Industry Leaders Seem to be Showing More Openness to Energy Descent Issues
Posted by Gail the Actuary on May 4, 2010 - 10:17am
This is a guest post by George Mobus, who is an Associate Professor of Computing and Software Systems at the University of Washington, Tacoma. His blog is Question Everything.
I've spent the last two days at the Institute for the Future's Ten-Year Forecast retreat in Sausalito, CA. The attendance list for the retreat reads like a "Who's who" of corporations (and a number of vice presidents from those companies), but includes governmental officials from all over the world who have a hand in strategic planning.
There were a few of us academics as well. At this retreat, I introduced ideas relating to peak net energy, and the possibility of major changes in the years ahead. I found industry leaders much more open than I had expected to listening to and understanding our energy predicament, and talking about what may be ahead. In this post, I would like to tell you about my experience.
The Retreat
My role was to report on the energy picture (which was linked with the carbon issues in climate change). I was asked to be provocative, which I found easy to do after just having read David Korowicz's Tipping Point paper [here (pdf)] and on The Oil Drum [here (html in a series in reverse order)]. This started with a set of "lightning" rounds, each only five minutes long, to frame the issues and provoke thinking. That was followed by breakout sessions where those of us who gave the lightning rounds led group discussions about our particular issues.
The covered issues were: The Carbon Economy (my piece), Cities in Transition, The Water Ecology, Adaptive Power, and Molecular Identity. The Institute staff had developed a number of scenarios for the future related to signals (signs of change) that they have been tracking on a global basis. The scenarios included Growth (what we ordinarily think of as BAU), Constraint (more or less self-regulation of society), Collapse (a theme often voiced here!), and Transition (essentially adaptation and mitigation in all of the issue areas). The genius behind what the Institute staff did to relate all of these was to generate potentials for actions by adding a third dimension to the discussion in the form of motivations: Happiness, Resilience, and Legacy. The whole meeting became a group exercise in identifying actions in these three dimensions and at least hinting at the system interrelationships.
You might be interested to know that my breakout session ended up being the largest subgroup, with about 25% of the participants, indicating that I had been successful in provoking interest and that many of the participants were indeed very interested in energy issues. Carbon took a back seat. Concern for finding ways to reduce CO2 emissions seemed a lot less immediate compared to peak oil and peak net energy.
Lightning Round Presentation
Below I show my lightening round presentation. I had to get the message across in just three slides and the words that went with them. Unlike most presentations on peak oil, where you start out with the bad news and then try to lift spirits with some kind of good news at the end (raise hopes?) I chose the Clint Eastwood movie "The Good, the Bad, and the Ugly," saving the worst to last. I wanted the audience to be nervous at the end!
The Good News
I was prepared for what I assumed would be the typical blow back from a crowd who I presupposed were committed to profits, growth, and the whole western capitalism ideology. As I watched the group gather for my breakout session, I grew nervous. The size of the growing group led me to think I might be in for a real show down.
As the questions started to come in, I realized that nothing could be further from the truth. The overwhelming sentiment seemed to be one of grasping the principles followed by concern for the implications. I had told them that society would soon run out of energy to keep the kind of consumer-oriented, high powered economy going and they were acknowledging that they basically got it. Incidentally, one of the client companies is one of the world's largest cruise ship enterprises. Another is a major ground delivery service company. Fuel is an important issue to them as you might imagine.
Companies like these are concerned with international business and profits from sales all over the world. Governments are concerned with revenues that they get from taxes on incomes of companies and individuals. All have developed their revenue generation models based on cheap energy, so my message was not welcome. But it was also not rejected (actually there was an investment banking representative who was a bit dismissive, telling me his analysts had assured him there would be no problem until 2030 to 2050). Instead the prevailing attitude was one of "OK, so what can we do to plan for this?"
Of course there were the usual questions about alternative energies replacing fossil fuels; I didn't raise their hopes with my answers to that. There was some discussion about natural gas filling the demand vs. supply gap for fuel; I explained some of the important caveats on the developments of natural gas wells. But by and large there seemed to be an overall sense of acceptance of the predicament. I even saw a number of heads nodding in agreement when I explained how the financial crisis of 2008 to the present was triggered by the oil price spike and that the bubbles that existed had been driven by the growing gap between real wealth and paper (phony) wealth based on declining net energy flows vs. gambling on our future ability to pay back all the debt we'd been creating trying to keep BAU afloat. I think most of them got it.
So the good news for me was that so many high level executives, thought leaders in major companies, and governmental officials charged with thinking about the future were open to the possibility that the collapse scenario (of the economy as we know it) would be brought about by the decline in net energy flow. Of course this was a small group compared with the number of companies still out there, presumably planning on futures based on growth and increased profits because they think the world will just go on as it has forevermore. These people were presumably at the retreat because they already understood that the world was changing in fundamental ways, and they were looking at the Institute to help decipher the signs.
Confirmed Impressions
For the balance of the day, yesterday, and this morning, I had several opportunities to confirm my first impressions as during breaks, at a wine reception, and at meals many people came up to me to thank me for being so direct and blunt about the future challenge. A number of executives engaged me in extended conversations with respect to their companies and what a decline in fuels or net energy would mean for their long-term operations. I don't remember ever collecting so many business cards at one event as I did over the last two days — cards proffered on me by executives who expressed an interest in knowing more.
During another, more free-form breakout session, a number of us had a very frank discussion about the problems with capitalism and profit motives and how the culture of corporations is at direct odds with achieving a sustainable future. I was amazed to hear these executives express what I consider extraordinarily enlightened understanding of the fundamental problems. Of course, those same executives are hard pressed to go before their boards and state as much. There is still a very long way to go.
Nevertheless, this experience was heartening. I came prepared to be booed and have rotten tomatoes thrown my way. Instead we saw contemplative consideration of the issues. Kathi Vian, Director of the Ten-Year Forecast program, told me that she had been amazed at the reception that these executives and minister representatives had expressed for the basic ideas in the forecast (esp. even considering Collapse).
She contrasted the attitudes with those of the last retreat when most people were more optimistic about the future. They had convinced themselves that some technological solution to carbon pollution would be found, and a vigorous carbon trade market would solve all problems. She had been anticipating some push back to the way the current forecast had been framed. Instead, she too was gratified to see the openness that participants had for discussing potentially devastating topics. Of course, the purpose for discussing these issues was to seek pathways through the map of challenges to achieve happiness, resilience, and legacy. People were eager to explore those pathways. The purpose of these retreats is to consider solutions to problems. People are still motivated to thrive and find meaning in their activities. No one is motivated to watch a society collapse into chaos or a new “dark age”.
What It May Mean
I don't want to read anything more into this one experience than is warranted. There were about 100 people at this retreat, an admittedly small sample. Even though they represent some real powerhouse companies, it is but a miniscule fraction of the total of capitalist institutions and their governmental enablers. Bob Johansen, Distinguished Fellow of the Institute, expressed the reality that the people who come to these futuristic sessions more largely represent "soft power" rather than the "hard power" associated with marketing and finance, let alone the executive control, of their companies. A lot depends on these folks’ influence on those centers of hard power.
However, I do think it significant that Kathi's comment and my surprise experience may at least point to something of a beginning of a trend. There seems to be a group who is growing in awareness of the real issues we face today. These people are ones who historically have been committed to the conventional capitalist model (including growth), and who are thinking more seriously about the future. They have noticed that the environment has somehow fundamentally changed, and have become open to conversations that suggest that an end to the capitalistic system is at hand. I suppose for those of us who have been trying to communicate the need to rethink everything (to Question Everything), this is a cause for hope. We may yet be successful in our attempts to communicate with some.
I am pretty sure that given the motivations of the participants, the message of declining net energy as a new experience for humanity is still not completely absorbed. It seems likely that the implications of declining energy have still not been completely grasped. But there is a nose under the tent! People are aware that something is not quite right with the world and are becoming open to understanding what is wrong and why. That is, I think, hopeful.
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I caught the tale end of Mr. Mobus' interview on PBS yesterday. Obviously a very smart fellow who has spent considerable time comtemplating potential options for our society. Can't see much fault with most of his ideas.
OTHO, his concepts for a forward plan are completely pointless umless the public and TPTB sign off on them IMHO. There are many truly clever folks on TOD with equally valid ideas. But what I really long to see is someone with a good plan to change the public/TPTB attitudes and impliment such ideas. To be cruely honest I don't really care to hear about another "solution" unless it includes a method to garner significant public/political support. Some here probably know what low expectations I have for our populace to embrace a significant change in BAU so my comment should not come as a surprise. Call me a doomer or call me a realist. Doesn't matter. The American people have a very clear record of what they'll accept in an effort to keep BAU. No one can deny that history.
My strategy, still not fully public, is to create a new paradigm that appeals to a wide variety of groups. To wit:
National Defense - The only way the USA can be defeated militarily is the way that Imperial Russia and Germany were defeated in WW I, by a collapse of the Home Front. The major risk of that is a prolonged and severe reduction in available oil. My approach is modeled on how the Swiss handled a seven year, 100% oil embargo.
Economy - The USA has been consuming and not investing. We are heading towards a 3rd World economy here (provable by MI model). Wealth is a measure of assets, not income and the current value of our wealth makes us no longer a wealthy nations.
