relation to Glenn?

"new industrial revolution" is a carefully chosen phrase to indicate real jobs making things. As opposed to more bankers or lawyers.

Interesting thought.

But even setting aside the enormous effects of GW, the first industrial revolution allowed humans (first in the west, now globally) to destroy ecosystems and extract non-renewable resources at an enormous rate that brought about the sixth mass extinction event since the beginning of complex life, and perhaps the largest ever.

What is needed is not more power in the hands of this eco-cidal species but much, much less, until we have somehow evolved to be more responsible citizens of the living community.

You are assuming constant technology.

The industrial revolution was the fruit of technological innovation.

You're assuming technology is energy. It is not.

Thanks for this cogent summary, Gail, and for the links to the Conference.

In regard to the "Green Hornet" which the President was standing in front of in slide 11, this is scheduled for a demonstration flight on Earth Day, the 22nd April, and the fuel will be a 50% mix using camelina as the source for the biofuel. That is an interesting choice, given that it appears there is a little difficulty in encouraging farmers to grow the source crop.

The camelina issue is a travesty.

Camelina has the best nutritional stats of any veg oil. Multiple studies in Europe show amazing ability to lower bad cholesterol and increase good, better than any other edible oil. It's delicious too.

The oil is widely consumed in EU but can not get "for human consumption status here in the US because then it would be controversial from the food to fuel perspective. However the hypocrisy rears its head in that Camelina meal has been approved for cattle, hog and poultry feed in order to make it more profitable for the biofuel industry.

Commercial biofuel production is a crime against the commons...and stupid also.

a crime against the commons...and stupid also.

I've seen dumber. People pitching that cities in the US A should go with horses everywere. The 1st crop failure - the horses will be subject to eating and imagine the uproar from the pro horse people!

Thanks for pointing this out. I didn't realize the jet shown uses biofuel. Some comments were made about the military efforts related to energy, particularly biofuel.

Hey, I just came up with a slogan for Biofuels!

to paraphrase Matt Groenig,

"When life gives you crop, make crop-ade!"

Oh ok... what a funny joke taking a politician seriously about anything concerning reality of the situation of energy as it relates to society or the future.

It is people like energy Secretary Chu... a proxy or pawn of special interest corporate fascism that may destroy the world... blindly, desultorily, and ignorantly, for the henchman of the political Price System using throwback language referring to the second Industrial Revolution....? Ha.
No conspiracy... just uninformed, business as usual.
Not even funny, but sadly indicative of the dysfunctional society we live in... with its 'profit' approach... above all else.
Viable alternative is not related in Chu's approach... at all Technocracy, Religion and Democracy.
Economics as 'religion' destroys the world for money... (debt tokens). Wake up people.
We are at the edge of the resource base and about to tumble over the cliff using this merry-go-round system of destroying resources for 'profit'.
Non market governance is possible using energy accounting in a non political science designed society (Technocracy technate).
The political Price System is clueless as to the dynamic of the situation we are in... or so heavily brainwashed as to be worthless.

I see far too much hopelessness and lack of imagination here. Sure BAU as we knew it will be over soon. However the gross amount of energy we use for certain results can be decreased, and this improves the prospects for the less dense sources. A case in point transportaion. You point out the energy density ration between liquid fuels and batteries. But electric has several mitgating factors. First the energy quality of the fuel for a vehicle is low (maybe 25-35%) will go into mechanical work, so there is maybe a factor of three available right there. Then most of our vehicles are not dominated by the fuel tanks, so an increase of several fold in the volume and weight involved of the portable energy store (fuel versus battery) is possible for many applications. Of course range driven applications, such as overocean airplanes are not candidates for electrification. We certainly have the wherewithal to decease the oil intensity of transport by a significant factor -if not make it independent of liquid fuel. That represents an obvious medium term (10-25year) goal.

But, of course the DOE and only be a modest part of the needed changes. But, one of those parts is cheerleader. Another is early stage research. If you are looking at a nearterm solver bullet to preserve BAU, we know it won't be found. But, if you are trying to create the infrastructure to enable a less disruptive transition to post fossil fuel, the program doesn't look that bad.

Offshore oil. Sure 1 million bpd (or likely less), won't solve our problems. One of the points is to bury the notion that drill-baby-drill is the solution, and letting the impossibility of that become obvious via removing obstacles seems neccesary, as Joe Sixpack won't respond to simple mathematics. And it will produce some needed revenue that can be captured by the national economy both private and public sectors. Not a solver bullet, but a decent incremental improvement.

Absolutely! I shake my head when I read all the comments on this site. I think Enemy of State does a good job of addressing vehicle battery storage but I'd like to address the heart of the pessimism that Gail expresses:

"The first industrial revolution was during a time of increasingly available energy, because of the new use of coal. That is very unlikely in the future, both because of peak oil, and because of hoped-for constraints on fossil fuel use because of climate change issues. Net energy available to society is likely to be going down, not up!"

Peak Oil says nothing more than the global extraction rate will decrease. It doesn't predict anything about net energy. I understand that oil comprises a large fraction of our energy consumption today but take a look at this chart and realize just how little of the total available energy we are currently using. I think the analogy of the industrial revolution is quite well formed. Moving from oil to renewables will be as transformational as moving from wood and food to coal.

My expertise is in solar photovoltaics and I spend most of my time talking with the PV industry about what technologies will reduce costs and improve performance. The yellow bar chart referenced in the post is backward looking and focused on domestic (USA) residential installations. It's been frustrating to me to see how these costs have flatlined over the past 5 years but I think future reports will show the trend track downward sharply (likely to ~$4/W in the next 5 years). A more up to date source of this information is avaliable here: Open PV Project. When looking at Germany, which has a much more mature PV installation industry, you find rooftop systems going in around USD$5/Wp in 2009 and much lower today due to a recent collapse of module prices. Secretary Chu's graphic of the PV learning curve is noting to dismiss. Granted modules represent approximate 1/2 of a total installed system price, but the 2010 data point on that chart is likely to be below $1.80/Wp. The lowest cost c-Si manufacturers have all in cost structures (including minimum sustainable margins) of well below $1.50. I routinely talk with companies with cost road maps that take them to $0.50/Wp! Finally, if you look at the ground mount market, you can see domestic installations that are becoming very cheap. Currently, large installations go in for less than $4/Wp. By 2012, we'll see many installations below $3/Wp and we should be below $2/Wp sometime around 2015-2016. This is a technology with an EROI of >20 and has grown at a CAGR of over 30% for several decades.

Taken together, new capacity additions of wind and solar have the potential to add more new energy than is lost by declining oil production. When considering the entire landscape with efficiency, unconventional fossil, smart grid, electrified vehicles, etc. it's really hard to buy into the doom and gloom on this site. We're on the verge of tapping a 5 billion year energy source and folks on this site are talking about a "reduced lifestyle"...

Electrified vehicles are reliant upon various rare earth elements. The issue is an ICE replacement, not electricity. Wind and solar will never make up for declining oil energy lost in the transportation sector.

Is this why China is aiming to have its entire high-speed rail infrastructure wind powered by 2020?

The rare earth china play is probably overstated - There are other rare earth mines.

High speed rail is another topic... I think far too much emphasis is placed on rail on TOD. Trains really can't beat point to point travel. Granted our current automotive fuel consumption isn't sustainable but I think there's tremendous room for revolutionary advancements in autonomous vehicles. I believe this type of technology will be more valuable, quicker to market, and potentially cheaper than Obama's high speed rail plans.

I sort of agree. If a solar panel were invented with a reasonable energy payback time and low or no dependence on rare minerals and was designed for ease of recycling, then maybe it would be possible to build "solar breeders". The problem with this is familiar to anyone who has played a real-time strategy game like Age of Empires: You can grow your resource extraction exponentially by re-investing resources that you extract in resource extraction capability, but you have to use some of those resources to produce military units or you lose. The key is balancing the two needs. Except in the solar panel analogy you build more panels instead of using the electricity from the panels you already have for other purposes.

I'm glad you picked solar. I can't speak for other renewables but know a great deal about EROI for solar. Let's just consider crystalline silicon (c-Si) panel which currently comprise ~75% of global PV production. Past estamates of EROI for C-Si (or "multi-Si) PV:

If you don't check the reference please note this methodology accounts for the energy inputs of the product, deployment, operation and maintenance, decommissioning, and even the energy associated with building the tools used to build the PV system components.

You'll first notice that the c-Si module consumes most of the energy inputs. This is primarily due to the silicon feedstock which must be purified thru a fairly energy intensive purification process. Essentially the blue component is proportional to the gram of silicon used per watt of rated power produced. The good news is that this purification process requires electricity the same stuff that PV modules produce! The bad news is that the foot print of these polysilicon production facilities are much smaller than the sunshine area required to power them and typically are located in regions with cheap hydropower. This doesn't mean that a solar breader facility is impossible, but rather impractical. Although it has been tried before

Now, when this data was created, the silicon consumption number was probably above 10 grams/Wp (module prices were high and there was excess Si feedstock due to the tech recession). However from 2005-2008 polysilicon prices skyrocketed and the PV wafer manufactures were able to increase silicon material efficiency to somewhere around 6-7g/W. Additionally, new processes based on less pure silicon as well as kerfless technologies are being implemented at the commercial and pilot scale.

Today, the blue bar may be half as tall and as the chart shows, the EROI on thin film (which don't use silicon) and CPV (which uses very small amounts of semiconductor material) are even lower and as you point out the potential to recycle these materials will further improve EROI.

When assessing the EROI of solar and wind, it is always the same mistake that is made : forgetting the storage component. Legacy fossil exergy and, with minor modifications, nuclear exergy uses can be time-shifted minutes, days or months without significant requirements of additional infrastructure. As the saying goes "batteries are included" in the price.
This is not a problem that can be easily swept away. Building a smart grid is not going to be the panacea. It is true that some activities, like charging an EV or washing some clothes, can be shifted a few hours away, but people will still need heat when it is dark and cold, lots of factories will need to be kept humming 24hrs a day and 7 days a week, and Britons will always go "en masse" preparing a cup of tea after the end of their favorite soap-opera ! The low hanging fruit of energy storage, like pumped hydro, have already been picked, and the emerging technologies, like batteries or CAES, remain to be proven on the large scale. Anyway, their cost is going to significantly decrease the EROI of renewables.
Storage is also important from a strategic standpoint. Nations who are not endowed with domestic sources of fossil exergy are already freaked out to be dependent of an energy source on which they still have 3 to 6 months strategic reserves. How about being dependent of a foreign energy source with no storage at all, which can be cut with the flip of a switch ? The US or China are safe in that regard, because their deserts are on their on own soil, but Europe ? From a strategic standpoint, projects like Desertec are pure lunacy. It is not surprising that it is promoted mostly by Germany and not by France. The French know better about political risk in their ex-colonies / protectorates.

Another important aspect of EROI is that a good chunk of energy consumption has to take place in a concentrated and "high temperature" heating a way to enable vital processes on an industrial scale (think about the BASF factory on the banks of the Rhine that consumes more Natural Gas than the whole of Denmark...). Getting that from electricity or solar concentrated in scale is a challenge that has barely been scratched. Again. expect some reduction on the EROI in the way.

"Anyway, the cost of storage is going to significantly decrease the EROI of renewables."

EROI is a simple concept that doesn't include storage. Granted if storage is required and there is a large amount of sunk energy in manufacturing the battery then the EROI of the "system" will be decreased. However, I think it's important to note how far we currently are away from needing storage for incremental renewable additions. The FERC Chairman isn't known for being the early mover away from traditional power generation but he didn't mince his words here. Most folks are skeptical of the smart grid because 1) it doesn't yet exist and 2) they think it has to happen all at once. My feeling is that smart grid technologies will be adopted incrementally (i.e. load curtailment --> TOU --> instantaneous pricing, etc) and asymmetrically (i.e. rich homes in CA, arbitrage opportunities in WI, progressive utility pockets, etc). It will take time but my point is that we have time. Also, millions of PHEVs are nothing to scoff at and the requirements for a distributed stationary battery technology are very different than what is needed for vehicle applications.

Also, I don't believe I understand you other point regarding energy density. Nobody is proposing that we power Manhattan with solar on top of skyscrapers. Most high population density areas and industrial applications won't be powered by on-site renewables. We'll naturally just use the grid that's already in place.

Basically as intermittent energy technologies penetrate the grid, storage will become more valuable. The effective load carrying capacity of the technology will be calculated based upon it's production profile and the regional load curves. All of this can be factored into the LCOE of the generator.

lots of factories will need to be kept humming 24hrs a day and 7 days a week,


Because people have to work and make things.

But do they have to do so 24/7?

We accept that business sometimes has to bow to nature when it comes to, say, massive snow fall. People don't go to school or work for a day or more, then things go back to BAU. This does not lead us to think we are somehow hopelessly backward.

