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How limited global oil supply may affect climate change policies
Posted by Gail the Actuary on August 28, 2010 - 10:45am
On Wednesday, August 25, I gave a presentation called How limited global oil supply may affect climate change policies at the MIT-NESCAUM Endicott House Symposium on climate change. This is a link to the presentations given there.
The audience included leaders from governmental, industrial, academic, and non-governmental (NGO) sectors. They were very concerned about climate change, but not very aware of, or concerned about, the issue of resource limits.
In my talk, I pointed out where the "standard" view of the economic response to peak oil goes wrong. People expect that if there is an oil shortage, prices will rise and then substitutes, or additional supply, or technological solutions will be found. But what if these solutions take decades or even generations to implement? Oil from new fields is not instantly available; new biofuels do not scale up quickly; and technological innovations take decades to make a meaningful difference in the overall picture.
In the absence of a quick response of substitute supply or technical innovation, it seems to me that other responses come into play--ones that explain the recent financial distress we have been seeing. When oil prices rise but are not met with immediate solutions leading back to lower prices, consumers respond by reducing discretionary spending, or by defaulting on debt. Either of these responses tends to lead to recession, reduced oil demand, and a reduction in oil price. Eventually growth in demand (perhaps from China and India) can be expected to raise prices again, but again, new oil supply /new technology /new substitutes are likely to be delayed, so that higher prices are likely to give rise to reduced discretionary spending and debt defaults, and more recession.
Because of these impacts, the expectation for the future should be for oscillating prices, but not necessarily very oil high prices. Recession can be expected to improve, and then get worse again. If the expectation for the future is this type of economic situation, perhaps views regarding needed climate change policy should be revised to match the new economic reality.
Furthermore, because the world is a closed system, with limits, there is the possibility that world oil supplies will actually decline in not too many years. The likelihood of this decline gives rise to a greater sense of urgency of the need to reduce oil use--one cannot just wait and hope that future technological innovation will fix the situation. It may be that lifestyle changes will also be needed, reflecting a lower standard of living. Climate policies may need to be rethought to match the way a world with limits can really be expected to act.
Dr. Richard Gibbs, one of the symposium co-chairs, kicked off the symposium by talking about the fact that the world is a closed system, and we are now dealing with pollution and excess greenhouse gases as symptoms of the limits inherent in a closed system. My job was to try to extend this idea--to explain that oil is subject to limits as well, and to point out that, in fact, we seem to be reaching some of these limits.
My name is Gail Tverberg. I am an editor for The Oil Drum website--a website that talks about "Energy and Our Future". My background is as an actuary.
Dick Gibbs started the symposium talking about the world being a closed system, because it reaches limits in many ways. I would like to talk to you today about one of the limits we are now reaching--namely oil supply limits.
When most people think about oil supply, it seems to me that they expect a scenario, pretty much like what I show on Slide 2. Inadequate oil supply will lead to high oil prices. High oil prices will lead to various kinds of remedies, including more oil extraction, new substitutes, new technology, and other innovation. One might expect that pretty quickly, an acceptable oil price would return, and the economy would return to economic growth.
The problem with this scenario, as I will show in the next few charts, is that there is a fairly long time lag between high oil prices and new supply or substitutes.
Let's look at crude oil supplies, and oil prices. In this slide I show world oil production and OPEC oil production, along with world oil prices. It is pretty clear from this chart that as oil prices rose between 2004 and mid-2008, there was very little increase in world crude oil supply. In fact, it was pretty much flat.
OPEC doesn't seem to have raised its supply very much in response to the higher oil prices either, except a million barrels a day or so at the end. One might suspect that their statements about high spare capacity overstates the extent that they can really ramp up supplies, when oil prices are tight. But they are willing to drop production when oil prices decline, and the portion of their oil supply that is most expensive to produce becomes less profitable.
This is a similar slide, showing crude oil production of OECD (that is, developed countries in total) and the US.
OECD crude oil production, in spite of the rising prices, is trending down over the period, with some leveling in the last year.
US oil production is fairly flat (except for when hurricanes hit) but if you look closely, you can see that US production has increased a bit in 2009 and 2010. This is at least, in part, in response to higher oil prices several years earlier, because it takes several years to add sufficient wells to create an increase in oil supply. The recent increase in US crude oil production reflects increased oil production in the deepwater Gulf of Mexico and in the Bakken shale oil (North Dakota).
Wind energy is the tiny dark green line that is visible only in recent years, just above the line I call "wood and ethanol" on the chart. (It is called "biomass" in the EIA report it comes from.) The "wood and ethanol" line does not rise very quickly either.
Other ways of measuring the rise in wind energy would give a little more favorable picture. For example, the percentage would be a little higher, if we looked only at electricity, or the amount of energy were measured differently from the way the EIA does it. But no matter how one measures it, it is not coming close to replacing fossil fuels.
The thick black line at the top is US energy consumption, and the difference between US consumption and US production is imports. One can see from the chart that imports were dropping in 2008 and 2009, during the recession. Oil represents the US's major type of energy imports, so the decline in imports to a significant extent reflects a decline in oil imports. During this period, world crude oil production was flat, and demand from developing nations was increasing, so a decline in oil imports should not be a surprise.
This slide shows my view of two different responses to high oil prices, if high oil prices are not immediately remedied by substitutes, or more oil production, or new technology. One outcome is debt defaults, as people and businesses find it more difficult to pay back loans, when they are faced with paying higher oil and other energy costs (since costs tend to rise together). This leads to a cutback in lending, as banks' capital is eroded, and banks realize it is not prudent to make loans to marginal buyers. With less loans available for buying new cars, and financing new business opportunities, businesses lay off workers, and recession ensues.
Another common response to high oil prices is reduced discretionary spending. If oil prices (and thus food prices, and perhaps home heating prices) are also higher, people respond by cutting back where they can. They may go out to restaurants less, or go on fewer vacations. This reduced spending on discretionary items also has a recessionary impact.
If we step back and look at the situation, we have high oil prices, leading to recession and to low oil prices.
Eventually, one might expect that demand will rise, perhaps from the developing world, and put upward pressure on prices again. Again, there is little immediate response in terms of additional supply or alternatives, so one sees a pattern of oscillating prices developing.
Oscillating prices are a problem, because they do not give clear price signals. They aren't high enough to encourage substitutes on a large scale.
One thing that is particularly confusing to consumers is that looking at inventories and other conventional measures of oil, the situation appears to be an over-supply of oil. That is in fact true--there is an over-supply of expensive oil, oil that many customers cannot really afford. What is really needed is a bigger supply of inexpensive oil.
There are really two problems.
One is that the world is a closed system--what some of us would call a finite system. There is still considerable oil left, but the oil that is left is more and more expensive (in $$ and resources) to extract, because we remove the "easy oil" first. At this point, and price threshold where recession occurs seems to be about $85 a barrel. This limit is related to low Energy Return on Energy Invested (EROEI). While it would be nice if prices could keep rising indefinitely, we know that at some point, it will take more than a barrel of oil to produce a barrel of oil, and at that point, it will not make sense to continue to extract oil, even if there still seems to be plenty available.
The amount of energy needed to produce a barrel of oil includes the energy of the infrastructure that needs to be in place (transportation for example) as well as the direct energy used in production. This need for infrastructure brings the EROEI requirement up to something like 3:1 or 5:1, rather than just 1:1. And it looks as though we are getting close to limits on both an EROEI and dollar basis--close enough that high prices cause recession rather than a quick shift to increased production; close enough that EROEI for oil from the tar sands seems to be in the 3:1 to 5:1 EROEI range already.
A likely outcome is that production of oil will at some point in the not too distant future, start to decline, rather than just stay flat, as it becomes more and more difficult to find oil that can be extracted at affordable prices and an adequate energy return.
The second problem is that energy transitions take decades, or longer. We first started using coal before 1800, but use did not scale up to a high level until 1910, over 100 years later. Natural gas use began by 1890, but it was not until 1970 that it reached 2.2% of world energy supply. Vaclav Smil, who has written over 50 science books, has written a recent book on this problem, called Energy Transitions: History, Requirements, and Prospects.
As oil production remains flat, and the amount of oil that the developed world is able to buy declines, it seems to me that we are likely to see more and more of the economic problems that we have experienced in the recent past. We can expect more and more business closures, more layoffs, and probably lower home prices.
Governments can be expected to act fairly differently, as their sources of revenue dry up. For example, road maintenance is likely to suffer, with more and more roads returning to gravel, and funding for higher education and research is likely to decline.
If there really is a significant reduction in oil supply, it is quite possible that new greenhouse gasses emitted may decline significantly, without any particular government action.
I don't claim to be an expert in climate change policies, but it seems to me that policies will need to be rethought, in the light of a very different future economic scenario than most have considered, and also in light of the possibility of declining oil supplies available to the US. If the decline in oil availability is a current, and near future concern, then the need for change takes on a much greater sense of urgency, than if one is simply trying to meet a 2050 climate goal.
It seems to me that the usual approaches may not work as well, and more pragmatic approaches may be needed. It is not at all clear than we will be able to maintain our current standard of living, as oil supplies decline.
Natural gas and coal supplies can be expected to decline at some point as well. There are a great many connections between different types of fossil fuel uses, so a decline in oil production may bring about a decline in natural gas and coal production as well, although we cannot know this for certain at this time. There are a number of interconnections that may cause extraction of various fuel types to move together. For example, if the credit system is impaired because of debt defaults caused by indirect impacts of declining oil supply, this could lead to less demand for all kinds of fuels, as occurred during the recent recession. There are other connections as well. For example, oil is used to transport coal to its destination, and to mine metals used in making coal and natural gas extraction equipment.
Almost everyone agrees that comprehensive energy legislation, including cap and trade, is not likely to be passed this year in the US. Instead, we see the US, like many other countries, is badly in need of additional tax revenue, and the oil and gas industry appears to be a likely candidate for more taxes (since it is easier to tax large, unpopular businesses, than to tax voters). So a likely outcome seems to be higher taxes on the oil and gas industry. But we need to think about this. The connection that everyone hopes for--lower production leading to higher prices--doesn't seem to be a very robust one. Instead, by raising taxes, we may produce more price oscillation, and more recession. This outcome is not likely to help alternatives at all, and will likely make our balance of payments situation worse.
So we really need to think through climate change policy approaches carefully, in light of the closed system of that we are working in.
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The disconnect between oil production and AGW is that all of the oil ever available simple wouldn't move the meter on atmospheric carbon anyway. The real heavy hitter is and will be coal. The effects to pay attention to are the increase of coal use with the lessening availability of oil.
The question is the extent to which this increase in coal use will take place, with a shortage of oil supply. We know China and India have ramped up use recently, but it is not clear how much this ramp up can be extended. Once China becomes more dependent on imports for coal, the cost will escalate greatly, and the availability for rapid ramp-up may not be there.
Furthermore, going forward, a cut back in oil production can be expected to have a big effect on financial markets--credit is likely to become much less available, and there may even be a reduction in international trade, as weaker countries default on their debts. These credit impacts and international trade effects may have an impact on coal and natural gas production as well, perhaps in the availability of replacement parts for machinery. More importantly, demand will be cut back, if buyers of fossil fuels cannot get credit to buy new goods that use energy in their production, and businesses cannot get credit to expand. So coal production may follow oil production down.
With oil I often assert that a sizable amount of what is left will stay in the ground forever. The technical difficulty of getting it out and amazing cost will become too much for a contracting world economy to handle.
However, with coal, I don't yet have a sense of whether we might just mine all the stuff out even if we are paying laborers just "a cup of rice a day" to do it.
An interesting analysis would be to examine the cost per BTU of coal over time to see if it is as sensitive to the same sort of cost escalation that oil is experiencing. And even if the cost does go up commensurately, might the technology for mining be one that we can rather easily maintain during contraction?
As I read Heading Out's tech talks on coal, it becomes clear to me that we have to maintain a very high tech society to extract anywhere nearly as much coal as we extract today. A few people with picks cannot walk miles into a mine, and extract a very large amount of coal. Without huge earthmoving equipment (and the diesel to run that equipments), we will not do the strip mining of coal that is done today.
We could theoretically make coal-to-liquid to substitute for oil, but even this requires considerable investment at the front end, and resources such as water, which are not very available in the arid west where much of the coal is located. So I would not count on this either, as investment capital becomes more and more scarce.
Gail,
I tend to lean toward this view ("Without huge earthmoving equipment (and the diesel to run that equipments), we will not do the strip mining of coal that is done today.") and yet I still can't shake the feeling that we will have so many extra people with no gainful employment that we could literally have (say) 25,000 people working at each open coal mine, easily.
We are, after all, going to have a lot of unemployed people. With that many available hands, we might be able to get fairly close to today's production numbers.
Aangel,Gail,
Modeling economic trends is quite beyond my area of expertise, but it seems as if eitherof you could be closer to the ten ring, depending on the way the cards fall-on how fast things go down hill, and how fast the various economies of different countries can make the obviously wrenching switch from high oil, high coal consumption to very high coal , very low oil consumption.
I gather that building a coal to liquids plant is a four of five year job, although something tells me that in an emergency, we could do it in three or less. Other adjustments involving heavy infrastructure,such as converting a large percentage of over the road trucks to run on natural gas, will probably take as long or longer.
If the expected next oil crunch arrives soon, my own wag is that it will knock the various advanced economies of the world as well as the fast growing economies of China and India, for a loop that will be close to a knockout punch.
We may get down so low that it takes many years to recover to a state of more or less steady if modest growth-maybe as long as a couple of decades.We might not recover, and if we do, the population might be substantially lower than it is today.
This would mean that while coal usage might eventually rise dramatically, it won't happen for a long time, and that coal use might dip substantially during the interim period.
Do either of you have any figures on expected CO2 levels based on intermediate scenarios similar to the one I propose?
Another thought that occurs to me is that existing coal reserves close to the surface and mineable by low tech, high labor methods might come to be considered as strategic materials and nationalized or at least embargied against export by the countries that possess such reserves.
I don't have any problem at all envisioning a world scared of a super power China doing things to make it harder for the Chinese to grow even more powerful ;and both Chinese and Indian coal reserves are not supposed to be adequate for more than a few more decades at most.
It seems reasonable that if they feel the need to do so, either or both countries will take strong arm actions well before the coal reserve issue becomes critical.This means such moves might occur within a decade to two decades at most.
They would only be following our example after all,excepting of course that our own recent and current overseas adventures have involved oil rather than coal.
Hi, OFM.
I ran some back-of-the-envelope calculations a few years ago when I was putting together the post below, however, I didn't end up putting them in the post in the end:
http://www.postpeakliving.com/content/peak-oil-and-climate-change-faq
At one point I thought ASPO was going to look at that but I haven't followed up to see. Perhaps the folks at the Uppsala Global Energy Systems Group have something on it. I would check with them first.
I was asked offline about that picture with the thousands of Chinese workers and their wheelbarrows.
It comes from this page:
http://spot.colorado.edu/~richtea/prints.html
It's "Fig 12. Application of wheelbarrows during flood control projects, Shandong, before 1973."
The Chinese have in the past tended to throw people at a problem because they had so many of them. We'll end up doing the same at some point, probably next decade (2020's) but maybe toward the end of this one when the large work programs begin.
Also, note that within a decade or so, it's very possible that big machinery will get vandalized by workers once it becomes clear how many jobs, say, a single backhoe replaces.
Right now, workers are still too expensive and oil too cheap so the machinery will continue to "get the job." By 2030 it should be completely reversed, is my guess.
I find it interesting that the typical construction wheelbarrow holds about 6 cubic feet. This translates into a bit more than a 42 gal. barrel of oil.
At todays wages and todays energy prices here in Australia, if you put a shovel in a mans hand you are paying $260 per kW/hr. The same amount of Electrical energy is $0.06. (6 cents.)
You are suggesting that human energy must decrease in cost by an order of magnitude to become competitive.
I must acknowledge the powerful force of culture, which miss-understands the economics.
This happens where I work. Manual labour is seen as a virtue. The more the sweat, the more virtuous the man.
It would be more logical for out of work people to vandalize the machinery to create jobs, than for those who use the machinery to make their jobs more difficult and share their pay with more people.
There may be a similar pic for the Snowy Mountain Scheme in Australia, but I can't imagine another like it (in Oz) any time soon.
But again, what the heck would I know.
It will always be cheaper to invest in fuel efficiency than to develop oil shale or more tar sands or heaven forbid coal-to-liquids (A COMPLETE NON-STARTER BECAUSE PEAK COAL IS JUST AROUND THE CORNER AS WELL). Let me inform you restless souls in the USA that we here in Europe can choose from no fewer than 15 production cars that get 55 MPG (US gallons, not imperial), they have 4 doors and 4-5 seats, albeit compact by US standards. We will soon have about 5 production models that get better than 60 MPG, although these are sub-compacts. Only one of these is currently a hybrid, the Prius. All the others are clean diesels. I own two clean diesels, but they are not the latest and best models. They only get 35-46 MPG. You yanks don´t have these because of a regulatory bias and a consumer bias against diesels based on a number of sh:tty models from the 1970´s. Diesel tech. has improved vastly, and is very cost effective. We pay about $7/gallon and have done this for about 4 years now. It really works to make you choose the right transport for every task. For many, this means public transport or bicycles.
http://www.greencarcongress.com/2004/11/average_fuel_co.html
http://www.newscientist.com/article/dn17506-us-vehicle-efficiency-hardly...
Keep in mind that President Obama hails from Illinois. As a Senator and as a candidate for President he stood for 'clean coal' as the 'deus ex machina' from our oil import problems, and for our energy future.
With that in mind, look for the administration to press forward with greater coal use in order to limit imports of oil. Maybe all those jobs we need are going to be in the mines? Of course, Illinois; coal is extracted by strip mining, so no big help in the home state, at least.
With the further consideration that Bernanke, Geithner and company are running the show, look for BAU decisions, ramping up of coal production, probable loosening of environmental restrictions on coal, and a host of other bad decisions to try to pump up the economy, or at least keep it from going totally flat.
Farther on down the line, it will be flat-lined. But that is a whole 'nuther story.
/rantoff
Craig
deus ex machina is what I see proposed most everywhere .. in total seriousness -- must make me a doomer ;-)
Since I'm in Illinois I have to jump in here.
I exchanged email, briefly, with my senator on the topic of "clean coal". Recall that, in 2007/8 there was much talk of the "FutureGen" carbon sequestration project.
http://www.futuregenalliance.org/
Progress has been two steps forward, three steps back, but I really believe they thought they had the answer at the time.
The reason they were so seriously considering carbon sequestration for Illinois is that natural gas is currently stored in certain rock formations in the Kankakee area, and it would be a similar exercise to store carbon dioxide the same way.
It's not a solution that can work everywhere, mainly due to geology.
Depending on where in Illinois one is, one's energy (excluding transportation) may come from Coal, Natural Gas, Nuclear or Wind, or a mix of all the above. Some Solar, but mainly for domestic hot water. The coal lobby is largely downstate. Although there are a couple of really dirty coal-fired power plants in Chicago that people have been trying to get rid of for a long time, but the jobs...
The current propensity for using hydraulic fracturing for retrieval of natural gas effectively eliminates those areas from consideration for use for carbon storage afterwards.
The problem with FutureGen is essentially political - there are many who don't want to see Federal dollars spent on a project that is perceived to benefit Illinois more than other states.
More crazy scare-mongering.
CO2 is stored in designated old oil and gas fields, unmineable coal seams or saline aquifers. Shale gas is mined from shale strata not coal gas or saline aquifers. Your assumption that they are going to happen in the same place as shale gas is nonsense.
For example in northern Illinois you have a large strata of sandstone with saline aquifers in it and no natural gas. It's perfect for CO2 storage.
CO2 sequestration seems to be the least sexy of all the
ways of going green and the one most likely to successful at drastically reducing CO2 emissions, which is so why many people hate it.
I think a lot of people hate it because they think it is just talk, and won't result in anything other than delay. Some hate it because the energy consumption of the more developed methods (if yoy worry about peak coal, then CCS means we get fewer KWhr per ton of whats left). Then there are those who buy into the "it will leak, and silently kill" scaremongering. Then there are the people who are horrified by mountain top removal, and think CCS, will mean more MTR happens in the future.
I consider myself mildly in favor. But, with a heavy emphasis on research for more energy efficient methods of capture. I don't think we are going to do it if it increases fuel consumption by 30-50%. I would like us to do CCS in conjunction with biomass, as a way to draw dowm atmospheric CO2. If we do get reasonably affordable capture methods developed, the scaremongering will become a problem.
Another disconnect is the difference between 'climate change policies' and actually doing anything materially which actually reduces carbon emissions.
It seems that the rate of coal burning increases in direct proportion to the number of 'climate change policies' produced.
The sad truth is that the issue of AGW is now politically dead as a dodo.
We saw this recently in the Oz national election. In 2007 AGW was rated by the winning leader as " The most important moral challenge of our times". In the August 2010 election it was barely mentioned by either side ( except the Greens of course).
As we continue to slide further into economic crisis,
( http://www.abc.net.au/4corners/content/2010/s2987864.htm )
AGW will be further marginalized as a political issue.
AGW due to oil will be "self-limiting" at current level of CO2 production and decline in future decades.
The big source of multi-decadal CO2 generation is coal. The world's major coal reserves are in China and the United States. China and the US will be locked in severe economic competition. Neither will stop burning coal so long as coal is the cheapest domestic source of electrical generation. They simply cannot afford to.
Therefore, the only possibility is to develop other sources of electrical generation that are cheaper than coal. Whichever succeeds at this becomes the winner in the competition.
If either artificially raises the price of coal in order to discourage coal burning, it artificially handicaps its economy, and it becomes the loser in the economic competition.
Other issues that are unrecognized by this analysis will make this author and his anaylsis forgotten very soon. He has analyzed why his car won't start by constantly checking the air pressure in the tires.
I would like to argue that this gives the false impression that a lower standard of living is automatically a bad thing. It is possible to have a higher quality of life despite having a lower standard of living.
http://en.wikipedia.org/wiki/Standard_of_living
I propose that 'Quality of life' should be should be the goal of civilized societies and by that measure life in the US, which is still considered to have one of the highest 'standards' of living, has a 'Quality of life' that is poor and getting worse.
I don't think that framers of climate change policies have even considered the possibility of living standards declining.
For example, electric cars are viewed as the way of the future by some. If electric cars are too expensive for many, or cannot be scaled up quickly, the question is what alternatives should be considered. I expect that most policy planners have never considered bicycles.
I mentioned during the symposium the possibility of some roads going back to gravel, as states found it too expensive to keep paving all of their roads. This idea seemed to come as a shock to some participants.
That's probably a very good point. I would imagine it is even less likely then, that they would associate the possibility of a declining standard of living, actually leading to a higher quality of life.
For the record, the fact that so many people seem to think that in the future we will all be driving around in electric versions of our current ICE cars and that this is actually the solution to our current predicament, makes me very despondent indeed.
BTW, Gail, in case you have ever wondered, I do agree with most of what you have to say >;^)
It's just that at times, it seems to me, that all of us, (and I include myself) are so deeply wedded to the current paradigm of BAU, that we are hardly able to imagine any other reality.
I'm willing to bet that the framers of climate change policies have certainly understood that lifestyles would change (much fewer large vehicles, less VMT, smaller houses, less heavy manufacturing), which would reduce output and hence incomes. Of course, this does not necessarily affect education, basic health care, and other Quality of Life considerations.
Given the state of the economy at the present time, I have no doubt that our currently lowered 'standard of living' will continue to decline regardless as PO becomes more apparent, so what the 'framers' above envisioned will likely take place in a roughly similar fashion, though use of coal (CTL, space heating) could be a wildcard.
"Of course, this does not necessarily affect education, basic health care, and other Quality of Life considerations."
Emphasis on "necessarily". I think that in fact in today's American culture education, health care and more will be traded by policy makers for deficit reduction, military spending and such without so much as a whimper from the majority of the voting public.
I was careful to put in 'basic' before health care. Heart and bone marrow transplants, for example, would be far more rare in such a scenario. Much of the population currently does not receive basic health care in the US.
I don't think any solution can be made to work in a short period of time - without a large scale effort like the WWII effort. There is a great deal of oil that can be saved by using electric bikes, for eg. Same with plug-in hybrids.
What is lacking is political will - not inherent engineering problems.
Before WWII, there were a lot of unused factories that could be put to use, and plenty of fuel and other inputs for manufacturing tanks and other things needed for war.
I don't think we are in the same position now. Most of the high tech manufacturing is now overseas. We lose control and understanding of what is involved, if processes are scaled up elsewhere.
Also, our electric system is so unreliable (outages, etc.) that few with high tech controls would want to build here, if there is another option elsewhere, at least based on what one of the people at the symposium was saying. You almost need your own electric supply to get high enough quality electricity in this country.
Take a look at the rest of the world, especially the developing world. Unreliable power, is like what Pakistan, Iraq, and even Soth Africa have. Losing several hours per day almost every day. We worry about an occasional regional blackout that happens every few years. We can be much mech much less reliable than currently, and still seem to be a paragon of stability to anyon from those parts of the world.
The problem is small "blips" (as well as small outages) that can take sensitive equipment like a refinery down. If this happens, it may take days to bring the refinery back up again. As homeowners and shop owners, we would hardly notice these small problems with electricity production, but they are a huge problem for industrial users, I understand.
http://www.powermag.com/issues/cover_stories/In-Search-of-Perfect-Power_...
$80M out of a $13T economy is about half a percent of GDP. Not a small cost, but not an end of the world scenario either.
http://www.powermag.com/issues/cover_stories/In-Search-of-Perfect-Power_...
It could be twice as high or more than 1%.
http://osu.okstate.edu/index.php?option=com_content&task=view&id=340&Ite...
http://beforeitsnews.com/story/131/318/CNN:_U.S._electricity_blackouts_s...
It is going to take more than money to fix the problem, as I see it. Somehow, things will need to be reorganized in such a way that agreement can be reached on uniform standards within the system. There also need to be changes so that it is easy to get agreement on what needs to be done to upgrade the grid, and who will pay for it. I think that organizational issues and responsibility issues may be more of a problem than the money involved.
Data centers typically have battery backup and motor-generator sets that are able to carry all critical systems through an indefinite power outage. Important data centers also have dual power feeds from grids on different substations.
Financial systems are implemented in two data centers more than 200 miles apart on different power company grids. The 200 mile rule by the Federal Reserve is intended to reduce outages due to common faults.
Some systems are backed up on other continents.
I doubt that any country has power from the electrical grid that is so good that "uninterruptible power systems" and geographic redundancy are not needed, both due to power outages and other disaster planning contingencies.
I suspect they have thought about it. But public relations wise it is very dangerous to allow your agenda to get connected to "doing with less". The reaction to decline (even if is good for us), is to put off anything else that seems to make the decline greater (or sooner). Look at Califonia prop 23 (a fossil fuel funded attempt to overturn greenhouse gas caps). It doesn't say NO CAPS, it says delay CAPS until state unemployment reaches some unontainable value. This is a pretty common reaction to a request to use less. And you can bet well funded reactionary forces are waiting to capitalize politically on it.
They cannot consider it.
And here is why.
Deflation.
As Aaron Wissner argues in The Automatic Earth any sane person who sees the situation for what it is will get out of debt. This will cause money to evaporate, and the economy to stall leading inexorably to deflation.
Economists treat Deflation with more dread than inflation as they cannot force people to borrow money and spend.
Deflation and Depression: Is There an Empirical Llink? January 2004,
Andrew Atkeson, University of California, Los Angeles and Federal Reserve Bank of Minneapolis
Patrick J. Kehoe, Federal Reserve Bank of Minneapolis
My understanding of this piece is that they have discovered empirically that the opposite of inflation is not deflation.
Further they argue that the slowdown in the Japanese economy was not the result of lack of liquidity or stimulus but that the economy had matured.
I interpret that to mean that the economy had achieved it's objectives and incentive to acquire were suppressed.
To the authors, as I understand them, Japans economy is an Ideal. The ideal of everyone's needs being met.
The horror of it all.
Still, how would Muggins in the street react if he thought that the inflation rate was going to go negative? He would do as I am doing.
He would pay down his debts and ensure he had as much cash in his pocket for the inevitable buyers market that will come as over-leveraged entities are forced into fire sales.
It is this liquidation of debt(money) that is the font of the economists nightmares. It is what is forefront in his mind.
Therefore he would relegate considerations of Peak Oil, Climate Catastrophe and their consequences into "to be dealt with later categories"
Is this how you audience reacted Gail the Actuary?
Perhaps this is true regarding state or national level climate change policy, although I somewhat doubt it. (Depends who is meant by
'policy planners'). At a local level, in cases where policy planners are thinking about climate change at all (admittedly still not 'most' places), it is far from true. Making roads more bike friendly is something local policymakers can actually implement. In San Francisco (and the wider Bay Area) it has become a noticeable feature of both politics and physical change in the city.
And in Portland (OR).
I agree with the basic sense of actual quality of life being only loosely connected with resource consumption, which is unfortunately how the masses perceive it now.
I think we will get nowhere with substitutions for carbon fuels until the masses have a clear and understandable explanation of what quality of life means.
Medical care can be much more at home. That's a good thing, considering the number of diseases one can catch at a hospital, among them depression at being treated like cattle.
Education can be rapidly shifted away from sending bodies at great cost to second homes at universities, and using MIT-style courses and non-attending grad students to personally tutor the online students.
City transportation can be by taxi-bus, which works very well and no one knows about it, including so-called transportation experts who live in the past, and are not aware of the penetration of cellphones, the existence of the necessary software, and the hydraulic hybrids already in use by UPS, FEDEX and the military.
Commodity transportation can be shifted largely to electrified rail carrying HVDC on their rights of way from central windfarms. I see double tracks running under transmission towers. NIMBY be damned. Cities can use smaller modular nuke plants, already for sale. Hot sulfur batteries are tested, and ready for installation.
Loss of subsidies on commodity crops will greatly redistribute the cost balance between meats and vegetables, and no doubt major newspapers will follow the NYTimes in pushing new status symbols like being skinny, socializing on the internet instead of flying back and forth for family birthdays, wedding, anniversaries and even deaths. I'd buy stock in videoconferencing software.
Nothing can be done without the people, and some way to negate the megaphone of Veblen consumptions advertising.
Work on that. The technology is relatively simple. Cognitive behavioral mass therapy isn't that expensive, but legislators need the masses behind them.
I agree with you on education, but would include secondary education, i've seen "cyber charter school" growth numbers of 30%+ for the dozen or so currently licensed in PA. My son participates in one that is about 5000 kids, about the size of a school district around here, the bus/car commute to school is zero, and while yes it requires a PC, in comparison to the brick and mortar investment for a whole school district vs 5000 pcs (which would probably be in the home, and in the school) - It seems like a lot less energy. The use of Moodle and open source education platform also has some implications including courses without books, courses "taught" to 90 kids instead of 30 (I remember introductory engineering classes at RPI of 300, and I definitely mastered them).
I would tell you that the educational subject choices are much broader than the traditional schools here, and I'd guess it is only going to get wider. So it is possible that drive by less energy some people will experience better outcomes in education.
Higher education is just before a major crash in funding and attendance.
Some schools may move to these high-tech systems but there will be very many less students to use them. Soon it will become clear to most students that spending $100,000 on an education when unemployment is 20% or 30% is not smart.
I have a post in mid-edit about this topic I hope to submit when I return from vacation. Higher education is a bad place to be right now and I recommend that college level professors start reskilling even more quickly than the rest of us.
I think the product will continue to have value. But, using online resources for learning and certification is much cheaper. I suspect within a few years, cheap online classes will start to take a dent out of the brick and mortar schools. And this is not too soon, too many are already priced out of higher education, and the trend is worsening.
Not for the middle class and lower. It really doesn't matter how cheaply the school can deliver its message if the market doesn't need it. There is already too much of their "product" on the market — educated people. This will continue to get worse as each year sees more graduates entering a contracting economy. How much longer do you think this trend can continue before people get smart and stop attending schools of higher education?
Higher education is going to go back to the privilege of the wealthy, and before this decade is out. This happens suddently, not gradually, which is the premise of the article I'm writing, that certain elements of our society "switch off" quickly.
My guess is that we'll be graduating 1/25th or less of the people we do now by 2020. Many, many schools will close, especially the private colleges.