Diverting several % of GDP to energy producing (renewables + nukes)plus energy efficient infrastructure will reverse that. One metric, GDP +13% in twenty years.
Environment - A subset of our advocated solutions will decrease CO2 by -38% in twenty years. Not Hansen's -50% but close. Add other measures, and I am confident that we could exceed -50% CO2 emissions.
Employment - +4% in twenty years
Lifestyle - The impact of obesity (diabetes and heart disease) is quickly becoming self evident. Few families will not be affected. TOD and increased bicycling is a major part of the cure.
This is a short summary. Trying to get my ducks in a row, uncertain about what to do, in what order, and trying to gather resources.
Best Hopes for the Least bad Way Out,
Alan
and
Extrapolating from "investing" and "GDP" extracted from the above statements - One thing I would like to see is a reformulation of the GDP to more directly reflect tangible products. It's funny that Credit Default Swaps are considered "investing" and the profit from fees derived from these play some part of the GDP. Because, they in reality are nothing but gambling instruments that artificially raise the asset/balance sheets of those playing the game and thus put crap into the GDP that doesn't reflect the real economy. The "value" of these instruments far exceed the tangible value of all goods in the world. (And I wonder if influence of the stock market should be greatly reduced in the GDP as well.)I would posit that a financial instruments-less GDP would be significantly lower than the 3.2% increase announced last week.
Yes! Regarding per-capita GDP, it quite surprises me to see the US per capita GDP continuosly maintain its fixed proportion higher than Canada's despite a) zero in-country damage in Canada from the CDO fiasco as Cdn regulatoras wouldn't let the banks invest in them b) the Cdn currency has appreciated from eg. 65% of US to 100% of US. c) a continuously degrading trade balance in USA, not in Canada. These three factors SHOULD have seriously narrowed the per-capita GDP gap as cited in CIA Factbook 2003 to 2009, yet the effect is completely invisible. What's going on?
"What's going on?"
Cultural/social manipulation, on a massive scale.
Canada spends about half as much on health care as the USA (despite living longer and healthier lives). They miss several % GDP right there.
Alan
And the GOM mitigation and clean up efforts. That will add to the GDP. Take it for the unexamined facetious statement that it is because when the pluses and minuses are added up also including other production that has been lost, it may well turn out negative.
The larger point is this mitigation and clean up expenditure will go in the plus column. As pointed out many a time, this is the inherent shortcoming of the GDP equation.
Right on Alan!
The first thing we need to communicate to the public is the gross aspect of the GDP as a measure of anything useful to us as a society of as individuals.
I am encoureged by Gail's reception at the conference, and will repeat my previous remarks about some commenters trash talk in respect to her supposed biases and prejudices.
She is a priceless asset and has not so far as I know hidden any expenses paid trips or gifts, etc, from the audience.
I for one know far more after she took that rip, etc, than I did before, and if the oil company had not paid for it, she probably wouldn't have been able to go except by sacrificing even more of her personal wealth and time than she does already.
Nuff said.
I am encoureged by Gail's reception at the conference
I do not believe that Gail was there. This is a report by George Mobus.
After some interactions, I no longer submit guest posts to TOD and restrict myself to comments here.
Alan
Your defence would be more convincing if you got your facts straight... just saying.
Hi , Alan and Bob,
My face is simply GLOWING right now, remembering times I have chided some others for not reading more carefully.I have confused Gail's byline as the posting editor with the authors identity, and jumped to the conclusion both she and Mr Mobious made presentations.
We are in the middle of semester finals right now and my fossilized old brain seems to be overloaded this week.If this site weren't a habit worse than alcohol or tobacco I wouldn't even be reading it these last few weeks , let alone commenting.Between school and the farm and old age I guess I need to back off somewhat on the blogging.
But the oil spill is I believe the most important news at least since the recent financial crash, and if it is not soon capped ......... it may become much more important.
I pray that everyone will accept my sincere apologies.
Dear OFM,
On behalf of the entire lurking and active constituency of TOD...well, actually...speaking only for myself, having been away so long and missing everyone (I'll be that honest!) -
I accept your sincere apologies.
Congratulations on all your efforts with school, farm and youthful enthusiasm. :)
Number 1 Hot Topic on CNN...
Times Square Plot
http://www.cnn.com/SPECIALS/2010/times.square.plot/index.html?hpt=htopic
I generally tend to shy away from conspiracy theories but this whole story sure pops up at a rather opportune time. Oh looky everybody Home Land Security has saved the day and another
completely amateurishevil plot, by abumbling foolhighly trained terrorist has been foiled. What Oil spill?!Then again, maybe this guy's theory holds more
oilwater than mine...Video: Michael Brown says Obama admin. is "using" crisis
http://ac360.blogs.cnn.com/2010/05/04/video-michael-brown-says-obama-adm...
Ah, never mind I'm just going to crawl back into my cave.
Treating this as a non-rhetorical question - Since it's a known, communicated fact that the statistics for inflation have been "adjusted" over the last few decades (first, exclusion of energy & food, then substitutes and heuristics used to hide observed price increases), then it follows that the statistics for GDP probably have been massaged as well. If the economy is based on consumerism, then it behooves the government to be in the "feel-good" business to encourage folks to consume. Thus more massaged statistics meant to make folks feel good.
Alan
Very glad you include Lifestyle.
'The West',the USA in particular, but very much including my own country GB, has created enormous suffering by evolving a perverse 'lifestyle'. However, during the last 10 years while we have been plugging away at our local Heart Support Group, we have seen considerable (but still lagging) change in medics attitudes both locally and nationally, and in those of us scared enough by our own conditions. The commercial culture, of course, still overwhelms the majority of our loved-ones, friends and neighbors, although as a culture we are winning on smoking and beginning to win on exercise.
It has occured to me that the timing of this forum, during this ongoing spill, may have been somewhat serendipitous.
Some here have described our impending decline as a "death from a thousand cuts". Some are small, easily shrugged off. Some, such as this blowout disaster, are hard to ignore. My sense is that those who are not totally invested in their numbness are beginning to feel the effects.
Whether it's balancing the checkbook at home or pushing through that next big deal at the office, things are not quite as easy as folks remember they used to be. Feeling, thinking people are surely experiencing some discomfort regarding the future, though they may not quite realize the source of this growing uneasiness. As the glow of social optimism slowly fades, many motivated folks will begin to understand the need for fundamental change. In fact, it is already happening, here on TOD, and on thousands of other sites, in discussions and at events such as George describes.
An "Invasion of the BAU Snatchers" if you like.
You are right, IMO. It is the big events--the Hurricane Katrinas--and now this, that take up by surprise and shake things up. Just when we think we have things all figured out, we discover our simple way of forecasting the future from the past doesn't really work.
“a method to garner significant public/political support.” Posted by Rockman
This is my actual fear; that nothing constructive can be done until things get so bad that the overall governmental systems of the US (and the West in general) can be flushed down the toilet and replaced with something capable of addressing the issues without having to pander to voters, lobbyists, and public opinion. Clearly whatever replaces the modern Western governmental model would have to be relatively authoritarian, but this would seem to be a small price to pay if its what it takes to avoid planetary ecological and societal collapse.
Antoinetta III
Is that Marie Antoinet(ta) of "let them eat cake" fame? Really, authoritarianism will simply be another huge step backward and add to the problems. What's needed is a) improved democracy (eg. get rid of the "representative" bit, they're too easy to corrupt). b) some "truth-in-advertising" laws for politicians and "so-called news" media. c) reduce (toward eliminate) the whole concept of nation-state. We are one species on one spaceship. Get used to it.
There's reasons why when the US / British elites promote "spreading democracy" abroad, the only model acceptable to them is a representative system, and the less democratic the better. It's only 300 years since the British colonists used to shoot Australian aborigines on sight as vermin. Let us NOT go back there.
“We are one species on one spaceship. Get used to it.” Posted by lengould
We’ve really always been this, but the world is too large for one governing structure, democratic or otherwise. The closest we have been able to come towards this is now, with “globalization.” But with economic contraction on the horizon, globalization will be going in reverse. There will be more, and smaller nation states as time goes on.
Democracy without “representatives” is impossible on a scale that is larger than the number of people that can sit around a table. The idea of some sort of non-representative “democracy” that could be organized in a country of 300,000,000 seems like a wishful-thinking fantasy. We’ve spent the 250 years since the beginning of the Industrial Revolution experimenting with various economic and political models. Now that we are entering an era of contraction, the time for such experimentation is over, as, quite simply, the clock has run out, there is no time to continue experimenting with something that at best has a long-shot chance at success.
They say that if you go up in a small plane and fly over the Haiti/Dominican Republic border, that you can see it clearly from the air. The Hatian side has all been logged off and the soil eroded, while the Dominican side is still forested. The difference is due to the fact that the Hatian government is too weak to stop provate individuals from going in and cutting everything down, while the Dominican government made it clear that unauthorized loggers would be shot on sight. Not a “nice” solution to be sure, but at least it works.
Unfortunately, democracy panders to people’s short-term wants rather than to the long-term well being of the planet. Authoritarian governments can be bad for individuals or groups that are out of favour, but democracy seems like it will enable the destruction of the ecosystem upon which we all depend.