Why not extend this idea of adjusting to the dictates of nature to energy availability.

If the sun isn't shining and the wind isn't blowing anywhere in the region over which our grid is operational, we take a little siesta? Spend the time in quiet meditation, or in some other valuable but low energy requirement occupation.

People tend to think that if we cannot create exactly what went before, then it is game over.

I actually agree that it is game over, but not because we would be incapable of living comfortably off of a small fraction of our current energy use and be more flexible in timing of that use.

But do they have to do so 24/7?

Some processes, like making semiconductors, don't mix well with scheduled daily shutdowns, and don't mix at all with random shutdowns ("if the sun isn't shining".) Still others, like surgery, may not always mix well either, since planning and preparation are needed, and once the (say) surgery is done, the follow-on processes (recuperation) can't very well be postponed. Other processes can be shut down readily, but the facilities are capital-intensive enough that if you don't run them close to 24/7 you may as well not bother since customers can't afford to pay you enough to keep them idle most of the time (e.g. with respect to "if the sun isn't shining", it's dark half the time and, in most places, cloudy more than half the remaining time.)

IOW if you insist on going back to the eighteenth century, you may have to go back in some very unpleasant and possibly even life-shortening ways, not just in ways ("take a little siesta") romantically framed to make it sound like it was a work-free utopian Arcadia, which by all accounts it most definitely was not, except maybe for a few genetically lucky (i.e. never in need of then-nonexistent medical care) top royalty. At a minimum you should expect to experience great frustration in advancing such a cause, since the unpleasantness and possible danger seem likely to cost it sufficient votes to guarantee that it won't be undertaken voluntarily...

You never seem to amaze me.

Hospitals, obviously, have backup systems for interruptions in supply, and I assume they will continue to do so. Other critical industries could do the same.

But you presumably knew this and are just bringing up these non-sequiturs to be cute.

I am surprised you limited yourself to the 18th century, and did not bring up the stone age or living in caves.

Some processes, like making semiconductors, don't mix well with scheduled daily shutdowns, and don't mix at all with random shutdowns ("if the sun isn't shining".)

Ok, so if you want those things you manufacture them either somewhere you have a 24/7 power source such as hydro or you design a large enough energy storage system to cover your needs,ever hear of back up generators or battery banks? The fact is that most of the factories that make consumer goods don't need to be on a 24/7 schedule. Hell, most of the things they manufacture don't serve much purpose.

As for surgery...give me a break!

By coincidence I was listening to a story on NPR told by an old geezer who had lived through the depression and had witnessed a doctor remove part of his sister's lung while his father held her down in his kitchen, detail, this was open chest surgery without anesthesia. His sister survived to a ripe old age. BTW, did you watch the recent news about the aftermath of the earthquake in Haiti? lotta surgeries there...I guess you want health care too, wimp.

Simple - thermal shock of shutdown. VERY heavy weight things getting out of round if the stop moving.

Glass furnaces, metal smelting, and my understanding is the wheel is so massive and the tolerances in a modern papermill are so tight that if the thing stops it gets out of round and will have to be re-milled into roundness.

Like it or not, some parts of this are gonna need hydro/fission/fusion/magical baby tears to keep it running.

When assessing the EROI of solar and wind, it is always the same mistake that is made : forgetting the storage component.

Actually most household energy is needed for heating, hot water and cooling.

This is all heat energy and heat energy can be stored cheaply (e.g. in a hot water tank or an ice tank as opposed to an expensive battery).

It would simply be ridiculous to keep on wasting fossil fuels for heating and hot water purposes, while transforming the grid to renewable energies and simply ignoring efficient heat pumps and air conditioning with heat storage and use them for load leveling purposes.

If we consider building out PV in energy bootstrap mode (ie only current PV output -and no more external energy sources added in to create more PV), then the growth curve looks like: P=exp( time/paybacktime ). At a two year paybackback time, that is comparable to the current rate of growth (i.e. we are not creating net energy with PV, but using the energy harvested for a rapid buildout). But, that equation is too optimistic, there is a lag between when the energy is consumed (mostly the silicon is refined), and when the panels are connected to the grid. You need to add that delay to the payback time, in the bootstrap rate of growth formula. So as long as PV is in its rapid buildout phase it won't produce net energy. Only a slowdown in the buildout, or a dramatic improvement in EROEI can change that fact.

Now personally I don't hold that against PV. I consider it as investing current energy in order to have future energy available.

Well said. It's a nuance that often get's over looked. In fact, in carbon calculations it's often intentionally overlooked because if calculated correctly, the growth rates needed for solar to have an impact end up distorting their carbon benefit within the timeframe of the exercise. However I think you agree that this is an example of folks getting too close to their equations to understand what will happen. We'll use traditional energy to fuel RE's exponential growth until it can't and at that point the energy contributions from RE will be so great on an annualized basis that something well below the "energy limiting expansion rate" will be more than sufficient to meet the traditional ~2% annual net energy expansion rate.

Really? Have you every lived in Europe? I have never used a car once, not even a taxi, living in France and Hungary and traveling around the Continent.

Let's banish this American perspective - the US is not the model ...

Even the US relies heavily on rail to move commercial freight. Perhaps that is why Mr. Buffet paid over $30 billion for a railroad ....

European countries have similar usage of oil imports per capita.

As an European all my life, I laugh at your example. Either you've never been to Europe, or you're horribly biased. The car culture in the UK and Germany is very real, and my experience in France, Greece, Spain and Turkey are no different. The major tangent from the US is we have less commuting distance on average, more public transport (or any, for that matter, given how dismal the US' can be) and generally far more economical cars and drivers.

That is NOT to say the problem the US has with respect to suburbia and reliance on the car doesn't exist here. Indeed, the very real uproar over petrol prices this month in the UK is evidence enough.

Your chart shows that renewables are less that 10% of total energy production which is actually overly generous. As I stated in my post, wind, and to a greater extent, solar is where we should be placing our bets and these comprise far less than 1% and 0.1% of total energy production respectively. But my point isn't in current production but future production. Folks on TOD keep talking about how the public doesn't understand exponential growth but yet I see the same FUD regarding renewables on TOD as I do in the mainstream media. Look at the trend of newly added elecapacity in the US (from EIA's EPA reports):

Most of this is wind but my point is that we've already seen a sea change in the newly added electricity paradigm in the USA (and many European countries are 5+ years ahead of the USA in this regard). Yes, even cumulatively this 5 year trend doesn't add up to much but give it time and realize that most of the current infrastructure (~$10 Trillion USD worth) isn't going to be shut down anytime soon. New energy additions just have to cover new demand. When you look at it this way, then things seem less dire. When you extrapolate them:

Things look downright sunny...

Now in case your criticism wasn't magnitude-based but rather ICE-based then I can only point to the half a dozen or so EV and PHEV options that will be in production this and next year. Granted they are more expensive and are less comfortable than current ICE solutions but they are better than walking and costs and performance are bound to increase with time.

That chart looks about as realistic as one from CERA.

lol. That's a very funny graph. It is completely divorced from the financial system that is supposed to support the buildout of all those renewables.

The Financial System is Disconnected

People come up with the strangest ideas, don't they?

With all due respect, I think the chart I posted has a bit more behind it than the napkin drawing chart you've posted. CERA's projections are detached from reality because they are odds with geology. Granted the chart I posted is optimistic but it's fully aligned with our energy boundary conditions.

The slide above shows a fundamental problem in how we are operating our economy. I'm sorry that you can't see that. Not everyone can at first.

Inside a properly designed system, at this point in the arc of our civilization we would be decreasing the money supply instead of increasing it. The system as designed now is highly unstable and a significant resource limitation, such as declining oil production, will cause it to reset to a new, much lower equilibrium point. Since the peaking of oil production is either this decade or has just passed, we will live through this reset. No amount of technology can make up for a badly designed system such as the one we have created. Consider reading The Role of Money: What It Should Be Contrasted with What It Has Become.

With all due respect to you in turn, your comment demonstrates to me that there aren't enough generalists who can connect all the dots across several disciplines. You may be very good at what you do but if you don't include the financial system and the impact of declining oil production those projections are just about as valid as this one is:

Officials at the U.S. Federal Aviation Administration (FAA) in Washington predicted a return to growth for air travel in the long term in their annual aviation forecast, which also calls for aviation infrastructure and environmental improvements contained in the FAA's Next Generation Air Transportation System plan. Due to the current worldwide economic downturn, the FAA's 16-year forecast for 2009 to 2025 predicts domestic passenger fights to decrease by 7.8 percent in 2009 and then grow an average of 2.7 percent per year during the remaining 15-year forecast period.

Emphasis added. They are saying that the world wide air travel sector will grow by approximately 50% in the 15 year period. Really? Perhaps someone should introduce them to the good work Jeffrey Brown and Samuel Foucher are doing:

Great Oil Squeeze

The people at the FAA are no doubt conscientious people. However, they have no clue about the macro trends and they are providing completely wrong guidance because of that, just as your graph is doing.

This chart is much better - it actually has units on the axes! I agree with what the first chart is trying to convey. I understand that there's a fundamental relationship between money and energy however it is foolish to assume that x dollars equals y barrels of oil and that this relationship is fixed over time. First off, money is more directly correlated with services and products both of which require energy (i.e. $=f(goods or services(f(energy))) ). Notice that the relationship between good or services and energy is largely a function of the efficiency with which the good or service is produced. Second, notice that the relationship is with energy not oil. As I stated before, oil is a major component of the energy landscape but the world has been in an extended transition towards electricity and current trends indicate that new energy additions will more than compensate for the shortfall in oil production. Add in the ability to do more with less (efficiency) and there's no fundamental reason why the amount of money in the world will exceed the available energy in the world.

Oh, there's one more thing that can remedy the $/energy imbalance. It's called supply and demand and the relationship can be charted with a similar degree of abstraction/qualitativeness:

Many of these oil exporting nations subsidize oil consumption. Even the King of Saudi Arabia has constituents. The export chart is export-land model.

Subsidies will distort the energy economics of the oil industry but this can't go on perpetually. For example, Saudi Arabia is able to subsidize their domestic oil industry because they have enormous profits from oil exports. However this can only be taken so far before the subsidies exceed these profits.

Yes, but current trends will not continue. I'm sorry: I guess I'm not making that very clear to you.


Money is a medium of exchange, a unit of value, and a store of value. Those are the three functions of anything that serves as a money.

You are butchering economics.

There is no relationship between money and energy. Money is used to facilitate transactions and avoid the high transaction costs associated with barter.

Someone needs to tell the global economy this news then. I think they missed the memo with regards to high oil prices being negatively impacting on the economy.

There is no relationship between money and energy.

R. Beck,

Your user profile shows you as a 9 week old newbie to TOD.

So we forgive you. Many of us have been lurking here for years.

We have discussed various definitions for "money" many a time.

One of the definitions of money is that it is a non-personalized promise and yet it is a promise nonetheless.

The promise is that society will give you something of "value" in exchange for your money tokens.

But if society has no spare energy, your Indian beads will get you nothing.


This argument is circular.

The economy will fail for lack of energy, and renewables won't fix that.

Renewables won't work because the economy will fail.

Why will the economy fail? because of a lack of energy.

and so on, ad infinitum.

Agreed. Isn't that precisely in the nature of positive feedback loops (that in this case act in a contracting direction)?

If economic growth increases, Peak Oil price pressures act in a contracting direction - that makes PO a form of negative feedback.

Increasing investment in renewable energy, on the other hand, reduces PO prices pressures, and increases economic growth through the investment multiplier, so that's positive feedback...but in an expanding direction.

I'm not sure you're following my argument: I'm suggesting that if someone says that biophysical limits are not in fact a limiting factor to the economy, a reply "oh well, the economy is going to fail anyway, and prevent investment in renewables" is inadequate. You need to reply much more specifically than that.

For instance, in the middle of last year you saw news reports of a decline in venture capital, and suggested that investment in renewables (wind and solar) would decrease due to the recession.

Instead, it increased.

Similarly, investment in EVs has increased spectacularly, and the Nissan Leaf and GM Volt are now coming out.

An economy which encounters temporary limits to growth due to commodity scarcity is well known, and is known variously as "the boom and bust commodity cycle", and sometimes simply as "the business cycle".

If you want to suggest that "this time is different", you need strong and specific evidence, not a general statement the economy will fail.

Yes Nick, everything is just fine and the capital will be there to fund the infrastructure needed to build out evs... We'll have a massive wind and PV build out that covers the Arizona and New Mexico Desert for the electricity and magically increase lithium and lanthanum extraction.

It is very easy to double EVs when they go from .01% to .02% of all automobiles on the road.

Pay no attention to an insolvent developed world... We can fix it with magical accounting.

magically increase lithium and lanthanum extraction.