The four-year Liberal Arts degree was mainly useful for the high socioeconomic status son who would enter business with the family or friends of the family, e.g. a G H W Bush. Alternatively, from one of the Seven Sisters was useful for the daughter who was expected to marry well.
However, higher education is alive and well. Apollo Group had an enrollment of 443,000 in 4Q'09. They and their competitors will do for brick and mortar colleges and universities what Amazon and Barnes and Noble did for your neighborhood book store.
Yes, but my thesis is that this situation is going to change dramatically and soon.
However you want to look at it the impoverishment of people in OECD nations will come from loss of income. The problem for individuals and families is the decline in their quality of life will not be a gradual process they can adjust to but a single drop from employment into unemployment. This will be devestating for people who are not financially or psychologically prepared.
Also, the government now has unemployment programs to protect the unemployed, but at some point the number of unemployed (and lack of tax revenue) may make it very difficult to maintain the programs.
Gail,
You have several hypotheses here which you've never tested. These include " consumers respond by reducing discretionary spending, or by defaulting on debt." and " other energy costs...tend to rise together".
You need to quantify both of these, and provide some evidence. Take a look at Professor Hamilton's work, for instance. I think you'll find that neither of these is as important as you're suggesting.
Nick
I am trying to understand your question. It would seem to me that when consumers have less money (due to higher energy prices)that they either reduce discretionary spending or default on debts because they have to. Are you suggesting that they have other options?
Sure.
First, they can go to substitutes: join a carpool (10% of US commuters carpool); buy a more fuel efficient car (e.g., a Prius, which costs less than the average US car);, take the train, etc. Heck, most households own more than one car: they can just switch their driving miles to the more efficient vehicle (dad takes the Corolla away from the teenager, stops driving the Escalade to work). Car-switching and car-pooling can be done literally overnight.
2nd, Gail seems to assume that an increase in consumer spending on fuel will significantly increase debt default, and that this would be an important factor in the economy. This appears doubtful: fuel spending is a small % of most consumer spending. The poorest quintile of income tends to not own cars, and most fuel is bought by the more affluent.
The existence of good substitutes also reduces the likelihood of debt default: why wouldn't someone about to be foreclosed on sell their SUV and buy a used Civic?
Hi Nick,
Even if debts could continue to be serviced, new loans would be almost impossible to obtain. Why, becausing borrowing into a declining economy would mean on average principal and interest would be very hard to repay-interest rates would be huge. In addition, people would be likely to hold onto cash-because in a declining economy and in an uncertain environment tomorrows paycheck is uncertain. For these reasons we would see a deflationary spiral with effectively no bottom. There'd be less and less money in the economy, and food and other essentials would I suspect crowd out everything else. And with less and less money in circulation-debts absolutely could not be paid off-only default or hyper-inflation would suffice.
As to why someone would not sell their SUV for a Civic-Who'd have the money to buy all those gas guzzling SUV's?
Agree on your earlier point-oil prices may decouple from other sources on the upside, but not on the down.
Regards,
david
Hi David,
That's assuming a declining economy. I'm questioning that assumption and the assumptions leading to it.
In order to prove that the economy will not decline, you need to show not that some people will avoid the impacts of declining oil supply, but that pretty much everyone will. I think that you are way off base in assuming nearly everyone can avoid the impacts. Look at all the folks out of work.
Yes, we're in a recession, and some are out of work.
But, that argument assumes that the current recession was primarily caused by the oil shock, and that a continuing decline in oil consumption would necessarily cause economic decline. First, you have to show that oil's impact on individuals was as you assume, and then show that their behavior will be the same in the long-term.
Otherwise, the argument assumes the premise.
Nick & Gail, I see you are both right, but arguing from opposite ends.
The Price spike does not need to be a PRIMARY cause of the recession, in order for consumer spending to change. It merely needs to be identifiable.
Note that it only takes a small change in discretionary spending, to have an effect, as much of the base-load consumer spending is locked-in (at least until they down-size). ie Power/Water/Taxes/Rates/Mortgage/Transport/Education
Here are some numbers, from outside USA, showing exactly how consumer spending moved, in response to the price spike.
30 June 2009 :360,303 vehicles registered in Auckland city
(84 per cent were private cars and vans)
= 13 per cent fewer vehicles than in 2005,
= 17 per cent fewer than in 2007.
= Motorcycle registrations were up 10 per cent
= motor scooters up a staggering 123 per cent.
= in the five years to June 2009, public transport patronage increased by 16 per cent
Note that registration number is total, not just new sales - the first recession response is to delay buying a newer car, the second response is to make do with less cars in the household. (Still well above 1.0)
This shows a very clear move to reduce the total household car count, and also a move toward the bicycle end of the transport option.
It is easy to find data showing the effects of changes in discretionary spending.
1.4 million people, 1000 km^2, 45F low in winter, 75F high in winter, yes fair amount of rain.
Atlanta
6 million people, 6000 km^2, 33F low in winter, 90F high in summer,same amount of rain.
You can walk and cycle 12 months a year in Auckland, but cycling at freezing point or at 90F with humidity is not for everyone. Auckland is paradise on Earth. Atlanta without AC would be...Weather arguments disqualify bike as a continuous solution in any large North American city. Too hot or too cold.
In North America bike is for pleasure.
You can walk and cycle 12 months a year in Auckland, but cycling at freezing point or at 90F with humidity is not for everyone.
In saying the "move toward the bicycle end of the transport option.", I was meaning mainly Scooters.
Cycles remain the domain of the truly (fool) hardy, with an accident rate much above scooters.
I see in USA the scooter trend is also very strong:
2008 ["Nationwide, the Irvine, Calif.-based Motorcycle Industry Council reports a boom in scooter sales from 12,000 in 1997 to 25,000 in 1999, 50,000 in 2001, 96,000 in 2004 and an estimated 131,000 in 2007, which MIC spokesman Mike Mount said could reflect demand outstripping supply.
“Through the first two quarters, scooter sales are up 66 percent over what they were the first two quarters of 2007,” Mount said."]
["The owners of the Vespa, Piaggio and Aprilia scooter brands saw a 100.5% increase in scooter sales in May compared to the same month a year ago. In June, sales were 147% higher in a year-over-year comparison and in July, sales were 173% higher."]
However, it does not look like those increases were sustained, but it does show how a price spike, strongly drives consumer buying decisions.
There is also now a strong drive to Electric Scooters, and Electric Bikes.
http://www.motorcycle-usa.com/363/5297/Motorcycle-Article/Peugeot-Return...
http://future-motorcycles.com/2010-ultra-electric-scooters/
http://www.gizmag.com/466-million-electric-motorcycles-by-2016/14306/
Says:
["Current annual global motorcycle sales: ~80M/yr (mostly ICE)
Forecasting that more than 466 million electric bicycles and motorcycles will be sold worldwide during the period from 2010 to 2016. (78M/yr)"]
Graph is here :
http://bioage.typepad.com/.a/6a00d8341c4fbe53ef0120a89778cd970b-popup
China dominates Electric 2 wheelers, with ~22M/yr,
driven by this :
["According to ETRA “the high sales in China can be ascribed to the large number of cities which have legally banned petrol engine mopeds and scooters, leaving consumers with no other choice but to opt for electric bicycles”.]
The EU is forecast to increase 33% in 2010, and break 1M.yr
Scooter...Part of a year in most of North America at best.
But,
http://video.google.ca/videoplay?docid=-2063667852598904740#
;-)
"Scooter...Part of a year in most of North America at best."
It still helps though. My 750 cc motorcycle (not a scooter) burned 56 gallons of gas less then my Aveo (economy car) for the 5000 miles or so I can use it from May to October.
Don't get me wrong, I used to own motorcycles myself but I'm mostly afraid to ride on public roads these days-I simply can't afford to take the chance of getting laid up as the result of an accident.
I still borrow a bike and ride occasionally where there is very little traffic.
I learned a LONG time ago that as far as actual per mile operating costs go,you can't really hope to save much if anything by riding a motorcycle compared to driving a compact car.
Your Aveo will probably go 40,000 miles on a 400 dollar set of tires, and it will probably last from 150,000 to 300,000 miles.
Your bike will probaby go 8,000 to 10,000 miles on a 200 plus dollar set of tires-if you ride conservatively.It probably will not last mich over 30,000 miles if it is a sporty perfomance model,unless you really baby it, but I will admit that the later model cruisers look as if they are good for at least 50,000 to 100,000 miles or MORE of reasonably trouble free riding.Some of them appear to be at least as reliable as a typical car.
When your Aveo is five years old and out of warranty and you need an alternator, you will be able to get one with an "as long as you own it" warranty for 150 dollars, in 2010 money;an alternator for your bike will probably cost from two to three times as much due to dealer only pricing; and it will be warranted for a year at best.
I probably shouldn't admit it, but I once tied my 450 Honda to the back bumper of a truck with a quarter inch piece of nylon rope at a traffic light one dark night;I knew the truck would be going my way,down a lonesome country highway, and the temptation was to much to resist.
I got simply extraordinary mileage for the next twenty miles or so before the novelty wore off and I dropped the loose end of the rope.
That's a rather modern couch-potatoeish perspective. Keep in mind that people have lived here for thousands of years, and thrived without motor vehicles. Not everyone requires a paradisaical setting to enjoy going outside, and the softness (to put it gently) of the present generation is far from the norm historically.
360,303 vehicles registered in Auckland city
= 17 per cent fewer than in 2007.
The number of vehicles dropped by 73,000 in 2 years?? That would be difficult to do even if new car sales were zero. Check your stats?
Why do you say that? The U.S. car fleet is shrinking, too. More cars are being retired than are being bought.
I wouldn't be surprised, but the difference would be very small.
I've seen speculation about this, but not data. Do you have a data source?
It did seem quite a claimed decline, but the info is here
http://www.aucklandcity.govt.nz/council/documents/stateofcity/docs/chapt...
To me, it meant many were not renewing their registrations, (as well as a decline in New car sales, but not to 0 ). [More may be driving unregistered ? ;)]
They also claim employment moved from 339,980 @ 2004, to 356,680 @ 2009 (+16,700)
so that's quite close to 1 car / city job (some jobs will be outside the city limits)
So that indicator is largely flat/positive.
More comment is here
http://www.aucklandcity.govt.nz/auckland/economy/analysis/july09.asp
and another site has this
Fuel use per capita in Auckland has declined from 1,191 litres in 2004/05 to 1,058 litres in 2009/10. (-11.1%)
which is negative, but not by as much (Suggests the lapsed registration/sold outside region declines, were used for less miles, than the 'main car' ?
Or, in USA units, 6.65 Barrels/year I think.
Relates to ~New York state, on this yardstick
http://www.infrastructurist.com/2010/04/26/how-much-gas-does-your-state-...
Recession was not caused by the oil shock. If high oil price is responsible, how come India, China and some developing countries are booming? Recession was caused by bursting of the bubble caused by too much easy credit. The amount of money people spend on gasoline is a small fraction of their mortgage payments. Are you saying that if gasoline was $1.50 a gallon people would not have defaulted when their ARM reset from 2% to 6%?
They are beginning to outbid us for oil. EG China and India have about 7 times our population and are able to devote much more labor towards obtaining a gallon of gas - a person may work eg 80 hours and need 1 gallon a week for his scooter. In our hubris, I think we in America never counted on this happening. They are demographically much younger too.
Their demand continues to increase while ours stagnates or falls. If fuel was cheaper, our demand for motor fuel would go up.
Think about it for a minute.
It doesn't matter how much world demand there is for oil, beyond a certain point it's more expensive than the substitutes.
The price of oil has risen, and now hybrids are competitive. EVs like the Leaf, and EREVs like the Volt will get cheaper. If market prices for oil rise, or if we get smart enough to internalize the steep external costs of oil (security, pollution, etc), we'll switch faster.
Most of the substitutes use fossil fuels as inputs. It is hard to have their costs not increase, which fossil fuel costs increase. This is the "receding horizons" problem sometimes referred to.
I am doubtful that the cost of EVs will drop. Subsidies are going to become more and more a thing of the past, as the recession gets worse, and governments are shorter on funds. Also, businesses will need to cover their own costs and make a profit too.
Most of the substitutes use fossil fuels as inputs.
The main substitute for oil is electrification. Electrical equipment requires very little oil to manufacture.
Wind has a very high E-ROI, and little of that small imput is oil, so it's costs won't be affected much by PO.
This is the "receding horizons" problem sometimes referred to.
This applies mostly to very low E-ROI things like ethanol. Even there, low coal and nat gas prices mean that E-ROI has less importance than one might think.
I am doubtful that the cost of EVs will drop.
They're already low enough to be useable, and their costs will fall with rising volume, and economies of scale.
Subsidies are going to become more and more a thing of the past, as the recession gets worse, and governments are shorter on funds.
Again, this is circular reasoning: you haven't shown that PO will cause the economy to decline.
Nuclear could substitute all gas and coal generated electricity as well as all heat generated with gas. It does scale. Not easily but does. Gas and coal diverted to transport. A bit like Pickens :-). Wind and PV do not scale "at this scale"
Yes, EV/hybrid is a dead end. EV freeze a lot of important metals in batteries and have fuel economy comparable with small turbo diesels. If you put a small turbodiesel in a Prius, it would have same fuel economy as Hybrid, but using somewhat lesser quality fraction of oil. For fully EV electricity must obviously be non-carbon which means...What scales. Wind, PV or nuclear?
China knows. They build coal plants but start building nukes like crazy, too. IMHO we should, too.
When things get really tough, we could see the sale of very cheap electric cars take off-and such cars can be built and marketed.
All that is necessary for this to happen is that the customer accept a very small slow car with a limited range -say thirty miles.
This can be accomplished with cheap , easily recycled lead acid batteries, and building the rest of an electric car is a piece of cake.
Lead is plentiful.So is sulphur.
I think that given the choice-no car, or small slow car with very limited range- millions of people will opt for the simple cheap short range electric.
If this comes to pass, thousands of people will find jobs installing coin operated charging stations just about every where a car can be parked legally.
Let us keep in mind that when and if things get really tight, gasoline will be one of the first things to be tightly rationed.Even a fairly well off consumer may find it much to his or her advantage to buy a cheap, slow, short range electric so as to extend his gasoline ration and therefore be able to drive an existing otherwise useless sport ute to Grandma's house once a month, or take the boat to the lake, or mow the lawn with the five thousand dollar lawn mower......
Such cars could actually be cheaper than a conventional compact car-and far cheaper to operate on a per mile basis, so long as electricity prices don't get out of hand.
But I believe the future is a not so cheap subcompact built out of very light wieght materials, superbly streamlined, powered by a VERY small diesel, and legally limited to a top speed of maybe thirty five to forty five mph.
Such a car would accelerate like a heavily loaded truck, but it would also get close to a hundred miles per gallon at 45 mph, and might beat that at 35.
If battery costs come down , it could morph into a plug in hybrid, and get an effective two hundred mpg in the hands of many commuters who drive less than fifty miles a day;such a car would only need a battery less than half the size of a Chevy Volt battery to go forty miles, and a quarter of that size to go the first twenty miles.
We have a simply mindboggling amount of money sunk into suburban autocentric infrastructure;we aren't going to give it up if there is any way at all to avoid doing so-even if it means teachers and lawyers commuting in micro minis not much faster than bicycles-but warm and dry in cold weather, and possibly even air conditioned in hot weather.
Such a very small car could be effectively cooled with a really small ac unit if it were insulated with a few pounds of foam and made relatively airtight.
It could also have an ac unit capable of running on grid ac while charging and freezing a couple of gallons of water in a built in cold pack;that might suffice for a twenty to thirty minute ride.
Do you mean like almost any of these ?
http://www.progressiveautoxprize.org/team-central
Whilst this segment makes great energy-sense, the problem lurking here, is crash testing.
There is a large no-mans-land, between small cars, and motorbikes, which is amplified by the crash requirements.
That will need a change in rules/approvals, and maybe even an impost on the '3 tonne SUV', which would simply obliterate one of the subcompacts.
i used to see a lot of 3ton suv's and full size pickup trucks with one person in them commuting to work and otherwise. I see probably 90% less over the last three years. I've wondered what the difference would be between my EV colliding with an Accord and my motorbike from time to time....
Something along the lines of the x prize cars ,yes;but with fuel prices and practical engineetring comsiderations determining what is built, rather than the somewhat arbitrary rules of the contest.
The three ton suvs will be seen only occasionally on the road if minidiesel or mini electric car becomes very popular;and my guess is that the drivers of such vehicles will learn to be very careful, as by then public sentiment will be against them, and laws inflicting draconian punishment (in terms of current punishments) on the driver of one who causes an accident will be passed.
That is an interesting point farmermac, differential punishment/fines, based on mass, imagine what you would get for an 18 wheeler! I'll bet that the first move here would be the insurance company, cars of equal cost, with the 1ton being a $3000/yr insurance and the 3ton being $10000/yr.
I didn't buy an air conditioned car until '81. In most of the country there may be a "want" for an air conditioned car, but there is no "need" for an air conditioned car.
I'm with you farmermac, lead batteries can do the trick, and recycling them makes it better. I have a polaris EV which seems to do about 30mph and supposedly goes 50miles, i haven't tried the that yet. If they made it into a NEV i could haul 500lbs of vegetables on a small trailer to a 2nd spot in the 45,000 person town i'm near and have another satellite market spot. The charging is 1kw and nicely charges from my solar panels. I'll keep an eye out for their next generation EV, and continue to watch the NEV's, by my way of thinking a lot of people could be satisfied in the 35 mph range in and around many cities and towns, i don't think the town of 45,000 has a road above 35mph.
India, China, and some of the developing countries use a lot less oil per capita than we do, so the impact there is smaller.
Also, they saw what was coming, and really ramped up coal use at the same time that oil supply was becoming less available. This very much helped give an offsetting increase in cheap energy, that helped make up for the increase in oil cost.
OECD countries were trying to get coal use down, and wanted to substitute higher cost energy--both of these factors could also be expected to contribute to recessionary impacts.
India, China, and some of the developing countries use a lot less oil per capita than we do, so the impact there is smaller.
Bingo! So if we could reduce our per capita oil consumption (which is very high compared to Chindia) we could easily cope with increasing oil price and grow our economy in spite of it. Isn't that what Nick has been arguing?
Also, they saw what was coming, and really ramped up coal use at the same time that oil supply was becoming less available.
But the crux of the matter is that their oil consumption has been increasing for several years. They didn't substitute oil with coal. They have increased both oil & coal consumption. As the oil consumption in OECD countries dropped, Chindia and some other developing countries picked up the slack.
OECD countries were trying to get coal use down, and wanted to substitute higher cost energy--both of these factors could also be expected to contribute to recessionary impacts.
Obviously the recession is made worse by higher energy costs. But I thought the debate was about whether high energy price was the root cause of recession.
Wow suyog - your bending my mind on that one. We can't easily cope.
The title of this piece is
The connection between Peak Oil and the recession is an aside.
I think that the fear of Deflation will trump any decisions about the Climate Catastrophe.
The deflation threat is more immanent although the CC is more lethal.
I seem to detect a false and non-productive thread disputing whether or not high oil prices caused the recession.
Most of the time recessions are caused by inappropriate and unproductive investments. The investments then have to be written down to their actual value which causes severe dislocations in the economy and a recession.
In addition, recessions are often exacerbated by borrowing large amounts of money to make these investments. I think there is no question that this factor made things worse.
I don't think that this recession is any different there were massively unproductive investments made. They were made in facilities that require cheap fuel prices to make sense. Some examples of these inappropriate investments that come to mind are:
-- large amounts of housing built in areas that can only be serviced by private vehicle
-- large amounts of roads built to service these areas
-- large amounts of commercial development built in areas that can only be serviced by private vehicle
-- facilities built to produce non-fuel efficient vehicles
-- the non-fuel efficient vehicles themselves
-- non-economic low EROEI energy developments
I am sure that could be much longer, but they all have a common thread in that they assume that fuel will be cheap for a long time to come. If investment had been made in a series of measures to realign the North American economy to massively reduce energy, and, in particular oil, use over the past 10 years then things might have turned out differently.
There seems to me to be little point in this dispute.
If wishes were horses .....
Hi Nick,
do you recognise that the economy is dependent on the environment for energy and material inputs as well as output sinks to absorb wastes?
Absolutely.
I'm simply arguing that in the long-run that the economy is not dependent on fossil fuels in general, and fossil fuels in particular.
Eliminating our current dependence on oil & FFs would also eliminate our biggest waste problem, CO2.
Even our current dependence on oil & FFs is overstated by the minority whose investments or careers are directly dependent on them.
Separating this kind of "substitution" from what people call "cutting back" seems almost like drawing a distinction without (much of) a difference, at least in terms of economic impact. If oil/energy issues become bad enough to drive people onto hugely time-consuming trains or buses (e.g. almost every day Chicago RTA invents some new lame excuse for the day's execrable service), or into hugely time-consuming carpools (the 1920s model of everyone marching in lockstep from an inner suburb to a huge nearby plant and back again at precisely the same time is pretty well kaput, so most end up taking the Grand Tour every morning and night, and end up waiting around for at least one laggard every night), then I would submit they'd be unlikely to get more than a pittance for the SUV, and that (reliable) used Civics would be too precious to be available at a "reasonable" (i.e. current business-as-usual) low price.
So they'll suck it up and spend more on gas, leaving less money for other things. Or they'll buy an enormously expensive new fuel-efficient car, leaving less money for other things. Or else ... they'll piddle away hours and hours, either waiting for municipal buses and trains whose lazy overpaid tenured drivers can't even be bothered to show up on time, or else riding all over town in a carpool twice a day - leaving no time for other things. (Plus, those buses and trains cost just about the same per mile as driving alone in a car, and seem cheap only because governments that still think they're flush with money give the "service" away practically for free. In a pinch that will become unaffordable, and the rider will pay or else stay home.)
As to debt, there may be some exaggeration in Gail's view of things, but it does seem as though the bubble economy lured so many people so close to the edge that a feather can push them over. And while I reject the silly notion that debt can't work without growth (after all, religious authorities have always inveighed against it precisely because it is often an effective tool), rapid growth makes it far, far easier to pay off, almost to the point of making it look like a freebie. That strongly encourages taking it on recklessly - which has already been done in spades so that now we're deep into the hangover. I suppose we'll have to wait and see how that turns out.
One way or another, there's never been a free lunch.
Very good points - in a short space it's hard to make clear distinctions.
Yes, most people don't like carpooling or mass transit, so it's not a perfectly interchangeable substitute. The point: both of them work to get people to their jobs. Carpooling in particular can be implemented overnight, costs nothing, and saves 50% to 80% of fuel consumption. So, if people are really in pain, they can still do the basics, like getting to work, without having to skip the mortgage payment.
By the way, Metra and CTA bus services aren't great (though CTA's BusTracker helps), but their electric rail service really is very good for commuting, and we have plenty of electricity.
they'll buy an enormously expensive new fuel-efficient car, leaving less money for other things.
A Prius is less expensive than the average US car. Ten year old Corollas and Civics are very cheap and reliable, and get pretty good mileage.
I reject the silly notion that debt can't work without growth (after all, religious authorities have always inveighed against it precisely because it is often an effective tool)
Would you like to expand on that? I'd be curious for your thinking.
we're deep into the hangover
True. It may take a long time to recover.
Debt: has been used for ages to time-shift the use of resources. By the time you could save up for a house, you hardly needed it any more. Or by the time you could save up for tools-of-the-trade, you'd hardly be capable of using them any more. So some form either of debt or of debt-called-something-else (often servitude) took care of such problems (e.g. apprenticeship, working for practically nothing for seven years; in the good old days, with life so short, many would never even have outlived that term of servitude.) OTOH as we've been seeing, debt can be badly overdone (even in times of rapid growth.) Hence the tradition of inveighing against it, reinforced of course by the bucket-of-crabs mentality that pervades at least some branches of many religious traditions.
And let's not forget all the other things that function almost exactly like debt but aren't called debt. For example, "free" and universal education at public expense. That's another form of time-shifting the use of resources from late in life to earlier. So, for that matter, is childhood itself. And yet somehow people managed, irrespective of the rate of economic growth, which was usually essentially zero.
Old Corollas: may be cheap now (almost by definition: nobody wants them) but if these issues start to bite really hard, they won't be so cheap or available any longer. This is simply not a door everyone can walk through at the same time.
Carpools: "Carpooling in particular can be implemented overnight, costs nothing..." Simply not true. Costs are often payable in currency other than cash. For many people carpooling (or transit) will carry a heavy cost in time, because most of us North Americans long ago ceased to conform to that ancient 1920s lockstep commute model. (Of course there are a few for whom it works fine; no problem with that.)
Debt: yes, if the material resources exist, we'll find social institutions to use them.
Old Corollas: Everyone doesn't have to walk through the same door at the same time.
Carpooling doesn't have to carry a heavy cost in time. Online matching systems, either ahead of time or in real-time, can make all the difference. Traditional carpooling was employer-based and clumsy because of communications and info processing limitations. Those problems don't exist now.
I must suppose that Nick is rather well off and doesn't know anybody who lives from paycheck to paycheck.
I personally know many people who do, and while they have cut back somewhat on energy purchases as prices have gone up, they have necessarily cut back MORE on other things.
And many people I know who do have "a little money", meaning they are moderately well off, buy a lot less gasoline and other fuels than they did formerly, but they have cut back thier fuel purchases LESS than spending on other things.
Gasoline is seen as necessarily having more utility than other goods or services to most people-especially the huge number who must drive to work and nearly everywhere else.
Science and the scientific method are fine things; but they need not be carried to ridiculous extremes.
Mac,
Sure, there a lot of people who live from paycheck to paycheck, but a lot of people don't. Gail is talking about the whole economy, not just the rural poor. We shouldn't do economic analysis assuming that everyone is poor.
Also, see my comment above.
You don't need everyone to be poor for the effects I am talking about to happen.
What is necessary is that some of the population be living from paycheck to paycheck. These folks aren't necessarily going to be thinking through the possibility of trading in their SUV for a smaller older car, and looking poorer in the eyes of their neighbors. The SUV will be depreciated in value (as it drives off the lot), so its trade in value on a new smaller car will be considerably less, in terms of what it will really buy.
You don't need everyone to be poor for the effects I am talking about to happen. What is necessary is that some of the population be living from paycheck to paycheck.
But how many is "some"? How big will the effect be? You need to quantify that. Otherwise, it's just a handwaving argument.
Again: the poorest quintile of the population tends not to own cars. The richest 40% of the population tends to pay cash, or have the cashflow to deal easily with such problems. We're talking about perhaps 20% of the population, and even most of them will be able to carpool, switch to the teenager's small car, take the train, etc.
These folks aren't necessarily going to be thinking through the possibility of trading in their SUV for a smaller older car, and looking poorer in the eyes of their neighbors.
They'll be thinking about it. Most will be reluctant to look poorer, but will they be willing to lose their house to keep their SUV?
The SUV will be depreciated in value (as it drives off the lot), so its trade in value on a new smaller car will be considerably less, in terms of what it will really buy.
They may have to buy a used car. Perhaps a 5 year old Corrolla, Civic, or Yaris.
Those in the lowest quintile do own cars. They are the older cars which are the gas guzzlers the upper quintiles bought new 15 to 20 years ago. The poor may have several of these cars since poverty drives many adults to live with their parents. The house next door to me has 3 generations living there. The retired generation provides child care for the working generation. When fuel prices go up they consolidate trips such as doing the shopping on the way home from work. They drive them until it becomes too expensive for them to keep them running and then sell them for scrap.
Those in the lowest quintile do own cars.
Sure, but at a rather lower rate than the more affluent. The poorest quintile live disproportionately in urban areas with mass transit.
They are the older cars which are the gas guzzlers the upper quintiles bought new 15 to 20 years ago.
The smart ones drive old Corollas and Civics, of which there is a good supply.
When fuel prices go up they consolidate trips
Yes.
They drive them until it becomes too expensive for them to keep them running and then sell them for scrap.
They drive them until the cost of a repair becomes larger than the very low prices of other old cars. In the US, we have a big surplus of cars, and throw them away prematurely.
Small, efficient, quality cars such as Honda Civics are hard to find on used car lots where I live, and I am in a mtro area with ~600,000+ people. Lots of SUVs and big pick ups for sale though.
Interesting.
The next question: has there been a significant change in the average resale price of small, efficient, quality cars such as Honda Civics?
Let's not get too silly about this. Even if there is some disproportion, many in the poorest quintile live in areas without useful mass transit. And let's not forget that the urban areas with useful mass transit are often bloody expensive to live in.
Let's also not forget that in most places, what transit there is serves only commuters who work 9 to 5 weekdays, and very possibly never on Sunday (only wickedly expensive cities like New York provide something approaching 24/7 service, and even in New York that's not everywhere, and you may find yourself waiting an hour at a place and time where it's dangerous to stand around for even a minute. I still remember dashing from an evening college swimming class at something called the Church of All Nations to the Bleecker Street subway station, with the repeated sound of breaking glass bottles coming from a variety of directions; not an experience I would ever want to repeat for any reason.) But lowest-quintile jobs are worked very disproportionately at what European labor officials refer to as "anti-social hours" - hours at which the buses or trains aren't running at all, or are at best running a skeleton service reaching only a very tiny minority.
Let's also not forget that (the previously mentioned) carpooling will often be at cross purposes with trip consolidation. There simply aren't enough hours in the day to take the Grand Tour not only of several workplaces and residential areas twice, but also of several consolidated-trip destinations. Again, this stuff is not cost-free, which is why so little of it is actually done.
Even if there is some disproportion, many in the poorest quintile live in areas without useful mass transit.
Sure. But, we're talking about the overall impact on the economy, so averages matter.
let's not forget that the urban areas with useful mass transit are often bloody expensive to live in.
We shouldn't confuse middle class lifestyles with poverty lifestyles. Single Room Occupancy hotels are pretty cheap.
you may find yourself waiting an hour at a place and time where it's dangerous to stand around for even a minute
Ditto - the poor do what they have to.
carpooling will often be at cross purposes with trip consolidation.
Carpooling doesn't have to carry a heavy cost in time. Online matching systems, either ahead of time or in real-time (Google "slugging" for one example), can make all the difference. Traditional carpooling was employer-based and clumsy because of communications and info processing limitations. Those problems don't exist now.
Again, we don't have to have one-size-fits-all solutions, and a few people will suffer disproportionately. But, the question here is the overall impact.
I don't think he's confusing anything. Where I live (San Francisco, one of the best transit cities in America), there is very little housing affordable at a 'poverty lifestyle'. SRO hotels barely exist anymore. Much of the low income housing, including substantial amounts of what is really medium income housing, exists only due to local ordinance requiring it of new development. All of what exists is spoken for, much of it will only come on the market when the occupant dies. (Another very substantial portion of affordable housing consists of rent-controlled apartments that will no longer be affordable when the occupant dies.) I don't see poor people moving from suburbs into the city at any fast rate. About the only option is for family and friends to move in with those who already have places in the city. That could definitely happen, but only for those who have the connections. Those who are poor partly because they do not have the connections are not going to make it here.
So, there are no significant pockets of poverty in SF??
That would be highly unusual for large US cities.
Yes, San Francisco probably is unusual; there are far fewer pockets of poor folks than in the average American city. The city has gentrified hugely over the last thirty years and many poor people have been driven out. It's been ongoing and highly visible as a political issue. For what you are predicting/suggesting regarding poor folks moving to the city, we would have to see the end of the existing trend first.
And you know what Nick? I attribute the gentrification partly to the city's excellent transit system. We now have a lot of folks (yuppies, I daresay) who drive or take a company shuttle or the Caltrain to Silicon Valley for work, and spend their weekends biking or taking the bus around the city. (For one thing, taking the bus avoids the danger of a DUI when you're coming back from a swanky bar with your friends. Also beats driving in city traffic.) Also living in the city makes it possible to live without a car, which allows some people to pay more for housing. So I see our transit system as an attraction for better off young people who drive up the price of housing, rather than primarily a life-raft for the poor, although it remains that as well in some places.
In many ways San Francisco is iconic and ahead of the curve when it comes to consciousness about carbon emissions and peak oil and crafting responses to those challenges. Some well off educated people move here precisely for those reasons. And it has to be admitted by anyone that those responses have not made it easier for poor people to live here.