Antoinetta III
I'll go you one better Antoinetta. Setting aside a represntative structure and go with that one man/one vote model. And how would we feel when 200 million of of our citizens vote in favor of killing anyone and everyone that gets in our way of maintaining BAU?
Tough choice, eh? Bet your future on 100's of millions of potentially selfserving and greedy citizens or put it in the hands of 500 selfserving and greedy politicians?
As I said above, IMHO betting on the kindness and self-sacrifice of the American public seems like a long shot to me. Currently we are continuing a policy with securing ME oil that has led to the deaths of thousands of our loyal troops and 100's of thousands of civilians. Still waiting for someone to offer a credible reason to expect a change in our society's priorities.
Been hanging around Canadians too long, eh?
Don't worry, I picked up on the use of "y'all" living in the South. It was a seminal moment when I used it in a department memo. Ran right out and had me some grits too! (Not really, still don't like grits).
"Hmmm", he says, "That's why Canadians say 'eh' all the time". Yes, we question everything (if only that were true).
"Tough choice, eh? Bet your future on 100's of millions of potentially selfserving and greedy citizens or put it in the hands of 500 selfserving and greedy politicians?"
Seems like this response should be directed to lengould, as he is the one who advocates the first choice above.
It seems to me that both have the same shortcoming, that of pandering to short-term, self-serving thinking and emotions, neither will be able to implement any sustainable, no-growth economy (let alone dealing with contraction) and both will enable the continued growth-oriented destruction of our ecological base--until it all collapses.
I suspect this is how it will work out; we will continue as we are until there is a general collapse. Only then, after the rubble of our current systems stops bouncing and the survivors of the collapse regather, in an environment with our extant political and economic systems defunct, will anything sustainable and relatively planet-friendly be able to be instituted. And this will be a world of micro-states where many different things will be attempted, but, without growth, only the sustainable arrangements will survive long.
Antoinetta III
A -- It was for lenny or any once else interested in my rant. But I like reponding to you more: somehow your name just makes me feel a little classier. And class is a short commodity for an old worn out geologist.
Thanx, Rockman, for your take on my name. (And yes, it's my real name)
But I just don't want to get tagged for proposing or supporting something I actually oppose.
Cheers!
Antoinetta III
Hi Rockman,
You bring up many excellent topics all at once.
re: "As I said above, IMHO betting on the kindness and self-sacrifice of the American public seems like a long shot to me. Currently we are continuing a policy with securing ME oil that has led to the deaths of thousands of our loyal troops and 100's of thousands of civilians. Still waiting for someone to offer a credible reason to expect a change in our society's priorities."
The American public *is* self-sacrificing, in the sense that so many join the military and many more support them.
Of course, many within it also question and resist and see the oil motive.
So, self-sacrifice is not the issue. Intelligent self-sacrifice might be.
The "kindness" issue is also depending on how one measures it. There are tens of thousands of non-profits in the US. Many are genuinely engaged in "kindnesses." Many focus internationally, supporting all kinds of things: orphanages, clean water, schools, etc.
People do not understand "peak oil" and do not know what to do about it, or about anything, with exception above.
Not to be a broken record, but that's why the idea of the NAS study appealed to me, and I have yet to hear why this is not a good idea. I have heard the usual arguments: too late, nobody cares, etc. These are not arguments that make sense to me. So, I'll give the reference again: www.oildepletion.wordpress.com.
People do care, they lack education. Some people care, let me put it that way. The percentages...? We have to talk specifics.
"They say that if you go up in a small plane and fly over the Haiti/Dominican Republic border, that you can see it clearly from the air. The Hatian side has all been logged off and the soil eroded, while the Dominican side is still forested."
A picture is indeed worth 1000 words. Thanx, Ghung, for the graphic, it makes my point far better than my text.
Antoinetta III
In a few spots it appears that Haitians have been sneaking across the border stealing wood. Can't say as I blame 'em.
... or perhaps its because ecosystems don't know borders.
Perhaps... we're one species, technically.
We're also one species with many diverse attributes. Like "birds of the same feather", the ones that don't seem to resemble seem to be taken for a ride for the collective good of the "birds of the same feather". So, sorry... we're not "one", really. There will be differences and, I say this with cynicism, humans will never stand up above their animal nature. Exploitation will go on and that means, a distorted view of reality, will always persist. So some will be blamed for, some will be used as scape goats and some ignorant masses will be taken for a ride with false promises. Deceit, Suffering and Death - inevitable outcome of life.
This question of the need for (or, more descriptively, the likelihood of) authoritarian responses to the predictable unworkability of present economic and industrial arrangements is one that begs for analysis rather than mere expressions of aversion. As for the suggested alternatives, none of the three seem to directly address the problem, say, of resettling a large fragment of the population from places that are hardly viable without the availability of cheap energy on a massive scale. Furthermore, how, under what circumstances, and in what time frames, are the three proposals envisioned as coming about? By means of representative democracy?
The deafening silence on this issue is instructive. Nobody wants to touch this one with a ten foot pole- all the potential resettlement sites are already owned by someone.
Wasn't Ben Franklin who said, "Democracy is two wolves and a sheep debating what's for dinner"?
Its obvious true democracy doesn't scale up, and is impossible without intelligent and enlightened full membership. Heck, some of the most dysfunctional quasi-democratic systems I've seen are in universities. Prurient interest trumps democratic interest every time.
I realized the ineptitude of group decision making years ago when I came to see the axiom "A giraffe is a horse designed by committee".
If one is looking for a sustainable path to the future, it does not lie in our existing paradigm of individuals participating in the body politic, whether it is democratic or authoritarian, living on a spaceship. It will be when we come into awareness that we are part of one larger organism. There are many ancient names for this organism so we don't have to get creative here; but there is one missing, or forgotten element that is central to living within this organism/consciousness/universe, which is free will.
This is not the free will of the Second Amendment, but the free will of the spirit and consciousness independent of politics at any scale. But I digress...
As Einstein said, "We cannot solve the problems with the same thinking that created them". (I paraphrase, but you get the idea).
I severely disagree with this. The California experiment with direct democracy via propositions is far more gamable by special interests than the legislature. This is largely because the only souce of information for most voters is big money TV advertising, and this is the province of big money sepcial interests. It is pretty easy to package something in Orwellian fashion as the opposite of what it seems, and fool enough low information voters into going along. It is precisely too much democracy, with too little truth in advertising which is leading Califonia to ruin.
The easiest way to limit the influence of special interest groups and minorities is to have compulsory voting. That is how it is in Australia - of you don't vote, you get fined. It is right, and an obligation, just like paying taxes.
And for democracy to have any hope of being representative, it needs maximum participation. At least that way, you get the true opinion of the country, on election day.
The idea of a participatory democracy has been around for some time, and with internet technology, it could be done, but I don;t think it is a great idea. California has a sort of half and half, but they only get to vote on propositions at election time, which means action on certain things can be stalled for years.
One of the main reasons I am a proponent of "smaller" government is that if it has less money to spend, people (incl corporations and special interest groups) will spend less time trying to get a piece of a smaller pie. But that seems to be wishful thinking these days, as governments of all countries seem to think they know better than anyone where money should be spent (which seems to be everywhere!)
Not only is voting compulsory in Australia (with some 95%+ participation) - but it is also preferential voting, unlike FPP in the US and the UK. Preferential voting (where you list your preference for the candidates from 1 to n) means that the least disliked candidate in each seat will be elected, once they achieve 50%+1 of the vote ... as it should be. Once you've lived in a preferential voting system, FPP looks quite barbaric, and certainly undemocratic.
Until a couple of years ago, Louisiana had an open primary system.
All candidates, R, D, I, Green, etc. ran in a common ballot. If no one got 50%, the top two ran off against each other.
Not as complex as Australia, but I like it.
Alan
The "least disliked" is a good way of putting it. Often, there is no candidate that I'd want to represent me. A mandatory voting system should allow a "none of the above" vote. It's even conceivable that "none of the above" could win, in some constituencies. I wonder what actions that would drive.
As these kinds of elections are for a national government, the overall votes should count to some degree. In New Zealand, we don't have a perfect system by a long way, but you get to vote for a local candidate and a national party. The parliament is then made up, roughly (though not exactly) of parties in proportion to the national vote. Even a preferential voting system could, in theory, result in a national government that doesn't reflect the popular vote.
Hi Len.
And from your comment downthread:
These points got me thinking, because they tie together in interesting ways.
"In my experience, nearly everyone else is as capable as I am of understanding complex issues." While this may be true on the surface, it breaks down in practice: no one can understand all the complex issues that face them, and people vary in their abilities to understand multiple complex issue swarms at a time. They vary in their abilities to see long-term patterns, and can also be overwhelmed by their emotions. They may be unable to delay the need for immediate gratification.
Corporations, on the other hand, can follow far more of the complex issues that they face in far greater depth, and can make investments that don't pay off for decades. They are never overwhelmed by emotion. I see them as having an apex predator point of view rather than a sociopathic point of view.