We have plenty of lithium. Lanthanum isn't used in li-ion batteries.

.01% to .02% of all automobiles on the road

A Prius is has a complete electric drivetrain. Hybrids are 3% of new vehicles in the US.

Pay no attention to an insolvent developed world

The BIS analysis is interesting - I don't know what to make of it yet. Have you seen any discussion of it by something more mainstream?

The US is certainly insolvent, and in very real risk of hyperinflationary pressure in the next few years. Good luck getting anyone to adopt a fleet of EVs or a massive PV build-out then. The UK and various EU countries aren't much better, and we all know about Japan.

Not that their individual circumstances matter, because the failure of the US with it holding the reserve currency jeopardises any and all financial institutions, such is a the efficiency of globalisation bringing instant wealth and despair should a bubble inflate then burst.

Stick to ships. The US is not insolvent and I challenge you to provide the calculation. And no, the best analogy for the US situation is Japan's Lost Decade, which involved deflation, not hyperinflation.

Show me the insolvency calculation. You can't do it ...

So a country that has several times its GDP in unfunded liabilities is NOT insolvent? Go and tell Stoneleigh, Denninger and Shedlock that.

After your educating at their hands, come back and try again.


The developed world is not insolvent. And no, Zero Hedge has no credibility among people with an economics and finance backgorund.

You can't simply add future liabilities without doing a proper present value calculation ....

Are you claiming that Social Security and Medicare are sustainable in their current form?

Solvency has nothing to do with Social Security and Medicare. These are fundamentally pay as you go systems. Current inlays pay for current outlays.

No one created Social Security and said we will create a set of investments which will cover future liabilities ... It is not like a private pension fund where the question is whether the assets can generate sufficient income to cover beneficiary payments.

Insolvency means that net worth is negative.

All this talk about insolvency is an abuse of language to scare people...


What do you think of the Bank of International Settlements analysis/projection of sovereign debt?

Hi, Nick. It's important to keep our eye on the bigger picture and not get caught studying individual brushstrokes. For instance, 30 years from now, will it truly matter whether peak oil was in 2005 or 2008 or even 2015?

I've always maintained that we would see a stairstep decline in the size of the economy in which the steps themselves would be somewhat flat or might even show a bit of recovery:

Staircase Model

I've also always maintained that there will be a big step down at some point when the unstable financial system experiences some sort of discontinuity.

I also assert that unlike what occurred in 1873, 1907 and 1929, in which growth resumed soon after the financial crisis, this crisis marks the beginning of de-industrialization for our civilization. Industrialization was enabled almost three centuries ago first by the use of coal followed by oil, natural gas and uranium. When our civilization hit the fossil fuel jackpot, our population and economy grew to exploit the extra energy. Now, as fossil fuels and particularly oil are at the cusp of decline, their substitutes should already be fully deployed. Instead, we are just beginning: renewable energy currently makes up less than 1% of the primary world energy supply (International Energy Agency 2007).

There are many people who concern themselves with the day-to-day fluctuations of the market, the "economic weather," if you like. I'm more interested in the "economic climate."

Many of the forces that propelled human expansion in the last 300 years are leaving the system and, yes, despite some small pauses along the way due to homeostasis (the negative feedback that you correctly point out asserts itself from time to time), the overall trend is downward and can be no other way given how our economy is currently set up. And no, I don't believe for a moment that we can adjust quickly enough to return to long-term growth using any energy source other than fossil fuels.

See Estimating the Economic Impacts of Peak Oil and in particular try to get your hands on Hirsch's paper.

I'd argue that it was human innovation that took off exponentially, not the conversion of energy from FF to useful work.

When it comes down to the gun (literally), we easily have the physical resources to power our economy with 100% RE resources at 40 cents per kWh at current price levels. If you really want to go to the extreme then you can see 2 scenarios:

1 - we deindustrialize because we can't pay the money for the silicon, even though it's all laying right there along with the people, IP, machines, etc..
2 - we do what is feasible to prevent the end of the industrial age, which is build infrastructure that we can pull off logistically (even if not under this capital system).

Do you seriously think we are going to powerdown when it is feasible to continue? Why do doomers constantly assume we need oil to run our economy when we are now using wind power to extract oil (this is a recent trend taking off).

I was pretty convinced the end of BAU for a while when I first got serious about oil but then I studied the numbers. I still don't believe in BAU, but I believe business-as-unexpected from three booms we have yet to happen: nanotech, green energy, and biotech, perhaps over the next couple of decades.

Actually, we have all of the tech we need, right now.

Affordable and effective wind and EVs are here right now. I see no reason why wind, solar and nuclear can't provide all the power needed for well below $.20/KWH in the US (your mileage may vary in other countries with differing wind and solar resources...).

but I believe [in] business-as-unexpected [BAUX] from three booms we have yet to happen:

[1] nanotech,
[2] green energy, and
[3] biotech,

perhaps over the next couple of decades.

Ah thou sounds as if thy are still in school and still filled with idealisms.

Perchance thou should take a non-engineering course in another "boom" that has already happened? It's called propaganda. It works. It is highly effective. And it already is part of our BAU.

Seriously aangel, what's with all the pseudo charts (and from the same presentation)? I'm sure you can find better data than a single PostPeakLiving slide deck...

That question is so out of my context I don't even know where to begin to answer you. Your earlier comment that you liked one of my graphs better than a previous one because "it actually has units on the axes!" was a telltale sign.

Perhaps someone else wants to answer you but I'm going to give your question a miss.

Have you read up on the relationship between money and energy yet?

The same could be said of the supply-demand chart posted. They aren't meant to have units quantitatively noted down, they're showing a potential trend. The export-land charts are no different in this respect. Just because there aren't hard numbers plugged in each chart for a particular scenario, doesn't invalidate what they're saying.

I've always maintained that we would see a stairstep decline in the size of the economy in which the steps themselves would be somewhat flat or might even show a bit of recovery...I've also always maintained that there will be a big step down at some point when the unstable financial system experiences some sort of discontinuity.

Well, we haven't seen that yet:
Quarter GDP Change
07-q1 1.2%
q2 3.2%
q3 3.6%
q4 2.1%
08-q1 -0.7%
q2 1.5%
q3 -2.7%
q4 -5.4%
09-q1 -6.4%
q2 -0.7%
q3 2.2%
q4 5.8%

That's more than a bit of recovery - it's a clearly a classic business cycle with a sharp decline followed by a reasonably strong recovery.

When you say "I've always maintained", that suggests that you've had this pessimistic intuition for quite a while - well before the current 2004-2008 oil price rise. What would you say was the original basis for this intuition?

Now, as fossil fuels and particularly oil are at the cusp of decline, their substitutes should already be fully deployed.... I don't believe for a moment that we can adjust quickly enough

As, so you agree that substitutes exist, but you feel that they're just too late?


See Estimating the Economic Impacts of Peak Oil and in particular try to get your hands on Hirsch's paper.

I've gone through all of these exhaustively.

Robert Hirsch is perhaps the most visible advocate of this idea.

He has published several studies. The last one suggests that oil consumption is related to GDP in a 1:1 ratio - in other words, if oil consumption drops by 10%, GDP will as well. Here is what he said recently: "So then if one calculates a range of 2 to 5 percent, some people think the number may be larger, 2 to 5 percent per year increase in oil shortage, one comes up with a rather disastrous indication world GDP will decline by 2 to 5 percent a year in tandem with increasing oil shortages."

Is this realistic?

No. We can see this from economic history: in the US, oil consumption fell by 19% from 1978 to 1983, and yet GDP grew slightly. Similarly, world oil consumption was flat 2004-2008, but GDP growth was been quite strong, stronger than for the US (which itself grew 8% 2005-2008, with flat oil consumption).

Hirsch seems to have looked at the relationship between oil and GDP over the last 20 years, noticed that the ratio of oil increase to GDP increase has dropped from the previous 1:1 to roughly 1:2.5 (an analysis which he attributes to the DeutcheBank, but which can be derived straightforwardly from IEA statistics). In other words, in previous decades as the economy grew, oil consumption grew as quickly, while lately less oil has been needed. Hirsch drew the very strange inference that GDP has become more dependent on oil, rather than less.

An important and relevant researcher here is Robert Ayers . We see that he showed that GDP is related to applied energy (exergy), and only very loosely linked to energy, let alone to oil consumption. The research indicates that BTU's only explain 14% of GDP,and that the source of those BTU's can change (coal to oil to wind, for instance). Both energy efficiency and energy intensity can change. Further, oil is only one source of BTU's. Oddly enough, many energy commentators seem to misunderstand Ayre's research, and think that it supports the idea of a strong causal connection between oil consumption and GDP.

US (and world) GDP could grow much more quickly than it's energy consumption (even including electricity). The best example of this is California, which has kept per capita electricity consumption flat over the last 25 years, while growing it's GDP relatively quickly.

Ayres used "exergy services", which are not "very close to BTU parity". Exergy services are work performed. So, for instance, a Prius performs the same work as a similar vehicle with half the MPG, but uses half the BTU's. Strictly speaking, a Prius can perform the same work as a Hummer (transporting people), and use 20% of the BTU's. An EV also does the same work as a Hummer, and uses about 1/3 of the BTU's as the Prius, and 1/15 of the Hummer's...and so on.

Another source for this argument is here: from the Philadelphia Fed. It concludes that a 10% decline in oil availability would reduce GDP, on a temporary basis, by about a cumulative 2%. This means that GDP growth would be 2% lower than otherwise in very roughly the 2 years following the oil shock, then go back to it's historical growth rate. Interestingly, it finds no impact on inflation.

I would argue that the paper exaggerates the short-term effect, due to an over-emphasis on the 1980 oil shock (which was made much worse by a simultaneous change in Federal Reserve policy under Volcker), and underestimates the long-term effect of a permanent price/supply change due to the cost of imports, but the overall magnitude of the effect would be roughly the same.


So, does this blog post add helpful information on this subject?

This strongly advocates for the idea that peak oil will "crash" the economy. However, it provides very little support. The discussion simply accepts Hirsch's arguments. It discusses both Hirsch's findings as well 4 other reports. Oddly, three of those other reports actually disagree with Hirsch's thesis of a strong causal connection between oil and GDP - like others, the post seems to misunderstand Ayres in the manner that is discussed above.

Here is an example of an unrealistically pessimistic perspective: "oil is peaking or will soon peak. I don't quibble over 2012 or 2020 — either date is a disaster for humanity because we can't get ready in time." source: .

On the contrary, a difference in timing of 8 years makes an enormous difference - an additional 8 years would dramatically reduce the cost and disruptions of the transition away from oil, allowing many car owners, for instance, to smoothly replace their old vehicles with ErEV's. This may explain this pessimistic perspective - there seems to a confusion about short-term vs. longterm effects: the blog assumes that a large short-term effect predicts an even larger long-term effect, whereas, as shown in the Philadelphia Fed paper, the reverse is the case: a large short-term effect will generally be followed by adaptation which will eliminate continuing impacts on the economy.

Andre, here you ask a correspondent to show proof that the US economy can survive a 20% reduction in oil supply. Here are two: the Fed paper above, which shows that a 10% reduction would only reduce GDP by 2%, and the 5 year reduction of 19% discussed above, where GDP managed to grow slightly.

One might ask about imports - hasn't the US out-sourced it's high-energy-consumption manufacturing to China?

Germany is a good counter-example to the argument that OECD countries are showing a higher ratio of GDP to energy because of out-sourcing, given that's it generally understood that Germany hasn't out-sourced it's manufacturing.

We can see it easily in energy use vs. GDP graphs. Till around 1970 it was linked very closely, after 1970 not so closely anymore and after 1990 not at all.

A chart of oil vs GDP would be even more dramatic, given Germany's fast declining oil consumption.

In 1978-1983 we were able to conserve oil, it was very easy at the time as it was being used for things that could easily be replaced with alternative fuel sources. The low hanging fruit are gone, a decline in world oil extraction will be much more painful this time.

Additionally, that "recovery" we're going through now? Denninger would like a word.

We have plenty of low hanging fruit:

Heck, if everyone bought a Prius, we'd cut our oil consumption by 25% right there.


Moving from long-haul trucking to inter-modal rail;

replacing fuel oil with air-source heat pumps;

replacing asphalt with concrete;

moving from hybrids to EREV/EVs like the Volt and Leaf.


Get real. People will move closer to work. Modern public transport like we have Europe will be deployed in the US. Homes will be insulated. People will drive less.

There will be substitution galore. Trains will move more commercial freight.

You Americans are the energy hogs of the world.

Roderick, what type of substitution do you believe there will be? You can not simply say "Substitution will occur." Long term as the net oil exports dry up, we will still be able to ride buses and simply drive less? Please tell me what we'll be driving.