For what you are predicting/suggesting regarding poor folks moving to the city
That's not what I was suggesting. This is what I said:
"The poorest quintile live disproportionately in urban areas with mass transit."
And, that's true. I was talking about the impact of high gas prices. Again: the poorest quintile of the population tends not to own cars. The richest 40% of the population tends to pay cash, or have the cashflow to deal easily with such problems. We're talking about perhaps 20% of the population, and even most of them will be able to carpool, switch to the teenager's small car, take the train, etc., before they default on the mortgage or are unable to get to work.
I cannot remember my source,but when Identifying where to place a retail outlet, it was found that the areas which had the most disposable income were neither the very poor neighborhoods nor the very rich.
Apparently all this "keeping up appearances" leaves one rather out of pocket.
Another excellent example of how out of touch you are with the real economy if you think it is just the rural poor living from paycheck to paycheck.
Mac was talking about rural poor, so I was addressing that.
Another excellent example of how out of touch you are
You do realize that's ad hominem, don't you?
if you think it is just the rural poor living from paycheck to paycheck.
Not at all. But, many people who live from paycheck to paycheck still have lots of income, they're just not saving. The % of people who are working, commuting poor who have very few options is certainly less than 50%, probably 20%.
Most people have a lot of strategies available to them to deal with gas bills besided defaulting on their mortgage or credit cards: again, they can carpool, take the bus, buy a more efficient used car, etc, etc.
"You do realize that's ad hominem, don't you?"
I'm not sure it's ad hominem but it certainly isn't very generous. I apologize.
It's just that I do happen to think you are out of touch with how the economy works based on your repeated failure to see the forest through the trees.
But I could have phrased it better. Perhaps: you have not yet formed an accurate, complete picture of the relationship between fossil fuels and the economy's dependence on them?
Is that better?
That's certainly better.
OTOH, something that acknowledges that we're doing an evidence, theory based project on TOD would be better:
" I strongly disagree with your picture of the relationship between fossil fuels and the economy's dependence on them."
Fair enough. I can go with that.
We all have our pet peeves...
That is NOT an ad hominem. An ad hominem is a logical fallacy where an argument is dimissed because of some irrelevant flaw in the person who made the argument e.g. He can't even keep his wife and he's telling us how we should run the economy!
Keeping a wife has nothing to do with economic policy, so this does not make any sense.
In contrast, an insult does not necessarily have to be anything more than an insult e.g. You're an idiot.
That's just an insult, and the person who said it may not have intended for it to be a counter-argument, or part of one. I might explain how you're wrong because you misread the chart, forgot to carry the one, and your conclusions do not follow your premises. After that, I might call you an idiot. As this insult does not form part of my rebuttal, is is not an ad hominem.
Finally, if the person's flaw is relevant, there's nothing illogical about bringing it up e.g. You don't have any backround in climate or modelling, have failed basic computing tests and didn't graduate form high school. What you say about global warming carries no weight at all.
This appeared to be both related to the argument, and not based on any evidence except that the two parties disagreed. That's an argument aimed at the person (ad hominem), and not the facts or logic at hand.
Nick,
Before the recession hit, the Puente Hills Land Fill in Southern California was permitted to receive 14,000 tons of trash per day. They hit that limit by 1 p.m. at which time trucks would have to go elsewhere. After the recession they are receiving 8-9,000 tons per day and are open all day. Is this the kind of evidence you are looking for?
There are also capacity limits to our transit options. This is not as simple as switching from steak to hamburger.
I'm not sure what you're telling me with the trash info. I agree that the economy has dropped significantly from it's peak before the recession. There's no question that we've had a big recession, and that oil played a significant part. That doesn't really tell us that much about Gail's assumptions up top.
There are also capacity limits to our transit options. This is not as simple as switching from steak to hamburger.
Yes and no. Carpooling is fast and cheap. It can be pretty inconvenient, which is why only 10% of commuters use it, but it works very well. We have a big oversupply of cars, so switching our VMT from low-MPG vehicles to high-MPG vehicles very quickly isn't that hard. For instance, 20% of VMT in Tokyo comes from 2% of the vehicles (taxis).
I see your comments above and raise you these two points;
First,where is YOUR evidence (you question Gail's assumptions!) that things are going to get better, rather than worse, within a meaningful time frame?
Second, most of my acquintances despite the fact that I now live in the country are urban types, but they still lead highly auto centric lives;and except for our so called public servants-govt employees, damn near ALL of them are either seriously hurting or at least feeling some minor pain.
The ONLY person I know well whose business is going great guns is a lawyer who specializes in real estate and bankruptcies. Everybody else is just holding on or slowly slipping downhill.
The diner (in the business district of the closest town) where I have lunch occasionally has suffered a twenty percent decline in business, and it's getting worse.
The man who used to wait on me at the plumbing supply I patronize was laid off recently.
Over fifty percent of the people I know who are in the construction trades are out of work.
The driveway/roadside sale of our peaches, apples, and nectarines to people out for a drive in the country has crashed so hard Daddy is seriously considering shutting down the orchards, keeping up just enough of it for our family use.
And things are fairly good around here compared to lots of places.
I'm working on a solar hot water heater between blogging and taking care of the every day chores today.
I expect my income to decline but my utliity costs to rise.
where is YOUR evidence (you question Gail's assumptions!) that things are going to get better, rather than worse, within a meaningful time frame?
1) I have evidence: both world and GDP are currently growing, though not growing fast as we'd like.
2) Really, the Original Posts on TOD should provide evidence, not just assertions. It shouldn't be up to the commenters to bring up essential points.
most of my acquintances despite the fact that I now live in the country are urban types, but they still lead highly auto centric lives;and except for our so called public servants-govt employees, damn near ALL of them are either seriously hurting or at least feeling some minor pain.
Yes, I agree, most people are still in pain from the recession. We had a housing bubble, a credit crunch, and a bank panic. We had a classic business cycle that was worse than the average since WWII, though mild compared to many before that. Yes, PO had significant direct and even more significant indirect impacts, but it wasn't the primary, direct cause. And, the current recession doesn't tell us that much about PO's longer-term effects on the economy.
they still lead highly auto centric lives
Yes, because they don't see that as a central problem. Most urbanites could carpool, switch to a higher MPG car or take mass transit if they chose to. I personally only drive about 2,000 miles per year, because I use electric rail (really, just about the best solution, but not available to all).
Nick,
I am afraid I must say that I believe your mindset is such that you are incurably optimistic;I look at the same figures you look at and where you see a growing economy I see a temporary minor uptrend at best, but a definite and steep overall continueing decline.
But it is interesting that you used to be a doomer, when I was a techno optimist, and now that I am more of less in the decline with the possibility of doom camp , you are the optimist.
We have probably looked at pretty much the same evidence.
For what it is worth, I will admit that although I think the odds are heavily against you, you might just be right-especially over the long term.
Even though his work contains numerous assertions I believe to be grievous errors, I try to get people to read Lomberg's "The skeptical Environmentalist" for the very simple reason that right or wrong, he goes thru the current arguments in respect to the environment and energy and growth from a point of view opposite to that we hear so frequently.
There are useful insights to be gained from his work;insights not to be found in mainstrean environmental writing, or in forums such as this one for the most part, except when somebody like you keeps to his guns in the face of massed fire from the rest of us.
Yes, we need to keep thinking carefully.
One thought about the economy: first, look at world GDP: you'll find the growth trend to be pretty convincing, I think. 2nd, look at US GDP from a "business-cycle" perspective: I think it's perfectly consistent with that. Here are the stats:
07-q1 1.2%
q2 3.2%
q3 3.6%
q4 2.1%
08-q1 -0.7%
q2 1.5%
q3 -2.7%
q4 -5.4%
09-q1 -6.4%
q2 -0.7%
q3 2.2%
q4 5.6%
10-q1 3.2%
The last 3 quarters are reasonably strong positive numbers. That's decent evidence of growth.
Nick,
Almost everybody lives paycheck to paycheck more or less, certainly most of suburbia is at income=outgo, and another large group would respond by cutting 401K contributions or such to buy that higher-mileage car. All of the above are recessionary and deflationary. There is no magic whereby you can raise costs across the board, especially for an imported resource, without side-effects.
Of course, if enough people buy new Corollas instead of Escalades, for those who buy cars, society overall may bump up in other spending -- that's the whole point of investing in efficiency.
I'm not convinced that high fuel costs immediately will create a downward spiral, but there is no denying a downward slope unless and until a cheaper fuel replacement arises. If you were alive during the 70s, this is pretty obvious.
Almost everybody lives paycheck to paycheck
Not really. 10% of car buyers use cash. A larger % of home buyers have no mortgage at all. Many more have significant savings.
another large group would respond by cutting 401K contributions or such to buy that higher-mileage car.
That would be smart.
All of the above are recessionary and deflationary.
No, buying a car stimulates the economy. Especially if you save less to do it. Right now, we're saving too much.
There is no magic whereby you can raise costs across the board
Buying a Prius cuts costs, across the board.
If you were alive during the 70s, this is pretty obvious.
No, it's really not. Remember Paul Volcker, and his 18% interest rates? Volcker would have cause a recession even if there had been no oil shock.
Excuse the hyperbole, it's only 61% of workers, and 30% of those making 6 figures. Of course that excludes the non-working retirees, unemployed, and welfare supported. Like it or not, you must in a minority.
http://www.marketingcharts.com/topics/behavioral-marketing/majority-of-u...
Buying a cheaper car does not grow GDP like an expensive car. Buying one AT ALL is only an option for those with lee-way -- many are stuck buying expensive gas due to lack of credit, or a simple cost-benefit analysis, at least for a new car. Buying a cheap, small, used car doesn't help Detroit much at all...
Is it your goal to dispute every point? Volcker wasn't in charge of the Fed until 79 -- he had nothing to do with the 70's -- that was all oil and an "end to growth" in American manufacturing. After that, globalization of industry began in earnest. But that's separate from high interest rates -- that was just an effort to reign in inflation without bankrupting the middle class, which is a technique unfamiliar to today's banksters in office.
Excuse the hyperbole, it's only 61% of workers, and 30% of those making 6 figures
This is talking about whether people are saving money, not whether they can afford a new car. We can see that this doesn't measure people's ability to afford a new car by the fact that 30% of those making over $100k aren't saving: many of those aren't saving precisely because they are spending money on new cars.
Buying a cheaper car does not grow GDP like an expensive car.
hmmm. Is this an argument for keeping EVs expensive? Seriously, I'm not sure what your point is. If people stop buying SUVs, and buy less expensive hybrids or small cars instead, the car industry might shrink a little, but that's not a big deal, in the long run.
A Prius is less expensive than the average car, but only by about 15% - that's not a big deal.
Buying a cheap, small, used car doesn't help Detroit much at all...
It gives the seller money to buy a new car.
Is it your goal to dispute every point?
Only those that don't seem to make sense to me.
that was all oil and an "end to growth" in American manufacturing.
Oil had an impact, no question, but it didn't cause an end to growth, either in GDP or manufacturing: US GDP is 150% larger, and US manufacturing is 50% larger now than in 1979.
Nick, I admire your persistence. It is useful to have someone like you make these arguments. But, in terms of the current economic problems, it doesn't take 100% of consumers forced to cutback to cause economic contraction. Heck our departure from the BAU trend is only around 10% or less. So what if 10% of car buyers use cash. What about the 20% who used to operate by trading in their old clunker, which is underwater in the loan, for a new car, and an auto loan for well over 100% of the new cars value? Knock these guys out of the market, and you already have a pretty good economic contraction built in. Then many of the other 80% defer purchasing, or downscale their expectations.
I do agree that the recent oil schock didn't cause the current recession. We woulda come to huge grief because of the financial enginering games regardless. It is possible the commodity spike of 2008, might have had something to do with the timing of the trigger point. But, even then I probably didn't advance the meltdown by much.
The real concern now, is the ability to recover. Virtually all the economists assume reversion to the trend is possible, likely, and desirable. But anything that looks like recovery (for the world economy), spikes oil and other commodities. I think the world has gotten itself under a resource ceiling upon which it will bump its head against whenever the recovery gains momentum. Clearly the proper strategy is mitigation via an agressive program to improve the efficiency of the economy with respect to resource usage. The question is, do you see anyone actually doing that at a meanful scale of effort? If the answer is yes, in fact most economies/political systems have fugured it out, then an optimistic expectation is in order. But, the way it looks from from my cheap seat, we have a few systems -mostly in Europe and China which are doing that halfheartedly, and much of the rest of the world refusing to admit there is a problem.
What a strange thing to think.
Growth was already slowing down due to high oil prices before the housing bubble popped and was doing so in countries other than the U.S., ground zero of the housing crisis.
Those two points alone indicate high oil prices were were slowing the world economy. James Hamilton handles the rest.
And it's easy to see with a basic calculation.
Looking at the U.S. alone, the country's annual oil bill went from roughly:
20.5 million barrels / day x 365 days x 21 $/barrel = $157 billion
to
20.5 million barrels / day x 365 days x 91 $/barrel = $680 billion (2009)
(Yearly average price can be obtained from http://www.inflationdata.com/inflation/inflation_rate/historical_oil_pri....)
or an increase of $523 billion. Put that money toward fuel instead of whatever else it used to be spent on and do it for several years in a row and the economy is going to shrink. It's especially going to occur because of how visible the price of oil is in our world ("Have you seen the latest gas prices?!?"). It affects pocket books directly and many spending decisions indirectly ("Gosh, I just spent $80 on a fill up. I don't think we should go out tonight for dinner.")
Of course the recession was caused by high oil prices. And the housing bubble happened to burst at the same time. Two causes.
Even worse, about 2/3 of the $523 billion annually increase in oil costs added to the US international trade deficit. The ability to buy oil on credit will run out before the oil fields do.
If exporters are smart, they'll hoard t-bills against the day their oil runs out, or importers get tired of shipping their wealth and income to other countries.
If importers are smart, they'll get tired of shipping their wealth and income to other countries sooner rather than later.
Germany and Japan have been reducing their imports for quite some time. The US has reduced it's imports by 20% in the last 2 years.
Nick,
I take it that you think the oil exporters are going to be able to redeem those t bills and but something useful with electronic-not even PAPER- dollars they get for them?
My expectation is that anyone holding long term debt is going to wish like hell he had exchanged it for something tangible and intrinisically udseful-such as a huge pile of scrap iron or coal.
I just can't see any way at all that the citizens of this country are going to accept a draconian austerity regime for the forseeable future which more than likely would still not solve our overseas debt problem-not when it can be inflated out of existence.
To be honest, I don't think there is any real hope of our society comin g anywhere close to being able to pay for the goodies promised to our own citizens.
I just hope like hell my dear old Daddy's social security and medicare benefits hold out long enough to see him to his final resting place out on the hill beside Momma.
I can pay the bills if these benefits don't hold out so long as he remains healthy;but if he were to develop an expensive chronic health problem,I would be broke pdq without the benefits.
I don't expect to collect nearly as much as I am theoritically supposed to if I live to be very old;the demographics are stacked to too great an extent against me, even if our govt were not ALREADY head over heels in debt.
On thing that the US produces that will be in short supply globally is food.
I expect a lot of those T-bills to be exchanged for purchases of food.
It will also pretty much end the obesity epidemic in the US. Good times for farmers though.
an increase of $523 billion. Put that money toward fuel instead of whatever else it used to be spent on and do it for several years in a row and the economy is going to shrink.
40% of that was domestic, and didn't shrink the domestic economy. The other 60% represented an import bill, that needed to be balanced with exports, either of goods & services, or T-bills and CDO's.
Yes, the import bill was a drag on the economy, if petrodollars weren't recycled. OTOH, at it's peak oil imports were only 25% of our total imports, and 50% of our trade gap, so oil wasn't the only problem.
What about the 20% who used to operate by trading in their old clunker, which is underwater in the loan, for a new car, and an auto loan for well over 100% of the new cars value? Knock these guys out of the market, and you already have a pretty good economic contraction built in. Then many of the other 80% defer purchasing, or downscale their expectations.
Yes, that's what happened, and it helped cause a recession.
I think the world has gotten itself under a resource ceiling upon which it will bump its head against whenever the recovery gains momentum.
Sure. I think PO is going to slow growth down.
do you see anyone actually doing that at a meanful scale of effort?
Yes, Europe, Asia and the US are doing so. I agree that they're not doing so nearly as quickly as would be desirable. But, diesels, hybrids, EREVs, and EVs are being ramped up quickly. Rail is replacing trucking.
Exactly what will be the result? It's hard to say. We could see stagnation for 10-15 years, though I think 1.5% US growth and 3% world growth is more likely.
The current recession will reduce the amount of "knocking our heads on the ceiling", and OPEC's floor under prices will help reduce boom-bust cycles.
Excuse me, but no-one can "save too much" - it is prudent, sensible, and has long-term security built in (very significant intangibles). If you are saying that "society" or "the economy" demand mindless conveyor-belt consumption in order to function reasonably, then it's probably a system not worth trying to resuscitate. And car-pooling works for only a tiny percentage of people - probably wiser not to propose it as a solution in every second post.
no-one can "save too much"
Google "liquidity trap".
There is no possibility of contraction in Nick's world despite the fact that it can easily be shown that it is happening right now. It's pointless discussing these issues with him, in my experience.
Edit: I retract that. It's useful for others listening in because they hear both sides of the discussion. However, I suspect Nick will continue to say what he is saying when official unemployment hits 15%, then 20%, then 30% and so on.
There is no possibility of contraction in Nick's world
No, I just think that prolonged, deep contraction is unlikely. I think that a Japanese-style stagnation is somewhat more likely, though not the likeliest thing.
Nick will continue to say what he is saying when official unemployment hits 15%, then 20%, then 30% and so on.
I'm questioning the assumptions surrounding that "when". You're assuming it's certain, and I see no evidence for that.
I know you see no evidence of it. That's what I mean about you having some sort of block because all of us keep showing it to you — repeatedly.
I think Greer's model is close to the one we'll follow:
However, Chapter 2 or 3 (don't have the book handy right now) of the Odum's A Prosperous Way Down lists well over 200 studies that look at resource depletion and many (most?) come to a similar conclusion: contraction is in our future. Actually if you read any of their work perhaps a light bulb will go off for you.
Greer's model isn't evidence - it's just a formalization of his assumptions. Greer, by the way, is a good writer, but he's not an authority on energy:
Education: University of Washington B.A. in the Comparative History of Ideas.
Training: Order of Bards Ovates and Druids (OBOD) correspondence study program - three degrees of Bard, Ovate and Druid, certificate as a Druid Companion of the Order. OBOD's Mount Haemus Award for Druid scholarship." http://www.aoda.org/about/greerbio.htm
Experience: philosophical/religious writing.
No energy, or economics related education or experience. No quantitative or technical education or experience.
Regarding Odum:
I've read some studies like that. My observation is that fossil fuels in general, and oil in particular, are the bulk of the resources they're using for that conclusion. Like Greer, their knowledge of the alternatives tends to be very superficial.
For instance, I looked at the 4 studies you used on your website: 3 of the 4 actually tended to argue against PO-induced decline, and the fourth (Hirsch) was superficial.
Are there one or two from Odum's list that you'd recommend?
:-)
Naah, we've been down this path before, Nick.
Nick, there are many things to question about the doomer scenario, and I also have some reservations about Greer's ideas - mostly, I tend to think that he assumes a level of collapse in a time period that is unlikely, despite his insistence that he is picturing a long descent. What I am seeing is an end to growth as a way of business, and long, very slow declines while maintaining most of society a la Japan. Then again, I'm seeing signs that America will take the other route and eviscerate the middle class, basically making itself a third world country...
However, if you're going to argue from his "lack of credentials", I would like to point out that economics is a psuedoscience right now, and mainstream economists have proven themselves to be consistently wrong... So his lack of brainwashing in the orthodoxy of monetary phrenology is, if anything, a good thing.
As for energy, like most people in the peak oil community, he's a well trained amateur. However, you should notice there are plenty of people on TOD that are actually in the oil industry and agree that peak oil is just a fact of life.
I'm left with two questions to ask you: do you think we have an infinite or at least very, very large supply of fossil fuels? If not, do you think that alternative energy is going to experience the breakthroughs necessary to keep up business as usual?
if you're going to argue from his "lack of credentials"
I'm just pointing out that, like others such as Kunstler, he's a writer, not an expert in energy.
he's a well trained amateur
He's not well trained. His knowledge of energy is superficial. He provides no information about energy (resources, depletion, substitutes, etc, etc) - his discussions of both wind and coal are superficial and entirely inaccurate. His novel contribution is speculation that an "inevitable social collapse" will come slowly, not quickly.
------------------------------------------
there are plenty of people on TOD that are actually in the oil industry and agree that peak oil is just a fact of life.
I agree with them. That's different from the idea that PO will be likely to cause long-term decline in the economy.
do you think we have an infinite or at least very, very large supply of fossil fuels?
Not at all. Though we do have enough coal to last far longer than would be good for the planet.
do you think that alternative energy is going to experience the breakthroughs necessary to keep up business as usual?
Alt energy doesn't need breakthroughs - it's good enough already. It just needs to grow...
Adamx, I've noticed that a lot of people tend to get confused about my theories concerning the timing of collapse, and very often their disagreements with me are based on that confusion rather than what I'm actually saying. The central point I'd like to make is that in historical examples of the decline and fall of civilizations, the process comprises a series of crises separated by periods of stabilization and partial recovery. The whole process takes one to three centuries; the individual crises are measured in decades, as are the intervals between them.
If this model applies to our civilization as well, as I suggest, then we're arguably early in the one to three century downhill run, but in the short term potentially facing one of those several-decade-long crisis periods. That doesn't mean drastic collapse in the near future; it means a fairly rough time for most people over the next generation or so, and then stabilization at a somewhat lower level of energy per capita and material prosperity. Now of course you're free to disagree with that as well, but I hope it's a bit clearer!
Nick, I notice that you've gone out of your way to reference a source that doesn't mention my training in the appropriate tech field back in the 1980s, as it's a bio for the Druid religious organization I head. As a rhetorical ploy on your part, that's pretty clever, as is the entire ad hominem argument you've made here -- "Greer doesn't have the background I think he should have, therefore everything he says can be dismissed out of hand."
Now of course you're quite right that Andre's chart isn't evidence, but that's not what Andre said it was; he said it was his best guess of what was likely to happen. The model is speculative, and indeed it was presented as such in The Ecotechnic Future, and in the blog posts where it first appeared in print; it's an attempt to map a theory exploring historical processes as a parallel to ecological succession onto one possible shape of future history. If you'd like to dismiss it, by all means, but please do pay attention to what I'm saying instead of beating up on straw men.
I notice that you've gone out of your way to reference a source
IIRC, I simply went to your web-site.
As a rhetorical ploy on your part
There's no ploy - as far as I could tell, you had no energy-related education or experience.
the entire ad hominem argument you've made here
That's not ad hominem: if someone is cited as an authority, it's appropriate to look at their credentials.
my training in the appropriate tech field back in the 1980s
Could you provide more information? That could clear this up.
Andre's chart isn't evidence, but that's not what Andre said it was
This is what Andre said:"I know you see no evidence of it. That's what I mean about you having some sort of block because all of us keep showing it to you — repeatedly. I think Greer's model is close to the one we'll follow:"
That clearly suggests that Andre thought he was presenting evidence. In any case, evidence is what I was asking for.
t please do pay attention to what I'm saying
I was paying attention to what Andre was saying: If your model was speculative, it didn't advance the argument.
-------------------------
I'm sorry if my comment seemed a bit harsh - I apologize.
It's just that I feel that the idea of a long-term decline due to energy limitations is highly, highly unrealistic.
I had put that in a new paragraph hoping to distinguish it from the previous thought. I did not intend Greer's graph to be evidence. The evidence I was referring to was that I gave in previous conversations.
I'm bowing out for a week's vacation. Have fun while I'm gone!
The evidence I was referring to was that I gave in previous conversations.
Ah. But...that evidence didn't support the argument.
I think Nick is unhappy that Gails arguments are qualitative, not quantitative. In their current state they can't be plugged into a mathematical model of the economy. That is clearly the next step. Get some academic economists to investigate this proposed effects in a more regorous form. I don't think we can fault Gail for not doing that. Sometimes an idea has to travel to someone else with the right qualifications before it can be fully fleshed out. It wouldn't surprise me if her presentation at this meeting might have got such a person thinking.....
I think Nick is unhappy that Gails arguments are qualitative, not quantitative.
Yes. For instance, statistics showing a connection between fuel consumption and mortgage defaults. Heck, something as basic as showing that the average household fuel cost was large enough to cause people to default on their mortgage. An argument needs numbers and facts.
That is clearly the next step. Get some academic economists to investigate this proposed effects in a more regorous form.
That's not necessary. Heck, some googling would do it, if the evidence existed. If she were to give it a try, I think she'd find that in fact the evidence didn't support her hypotheses. I'd look for evidence, but it's hard to disprove a negative (IOW, how do I prove evidence doesn't exist?).
That kind of basic quantitative argument, with numbers, sources and such, is what makes TOD an interesting place.
Now, if you're thinking about the hypothesis that PO would cause long-term decline? There are, in fact, a number of analyses by people like James Hamilton, and the Philadelphia Federal Reserve, or Ayres (discussed elsewhere today). They don't support that hypothesis.
It's easy enough to prove the negative, if the negative is true. Just find some data (maybe this is place to start?) for gasoline consumption by county, and then find some data for foreclosures (and/or commercial bankruptcy filings?) by county, which is probably possible. Either the data will show correlations or it won't.
Either you or Gail could probably do this, if you had the time. Granted, not having the time is an acceptable excuse in my book.
Perhaps someone has done it already.
And what does it mean then. The number of people carrying open umbrellas correlates strongly with rainfall. Ergo, umbrellas cause rain! Correlation is only the first step. Then you need a good theory, and a way to test it. (1) Rain makes people open up umbrellas to keep dry. Or maybe the weatherman predicting rain causes it to rain, and also causes people to open umbrellas. Or even umbrellas cause a local perturbation to the weather that attracts rainclouds. Then after some careful observations and experiments, you can start excluding some of the hypothesis.
See reply to PaulS
However, correlation is not causation. All sorts of economic curves go up and down randomly for all sorts of ex-post-facto narrative "reasons". And all sorts of local factors influence foreclosures.
Correlation is not necessarily causation, but lack of correlation is necessarily not causation. Since Nick was talking about proving a negative, it's the latter fact that is pertinent.
Yes, but the problem: there are a lot of false correlations. For instance, exurban housing was hurt by the housing bubble (sub-prime mortgages taken out by people who couldn't afford the ARM resets, combined with a lack of demand for new housing), while many incorrectly assume that rising gas prices was the cause of exurban problems.
So you have data that proves that exurban housing that was 'hurt' is more strongly correlated to ARM resets than the cost of gas for homeowners?
I'm more or less agnostic on how significant a role oil prices played in the recession. But I don't buy your 'can't prove a negative' argument here.
Yes, I think a little analysis would tend to support the idea that the cost of housing was far more important than the cost of gas. OTOH, your question only illustrates the difficulty of "proving" such things.
In any case, my original point was that Gail was not providing any evidence for her arguments: that's where the discussion should begin.
Consumer Spending in the Economic Downturn - The wide ranging impact on consumer behavior
Results from September 2008 Consumer Spending Behavior Study conducted by Booz & Company
Spending more time at home, driving less, and shopping more frugally are top categories of consumer behavior modification due to high energy prices and the recession.
From Transportation Energy Data Book - Chapter 8 Household Vehicles and Characteristics Only a little over a third of miles driven are to/from work or work-related business.
Table 8.8 Trip Statistics by Trip Purpose, 2009 NHTS Share of trip miles traveled Trip purpose To/from work 27.5% Work-related business 6.7% Shopping 15.8% Other family/personal busi 15.7% School/church 4.4% Medical/dental 2.7% Vacation 2.2% Visit friends/relatives 10.7% Other social/recreational 13.7% Other 0.5% All 100.0% Source: Generated from the National Household Travel Survey Internet site: nhts.ornl.gov.Absolutely true, but I'm not sure of your point.
Yes, there's some discretionary, lower-value driving that can be cut back if necessary. There's some shopping that can be done in larger, less freqent trips, or replaced with online shopping.
65.8% of driving is highly discretionary and can be cut back significantly. Even medical/dental can be reduced by choosing nearby over distant practitioners.
I can't find the statistical reference, but the percent of income spent on gasoline is essentially constant over a wide range of household income. So more affluent households can certainly cut their gasoline expenditures to the level of their less affluent neighbors.
I agree.
And in the medium -run, they can cut them 60% by buying a Prius, then in the longer-run eliminate them entirely with a Volt or a Leaf.
The type of vehicle that is driven the most miles per year per vehicle is the minivan. However, carpooling declined over the period 1980 - 2008, so it is probably not due to its being the primary commuting vehicle.
I think "the percent of income spent on personal transportation" would be a more meaningful metric, as there are many ways to get from-here-to-there without gasoline, and many choices generating costs that have nothing to do with gasoline.
Average Annual Expenditures of Households by Income, 2008 (XLS file) shows that "Gasoline and Motor Oil" expenditures are from 5.3 to 6.5% of expenditures across all household incomes up to $70,000. For $70,000 and up, they are 4.7%.
Overall transportation expenditures as a percent of expenditures are about 3 times higher, with motor vehicle purchase and other vehicle expenditures being about equal. Public transportation expenditures are pretty trivial for all income categories.
I agree: people change their behavior in response to recession and higher energy prices. They cut back spending overall in response to recession. They respond to higher energy prices by driving less, changing their transportation options (see the chart showing 20% of people doing so), etc.
There are other ways to see the connection between oil prices and recession and debt default.
Clearly, if your salary is fixed, and a portion of your expenses related to very essential needs (food, transportation to work, perhaps home heating) goes up, you will need to cut back somewhere. What are your choices? If you have been saving, you can cut back on savings, or perhaps use some of your savings. But this option is not available to everyone.
For those for which use of savings is not an option, there really only two options that I can see--cutbacks in discretionary spending and defaults on loans. I would include in discretionary spending, buying of more expensive homes. So higher oil prices would be expected to affect home markets as well, starting as early as 2004.
If one looks back historically, there has been a close connection between recessions and oil price spike. Energy Secretary Chu talked about this in the 2009 EIA Energy conference, when he showed this slide:
Jeff Rubin made a similar point, when he used this slide to support that point that higher oil prices started four of the last five recessions.
Jeff Rubin also mentions that the recession is world-wide, and did not even seem to start in the US, so pinning the recession on subprime mortgage problems is a real stretch.
I have talked about the expected impact on credit for a long time--since considerably before the 2008 credit crunch. As long as the economy is growing, and jobs are plentiful, it is easy to pay back debt with interest. Borrowing from the future makes sense when the future is better, but a lot less sense, otherwise. As soon as there is contraction, or even no growth, it is hard to pay back debt with interest. While most people continue to pay back their loans, even the increase of a few percentage points in defaults is problematic to banks.
James Hamilton showed the connection directly between oil prices and recession, both in a Brookings Institution study, and in later writings.
I might mention another connection of higher oil prices with credit. When the federal reserve saw oil prices rising in the 2003-2004, it interpreted this as excessive demand giving rise to inflationary impacts, and raised interest rates to cut off demand, as documented by Steve from Virginia. This also contributed to pricking the bubble that had been built up, from an over-expansionary policy with respect to home ownership, that had been put in place, to help boost the economy. This was clearly an oil related impact as well--and does not eliminate the other direct oil impacts.
Gail,
Clearly, if your salary is fixed, and a portion of your expenses related to very essential needs (food, transportation to work, perhaps home heating) goes up, you will need to cut back somewhere.
That's not at all clear. People can go to substitutes: join a carpool (10% of US commuters carpool); buy a more fuel efficient car (e.g., a Prius, which costs less than the average US car);, take the train, etc. Heck, most households own more than one car: they can just switch their driving miles to the more efficient vehicle (dad takes the Corolla away from the teenager, stops driving the Escalade to work). Car-switching and car-pooling can be done literally overnight.
I agree that oil shocks have economic effects. Perhaps the single largest one is that people stop buying cars while they wait to see what will happen to fuel prices. But, that's a temporary, classic business cycle problem (consumers and business temporarily reduce capital spending, which has a disproportional effect).