It is for this reason that corporations are so heavily involved in the political process, and so successful at it. The problem is not that the enligthtened masses capable of understanding the complex issues of the day are being kept from expressing their views, it is that those masses have to make a 3.7% turnover on their cold calls to sell windows and doors to you during dinner, and therefore don't have the time or energy to read 10,000 words a day on peak oil (or anything else). There's laundry to do, and kids to help with homework. But boy, those baby seals are cute...how could supporting people who like baby seals be bad?
As for the Mass media (and particularly TV), they are an entertainment system, not an educational one. The audiences for PBS in the states and TVO and, to a lesser degree, the CBC up here, as compared to the commercial networks, makes the point obvious. If it were possible to get the public to engage in learning about complex issues, then the newspapers wouldn't be losing readership. (I suspect the readership of TOD and similar sites is an aberration, and the narrow focus of the subject matter is problematic in view of the fact that we may wish to follow local and national issues as well: there is, as I noted above, a limit to the number of topics one can follow in detail.) This is the crux of the problem: What's important? What should I read first? Who do I trust? How much detail do I need to make a decision? How will this affect things 25 years down the line?
I think it may be a good thing that those who are overly involved in the lives of Brangelina and the Octomom and who obsess on American Idol only get to vote every four or five years. The side effect is that I only get to vote every 4 or 5 years...
First, I agree with much that you say, in fact more than many above, esp. those promoting authoritarian government. That's been tried, and to date, EVERY time Stalin has killed off Lenin, Papa Doc or Baby Doc winds up in control of Haiti. Those who think the sad state of Haiti is a result of it's having more democracy and less authoritarianism than the Dominican need to read some history.
In the space available, i wasn't able to include my solution to your objection to true democracy, which I believe also addresses the failings of California's system. What I propose is a modified hybrid "True / representative democracy". The difference is in how the representatives are appointed. A central computer repository stores "vote assignments" from any individual to any other individual for any time period, non-specific, which the voter may review and change at any time they wish. I may choose to assign my vote on energy (ministry issues) to Nate, on finance (ministry issues) to Gail, on economic (sub-ministry issues) to Ilargi, on agriculture (ministry issues) to OFM, etc. etc. In that case, I no longer am allowed to vote on legislation in the assigned ministry, but however Nate votes on energy ministry legislation now counts as two votes. I can review his voting record any time I wish, and change if not pleased, even at five-year intervals if the present "representative" system pleases me. Nate formally gains nothing from having my votes assigned to him, and must abstain from any vote in which he may have a conflict of interest (enforced by an ethics department with adequate budget recovered from present costs of running parliament / congress), in which case assigned votes are lost.
It works.
Hi Len.
Thanks for replying in detail. An interesting concept: essentially subject matter experts as block captains, presumably campaigning (and corresponding) to extend their influence and reach. Considering the back and forth of committee work, it does start to seem unweildly; what about the time element? At what point do the vote agregators have to see bills in process? What about secrecy?
It also doesn't totally remove the unpaid work element of the equation. Perhaps a tax break depending on the number of "followers" one has? And a cap on the number you can represent on an issue(to make it difficult to corporatize?) I worry about the addition of a new political class, especially one with such a low bar to entry. As well, the potentially transitory nature of the support is truly frightening...at a time when we need to make decisions about the long term future, the idea that a concentrated twitter/Facebook campaign can get William Shatner considered as Governor General (at least in the media) gives me pause...I would want one's proxy to last a stated time (minimum quarterly)and for all proxies to be assigned on the same day(to avoid fluctuating support.)
Lloyd
One problem with that is that the "authorita" in charge might end up being someone like drill,baby,drill Sarah Palin. Enlightened dictators are in short supply.
Except that unsustainable stuff like "Drill, Baby, Drill" won't last as it's, well, unsustainable. And when we're at the point that things have fallen apart that we are able to implement new political structures, the Palins and other proponents of growth and BAU will have already been discredited. The bottom line is that whatever policies that are proposed will have to actually WORK, and ideas that don't work and the rulers that try to implement them won't last long.
Antoinetta III
"ideas that don't work and the rulers that try to implement them won't last long"
This wonderful concept doesn't seem to apply to many third world dictators, particularly in Africa.
If you have a big enough and brutal enough military/goon squad, you can quell any disturbances that arise from your inane and greedy policies.
For one example, read Peter Maass's second chapter of his book "Crude World" about President Obiang of Equatorial Guinea--the chapter is called "Plunder." 'nuf said.
Absolutely wrong, period, the historical record is full of evidence. EVERY time (that I can recall from history) that a dictator's failed policies begin to cause unrest among the people, their reaction is to increase police and military power and authority. When was the last time you can cite where a people became so upset with their dictator / king / etc. that they had a revolution, overthrew the dictator, gained unchallenged total power, and then voluntarily instituted a new "more enlightened" dictator? People do tend to learn eventually, and this has been one of the foremost lessons of history.
I subscribe to David Korowicz's view that cheap energy has resulted in a non-resilient complex system that cannot be gradually unwound. To avoid collapse we need to conciously replace our existing inefficient system with a new system that makes much better use of natural resources. The best (and perhaps only) concrete plan I have seen is Jay Hanson's America 2.0. I can sort of visualize how a populace movement could force a separation of corporate power from politics. But I have a tougher time seeing how we can eliminate our market systems as Jay says is necessary. I'm not optimisitic about implementation but it is nice to know there is a solution avalable if enough people wake up.
ROCKMAN stated: "To be cruely honest I don't really care to hear about another "solution" unless it includes a method to garner significant public/political support."
The answer is below:
http://en.wikipedia.org/wiki/Deliberative_democracy
Just another proposed political "experiment".
Requires more informed participants than exist, too complex for a de-complexifying future; in other words just another distraction from our problems and a huge waste of time and energy--while Rome (now the planet) burns.
Antoinetta III
Speaking of Rome.
We need a benevolent despot like Caesar Augustus.
Yes, you are probably right. Too bad though because that means we are screwed.
"Requires more informed participants than exist"
Doesn't that mean that 'informing' more potential 'participants' is exactly what what we should be doing?
I think Bill McKibben got part of the picture right (in one of today's Drumbeat articles) when he said that different areas are going to have to come up with their own solutions. He was specifically discussing energy, but I think the same applies to governance. In his recent book, "Eaarth" (intentionally mis-spelled to emphasize that we are no longer on the world we once inhabited), he points to local deeply participatory democracies in early New England (and still, to some extend, in Vermont) as models of effective self governance in a context of relatively low energy inputs. He also does a nice job of tracing how these early intensely local identities turned into present day imperial USA, and how we have to figure out how to mostly devolve back into more local resilient locals.
Interesting that he, a long time liberal, is sounding quite a bit like some folks that are usually branded right wing. Are we coming to a place of convergence on some basic goals for dealing with the perils complexity has lead us into, goals that may appeal across the political spectrum?
It doesn't require "informed participants". You obviously haven't looked at the definition. It simply requires people who give a damn and have open minds.
Hi Rockman,
Thanks for the opportunity,
re: "To be cruely honest I don't really care to hear about another "solution" unless it includes a method to garner significant public/political support."
Our effort is to first direct the National Academy of Sciences (NAS) to actually address the *one missing study* - global oil supply decline, impacts and policy options. Please see www.oildepletion.wordpress.com for details, and also you can search for previous article on TOD.
The idea is: Action requires a common frame of reference. This can be supplied by the one entity that's instructed to give the Nation advice on matters of scientific import.
They currently avoid "peak oil." Why?
The NAS has to be directed in order to undertake a study.
With a study in place, Alan, Rockman and everyone else can submit anything they want.
The NAS will give our country the impartial and objective platform on which to plan.
As it is, even local bodies have nothing solid to point to as justification for reasonable "peak oil" preparations. For example, within 5 miles of where I sit: the city is putting the finishing touches on a...NEW AIRPORT! Horrors. Then, in the other direction, is the NEW SKATING RINK! What? For what?
Well, the idea is to have the NAS weigh in. This provides rationale and a way to proceed, especially as we get into the "remorseless decline" to quote Campbell.
Excellent, thank you.
There may have been just 100 in attendance, however, those folks talk to another 100 and so on. Furthermore, as events unfold in clue like fashion, the talk resumes.
"However, I do think it significant that Kathi's comment and my surprise experience may at least point to something of a beginning of a trend. There seems to be a group who is growing in awareness of the real issues we face today."
I think there is a visible trend of reporting and listening to the concerns about energy and sustainability. Unfortunately, I also believe there is a deliberate effort made to keep these issues hidden in order to maximize profits and investment opportunities. For example, Buffet saying not to pick on Goldman, "it wasn't their fault". How many shares did Buffet pick up and why would he say this?
Cynicism is not too far from critical thinking. Maybe it is a valuable shortcut.
Respectfully, Paul
Agreed. This is one of the most promising things I've read this year. Congratulations George for getting to such a high level audience and great job for giving them things to think about.
Really, I think the price spike up to 2008 and the economic crash that followed probably woke a lot of people up. There are certainly people who think those were unrelated, or both due to speculation, but the recent rise to over $80 per barrel again has to make people think. The coal mine explosions around the world and the Gulf oil catastrophe can't have hurt.
Peak oil and net energy are serious issues. The sooner the business community comes to grip with them, the better the chances of a smooth, or at least less than calamitous, transition.