You Europeans need to realize that you have very little in the way of indigenous energy deposits.

what type of substitution do you believe there will be


if everyone bought a Prius, we'd cut our oil consumption by 25% right there.
moving from hybrids to EREV/EVs like the Volt and Leaf would take care of another 20%.


Moving from long-haul trucking to inter-modal rail;

replacing fuel oil with air-source heat pumps; and

replacing asphalt with concrete.

I'm not going to address each of your points.

I will point out instead:

  • The states and municipalities are preparing to lay off a hundred thousand employees combined, to start.
  • When all the housing support programs end the foreclosure rate will rocket once again.
  • 39 million people are now using the food stamp program.
  • The U.S economy is so far in debt BIS issued a warning about it (including other countries).
  • Pensions are unfunded to the tune of as much as $3 trillion dollars and the "funded" part has completely unrealistic growth expectations (8% from here on in).
  • And to top it all off oil is ~$84/bbl and trending higher.

If you can't see what's happening, there is nothing I can say that will change that.

I'm not going to address each of your points.

That's too bad. I've read all of your presentations, and I've been trying for a couple of years to give you some new ideas. Have you at least read through what I wrote, and given it a bit of thought?

If you can't see what's happening, there is nothing I can say that will change that.

Don't give up on dialogue. Really - if we really pay attention, we can make progress. I really do pay attention to new ideas - are you ready to think about some?

I could answer your economic points, but...maybe trying to discuss the details is just frustrating. Maybe we should start with the big picture.

So... you've suggested that you've had this pessimistic intuition for quite a while - well before the current 2004-2008 oil price rise. What would you say was the original basis for this intuition?


I appreciate your generosity. However, I'm just not interested in putting more time into this. I've spent the last three years understanding the macro trends at work and I actually think I have a good handle on them. Perhaps someone else is willing to put in more time but I have a business to run and I've participated already way to much on this post.


Well, I can understand that - there are some things in my world-view I've "processed" to my satisfaction, and don't feel interested in revisiting. It's hard for me to understand that approach on this topic in this place, but I've certainly had the feeling.

You might want to save what I wrote, and review it when you have time - I'm confident you'll find things worth thinking about.

No. We can see this from economic history: in the US, oil consumption fell by 19% from 1978 to 1983, and yet GDP grew slightly.

And what if that that was a lie as Memmel's calculations would suggest?

The following chart from Stuart Staniford shows the lie as well although I doubt Stuart realises what he's plotted and even Memmel hadn't calculated his estimated oil consumption figures back then.

The Auto Efficiency Wedge

Year on prior year percentage change in estimated fuel efficiency for all deployed gasoline vehicles in the United States by year, 1945-2005

US cars magically became much more efficient virtually over-night as the supply supposedly reduced. At one point becoming almost 7% more efficient in one year! It's a load of nonsense in my opinion.

Someone was supplying extra oil back then but could not or would not admit it.

That's funny. I just got finished suggesting to Andre "aangel" that he consider new ideas, and now I'm in his position.

Sadly, I find Memmel's ideas and calculations so out of touch with reality that I have hard time putting time into them.

Oh well. I took a look: is he really suggesting that we can estimate annual oil consumption in the US (a fraction of hydrocarbon consumption of a fraction of the world, which is itself only a part of the system that makes CO2 vary) from CO2 measurements??

As far as sudden increases in auto efficiency go, it's worth noting that the existing auto fleet has a wide range of efficiency, and there's a lot more vehicles on the road, and in use in many families, than are really needed. When a oil price shock hits, it's quite easy for people to switch their driving miles to more efficient vehicles literally overnight.

Sadly, I find Memmel's ideas and calculations so out of touch with reality that I have hard time putting time into them.

I'd listen to Memmel before you any day. But then I'm out of touch with "reality". While I wouldn't take his figures as 100% accurate they make a lot more sense to me in general than the manufactured crap I believe we are fed when needed.

the manufactured crap I believe we are fed

Well, we have to start somewhere, and official figures generally use a consistent methodology, at least. Actually, I haven't seen anyone else seriously question EIA's US oil consumption and production numbers.

I don't quite know what to do with Memmel. I don't want to hurt his feelings, and yet I really find his ideas....very unrealistic. For instance, he's been saying every year, for the last 3-4 years, that "this was the year" that oil production was going to drop like a rock, and countries like KSA were hiding this imminent crash temporarily by using storage to supplement production.....

I mean, seriously - using CO2 measurements to estimate US oil consumption annual variations??

Regardless of Memmel's validity, there was a LOT of efficiency savings going on in the '70s, and I'm, very wary of GDP growth figures from even that far back given that was around the time the US really started ramping up the deficit spending. John Williams and Denninger, and our own Stoneleigh et al would be better placed to discuss those figures. Needless to say, saying we can get off oil if everyone drove a Prius misses the big picture by a parsec or two.

The technology is not the issue. It is the will of the people and the ability of our shattered economies to enable such a transition, and to do so within a minuscule time-frame. Memmel may or may not have gotten the wrong time period, but the glut of reports out from formerly optimistic parties such as the EIA, IEA and various Big Oil companies, makes the prospect of a lack of any relief from this depression any time soon, if at all. Until I know someone personally at my workplace of 1400 people who has an EV, or even a hybrid, or who gets their utilities via the sky or ground for free, I'm firmly cynical of any rapid changes. It's not like I work with people who are paid peanuts or are unaware of such issues, since they're all scientists of various fields like myself.

But we shall see. I admire your cojones in saying "No more!" to the BAU model, especially in the worst financial predicament in recorded history. Now we need the masses to understand this (although as I've posted before, the 10k+ posts to a recent blog do not fill me with confidence).

Let's stop the hyperbole. The Great Depression was a far greater financial crisis than the Great Recession.

Not according to actual economic indicators from official sources, to say nothing of those that see through government massaging of the numbers. But feel free to show otherwise. You've posted enough comedy gold in this topic so far, I could do with more fun.

I don't quite know what to do with Memmel. I don't want to hurt his feelings, and yet I really find his ideas....very unrealistic. For instance, he's been saying every year, for the last 3-4 years, that "this was the year" that oil production was going to drop like a rock, and countries like KSA were hiding this imminent crash temporarily by using storage to supplement production..

Here's what Memmel was saying in 2006

Hmm I figured a spike late next summer based on to many negative factors causing a run on the market I did not consider any actual shortages for quite a bit longer 2009 at the earliest.

My opinion is still only a price spike in 2007 since I think KSA is filling storage and we still have the SPR that can be drawn down. Plus I think they have idled some production it may be heavy oil but I still think its happened.

So if you consider these factors we won't see shortages in 2007 and probably not 2008. 2009 is looking like a really bad year maybe 2008 but I think we will squeeze through 2007 with just one price spike and limp into 2008 with oil under 100.

Looks pretty accurate to me. Just as well we had the financial crash.

Indeed. The Credit Crunch was the Outside Context Problem that delayed any real peak oil predictions from hitting the nail on the head. IF the world is starting to use more oil again (note: I'm not going to say "recover" until jobs, mortgages, credit etc. return to nominal levels), then it is clear this year will give a good indicator as to where we sit in that peak, or down that slope.

Well, I think most people who are very pessimistic about PO feel that our current recession was caused by PO. I agree that it wasn't, at least in any direct way.

Until the credit crunch hit, the world was handling a serious oil price shock pretty well. US inflation pressures were rising somewhat, but not dramatically; there were no shortages in the OECD; and the normal market responses were showing up: consumption was falling, production was rising (if only a little), real substitutes were starting to gear up (like EREV/EVs).

There were no signs of the OECD economies crumbling without growing oil consumption - quite the contrary.

Right now, US oil consumption is falling quite sharply, but growth is continuing. From 2005 to today, world GDP grew strongly even as oil production plateaued. US oil consumption today is lower than it was in 1978, but the economy (including domestic manufacturing) is much larger.

PO didn't cause this depression, correct. But high energy prices did trigger an event that was eventually going to happen anyway, so better the bubble burst today than tomorrow, I say.

Additionally, the US and other Western nations have outsourced a lot of industry to Chindia and elsewhere and focused more on services which can use far less oil and allow for greater efficiencies or telecommuting etc. China and India are certainly the best examples of economic growth in real terms, and also of energy growth in all areas too. The US, like the UK, has not had any real net growth in anything significant with respect to manufacturing. The majority of the cash being lost in this economic climate is from financial instruments that cost nothing in terms of energy or resources to bring about and increase "wealth". The Market Ticker has a few good articles on how GDP growth in the US, for one, is mostly phantom growth with a lot of number padding. While it may look good to fiddle with mortgages, debts and so on in order to turn a positive result for a company, it doesn't really show the type of growth one would associate with reality, that is, the heavy industrialisation going on in Chindia which requires ever higher amounts of fossil fuel or alternative energy. One can expand an economy on efficiency savings for a time, but to really be productive and not just playing a fancy shell game, we really need to do stuff in the real world. Let's also not forget the countries that have been losing out because of the higher price of oil, and so face energy shortfalls (much of Africa, Pakistan and so on).

Additionally, I'm not a fan of the Prius as a solution, or as a car. There are cars today that get better mileage, are more economically friendly in their production and do not cost such an extortionate amount. Most European diesels are more than adequate, and so I equate the Prius and its copies such as the hideously useless G-Whizz as more poseur-mobiles more than anything. Indeed, most people won't be buying new cars for a while now they've exhausted the Cash for Clunkers/Scrappage Scheme deals and are still wary of their job security. They certainly won't be flocking to overpriced EVs or even newer PHEVs anytime soon, I'm afraid. It suits me fine, though, if that means less miles driven and more healthy lifestyles and reassessments of commutes taken.

I think if you search a little further you'll find the remarks I'm referring to.

So he got lucky ...

You folks really don't understand probability and statistics. A monkey by throwing darts can select stocks better than 85% of mutual fund managers each quarter ....

To be fair, that's only after you subtract their fees....

Do you expect us to take this conspiracy theory seriously?

Did you consider people drove less and drove slower ...

The industrial revolution was enabled by fossil fuels, but by new technologies such as the steam engine and later the combustion engine.

Your analysis fails to be convincing because you assumes there is no technology solution to Peak Oil and ignore the power of subsituting away from oil and energy consumption.

Energy intensity per unit of GDP varies dramatically ....

because you assume there is no technology solution to Peak Oil

Once again,

you are a newbie here.

I feel badly for you.
Once you open your mind and choose to learn as many of us have done so here, you will find that none of the easy fixes are going to work.

There will be a long bargaining phase and then depression. Finally, acceptance.

Inside a properly designed system, at this point in the arc of our civilization we would be decreasing the money supply instead of increasing it.

That sounds like a Kensyian style system. What is the name of the model the present system is working under VS the name of the model it is supposed to be? Keynesian used to be the invoked name....


Where do you come up with this stuff? How do you deduce the money supply should be falling?

Are you aware that a declining money supply over the long run would probably lead to falling prices and increase the real burden of debt, which is nominal in most cases and not indexed to the price level.

Do you understand the dangers associated with deflation?

Oil is a real resource. Money is not. What sort of connection are trying to draw between the two?

physicsperspect: I'm generally with you on this argument, but I have to say that last graph is wildly on the optimistic side (except for nuclear, which it has vanishing in short order). Eyeballing the graph, it has peak oil circa 2030, and peak natural gas 2040-2050. Just maybe that might pan out for natural gas (if shale gas, and methane hydrates pan out), but it looks like 2005-2015 for peak oil (most on this site would say 2005, but I'm being generous here). On the other hand, I don't see a need for a roughly 4x increase in energy consumption, but a big part of the adjustment must be learning not to waste. [Maybe we can teach grocery store managers that the world won't end, because someone didn't make an impulse buy of ice cream because it was behind a glass door, rather than sitting in an open air cabinet etc....]. We have a lot of scope to use very much less in toto. Part of progress should be to continually make things more efficient, rather than things that accomplish more by brute force.

Yes - I probably shouldn't have thrown that chart out there. It was mostly a knee-jerk reaction to Floridian's EIA chart showing renewable as insignificant and therefore (in his opinion) "Wind and solar will never make up for declining oil energy lost in the transportation sector". I get frustrated because EIA and other energy forecasters take great liberty in extrapolating BAU trends (e.g. "Oil production has gone up for the past 30 years so we can project it going up for the next 30") but somehow never feel comfortable extrapolating growth in unconventional technologies. For the past several years, EIA has forecast "next year's renewable growth" to be negative and out year rates to trend to zero despite decades of evidence to the contrary. I understand that they have constraints with their models which can't take small contributors into proper account but it still annoys the crap out of me. Additionally, it's an EU chart with an obvious agenda behind it so that's why it has fairly conventional oil projections (probably from 2008 IEA) and aggressive RE projections. I believe that the total energy growth is high because it's global. 4x growth doesn't seem excessive when considering the time scale and aspiration that per capital consumption harmonizes to something like the average Japanese citizen. I also strongly agree with your efficiency remarks. Speaking of grocery store opportunities - have you ever had a chance to listen to the walmart folks discuss what they are doing and planning for regarding retail efficiency? Pretty impressive stuff for such a "conservative" (i.e. profitable) company.