Also, of course, more money goes from oil-importing countries to exporters. OTOH, look at the reduction of imports in the US in the last several years.
Yes, rising oil prices (along with other commodities) tends to cause a turn in the business cycle. That's very different from the idea of perpetual zero growth or decline.
It's a very big jump from Hamilton's work, which shows that oil shocks have a significant impact on the US economy (not necessarily the world in the same way) to the idea of perpetual zero growth or decline caused by a longer-term oil shortage.
------------------------------------
Finally, I'm simply looking at the points I highlighted: you've mentioned them a number of times, but you've never quantified them. What % of consumers are strongly affected by high gas prices? What % might default?
Do coal and nat gas prices really rise with oil prices? Sure, coal spot prices rose in 2008, but coal isn't priced by the spot market like oil is, and longer-term prices didn't follow oil. Lately, NG prices have disconnnected from their historical link to oil prices.
You need to actually provide some analysis, rather than just making assertions.
Nick, individuals are already substituting to a great degree. It sure doesn't look like the substituting is or will fix the problem, at least for the foreseeable future. The issue of course is larger than the price of fuel at the pump. I agree the wealthy will not suffer for quite some time.
I certainly wish we were moving faster...
I agree the wealthy will not suffer for quite some time.
Yeah. Oddly enough, the average Prius driver is older and more affluent than the average US driver, even though the Prius is cheaper than the average car.
Perhaps they have less to prove about their status, and so they're more willing not to drive SUV's? Perhaps more education makes people more aware of AGW?
Oddly enough, the average Prius driver is older and more affluent than the average US driver, even though the Prius is cheaper than the average car.
Public Utility Commissions used to justify having the telephone companies charge extra for Touch Tone on the basis that this optional convenience would be bought by the more affluent ratepayers who could certainly afford it and thereby cross subsidize the lower-income ratepayers.
The only problem was that a detailed analysis of purchasers showed that Touch Tone was more often bought by poor people.
You always need to look at the data.
You always need to look at the data.
That's all I'm sayin...
The perfect is the enemy of the good.
Must Mr. Darwin explain the origins of life in order for his Theory of Evolution to be true? Of cause not. Darwin didn't have a clue about the genome, but his idea is still sound.
Must Gail's work be a tome in order to have merit?
If by some Herculean task Gail managed to produce such a tome, would you read and inwardly digest it?
I would not.
Would such a tome be any more useful than the synthesis of ideas presented here?
My mind evolved to find the salient points and integrate them. And I am pretty darn pleased with my mind. It is the product of millions of years of ruthless selection, a fine honed instrument.
My Superpowers.
Unfortunately, you get a lot of 'it has to be logically and mathematically perfect and already proven beyond a shadow of a doubt, or else it's just a load of absolute crap' around here.
The very idea of only thinking about ideas...*gasp* sacrilege!
Now, Logic 101 was one hecka long time ago for me, but I remember one of those boring things, the Fallacy to Authority. 'He said it. He is a total expert (list all the degrees, papers, ad nauseum). Therefore, it is perfectly true.'
Appeal to authority irritates the bejeezus out of me. It contains within it a connotation, the unspoken opposite, that the nonexpert, the uneducated, can NEVER EVER have a worthy idea. Elitism of the very worst sort, 'I went to school and you didn't, so I'm wonderful and you're worthless' nose-in-the-air...blegh!
And the people who are so very enamored of pieces of paper with names of schools on them get so, so, so very threatened by the mere mention that ordinary folk can have good ideas...
Blaspheme the Uber Sacred Cow of Education and be consigned to the Righteous Internet Flames
Not everything in this universe has to be backed up with numbers, studies, and graphs. In fact, numbers, studies, and graphs could easily be pointed at as what largely got us into this mess in the first place. Think of all those business prospectus papers with the shiny graphics promising such boodles of wealth.
When I took Statistics, the prof walked in and said, "There's lies, damn lies, and then there's statistics. I'm going to teach you every way there is to lie with numbers." So called "proof" is utterly meaningless, depending on who generated it with what motive.
What would Freud say about people who scream proof! proof! proof! on absolutely every subject? Insecurity issues?
Not everything can be known to the nth degree. Not everything is discoverable, or knowable. And there is nothing wrong with ideological debate. Heaven forbid- there might even be some truth in there. Maybe even spoken by someone who isn't an expert.
Ordinary people can and do have good ideas. But in complex scientific fields (yes, that includes economy), laymen cannot improve upon the prevailing paradigms.
Ah, jeppen, jeppen.
If you had chosen anything but economics, I would have agreed with you.
And if the prevailing paradigm is WRONG, it's wrong. In which case, the most ignorant layman is as good as a Nobel Laureate.
Economics? A bunch of voodoo doctors, dancing around waving rattles and reading chicken entrails while chanting 'Greed! Greed! Greed!' (No offense to any voodoo practitioners out there; just trying to illustrate a point.)
Science:
Physics, mathmatics, biology, geology, chemistry, astronomy
Not science:
Economics and psychology, no matter how much they howl to the contrary. Science is rational. Humans are not. Subjects concerned with human behavior are not sciences. What they are is glorified guesswork.
However, I will never convince you, and you will never convince me; so my suggestion would be to agree to disagree, in the name of efficient use of time and low blood pressure.
What about geology? The volcano eruption on Iceland should make all geologist ashamed. Not a single one of them managed to predict the eruption. This proves that geology is no real science.
The education in geology in universities of today is entirely founded on mathematical models, which may be elegant but lack all contact with reality. Furthermore, these models originate from the US and therefore lack any relevance to what's going on in the bedrock of, for instance, Iceland.
We have to abandon the mathematical models and instead go back to the geological science's great fathers in the 1930-ies and try to understand how they were thinking. Only then can we understand that the Earth's crust doesn't move in a rational and predictable way. Only then can we acknowledge that the movements are irrational and seemingly random. If geologists realize this, a lot of inane teaching in our universities will be avoided, as will lots of human suffering due to geologists mispredictions and misguided recommendations.
No, jokes aside, economy IS a science. It has hypotheses that can be tested by time and statistics, and increasingly, by experimentation. It has relevant models and useful predictions. The current theories aren't "faulty", but just as newtonian mechanics, they can be refined and improved by new theory to be even more useful and have even more predictive power. But you're right, you won't be convinced. It is important to you that economists are wrong, and thus, to you, they are.
I think your analogy to Newtonian mechanics underscores precisely why Economics fails as a falsifiable science with no possibility for it to formulate any cohesive scientific theory with predictive value.
Newtonian mechanics while useful for special cases of modeling even today, is not sufficiently powerful to give us a full understanding of nature. For that we need a more complete scientific theory such as special relativity.
Science should be able to progress by formulating newer and better theories that are able to supercede older theories in their explanatory power while still being consistent in their description of reality described by those past theories.
Current Economic theories it seems to me are stuck in a rut. Economics needs something on the order of a theory of special relativity in Economics for it to continue to be relevant. As`it stands at present it is a very limited and boxed in view of a special case, the big picture is more complex than what it seems to be able to model.
Perhaps this paper by John Foster might clarify the point I am trying to get across.
http://www2.econ.iastate.edu/tesfatsi/macrocas.foster.pdf
The problem with all that you say in that comment, is that you have no clue whatsoever. You critize that which you know next to nothing about. You demand a better theory, but don't know squat about how economics is evolving.
What you have demonstrated time and again, however, is an enormous disdain for TPTB. Your view of economics follows from that.
Ok let's take a real, scientific theory as an example, The Theory of Evolution.
As a concrete example of what I mean, the TOE predicted that there had to be a fossil such as this one. Based on that prediction, scientists were able to find it.
http://tiktaalik.uchicago.edu/
Leaving aside the issue of my supposed disdain for TPTB, (to which I readily admit but despite what you claim, is irrelevant to my point) perhaps you could enlighten me as to how the supposed 'Grand Unified Scientific Theory of Economics' has become the central organizing principle behind modern Economics, directing research and providing a unifying explanation for what is happening in the world right now?
Other than the relatively new and emerging field of Biophysical Economics, Astrology and Intelligent Design seem to have a better record at prediction and explanatory power.
So where might we find the
Black SwansTiktaaliks predicted by The Scientific Theory of Economics?What kind of predictions do you require, really? Because some of them are so obvious that you are probably fully aware of them, if you think about it. For instance, if you introduce a (meaningful) price ceiling on a commodity, then there will queues, black markets and quality problems. Of course, many economists have warned about this and seen their predictions come true when ignored.
The perfect is the enemy of the good.
I'm not asking for perfection, I'm looking something at all. The Original Post (and others like it) presented no evidence at all.
Must Mr. Darwin explain the origins of life in order for his Theory of Evolution to be true?
That's a striking example: Darwin spent decades compiling exhaustive evidence for his theory. He is the poster-child for backing up one's argument with evidence.
Not the car-pool solution again ... please no!
One can also cut the quality of the essentials as well. Some might say cutting the cost of some essentials might improve the quality of life, depending on your choices. If I remove 90% of meat from my diet, I can probably save money in the food (essential) category and be healthier, same with carbonated drinks etc. In our south central pennsylvania house we endeavor to live without airconditioning as much as possible, so we do our outside work early, and at the hottest part of they day siesta, then back in the fields in the late afternoon. Maybe my conversion from a car to a bike for six months is better for me as well.
Gail,
This is an excellent summary for those not already familiar with our discussions here on The Oil Drum. Your focus on the problems of oscillating oil prices and the lack of clear price signals is especially significant.
I have only a couple of minor comments.
1) On slide 11 you say "Greenhouse gases may even decline significantly"
I think this should be rephrased as "Greenhouse gas emissions may decline". There are so many interacting systems in the biosphere and hydrosphere that determine atmospheric CO2 levels that it is not clear what the equilibrium level would be even if we completely stopped pumping CO2 into the atmosphere through fossil fuel combustion.
2) I would probably also disagree with your suggestion that a lack of cheap oil will reduce our (global) consumption of coal. I actually imagine the contrary will happen as one of the most obvious forms of fuel-switching.
But I agree completely with your bottom line that we should rethink climate change policy. My own thoughts about the conjoined issues of climate change and peak oil are the following:
Cheers,
Jon
I think what I say regarding emissions is right in the text ("new greenhouse gasses emitted may decline significantly"). I agree with you that it is unclear what the new equilibrium level will be.
I think at least some of the people at the symposium were getting discouraged at how poorly current climate change policy approaches are working. Maybe having some new ideas will inspire some new thinking on the subject.
Gail:
You're right about the level of discouragement over the status of current climate policy approaches, and I'd also add that such discouragement extends well into the technologies available for reducing emissions.
There were a couple of people from our office who were in attendance at the MIT meeting, and unfortunately they didn't mention your presentation. We've had some discussions internally regarding peak oil, but they don't seem to gather much attention. The fundamental problem is the paradigm in which most people operate. Resource limitations are not something they've really ever had to deal with, and revising their world view to consider them at this point is, at best, difficult. We do a lot of climate mitigation scenario development and evaluation, and we do think about technology availability and to a lesser extent resource availability. I will ask our attendees about your presentation - there may be some interest in looking at resource limits in our future evaluations.
It's great that you were able to present at this meeting. It's got an excellent mix of science and policy people in influential positions, but typically below the level where they have much public recognition. It's at that level, though, that the groundwork is developed for future policies. It will be interesting to see if we hear anything through internal channels about peak oil.
I too would be interested in the memes that are running through the corridors of future power.
Please keep us posted.
Pretty good points Jon,
I too don't buy the argument that missing of expensive oil inputs will cause a contraction in coal consumption. Most of the mining and transportation dependencies on diesel could be replaced or at least heavily ameliorated with elecitric power. Much of this machinery is already hybrid, diesel generates onboard electricity which drives the wheels. Just add a mechanism for feeding grid power into the machines and diesel consumption can be seriously cutback. This probably isn't done today because the hassle and expense isn't worth the saving in fuel costs. But if the price of fuel gets high enough, it will be attempted.
I disagree with your point 4:
Unfortunately there are responses which make climate change worse. Use of low EROI methods of creating liquid fuels are top of the list. It may be possible to produce oil or some other liquid fuel by low EROEI means, if the primary energy input is not itself derived from oil. Stuff like oilshale, tar sands, and cola to liquid come to mind. This is essentially the drill-baby-drill mentality as oppposed to the conserve and transition to renewables mentality. We can't assume that the correct choice will be made.
eos,
You're sure right about that!
Coming from conservation minded, eco-liberal Seattle, I assume that folks won't reach for the cheapest, dirtiest option available regardless of the environmental iompact. But Seattlites are probably only as green as we are because we have access to cheap hydro.
Somehow we need to use the pocketbook issue of Peak Oil to get non-climate believers motivated but also encourage the kind of conservation and efficiency measures that we need to address increasing atmospheric CO2.
As always, I believe the answer lies primarily in educating people about our concerns.
Jon
People refuse to be educated if either their job, or their ideology depends upon remaining ignorant.
"Greenhouse gases may even decline significantly"
"Greenhouse gas emissions may decline".
With regard to both those statements, I'd like to see fossil fuel decline scenarios run through existing climate models to see if there is any meaningful impact in the short-, medium- and long-term.
I realise many people do not find climate modeling to be of substantive value, however we are seeing the forecasts bear out in current weather "anomalies". The models are the best we have right now.
Let's see the projections, based on inputs of fossil fuel availabilty to the models, rather than on loose assumptions.
PostScript : If there is less fossil fuel to burn, it is likely that more wood will be burned. That has a double effect - adding carbon dioxide to the atmosphere and reducing sequestration in trees. As it is, deforestation is one of the primary causes of increased atmospheric CO2.
Not to mention more land required for agriculture.
A reduction in the use of oil for transportation in the US might be effected in the following way:
It has been pointed out that certain states like NY, MI, IL, and CA are pursuing irresponsible fiscal policies. Much of this relates to high expenditures in core urban areas for wellfare, unemployment, remedial education, indigent health care and so forth.
It has also been pointed out that a low energy, economical lifestyle is available in the rural areas where these populations can be less expensively housed and fed, in large part by their own efforts.
The urban centers grew rapidly in the manufacturing boom of the 1940-1970 period, and much of their current population is the result of migration from rural areas. By eliminating the artificial support of this manufacturing workforce that is no longer needed, they can be greatly encouraged to migrate back to the rural areas.
Once this happens, the cities will be on a sounder economic footing, and the redevelopment of the city centers can proceed. A centerpiece of the redevelopment would be light rail and commuter rail development, and electric vehicle development to transport both people and goods. As development provides an attractive low-energy living environment, there would be a movement of people and businesses from the suburban rings towards the city center. Urban areas would take on the characteristics of other cities around the world, where the wealthiest population lives near the city center with decreasing living standards as you go outward.
How would you implement that?
I take issue with the notion that rurual people use less energy. In the city public transportation is available, distances are shorter, and multifamily housing is more prevalent. In the country public transportation isn't available, people travel longer distances for everything, and single family housing is more prevalent.
As it is, unemployment in rural areas is high. Are you going to take all these people from center city, get them a car, and resettle them on a farm? Are you going to give them tools and teach them the necessary skills? Where are you going to get the farms?
I'd give them a bus ticket to whereever they wanted to go.
If you don't have a job and you are living on public assistance in or near a small rural town that has a grocery store, you don't need transportation.
Many small rural towns have had decreasing populations and inexpensive housing is available. If the farming is mostly small acreage intensive communal gardening, not much land is required. The locals with appropriate skills might be hired as instructors and mentors to get them started.
The costs of living, and the payments by governments for public housing assistance, are very high in core cities because the real estate is very expensive.
I am not convinced at all that this idea of busing lots of folks out of major urban areas to rural towns has much merit.
I would not be surprised if most folks in most small towns and rural areas do not want migrants moving in from urban areas.
This sounds like re-arranging the deck chairs on the Titanic.
Wasn't that Pol Pot's idea? (remember him?)
I have a problem.
It is not unrelated.
I want to buy wheat to grind into flour and make bread.
However I do not have a car to go to one of the many farms around here to buy the wheat.
I have not solved it yet.
I guess that it is going to be a long ride on my bicycle.
However I do not have a car to go to one of the many farms around here to buy the wheat.
But the farmers may have cars and/or pickups. So you might telphone around to find a farmer willing to sell you the wheat delivered for a small additional charge. If you are in a small town, you might buy and store more than your need, and sell the surplus to others in your town, possibly realizing a small profit on the whole transaction.
Convincing people that their futures lie outside major urban centres is very difficult - even poor people who do not have a significant material stake in that city. It is the only life they have ever known, and there are often multiple generations of history, connections, and so on. It may not be a great life, but heading out to some rural town of 5,000 people (or whatever) - and possibly white, conservative and suspicious people - could look as realistic as flying to the moon.
Might be a hard sell - even for the most good-willed people. Changing from inner city hard scrabble (dealing in hub-cabs, cigarettes, and a few other commodities - and I am being stereotypical here) to digging soil, producing carrots, and being all wholesome ... hmmm.
In my rural area, the people don't commute anywhere as they work on their own farms, and sometimes their workers live on the farms, or adjacent, whether they are Amish or "English". I've seen this in rural NY, Wyoming, etc. Yes they may have to cover a longer distance to goto the store, but they go once a week, and sometimes they pickup a friend or relative to shop together. They never get on a jet plane and go anywhere, whereas my urban friends do many times per year.
"Eliminate all wellfare and extended unemployment payments in the core urban areas of the Northeast, Midwest, and California"
Considering that NY, MI, IL, and CA have been providing the welfare payments that support the Red states, that idea is probably a non-starter. In fact, that may be why we are all having problems paying our own bills.
http://www.taxfoundation.org/blog/show/1397.html
I think the key correlation to take from this map is what states have senators on the Appropriations committee.
Income is the biggest thing: affluent states like CA, NY and IL subsidize poor, rural states.
BTW, CA and IL have more than enough money to pay their bills. The problem: voters just don't feel like it...
As a Chicagoan, I take exception to that. We don't have the money and we won't have the money until everyone gets on board the train to a balanced approach in spending and tax policies. Right now we are getting the either/or routine from the politicians, and they are working harder than ever to make sure their voters turn out and not the other guy's.
Illinois has a very low income tax, at 3%. It's far lower than for comparable states. Illinois has the money.
A lot has to do with military spending. My old homestate New Mexico, which is number one (for a state) gets huge government military related R&D; Los Alamos, Sandia, and White Sands. Alaska, being huge and sparsely populated requires well above average per capita military presense. I think that does say a lot about our national priorities. But it not welfare in the ordinary sense of the term.
Or LOTS of big military installations and LOTS of govt employees-as in the case of Virginia.
Northern Va abutting DC is so divorced nowadays from the rest of the state that mention is sometimes made in local papers-not TOTALLY tongue in cheek- of splitting the state into two parts.
There is a zero chance of this happening of course, but the culture clash is very real.
Interesting outlook, but doesn't mention what I see to be the more likely need for interim allocations to liquid fuel user/industries (e.g. air transport) for whom there are no reasonably available, quantity alternatives/substitutes, prior to commercialization and upscaling.
Gail,
I am a newcomer to the study of Peak Oil and just registered on TOD today to comment on your post. My admittedly limited studies thus far have been leading me to very similar conclusions to the ones you presented. I understand Nick's criticisms but I also believe this line of thought is worthy of much more analysis to see if there is historical empirical data to back up your conclusions and continued study to see if we do appear to be headed in that direction.
I am also very interested in the audience response to your presentation. I work in state government in utility regulation and I can tell you that while everyone in my field is talking about cap and trade, climate change, wind, solar, shale gas, shale oil, and nuclear, no one is talking about peak oil.
GSM522,
the correlation is very tight between oil usage and the size of the world economy. For some sample papers, see:
http://www.postpeakliving.com/blog/aangel/estimating-economic-impacts-pe...
A good summary paper is the one by Hirsch, "Mitigation of maximum world oil production: Shortage scenarios." It is behind a pay wall but is worth reading if you get access to it.
His conclusion is that the world economy will contract roughly on the same order of magnitude as oil contracts i.e. not 10 to 1 and not 1 to 10 but approximately unity.
His analysis is fine for a first approximation but it excludes many impacts and the positive feedback loops that are set up on the way down (in a negative direction). In other words, the following may have the economy shrink very quickly:
When the papers Cheney has successfully kept from public view are finally unsealed, I believe we will see clear evidence of my thesis. (Some people assert the evidence is already available and I think there is merit to that view.)
And now Britain is hiding its oil discussions by refusing to honor freedom of information requests.
Oil's decline will surprise most people and they will say, "How come no one saw it?" just like they did with the credit bubble contraction. Mind you, we likely will be so engaged blaming various agents (oil companies, the government, Muslims, etc.) that the reality of resource depletion will be known only to relatively few people.
Nick will fail to see the value of everything I have said and will try to convince you that it's "unproven" that the economy will contract as oil declines. I think it's a positively daft thing to say, but people have different psychological "blocks" that get in their way of understanding our predicament and then spend too much time in the denial phase of Kubler-Ross's Five Stages of Grief:
I myself went through this process and only reached acceptance I would say in early 2009.
Nick will fail to see the value of everything I have said and will try to convince you that it's "unproven" that the economy will contract as oil declines. I think it's a positively daft thing to say, but people have different psychological "blocks"
Again, that's ad hominem. It's also untrue for me: I thought the same way you did 30 years ago, when I first saw Limits to Growth, and gradually, through careful analysis, came to a more reasoned view.
For some sample papers, see:
http://www.postpeakliving.com/blog/aangel/estimating-economic-impacts-pe...
Oddly enough, of the 4 papers presented, 3 disagree with the theory that PO will cause long-term decline. For example, there's Robert Ayers . We see that he showed that GDP is related to applied energy (exergy), and only very loosely linked to energy, let alone to oil consumption. The research indicates that BTU's only explain 14% of GDP,and that the source of those BTU's can change (coal to oil to wind, for instance). Both energy efficiency and energy intensity can change. Further, oil is only one source of BTU's. Oddly enough, many energy commentators seem to misunderstand Ayre's research, and think that it supports the idea of a strong causal connection between oil consumption and GDP.
US (and world) GDP would grow much more quickly than it's energy consumption (even including electricity). The best example of this is California, which has kept per capita electricity consumption flat over the last 25 years, while growing it's GDP relatively quickly.
Ayres used "exergy services", which are not "very close to BTU parity". Exergy services are work performed. So, for instance, a Prius performs the same work as a similar vehicle with half the MPG, but uses half the BTU's. Strictly speaking, a Prius can perform the same work as a Hummer (transporting people), and use 20% of the BTU's. An EV also does the same work as a Hummer, and uses about 1/3 of the BTU's as the Prius, and 1/15 of the Hummer's...and so on.
----------------------------------------
The 4th, by Hirsch, is very superficial. It suggests that oil consumption is related to GDP in a 1:1 ratio - in other words, if oil consumption drops by 10%, GDP will as well. Here is what he said recently: "So then if one calculates a range of 2 to 5 percent, some people think the number may be larger, 2 to 5 percent per year increase in oil shortage, one comes up with a rather disastrous indication world GDP will decline by 2 to 5 percent a year in tandem with increasing oil shortages."
Is this realistic?
No. We can see this from economic history: in the US, oil consumption fell by 19% from 1978 to 1983, and yet GDP grew slightly. Similarly, world oil consumption has been flat for the last several years, but GDP growth was strong thourgh 2008 ( stronger than for the US (which itself grew 8% in the last 3 years up to that, with flat oil consumption), and has resumed growing.
Hirsch seems to have looked at the relationship between oil and GDP over the last 20 years, noticed that the ratio of oil increase to GDP increase has dropped from the previous 1:1 to roughly 1:2.5 (an analysis which he attributes to the DeutcheBank, but which can be derived straightforwardly from IEA statistics). In other words, in previous decades as the economy grew, oil consumption grew as quickly, while lately less oil has been needed. Hirsch drew the very strange inference that GDP has become more dependent on oil, rather than less.
Nick,
Ok, I'll bite. How do you think this plays out and how did you reach that conclusion?
Ah, now you're asking good, difficult questions!
My best guess is that we'll have slow growth due to our financial problems. Unfortunately, individuals are trying to save their way to prosperity, and investors aren't investing all of those savings in productive pursuits due to FUD.
As best I can tell, in the last 50 years OECD countries have become reliant on debt instead of taxes (when we have recessions, we cut government taxes when we should raise spending instead). Now we're at a point where that's hard to do further, and the obvious solution of greater government spending is blocked by private interests (to some extent the same interests as those mentioned above). So, the excess savings mentioned above are just causing unemployment.
PO will also create a headwind for the economy, though much smaller than many on TOD assume, due to uncertainty and "friction" (economic speak for the difficulty of moving people and capital from one industry to another). Combine that with the cost of oil imports which aren't being fully reinvested in OECD countries due to our recent credit crunch (and FUD), and OECD countries face slow growth for a while.
Eventually, we will transition away from oil (and then coal and gas), and then we'll just be left with the artificial financial problems that we will continue to create for ourselves (as well as dealing with other challenges, especially AGW).
Personally I suspect that as easy-to-measure and easy-to-manage manage hard industries like agriculture and manufacturing become a smaller and smaller part of our economy, things will get weirder and weirder in the US, until we begin to recognize that we really do need to have some central planning and management for services like healthcare, and the grid.
I could type something about net oil exports, but I seriously doubt that anything I posted would be something you haven't read before.
We shall see how it all plays out in future years, especially if Chindia's net oil imports continue growing at something like their recent rate, versus an ongoing--and IMO, probably a long term accelerating--contraction in global net oil exports.
BTW, why don't you prepare a guest post for TOD? I am especially interested in how you foresee the global economy being powered after we "transition away from oil (and then coal and gas)."
I agree that ELM is a significant problem. OTOH, look at Germany's combination of falling imports and good economic growth.
The global economy will be powered by wind, solar, nuclear, geothermal, etc.
I'd be delighted to do a guest post. Any editors reading this, please feel free to start with http://energyfaq.blogspot.com/2008/09/can-everything-be-electrified.html
You have to submit it via email...they won't follow a link in this thread, that's now how it works.
In typical previous recessions, not just in the US, but all over the world, the economy have sped up instead, and have put GDP back on its trend line. Afterwards, it's as if the recession hasn't even occured. It's not that strange if you think about it. Long term, GDP is determined mainly by technological progress and the education of the population, and short recessions don't really inhibit progress in those areas.
Actually, current research says cutting taxes is a better stimulus than spending hikes. If interested, I could provide you with a number of links supporting this. Or you could start here.
I'd say precisely the opposite. You need to recognize that you have to let those heavily regulated industries free.
That is a very good point. I think it will be interesting to see if this recession follows the pattern, as a test of how tightly coupled net energy and economic activity are in "modern times".
I'm prone to think it will not follow the pattern, as we don't have the same leeway in available energy to drive economic activity that we had in the past.
In typical previous recessions, not just in the US, but all over the world, the economy have sped up instead, and have put GDP back on its trend line.
I hope you're right. OTOH, that's only true post WWII. Look at the 20 year recession of 1873, and of course, 1929. The Great Depression was only ended by a command economy.
current research says cutting taxes is a better stimulus than spending hikes.
I think that applies to small recessions, not liquidity trap situations. Furthermore, that's a short term strategy: there's a limit to government debt in the long term.
you have to let those heavily regulated industries free.
Healthcare isn't a good that consumers can easily evaluate or compare. A sick person can't put out bids, or evaluate quality of care. Furthermore, proprietary drug research and procedure evaluation is far too slow and limited.
Because, since WWII, economic science has become strong enough to make us avoid the most stupid responses.
Myth.
Neither statement is very true, and they are not good enough reasons to organize health care soviet style.
Want innovation? So let go of the regulation then. Let people do whatever drugs they like. And let anyone practice medicine. Too anarchistic for you? Convinced that people will get hurt by bad medicine and bad doctors? Of course they will, but the benefits will be larger still.
since WWII, economic science has become strong enough to make us avoid the most stupid responses.
But what about the excess government debt problem?
Myth.
Could you expand on that?
That's more of a problem with discipline, not knowledge. Also, it's about not being prudent enough. If you run a big deficit in good times, as Bush did, and then enter a sudden recession, you have a problem, obviously.
I was a bit hasty with that comment. I agree the WWII public spending helped get unemployment down and production and utilization up. However, the reason for being in the protracted mess in the first place was stupid government and fed policies. For instance, wages weren't allowed to adjust. With current knowledge, even allowing for imperfect politicians and fed boards, the Great Depression should have been shallower and over in four years. Without the economic stupidity, the public spending would be as a medicine without an illness to treat; it would only have had side-effects.
Are you talking world GDP or US? You can't really talk about either without framing the role of debt in the US and the role of industrialism in the 3rd world.
And, overall, using GDP as a measure is flawed, because it's only a goal in an economic-growth seeking world. Once we hit peak many things, we will have to invest in many areas at once. In the 70's, we had one, politically driven, issue to deal with.
Why pick 78-83, which is in some regards a sweet spot after the shocks of the earlier 70's kicked us off oil as the source for electricity? The early 70's and much of the 80's were pretty flat, GDP wise. Nuke energy picked up over half the energy growth of that timeframe (2% of the total in 71, close to the current 19-20% by 1988), and coal and hydro much of the rest.
Substitution is a painful game to play. It will be harder when the whole world is playing it at once.
You can't really talk about either without framing the role of debt in the US and the role of industrialism in the 3rd world.
Could you expand on that?
Once we hit peak many things
Oil is the main problem, AFAIK. AGW appears likely to hit us a little later.
much of the 80's were pretty flat, GDP wise
?? US gdp grew 29% from 83 to 89.
Substitution is a painful game to play.
The big thing is transportation. Replacing ICEs with EREV/EVs won't be especially painful, in the larger picture. Nor will replacing trucking with rail (except for the truckers, of course).
Really? I am not very good at these sorts of things but Chris Martenson left me with a different impression.
Now I am confused.
There seems to be a disconnect between GDP growth and growth in the well being of the overwhelming majority of Americans. We currently have GDP growth even as more and more people lose their jobs. Even the so called GDP growth of the last decade was paper wealth concentrated in the already richer parts of the population. I contend that GDP growth should be abandoned as an economic goal and instead use the GINI index.
We already are in a fundamentally different economic environment than that which existed through most of the 20th century. First global per capita oil extraction has been falling for many years and the same is true about many other nonrenewable resources. Real wealth can only be created through the conversion of natural resources in to goods. All other forms of wealth are just a matter of redistribution of the ability to buy goods.
Secondly the use of digital technology has lowered the demand for labor. Automation has finally become good enough that it has reduced the need for people to tend to those machines. More competition for resources will raise prices while technology reduces real wages.
The growing lack of equity will eventually reach a tipping point where the voters will demand more social services paid for with higher taxes on the rich or through government ownership of substantial shares of corporations like we have recently seen in the auto industry. Such things as deep reduction in the work week (such as double time for anything over 20 hours per week) just to keep the peasants from revolting. Considering the widespread ownership of guns the rich should be very afraid of a peasant revolt.
So a painter creates real wealth, while a musician does not? At least not unless the musician makes recordings?
Even the so called GDP growth of the last decade was paper wealth concentrated in the already richer parts of the population.
Not at all. The housing bubble was caused by building too many homes.
Real wealth can only be created through the conversion of natural resources in to goods.
That's....goofy. Health, education, entertainment, art, these are all real. And good.
OTOH, I do think that you've got a point: as I discussed above, I suspect that as easy-to-measure and easy-to-manage manage "hard" industries like agriculture and manufacturing become a smaller and smaller part of our economy, things will get weirder and weirder in the US, until we begin to recognize that we really do need to have some central planning and management for services like healthcare, and the grid.
More precisely, the collapse of the housing bubble was caused by building too many homes. Or perhaps even more precisely, by building homes nicer than what people could actually afford to pay for.
The rise of the bubble was characterized by over investment in building new housing (which, one might add, occurred to a significant degree because much of the financing for it was essentially a ponzi scheme, a.k.a "mortgage backed securities")
The growth of the housing bubble was partly caused by the trade deficit exacerbated by oil imports.
We would import oil and send dollars to the seller. The seller then has to do something with the dollars -- he has to find a dollar denominated asset to buy or put them in a dollar denominated bank account. Currencies can be bought and sold, but you can't actually "convert" between them. "Converting" a dollar to yen is done by finding someone who will accept your dollar and give you yen in return.