I gave a presentation in San Francisco on Thursday of last week, and my slide-deck and talk dealt with the same issues. I explained the history of California transport systems, and how the current system was built out on 14 dollar oil between 1945 and 1970. I used historical and current data for counties like San Bernardino, to illustrate overall economic sensitivity to higher gasoline prices. In addition, I suggested in a more academic way that California as a culture currently had no transport plan outside of continuing automobile/highway build out. As a backgrounder, I showed that the developing world has turned to coal, not oil, to fund its growth because there is simply not enough of a supply response in oil to fund developing world growth rates which demand significant increases in energy supply. By the time I asked: do you think California can fund growth using oil, from this point forward? my work was essentially done. The Q+A lasted an hour, with several people still wanting to talk afterward. I was amazed I got no blowback from this group. People were from many of the local investment banks, research houses, and mutual funds/money management industries. They all wanted more of my reports.
My take is that its easier for individuals to grapple with challenging material like this, if the setting is conducive. However, as part of larger groups the individual will lean away from acceptance of the net-energy situation and economic descent, and will be pulled inexorably into the views of their tribe. As always, we are intellectually constrained by social demands.
That said, it's very encouraging to hear your account of this retreat. Thankyou.
G
Thank you for the report and encouraging insight. I've often thought about the implications of decline from individual, family, and community impacts, but I've not thought of what the corporate impact would be. What if the "nose under the tent" lead to a "great awakening" on the corporate front - what would that look like? Did any of the executives you spoke with suggest business paths that would replace the growth paradigm for their business? How many companies would it take to create a tipping point of driving a new paradigm of "sustainable corporations" rather than BAU of growth, Growth, GROWTH! (and picture pounding fist on table in boardroom.)
As I drive around Austin and surrounds, I see an incredible number of brand new and older strip malls with multiple empty leases - and we haven't been as hard hit as Detroit or much of California. To me it's a confirmation that we have begun the stair-step decline described in "The Long Descent", rather than a massive collapse several here posit. However, that's not to say continuing BAU won't result in the big collapse. As long as the economy is propped up on the huge fiat money machine that has little connection to real world activities, and growth is the mantra, the odds of collapse increase.
I hold out hope that events such as you described where some portion of the corporate community becomes aware of the limits of perpetual growth which leads to actions that soften the landing. (I've always been a bit much of an optimist though...)
On the basis of "the bigger they are, the harder the fall," my take is that there will be a stairstep descent, and that it will feel like a series of massive collapses, interspersed with smaller ones.
A review of historical events from the past 12 years plus would seem to indicate that the U.S. has been preparing for the big one; measures have been taken and systems are in place, from all appearances (that means "in my humble opinion"), to declare a state of emergency, suspend habeas corpus, declare martial law and lock things down should violent uprising occur. These would include riots (food, gas, jobs, etc.), and revolutions - generally any civil insurrection. FEMA and DHS would be the administrators, and rationing and curfew would be the order of the day. Preparations began in the late 90's, and have been discussed more or less frivolously from time to time. Of course, no admissions have been made.
Most of the preparation has been above-board, by empowering agencies in the event of [riots, disasters, etc.] to take the needed actions. Recent reviews of Dick Cheney's activities and statements have been indicative of direct WH involvement, IMO.
In a way we should feel good about this; at least it would show that the PTB are aware. Not so good is that they have done little to correct the situtation in a constructive way, other than to 'secure the oil fields' in Iraq (so the military would have fuel for later occupations and FEMA/DHS for the homeland.
In any event, it is unlikely that we will be happy with the outcome. 'Descent' or 'collapse' will be a distinction without a difference.
Craig
There will be, I think, relatively little stair steps down (we just went through one) but at least one or two big ones, too.
The current system is unstable and getting increasingly so. It will reset to a lower level of activity; it just needs a triggering event.
The exact conditions present right now that allow us to gather the capital to fund one billion oil rigs will disappear. When that happens, we won't build just 2 oil rigs instead of 10. We will likely not be able to build any at all.
The same thing happened with the nuclear industry in the U.S. It was entirely privately funded (I'm referring to the period after the government had spent lots of money demonstrating the feasibility of the technology). Then, after a number of incidents (including large bond defaults), the money dried up.
Now a nuclear plant cannot be built without government loan guarantees.
I think we'll be surprised at how things can change literally overnight.
Got a great chart for your collection Aangel
"Exponential Growth and Depletion: Chart of the Century"
http://www.benzinga.com/256966/exponential-growth-and-depletion-chart-of...
That's some snazzy chart, for sure (and very evocative). Thanks for pointing it out!
The two industries explicitly mentioned in the article were cruise lines and package delivery.
Personally, I will see the cruise industry disappear with mixed emotions (since I used to make twice as much doing my show one night a week as I do now working two jobs usually seven days a week), but really, what would the path forward for such an industry? The report associated with the second Oil Shockwave exercise in 2006 (see my "Who's talking about the peaking of world oil production - And what they're saying") basically already predicted their demise. But the industry response has been newer and bigger ships, as if there is no end in sight (and such things as Royal Caribbean's contract with Jamaica to build a new pier in Montego Bay). They do have some palliatives - e.g. RCCL having some sort of research lab on board its Voyager class ships - and plans to eliminate the ship-generated smog in Skagway, AK by means of hydroelectric generation for while the ships are in port. But Reality is not so easily appeased. The fact is that the industry is highly dependent on three unsustainable quantities (in order of increasing importance): (1) its own intensity of fuel use, (2) airlines, and (3) confidence.
As for package delivery, presumably there are more sustainable relations of scale and means of delivery, and maybe half-measures from the corporate leadership might actually make some kind of difference, though it's hard to say how much. But the core difficulties from not having planned for a viable future will come from other areas - making things, providing food, etc. Any indications of progress on the corporate front in these areas?
Maybe sailship cruises? Very high-toned and fancy, perhaps twenty super wealthy passengers per three-master?
For most of the history of the United States, it was called 'the post office'. They were even the first to develop high-speed delivery! It was called 'the Pony Express'.
There was a smaller breakout session later in the afternoon that was partly formed to talk about how companies might organize to model living organisms wherein the latter grow to maturity and then stop growing. In that conversation we noted that until the concept of profit is properly understood (esp. the size of profits relative to real value added) and public ownership (through stocks) is ended there is little that we will be able to do to organize corporations like organisms (note we are talking about individual organisms and not populations). The operating paradigm of capitalism and corporations owned by shareholders is to MAXIMIZE shareholder wealth; NOT OPTIMIZE shareholder wealth. The latter implies securing an income stream that protects earned wealth as it decays over time. But with the notion that profits should be unconstrained in order to maximize, companies are compelled to have a balls-to-the-walls attitude. Private companies are only subject to the desires of the fewer owners. There have been examples of relatively more enlightened owners who are satisfied with nominal but reliable profits and don't necessarily seek growth. Unfortunately those businesses (and markets they operate within) are few.
But the real problem is more complex since individuals (or a combination of two individuals) do continue growing in the sense of reproduction and continued increase of biomass in toto. Only external countering forces (e.g. predation) can check internally unregulated growth. Both humanity as a species and our cultural entities like corporations have transcended that natural check and so continue to increase population (on the species side) and spawn or grow corporations on the cultural side. Until we figure out how to instill internal regulations on our growth, as our individual bodies have done through evolution, we are likely doomed to continue to chase profits and growth all the while consuming dwindling resources.
"we are likely doomed to continue to chase profits and growth all the while consuming dwindling resources."
Yep, capitalism turns out to be probably the most efficient mechanism ever devised to use up resources and fill up 'sinks'--i.e. to trash the planet.
You said many of those attendees did "get it" but the questions about how declining net energy will affect their corporations implies that they didn't "get it". If our aim is sustainability (if not, collapse is certain), then it seems self evident that the profit motive must go, as that drives growth.
I can't see how new businesses come into being, unless old ones, fulfilling the same role, go out of business. The same with growth up to some mature level - it implies the decline of a similar business. The market for a product or service cannot grow, in a sustainable society/economy, once it reaches some level. Beyond that level, growth dictates collapse.
I suppose it's like a sustainable population; the birth rate must not exceed the death rate. For a sustainable society to operate with what we might recognize as businesses, the birth of businesses must not exceed the rate of business closures. Alternatively, the market for any good or service must not grow.
Good article. Thanks for the insights into your experience. I'm not really much surprised the way you were at the reactions of these people. In my experience, nearly everyone else is as capable as I am of understanding complex issues. The difficulty is the huge propaganda machines which we collectively voluntarily support (mass media). I think out best hope is that "mass" communication dies a well-earned death, replaced by personal interactions and interactive media such as this. We need to work on that.
Thanks George, as I have been following your work with interest.
I share Rockman's skepticism, from someone working with Transition in Marin, where this conference took place.
I'm with you and Rockman - highly skeptical that any real "plan B's" will actually be embraced and implemented by TPTB.
When it comes to real change, nothing will happen until Nature forces it to happen.
Having said that, it is very refreshing to hear that at least some of the "soft power" people are waking up.
Question - was CERA invited to this retreat? If so, did anyone bother to go to their presentations?
The case for EROEI is still completely unproven by its advocates.
It hasn't even been properly debated at TOD.