Wind and solar have nothing to do with transportation, they are a solution to AGW. EVs in use in the US for 2007 were .02% of the vehicle fleet, and that hasn't changed much in the meantime and won't change in a meaningful degree for decades, even with Nissan, Toyota, and GM attempting to market PHEV's.

Sure it hasn't changed much in absolute terms but again I stress the trend rather than the current status. It boggles my mind that people on the TOD think that oil will shoot past $200/barrel yet nobody will adopt EVs. People wait for buses in the rain, stand on moving escalators, and take taxis for any trip over 400 meters, all just to avoid walking. In my mind you either have to believe that there's plenty of oil for the world or that people will embrace EVs when the alternative automotive paradigm is no longer possible. The third option, that folks simply start traveling less and walking more when they do, is contrary to most human behavior I've witnessed in the USA. I guess the twist on this third option is to embrace some sudo-economic theory like aangel and state that society will collapse when the money supply increases and the energy supply decreases. Perhaps this is why doomers get such a bad rap...

PP, you really should do more research about the link between energy and money. Your lack of knowledge on the topic is showing up in virtually every post while you cast aspersions on people who actually have done the work of understanding the relationship.

I suggest starting with:

Estimating the Economic Impacts of Peak Oil

In it you will find papers that you should read. Even if you don't read them, you can get the gist from the writeup around them.

Unfortunately, the most relevant paper discussed is behind a paywall (Mitigation of maximum world oil production: Shortage scenarios, Hirsh, Energy Policy 36) but I summarize it in the post.

If you email Dr. Hirsch, he may be kind enough to send you a copy if you don't want to pay the fee.

Then you should read Gail's Delusions of Finance and Stoneleigh's Case for Deflation. To round things out a bit, read Buffet's famous "Derivatives are Economic Time Bombs" piece.

Once you have done all that, you may start to see the predicament we are in with our monetary system. I won't hold my breath because you seem to be resistant to learning something new while labeling people who introduce you to new ideas.

I know it may seem hard for you to believe, but there are actually people who might know what they are talking about on this site.

I know it may seem hard for you to believe, but there are actually people who might know what they are talking about on this site.

And yet, their pessimistic assumptions could still be wrong. I've read all of that material, and posted a detailed reply below.

It's here:

I probably shouldn't have thrown that chart out there.

It's a terrible chart, but still a worthwhile conversation because many people think that that chart actually has something to do with our future :-)

Your viewpoints are refreshing but I'm still not convinced about the cultural aspects of this. Psychology of previous investment as well as the accumulated capital of the oil and gas industry should serve to amplify the negative feedback loops going forward, especially since we live in a global capitalism model - save for some aspects of China.

Show me Joe redneck and Jane soccer mom who are willing to drive electric Tato nanos and ditch their pickups and SUVs en masse, and peak oil solved.

If there was ever an argument for a command economy, at least temporarily, it's peak oil. But we'll never get it as Americans are convinced they saved the world for hypercapitalism, and if you disagree we'll bomb you or better yet set the IMF on you.

Show me Joe redneck and Jane soccer mom


You don't need his help. You can find them for yourself right here on these 'internets'. Just left click on the picture to the right.

[Maybe we can teach grocery store managers that the world won't end, because someone didn't make an impulse buy of ice cream because it was behind a glass door, rather than sitting in an open air cabinet etc....].

But even before we get there could we please make a point of teaching people to look through the glass before making a decision as to what product to remove from behind the glass door. "GLASS IS F"N TRANSPARENT!" for crimminies sake.

This happens to be one of my pet peeves. There are few things that annoy me more than encountering some dazed moron standing there lost in a reverie while holding the damn glass door open and getting it all fogged up so no one else can see through it!

I usually make a point of asking such people if they are aware that they can see through the glass...
From the looks I generally get in response, apparently not!

Where does this graph come? It is rubbish.

Debt and money are not the same thing ...

You can go with brushes and more copper/iron to make the other magnetic field - the rare earths make for a "better" system is all.

As a "been there done that", living on RE kind of guy, I agree with your advocacy of renewables. A sense of urgency is required that matches the scale of the problem. I've written about the need to prioritise several times here. I don't agree with Gail's level of dismissal of renewables completely but I do, to some extent, agree that the time to impliment these technologies is late.

It took us about ten years of prioritising and planning to get to the point where we live mostly on RE. We did it on a modest income and sacrificed much of our former lifestyle in the process. We are now in a good place energy-wise. That said, if we started today, with the current economy, despite falling PV and balance of system prices, it likely wouldn't be doable for us. Things have gotten too tight financially. We would still be pursuing our goal of energy indepenence, but would find ourselves "a day late and a dollar short". I feel that this is where our culture/economy is today. Too many debts, too many commitments, to impact the crisis in a big way. We've waited too long (most of us). So...go for it. Just don't expect miracles. As I did (voluntarily), we the people will be forced to power down.

It's great to hear that you've largely made the transition to RE. I'm still living in tiny condo without many options to convert completely to RE. I also agree that anybody starting 10 years ago had a long road ahead of them to make a transition. However, today the major economies of the world are fairly well positioned to make the transition. The technologies are much better and perhaps more importantly the BAU path is looking less attractive with each year. At the individual level, I think the transition won't require as much planning. Certainly individuals can be early movers and perhaps save some money in the process but the real transition will be made at the state an national level. smart+super grid investments, carbon policy, progressive utility regulation, etc will all need to happen and is fairly analogous to your "planning period" you mention at the individual level.

In many senses I think we (humanity) are lucky that it looks like a "goldilocks" transition is possible. PV research got a kick start under Carter and continued to make steady progress thru the era of cheap fossil. Over the past 10 years, as visionaries saw the energy landscape changing, 10s of billions USD have been injected into the cleantech industry to scale R&D into manufacturing. The policy work began 5 or so years ago (in the USA) and still has about 5 years to go before being on a steady footing but my point is that I think it will happen.

I guess time will tell if we've done enough, early enough but one think I know is that when the choice for humanity to "power down" (i.e. more than just "efficiency up") or transition to RE the choice will be an easy one...

Well, I'm glad I stopped in. A whole series of sensible posts. A very good point about the difficulty doomers have in understanding exponential growth in terms of the build out of technologies capturing current energy.

Then there is the tendency to simply misconstrue history.

For example, this sentence

"The first industrial revolution was during a time of increasingly available energy, because of the new use of coal."

should read

The first industrial revolution made coal more accessible and the energy stored within it increasingly useful to society.

It's probably a question of semantics but I think of the industrial revolution as:
Steam Engine --> Fuel need beyond wood --> coal mining. People cut down trees with axes and dug coal out of the ground with TNT (high power but low energy) and picks. It wasn't until much later when automated coal extraction was put into practice.

As I remember, the earliest industrial steam engines were used to pump water out of coal mines as coal was already in demand for the concentrated energy it carried. The industrial revolution expanded demand and supply.

I know the Industrial Revolution is generally dated from Watt's improved steam engine, and I understand why, but I think it is inseparable from the preceding centuries of intellectual and practical developments in the political, social and economic domains.

The coal was underfoot in Britain during millenia of human habitation but was of little use before the confluence of social arrangements, ideas and technologies that occurred prior to Watt's efforts.

Hey PP,

I bet you could write a wonderful post on PV and the future.

I'd love to read it....

One good example is that europe is planning to have the equivalent of 16 nuclear power plants worth of offshore wind installed in 2015. Even if they miss this date by a few years that is a pretty impressive scale up of this technology.

Peak Oil says nothing more than the global extraction rate will decrease. It doesn't predict anything about net energy

It does. Even the net energy of oil will go down. Think of all the additional energy used for enhanced oil recovery, offshore platforms etc.

This is a summary of the ASPO 2009 conference on this topic:

Diminishing Returns of Fossil Fuel Energy Invested

That's a good point and shouldn't be overlooked. However, it's largely accounted for in the price of oil. For resources that require a tremendous amount of energy to extract (shale oil) the cost will exceed the market price and the resource won't be tapped. Granted this means that the decline may be steeper than what conventional thinkers may believe but rest assured the oil that is produced is likely to have a reasonable EROI. The exception to this is when distortion is caused subsidies but the oil industry is too big and politically unpopular to receive subsidies as significant on a BTU basis as for example the ethanol industry.

It's been frustrating to me to see how these costs have flatlined over the past 5 years but I think future reports will show the trend track downward sharply (likely to ~$4/W in the next 5 years).

I work with PV myself and can currently profitably Install a 5K residential system for about $7.5/W in South Florida. Though since our incentives have pretty much dried up business has dropped off significantly.

While I would like to believe your estimate of $4/W in 5 years, I'm curious as to how you see that happening?

In Germany they primed the pump well for quite some time with their Feed in Tariffs and incentives which they are now in the process of reducing. Though that is exactly what you would expect as their industry matures and becomes self sufficient.

I think we need to do a much better job of providing incentives here in the US $4/W installed might eliminate that need but I'm not quite as optimistic as you. My instincts tell me there are too many contrary interests at stake, at least where I am in South Florida.

a 5K residential system

That's a very small system, relative to industrial/commercial systems. In CA, 80% of systems are residential on a unit basis, but 80% of KWH's are I/C.

I/C systems are, IIRC, at or below $4/Wp these days.

So I have to confess that I'm "upstream" in the PV industry and so I'm somewhat distant from the retail side of things. The ~$4/Wp forecast I made is based on module prices (to the installer) below $1.50/Wp (easily achievable with costs being below $1/W at that time), residential inverters below $0.20/Wp, and remaining BOS costs below $1/Wp. Assuming that there's less overhead per installation and system sizes tread upward to ~5kW, it seems reasonable that installation labor could drop below $1/Wp (but you probably have a better perspective on this). The efficiency of the German PV market would suggest this is possible. Also, keep in mind that I didn't even factor in new technology like micro-inverts or BIPV.

I share your concerns about structuring a program correctly so there can be a smooth transition to unsubsidized adoption. $4/Wp at the residential level probably isn't quite there. The LCOE modeling I've done suggest that we many need to get below $3.50/Wp and even then there needs to be decent sun and average to high retail electric rates. But in the end I'm not terribly concerned. PV is pretty adaptive. If it's not quite ready for residential, perhaps more product can flow to commercial PPAs or Utility owned ground mount systems. If it's not quite ready in South Florida then perhaps waits a bit longer while folks in CA "buy down" the price. Basically I'm just saying at this point the technology makes enough sense in enough places that it won't go into hibernation.

I wholeheartedly agree. The pessimism on this site is not only unjustified given the success of European states and Japan in living well on far less energy, but discredits the Peak Oil Movement.

Fear mongering is not useful.

I disagree. Offshore oil drilling is actually a dangerous and deadly delusion as all it will do is suck scarce resources away from permanent solutions to the energy problem and the costs of this could be very high for human health and welfare. Each of these rigs cost hundreds of millions, every dollar of that is money that could have been better spent on conservation measures, bike and pedestrian friendly upgrades to cities, near work affordable housing, public transit and wind and solar installations that provide real, permenant solutions. These rigs are also not safe, the offshore australian spill is a prime example of that, which has poisoned fisherman as a result of contaminated seafood as far away as Indonesian. If you believe offshore drilling is safe, i have a deal on the brooklyn bridge you might be interested in. The rigs have so many points of failure, miles of pipe and so on, chances are will be some sort of failure at some point. Catastrophic spills happen, but not every day, but when they do there is a devastating price to pay, and I place the health of the environment as a higher value than just a few more years of a dirty, messy energy source. You also have the day to day leaks, the drilling fluids, the produced water, smaller spills and leaks, etc.

We should not allow lies to trump the truth of this matter. The joe sixpacks and palin types need to be whacked over the head and put in a place where their idiocy can no longer dominate energy policy. The idea of offshore drilling feeds a dangerous delusion that we can solve the energy problems with "drill baby drill", and the environmental consequences of this are severe, from polluted contaminated seas and seafood and damaged coastal systems and so on. We need to make structural changes to society, moving from a consumption based model where jobs are tied to consumption to one based on conservation and meeting human needs, even if it means throwing away the market-based laissez faire ideologies. We need to throw out market based valuation of housing and instead place people near where they work to save energy. We need to make sure that people can survive without trying to sell massively wasteful products and services that are not needed. People can use clotheslines more and we need to encourage more gardening activity. We need to end subsidising car travel and massively expensive road projects when this money should be spent on things like public transportation using electrically powered trains for instance. Even a bus can get 100 mpg. Much of Obamas recovery act was frittered away on road projects that will be useless when gas hits $10 per gallon. All of it should have been spent on non fossil fuel conversion efforts. Just a few miles from me there is a $200 million dollar freeway project. Its too bad that by the time its done gas could be too high priced for many to use it. We have a society that is stuck in a behaviour pattern it cannot break out of, weve only had this paradigm for 100 years but people act as though it is their god-given right to fill up their gas guzzler SUV and drive 40 miles round trip from their McMansion with a pesticide drenched yard and screen boxed swim pool in a distant suburb sitting on top of a mowed down rainforest. We need tougher regulation on oil companies and maybe a tax on gas and oil as an energy source to drive energy investments away from oil and towards renewables and conservation, perhaps requiring oil company profits to be invested in renewables and conservation. We need to begin implementation of renewables and restructure to live within the limits of these technologies.