So there are all these dollars sloshing about looking for a home in dollar denominated assets.
US investment bankers packaged up dodgy mortgage debt and sold it to the foreigners and banks holding the dollars.
Now the dodgy mortgage debt is not saleable anymore, and the US government has taken it over and guaranteed it by parking it in the nationalized Fannie Mae and Freddie Mac and in the Federal Reserve. No investors will invest in US mortgages without their being backed by a US taxpayer guarantee. The US homeowners' credit has basically been downrated to junk in the eyes of the world.
Yes, petrodollar recycling was a significant indirect cause of the bubble. Of course, asian trade was part of it too, as were many other factors.
the collapse of the housing bubble was caused by building too many homes.
A bubble is an oversupply. The collapse was inevitable, and caused by the oversupply.
by building homes nicer than what people could actually afford to pay for.
No, the number of homes built was 50% higher than the long-term average, and far more than was needed.
much of the financing for it was essentially a ponzi scheme
There was a big demand for investments, and the US financial regulatory system wasn't strong enough to prevent the normal bad-investment-filters from breaking down. The ponzi element came later, as buyer/investors began to think there would always be a bigger fool to which they could flip the property.
No, a bubble is an overvaluing by a market. And the overvaluing (by definition) was going to eventually collapse whether it created an oversupply or not. In the case of housing it happened to collapse through an oversupply. (The tech bubble didn't cause an oversupply of software, but it collapsed nonetheless.)
Perhaps, but people aren't going into foreclosure because they don't need a home, they are going into foreclosure because they entered into financial arrangements (home loans) that turned out to be unrealistic, for whatever reason. I don't have time to argue numbers, but I'd guess a fair number of those houses were sold for more than they were actually worth as a home, because they had features that jacked up the price (much more than the features cost to build). I worked recently on such a home - new house, backyard with putting green, large pool, huge outdoor range - which the owner bought after foreclosure at a price comparable to much less fancy houses in the same town.
No, a bubble is an overvaluing by a market.
You can have a price bubble, or a production bubble, or both. With homes, we had both: prices were too high, and production was too high. Have you looked at the annual timeseries of new home building?
The tech bubble didn't cause an oversupply of software
The tech bubble certainly caused excess production. For instance, look at the oversupply of telecommunications: it took years for demand to absorb it.
t people aren't going into foreclosure because they don't need a home
The oversupply of homes had a great deal to do with the price collapse, which in turn had a lot to do with people being unable to sell at the price they expected.
I'd agree that some people got into things they couldn't afford, and that many homes were gold-plated.
Services are real but people provide them so they can buy goods. What good is the best trained doctor without his instruments, medications, and other medical appliances? What good is the best teacher without books, pencils, and paper? Singers and story tellers can ply their trades using only their voices but how long will they last without food? Services are just ways of distributing the ability to buy goods and most services need goods in order to do the jobs others pay them to do.
Is it any coincidence that real wages stopped growing when American oil production peaked and the dumping of foreign goods exploded?
They didn't stop growing.
Services are real but people provide them so they can buy goods.
Nah. That's like farmers dismissing those newfangled craftsmen with their manufactured goods as being unnecessary fluff.
I'm doing a little scribbling from time to time;a novel might emerge from it someday.Yes, the rich should be very afraid of a peasant revolt.
It just occured to me that in the future, if tshtf really hard, local chieftans of clans of hunters/survivalists might have the heads of bankers, lawyers, tax collectors,and various others mounted like trophy deer.
The possession of such a trophy would be an ultimate status symbol in a mad max world.
Of course one mustn't forget that old saw about death and taxes. Said local chieftains will simply be the new equivalent of tax collectors, lawyers, and maybe to some extent bankers. So in that mad-max novel, it might be interesting to explore the possibility of an infinite regress of mounted heads - the sort of thing that Hammurabi, who seems so cruel to delicate modern sensibilities, may have been trying to stop or at least bound...
I think those kinds of luddite arguments has been put forth continuously ever since, well, the luddite movement in the early nineteenth century. They have always been proven wrong. People's lives has been improving and is still improving, and there is always stuff to do so one needs never be unemployed except for short periods when the economy is recalculating.
I speak for myself.
I am no Luddite.
In my ideal world all work would be relegated to slaves or robots and I would spend my time in hedonistic pleasures.
Labour, misery and pain are Evils.
What we are concerned about here on the Oil Drum is a disruption to our pleasurable pursuits, the procreative arts being the most obvious. (And cold beer)
How are we going to get the energy we need to continue our Idle? It is those pesky Laws of Thermodynamics.
No energy= no work.
This is my metaphor for the situation we are in now.
If my motor car nearly runs out of fuel, but I just make it to the next vendor of fuel, I can continue in air-conditioned comfort.
The optimistic view is "No sweat man, we always found more fuel up ahead".
We on the Oil Drum are worried about the veracity of this claim.
And the engine is making strange spluttering noises.
We don't need no stinkin' oil.
We will fill our sails with the wind, and sun, and a bit of the atom...
"Iraq was clearly (in my mind) a bid to get its oil by two economic powers (Britain and the U.S.) who recognized that their lifeblood was running out."
Yep. The great mystery at the start of the Iraq war was why is Tony Blair, head of the peace at any price party, blowing the horn for war? Then I found out that Britain's oil production peaked in 1999. Where were British troops? Around Basra, controlling the southern oil region. Mystery solved.
GSM522,
Welcome!
There probably should be more work in backing these things up.
At the same time, I have been talking about some of these things for a very long time--from before they started happening in large scale. For example, this is a post I wrote in April 2007, before I was a staff member, that talks about the likelihood of recession and financial implications of peak oil.
At the beginning of 2008, I correctly forecast the financial distress in 2008. In February 2009, I wrote an article about what I saw, that other folks missed in early 2008. (This is a write-up of a presentation I gave at last year's Biophysical Economics Conference.)
Another post new readers might be interested in is The Expected Economic Impact of an Energy Downturn, from March 2008.
I have been talking about some of these things for a very long time--from before they started happening in large scale.
I am grateful that the very first time I was introduced to gambling that I lost badly. If I had been unlucky enough to win I might have wasted money in life on gambling.
You have been unlucky enough to have been encouraged by coincidence. Stock market permabears are right once every business cycle, but that doesn't make their forecasts useful.
Gail,
At the same time, I have been talking about some of these things for a very long time-
You and I have been alive for >60 years but I dont think we have lived "for a very long time", a bit of an exaggeration to say 3 years is a very long time, except for the progress in electric vehicles.
If we exclude coal and nuclear, we are down to renewables, which comprise only 6% of the energy supply (Figure 1). Starting from such a small base, it is difficult to increase production enough to make up for a shortfall in the oil and gas supply.
On the other hand, wind energy world wide and in US has doubled since 2007(that very long time ago, and will probably double again in next 3-4 years. We only need wind to provide 20% of US electricity to completely replace oil used for land transport.
GSM522:
Welcome to TOD. The big picture is understand best by including exponential population growth and exponential fiat money/debt growth in the equation. Peak oil is happening within this context, and I'm sure you'll find stimulating discussion of those things here.
There seem to be two schools of thought regarding what's going to happen. The first is the doomer/declinist/catabolic collapse school. Informed by the historical record, this school basically believes that we've overshot limits, and when that happens declining marginal returns on complexity will ensure that our global, industrialized civilization takes the path of least resistance and simply ceases to function. The Four Horsemen will duly arrive. The second is the techno-optimist school. They believe that humans are productive, creative assets (the more the better), that humanity has never had it so good as far as literacy, nutrition/health, cooperation, technology, etc., and that peak oil will be met with a mobilization so complete that it very well might result in unforeseen and exponential leaps in alternative energy and efficiency. In effect, peak oil becomes a manageable problem, if not a boon to the human race.
I'm of the first school but, despite the fact that we are 5 years into the world production plateau, my opinion is that we are just at the very beginning of what's going to be a wild ride. The real show will start when oil production begins to decline.
Global population growth has been sub-linear for two decades now - yearly growth in millions peaked in 1989. Isn't it time to stop talking about exponential population growth?
Yes.
It is time to talk of exponential population decay.
Topics of interest.
Floods in Pakistan, Aids, Famine, War.
And the new kids on the block, endocrine disruptors and the Climate Catastrophe..
Grim Reaper: "What a rich harvest! Time to get to work."
(Whistles merry tune, "Always look on the Bright Side of Life")
You aren't one of those who would say "hope you're right" to us cornucopians, right? Some of you seem to actively search for reasons for doom and then revel in your predictions.
Gail, Your timing on this issue is interesting for me as I was in a deep discussion on this very topic last night. As one who has followed and pushed the peak oil debate for over ten years, 2008 was still a wake up call for me as high oil prices became self limiting. Yes we had sub prime mortgage issues and other ponzi like shenanigans in the financial systems which came to light in Aug/ Sept of 2008, but the tipping point, making those issues visible, was the rapid and severe run up in oil prices, which caused the worlds economy to falter.
It is really sticking your head in the sand to not see that relationship, and it, to me, means that we will continue to see the stair step down to reduced economic output as time and oil resources go by. It frustrates the hell out of me that people can not see the difference between inexpensively sticking a rod in the ground at Spindletop and getting 100,000 barrels a day squirting out , and spending billions and years to get a less valuable result in the tar sands, or deep water, etc. We simply will not be able to keep up with depletion, and alternatives will not come fast enough. Timing is somewhat questionable, inevitability is absolute.
Good article.
Glad you liked the article.
Relax Treeman! That's only because you fail to understand that 'Energy' is an abstraction and EROEI is a useless reification bordering on nonsense. Once you get past that, every thing begins to get mellower and mellower. Plus everything the economists tell us about the great coming economic recovery begins to start sounding more and more believable... Let me pass you some of the Kool aid.
Oh, and in case you're interested I have this great opportunity to invest in a corn ethanol plant in Iowa.
Don't worry, be happy!
I think people in general---collectively--- can`t process the information contained in the PO idea.
Example: There are some enormous hotels---perhaps thousands of them---in Tokyo, made of cement, almost the size of a baseball stadium each (it seems to me), run by huge corporations and not so huge.
Given the PO information, all should just shut down and all employees move out of Tokyo. There is no hope. It will never be as good as it was in 1980s and 1990s when the majority of these hotels were built.
But that is not what is happening at all. Lots of expensive weddings are no longer held, lots of go-go business symposia are gone---sure it is tough....and the hotels are struggling now and holding events such as kids` toy train exhibits. But they have lowered their sights, there are job fairs, the government sponsors smaller events...people don`t come in droves, but there are still people.
The shops in them have "sale" signs. It looks empty...but, no matter.
It will take a long time to finally turn out the lights on these mammoth hotels. There is a lot of love there, a lot of pride, a lot of investment, honor, business skills, professional names at stake. People will not just go quietly. They have staked their lives and fortunes in the city. The best universities, the best schools, are there.
Whether and how such businesses will go bankrupt depends on their capital structure. My recollection from longer ago is that utilities, such as electrical or telephone companies, should have up to 50% debt and greater than 50% equity. Manufacturing companies should stay below 25% debt, while service businesses should be run with no debt at all.
In the case of hotels, if their capital structure is mostly equity or a small portion of debt with maturities well spaced in years, then the hotel should be able to survive hard times so long as it can fund operating costs from current revenues. It need not worry about large sums of debt coming due on its land, building and fixtures.
The alarming thing about this recession is that many business owners seem not to be business owners in fact, but rather, they hold only a tiny slice of equity with the remainder of the businesses capital being debt. And they have also been imprudent in matching their debt maturities with their anticipated revenues over time, assuming incorrectly that they can always "roll over" large sums of debt.
That EROI stuff is just embarrassing, Gail especially at MIT.
IMO, just drop EROI from your talks.
You haven't proven your case that new supplies and substitutes are too slow in coming. Wind is stymied because of a lack of support and NIMBYism, ethanol by the 10% cap and the dumb cars we keep buying. The US is really a study in how NOT to transition--especially due our dysfunctional political system. We rely on the markets and don't plan so substantial nothing gets done.
A better case is that the US is doomed not by energy but by
its culture.
A better idea is to look at Europe where planning is going on.
http://ec.europa.eu/energy/strategies/2008/doc/2008_11_ser2/strategic_en...
That EROI stuff is just embarrassing, Gail especially at MIT.
IMO, just drop EROI from your talks.
I'll second that as well. While it might pass muster in the sense of trying to confuse noobs into thinking that there is a scientific basis for someones favorite scenario, nowadays it seems like it can be used as a profiling technique, I see this thing show up at any resource talk and its a red flag.
Reservegrowthrulz2 or majorian
Okay, several people on ToD don't like EROI, ERoEI, netEROI (however you like to spell it or quantify left over). Maybe it doesn't say that much about quality or substitution but it gives some measurement of energy use.
The piece was written that 'oil' reserves aren't the same as bygone years. For instance, the Canadian tar sands uses a lot of natural gas here or here for processing it to synthetic oil, exactly what methodology would you use to measure this or describe diminishing energy return that has substitution value for the worlds transport system that is vastly reliant on oil and its derivatives.
Its a genuine question, it would be really interesting to understand what you'd use.
Whats wrong with using what we already use to express value? Money?
It is paper.
That is what is wrong with it.
I know about these things.
I am from Zimbabwe.
Of course it is paper. But it also allows the difference in energy forms to be properly valued, relative to each other, so people don't make silly mistakes by pretending that a BTU of sunlight has the same value as a BTU of gasoline.
EROEI, among other things, is a way to conceptualize the fact that some energy resources of the same form require more energy to produce than others. (e.g. deepwater oil requires more energy to produce than oil under Texas did). The EROEI of oil is going down as we graduate from easier to produce resources to more difficult to produce resources. This has a corresponding effect on the dollar value of production costs. It may be fine to count the difference in dollars (as long as you're not confusing EROEI with other effects on dollar values), but nonetheless there is a point to be made that is best understood by talking about EROEI.
This has a corresponding effect on the dollar value of production costs.
This can be exaggerated: rising labor costs are more important than rising energy inputs.
EROEI, among other things, is a way to conceptualize the fact that some energy resources of the same form require more energy to produce than others. (e.g. deepwater oil requires more energy to produce than oil under Texas did).
So what? The energy used to retrieve oil doesn't matter either. If it did, the instant Ghawar was discovered all development of the heavy oil in California would have halted. That didn't happen. Why? Because there is money to be made, and while Kern River oil might net $30/bbl profit and Ghawar $70/bbl, both are profitable regardless of one having an EROEI different than the other.
The EROEI of oil is going down as we graduate from easier to produce resources to more difficult to produce resources.
Easy oil disappeared around the turn of the 20th century. Everything since about 1901 has been "less easy" oil and required new and advanced technologies to retrieve. "Cheap" oil disappeared around 1970 with the advent of the US no longer being the global swing producer. So we've been transitioning longer than most people on this forum have been alive, why all the excitement now? Nothing new is happening, just the same long, slow sinking into the resource pyramid.
Gail,
I am really interested in hearing what responses you had to your talk. I suspect many their have not considered these ideas or had not discussed them openly before.
There were a number of good questions. One person said he wished there had been more speakers on the topic.
I met a few people at the symposium who clearly had thought about the question--in fact, were Oil Drum readers. But there were two speakers who talked about "nearly unlimited fossil fuels", and who were not available at the time of my talk.
I am sure that there was a range of reactions. People who have spent their lives thinking about air quality (SOx, NOx, ozone) may never have really thought about the question of resource limits at all.
I have spent most of my life working on air quality and have been quite concerned about resource limits for at least 5 years. I was at an international air quality conference in Xi'an, China in May attended by about 50% Chinese, 25% North America and the balance mostly but not all European. In Plenary session presentations the topic of energy usually came up in the form of unending upward growth curves. The Joint Operating Environment 2010 Report (JOE) had just come out come out from US dept of Defense:
http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBIQFjAA&url=http%3A...
which (rather indirectly) admits oil supply and production are a problem in the next 5 years, so I assumed that (from the Chinese point of view) questions about failing supply were on the table. I asked all those speakers why they had such overly optimistic energy growth projections and refered to the recent JOE report among others. The Chinese official said flat out "I have no answer"; EPA official gave no answer; and one international consulting organization said after "come talk to me". I taught a course at the conference and included some info on peak oil and modeling civilizational complexity (after Sornette) showing a singularity (end of growth) around 2050. Link:
http://www.er.ethz.ch/publications/ENDofGROWTHeraESSAY3.pdf
It was all news to the Chinese (faculty and grad students). However, after my public questions people would say, "Oh yes, you're the peak oil guy...", so we air quality types are totally out to lunch.
Conflated,
Thanks for your comment.
I think you are right. Resource limits really run counter to the point the air quality folks are trying to make, and for that matter the climate change folks. So many of them would like to ignore the problem as much as possible. If it is possible to make an argument that coal will be a problem forever, they will focus on that--not look at the impacts of an oil shortage in the near term.
I have made very little progress with my climate change colleagues raising the issues we're discussing. I get further with people who aren't as invested in their cause.
This is terrific, Gail. By my judgement here in academic circles at Indiana University
among professors either researching climate change, or actively teaching about it, almost
no one is aware, or concerned about peak oil.
Could you elaborate a bit more on the reception of these ideas to your audience?
Was there skepticism? Dismissal? Interest?
Having given many peak oil talks here, I am flabbergasted by the number of undergraduate
seniors who have nary a clue re P.O.
But, they are generally well -informed re climate change.
See my comments above. There were definitely some who were interested in the question, but others who dismissed the idea completely (and in fact, did not show up for my talk).
It was a new idea to most of the attendees. Quite a few expressed interest in the topic, either outside of the session, or by asking questions at the session.
I also see a porpoising of the economy and energy prices as 'recoveries' start to take hold, though I see this in a downward slope. At some point, we might hit a 1900s level of economy in more or less a steady state, though there are any number of scenarios.
Carbon taxes likely to seriously impact economy
This is simply an assertion. One could say that carbon taxes could significantly help the economy get off of oil and coal (and to some extend, natural gas) while shifting some percentage of the tax burden from individual.
One can't magically wish for carpools/etc without some form of incentive (or single occupant disincentive, such as a carbon tax). What would you do to raise the level of carpooling that isn't already being tried?
Won't help alternatives
Another unsupported assertion. A transfer of tax burden from income to carbon-based energy might be (and indeed will most likely be) of tremendous benefit to alternatives.
Shifting it onto who or what? Onto a different species of people who are not individuals? Onto a magical abstraction in the sky that pays the taxes from the proceeds of zero-point energy with no impact on or cost to individuals?
OK, so the magical goal is to have an impact on individuals - that is, force them to waste endless hours, taking the Grand Tour of town every morning and evening, and waiting for the day's laggard every evening (the old 1920s model of marching simultaneously and in lockstep to and from the same neighborhood to the same huge workplace being dead, dead, dead as I said elsewhere) - without having any impact on individuals. To put it as politely as possible, such a goal seems utterly unintelligible.
Shifting it onto who or what?
As I stated above, to carbon taxes. There are bills in committee that address moving income tax to carbon tax. Please parse sentences before you ask the kinds of questions you did above.
[Raising the level of carpooling] seems utterly unintelligible.
To a cornucopian BAU proponent, any change would seem threatening and unnecessary. Good luck when you find yourself searching for a secure source of meals for your family post peak...
All taxes are tools of income redistribution and social/behavior engineering. It doesn't really change the total investment by society WHERE you get it, if you spend it the same way.
Agreed. Shifting taxes adequately from individual incomes to fossil fuel consumption would certainly affect those consumption behaviors.
Let's please not be silly. Carbon taxes may or may not be a good idea, but carbon taxes are not paid by carbon taxes, so there's no such thing as shifting the burden to from individuals to carbon taxes, as you explicitly stated. In the end carbon taxes are paid by individuals, just like all other taxes. So whether or not it could be argued that a carbon tax is more optimal than some other tax, let's not pretend that the burden magically disappears, or is magically removed from individuals.
Let's please also not be obtuse just for the pure sake of obtuseness. Raising the level of carpooling is not unintelligible. Raising the level of carpooling with no impact on individuals is what is unintelligible. Carpooling is not done to any great extent right now because it's a huge consumer of time (and it doesn't mesh well with trip consolidation.) So you'll have to force people to do it, precisely because it's expensive. That the cost is payable in time rather than cash makes it not one jot less real and does nothing to remove the negative impact on individuals. Whether there's some other positive impact that would offset the negative remains as a question. Most people apparently are answering in the negative - else they'd do it without having to be forced, and we'd be taking it quietly for granted instead of discussing it here.
Hi Paul.
I agree wholeheartedly, and would like to add in a little epiphany I had reading this thread- carpooling has an ROI.
Consider an 8 hour workday, and then add in, for the sake of argument, a one hour commute (total both ways). So... 9 hours out of your day.
If you're going to carpool, if your pool companion lives next door, you do not have obvious ROI issues...until you look at actual driving behaviour. Do you go shopping on the way home? If you're single, do you go on a date? Do you go to a night-school class? What about Doctor's appointments, or picking up children from the ex-wife's house? What about taking children to daycare? All of these things interfere with the efficiency of the pool, as they necessitate additional trips to accomplish these activities, or giving them up.
If your partner is farther away, the costs become more obvious. If you have to make a ten minute side-trip (and this is an impossibly short time, in my opinion, considering variables like traffic and the partner not being ready), this becomes an extra 1 1/2 hours of work per week. If the other co-activities from the paragraph above are added in, it starts to look more like 2 1/2 hours per week, minimum. My WAG is that the real times for people in the real world would be more like 4 hours minimum. A lot like having a part-time job, or an 8% cut in pay.
Considering the chart up-thread that says work-related driving takes up only 30% of trips, I think that people will not see car-pooling as a good use of their time, considering it's actual cost. Shopping, personal business, and visit friends/other social make up about 55%. These items are far more amenable to combination, substitution or elimination: these kinds of trips can be planned and consolidated much more easily than a morning commute, and as I have noted, can be combined with a commute in some cases. Also, the cost of a failure during a morning commute is high (loss of pay, discipline for lateness or absence), while the cost of being late to go shopping is non-existent.
In short, I think that people will forgo some uses of the automobile and use it more judiciously in other cases, long before they consider car-pooling. The costs of car pooling are too high, and the benefits of driving yourself (selecting trip times, control of your destiny re: work, making side trips, etc.) are too great for people to give them up easily.
There will be costs and opportunities to those other car-use choices as well (unemployment and/or re-localization and/or falling property values and foreclosures...y'all can make up your own scenarios.) Things will not go on as they were except with fewer car trips. Things will change, and pretending that car pooling and similar solutions will save us, even in the short term, will interfere with being able to plan for it effectively.
Lloyd
I think that people will not see car-pooling as a good use of their time
In a BAU world, that might be true. You've been here almosta year, so should have an idea that we also consider post peak scenarios
pretending that car pooling and similar solutions will save us, even in the short term, will interfere with being able to plan for it effectively.
This is most interesting; you've created a strawman, and now you are attacking it. First, let's review what Gail wrote;
While I agree that these measures would help to reduce transportation energy consumption, I asked the question about what it would take to increase these mitigations;
Hi Will.
The central thrust of my argument is that people are going to do the thing that benefits them the most economically. In a "post-peak scenario", I fully expect them to behave the same way, only more so. If you can barely afford gas for work, or gas is unavailable, you're going to do things like take your kid out of hockey so you don't have to drive to tournaments, or shop closer to home, before you add 3 hours to your workweek with a car pool.
From Cargill, above:
This whole thread is peppered with car-pooling thoughts, easily more than a dozen. One could spend one's life debating car pooling on the Oil Drum. Car pooling comes up again and again as the reason we can change from oil momentarily, so we don't have to plan for it. It is a touchstone for cornucoppians. This last point was directed at them rather than you, and I could have been more clear. For which I apologize.
My point is that car pooling is not a low-cost alternative. The low-cost idea is a fallacy: it requires no initial capital cost, but has huge ongoing labour costs.
I would do nothing, because there are so many other more convenient and more economically viable alternatives to reducing fuel use. The maximum you can reduce your fuel use with a 2-person car pool is about 15% (half of 30%). By cutting your personal/recreation use by 25%, you can accomplish the same thing. In my opinion, the only thing that will cause car pooling to increase is if work driving was equal or greater than personal driving. At such a point, the economic arguments may start to collapse. However, such a situation may also make alternatives like boarding houses close to work, moving, buying a motorcycle, or using public transit seem attractive. The scenarios I can see that could lead to more car pooling tend to be so extreme that all avenues are open. While "Make gas so scarce that in order to go grocery shopping with the car, you have to car pool to work" is an excellent answer to the question, it is outside the spirit of the question.
There is a subset of members of this forum who really, really want car pooling to be the answer. If it were easy, convenient, and economically advantageous, people would be doing it already. It is none of these things. It's like training a cat to fetch: it may be possible for a small subset of cats and dedicated trainers, but on the whole, you're better off getting a dog.
Lloyd
My point is that car pooling is not a low-cost alternative. The low-cost idea is a fallacy: it requires no initial capital cost, but has huge ongoing labour costs.
I was in a vanpool for 6 years and have been in other carpooling situations off and on another 12 years. I can assure you that I had no 'ongoing labor costs'. If I needed to do something different during a given day, I would drive in myself, though that was less than once a month. I certainly made a few compromises, but nothing of significance.
The maximum you can reduce your fuel use with a 2-person car pool is about 15% (half of 30%). By cutting your personal/recreation use by 25%, you can accomplish the same thing.
Um, do you have any reliable references, beyond your own SWAG? I have no doubt my 12 person vanpool resulted in 95+% fuel savings for all involved. Other 2 person carpools were likely ~40% savings, and one 5 person carpool was likely 75% savings.
Hi Will.
I have no doubt that your vanpool saved energy. I also think you realize that your situation is unusual, and I question the repeatability of your experience. Indeed, if your experience was so successful, shouldn't you be telling us how you did it, why it worked, and why the rest of us are chumps not to do it, rather than asking for different ideas on how to promote carpooling? There seems to be a disconnect here. Either it's a problem or it's not.
Were the participants all going from a central location to a central location? Were they related? Were they all working the same shift? Was the project supported by a single employer? I question the likelihood of each of 12 people having a 12 person vehicle. Your systems sound more like an informal bus system rather than a car pool.
I had a one year car pool with my parents when I was 20, and a brief attempt at a car pool when I was in college. Since then, there have been no circumstances when a car pool was convenient. I realize that some people do carpool; I think, however, it is more along the lines of my carpooling with my parents: it happens when it doesn't make sense not to happen: over long distances with close start and finish points for all concerned.
You're being deliberately obtuse here. The ongoing labour costs I refer to are the extra time required to drive the extra distance to pick up and drop off your partner, time spent waiting when one's partner is late, and time lost from being unable to attach non-work-related travel to your commute. Edit: The other thing to remember here is that these costs are reasons for not carpooling. Obviously, if you found some way around them, you would carpool. The relative lack of carpooling would suggest that these costs are real.
I was using the reference that Merrill posted above (I realize it's an average and your mileage may vary.) Edit: The same caveats as above apply here: if you are a statistical outlier, there may be an advantage to carpooling:
Lloyd
I have no doubt that your vanpool saved energy.
Which is precisely the point of this entire article. If you are going to complain that carpooling inconveniences you, there are many suprises awaiting you post-PO....
I question the likelihood of each of 12 people having a 12 person vehicle.
I know of no vanpools with a similar situation - where do you get such an idea from??
The ongoing labour costs I refer to are the extra time required to drive the extra distance to pick up and drop off your partner, time spent waiting when one's partner is late, and time lost from being unable to attach non-work-related travel to your commute.
I actually have saved time due to HOV lanes, which are quite common in US cities. So your entire thesis about lost time is turned on its head in such situations.
From Transportation Energy Data Book - Chapter 8 Household Vehicles and Characteristics
This does not prove your claim of 15% maximum savings. You are approaching this from a stochastic perspective when it really needs to be discrete. For example, vacation isn't spread amongst each day, nor are medical/dental trips, church trips, etc. Also, people make adjustments to how they approach combining various trips when carpooling/vanpooling, so you need to provide valid analysis to this raw table, instead of making hurried, invalid assumptions.
Hi Will.
You are not answering the specifics here.
From your post of Aug. 29, 2010 2:56pm:
I got this idea from you mentioning a 12-person vanpool. I said I thought it was unusual and difficult to repeat, and probably an informal bus service. I need details, and I asked for them. Your unwillingness to provide them or to say which of the options I suggested is or is not true does not bolster your case.
Your entire argument is based on "such situations". I have said that carpooling is advantageous to a small subset. You have to prove that it would be advantageous to a large subset. People vote with their feet(or cars.) If car pooling were useful, people would do it.
I find this holier-than-thou attitude annoying. I have pointed out that people will do things that are more convenient whenever possible. For instance, both my wife and I work from home, and our trips to remote offices or for sales calls are usually short. I have a wide variety of public transit options and bicycle lanes. I have spent time and money to get to this position, because I think in the long run, walkability and public transit will allow me to lower my carbon footprint and prepare for reduced energy availability. The surprises are there for those who think there are easy answers without careful planning.
Carpooling is presented by cornucopians as a cure-all, as a way of dealing with a crisis and changing in a short period of time. A way for the whole population to reduce consumption. From this perspective, I am quite content to use averages. I stated that carpooling will make sense for a small subset. Looking at the averages, I thought that people would reduce in other areas first. Is your position that people will carpool even if they don't have to, or if there is an easier alternative? For example, I am an extreme case- no commute. I would have to reduce in other areas; there is no other option. Carpooling, for me, will increase my carbon footprint (I would have to drive somewhere, pick up a partner, go to their office, and come home.) The figures suggest that if work driving is 30% of total US trips, there are lots of other areas where driving is discretionary. Discrete or stochastic, I don't think you can get around that. It may be possible with huge effort and the extra time costs I mentioned to get more than 15%, but you haven't provided any methods to facilitate this. Instead, you are asking others to tell you how to do it. The way I look at it, you have to prove why carpooling is fundamentally easy and convince people that they should do it. I don't think it is, and nothing you have said addresses this point, except to suggest that when things get tough enough, people will car pool (this is my interpretation of your condescending post-BAU comment.) I agree, and even provided specifics of when I think this will occur- when you have to car pool to the office to have enough gas to get to the grocery store: the point when there is no discretionary driving to reduce. I also pointed out that such a circumstance would leave all avenues open. Everything you have said, and your initial position- that you need help finding ways to convince people to car pool- suggests that my position is more realistic: carpooling is advantageous to a small subset of the population. People will do the easier, cheaper things first. Carpooling, on a national basis, is neither.
So unless you've got a plan, or other figures, or a different interpretation of Merrill's chart, or a detailed explanation on why your carpools worked (distances, times, costs, type of jobs, number of pickups, etc. (and I'm actually interested, because, as I have pointed out repeatedly, carpooling is a niche answer, and these details are of use in my arguments)) I think we're done here. I think carpooling is difficult and of limited value except for a small subset of the population, have some figures to back up my ideas, and the behaviour of the general population supports my position. You disagree, but have no ideas, (and are asking for other people to help you out on ways to get people to carpool) won't explain why your carpools worked, and point to small-scale exceptions (despite my admitting that there are situations where carpooling may be advantageous.)
Carpooling is presented by cornucopians as a cure-all, as a way of dealing with a crisis and changing in a short period of time.
No, it's not. It's presented as a workable stop-gap, which it is. The point: high oil import decline rates would not necessarily cripple the economy, because people could still get to work.
Would many people use other strategies first, such as reducing non-commuter trips, telecommuting, switching their driving to the most efficient vehicle in the household, etc., etc., avoiding carpooling until unavoidable? Sure. There are a lot of ways to reduce or eliminate oil consumption.
Is carpooling a good long-term strategy? No, obviously HEV/EREV/EVs are much better. Is it a reason not to start reducing oil consumption ASAP? No, and no one is suggesting that.
In general, I suggest we get off of oil ASAP: it's external costs are very high: oil wars, trade gaps, oil shocks, pollution, etc., etc. My debates on PO are commonly with those who don't think this is possible.