Technology has lowered the EROEI of wind, coal and raised the efficiency of
energy transformation.
Ethanol production is growing despite the reduction in the blender's credit on Jan 1 2009.
http://www.ethanolproducer.com/article.jsp?article_id=5309
The EROEI theory has failed in practice.
In basing his whole worldview on such a fringe theory the presenter will undermine real issues like depletion by concompounding it with EROEI.
Take this red herring off the table!
Say, I've got an oil well for sale that you might be interested in buying.
The well pumps $1 worth of oil for every $1 you spend on production. I'll sell to you real cheap!
No Really, is it a deal?
That reminds me of an old SNL skit in which someone has an idea to start a business that makes perfect change($) for people. They asked him how he expected to make any profit and he answers "One word, volume."
LOL - thanks for reminding me of that skit. One of my SNL favorites.
$1 is now a measure of energy? My engineering school never mentioned this, could you please provide a reference?
How about 1 joule (or whatever measure of energy you want) of energy extracted for every joule of energy invested in said extraction.
Antoinetta III
21 billion joules of bituminous coal costs ~$50.
21 billion joules of natural gas costs ~$120.
21 billion joules of oil costs ~$320.
If I could invest 21 GJ in coal and extract 21 GJ in oil, I'd make $270 profit.
"If I could invest 21 GJ in coal and extract 21 GJ in oil, I'd make $270 profit."
majorian, unless your process converts at 100% efficiency, you could not extract 21 GJ oil with 21 GJ coal.
So, as I said, my well produces $1 worth oil per dollar invested in production. Will you buy my oil well or not?
(Also, thank you for helping reservegrowth above understand conversions so he can figure out the concept of $/unit energy. His engineering school did not teach him this.)
No, I could.
One method would be to apply ~18 GJ of coal heat indirectly to oil shale to slowly cook out the shale oil. The process net energy positive. The coal could also be converted to electricity and be used to heat the shale in Shell's method.
I could use the coal to distill ethanol which substitutes for gasoline.
I could convert coal to hydrogen gas and use the hydrogen to upgrade mined bitumen to syncrude(currently natural gas is used at the rate of 800 cf per barrel). 1/10th ton of coal could provide that much hydrogen.
Obviously the energy of coal can produce oil
most efficiently by turning low grade unconventional oil into petroleum products.
Oil refineries use oil to make oil but also use some piped in natural gas.
Use your imagination, aardvark.
You're right, that was a dumb comparison.
So EROEI doesn't matter if a profit can be made (e.g. D-batteris), and/or there are not limits on whatever energy inputs you choose?.
Is that correct?
No, just that as I've also pointed out long ago similar examples to above, EROEI is a LOT more complicated a question than many here make it out to be. You attempt at confusing the issue with an irrelevant reply is only one example.
I know EROEI is a LOT more complicated that it appears. That's why I'm asking these questions. Please don't confuse my confusion with an attempt to confuse the issue ;)
I'll go back and read old oildrum articles on the issue of EROI and stop pestering you guys with silly questions.
I like natural gas myself because its a wonderful money maker with a EROEI<1. Using an energy equivalence of approximately 6000 scf to a single barrel of crude, you take the 10,000 scf necessary, at a cost of perhaps $50, and turn it into a barrel of synthetic crude worth $80.
Now you've got a profit making exercise with an EROEI<1.
It requires someone who thinks that energy is money to fall for this line of reasoning. Certainly during the decade I spent exploring, drilling, cementing, stimulating and producing wells I never once calculated EROEI to determine the economic value of a project. I can just imagine the look on the reserve auditors if I tried to explain how an EROEI deficient well making me $1000/month should be plugged immediately, let alone what the owner would say to such a ridiculous idea.
Just because you didn't make this calculation doesn't mean that society shouldn't consider EROEI when evaluating various routes forward. Money has whatever value society puts on it which can obviously change a lot and quickly, so it is not necessarily a good tool for comparing various energy sources at various times...
Society should consider all sorts of things when evaluating routes forward....and doesn't. Some of those at least make sense, racial equality, health care for all, education for those who want it, etc etc. EROEI doesn't qualify. Some country with stranded natural gas can make the investment to convert natural gas to liquids for the next century and make money on an EROEI<1 process. Whereas Japan might save the 40% conversion loss and simply produce hydrates into regular NG transmission lines and pipe it to the mainland...not because of EROEI, but because they already have an economy and infrastructure built to accomodate natural gas and can use it more efficiently by avoiding the conversion loss.
Money works great for what it was designed for. It just doesn't have the relationship to energy that some might wish.
"Some country with stranded natural gas can make the investment to convert natural gas to liquids for the next century and make money on an EROEI<1 process. "
So EROEI doesn't matter assuming: 1)you have an essentially inexhaustable supply of one energy source for an input, 2) as well as no limits to production of that energy input (i.e the supply for the input source is always in excess of the demand), and 3) the price paid for the energy returned is sufficient to "make money"? Is that correct?
And if any of those factors change - the input source is not inexhaustable, there are limits to production of the input source, and/or the profit margin disappears (declining demand for example), does the EROEI matter then?
1) Fossil fuels aren't inexhaustible and I certainly didn't say that,
2) I certainly didn't imply anything about a supply/demand configuration related to 1)
3) I certainly didn't say anything about what a "sufficient" price for energy is, using only current pricing to make the point as to possible profit margins in an EROEI<1 system.
So no, your statement is not a correct representation of my post.
EROEI is irrelevant as a measure in any economic system I am familiar with. Admittedly, my economic experience is concentrated in oil and gas project economics, field economics, cost/supply calculations, proved reserves and such. Are there examples of EROEI being used in any other economic system as the primary criteria for green flagging a project? I can't say I have seen any presented around TOD, but certainly TOD does not define the known universe on the topic.
What if your economic system changes because there are limits to those things you are used to being inexhaustable for energy invested? Either because of limits of production of the energy source (e.g. coal) you use for investment, or because of dramatic increases in demand for your source of your energy invested (e.g coal) from sectors of the economy that are switching (twitching) to coal because their former energy source (e.g. oil) is declining in availability, or became too expensive?
I'm not trying to misrepresent your point. I'm asking if EROEI did not matter in the decade you worked because at that time there were no serious threats to the supply of energy invested.
Does EROEI become a factor going forward in a world with declining net available energy?
I think that my 10 year snapshot of industry was long enough to make some blanket statements about the use of EROEI within industry. Certainly no one was claiming EROEI was the reason for "serious threats to supply" during the 70's energy crisis, and I haven't seen anyone doing it at local, national, or international conferences on either side of the isle ( SPE or AAPG ).
Of course not. In part because you use the word "energy" instead of oil, I don't believe anyone is advocating that peak solar will occur in the near future, and fossil fuel usage is just a rounding error in any calculation using "energy" available to mankind rather than talking about a particular subset of energy, like fossil fuels.
Agree. Trying to confuse energy issues by claiming some phantom equivalence between one particular form of energy (not even the most significant one energy-wise worldwide) with one particular form of currency (the $US which recently has had a wildly fluctuating relative value against all other currencies worldwide) is so obviously pointless as to be called a fool's game.
Energy has a lot of attributes relevant to it's economic value. If fossil, there's
1) the cost of discovering the resource
2) the cost of acquiring ownership of the reaource
3) the cost of building the infrastructure needed to extract it (wells, pipelines, loading terminals etc)
4) the ongoing "cost of lifting" and delivering
5) the cost of converting it into a marketable form (upgrading, refining, sweetening)
6) the cost of seasonal storage operations (natural gas)
7) the cost of retailing / distribution
8) many others
other more general attributes include
a) the energy's quality (what maximum temperature can it generate in use)
b) the energy's portability (how costly is it to carry and use to power transportation vehicles)
c) the energy's storability (eg. electricity vs. diesel fuel vs. biomass vs. solar thermal store)
d) the energy's costed environmental footprint (SOx, CO2 etc)
e) the energy's uncosted environmental footprint (mountaintop removal etc)
f) sustainability questions of the energy source
g) sustainability questions of the capture infrastructure
g) sustainability questions of the use infrastructure
A single money measure such as the $US which has lost near 50% of its value this decade is a poinless attempt at oversimplification.
I certainly agree there are many variables that could be included in calculating the energy input, or the energy output.
I'll have to go back into the OilDrum archives and review past discussions on EROEI.
Thank you for your patience.
"fossil fuel usage is just a rounding error in any calculation using "energy" available to mankind "
I think you are confusing yourself here. We are talking about the energy we can actually harness for work, not the total energy available from the sun, or the total energy available in the Earth's mantle and core...
Is energy from fossil fuels "just a rounding error" when you measure the actual energy sources mix we currently rely on to fuel our civilization?
"No one is advocating peak solar..."
Again, you are confusing yourself here. Most people are intelligent enough to make the distinction between the amount of solar energy we can collect and convert to usable forms (e.g. electricity), and the total amount of solar energy that hits the earth.
Would you also suggest no one is advocating peak geothermal energy too (i.e do you include the energy from the earth's core and mantle in you energy calculations - so that fossil fuel consumption becomes a rounding error?).
This is getting silly.
You dancers on pinheads become tedious. His meaning was clear, and clearly correct.