I found Chu's presentation to be very disappointing.

He basically said - "Yes - cheap energy is going away, but we will replace it with technology and good policy." No indication that we might have to live differently.

And of course he showed his career academic agenda by calling for more government support of R&D. After all he will not be in Washington forever. Follow the money.

replace it with good policy.

Note how "good" for whom is not defined. And implementation of the declared policy is also not addressed.

Signs of the times - First nonstop from Chicago to Bejing

I wonder why they left hydrogen off the chart, with an impressive 120 mj/kg. Perhaps they didn't have graph paper that wide. ;-)

If we have a big takeoff of methane hydrates, you can expect hydrogen to be a gigantic game-changer.

Are there any US modular nuclear reactors that will be on the market by 2020? The train has already left the station and the passenger is still sleeping on the platform.

Excellent critique of our country's energy plans (wishes).

My premise is that conservation is the main way to reduce FF use and it will come mostly through demand destruction caused by higher prices and economic malaise.

Even if the US governement wants to implement new energy technology with federal investment, where will the money come from? Deficit spending will be reigned in soon by either inability to sell treasury notes or a severe drop in the value of the dollar. Obligations to pay social security, medicare/medicaid, government employee pensions, and interest on the federal debt (now nearly $500 billion per year) will take prescidence over energy initiatives when the government is forced to reduce non-obligatory spending.

Even if the US governement wants to implement new energy technology with federal investment, where will the money come from?

Paul Krugman had a pretty good budget anaology. The federal government (budgetwise) is a huge insurance company with a large expensive army. All other expenses are peanuts contained to insurance/retirement plus military. Now just because the remaining stuff is small potatoes, doesn't mean when cruch time comes that we will cut the insurance/military part in order to preserve some needed infrastructure programs. But, a rational system would.

So is a Nobel Prize-winning physicist Steven Chu and idiot or a liar?

dc -- I fear he is evolving to an even more disappoint hybrid: a scientific politician. Or is that political scientist?

Hybrid Chu - Dr. Jekyll and Mr. Hyde - or maybe Zaphod Beeblebrox ???

James Lovelock on The Hybrids:

Lovelock: 'We can't save the planet'

'Science has changed in our lifetime...'

Scientists, he says, have moved from investigating nature as a vocation, to being caught in a career path where it makes sense to "fudge the data."

"Fudge the Data" is S.O.P. in our world today.

Pretend and Extend... and soon the cliff is reached and even the "Fast-Crash Doomers" are surprized at how quickly civilization unravels.

As far a Lovelock, I like to think of climate change as the biggest unplanned science experiment ever. Gaia can kill most of us and then recover. Given the know history of earth I'm not sure why Lovelock is being so dramatic.

Lovelock is a loon.

He says climate change will be an unparalleled disaster, and in the same breath condemns wind power because it will ruin the view in the English countryside!!

No. He is against wind-farms because he believes they make the problem worse. He believes nuclear power is the best of a load of bad options.

If wind energy were the one practical and affordable answer to global warming then I would grit my teeth at the loss of the countryside and accept it. But I know that windfarms are no answer to global warming in northern Europe.

The Germans, who have invested more than anyone in this form of energy, are finding, according to Der Spiegel, that despite more than 17,000 wind turbines across Germany the nation is emitting more CO2 than before it built them.

Why? Because the turbines are only 17% efficient. The wind does not blow at the right speed often enough for them to do better.

As a result, 83% of the electricity that should have come from wind has to be made in coal-burning power stations that can never work at optimum efficiency because they are forever adjusting to the fluctuating flow from wind generation. Even with the huge attraction of subsidies, energy companies are increasingly abandoning wind as an effective and green source of energy.

Lovelock is obviously a blatant liar:

According to the department of energy average wind turbine costs were $1480 /kW in 2006:

On the other hand:
Florida Power and Light estimates its two new nuclear plants (2.2 GW to 3 GW) will cost as much as $24 billion:
Even at 3GW that's $8000/kW.
Same with new nuclear power plants in Canada:

The decommissioning of this nuclear plant has reached $1,400 per kW (after completing the decommission), which makes it almost as expensive as the capital costs of a new wind turbine.

The ultimate repository at Yucca mountain has already reached costs close to $1000 per kW and nuclear power plant:

And Germany got only 43.6% of its power from coal in 2008 (probably less now as CHP and renewable energies went up and power demand went down):

And besides that interconnected wind farms provide baseload. Power fluctuation is mainly because of demand fluctuation and this is taken care of with hydro, pump-storage and gas power plants and not with coal power plants.

You are obvious spinning numbers to fit your anti-nuclear / pro-wind agenda. How about some more recent wind numbers and a bit of proper perspective. I can speak from the Canadian perspective. We had recently completed a wind project on Wolfe Island (2009), at the end of Lake Ontario, by all rights an excellent site. The numbers are thus:

# units: 86
total nameplate cap: 200MW
Cost of project: $478M
Capacity factor reported: 23%

That's just a little under $10,000 per kW for based on the mean power DELIVERED, i.e. just under $500M for roughly 50MW mean continuous power. And, we haven't factored in any costs for storage, backup-fossil or supergrid if you wanted to make such intermittent sources closer to 100%. So, tell me how cheap wind is to build again? Your 2006 numbers are obviously WAY out of date, or there has been some major recent cost inflation somewhere.

From the Danish Wind Industry Association, the maintenance cost is approximately 2% of build cost per year: these things break and need to be kept up, so there is an ongoing cost each year. The energy isn't free after the windfarms have been assembled.

Now, for the nuclear number quoted for Ontario Power: what WASN'T reported was that the $26B was for the *60 year levelized cost*, including fuel, maintenance, decommissioning and upgrades for balance of plant for a 2,400MW installation. That was NOT the cost of the reactors alone, which we were of course lead to believe by omission by the Toronto Star.

So, lets compare. Taking a build cost of $10,000/kW-delivered, and a 2%/a maintenance cost, over 60 years wind will cost $22M/MW delivered. Those reactors will produce at 90% cap. factor so the 2,400MW nameplace works out to 2,160 MW mean delivered. To do this with wind, ***ignoring the need for storage and / or supergrid, and/or fossil backup***, to deliver the same amount of power for 60 years would cost close to $50 BILLION. Factoring in costs for these little extras like making the grid reliable from 75% unreliable sources and who the F! knows how much it would cost. So, the cost is north of DOUBLE the cost of the supposedly crazy nuclear option.

You are being misleading at best if you are trying to claim wind is super-duper cheap and nuclear is off-the-charts expensive to deliver the same amount of useful power on a reliable basis. You have to compare like things if you're going to be honest about it, i.e. you must look at the cost to deliver the same unit of ENERGY, on demand, calculated on a life-cycle basis.

Capacity factor reported: 23%

At most sites in the US, wind capex is about $1.80/Wp, with capacity factors of 35%. So, these costs seem a bit high, and the capacity factor seems a bit low.

When were the last turbines installed? Was the capacity factor measured after that point? Do you have a source?

From the Danish Wind Industry Association, the maintenance cost is approximately 2% of build cost per year:

Here's what they say: "For newer machines the estimates range around 1.5 to 2 per cent per year of the original turbine investment.
Most of maintenance cost is a fixed amount per year for the regular service of the turbines, but some people prefer to use a fixed amount per kWh of output in their calculations, usually around 0.01 USD/kWh. The reasoning behind this method is that tear and wear on the turbine generally increases with increasing production. "

I have to agree with "anyone" - Lovelock appears to be blatantly dishonest.

1) He cites low German wind capacity factors, when it's well established that English wind capacity factors are much better,

2) He suggests that the low German wind capacity factor causes net coal consumption to rise - this is absurd. First, German grid managers are far smarter than that: they'll use other resources that compensate for wind variation more efficiently than coal, and second, load-following even with coal plants is far more efficient than he suggests (it was standard practice in the US long before wind power became important).

In Lovelock's defense, these ideas are standard talking points from nuclear advocates, so he may just be incompetent, rather than dishonest...

Scientists like Lovelock should be listened to very carefully when they describe our general predicament, much less so when they prescribe specific solutions.

Faults in their ability to do the latter should not diminish our respect for their ability to do the former.

Lovelocks great contribution to science was an understanding of how planetary systems work. His understanding of our current planetary meltdown should be heeded with great attention. He has not spent much of his life thinking about the policy implications of specific energy programs. My impression is that he is just taking the word of some colleague in physics who happens to be a nuke enthusiast.

Listen to him on things he knows about (global climate systems), not on things that he doesn't (energy policies).

My impression is that he is just taking the word of some colleague in physics who happens to be a nuke enthusiast.

He spends a lot of time and energy talking about things he knows nothing about. If it was an occasional marginal comment during an interview, that would be one thing, but he says this kind of thing a lot.

I don't pretend to be able to judge climate change (I take the word of climatologists), but I judge people by what they say about areas in which I'm knowledgeable. By that standard...he's a loon (either from general daffiness, or willful incompetence).

So in what way exactly are you guys more competent that Lovelock to judge nuclear power? Should we be asking to see your PhD's in nuclear physics?

Economic facts and facts about the German grid are what they are.

Not even a PhD in nuclear physics can change these simple facts and at the same time turn dishonest comments, which purposely badmouth German wind energy magically into reality.


If you are the real deal, then rather than seeing your PhD certificate I would be more appreciative of you providing a discourse on how constant bombardment of of the reactor vessel innards with neutrons and other radioactive decay particles causes metals to become brittle and ...

Also talk about how nuke plants are built by the lowest bidder using the cheapest allowable quality of materials. I suspect that will go a long way to dispelling the fantasies of many a pro-nuke readers who lurk here. (If nuke were such a great option, how come the "market" has not seen to it that 1000's are built?)

I am NOT a nuke expert. So I won't pretend to be one here.

As "anyone" notes, I wasn't talking about nuclear*, I was talking about wind.

I find it breathtaking that Lovelock describes climate change in apocalyptic terms, and then turns around and dismisses windpower with feeble disinformation. As best I can tell, his real complaint about wind power is that he doesn't like how it looks in the English countryside!!!

*I'm agnostic about nuclear power.

On a more positive note, I think we will see a major energy plan from Obama. If we can't do carbon tax, then government funded jumpstart seems to be the only choice. There's some opinion that 10 nuclear plants need to be funded to get that ball rolling.
Chu's presentation shows what this plan will contain.
The only place the U.S. has dollars is energy imports and the military budget. It doesn't seem that either can be available in the short term.
On a related note, I saw that the U.S. begins to phase out incandescent lightbulbs in 2012. I missed that law being passed.

After WW2 and depression era there was the WPA where much of the infrastructure of industrialization was built out.

What we need now is a new WPA that focuses on repurposing existing infrastructure and building out the new infrastructure of Localization. This can be a hugely labor intensive effort to maximize jobs and minimize energy consumption.

It MUST be the top 10% of the wealth owners who are largely responsible for funding this effort and I don't mean whereby they end up owning this new infrastructure. They must give the money, resources, equipment, materials, real estate, expertise, and even labor when possible as a legacy to future generations.

This is what I am focusing on because the alternative is ugly.

It is true that the wealth of the top 5-10% of the U.S. is enormous. I don't know if that's as true in Europe. Most of these people are diversified into physical commodities and land.
We can exchange imported oil for energy jobs if we're smart.

The only thing that will be given up is the welfare state. It is done, the writing is on the wall.

Keep telling yourself that, FLA.
Most of the writing I see on walls I don't take too seriously.

But really.. with us entering these 'tough times'.. you don't think there will be a total outcry for WPA and other big gov jobs, food, ed and reeducational programs?

I think you're going to see govt doing more in the coming years, not less.

Yes, right up until the point the debt jubilee cannot continue and the whole thing implodes. Debt is a curse, eventually compounding interest works its magic. It is a shame politicians do not understand math.

I think we're going to see it at least giving the appearance of doing more, even as it more often than not makes things even worse. Just making it bigger doesn't mean it will do the things the folks who wanted it bigger were after. It may well use (and has already used) its ever-increasing powers to do other things altogether...