You don't speak for all cornucopians. Get together with a bunch of them, and get back to me with a concrete position. My interpretation of an amorphous group is my own. You can say that, as a cornucopian in good standing, you disagree, or that this is not your position, but you can't say I'm wrong. Unless you can take all my reading and conversations over the past 20 or 30 years and show that my interpretation is incorrect.
Well then, a better approach would be to campaign to cut down on discretionary driving (and all the lifestyle and standard of living changes that would entail).
Especially me. Take your frickin' strawmen and self-debates somewhere else.
No...in my case, it's not a question of whether I think it's possible. We'll get off oil one way or the other. The question is how unpleasant it will be. I don't think we'll "get off oil*" without millions of people dying, because people won't change in a timely fashion. That's where we differ.
*I would use a broader definition of the challenges that face us because of the timescales and uncertainties involved. Whether millions die from habitat loss, or resource scarcity, now, or 100 years from now, in's still millions dead. I don't care to split my hairs that fine.
You don't speak for all cornucopians.
No, but I have read most of TOD for 5 years. I haven't seen anybody discuss carpooling in such terms in this arena.
I don't think we'll "get off oil*" without millions of people dying, because people won't change in a timely fashion.
I'm sure you're right: roughly 70M people die every year, and PO will certainly raise death rates at least a little: a .1% increase would kill 2.1M over 30 years. Heck, even a 10% increase would be very far from the kind of mad max scenarios often discussed on TOD.
No, the 12 people that were in my vanpool do not each have 12 person vans - this is a silly claim. There was one van, and people met at common locations (2). We took two HOV segments, a total of about 20 miles, whizzing past 11 miles of stopped traffic in one, and a time-dedicate highway for the other 9 miles.
I have said that carpooling is advantageous to a small subset.
You would need to support that hypothesis if you want others to consider its validity. You haven't provided anything in the way of support yet besides some raw data (Merrill's chart, which does not support your claim, as I detailed in previous posts).
both my wife and I work from home
Good. I've been able to obtain 1/2 time at home, though that's not happening now.
Carpooling is presented by cornucopians as a cure-all
I'm not a cornucopian, neither is Gail, by a long shot. It IS one of many mitigations, though does not stand alone by itself. If you feel different, I have not problem with agreeing to disagree.
when things get tough enough, people will car pool
Ok, then you agree. It's Miller time...
Car pooling comes up again and again as the reason we can change from oil momentarily, so we don't have to plan for it. It is a touchstone for cornucoppians.
That's not true. No one suggests that carpooling is a reason not to plan for PO.
I very commonly, as I did above, suggest that carpooling is a reason not to expect the economy to collapse because of PO: it's a perfectly good stopgap, which would allow people to get to work in a shortage situation.
In general, I suggest we get off of oil ASAP: it's external costs are very high: oil wars, trade gaps, oil shocks, pollution, etc., etc. My debates on PO are commonly with those who don't think this is possible.
Think of carpooling as a stop-gap: order your Prius, and carpool until it arrives. Or, if you don't have the money, carpool and save money until you do.
Nick, exactly how are all if these hybrids and electric cars going to be built?
800 million ICE's on the planet, say we try to to carbon friendly and replace 200 million of these with hybrid and electric vehicles over the next 20 years. Sounds good to me, order me a leaf.(Planes, ships..)
You have to build the car, in this case, 200 million of them,steel, plastic, electric motors, batteries, wiring, tyres, airconditioning or heaters, seat belts, seats, steering wheels...you have to increase the plant infrastructure or modify same to produce a different product.
You have to deliver the resources to the plants so they can build them, you have to freight the product to the yards so they can sell them. You have to manufacture spares, so these vehicles can keep running..
Now there are seven gallons of carbon energy in a single tyre.
If oil is on the down slope of the bell curve you cannot maintain production levels(PO), all the low hanging fruit is gone, you have to expend more energy to get energy, theres less oil free flowing, the population continues to increase, china and india have increased demand, it becomes more expensive.
Lest we forget, we want to build new nukers, solar farms, wind farms to replace our reliance on oil, it takes oil to do this. (and time)
Just wondering Nick, how do you think we can replace a significant amount of our infrastructure without cheap and easy to harvest oil?
And you are worried about car pooling? Your Leaf?
.you have to increase the plant infrastructure or modify same to produce a different product.
That's not that hard.
If oil is on the down slope of the bell curve you cannot maintain production levels(PO)
Sure you can. Freight is a minority of oil consumption, and it's not hard to make more efficient. For instance, Walmart is doubling their truck MPG. Further, rail is 3x as efficient as trucking.
Paulus wrote;
there's no such thing as shifting the burden to from individuals to carbon taxes,
If you don't understand the difference between individual income taxes and consumption taxes (carbon tax), then I can't help you. You seem to want to pedantically tilt at windmills, however, so I'm not going into an endless loop with you.
Raising the level of carpooling with no impact on individuals is what is unintelligible.
I'll say, but who'd think up such a convoluted thesis statement, and for what purpose?
Most people apparently are answering in the negative
And those same people are confused about how the country became (and continues to be) addicted to oil.
I take a bus, which takes slightly longer than a single occupant vehicle run, and don't whine about a few minutes here and there. Indeed, I can work or look at personal email on the bus' free wifi.
You allusion to BAU perogatives shows a dearth of understanding about what will transpire after the obvious decline of global oil production.
The "won't help alternatives" statement really relates to my slide 13, in which I hypothesize that the government simply taxes oil and gas companies at a higher rate, and does nothing to redistribute these funds to anyone else, because there is no climate/energy legislation per se. The reason why it does nothing to help alternatives is because there is not enough of a consistent oil price rise to help alternatives, and there is no funds reallocated to alternatives. (People at the symposium kept talking about higher oil prices helping alternatives.)
You have given a very good reason for the government to subsidize alternatives to fossil fuels instead of waiting for the market to produce them. Rising fossil fuel prices also drive up the cost of converting to alternatives. The invisible hand of the market need to be guided to what is in the best interest of most folks. Never forget that the market doesn't care if you freeze and starve in the dark. Before the social reforms of the 1930s freezing and starving to death in the dark was quite common.
Here I largely agree : Many half baked fixes, like more taxes, or ETS, can be worse than useless. They remove money from consumers pockets, and if that money is not carefully recirculated into alternatives, the 'claimed remedy' acts as a brake, not accelerator.
The Utilities, or Fuel companies, simply pass on any operating cost increase.
If you look around the globe, the most rapid change has come from focused action
[ China cities simply banning petrol mopeds, is an extreme example, more typical is feed-in-tariff support, for renewable energy ]
Something like the new Ford ECOnetic, gives surprisingly good fuel figures (even tho it does not yet have stop-start), and can clearly drive down fuel usages significantly, thus buying valuable time (decade+?) for transition.
Problem is, very few countries have direct incentives to steer buyers to such vehicles.
Of course, a poorer buyer upgrades less frequently, so the recession does not help, but a poorer buyer paying higher feel-good taxes, any upgrade is even less likely.
The Effect of Gasoline Prices on Household Location
It is surprising that they did not find that an increase in gas priced caused a decrease in house prices in areas with long commutes. However, their results appear to be based on data through 2008, and not 2009.
The big drop in housing prices initially was in the most distant suburbs--a pattern one would expect if gasoline prices were a factor. I will need to look for the link on this--I know it is a point I have made in the past.
Look at new construction as well, where is it now? While it is incredibly slow now, I've noticed that the remoter developments are close to zero and the "close in" (banks,bestbuys,grocerystores,business hq's) seem to be moving forward though slowly. I'm talking about developments that were in place in 2006-8 with empty lots. Another interesting factor locally is the steady growth of 1200-1500sq ft "senior housing" (we have special zoning for this), some people are navigating downsizing and setting themselves up for lower operational costs. Thankfully the ones i see are also "close in".
The distant suburbs were the newest and poorest: they were financed with sub-prime mortgages. It only made sense they'd be hit first.
Housing costs are far more important than fuel costs.
Gail,
The macroeconomic cycles in slide seven are too simple for me. It could just as easily be said that an equilibrium of several types would result from the situation you describe.
Love the site though!
Do high oil prices cause recessions? I am not sure it is so clear. I think our current recession has much more to do with the financial crisis and the housing market collapse. The price spike in 2008 was very short lived and the subsequent fall in prices did little to avert the recession. I am not saying that oil prices had no role, but I think it was more of a contributing factor rather than the root cause.
I disagree that a carbon tax would be unhelpful. I like Bill Gates idea that carbon taxes could be used to fund basic research on energy breakthroughs. If the tax is $10 per Ton of Carbon emitted and increases by $5 per year for 15 years it would be predictable and would move us away from fossil fuel dependence.
The housing bubble was blown in part due to oil trade deficit dollars coming back through foreign bank depositors to the US to buy mortgage-backed securities. So the oil deficit was partly to blame for the "innovative" mortgages designed by the mortgage brokers and lenders, and their equally "innovative" securitization by the investment banks.
The oil price spike punctured the bubble by suddenly making it less attractive to buy a house in some far-flung development outside of LA, Phoenix, etc. This cratered the new construction business, put lots of new homes on the market at low prices, drove down the prices of existing homes, put homeowners under water, speculators started to walk away, etc. In some CA, NV, AZ and FL communities, home building was a very large fraction of the available jobs. When these were lost, it added to the downward spiral of defaults, foreclosures, and markdowns in prices. These caused the riskier tranches of the MBS to be marked down, the balance sheets of financial institutions to be questioned, and the ensuing global liquidity crisis.
Once the recession deepens, the economy cannot recover in the sense that it cannot get back to the state that it was in prior to the recession. The economy can only recover in the sense that a mix of new businesses with new products and services can eventually produce an equivalent value of GDP.
We are currently undergoing all sorts of structural changes in the economy that will lead to such a new and different economy, one which may be better or worse than before. It is too early to tell.
Besides energy and housing industry changes, the financial industry has been dramatically changed, e.g. tens of thousands of employees who were processing paper checks no longer have jobs. On-line banking, bill payment, brokerage services have become the norm.
Publishing of books and newspapers is circling the drain. Just as Barnes & Noble killed the local bookstores, electronic book selling will kill B&N's brick and mortar based business.
Agriculture and manufacturing are small sectors of the modern economy. It is predominantly service-based. Consequently, I don't think that the old levers of Federal Reserve policy and government fiscal spending policy have the same effect that they formerly did. Therefore it is less certain as to how the future will shape up.
So the oil shock certainly was the trigger for the recession. However, the price of oil is only one factor in the reorganization and rebuilding of the economy on the way out of the recession.
Thank you Gail, that was excellent.
Much of the political chattering about the recession has identified a lack of small business investment with the unavailability of credit and/or the uncertainty of future costs for healthcare, taxes, or other government mandates. However, the future cost of energy may also be a significant source of uncertainty that causes small businesses to be reluctant to invest. Small businesses in several sectors also pay more for energy that their larger counterparts.
The report has a wealth of information about small business energy usage broken down by NAICS code.
Characterization and Analysis of
Small Business Energy Costs
Slide 11 says that greenhouse gases may decrease. I think this is a misstatement. It may be that expensive oil will lead to a decrease in the rate of greenhouse gas increases in the atmosphere. I don't see anything that would suggest a absolute decrease in the amount of greenhouse in the atmosphere.
I tried to describe the situation in the discussion below the slide. New emissions will be reduced. How that ties in with accumulated amounts is not as clear.
But the "80% reduction by 2050 goals" are stated in terms of new emissions as well. It is the 350.org and similar groups that are talking accumulated amounts. It seems like they would need huge reductions, immediately, to get to decreases in accumulated amounts.
It would still be appropriate to edit the slide to include the word "emissions."
This is the actual slide I used, so I can't really go back and change it. My intent all along (and in what I said at the conference) was to discuss current emissions, which is what policy makers are talking about limiting.
Okay, but if you are going to give the talk again, or post the content of the slide in a different context, change it.
Getting off a drug habit(cheap credit and cheap energy)is hard but necessary to long term health and ultimate survival. It is all tied together. A healthy low energy economy is possible. GDP is not the only meaning in life. Cash wasn't always king. People made a lot of their own things at home, etc. and didn'T need too much consumer goods. We can go back to that, live more local, more sustainable. Gail describes an obese person going on a diet with a constant yoyo effect.
The less money and energy I need the better. Cutting costs means cutting dependency for me and for everybody else. If the banks and the consumer temples go down, all the better. However my attitude is not that of a chinese yuppie who just has to get a BMW. We are on the downslope and think healthy while they are on the upslope and want the good life with all its excesses having come late to the game (Europe came earlier and is ahead of USA on the downslope in the energy curve).
Going direct backwards doesn't look so good however(USA in 1900 with 75 million people and no artificial fertilizers and 20 million horses eating a quarter of the crops), but a slow fall over stages of tech decline (Prius>streetcars>bikes>walking) is workable under an enlightened stalinist centralized dictatorship powerdown instead of relying on chaotic 4 Ponies methods of St. Johnny Boy Apocalyptico inclusive Megiddo and Seven Seals Plagues.
The amount of surplus of an individual's productivity available for taxation is heavily dependent on the amount of energy supporting that individual's labor...in other words, a low-energy future will inevitably be one of lower taxes and smaller government.
Historical models of centralized control substituted labor contributions for taxation, and the consent of the populace was a much greater factor. All the much-touted fears of "one world government" and so forth are highly unlikely - we haven't got the energy for it.
Is the EROEI of oil relevant now that it has decoupled from other energy (like gas)? Oil has two important characteristics:
The most immediate characteristic is as a source of energy. However once the price of oil gets above a certain level then we stop using oil just for energy. The first step in this process was when people stopped using oil for electric power generation, which happened 40 years ago. The next step, which is happening rapidly in North America, is that people stop using heating oil to heat their houses in winter. We are not running out of energy. Indeed it seems certain that we will get Nuclear Power working and producing cheap electricity well before there is any shortage of coal or natural gas. Claims that we might run out of Uranium are silly: it is precisely because there is so much cheap Uranium that we can't get more modern reactors up and running that would use much more of the nuclear fuel and leave much less residue.
The 2nd characteristic of oil is as an energy carrier. Liquid hydrocarbons are the ideal fuel for transport. And we have an enormous infrastructure using that. But the oil price has already disengaged from the price of energy. Natural gas is cheaper, electricity is cheaper if it doesn't come from renewable sources.
Once we stop worrying about its EROEI, we can see that it doesn't matter if Canadian tar sands or very heavy oil requires a lot of energy to extract. We could even make oil out of thin air, using algae for example. The EROEI no longer matters.
Obviously that's not entirely correct and we're in for a nasty decade or two as described in the lead article. At the end the successful countries will be the ones that make Nuclear Power work. Certainly India and China agree on that point.
Yeah, I'm sure with proper funding from Exxon, Craig Venter could easily engineer a new oil producing organism, he could call it 'Airgae'. It wouldn't need water or nitrogen, phospate and potassium either... While we're at perhaps Congress could repeal those pesky Laws of Thermodynamics so we could stop worrying about EROEI.
http://www.guardian.co.uk/environment/2009/jul/14/green-algae-exxon-mobil
Remember, you still have to mine uranium, and that takes oil. So you need a system that reuses uranium, or you have a problem.
I think price is as important as EROEI. But a person needs some kind of way of describing the fact that it is qualities associated with the oil that are important, price cannot just go up endlessly. There are so many differences between fuels, the EROEI does not really do justice to the discussion.
If oil is only being used for medicine, we could no doubt accept quite a high cost for the oil. But we cannot ever get to the point where 75% of our salaries (or some other high percentage) are used for energy inputs (oil, natural gas, electricity, etc.)--we would have nothing left for other things. And that is really the issue.
Gail -
This subject always makes for a very interesting and lively discussion.
You say that the mining of uranium takes oil. Technically true, but not all that relevant.
The use of oil in the mining of uranium is not critical and is mainly associated with earth-moving equipment and the trucks used to transport the ore from mine to processing plant. With that being the exception, by far most of the total energy required to deliver a ton of low-enriched uranium for the fueling of the reactor in a nuclear power plant is associated with both the ore concentration process and the uranium enrichment process, the latter being by far the largest energy input. However, all these consume electricity rather than oil.
Thus, the production of enriched uranium is mainly dependent not on oil, but rather upon natural gas and coal, and the amount of fossil fuel energy consumed represents but a very small fraction of the total nuclear energy released in the reactor (this becomes even more so with the latest nuclear cycles and breeder reactors). And since this is electricity, there is no reason why it can't come from another nuclear power plant (or for that matter, even solar or wind power) and thus be self-sustaining.
So, if we were to switch to electric earth-moving equipment and trucks (some of this is already taking place in the mining industry), it would be possible to make the nuclear power cycle in effect totally independent of fossil fuel.
I hope that at some point, virtually all of our petroleum consumption will be for high-value chemicals and plastics rather than just burning it in heat engine or using it for space heating. It is important that there be a hierarchy of petroleum usage, and short-term market price should not be the main determinant of that usage.
You put it so nicely in two sentences...
"The use of oil in the mining of uranium is not critical and is mainly associated with earth-moving equipment and the trucks used to transport the ore from mine to processing plant."
Since I took that class, I'll weigh in. Much uranium is in deposits suitable for solution mining. Impermeable shale above and below a roll-front deposit in sandstone. So drill several holes, fracture it, run in the lixiviant (solvent, which is water-based), and pump out the dissolved uranium from a different drill hole.
Nearly all the energy input is or can be electric. And not much of a surface footprint either.
Will this lixiviant poison the watertable?
Where will I find the MSDS form for it?
Although we use this leaching method for uranium mining,
over here in Australia they are planning using earth-moving equipment to create the biggest hole in the ground on earth.
I am curious about their rational. Is it just because of group-think?
Does office politics silence creative thinking in overlarge, bureaucratic organisations?
Is this just boys playing with their oversized toys?
Is it another example of a statement by a dying civilisation?
"We woz 'ere. We dun this!!"
I don't get it.
Amount of fossil fuel used to mine and refine uranium is small compared to amount FF burned to generate electricity. EROEI of nuclear is comparable (within range) of other sources.
Australia has managed to avoid an economic downturn by exporting coal, LNG and iron ore to China, India and other Asian countries. If PO slows their economies it will flow on to Australia. Additionally the Greens Party will control the Australian Senate by this time next year and they want to bring in a carbon tax of $A23 per tonne of CO2 and phase out coal exports. Expect major hysterics.
As I see it oil supply will determine coal demand, a kind of Liebig's Law for humans not plants. More natural gas will probably go towards replacing oil. The unknown is length and activity level of the transition period. I think IPCC should rework their emissions simulations. The trouble is that nobody really wants to admit to a global powerdown. It's hard to see a UN committee formally admitting the world economy could keep contracting for the next 20 years or so.
Gail nice read.
Problem is our economies are based on infinite growth whilst our primary energy source is finite.
So we all go out and buy an elctric car right? Well, there are 7 gallons of oil used in the production of 1 tyre, forget the metal, just 1 tyre, think we have the oil to build 500 million electric cars just to start with? Think again.
There are currently 800 million internal combustion engines on the planet that run on....get my drift?
Food - 10 grams of carbon energy to get 1 gram of food on your supermarket shelf.
Nuclear power stations, well now you are investing serious energy to get energy, low return folks. Artic shelf, low return folks.
Most of the low hanging fruit has been picked, once upon a time you could expend 1 unit of energy to get, I dunno..30? Try doing that on the artic shelf.
Wanna build huge solar systems? Wind Systems? Tidal systems? Guess what you are going to need...oil, huge energy investment in infrastructure terms, and those sytems needs maintenance, that would be, more oil. BTW, guess who gets to use that energy created by those systems first...the closest cities...think about that.
Exactly why do you think the US is in Iraq? Embassy complex bigger than Vatican city they built, couple of other defence complexes that are huge as well, hardly temporary...get my drift.
Take it a step further, its not that the US is in Iraq...they are now in the middle east...40% of estimated world oil reserves...get my drift. The US with a world population of about 5%, uses current world oil production of 20%...see a problem.
Population pre oil was about 1 billion, now around 7 billion, thats a tad over 100 years or so, see a relationship? Get my drift?
Yer, but buy a leaf, car pool and other stuff, its really gonna help, well actually it isnt, too late, way to late.
Heres a prediction even with huge governement interferance with regard to barrel prices(read, US sitting on the oil in the middle east) barrel price will hit US $250 within the next 18 months, within 3 years $450.00 a barrel.
Now there are 10 grams to carbon energy in every 1 gram of food to hit your market shelves....see a problem?
There are 7 gallons of oil in every car tyre, see a problem?
Nick, you need to wake up, if you dont understand the outcome of a paradigm based on infinite growth, meeting the reality of finite energy...but sure, you go buy your leaf? :)
Uranium, takes about 10 years to get a plant designed, approved and built. Now you have to build that plant, concrete, plastic whatever, thats oil folks, you have to deliver the concrete, by truck..get my drift?
All those plastics in the plant, computers, circuit boards etc, thats oil more oil, to make 1 computer requires 10 times the machines weight in oil. Cooper, silver, how do we mine it...oil.
Are we going to retrofit 800 million cars to run on electricity? Are we going to build another 500 million cars that will run on electricity? There are seven gallons of oil in every tyre, just the tyre..Planes?? Boats??
Peak Uranium? Are there not already Unanuim shortages?
Nuclear waste anyone?
We would neeed another 10,000 nuclear reactors to replace fossil fuels in terms of energy requirments.
Coal, there is NO such thing as clean coal. Sure we can use the gasification process to convert it to synthetic oil, where are we going to dump the waste, into our atmosphere?
Coal also shares the same issue as oil at this point, we need to use serious energy to get energy!
Peak Coal anyone?
World energy consumption is about 15 TW. An AP1000 reactor has a thermal rating of 3415 MW, so a fleet of 4400 such reactors would suffice. That is entirely doable - its precisely ten times our current commercial fleet, which we built rather easily.
Sure, uranium supply may become an issue. But if half of the reactors are breeders, and fuel is reprocessed, those 4400 reactors would consume about a fifth of what the current fleet consumes, and for the first few centuries, that could be supplied from stockpiles of depleted uranium.
So we only need about 5000 new nukers, thats okay then :)
So they are going to appear overnight?
Does it really matter?
We still have to retrofit our transportation systems from ICE to electric, cars, planes, ships, we still have to substantially increase our investment in solar and wind, this is all going to take oil.
I dont disagree with any of the above btw, but is should have started in 1976 when Carter gave his energy speech.
Its to late.
Nonsense Winny.
The Limits to growth scenario 7 says we can have a nice stable economy if we implement major change by 1982.
Arthur, you made me laugh thank you :)
Yes, it does matter. Current world military expenditures is on the order of $1500 billion per year. That is less than 3% of global GDP but would suffice for a tenth of those reactors, given economies of scale and a bit of no-nonsense focus. And we need to stop investing in solar and wind, because that's nonsense.
I wouldnt worry about the military, they are busy sitting on the middle east reserves as it is :)
So 500 down and 4500 to go....
No-nosense focus?? Too late now sport, that should have been used in 1976.
I don't think we'll need to replace more than 10% of the fossils per year.
I believe it's too late when there is actual collapse, not before. Right now, it seems we have no real problem.
You'd probably run out of fuel---the 4400 one GWe AP1000 fast breeders(BR=1) which would take the equivalent of 500,000 tons of natural uranium for the 20% HEU fast breeder fuel. While fast breeders can theoretically have a breed ratio of 1.8, all the lastest designs stick at about 1.0--meaning they don't produce excess plutonium. Eventually the natural U-235 and plutonium will run out.
Thorium breeders are thermal and don't produce excess U-233.
Once filled and equipped with dedicated reprocessing plants these units might run for 200 years slowly chewing on maybe 22,000 tons per year of depleted uranium and thorium.
IOW, at some point(300 years?) you just run out of fissile material.
Right now you have about 400 GWe of light water reactors
which use ~60000 tons of uranium fuel per year, so over the next 25 years more than half of world natural uranium about 3 million tons will be used up. The light water reactors will eat up the natural uranium while the once-thru waste will supply some plutonium reprocessed from the LW waste.
LWRs will turn the world's natural uranium into depleted uranium and nuclear waste within 75 years. Breeder technology has failed as a safe, reliable source of electricity generation and even France has given up on reprocessing as a source of fuel.
It is only theoretically possible to create a 'plutonium economy'.
If you were to do this, you'd aim for a higher breeding ratio. The russian design does 1.2, btw.
I agree it might be a bit tough to do initial load of the breeders, but you'd probably start by reprocessing stockpiles of spent fuel for plutonium.
You are mistaken if you think 3 million tons of natural uranium is the limit. That's only the amount of current proven reserves extractable at a very low cost. But since the fuel efficiency of the plutonium economy is much higher, you can stomach a much higher uranium price. A hundred times higher price is ok, and that would increase reserves about 90,000 times, allowing for your 300 years*90,000 = 27 million years. And that's a bit conservative, and not counting the more abundant thorium.
Breeder tech is still being researched and reprocessing is just a bit out since uranium is still so plentiful and cheap. The abundance of uranium is the "problem".
No.
The idea that high prices stimulate proportionally high production is free-market idiocy.
It won't happen. People can see around the bend.
As a matter of fact right now the percentage of uranium in the ore is falling. Namibia's Rossing mine(world's 5th largest) is .01% ore and richer grades elsewhere are being exhausted. It means many more millions of tons of ore being processed for the same amount of electricity.
Thorium in a breeder is no more fuel than depleted uranium (U-238)is and we have plenty of that.
What will happen is, the cost of nuclear plants and fuel will become extravagently expensive(lots of reactors will close) and solar will be cheaper.
Breeders won't get off the ground.
Please realize that uranium is nowhere near the peak of the Hubbert curve.
Yes, of course it is. But nevertheless, it was you yourself that stated 3 million tonnes, and that's just proven reserves at a very low cost. Reserves increase 300-fold if ore grade is reduced to a tenth. Thus we have no fuel availability problem if we choose to employ breeders. The fuel will cost next to nothing - only after millions of years the cost per kWh will approach today's fuel cost for LWRs.
Funny. Nothing points to that.
Nothing ?
* So the sticker shock of the latest Nuke prices is an illusion ?
* The falling price of Solar PV is also an illusion ?
* The added GW of Solar PV exceeding Nuclear-added GW for a while already ?
* The trend lines that show the cross-over band, already entered
(this varies somewhat with country, geography and subsidies )
* Strongly increasing Global PV factory capacity, with GW+ fabs now common.
I'd say there are MANY real indicators, right now, that point to exactly that.
So much, that there is emerging a real risk Nuclear may collapse faster than it should, and special action may be needed to keep Nuclear on life-support.
US sticker prices? Pretty much. It's an artifact of tight regulation, conservative estimates, high financing cost and little experience. Meanwhile, South Korea is selling nukes to UAE for $5 billion a piece, and China is building domestically for half that.
It is mostly irrelevant. Even if the panels themselves would cost $0/kW, putting them up somewhere and doing O&M is hardly worth the cost.
Only made possible by extreme PV subsidies. Also, please note that all GW is not created equal. There are some 60 GW nuclear construction currently ongoing. Total worldwide grid-connected PV is some 21 GW, which is worth only 5 nuclear GW.
Then you are doing some calculation based on grid-parity for subsidised PV. In terms of real costs, PV is still many times more expensive than nuclear.
I googled to verify that and that has so far led me believe that you are incorrect. But please provide a link that supports your claim and I'll reconsider. It doesn't matter much anyhow, though - it's still nothing compared to nuclear construction, which is also strongly ramping.
Yes, the UAE example. A loss leader, with a subsidy...?
A $20.4 billion contract, $16 billion below that of France’s AREVA/Electricite de France-led consortium.
Apparently the EPR design’s redundant safety systems require a heavier load of steel and concrete, adding to its construction price. The French, who drastically underbid for their EPR contract at Olkiluoto, Finland, were clearly in no mood to offer any more loss leaders.
Now that does make me smile. A claim that $0/kW, is hardly worth the cost ?!
GW PV ? Let's see :
- First solar passed 1GW run rates, back in 2009, and show 2.1GW in 2011
and this:
"Neo Solar starts construction of USD$937 million, 3.4 GW solar cell plant in Taiwan"
- That will be finished well before any Nuclear plant started at the same time, and be producing 3.4GW every year, once completed....
and this
["LDK Solar Co., Ltd. (NYSE: LDK), a leading manufacturer of multicrystalline solar wafers and PV products, today announced that it reached the milestone of 2.0 gigawatts (GW) annualized capacity at its wafer plant."]
Nuclear remains the domain of Federal Subsidies, and cost overruns, paid for by someone. Be it the customer, or more common now, the shareholders under Price Guarantee selling to very wary customers ...
Just Ask Areva.
Remember, a nuclear plant 'under construction' does not add any GW until it is finished. A 60GW 'construction' claim, might add 10GW/year, which also has to replace retiring capacity.
Recent Nuclear examples :
2009 saw 2.5GW retired, and 1GW added.
2008 saw 0.4GW retired, 0GW added
When that 'under construction' plant is finally finished, the NEXT Nuclear start will cost even more, and Solar PV will have continued to scale, and be even cheaper....
Do you have evidence for that? I wouldn't be surprised if it was subsidied, but I haven't heard that it is so, and I find it hard to believe the private consortium would sell four reactors at a multi-billion dollar loss.
So, good riddance then. Nuclear safety is over-the-top nowadays.
Not more strange than that wind is hardly worth the cost, even though fuel costs are zero. It's the total cost that matters.
So? A forge for big nuclear pressure vessels will produce many more gigawatts per year. But it doesn't matter - total costs are still several times higher for the PV energy.
Yes, and that 10 GW will produce twice as much as the entire grid-installed PV capacity. Please note that nuclear is in a big ramping phase - three years ago, only 28 GW nuclear was under construction. So, it seems as nuclear construction, just as wind construction, doubles every three years.
It is illogical to consider retirements like that. The makeup of retirements is irrelevant to the choice of new capacity.
It will continue being stupidly expensive, even in comparison to wind. PV will stop scaling when governments decide subventions are getting too expensive.
For the UAE to build a nuke is the epitome of stupidity.
They have no need for 24 hour baseload as they have little manufacturing.
Perfect location for solar thermal.
Nukes make more sense for shady northern Europe which lacks renewables, land and fossil fuels.
A solar thermal costs around $1 million dollars per acre and 6 acres is a MW, so a 1 GW plant would take 6000 acres(9.4 square miles) and cost $6 billion dollars.
This is why people fear nukes--irresponsible power-mad nukers equating safety with cowardice. A majority of the public hears such bluster they turn against nuclear power.
Solar energy will never kill anyone.
Nukers calculate 'acceptable losses'.
Only GW which most nukers don't believe in is giving nukes a second chance.
All nations needs baseload and total UAE load in 2020 is expected to be some 40 GW. Nuclear will save them lots of gas which they can export. I guess they'll do desalination with some of the electricity.
Perhaps solar thermal could work for them as well, but costs and land requirements is likely of concern. What would a 5 average-GW solar thermal electricity plant cost?
I'm as Spock-like as they come - I don't care for cowardice or bravery. I'm simply saying that current nuclear safety is irrationally high and thus hurting us, since it drives cost higher and thus keeps nations poorer and their coal plants going. The problem is not me being irresponsible, it's politicians and beaurocrats being irresponsible by demanding more safety so as to be seen as responsible and tough.
Exactly, and proud of it. But solar energy kills by proxy (namely coal). The money involved in solar electricity could replace 4-10 times the amount of coal if spent on nuclear.
Perhaps I need to answer that myself. Andasol in Spain cost $380 million for an average production at 20 MW. Five GW would thus cost about $95 billion and cover 500 square kilometers. The life of such a plant is shorter than that of a nuke, and the O&M costs involved in servicing and cleaning such an area will likely be higher than the O&M costs for the nukes. So the five times higher investment cost is hard to motivate.
Yes, the UAE will nervously watching both the price of Oil, and the price of Solar Thermal and Solar PV, as their construction progresses.
Let's look at recent USA Govt Loan Guarantees infos, which underline the high cost, and long lag-times, of Nuclear. (so you get much less GW/loan $ Taxpayer Guarantee )
BrightSource Energy has recently received a loan guarantee from the U.S. DOE for nearly $1.4 billion, enough for 15 gigawatts of solar thermal projects in California.
and for comparison:
Southern Co., the second-biggest U.S. utility owner, agreed to a $3.4 billion U.S. loan guarantee for Nuclear... {~2.2GW}
Notice the 16.5:1 loan guarantee coverage, is much greater than the capacity factor differences. That spread, will only increase over time.