Lengould, his meaning is not clear to me.
Is he counting total energy available (solar and geothermal) or total energy we can capture and actually use?
Are fossil fuels a "rounding error" when we count the sources of energy we use to run our civilization?
Simple question, easy to clarify for dunces like me ;)
aardvark, you're right to question such views. I've no doubt that businesses look at profit rather than environment, when making investement and development decisions, but that doesn't help the environment. To not consider EROEI is just silly from an ecological standpoint.
The assumption that humans can extract energy from any source (and, by the way, do so without consuming any more limited resource) at whatever rate they choose is blinkered. As environmentalists say, you can't do just one thing. We need to consider the impacts of diverting natural energy systems (all of which are currently fully utilised in natural systems) for our, usually wasteful, lifestyles.
Unfortunately for us humans, most of us don't seem to consider the impacts of what we do. Economic growth and wasteful lifestyles are much more important.
The energy from the sun can be, and is, "actually harnessed for work". The original quote was "net energy", and certainly the amount of "net energy" from the sun overwhelms all others in magnitude, regardless of whether or not we humans decide to harness any portion of it at any particular moment.
If someone says "energy", it is unreasonable to pretend that only a few favorites of the total available should be counted. Certainly the economics of such energy is a different question of course, but no cost/supply curves for this "net energy decline" were provided or referred to.
Calculations on net energy from the sun?
Calculations on how much solar energy can be safely and practically harnessed?
Well, the authors of the Desertec proposal state
(note: above based on 15% conversion efficiency solar radiation to electricity, easily presently attainable with existing trough or tower technology).
(note: I assume these figures state raw energy, not converted to electricity at 15% efficiency, but still, less than a year for 5x proven reserves all fossil)
Clean Power from Deserts - The DESERTEC Concept for Energy, Water and Climate Security WhiteBook · 4th Edition
Certainly their proposal for the MENA project, supplanting all Europe, North Africa and the Middle East's electricity generation with solar electricity from a patch of the Sahara about the size of a postage stamp on a full-page map of the Sahara as well as providing desalinated water for all the dry regions surrounding the Med, is accurately engineered, do-able with present technology, economically viable, has sufficiently high EROI, uses primarily glass and aluminum which are just sand with energy added (the solar generation returns its energy invested in about 3 months based on their used 15% conversion efficiency solar to electrical).
The only reason we're not doing this now is because so far we haven't percieved that we need to.
Sorry, but this appears to answer neither of my questions.
How much energy has to be expended in collecting and distributing energy from the sun? That is, what is the net energy?
The sun's energy is not un-tapped; 100% of it is currently employed powering the earth's natural energy systems and its life. So the correct term might be "divert" instead of "tap". Consequently, my second question had two parts. given that other resources are needed to divert solar energy to our requirements, is there a practical cap on the rate of that diversion? Lastly, given that solar energy needs to be diverted from other uses, where are the comprehensive studies about the maximum safe rate of diversion (I've seen one or two very limited studies on specific projects)?
The Sun pumps out 65 million watts / m^2. The Earth gets hit with perhaps 1000 watts / m^2 during some portion of a day?
While I'll admit that my math basics have atrophied somewhat over the decades, I'm pretty sure that 1000/65,000,000 isn't 100% utilization.
If you are implying that a Dyson sphere is involved in solving mankinds energy problems, I would venture that such a solution might be viewed as a bit "down the road", particularly considering the sheer volume of fuels and resources still available for our use.
As to your interest in net numbers, I think the basic calculations demonstrated for the sheer abundance of energy available tends to negate the value of the question. Mother Nature wastes 99.9999% of every watt of output in transmission and yet manages to power every system on the planet with the 0.00001% which arrives. Terrible net number...and yet even that miniscule amount is feverishly wasted by humans on melanoma and heating up houses....which they then burn fossil fuels to cool back down. Ridiculous behavior on our part, but it will certainly change exactly when change is required, and not a minute sooner.
Jeez, I would have thought it was obvious that I was talking about solar energy that currently hits and is retained by the earth.
Mother nature wastes nothing. Waste is a human concept.
Sorry.....I thought you might have meant that, but it certainly wasn't clear. After a few years of technical writing and the peer review which comes with it, reading and writing become a very literal exercise.
Thanks for the figures. I thought the statement I had made earlier was common knowledge around here, and certainly didn't require the proof you so amply provided.
And your conclusion is obviously spot on as well.
Ya know, majorian, try as I might I can't figure out why someone who thinks that EROEI doesn't matter wastes his time posting on TOD. If EROEI doesn't matter, then Peak Oil is a non-issue and we should just get on with running the economy on cheap vodka and PV panels.
BTW, I can dig enough coal from any one of a thousand Appalachian road-cuts to heat my house for a winter, and I can do it with a $15 pick axe from Wal-Mart. Which might explain why coal is somewhat cheaper than natural gas or petroleum -- no billion dollar floating oil platform needed. Which also might clue you in as to why EROEI matters.
Stop muddying the waters. We have enough people doing that.
If a belief in EROEI was required here I probably wouldn't be here but I think this site is about depletion.
EROEI says that we will run out of energy because every year it gets harder to extract it.
In the old days where hundreds of people worked in a coal mine, today its a few dozen and of course more efficient machinery has replace the antiques.
EROEI doesn't make any sense.
What if the source of energy for the efficient machinary declines in availabity and/or rises in cost? Is there a limit at which EROEI matters then?
You're missing the big picture.
Why do the EROEI folks make such a point of their theory?
Because it 'proves' that the world is on the verge of total energy collapse.
Except it doesn't.
It depends on the thermal efficiency which goes into making the fuel as you can tell with the slopes. Highly inefficient transformational processes like the old steam engines were not EROI sensitive at all.
The lines represent efficiency of the transformational process with oil being at 80%(top blue) and electricity at 30%(yellow), etc. C/R is the system transfer function, that is the output btu of EROI per fuel input btu.
As you can see, high transform energy carriers are more sensitive to EROI decline than electricity but oil going from .66 at EROI 10 to a .5 at EROI 3(oil shale,tar sands) is not the end of the world. Even at 1.5 EROI a btu input is only half as effective as at an EROI of 10.
I do not understand what your graph is meant to represent, although a 0.3 efficiency (?) for electricity for any application I can think of is WAY too low. And 0.8 too high for oil except space heating.
Alan
Those figure might reconcile with the approximate raw energy in vs. net energy out?
R is raw energy in.
C is energy out to the consumer.
It is also the control ratio, C/R in feedback theory.
Consider that our system is a simple feedback loop with increasing EROI acting as negative feedback. Would dropping EROI cause instability? It seems unlikely as our current system is incredibly wasteful in energy.
Usually negative feedback justs slows things down rather than sending them spinning out of control.
Of course, our system is much more complex than that which again shows that EROEI is too simplistic to be useful as well as outright wrong.
The different lines are for different transformational(thermal) efficiencies to go from raw energy to a consumer fuel.
Going from crude oil to gasoline is about 80% efficient. Going from coal to electricity is 30% efficient.
The result here shows that highly transformationally efficient energy sources are more affected by dropping EROI.
Going from coal to electricity is 30% efficient.
Only old coal plants. Newer coal plants better still (Danish 40%).
Natural gas (that + wind are 90+% of new plants in USA in last 20 years) via combined cycle can be 60% efficient (GE H class) and mid-50% is typical.
Combined heat and power plants routinely exceed 50% and can approach 70% efficiency. Half the electricity in Denmark comes from CHP.
Falling water converts to electricity with 90+% efficiency.
Blowing wind likewise (but >10% of the energy flow is captured).
Nuclear heat is about 30% efficient (but we have found no other peaceful large scale use for fission heat).
Geothermal can get as low as 13% efficiency (with lower temperature sources).
The Energy returned on energy invested for ALL forms of electricity generation has been increasing over time. (
Examples, Hoover Dam is being reworked to increase electricity per given water by about 6% over 1930s tech; old coal plants operated at 1000 psi, 1000 F. Both higher on new ones.
I find your graph meaningless.
Alan
Obviously.
You are caught up in the delusion of efficiency.
CCGT can get 50% efficiency which helps offset high natural gas prices but that just encourages the quick depletion of natural gas.
CHP in Denmark was adopted after 1973 when oil was phased out.
You seem to use small unrepresentative countries Switzerland and Denmark to make your points. How much heat recovery could New Orleans use?
that just encourages the quick depletion of natural gas.
A problem not shared by your supposedly 80% efficient oil.
BTW, electric motors are 90+% efficient in every case I can think of. Gasoline ICE motors 0% to 30% (actual US average @ 15% if you include the vehicle mass. >1% if you consider the mass of the passenger).
The CHP for the University of Texas at Austin is 68% efficient and could be higher with new equipment, purposely designed. Low grade heat produces chilled water with absorption cooling.
CHPs can be throttled between heat and electricity production, depending upon the demand. A good thing !
GE's H series CCGT is 60% efficient. Order one today !
As noted, your graph lacks meaning and context.
Alan
""but oil going from .66 at EROI 10 to a .5 at EROI 3(oil shale,tar sands) is not the end of the world. "
So this is when production rates count ? If you can produce sufficient quantities of the lower EROEI (oil shale, tar sands) to replace the higher EROEI sweet crude, then EROEI doesn't matter?