Thanks for posting Gail. I was visiting with Vaclav Smil recently and he made some of the same points. His new book "Energy Transitions: History, Requirements and Prospects" is due out by June. He commented that the administration is painting a way to optimistic picture about our forthcoming energy transition. He expects this work to generate a lot of lively discussion and I am looking forward to reading it.

As you can see, Smil has done some other research on this and related subjects.

I had thought Vaclav Smil was more of an energy optimist--at least a while ago. Maybe he changed, or maybe I am confused.

I don't think you are confused. I thought Smil was an optimist (i.e. didn't get the whole picture), too. Perhaps he has begun to see the deep-seated problems we are facing more clearly.

As Robert Hirsch said, "This is a topic that gets worse the more you look into it."

I wouldn't call him an energy optimist but I guess that is all relative. He has studied and written about energy about as much as anyone on the planet. I think he tries to be a realist about what we know and what we don't know.... the latter of which is probably a lot. He certainly understands the scale of the energy problem as well as the historical challenges of energy transitions. He is a very thorough student of the earth's biosphere and geology among many other topics as you can tell from his lengthy list of writings.

I know he has been skeptical about PO in some of his historical work yet he has also shown peak oil graphs in his writings. We seem to be seeing more of this lately with people playing down "peak oil" and then calling it something else...quack quack. The Le Monde interview of Obama's DOE oil guy is a great example of this with his "undulating plateau" which we have been talking about here on TOD for several years. When viewed in the rear view mirror 100 years from now, that is obviously going to look like a binomial curve with a peak.

His books are researched very throughly and well worth a read for their perspective on energy. He knows alot about ecological economics and lives a pretty light footed life XC skiing in the winter and growing vegitables...avoiding flying whenever he can and driving a honda civic. I will admit he often comments for effect and his upcoming works will show this. He loves to stur the pot as many do here on TOD. He is an interesting character and worth following.

Anyone know how to buy an EBook version for my Sony Reader? (Amazon supports only Kindle apparently, not sure of compatability).

To me this presentation looks like one of these statements about Lehman Brothers a few days before its collapse. I think Chu is well aware of the issues, which become apparent between the lines. But being in the government he doesn't dare to articulate it more clearly. Perhaps it is one of these "avoid panic" dilemmas, which can eventually lead lead to an even greater panic - due to a reality shock.

The "War on Truth" has gone on for a long time now.

Politics is the enemy of truth, especially in our currently volatile political climate. People do really stupid things, make really stupid decisions, when they feel threatened. This is about the best that Chu can be expected to do until this election cycle is over. They know better than to give the tea party politicos anything more to run through their distortion mill. And with the re-emergence of Gingrich the Newt, the Palin/Bachmann "dill baby" babefest ( funny), and upcomers like Cantor, all slinging sh@t just to see what'll stick, don't expect anything of substance to come out of this administration for some time (if ever).

You probably already saw this drill baby drill post from ASPO.

Thanks, Jim. Added to my ammo locker.

yes, it is good that some of our guys here in Michigan are on to this important stuff.

There is no doubt that Chu is aware. One of his earlier ~2005 slide slows on PO and climate change was posted on TOD last year.

Interestingly, on the same conference in his presentation Adam Sieminski from Deutsche Bank announces his estimated

Timing of the Next Recession:

 Although it has not been officially declared yet, the latest recession appears to have ended in June 2009. According to our US Economics Team, the Fed will embark on a new monetary tightening cycle in Aug-2010.
 Based on our calculations, this would imply the next US recession will begin in November 2012, which would represent one of the shortest economic expansions in the last 55 years.

Unlike their earlier optimistic statement coining the current situation "peak demand" now DB adds links the "demand shock" to the 1973 oil crisis.
This is one more step towards admitting peak oil.

And Sieminski writes:

Can Oil Prices Be Too High or Too Low?
At 5-6% of global GDP, oil absorbs too much income -- and provides too much incentive for substitutes.
 At 1-2% of global GDP, end use demand grows rapidly and upstream investment does not.
 The “sweet-spot” appears to be somewhere near 3-4% - which translates into a current WTI price near $70/bbl.

This sounds like an advice to OPEC to keep the price at this level - otherwise we will simply switch to biofuels and electric cars, ships & planes ;-)

It won't be BAU for the US because it is falling rapidly behind the rest of the world in cleantech. But who cares about the US?

The reality of the PV situation is that we are approaching wholesale costs of under $1/W now. We are seeing rapid expansion and commercialization of lab results like never before. As long as storage solutions continue at the same pace, we will reach grid parity in under 10 years at current electricity prices. But I think current Wp prices will rise and we'll see grid parity reached sooner, as coal gets more expensive and solar gets cheaper. The Chinese are aware of this and expect to be spending $1 trillion per year in cleantech by 2013. The US is spending a tiny fraction of this.

The Chinese are real engineers and they're open to ideas like using ammonia as fuel, geographical averaging of wind power, making solar cheap through economies of scale, and forcing higher electricity prices to reduce quantity demanded and encourage new investment. The government is working very closely with its renewable power corporations, ensuring their survival with mega contracts.

......and their per capita energy use is still a fraction of that in the US.

Mister Chu has his own vested interest in maintaining his position, maintaining the supporting structure of the System, and many more.

Furthermore, he is a brainwashed member of a tiny fractional elite that is itself only a small fraction of Earth's people. This small crust, called 'scientists' is largely composed of welfare bums feeding at the taxpayer dollar trough.

It would do everyone good to not listen to a word of what this creature has to say. His purpose is to brainwash the masses into funding and continuing to support his bankrupt system and way-of-life.

That is all,
over & out.

Could it be that the current "crop" of human fat (the 2/3s obesity rate) has been purposely "grown" so as to be a back up source of energy in the future?

The military has developed the new "reactors" that can create usable fuel from about any type of biomass?

A good harvest might gain the US a few extra weeks at least?

When you start to see busloads of fat people being driven has begun.


The System is maintained by your precious heroes at Exxon, Goldman Sachs, etc. Welfare bums of the first order.

Furthermore, he is a brainwashed member of a tiny fractional elite that is itself only a small fraction of Earth's people. This small crust, called 'scientists' is largely composed of welfare bums feeding at the taxpayer dollar trough.

Guess you don't have many acquaintances who happen to be scientists, do you? Most scientists that I know are neither brainwashed nor are they welfare bums feeding at the taxpayer dollar trough. They are mostly positive contributors to society.

As for Dr. Steven Chu, he was one of three scientists to share the 1997 Nobel prize in physics: "for development of methods to cool and trap atoms with laser light"

Currently he is US Secretary of Energy, a political job and he does have to answer to his boss.

Oh, re: "over & out" It's either "over" or "out" never both!

Trained radio operators grind their teeth on hearing 'over and out.' In proper usage, 'over' means 'I've finished speaking for the moment and await your reply.' 'Out' is used to terminate a conversation.

Fmagyar: OUT!

It is unfortunate that the recalcitrants in the anti-nuclear lobby still can't get their heads around the urgent necessity to get coal out of electricity generation.Are they serious about reducing polution from fossil fuels? Coal is by far the biggest offender and really the easiest to tackle once nuclear is recognized as the simplest,cheapest and quickest solution.

The security issue is not relevant to civilian reactors.Those countries or groups who want to get into military use have and will get hold of nuclear material regardless.The cat is well and truly out of the bag.It is a military and security problem.

The waste currently generated by once through reactors can,and will be used for fuel by Gen 4 reactors.The technology for these is proven.Commercialization is in progress in several countries.

There is no world wide shortage of uranium to fuel the current (and projected to be built) generation reactors.

There are large thorium resources which can be used in Gen 4 reactors.

The safety record of nuclear power is exemplary,especially when compared to coal mining.

It is more economical to build small,mass produced reactors which can be plugged into the existing grid than to build huge gigawatt customised reactors.This also enhances the reliability of the grid.

CCS is a dead end as it can't be scaled up except in an Alice In Wonderland World.

Renewables are good in their place but can't produce base load power.Without adequate base load power you are going to be looking at massive disruption to entire nations.

Please,let's get real about this energy issue.

While I agree with your thoughts on coal - you really think that Nuclear is the cheapest and fastest and easiest solution? Perhaps this will be the case in China but in the western world, a combination of NIMBY, bureaucracy, capital costs, schedule uncertainty, transmission costs, and "lumpyness" will likely prevent new nuclear from being a realistic solution. The writing has been on the wall for at least a couple years now that the western world's renewable additions will dwarf any new nuclear now and forever into the future.

I'm no big fan of nuclear but I've seen enough disruptive technologies wipe out the previous way of doing things. Perhaps these small, modular designs will be another such instance.

yes there may be something in new nuclear technologies but I think actual build out of these designs is quite a few years out. Look at how hard it is for the USA to put spent fuel in underground storage. We're unlikely to streamline the adoption of an entirely new nuclear power generation technology. Basically by the time these new nuclear technologies are ready, I think RE and smart grid technologies will be so far down the learning curve that the new nuclear technology won't be competitive or needed.

I don't think many people will advocate large centralized over small and diverse for system redundancy.

But given the manner most industrialist have run things - can you imagine 300kW reactors at the core of each manufacturers place of business and how they'll maintain them?

Then toss in security concerns.....

The energy density graph reinforces my view that methane or its derivatives are the transport fuel of the future. Right now we seem to have adequate supplies of natural gas which is usually 80% or more methane. In the future we can make methane in other ways such as combining bio carbon with nuclear hydrogen. The transition from natural to 'unnatural' gas could be smooth with less need to replace existing road fleets (by then) and the distribution network. We should resist the temptation to use gas as a replacement for coal fired electrical generation as that is the role for nuclear power.

Thus I'm suggesting that the Methane Economy can get a lot bigger. OTOH biofuels and solar PV may have already maxed out if you take away the subsidies.

"solar PV may have already maxed out if you take away the subsidies."

Maybe not maxed out, but the news isn't great.

(Updated 3/12/2010)
2008 was a boom year for PV, but 2009 will be devastating. A sobering update appeared on 9/02/09 in Renewable Energy World (and another on 10/23/09) that paints a bleak outlook of PV for at least the next three years.

Their mid-range projection sees PV production getting back to 2008 levels in 2011 or 2012 and then growing from there at a 15%/yr rate in dollar amount of sales. No more of the 50%/yr growth rates seen from 2004-2008, even with prices plummeting because of enormous over capacity. A recent report (9/2009) by DigiTimes projects a 26% growth from 2009 to 2010 in terms of panel MW of sales, but production capacity utilization dropping to 26%. Some PV prices have dropped as much as 35% in the last five quarters, which is making it tough for manufacturers to survive. Half of the solar manufacturers are likely to fail by the end of 2010. If one looks further ahead, under present conditions it seems likely that another 30% may fail in 2011, and another 20% in 2012.

A study released by Lux Research in February 2010 projected 14%/yr dollar growth for all solar (PV plus CSP) for the next five years and 23%/yr total capacity growth. That would imply 9%/yr drop in $/W going forward. They also expect to continue to see many company failures because of over capacity for at least the next three years.


It's clear that recession and reduced subsidies are taking their toll on the PV industry. Best hopes for a quick recovery.

Well, if you are subsidizing production while demand is contracting during a period of extended unemployment loss of net households etc, the result is fairly predictable. This has very little to do with the long term viability of the technology but rather the overall economic environment in which you are trying to jump start it. It may make more sense to shift resources to basic problem solving regarding agreed upon technical challenges a la SEMITECH during the next several years rather than continuing to add to the over-supply problem with continued subsidies for production.

The catch is that with the acid rain cap and trade program, there was an easy technical solution to the sulfur dioxide emissions. An electric power plant had the option of installing a scrubber, and thereby clean up its emissions, or it could buy pollution allowances.

I believe this 'easy technical solution' merely transfers the atmospheric sulfur dioxide to the natural water system. After all, the scrubber waste water, sulfur dioxide included, must be disposed of somewhere. I'm no expert, and there may be ways of profitably extracting the sulfur, which is a needed element in the process of creating chemical fertilizer, but I'm not so sure this easy technical solution goes far enough in closing this loop.

I know that at the Oil Sands in Canada, there are big stacks of sulfur blocks that have not been sold because the price for sulfur is not high enough.

I know that they were also selling some sulfur for fertilizer in Canada. So at least the oil companies are doing something with sulfur. I don't know about electric companies, though.

The electricity companies get rid of SO2 by passing the exhaust gas thru a column of limestone. Overtime the limestone is converted to 'synthetic' gypsum which goes into drywall and the fly ash is used as filler in concrete.

I know that at the Oil Sands in Canada, there are big stacks of sulfur blocks that have not been sold because the price for sulfur is not high enough.