Again, the hard numbers tell a story. Simple Arm-waving looses, again.
Sorry to burst your bubble, but you're a (hopefully embarrased) victim of extremely bad news reporting. Here is the 400 MW solar project that the US DOE gives the $1.37 loan guarantees for:
http://www.brightsourceenergy.com/projects/ivanpah
So, 400 MW solar for $1.37 billion versus $3.4 billion for 2.2 GW. Considering capacity factors, solar needs nine times more loan guarantees (9:1) than nuclear.
I agree, the hard numbers do tell a story.
Really ? Just whisper Finland in Areva's ear!!
The word is, Areva was too recently bitten to offer another fixed price quote, and
Korea was not.
But the striking thing about the Korean bid, $20 billion for four 1400 MW units (much of it offered at a fixed price)...
Time will tell, just where that fixed price subsidy fallout goes.
Someone has their fingers crossed.
It may be there is enough 'stretch' in the tail-end, as the total contract is mentioned as $40B, with only half that in initial building phase.
It is also important to note, that Nuclear's claimed 'ramp' is very regional, the developed nations, scarcely register a blip.
Following the numbers, shows just how thin the ice is, under Nuclear's foundations.
So the only proof of subsidies you have is that the price is fixed? That's not very convincing.
I consider the ice under wind and solar much thinner, as they are based on subsidies. That is very easily seen in the very erratic capacity increases of individual nations - matching the introduction and abolishment of subsidies.
Regional, yes, nuclear is ramping mainly in Asia and is now picking up in Eastern Europe as well, but as you note, many old world not-so-hungry countries are so far merely planning and removing obstacles. But such planning is ramping as well. 164 GW is listed in the planning phase world-wide but 90 GW three years ago.
Let's have a look in another three years. Perhaps nuclear construction has doubled again, to 120 GW, and perhaps not. Interesting times.
I think Gail may be correct in that the World economies' demand for oil will contract as oil price rises above a certain point...we may not see $250/bbl let alone $400/bbl oil. Much demand will likely be destroyed.
You bet much demand will be destroyed, wanna know why? Nobody will be able to afford it.
Whtado you think is going to happen when this demand is destroyed?
There are 10 grams of carbon energy in every gram of food produced...there are seven gallons of oil in every car tyre...whats going to happen to your workforce?
EXPECT HALF TO 2/3'S OF YOUR WORKFORCE TO BE OUT OF WORK..COLLAPSE.
Quite the opposite. More people will be needed to replace machinery and to adapt the society.
And what, stand in line at soup kitchens, work a coal mine with their hands and picks, that is collapse.
Implementing electrical infrastructure, CTL plants and so on.
That will use just a fraction of the unemployed. I ran some numbers a few weeks ago to demonstrate that but don't have time now to look for them (about to resume packing for vacation).
Why don't you run some numbers and see how far your assertion goes? I'd wager you won't need more than a couple million people. Contrast that to the number of people who are/will be unemployed and quickly one sees the problem.
I don't even agree there will be a crash and unemployment, but anyhow, rail is quite expensive. Costs that ultimately comes from labor.
there are 7 gallons of oil used in the production of 1 tyre
I don't think that's correct. Do you have a source?
The oil saved by an EV is much larger than the amount needed to manufacture it. Not to mention that the amound of oil needed to manufacture an EV isn't greater than the oil for a conventional vehicle.
Wanna build huge solar systems? Wind Systems? Tidal systems? Guess what you are going to need...oil, huge energy investment in infrastructure terms
No, wind has a very high E-ROI, and most of the energy inputs aren't oil.
Wind and solar power are very, very scalable.
there are 7 gallons of oil used in the production of 1 tyre
"I don't think that's correct. Do you have a source?"
Hell just for you www.rma.org/about_rma/rubber_faqs/
Also try National Geographic.
Okay there is the equiv of seven gallons of carbon energy in every tyre. I thinks its correct, I dont need to be spoon fed data like you do. Try google, it works for me. Hey maybe its six, or five, or eight, does it matter? You build the plant that makes the tyres, you freight the damn materials to the plant, you use machinery and electricity to make the damn tyre,you maintain the plant and equipment that make the tyre, you freight the damn tyre to the market place...its all oil...GET IT!
"The oil saved by an EV is much larger than the amount needed to manufacture it. Not to mention that the amound of oil needed to manufacture an EV isn't greater than the oil for a conventional vehicle."
You dont get it do you Nick? We are on the down slope of the bell curve in terms of PO. Oil becomes more expensive, production levels drop, we have to invest serious amounts of energy to get energy, oil becomes more expensive. Then you mention solar/wind systems, how do you think these will be made? Maintained? You build a solar farm guess who gets to use it first? The cities closest to it. Think about that.
So Nick, all this infrastructure we have created over the last 100 years or so, on the back of CHEAP oil, with production output going UP the bell curve we now begin to replace with EXPENSIVE oil when production is on the donward slope of the bell curve, is that how you see it? You think thats doable dont you :)
How about the worlds population increasing Nick, do you believe that?
Nick you cant see the forest for the trees, you are concerned with outputs, we build an EV and long term we will save energy, however most of the energy expenditure is up front, do you know how much water is used to manufacture a vehicle Nick? Need a link for that as well? Do you know how energy expensive it will be build nukers, wind farms, solar farms? These are all up front costs, when oil production is sliding down the bell curve...becoming more expensive...less of it to go around..
No doubt you alos believe that the USA is in Iraq to bring democracy to that country, albeit Iraq holds huge oil reserves. A step further, the US is now in the middle east...
Hey Nick, it takes the equiv of 10 grams of carbon energy to put 1 gram of food on your supermarket shelf, and guess what, The worlds population is increasing. Need a link? You dont believe that?
Sorry, that probably sounded a little harsh, but after reading your comments on car pooling, and start saving for an EV, I couldnt resist it.
Need a link? Source?
Hell just for you www.rma.org/about_rma/rubber_faqs/
TIRES
How much oil is required to produce a tire?
Approximately seven gallons. Five gallons are used as feedstock (from which the substances that combine to form synthetic rubber are derived), while two gallons supply the energy necessary for the manufacturing process.
Also try National Geographic.
But right Nick, lets knock out a couple of hundered million EV's, no problem :)
Now lets see Nick, lets build 20 million EV's shall we. Say 4 tyres to a vehicle, forget the spare.
So we need 80 million Tyres @ 7 gallons of oil per tyre, thats 560 million gallons of oils just for the damn tyres.
Now there are about 42 gallons of oil in a barrel, so we need approx 13.3 million barrels of oil just for the tyres.
Forget the steel, plastics,batteries, wiring, electric motor, converters, seats, and on and on. Forget converting factories and machinery to achieve the economies of scale to produce 20 millions EV's.
Now there are 800 million ICE's on the planet give or take, this model assumes replacing 20 million of them, thats would be 2%
See a problem?
So, new tyres for the 800 million ICE vehicles would require 13.3*800/20 = 532 million barrels, or one week's worth of global oil production. What's the problem with that, even in the face of PO?
Also, each EV should save those 4*7 gallons in less than a month of driving compared to the ICE it replaces, right?
jeppen, thats just the tyres, you then have the rest of the vehilce to build, the plant to construct.
All this while we are building new nukers, solar sytems, wind systems, china and india going through massive infrastructure increases, having to use more energy to get energy, feeding an increasing world population....as PO comes down the bell curve it becomes more expensive, there is less of it...you know this, you just expect nukers, pwer stations, solar whatever to pick up the slack, just like that, hey lets build another 400 nukers, next week..next year?
Jeppen, there is no point to you, you want the market to take care of this problem, the market relies on infinite growth, energy is finite, yer you waffle on about nukers, solar whatever, but your own paradigm hasnt changed. Markets, consume, build, lifstyle, whatever.
You dont understand PO or peak energy, hell, you dont believe in it, its all gonna be alright, lets just build 800 million EV's, no problem. Hell, the US is sitting in Iraq, bringing democracy and stuff, no other reason..
You dont see the problem, because you are part of the problem, there is no problem right? Markets will fix it, infinite growth, energy sources are over rated, draw me a graph,just build 5000 new nukers, just build 800 million EV's, problem? What problem, show me a link, I have to be told beacuse I sure as hell can't see :) Its cool, you will in time.
If the tyres are no problem, then why do you mention it?
The market does not rely on infinite growth.
The world in general, but North America in particular, is so wasteful in oil that easy savings and alternatives will create ample time to let the market scale more alternatives.
"If the tyres are no problem, then why do you mention it?"
What worries me here, is I actually think you are serious, perhaps english is your second language?
The tyres will be a problem, the whole vehicle will be a problem, I was responding to a source request on the issue. Try reading.
"The market does not rely on infinite growth."
Just LOL at that.
"The world in general, but North America in particular, is so wasteful in oil that easy savings and alternatives will create ample time to let the market scale more alternatives."
Sure it will, as the US cuts back on its energy waste (have they ever?), China, India, et al will pick up the slack, as will increased energy needs to produce energy, feed people, build those alternatives. We aint going anywhere on oil use.
"to let the market scale more alternatives."
There you go again, the market will fix it all :)
You seem to be struggling with this. How about you move on to something else. Denial is the first step, you are certainly there :)
How about we ignore each others comments from here on in, you dont see any problem whatsoever that the market cant fix, I do see a problem that the market has no hope of solving.
Enjoy your day/night.
Yes, in fact it is. Is it your third?
Previously, you were simply wrong. Now you're wrong and laughing like a maniac.
What slack? I thought we were talking about the post-peak downslope. There is no slack, just demand destruction. And if I were to guess, I would guess proportionally more demand would be destroyed in China and India.
Denial of faulty reasoning is a virtue.
Sorry, I don't do that. When I comment, I comment what triggers me, regardless of author.
"Yes, in fact it is. Is it your third?"
I am sorry, it wasnt a dig at you, but you were not making sense. Now I understand why.
"What slack? I thought we were talking about the post-peak downslope. There is no slack, just demand destruction. And if I were to guess, I would guess proportionally more demand would be destroyed in China and India."
From your previous post you suggested that North America will have to stop wasting fuel, in fact it was one of your solutions to buy time effectively to place alternatives.
"The world in general, but North America in particular, is so wasteful in oil that easy savings and alternatives will create ample time to let the market scale more alternatives."
Now its demand destruction, will you please make your mind up. Which is it, is it demand destruction, or by reducing wastage do we buy time to place alternatives? Because if it is demand destruction, there will be no time to place alternatives. Are you not agreeing with me. MAKE YOUR MIND UP!
"Denial of faulty reasoning is a virtue."
I'm sure it is.
"Sorry, I don't do that. When I comment, I comment what triggers me, regardless of author."
Thats nice, you do that.
Enjoy your evening/day.
By the way, why do you think the US is in IRAQ and the middle east?
Would you be kind enough to tell me where? I looked back into the context of your comment and didn't spot anything. I'm always interested in improving my language skills.
Waste will be reduced by demand destruction. Yes, it will provide time to create alternatives. Why would it not? Please note that there has been demand destruction each time oil has been more expensive than last year. It is not a new phenomenon and needs not be very dramatic.
"Would you be kind enough to tell me where? I looked back into the context of your comment and didn't spot anything. I'm always interested in improving my language skills."
Your language skills are excellent Jeppen, nice job. You missed the tone of my post is all.
"Waste will be reduced by demand destruction. Yes, it will provide time to create alternatives. Why would it not? Please note that there has been demand destruction each time oil has been more expensive than last year. It is not a new phenomenon and needs not be very dramatic."
I agree its not a new phenomenon, but now the circumstances are changing. Your arguement is will we waste less oil and transfer this time benefit to create altenatives. Fair enough, thats your opinion, I truly hope you are right.
My arguement is production will decline significantly, the costs of prodution will rise significantly, the return on energy investment to procuce oil will drop. Demand will increase, food, EV's cars, infrastructure, energy altenatives, those very nukers you are discussing above. The price will have a series of spikes and downs, and then sit, high.
Your point of demand destruction is interesting, it wont just remove waste, its going to remove jobs, industry, business. If the USA has never been able to curb their waste on oil, why will they start now?
DO you agree the worlds population is growing?
Do you agree that oil demand is always increasing?
I NOTICE YOU KEEP AVOIDING THIS NEXT QUESTION.
Why exactly do you think the USA is in Iraq?
It will also create demand for new infrastructure, more localized production, more telecom. The economy will simply shift. We'll be a bit poorer, but there is no reason to have low utilization of industry and workforce. Just if the governments significantly resist change will we have problems.
Because of higher prices.
Yes, but the growth is slowing.
Yes, but that's good. It shows the economy is alive and well.
Because of previous engagement that had to be resolved and because that particular way to do it was how Bush thought he could make a nice place for himself in the history books. It's about a twisted view of honor, mainly.
The previous engagement, however, i.e. the first gulf war, was about oil supply security. But hey, what if Iraq is all about oil? That proves only oil is valuable, not that we can't handle PO.
"Because of previous engagement that had to be resolved and because that particular way to do it was how Bush thought he could make a nice place for himself in the history books. It's about a twisted view of honor, mainly."
Its about a twisted view of honour is it? Oh dear god, where do you people come from. Its not about oil is it, not oil, god no. Imagine if it was about oil, imagine if a superpower just decieded to take it, imagine if a superpower knew something we didn't. But no, its about honour, sure Jeppen, now that makes a lot of sense. I am starting to lose interest in your POV. You are in denial.
"The previous engagement, however, i.e. the first gulf war, was about oil supply security. But hey, what if Iraq is all about oil? That proves only oil is valuable, not that we can't handle PO."
We already knew that oil is valuable.
The US invading Iraq is one nations reaction to PO, supply has to be maintained, price kept down, the oil must flow. The US is sitting on that oil, they aint going anywhere, they are in fact sitting in the middle east.
"But hey, what if Iraq is all about oil? That proves only oil is valuable, not that we can't handle PO."
I TOTALLY lost interest in your POV here.
Best of luck for the future.
A few points:
But the supply dwindled, the prices skyrocketed and the oil flow from Iraq slowed to a trickle. It has still not been restored to pre-war levels. You think the "superpower" plans strategically from a PO perspective but are completely incompetent when it comes to implementation and tactics?
That's fine. You haven't said anything of depth or real value here - you just ramble superficially, so this discussion isn't likely to go anywhere anyways.
Jeppen you are so busy gathering "market" facts you are missing whats actually happening right in front of your eyes.
So your view is that the US is in Iraq, to soothe Bushs ego.
"Everything we know about Bush's decision-making and his rationale, reported from those who worked close to him, is that he was simply nonchalant and wanted to be a "successful president" by going to war."
Now this is most unlike you, because you cant confirm it as being fact its heresay. However, it suits your denial process.
You agree the the first war was to protect supply. You posted as much.
However, the second war was to soothe a presidents ego. I call BS. You write off a war on the basis that Bush felt better that week.
The second war was about ownership, they are sitting on it.
And after a lengthy post with regard to Bushs ego, you slip this in.
"But hey, what if Iraq is all about oil? That proves only oil is valuable, not that we can't handle PO."
You then post this "Claiming that the Iraq war is due to oil concerns is a conspiracy theory" - but your own view is that the US is in Iraq to make Bush feel better. Are you nuts?
Here is a fact Jeppen, The US is in Iraq, the US is in the middle east now, they aint going anywhere, even with a new president. They are sitting on that oil and nobody is taking it away from them.
"But hey, what if Iraq is all about oil? That proves only oil is valuable, not that we can't handle PO."
Iraq is about oil, a soverign nation was invaded and its future is being determined by the US. If Iraq is about oil, which it is, it proves that 1 nation will invade another to have it. See your market doesnt quite sort that out does it. How about your concept of freedom, not so important when oil comes into it?
Now why dont you run along and download another 5 pages of "market" facts from google, its all you have to offer, market facts, you are ignoring reality, world events.
Seriously, you believe the US is in Iraq to make Bush feel better, now thats a conspiracy theory. You cant even be honest at this point, its the elephant in the room that you just cant explain away.
Oh, but you can, Bush needed a self esteem boost? Now that sounds pretty superficial :)
Now? What do you mean by "now"? Before GW2, they already were in Saudi Arabia, Kuwait, Bahrain, UAE, Quatar and UAE. But the oil isn't property of the US in any of these countries, and not in Iraq either. It's the property of the host country. Saddam was selling his oil - he had to, as any ruling entity of Iraq would have to to retain power. So there was no real oil-related problem for the US to fix.
Please tell me your version. Who decided to go to war with Iraq? Bush? Cheney? CIA? The joint chiefs of staff? ZOG? Who? If you agree with me that it was Bush - that he pushed for it and made it happen, then why did he do that? Are you telling me that he didn't primarily think about his own political image and his reelection? That he instead looked beyond his two terms and did what he considered was strategically right for the energy-security of the nation? For a US payoff when somebody else would be president?
"Now? What do you mean by "now"? Before GW2, they already were in Saudi Arabia, Kuwait, Bahrain, UAE, Quatar and UAE. But the oil isn't property of the US in any of these countries, and not in Iraq either. It's the property of the host country. Saddam was selling his oil - he had to, as any ruling entity of Iraq would have to to retain power. So there was no real oil-related problem for the US to fix."
That sounds great Jeppen, so why is a the US there? What do they know that YOU dont? The FACT is, they are sitting on it.
"But the oil isn't property of the US in any of these countries, and not in Iraq either. It's the property of the host country."
Again you are in denial, if the US has no issue in invading a sovereign nation, killing of its politiacl structure, engaging in a civil war, what, you think ownership of property is an issue? Please, be serious.
"Please tell me your version. Who decided to go to war with Iraq? Bush? Cheney? CIA? The joint chiefs of staff? ZOG? Who? If you agree with me that it was Bush - that he pushed for it and made it happen, then why did he do that? (1)Are you telling me that he didn't primarily think about his own political image and his reelection? (2) That he instead looked beyond his two terms and did what he considered was strategically right for the energy-security of the nation? For a US payoff when somebody else would be president?"
(1) No, I dont agree with you at all jeppen, you are trying to find an excuse for what all these lovely little "market facts" and nuker outputs cant explain. You are in fact supporting a conspiracy theory, most unlike you may I add. You also forgot the white house cleaner.
(2) Think about that.
AS YOU POSTED YOURSELF, the first war was about oil security, now lets use our heads here shall we, the first war is about oil, hmmm, I reckon the second war could be about... OIL! Not hard is it. ITts about oil ownership, oil control.
See you cant explain it, your point 2 above even provides an answer for my arguement. What do THEY know that you dont.
Jeppen, you hide behind the markets, facts, figures, this isnt new, this was all discussed post Carters speech in 76'. You are not presenting any new ideas, Nukers, solar, whatever, these are old idea's, and we still havnt done anything of note.<>
You comment that my comments are superficial, thats fine, I have no need to throw a plethora of facts at you, you know why, Im just watching whats actually happening. I am watching world events. Maybe, just maybe, you should get your head out of reading reports on google and actually see whats happening.
I asked a question, why is the US in Iraq?
You come back with some conspiracy theory about a president and his ego..what a load of BS. And more to the point, you know it!
All your arguements go out the door dont they, it doesnt make sense does it, there must surely be a reason....there is....OIL.
In your world, we are just gonna knock out another 800 million EV's to replace ITE technology. We are going to build another 5000 nukers to help alleviate the problem, we are going to develope massive solar/wind/tidal systems, we are going to be able to maintain food production levels, in fact, increase them as the worlds population continues to grow. In your world the market will control the price and distribution of resources, in your world there will be no energy wars.(They have started, read US in Iraq)
I call BS, there aint enough oil, what was obvious in 1976 is even more so now.
Did you know that bushs ranch has been off grid since 2002(I think)?
Right about here you have lost the plot. So post away nobby, I think people may have stopped reading.
Thanks for the discussion.
Hi Gail,
Many thanks, as always – and congratulations on the venue.
I’m glad “GSM522” and “bloomingdave” asked about reactions from the participants.
It’s amazing how narrowly defined, apparently, research topics are – yet, still – you created a chance to introduce the obvious.
re: I’d like to take this opportunity to reference our idea that the National Academy of Sciences (NAS) ought to be directed to tackle “peak oil” directly – namely, by an immediate investigation of global oil supply (decline), impacts and policy options.
www.oildepletion.wordpress.com.
This would cover several bases, including the demand for more qualitative and integrated information, and the NAS weighing in would give even local governments a justification for actions. While many people see the NAS as somehow not being up to it, they are, after all, the advisors to the Nation on matters of science. BTW, they must be activated by directive.
re: And, I’d like to make a suggestion. Currently, there are several related studies, and I’d encourage you, Gail, to formally submit your talk to as many of the committees as you can. It looks to me like there is still some opportunity to do so for the current climate change study, and also there are several others where it might be appropriate.
http://www8.nationalacademies.org/cp/default.aspx
http://www8.nationalacademies.org/cp/information.aspx?key=Internet_FAQ
In addition, via personal correspondence, I found out the following:
“Submission of information by outside parties: Interested parties can provide written comments, scientific literature, and articles and other data to the project staff on behalf of the Committee throughout the study via the "Feedback" form posted at the bottom of the project page in the Current Projects System. Materials also can be submitted to the RSO by email, fax, mail, courier, or hand delivery. Materials may be submitted at any time during the term of the study, including after or in response to any interim reports that may be issued during a particular study.”
re: Andre’s comment about Hirsch’s paper. Is there any chance Hirsch might allow his paper to be published as a guest post, and perhaps he might comment on it as well?
The hidden safety factor that I don't see mentioned here is electricity as a replacement fuel. In that role many commentators do a direct joule for joule equivalent "petrol" to electricity to demonstrate how difficult it would be for electricity to replace oil and how more damaging it would be to the environment.
The truth is that fossil fuel engines are not very efficient. 25% energy conversion efficiency is considered good. Electric motors, particularly the latest ones are, on the other hand, up to 95% efficient. This is why upcoming vehicles such as VW's Milano can boast an anticipated range of 300 klms on just 45 kwhs of energy. This would require a petrol equivalent of perhaps 20 litres in the average small car. So petrol's 9kwh energy equivalent per litre costing 180 kwh to achieve the same as mains energy direct to batteries, direct electricity for light transportation is a good environmental deal. Even when the energy comes from coal it is not as disasterous as is often presented.
This prospect tends to get the nuclear boffins salivating uncontrolably, but the efficiency of electric transportation has even more relevence for solar energy. When properly calculated the energy that falls upon us all every day is many times more than we need for all of our individual exploits. Herein lies the safety valve for our energy hungry life style. There are natural energy solutions for every human situation except the highrise stack. The lower the density the greater the potential. By my calculations solar energy (high end solutions this is where conversion efficiencies are approaching 40%) will work for the greater worlds population for every density up to 3 stories high, including personal transport energy needs.
So where people are excessively gloomy it is, in my view, a symptom of insufficient knowledge or immagination, or a deeper understanding of political intransigence than I have.
I am not as disheartened about or future prospects as I once was, from an energy standpoint that is. From a housing perspective, though, I could not be more pesimistic. The reality is, I believe, that every new house being built today is not capable of lasting longer than its mortgage payments when climate change factors are taken into consideration. Give your own dwelling the test. Can it withstand grapefruit sized hail, can it withstand firestorms, can it withstand tornadoes, can it withstand flooding and deluge inundation, can it withstand sea level rise, can it withstand ultrahigh wind velocities, can it withstand lightning strike, can the mortgage payer withstand escalating insurance rates. This will, at the moment, sound highly improbable, but with up to 1/3 of Pakistan currently deluged with flood waters (almost biblical) the warning lights should all be flashing furiously.
Exactly how are these electric cars going to be built?
Are we going to be able to retrofit 800 million ICE with elecric power sytems?
How about ships? Planes?
There are 7 gallons of oil in a single tyre, forget the steel, plastics, thats a single tyre.
Who exactly is going to pay for these electric cars? As oil is on the down slope of the bell curve it becomes more expensive, production capcity decreases, simply reserves are depleted.
So we are going to build 1000's of nuclear reactors, 100's millions electric cars, maintain worldwide food production, actually, increase it, as the world population continues to expand. Build a huge solar/wind power network to provide our energy in conjunction with the nukes....where is the steel going to come from to build these HUGE solar/wind systems....you need oil, to do all of this, but its peaked, its becoming harder to access, we have to expend more energy to get it, the worlds population continues to grow...
Peak oil is a tap, the tap can only pour so much oil, the tap is now losing its efficiency, we cant get what we used to, but heres the thing, we need more and more of it.
Some of you guys think we are just going to build all of these nukes, electric cars, massive solar power or wind systems...but oil has peaked, if you divert what oil is produced to attend to this massive infrastructure investment whats going to happen to food production, other industries, airlines..that what peak oil is about, its a finite resource, some of you guys dont get that, you still believe in the paradigm of infinite growth.
You're getting a little lost in the doom there winny. You have to realise that every vehicle is replaced every 15 to 20 years in a constant replenishment process. VW calculates that 10% of all vehicles will be electric by 2020. Others optimistically say 20% by 2020.
I've no reason to doubt that there are 7 gallons of oil in every tyre, now. More specifically there are 7 gallon equivalents of carbon in every tyre.
Gail makes the point that the pace of improvement is unlikely to match the consequences of a declining oil supply. Certainly that is the case for the US and Australia. But for the rest of the world, the other 6.5 billion people, the outcome will be less severe, with the effect being reduced in proportion with simplicity of living standard.
Just because we use oil for every little convenience today, this does not mean that we have to. We have been completely blinded by our inefficient standard of living and our hopelessly flawed economic thinking to the extent that we are convinced that there is no other way to be, and are completely unprepared to consider that there may be other life style solutions.
As an example (common where I live) consider a person who commutes 100 klms per day in a 6 cylinder vehicle in order to pay the mortgage on his/her dwelling (30 years) while supporting a family. In Australia we have a compulsory 9% superannuation contribution paid by every employee into a fund for their retirement. In the recent financial crisis many of these funds lost half their value. An alternative is for a young family to source a house that can be afforded from their salary. This can take up to half of the average pay packet. Once the mortgage is secured if that persons 9% superannuation is then directed into making additional mortgage payments then a 30 year mortgage can be reduced to as little as 12 years. At that 12 year point the family income effectively doubles and the house has become the first part of the family retirement stability. Now if you reflect on the amount of interest payments that have been avoided in this process and calculate that into work hours not required and commute travel avoided along with the oil and oil based products not required to be consumed then you will see that a simple change in thinking can prevent huge amounts of oil consumption. Now just because the family house is paid off this does not mean that the people stop work, but it does mean that they have more options and a higher level of security without the compulsion to consume oil at the maximum rate just to make ends meet. Multiply that by 6 million and there can be a massive shift in oil consumed. Who loses out? The banks, the investment industries and the insurance companies. What would really happen? People would buy even bigger houses to fill with more consumer goods. Sigh!
Those levels will never happen by those time frames. Every projection by a mainstream company or institution is using the experience of the past few decades as they look forward. Except that this coming decade is going to be a doozy. The numbers you quote are about as likely as the air-traffic projections of 9 billion passengers annually by 2025:
http://www.airports.org/aci/aci/file/Economics/ACI%20Executive%20Summary...
The vehicle turnover rate slows during contraction. Last I checked we were at about a 22-year turnover and got as high as 27 a year ago or so before it came down again. However, as more people see we're heading into a so-called "double dip" the number will increase again.
I suspect that when we have our next oil shock (2012/2013-ish) we will see a 30-year or higher turnover rate and will again be discussing auto company bailouts.
You're splitting hairs there Aangel. Are you saying that the double dip recession is going to last for 30 years? The comment made is that there is an available mechanism for most passenger vehicles to become electric vehicles with a "timeframe", be it 20 years or 30 years. In that time, judging by the supersonic pace of technological development underway now, technological improvements are likely to bridge the gaps that keep people buying SUV's (mainly coping with snow in the colder states), and provide solutions to allow many people to work at or near home. You fail to factor into your argument, for the medium term, the impact that electric vehicles will have on petrol (versus oil) demand. Obviously very little if 2013 is oil shock year, but very significant if it is 5 years further on.
As an example of how technology can obliquey effect change, Australia is on the verge of installing a national optic fibre network that will facilitate true realtime full vision teleconferencing. This will mean that many people can work and study (lectures live to anywhere) within walking distance of their homes. There are many ways to reduce our dependence on oil.
You will only be talking about auto company bailouts if those companies continue to missread peoples real needs and fail to fill those needs. Executive greed and arrogance is the cornerstone of economic inefficiency, GFC being prime example.
In fact this article
http://wasatchecon.wordpress.com/2010/08/06/us-passenger-vehicle-stock-t...
suggests a 15 year fleet replacement time frame. Further with 1.2 cars per registered driver the spare cars are likely to be the 30 to 100 year replacements.
I'm with BilBb.
Here's Deutsche Bank's projection of the next spike in oil prices (in 2016-17) and the predicted consequence: rapid electrification of surface transport fleets.
http://www.scribd.com/doc/24860052/Deutsche-The-Peak-Oil-Market-Oct-4-2009
In the US, electrification of surface transport would reduce oil demand by 60%.
The pace of tech development and commercialization in this area is quite stunning. To see the activity, try setting some google alerts for the some of the innovators such as Tesla Motors, Chevy Volt, Nissan Leaf, BYD, and A123 Systems and read for a month. IMO many people commenting on TOD are not following tech innovation and therefore underestimate its prospects.
Cities, states and and fed are broke. The rapid electrification idea is a pipe dream. Some will electrify but it won't be rapid and it won't be extensive.
Electric cars can't compete with gasoline ones unless one travels only a few miles for each charge.
I'm following the EV scene closely (former member of the San Francisco Electric Auto Association) so I'm quite aware of the limitations of electric vehicles. Try getting a 1-ton pickup in an EV.
Cities, states and and fed are broke. The rapid electrification idea is a pipe dream. Some will electrify but it won't be rapid and it won't be extensive.
Electric cars can't compete with gasoline ones unless one travels only a few miles for each charge.
I'm following the EV scene closely (former member of the San Francisco Electric Auto Association) so I'm quite aware of the limitations of electric vehicles. Try getting a 1-ton pickup in an EV.
Cities, states and and fed are broke. The rapid electrification idea is a pipe dream. Some will electrify but it won't be rapid and it won't be extensive.
Electric cars can't compete with gasoline ones unless one travels only a few miles for each charge.
I'm following the EV scene closely (former member of the San Francisco Electric Auto Association) so I'm quite aware of the limitations of electric vehicles. Try getting a 1-ton pickup in an EV.
No sooner declared impossible, Aangel, than done
http://www.evworld.com/news.cfm?newsid=23156
and there is plenty of indication of EV pick-ups on the way. Also already available are cableless charging stations. Even though these UPS vans are hybrides, Mercedes are trialing full EV's at present.
I have to say that the idea of using 2500 kilogrammes of metal to haul 100 kilogrammes of human is ludicrous, and not what electric vehicles are about.
You might care to view the VW eBike. It is a sweet machine, very nice design though probably not for the average back country logger.
http://theage.drive.com.au/motor-news/electric-bike-folds-into-car-boot-...
You may be right. I forgot to mention that the turnover rate in 2020 will likely be 40 or 50 years, in my view.
As always, TOD is a bit US-centric. "Boo-ho, we've got a lot of SUVs and had a financial crisis, we're doomed."
Meanwhile, the IMF global growth forecast for this year has been raised to 4%. In China, the electric bike industry churned out 22 million e-bikes last year. Globally and cumulatively, Prius sales are approaching 2 million. Perhaps the US is no longer the world economic engine, but I guess Asia and Europe can pull you along, eventually.
It's true that some regions might continue to grow for a while.
We're seeing the early effects first here but eventually they will be seen in more and more economic regions so that, in aggregate, the world economy will contract. It's the very same mechanism that we are seeing with oil regions. As each country passes its peak, it becomes impossible for aggregate oil production to grow.
The future will be lumpy, but the trajectory of the whole will definitely be down once we fall off the oil production plateau we are currently on. We might get periods where, again, in aggregate, the world economy will grow for a while and the politicians and people will cheer, completely misunderstanding that the human footprint must contract as quickly as is practical before we further destroy our ecosystems.