Since the C/R ratio drops you need more R to get more C.
Yes, lowering EROI accelerates depletion of lower grade materials but not all that much.
In the hypothetical example, a world running on 75 mbpd of sweat crude would be equivalent to a world running on 99 mbpd of tar sands and shale oil. The world only have 37 years left of conventional oil 1000 Gb/ 27 Gb/a).
Unconventional oil alone would last 50 years(500 Gb Canada, 250 Gb Venezuela, 600 Gb Colorado=1350/27) but derating for EROI it would last (another)37.5 years.
Thanks for your clarifications majorian. Quite the hornets nest you stirred up here ;) But that is good - at least for my education. Time for a refresher course on EROEI for me.
Now if only we could produce 99 mbpd from the tar sands... (ignoring the ecological damage, etc).
And again, thank you for your patience (especially in light of my initial and any subsequent sarcasms).
The numbers for the Orinoco have recently been reevaluated.
http://www.usgs.gov/newsroom/article.asp?ID=2386
EROEI matters because we can't do anything without energy and putting in more energy, into anything, than you get out gets you on a perilous downward slope. Of course, some low EROEI might be of benefit, because of the form of the energy obtained, so long as the total EROEI for society (and its associated economy) remains at some high ratio. 1:1 means that society can't function. The higher the return, the more energy is available for societal complexity. I wouldn't expect to run today's society on less than a 10:1 return, probably not less than 20:1.
EROEI matters. It's the notion that it doesn't that has got us into this mess.
Actually aardy that's the biz model to some degree many of the public companies in the shale gas play bought into. And, in one aspect (share price growth) can work for a whle. until, of course, you're making $.80 for each $ spent. But you can't actually live with that for a while. I once spent $25 million to increase company revenue by $20 million. But the effort also increased the stock price from $0.50/share to $3.50/share. Don't ask me to justify how Wall Street works. It's distateful enough to just explain how it works.
LOL, Very good point Rockman.
As long as there is a sucker born every minute Wall Street will always have greater fools to sell too. Maybe the new shareholders will someday understand EROI.
Good work on this. My experience is that many governmental leaders are already aware of this but just don't know what to do and do not want to cause a panic. So, the topic of resource depletion is unspoken other than using the words "energy security." They also want to get reelected so to discuss this would be the kiss of death in an election. I am hopeful but continue to agree with many of the observations expressed by Rockman.
This is what I wondered, when I learned about Peak Energy, about the Bush administration. Did Cheney get this (being an industry insider with high-level visibility into many major's operations), and really think that putting a standing army in Iraq would give us a semi-secure source of oil for longer than we would have otherwise?
Of course, you are right.
That is exactly what Cheney and the NeoCons thought. He warned about Peak Oil when he was Haliburton CEO. The NeoCons advocated an Iraqi invasion before the election, and before W allowed Cheney to pack them into his administration.
Villainous fools, all!
Cheney was Sec Def during the first Gulf War under Daddy Bush.
The restrictions put on Iraq limiting their oil exports were to save the oil in the ground until needed.
No one ever pushed Iraq to come clean on the WMDs during the 1990s..Why? Because we didn't need the oil yet.
Baby Bush and Cheney decided it was time to get the oil so the second Gulf War was started under the guise of finally forcing Saddam to cough up the fictitious WMDs.
The whole 911 thing has many loose ends but I am not going there.
This is my speculation but it makes perfect sense.
George:
How interesting: More business people are actually “getting it” and aren’t panicked.
The sky is not falling, but the bad news is that “two shoes ARE dropping.”
First shoe: It is no longer just that peaking will set off economic contraction.
Second shoe: It is the hard physical science underlying net energy that undercuts the techno-optimism that still believes that "alternative energy bailouts" will allow us to easily resume our old ways of cheap energy “Business As Usual.”
I believe that all who understand "both shoes" need to remind business people that a decline of Capitalism (continued growth with the payment of interest based on growth,) does not mean an end of free market economies, just a dramatic restructuring of how free enterprises must operate to survive in a changed environment.
The clues to that trick are in the energy flow charts of a solar-based, steady state society.
For instance: this week’s recent Bloomberg article Leanan posted about "too cheap" wind power and the technology's low-cost energy potential may seem like bad news for bankers and venture capitalists, but it actually carries the seeds for the survival and prosperity of free markets and quite possibly even the modest growth form of a new kind of capitalism.
Cap'n Daddy
(Sausalito, gosh, tough job, but somebody's gotta do it.)
Despite the somewhat surprising openness of your audience this time, there's still a whole lot of incomprehension out there.
On RealClimate, which most folks here probably know is the place for climate science from climate scientists, the discussion often strays to energy issues, peak fossils, etc. I've tried to introduce some bare basics about the difficulty (impossibility?) of maintaining or improving the current economy as fossils decline, and some of the knowledgeable (about climate) regulars there truly do not get it, even after repeated tries. They think oil bad, sun and wind good, so let's have some more of the good, without a thought for interdependence, feedback, sources of capital, cost of using one form of energy to make or store a different form, etc etc.
I've recommended TOD and its references. No explicit sign that anyone noticed, but doubtless some of the quieter readers have done so.
As a reader of both TOD and RealClimate I'd say that the reverse cross pollination also seems to hold true. Both of these sites have their specific focus. IMHO, the people who come to TOD, in general, seem to have a better grasp of the big picture issues across the board.
Here is an interesting question. To an extent the audience is self-selected. They found the topic sufficiently interesting that they could make time in their busy days to attend.
Contrast this to a different audience who might have heard of the conference, but elected not to attend for one reason or another. That audience might have been more dismissive, but then again they weren't there so they couldn't give you this feedback.
There is a third audience out there - those that never heard of the conference ahead of time. We can't say as much about them except perhaps that whatever they have heard of the subject isn't grabbing their attention that they even go looking for this sort of thing.
Based upon the information that was made available before this conference, how much do you think this might have been a factor in the acceptance (or perhaps a better way to put it would be a lack of dismissiveness) of your message?
This would be hard to assess. I can only say that my impressions were formed more from the personal interactions and conversations rather than some kind of sampling of, say, Likert-scaled questions. Several of the people I talked with had prior knowledge of peak oil and its implications. Some didn't but seemed to quickly grasp the significance and accept the data. What really caught my attention is the degree to which they were willing to see the relation between net energy available for the economy (declining) and the effects we think this has had on the economy as a whole. That is the part that most impressed me since I've been used to the typical neoclassical economists arguing that energy (measured in dollars I suppose) is such a small part of the GDP that it couldn't have been the "cause" of the economic downturn. These business people and government analysts had no trouble seeing that turning down the energy input would turn down the work accomplished and hence create a disparity between real wealth generation and the phony wealth created from debt and treating bets as if they were real assets.
As far as the potential for framing error (your three audiences) I didn't mean to sound as if this were some kind of statistical sample. I have no idea about the selection process that gave me that particular audience.
One of my favorite books that discusses all of this is Frederick Soddy's "Wealth, Virtual Wealth and Debt" which I am recommending whenever I can.
Hi Jim.
Thanks for the reference. Being inundated with reading material already it would be helpful to me to have a two sentence synopsis of the book to give me a motive for taking a closer look. Otherwise it will end up as one of those recommendations that when I get the time I will look up on Amazon (if I remember!)
Yes, I can empathize with the reading loads.
This work by Soddy has been around since the 20's and in my view is a classic. A highlight is that real economic wealth is the ability to control the flows of useful energy and embedded energy. Governments can easily create money with the stroke of a pen or by turning on the printing presses but you can't create USEFUL energy....that is, low entropy energy. Money is just a "marker" for economic wealth and has no intrinsic value. Here is an ok summary of Soddy's work. You have to read the book to better understand Soddy's thinking. http://nesara.org/articles/soddy88.htm
It is also the basis for some of the arguments on behalf of ecological economists, such as Dr. Robert Costanza, and you can read the reference to Soddy in this interesting paper on our transition from an empty world to a full world and its implications. http://www.uvm.edu/giee/publications/Costanza%20Development%202009.pdf
Hope you get a chance to look this over. Keep up your important work!
Jim,
Thanks.
[then slaps head reading the first sentence!] I really need to have a stronger cup of coffee before logging on in the morning.
I haven't read the book, but I certainly know about Soddy and have read synopses including the Costanza link. My apologies for making you type the extra! But I will take seriously the suggestion to read the book itself now that you've raised the importance. Thanks again.
George
George - Good. From the many posts I have read of yours I think you would really enjoy this important work, though it is not always an easy read. I especially like Soddy's discussion of the unending march of entropy. I own and operate a business and have to spend at least a million dollars a year just to overcome second law degredation effects and stay even. We call it "maintenance CAPEX." It represents a very close and personal look at second law impacts.
later......BTW, I read your article on the future of capitalism which discusses all of this stuff including my maintenance CAPEX. http://questioneverything.typepad.com/question_everything/2010/04/the-fu...
This is one of the clearest explanations on this subject that I have seen. I am going to send it to some of my friends and will try and follow your blog. Way to go!
Thank you Jim. It's always good to hear that one's efforts are appreciated!
George