Canada accounts for about 25% of world sulfur production (spelled sulphur in Canada). There are a lot of big yellow stacks of sulfur in Alberta, most of them next to gas plants. A lot of the gas is high in sulfur, and since companies are not allowed to release it into the air, they recover it and sell it.

The stacks grow and shrink depending on international prices. When the world prices are high, the stacks shrink, and when they are low, the stacks grow.

Here's a link to Shell Canada's sulphur marketing site.

It should be remembered that the EIA's mission is to provide a plausible scenario whereby the energy to fuel the growth required to service the $50,000 odd billion in debt will be available going forward. Otherwise, the whole damn house of cards collapses. We would all suffer from that collapse no matter how much we love candor. Dr. Chu is doing his part.

SW -- Perhaps I'm missing your point. But it seems as though you're saying that Dr. Chu is doing his part to bolster our belief in a "plausable scenario". And by doing so he keeps the house of cards from collapsing. But unless you reject PO and beleive the house of cards won't collapse then it seems you're supporting an effort to hide the likely thruth from the public until it inevitably comes out. Thus in the mean time the public would resist any effort to lessen the impact of PO because the EIA and Dr. Chu said not to worry.

We are worried about the future. Listening to these people it sounds like they are too. But it is really about the present. There have to be enough people in the bond market who either reject peak oil or believe that we could transition to an alternative based economy quickly enough to provide the energy required to fuel the growth needed to sustain the debt already issued or things fall apart today. It is something like strategic ambiguity. I would argue that it was the smart money reacting to the dawning realization that this is not true that caused the recent economic collapse. The fact that the Iraq gambit failed. The task that Chu and CO face is to replace the Iraq gambit with a new bit of hocus pocus. In an ideal world, this is done to give us some breathing room and once things are stabilized we start talking about reality. But things are far from stabilized right now.

So are you saying you are ok with the "smart money" knowing the truth while an ongoing (post-Carter) psy-op continues against everyone else?

Why do I find myself hearing voices from the future saying "well we somehow convinced ourselves, or let others convince us, that we were doing the right thing. But in retrospect we undoubtedly, ultimately made things far, far worse."

I agree with you's a tough balance. I don't envy Dr. Chu's position. Nor President Obama's for that matter. As been said before we may not have solutions...just better and worse choices. I suspect that any tack he tries would be subject to valid critism. It's a true but sad reality: the guy you put on point is often the one who's loss diminishes you the least. And the point man usually knows it too. You just hope to rotate out before TSHTF. It will be intersting to see if Dr. Chu gets to catch that Freedom Bird before that point.

SW I was just having a glance at your blog and came across this under "Drill Barry Drill"

U.S. domestic crude production has managed to stay on a very long plateau since it peaked in 1978 due in large measure to the ingenuity of independent domestic producers in the oil patch learning how to get more out of wells that are past their peak in production.

Don't know where you got that info from.

As a renewable energy advocate, I am trying to be charitable.

tow -- If I get your point the answer is in your graph. It shows about a 20 year plateau of US oil production. Perhaps "long" is relative term we view differently. In the world of oil field declines 20 years is an extremely long plateau in my experience. The plateau finally collapsed in the 80's when oil prices dropped too low for even the independents to maintain production. IMHO had it not been for US small independents we would have hit current oil rates in the late 80's. Thus it put off the worse of PO in the US for a couple of decades perhaps. Just a shame we didn't take advatage of this span to change our bad habits.

Energy Secretary Chu provides an optimistic view of our energy future

Correct! Lets not scare the women & children.....especially those in Steerage.

When on looks at a Berkeley 2009 report on the Installed Cost of Photovoltaics, the graph of the total installed cost is much different.

Obviously they did clearly pay too much:

As you can order PV-modules online for $1550 per kW.

And inverters are less than $200 per kW.

A 10 kW system is installed in one day.

If you pay the electrician/installer $2000 per day you end up paying about $2000 per kW for the entire 10 kW system (which by the way will produce at least 10 times more electricity than my household - anywhere in the 48 states).

(Or wouldn't you work for $2000 per day?)

For one thing, there is really no solution to our liquid fuels problem.

So what? Cars, trucks and heating systems also run on natural gas.

LOL !!

You're way too naive in believing those Chinese vendors.

Actually we just received a delivery from one of those manufacturers (and they delivered what they advertised).

Btw, does the I-phone made in China actually work or is it just a big hype? Or are we just naive and simply believe our eyes when we see an I-phone or a macbook made by a Chinaman? LOL !!

Needless to say: First Solar is at $850 per kW since last year (still 50% lower than those Chinese vendors).

Anyone - thanks for the links and the PV optimism. I spend quite a bit of my day looking at PV prices and how new technologies may drive down costs further. If I were in the market for PV modules, I might be a bit skeptical of Joy Solar modules but would definitely feel fine about Suntech, Trina, or Yingli. A question I have for you (assuming you're an installer or have a good perspective into their business), how does a module go from $1.80/Wp at the factory door to perhaps over $3/Wp when the customer purchases it. Where are the primary markups? From my understanding, most installers will make a quote by saying "this is how much the modules, inverters, and BOS cost, and this is how much I'll charge for labor". Are the "costs" they cite significantly marked up over what they originally paid for them or are local installers forced to pay huge markups from distributors since they are buying in relatively small volumes? I guess the third options is that installers could be profit taking during a time of rapidly falling module prices. Let me know your perspective.

I agree that there are differences between Chinese manufacturers and I don't recommend any modules, I just wanted to give one example (there are many manufacturers/distributors on that website). (I'm not a professional installer - this was for a project from a colleague at work who has a house with a fairly big roof). I don't know what the reasons for these differences are. I just see (at least here in central Europe) that installers charge much more for modules, than if you get the modules from China directly. Maybe there are significant markups from local distributors and markups from installers. Maybe the local distributors were simply not able or willing to follow the significant module-price drops which were going on for almost a year now.

Just a note, I'd avoid using "Chinaman" given the racial connotations that term has, namely in the pejorative. The correct term is "Chinese".

Additionally, given the soon to deteriorate drastically finances of the United States, what good is all this talk about people spending tens of thousands on PV systems when they already can't make ends meet?

Don't tell the cricketers!

What is a chinaman?

A chinaman is a left-arm leg spinner

The term comes from the former West Indian player EE Achong, a left-arm spinner of Chinese origin, who bowled wrist spin as well as left-arm orthodox

South Africa's Paul Adams and Australia's Brad Hogg have recently revived the art of the Chinaman

I guess I'll avoid the Barmy Army, if only because I think they have enough things to be pissed about.

Just a note, I'd avoid using "Chinaman" given the racial connotations that term has, namely in the pejorative.

Sorry I couldn't help being sarcastic, but someone who automatically assumes that Chinese manufacturers are dishonest and make bad products is making a disparaging/pejorative comment.

Additionally, given the soon to deteriorate drastically finances of the United States, what good is all this talk about people spending tens of thousands on PV systems when they already can't make ends meet?

Besides that one does not even need to spend $10k on a PV system to cover the electricity demand of a household for 30 years.
Of course, it would be cheaper for Americans to simply be more efficient. There's no reason for the average American to consume 100% more energy/electricity than the average European.

But for people having trouble making ends meet, I find it a little puzzling to notice that this monster vehicle is America's best selling car:

If I had trouble making ends meet, I might buy a myself a bowl of rice and drink tap water but I would definitely not buy this vehicle.
As long as people can afford vehicles like this, they can easily afford a PV-system for less which lasts much longer, requires almost no maintenance and doesn't consume any fuel.

Ugh, that truck. I chalk that particular fault of the species down to Americans not having any automobile taste and far too many credit cards. It would, of course, pay to have people be more frugal and efficient, not spending their savings on trinkets. But sadly, this is where human nature hits. The technology and ideas needed to stave off PO and many of our present nascent crises has always been around. Technology is nothing, the will is everything. The will to act, to quote Ducard from Batman Begins.

I guess four-dollar gas will mean less people trying to even attempt to buy one of those monstrosities though, and Hummer is dead as the dodo.

Hummer is dead as the dodo.

I got to see a farm field converted into a Hummer dealership.
The building got built out, all done but never a car. Was up on the for sale block and then demolished for a different building.

Went on a Mastercraft ski boat over the weekend. Took over $200 to fill the tank, and after less then 30 miles of cruising and less then 4 hrs on the water, the fuel gauge went from 98% to 63%... God are we just wasting energy or what!

Chinese Alibaba?! Yeah, open "Sing Sing!"

As for (Or wouldn't you work for $2000 per day?), only if you are superman can you single-handedly install a 10KW system in one day. I sure wish I could, I'd be making a killing ;-)

Even if you need an entire week, you are still almost 3 times lower in costs than what Berkley suggests.

Well, I certainly will not join the Apologist's camp in any kind of a soft-hearted explaining away of these mind-numbing presentations from DOE. The notion that there's actually some value in keeping Notions of BAU alive in order to get something constructive done--to me--is little more than a hazy and unrigorous notion from the sidelines. My view: the value of keeping hopes alive is precisely zero. It would be healthier for the DOE, Chu, and the Admin to basically say we are in deep trouble wrt oil. The current framing and approach will accomplish nothing. The latter would at least trigger more debate and would also guide the entrepreneur class to try new things. It would also give cover--and this is extremely important--to those governors and mayors who already get it and are trying to transition to electrified transport.

Ding Dong EIA/DOE/Chu just failed once again. No surprise.


Hi, Gregor. On the whole I agree with you. What makes me pause is my belief that the moment an official pronouncement is made the markets will crash worldwide.

Of course that may not happen but it's definitely a risk to be considered if only because the impact is so large.

On the contrary, major investments would be made and certain industries doubled overnight should Chu come clean with the truth about oil.

I don't think that's how the markets work.

I think most business people would see that their investments will not give them the return they were expecting and will immediately try to sell. Companies are valued in future earnings which includes growth. Tell investors that the companies will contract instead and every company is immediately overvalued. Then they'll run for the exits. Not to mention the hoarding will begin and people may pull their money out of the banks, lending will stop, etc. etc.


The fear mongering is just as bad as the Apologists.

Peak Oil is a considered a nest of lunatics.

Anyone who lives in Europe knows that energy efficiency is the key. The Americans just don't get it because they are unwilling to recognize that their way of life is finished. Kaput.

I'm not sure that I totally agree with all of the cynicism on this thread. Don't get me wrong, I'm with you guys that the problems faced are far greater and more complex that Chu may let on, but he is right that investment is the key driver of change that we must rely upon. Cultural paradigm shift would obviously be more effective but is unachievable before large consequences manifest themselves, frankly.
Also, the success of the acid deposition cap-and-trade program is not something that should be dimissed, and I for one am happy that Chu recognizes it as a key tool for arguing for further climate legislation.


I'm not sure that I totally agree with all of the cynicism on this thread. Don't get me wrong, I'm with you guys that the problems faced are far greater and more complex that Chu may let on, but he is right that investment is the key driver of change that we must rely upon. Cultural paradigm shift would obviously be more effective but is unachievable before large consequences manifest themselves, frankly.
Also, the success of the acid deposition cap-and-trade program is not something that should be dimissed, and I for one am happy that Chu recognizes it as a key tool for arguing for further climate legislation.


Nice work and I agree that the first industrial revolution was during a time of increasingly available energy. Maybe history gave give us some insight into the impact of supply shocks as they are most intense for goods with supply constraints.

The price of energy rose sharply in the early 1300’s as scare wood supplies, resulting from a growing population and deforestation, as wood had to be transported over greater distances. Wood prices rose rapidly only to be held at bay by a global plague that erased one-third of the world’s populous. Price Increases in energy lead to a greater divide between rich and poor often leading to social unrest.

During the 1600’s, wood prices again rose. Wood was being used for just about everything, tools, homes, wagons, and fuel. However, advances in technology such as the steam pump enabled extraction of coal at deeper depths thus allowing coal to substitute for wood for energy.

Long lines at the gas pump exemplified oil supply shocks such as those in the 1970’s, for those that can remember. There are some that argue that the reduced demand for oil during our current recession is evidence that demand for energy exhibits elastic behavior. However, products without readily available substitutes are rather inelastic – meaning expect dramatically higher prices when supply becomes scarce.

Falling oil production in the US and in particular Alaska, despite the significant increase in oil prices that lead to a significant increase in drilling activity demonstrates how vulnerable we are to supply shocks in the world market. While industry experts and scientist debate whether more drilling will ameliorate the energy challenge we face, let’s look at a couple of data points. Higher drilling activity as measured by Baker Hughes Rig Count data does not necessarily correlate to more oil production as measured by US Oil Field Production by the EIA. Higher drilling activity does not produce more oil.

What is most important is to formulate an energy strategy that can find a substitute for oil in our cars and trucks. Alternative energy sources are our only solution we can’t drill our way out. If there is any interest to follow up:

Energy Perspective Oil