Further growth on this planet is, in my view, moving us toward our collective suicide. Who knows? Maybe the forces we've set in motion with climate change have already sealed the fate of most of the people being born right now. I do believe the climatologists who say that we've got already one more degree Celsius of extra warming due even if we stop emitted carbon today.
Plus, despite what Nick says, remove oil from the system and we will contract, probably in a stepwise fashion like this:
The big step down is a stock market crash or similar in which the air leaves the bubble rather quickly, never to be inflated to that size again.
Just curious: What's the minimum set of circumstances that would have you abandon doomerism?
I may not be representative, but the minimum circumstances for me would be:
A negative human population growth rate and a declining global GDP.
Those would be the two conditions that would indicate that our species was on a path to living well on our finite planet, and that a bright future was possible. Of course, one problem is that most people would consider those two things either catastrophic in themselves, or only conceivable as the result of catastrophe.
I think your conditions are a good start but I would add one more:
a widespread acceptance that we must contract on our own terms before nature does it for us.
After all, the two conditions above could be temporary and not "chosen by us."
As long as the business people and technologists have the rest of the species convinced that limits do not exist (in practical terms), I think we'll just keep trying to expand until something breaks. I believe much is already broken and breaking right now in our ecosystems but the impacts are not clear to people other than those studying the situation closely i.e. the scientists in their respective fields, and a few of us paying close attention to their work.
I see no reason for scenario one from the Limits to Growth folks not to occur:
The gentle downslope on the right I believe represents much human misery unless with embrace contraction and get busy preparing for it.
BTW, I don't accept the doomer label. Just because I expect contraction doesn't equal across the board "doom." Some regions and countries and communities in the U.S. and elsewhere will transition relatively successfully to a new, lower economic level. Of course, much of the world will also riot and do those sorts of things, just like they did in 2008:
2007–2008 world food price crisis
http://en.wikipedia.org/wiki/2007–2008_world_food_price_crisis
I expect many democracies to fall as people accept very tight rule in exchange for the promise of security. Basically, all the usual stuff as a civilization moves from growth (white line below) to extreme contraction (green line below);
I think the science is quite clear that we can't continue to consume resources at the level we currently are so neither the red line nor the blue line are an option for us. I understand that Jeppen and others have a different point of view.
To me, that future-scenario graph has a bit too much on the vertical axis. I expect the fossil fuel use to increase the coming decade, then stagnate and start to contract slowly, being replaced by nuclear. I expect resource use to increase, the population to stabilise and the pollution to decrease.
Also, I believe that we should be ahead of the game when it comes to environmental concerns, but regarding resource and energy depletion, I think we should just let the market take care of it.
Jaw dropping.
Wow.
Do you mean like how the market handled the sub-prime mortgage bubble?
What would it take for you to abandon free market capitalism?
Personaly I am for Distributism.
Even Guild discipline is better than capitalism.
A system that is driven by fear and greed is the epitome of Evil.
It is a creation of Satan himself.
You cant argue with these folk arthur.
You can tell them that the worlds population was around 1 billion pre oil, its now 7 billion and growing in a hundred odd years.
If oil created the population, whats going to happen when its removed.
What it would take for me to abandon free market capitalism? I have a hard time seeing that happen. It is both functionally and morally superior. The subprime crisis were in large part created by the government, btw.
Are you talking about socialism? Where 49% pays net taxes to the other 51% out of fear of the police, and the 51% votes for the socialist system out of greed, envy and a desire to steal those "rich" people's hard earned money?
To me, free market capitalism is simply based on voluntary exchange and interaction. The alternatives are all about forcing others to pay for you and do your bidding.
The marketplace is just a tool, good for some purposes, not so good for others.
But as long as you and others treat it like a religion, we collectively have no flexibility to use the right tool for the job. We certainly won't go exploring for others with such dogmatism.
So freedom is merely a tool and other tools may be right for the job? Ok, let's not argue about that - our fundamental values seem to differ quite a bit and discussion can't resolve that.
You seem to have misspelt "free market capitalism" as "freedom". These are, of course, very different things. Both are undesirable in certain situations.
You do realize that capitalism consists of people who have extra money making money with their money, while people not so lucky as to have extra money do the actual work for the capitalists? Would you seriously disagree with this characterization? Does it strike you as fair? (BTW, let's leave aside the 'free market' here, because it is something distinct. I'm talking about capitalism, which is something people who have extra money choose to engage in, when they could choose to do something else in a free market.)
Capitalism may be functionally superior in some sense (perhaps in the sense of being unavoidable) but you will never convince me that it has moral virtues. Morality is by definition that which makes things fairer, and in my view capitalism is unfair by definition.
Yes, I would. Making money with money is actual work. Also, employees mostly work for themselves. Capitalists just offer a highly organized and productive environment to do this.
Yes, of course. The capitalists negotiates freely with workers and they reach voluntary agreements with each others. If a worker or capitalist feel he isn't benefitting from the agreement or could get a better deal elsewhere, they go their separate ways. How could this not be fair?
Capitalism is what a "free market" becomes after a while, when innovators and organizers have had time to set up environments that allow people to do more and better products and services together than by themselves.
Even for a socialist, that would be a very narrow definition of morality.
Nonsense. Returns gained by capitalists (or losses incurred, for that matter) are proportional to the capital they are working with, not the work they do. That's why it's called capitalism, after 'capital', and not something else. The actual amount of work effort that someone puts into the matter is coincidental, and can be completely unrelated to the returns they earn (among other outcomes, their work may result in losses). A small business person can put just as much work into his business as certain Wall Street brokers who earn many times what he earns. A line manager working for either of them may put in more hours and earn much less, while earning them money. Millions of people buy stocks and other instruments of capitalism after mulling it over for only a few hours, minutes, or even seconds, or even by doing nothing but letting money be deposited automatically in retirement accounts, and then they receive returns (or losses) on those investments that have essentially nothing to do with any work they have performed for it. Whether this is right or wrong, it's undeniably the way things actually are.
You're describing a free market. That's distinct from capitalism, as evidenced by the fact that capitalists throughout history have often refused to negotiate freely with workers, using violence or other coercion instead. You can't seriously dispute that.
Again, nonsense. Economic freedom ebbs and flows with all kinds of contingent circumstances. In Germany and other parts of Europe capitalism morphed into facism instead of a freer market. What happened in Russia was a little different, but not much. Freedom (economic or otherwise) requires the constant struggle of ordinary people to establish their rights within a system. Capitalism is no friendlier to this effort than any other behavior that tends to concentrate wealth and power over time.
Returns or losses are proportional to capital? That doesn't make sense. And for instance Microsoft - how much capital had Gates to work with from the start, and how come other businessmen with more capital didn't keep that distance?
Amount of work? I've not said anything about amount. I'm saying investing in something is an active choice, and as investments has to be done rationally, capitalists who do these investments are doing useful work, even if they only buy and sell stock. (If they get involved in board work and industrial structure such as mergers, they do even more useful work.)
It's still useful work. Forced retirement deposits could be seen as an exception, but I don't think that's free market either, so...
Sometimes the violence is a result of harassments and lynchings of scabs - i.e. when unions deny people their right to freely negotiate with employers. But no matter - you're right that capitalism doesn't imply a free market - however a free market give rise to capitalism.
But the context is your question: "You do realize that capitalism consists of people who have extra money making money with their money, while people not so lucky as to have extra money do the actual work for the capitalists?" This is obviously a case where capitalism and the free market overlaps today in most of the world. You take a job and you go on the next job if you aren't satisfied with conditions. If anything, unfair restrictions are put on capitalists, who can't fire people at will in much of the world, and who are subject to blackmail from unions and so on.
Now you've read carelessly. I said that the free market implies capitalism, not the other way around.
how much capital had Gates to work with from the start
Quite a lot, because he was sponsored/annointed by IBM.
JUST LOL.
So, you have a theory about what is needed for us to "live well on our finite planet", and you'll be optimist only if those needs are met. But that means no circumstances can make you reconsider or relaxing your theory, right? Isn't that a bit, well, non-scientific?
You have a curious way of wording things, but to answer:
if by theory you mean an educated opinion, yes, referring back to the two conditions.
conditions rather than needs. I am a "personal optimist", you might say, and live well myself with very little, but don't see any cause for optimism for the situation of our species without those two conditions being met.
None that I can think of, though a breakthrough in solar or fusion technology might kick the can down the road a bit.
No.
So unlimited carbon-free energy will only postpone doom? Why?
(Btw, solar and fusion breakthroughs aren't necessary. Breeder fission is proven and does the trick.)
"doom" being your word, not mine, but I know generally what you mean. There is no point where a whistle blows and the game ends. Every generation has its own problems to solve, and if you look back through history, as far as you want, there was always some emergency to be met and some paradigm-shifting problem to be solved for each generation. I think that's a part of how our brains work, collectively.
In any case, in spite of the numerous "peaks" we are at or near at present, a new cheap and plentiful supply of energy would solve the majority of them...we could pursue desalination, we could expand mining activities, perhaps geo-engineer our way out of climate troubles and the mess agriculture is in, and in short provide for a human population in excess of 10 billion, continuing the pattern of relentless growth in numbers and resource consumption.
I can only offer my own deep-seated prejudice as to why I don't consider that to be a good thing; I love the world I was born into, it is a beautiful land - all the wild places, and all the variety of life. Everything we have done to the planet to reach our existing numbers has come at the expense of that, and I see no possibility of anything that I would define as a bright future unless our numbers resolve to some semblance of balance with the rest of life on this planet, and unless our consumption of resources can be balanced against the available resources of the planet, allowing for the rest of life as well.
At this point, I suspect that success for humanity is success for the world species. For better or worse.
I sort of like your staircase picture. But I don't envision it as steps down uniformly across the economy, particularly not the global economy.
Instead, what happens is more like California mudslides. Each mudslide wreaks destruction on a part of the slope on a single hill, while the rest of the slope continues pretty much BAU, as do the rest of the hills. So there is a "big step down" locally, while on average there is just a "small step down". In fact, averaged over the hillsides, maybe some variable such as mass of vegetation actually increases, although nothing remains but mud and rocks locally.
As another example, I think it was Merced, CA where the state announced a planned university with perhaps 20,000 students. Developers rushed in and built houses in anticipation of an inrush of faculty. However, due to the recession, the college is far smaller than planned and there has been a "mudslide" of foreclosures in Merced.
"Perhaps the US is no longer the world economic engine, but I guess Asia and Europe can pull you along, eventually."
The US will get going again eventually. We need to write off the bad debt caused by the latest bout of stupidity, and TPTB won't do it right away because too many of them we among the stupid. So they are going to drag it out for a decade.
That sounds hard to believe.
The smartest way to do turnover, is to also try to include vehicle usage,
(as the highest kms vehicles tend to be newer, and fleet vehicles are an
easy target)
I found this good study, which used actual-use numbers, in 7 cities.
http://www.issrc.org/ive/downloads/presentations/IVE_TAP_2004.pdf
UseLocation Average Age (years) Average daily use (km/day)
Pune, India _ _ _ _ 4.7 _ _ _ _ _ _ _ _ 29.8
Mexico City, Mexico 6.4 _ _ _ _ _ _ _ _ 32.5
Santiago, Chile _ _ 6.5 _ _ _ _ _ _ _ _ 35.5
Los Angeles, USA _ _6.6 _ _ _ _ _ _ _ _ 54.3
Lima, Peru _ _ _ _ _11.0 _ _ _ _ _ _ _ _26.6
Almaty, Kazakhstan _11.3 _ _ _ _ _ _ _ _33.8
Nairobi, Kenya _ _ _13.2 _ _ _ _ _ _ _ _30.7
USA (LA) has an average age of 6.6 years, but (of course) the highest km/day.
So, it looks feasible to replace half the worldwide vehicles on city streets, in the region of a decade. (not three)
That's why MORE pressure to lower the fleet fuel usage is so important, and should be applied as early as possible (area under the curve effect)
The very newest cars, have quite impressive fuel and emission numbers.
- once you can wean yourself off the Size Obsession, fuel usage can plummet, and that buys valuable time.
I've been using the total vehicle fleet size divided by annualized, monthly sales. Thus a 220 million vehicle fleet / 10 million vehicles sold = 22
When annualized sales dipped to 8 million, the calculation provided 27.5 years.
Let me mull over this other way of calculating it, but can't do it right now.
There are a number of fundamental flaws with this approach :
* A small change in this-year-buy, gives a large change in life estimates.
( ie noise is amplified)
* This is a number to create a pool size equal to ALL the current fleet
* If you use only NEW vehicle sales, you miss a reduction in age from a 12yo upgrade to a 3yo
In reality, fleet age is not a single number: it is a curve, with a long tail, but the numbers in that tail are small. (which is why a live sample of traffic, is smarter)
So, the average fleet age is a better value (or median, but that is less quoted) and the better vehicles/buyers to target, are those who DO upgrade more frequently.
All this means you can make quite an impact, and insulate GDP from finite oil price movements.
Newer cars are used much more than older cars, which effectively reduces the replacement time by 1/3.
Also some drivers drive far more miles than others. For instance, in Tokyo 20% of the vehicle miles come from 2% of the cars.
So, overall averages are very misleading.
Hi there Bilby,
I come from Zimbabwe to Australia, so I have an outsiders view of Australia.
The Australian economy is real estate. All Australians sing from the same hymnbook. You have heard it all before. What you do is borrow money,buy a house fix it up, get equity in the property and sell it into a rising market...yadda..jadda...yadda...
"Houses have no more economic value than a pair of trousers." Adam Smith.
Because of this real estate religion, money does not flow to where it is really needed. Which is industry now, and agriculture in the future.
How many times have you heard people moaning about there being no investment in innovation? We are not capitalising on our greatest asset, our minds.
Why not? Because we obsess about real estate. Like nesting penguins on a rock.
We managed to dodge this last bullet by selling commodities to China, but I can see it coming down the turnpike. The whole real estate market is holding its breath right now.
You're preaching to the faithfull there Arthur Robey. As a product designer, inventor and manufacturer I am all too aware of what is possible, and what is achieved.
But very importantly, as a manufacturer I am conflicted over my need to consume resources in order to make a living. Clearly everything said above is about what I do. This is why I am examining my operation from an environmentally strategic point of view. I aim to manufacture in a way where the consumption of resouces culminates in the reduced consumption of other resources. This is why I champion electric vehicles, ultimately these vehicles protect our environment, have a considerably longer service life (electric motors have and indefinite life and batteries are 95% recycleable) and thereby ultimately reduce the consumption of resources, especially fuel.
You will be interested to know (being from Zimbabwe)that electricity works well for light aircraft. The best working specification to date is for a 2 seater with a range of 560klm at 160kph using just 60kwh of electricity (petrol equivalent 7 litres), with a vehicle empty weight of 420kg batteries included. Think about that, a vehicle that weighs less than a third of a car (consumes less resources) travels further and faster more directly than most cars and has, excluding wheels and door knobs etc, one principle moving part...the motor armature. Being all electric it is also very quiet.
You are right to say that our imaginations and inventiveness hold the key to our survival. But you are wrong to assume that there is nothing being done.
An electric glider.
From http://glider-one.si/
Enstroj are designing photocells for the wings.
I would like to see some development in Doppler radar angled at 45 deg up or down and a computer algorithm to extract the vertical components of the thermals and present them to the pilot.
The day's schedule would be coffee and breakfast till 10 am or until thermals develop. Then up into cooler altitudes and harvest the potential energy of the thermals.
This would give unlimited travel over the continent with no greenhouse gases and no roads.
a 2 seater with a range of 560klm at 160kph using just 60kwh of electricity (petrol equivalent 7 litres), with a vehicle empty weight of 420kg batteries included.
Could you give more info?
http://www.aircraft-certification.de/index.php/e-plane-family.html
Thanks.
"You're getting a little lost in the doom there winny. You have to realise that every vehicle is replaced every 15 to 20 years in a constant replenishment process. VW calculates that 10% of all vehicles will be electric by 2020. Others optimistically say 20% by 2020. "
There are 800 million ICE's on the planet, get my drift, cars, buses, trucks, tractors, planes, ships and on and on.
You seem to focus on the vehicle using this fuel on a day to day basis, to build the damn vehicle takes oil, plastics, steel, tyres,Electrical systems, electronics, air conditioning, heaters, new plant on the factory floor, R&D (computers etc), can I make this clear once and for all, THATS OR OIL!
You build the damn car, then you have to ship it, thats oil again, you have to manufacture replacement parts, tyres, thats oil again(ironic that you mentioned VW).
You need to build the new nukers or huge solar/wind farms or both to provide the electricity, thats all oil, concrete, steel, computers, electronics, plastics, shipping the materials to the build site, its all oil.
Why in gods name do you think the USA is in the middle east, they are sitting on it, they know whats coming, they know their econony needs cheap oil, and a lot of it, most of the world does.
There will never be another edifice like oil.
I dont disagree with some of the solutions touted, but its to damn late, as soon as you divert oil reserves to huge infrastructure projects there is a world shortage. You just cant say, hey guys, next 10 - 20 years you have to operate with 30 %40% 50% less than you used to.
There are 10 grams of carbon energy in every gram of food produced.
There are 7 gallons of carbon energy in every car tyre(just for you)
Think about it for gods sake.
I did try to point out that a wheel has carbon in it not oil. Carbon can come from oil, it can also come form many other sources including methyl hydrates.
Do you know what a tweel is winney? It is an alternative.
There is much cause for gloom. But wallowing in fear and panic is not how problems are solved.
Hey BilBb
Yes there are alternatives, at home we have solar on grid, within 3 years hopefully off grid. We have land, we grow some of our own food, I guess to some extent our family is very much aware of alternatives.
(Some countries are aware as well, Germany et al)
Problems should be solved as they arise, Carter gave his energy speech in 1976, the US had just gone through a painfull experience, they investigated and came to the conclusion that energy in the future was going to be a problem. Carter knew.
Panic? No, In a lot of ways I see opportunity, to change our lives, its sad how detached from the land we have become.
I do risk managemnt, I look at numbers, we have peaked or very near to it, the bell curve has started to, or will soon, hit the down slope.
I dont disagree with you with regard to solar etc, I use it, its to late though, yes there are alternatives, should really have done somthing about this 30 or 40 years ago though.
Whatever alternatives you come up with need to on the downward slope of the bell eventually replace 90 million barrels of oil a day, not at once of course, not next week, its a gradual decline, but the price will rise, it has to, you know what I mean.
Electric cars, another 5000 nukers, huge solar/wind/tidal systems, these all need oil, they have to be built(oil) and then maintained (oil), the world population continues to grow, need more oil for food production.
I'm sorry, but our exising infrastructure has been built on the back of CHEAP oil, it aint gonna be so cheap anymore, nor is there going to be enough of it to supply demand. All the low hanging fruit is gone as well, we are now expending serious energy, to get energy.
As you divert oil to create a new order of infrastructure, you make it scarcer, more expensive to make these electric cars, GM closes down, 1 in 7 jobs in the USA are related to the auto industry, it becomes more expensive to produce food, run the tractors, freght etc.
I'm sorry, but who exactly is going to be able to afford a new electric car?
Doomsters? Come on, all the information it out there, what are you going to throw at us next, Hydrogen fuel cells? Make oil from algea and air? Heres one, how about we start using serious amounts of coal, thats really gonna help.
I dont disagree with some of your solutions, Im living them right now, but from a global perspective, its to late.
Now if the worlds population were only 3 billion...
Panic? Heres a word, denial.
I appreciate your optimism, but when world economies are based on infinite growth and then, begin to meet the harsh reality of finite energy there is only going to be one winner.
NO, it has oil.
TIRES
How much oil is required to produce a tire?
Approximately seven gallons. Five gallons are used as feedstock (from which the substances that combine to form synthetic rubber are derived), while two gallons supply the energy necessary for the manufacturing process.
That's not much. But you could use coal, natgas or biomass instead. Or even air-scrubbed CO2 combined with nuclear-electrolysis-derived hydrogen.
I have seen the formula for tires. #1 SINGLE ingredient, natural rubber. Tree sap. #2 ingredient, Carbon black. Probably acetylene soot, but there are 'biological' sources.
http://www.goodyear.ca/tire_school/ingredients.html
A gallon of oil probably weighs about 6 lbs.
If a 21 lb tire was 100% solid oil, it could only contain 3.5 gallons of oil, right?
------------------------------------
All right. Let's assume that somehow that the average light vehicle uses tires that require 5 gallons of oil.
US vehicles drive about 3T miles per year. If we assume that tires must be replaced every 30,000 miles, that's 100M tires per year, or 500M gallons of oil. 500M gallons is about 12M barrels. Over 365 days that's about 33 thousand barrels per day. 33K bpd is less than .2% of US oil consumption. And, of course, that 5 gallons per tire is almost certainly 2-4x too large.
I think we can handle making tires.
Actually, Winney, this
"Why in gods name do you think the USA is in the middle east, they are sitting on it, they know whats coming, they know their econony needs cheap oil, and a lot of it, most of the world does."
is entirely the problem.
Why do you think that you have the right to consume everything just because it is there? If the USA had not been so successful in bullying other nations out of their resources then the US would have developed sustainable solutions decades ago. Frankly the Middle East should hang on to their oil, for their own populations far into the future, and the USA should either go jump or solve their energy problem properly, sustainably.
What you think there is no solution? That shows the massive limitation of your understanding, or more probably your reluctance to change.
"If the USA had not been so successful in bullying other nations out of their resources then the US would have developed sustainable solutions decades ago."
Theres the problem, "would have developed sustainable solutions decades ago."
Its toooo late, it should have been done decades ago, you know it, I know it, everyone knows it.
"Frankly the Middle East should hang on to their oil, for their own populations far into the future, and the USA should either go jump or solve their energy problem properly, sustainably. "
You are being naive, who exactly is going to kick the USA out of the middle east? They aint going anywhere. They are sitting on that oil.
Want to know why? -"would have developed sustainable solutions decades ago."
"What you think there is no solution? That shows the massive limitation of your understanding, or more probably your reluctance to change"
Our family has changed, we have solar power on grid, we grow some of our own food, we have reduced our debt.
There is NO SOLUTION that maintains the status quo in global terms.
Wanna know why - -"would have developed sustainable solutions decades ago."
There is going to be pain and suffering, its darwinism, remove the energy and things go back to doable levels so to speak.
Wait till the resource wars start.
BTW, I'm actually Australian.
Well good on you Winney. That is the right approach, individual action. You will be pleased to know that there is a total energy system being developed right now. This will give you 10kw electricity plus 8 to 15 kw of airconditioning along with hot water and space heating, all from the one automatically seasonally compensated system. This system will charge your VW Milano 3 times a week (900klm travel) while powering your fully airconditioned house,and still allow you to sell power back to the grid. This is real, and also why I am optimistic. With solutions such as this available your main future exposure is to climate change. Can your preparations withstand extreme weather?
Yes small steps, but a start. Our family has decieded to embrace change not ignore it, long way to go though.
I'm not worried about myself, I have kids, who will have kids you understand.
I enjoy your optimism by the way, I once shared it, not anymore though, have kept my eye on PO for 5 years now, I can see what is going to happen, I hope I'm wrong. I hope you are right.
I wont be able to afford the VW Milano, in fact the air conditioning could be a battle if I dont get the timing right, The milano will cost to much, if VW are actually around to be making them, milano, airconditioning, consumerism continued.
Water? Now theres an issue.
In my model, if we cant deal with PO, then climate change will certainly finish us off.
winny, the vast majority of transportation energy comes from oil, and the vast majority of all other energy use, including manufacturing, does not come from oil, it comes from other sources. It's true that in a world of declining oil resources we face much larger obstacles to building things, but it's not all about oil. Transportation is the big bugaboo. Address that and the rest is probably not nearly as big a deal.
Workshop on Trends in Oil Supply and Demand and Potential for Peaking of Conventional Oil Production
This was a workshop sponsored by the National Academies in 2005. So there has been some interest in the subject.
I've got an exclusive video preview of Glenn Beck's restoring honor rally:
http://www.youtube.com/watch?v=_Q-6H4xOUrs
How are we going to convince the masses of undereducated Glenn Beck lemmings, many of whom are now unemployed, that the Earth is a "closed system".
As mentioned downthread, with respect to energy it is not a closed system - we enjoy regular solar input. I'm sure none of the Beck crowd would know the difference in any case.
What symbol will they use?
Not the swastika I hope.
It has been done.
They need something new. Should it be in black on a red background?
It needs gravitas.
We will have to consult the fasionistas.
They already have one - the old colonial rattlesnake, on a yellow background.
Cross of Lorraine ?
http://en.wikipedia.org/wiki/Cross_of_Lorraine
Nah, too foreign...
Vested interests in both coal and oil have kept the U.S. in a comfort zone that allows the existing population to take a care less attitude for the future. Technology, they believe, will solve all the problems.
However, necessity and dwindling supplies of oil and coal will drive the politics and the population's shift to a combination of alternative fuels and conservation. Add to the shortsightedness is a pending crisis which will surpass even the thirst for oil -- water. Not just quantities of water, but quality as well. Rivers, lakes and even the oceans are becoming more acidified and polluted.
Scientific American September issue, prophetically perhaps with their cover, The End, examines the question of peak oil and coal. Peak oil will occur in 2014 and peak coal production already occurred in the 1920s. According to the analysis by Cal Tech scientist David Rutledge the world will have extracted 90% of available coal by 2072.
Conservation will, in my opinion, be the main course of action if we are to continue the production of factories and internal combustion engines. Most people on this site I assume are younger than I and have never experienced true rationing of all sorts of consumer goods we take for granted today. Gasoline, tires, any petroleum based material, food, automobiles, clothing -- and much more -- all forced people to cut back as a sacrifice to fight the Axis powers in World War Two.
Today, everyone wants everything with all the bells and whistles and few ever consider sacrificing for the waning wars in Afghanistan and Iraq. Who cares? is the attitude of most Americans who leave it to the middle and lower middle class youth to fight the wars which were once hyped as "just and noble" causes which many politicians declared were the most important wars in the history of our country.
Now, the financial institutions and Wall Street mavens are sitting back hoping that consumers will once again return to the gluttonous heydays when homes were consumers' ATMs, home prices and appraisals were on an infinite climb to the heavens and the totally overrated belief in the gross domestic product (GDP) would resume unabated. The banks would once again figure out how to give loans using the creative financing legerdemain such as junk bonds, hedge funds, derivatives, credit default swaps and one of the most comical, collateralized debt obligations that were packaged and sold to the expectant suckers who saw new quick paths to riches.
I have accepted the hard truth that, due to a far superior propaganda machine than the Democrats, Republicans and their global warming deniers will take over one or both houses of congress in November. We know who might well be the next chairman of the energy committee, Oklahoma Senator James Inhofe, who not only is a global warming denier but also believes, in spite of overwhelming scientific evidence to the contrary, that we are in a 9-year cooling cycle.
I'm sure future generations will adjust to changing climate, dwindling resources and shorter life spans as more citizens die due to increasing respiratory problems, more pollution and a much lower quality and standard of living. Those who genuflect at the altar of the free market do so at the expense of the health and well being of our population and our nation.
I do not say I have a special insight as to what our Founding Fathers intended. I leave that to self-proclaimed "orginalists" like Antonin Scalia and Clarence Thomas. But, James Madison wrote in the Federalist Papers, "In framing a government which is to be administered by men over men, the great difficulty is this: you must first enable the government to control the governed; and in the next place oblige it to control itself."
We may speak loftily of being good stewards of the earth on which we all live, but what do we really mean?
Featherlite, great summation.
There seems to be two factors about energy that lots of folks seem to have difficulty realizing how they apply.
Energy Density - the amount of energy in a given quantity. Easy to say but most folks don't realize just how much more fossil fuels are energy dense than alternatives and therefore gloss over the problems of replacement.
Net Energy Output - How much energy is needed in infrastructure and transformation into a usable product. In an energy strapped world, if you insist on marginal NEO fuels because they're easy, before long you're just digging your hole deeper. This is similar to EROEI but I think a more straightforward way to say it. Hydrogen is a classic NEO example. It doesn't exist in nature by itself. If released, it rises to the top of the stratosphere and is carried away by the solar wind. It must be created from some other resource and although energetic, it is certainly not dense.
Someone mentioned electricity as a fuel. Like hydrogen, it's not a fuel, it's a transfer agent. Both have to be created from other sources of energy. We need to really start looking carefully at what the real world can sustain.
Bill, I really appreciate your optimism but I can't be as hopeful
When my father had to quit smoking his pipe, quit drinking, and lose weight because he was going to get diabetes if he did not, we were just thankful he finally did it. Our years of chiding 'paid off' IMHO. He passed away 3 years later. Still, he had 3 good years. It was worth it.
It's mentioned several times that we live in a closed system. It makes no difference to any of the points in the OP, but in fact we do not live in a closed system, at least with regard to energy. The earth's systems receive energy inputs from the sun.
It would be correct and sufficient to say that we live in a finite system.
When the solar input is 20,000x the level of US consumption, the finiteness of the solar input is moot.
Finite system is the term I have always used. Dr. Dick Gibbs used "closed system" in his introduction both to the symposium, and regarding my talk, so I felt that was the word I should use. But I agree--we keep adding energy from the sun from outside the system, so it isn't really closed. The amount of oil made in a given year is small enough that the oil replacement system is pretty close to closed, though.
I do so much more on my bike than most. I live in the US and I have 4000 miles on my favorite bike. I ride others. Here in Gulf Shores it gets HOT and HUMID. Hell on earth some say. There is one secret. I ride mostly at night. I do ride in the daytime when I feel like it. I have a picture of me stalking the BBIC man while riding my bike. Just wear synthetics, cotton is worthless. Always wear a hat or at least have one. It is the only way to ride if it rains. The water is no problem if it is warm enough.
A test of the TinFoil bike cam.
http://s892.photobucket.com/albums/ac126/tinfoilhatguy/GS-OB%20August%20...
Forgot the laptop on a trip, so used the Inn's kiosk to access this article, which is great, thanks Gail. Amongst other statements, this one caught my eye;
I agree with this assessment completely, and in particular that price, 85. How much can be extracted, and how much can be produced daily etc. pales in comparison to price. Not that those other factors don't influence price, they do, but ultimately the price being embedded in so many products is such that either the economy can grow at a certain price or it cannot. And we what keep seeing is the economy slowing as the price approaches 85, then speeds slightly as the price drops. It's even at the point where the stock market and the price of oil (on most days) move up and down in concert.
People use to say, oh, don't worry there are tar sands and shale oil, etc, however the price that makes those possible is also the price that slows the economy to a crawl. And it seems that crawl is not enough to keep budgets in balance for states and the fed. Boatloads of money are being borrowed in hopes of a better future, but one that probably will not include cheap oil again, so its doubtful the loans will ever be repaid.
Let's pretend. Let's pretend CO2 levels in the atmosphere were 400 PPM and DECLINING, instead of increasing. Would you be relieved and elated? Why? Why not?
For starters Jauregui, the CO2 level will be 400ppm in about 3 years time so we do not have long to wait to find out.
If CO2 levels developed a definite down trend I would be ecstatic. Why? The shift to electric vehicles and solar energy is already technologically and commercially consolidated. This is the cornerstone of a far better future greener without vehicle vehicle fumes and perpetual noise. And a future with better independence from the "system".
Excellent! How then would you feel about IPCC projections the atmospheric CO2 levels would approach, say, 200 PPM by 2085?
All evidence to the contrary, jjauregui, CO2 levels would need to be declining now rather than increasing at an accelerating rate.
http://co2now.org/
Yes, let's pretend. Let's pretend that humans evolved in a hotter world where CO2 levels were 400ppm, and that we had invented some magical industrial processes that caused CO2 levels and temperatures to radically decline. I would be just as alarmed about changing CO2 levels as I am now.
(Is that what you were trying to get at?)
The point with regard to CO2 atmospheric concentrations is the impact on plant photosynthesis. What is the relationship between plant growth rates and CO2 concentrations in PPM? Do you know? Let's pretend some more. If you owned a commercial green house, what concentration of CO2 would maximize your production, assuming you want to maximize revenues and profits. For non-profit organizations with the goal of feeding the hungry, what CO2 concentration would maximize the number of people you could feed?
Better yet, at what CO2 level do you go out of business and join the food lines along with your family and friends.