Looking in the Rear View Mirror
Posted by Phil Hart on May 18, 2011 - 2:29pm
It has often been said that we would only be able to see peak oil by looking in the rear view mirror. It's well past time for a head-check, so this post provides a quick look back at production over the last five years and at some of the predictions I and others have made.
The Early Days
While the peak oil theory traces its roots back to M. King Hubbert in 1956, I think the contemporary peak oil movement can pin its origins on the Scientific American paper “The End of Cheap Oil” by Colin Campbell and Jean Laherrere in 1998. At some point those authors deserve a medal for the prescience of their work, and the rest of the world a slap in the face for ignoring it at a time when we could have usefully started the transition away from said cheap oil.
It was not until 2004 though, when oil prices began to move firmly above their long-term trading range that awareness began to grow at all significantly. I started work in the oil industry in the UK in 2001 but first heard about ‘peak oil’ from an outside source and joined the growing numbers following peak oil websites in October 2004. The Oil Drum was one of those sites I followed, soon after it was launched in March 2005.
February 2006
Stuart Staniford’s plateau updates were a feature of The Oil Drum and I, like others, followed them closely. Charts like that above made it seem obvious that we’d hit the ceiling for oil production and it was just a question of when decline would begin.
While Stuart didn't take much of a position in writing the statistical updates, he did frequently include curve fits to the data. Although he explicitly stated they weren't forecasts, seeing those curves dropping below 0% growth rate was strongly suggestive to those looking for evidence that peak oil was near at hand.
Very shortly after Stuart's February 2006 post, Dr Deffeyes defined a date for peak oil:
I predicted that world oil production would peak on Thanksgiving Day, November 24, 2005. In hindsight, that prediction was in error by three weeks. An update using the 2005 data shows that we passed the peak on December 16, 2005. . . . . . By 2025, we're going to be back in the Stone Age.
That's it. I can now refer to the world oil peak in the past tense. My career as a prophet is over. I'm now an historian.
I was considerably less certain about the timing than Mr Deffeyes, but at the end of February 2006, summarising Chris Skrebowski’s Megaprojects analysis, I stated in a submission to an Australian Government Senate Inquiry that:
These industry figures indicate that new production coming online before 2008 will probably be insufficient to offset decline in existing fields, and that falling total global oil production will be self-evident by 2010.
Clearly that hasn't happened and I thought I was being conservative at the time. Somewhat more cautiously, in describing Colin Campbell’s model, I also said:
The ASPO scenario forecasts a peak in 2010, with significant uncertainty on either side of this date. We can only state with reasonable confidence that peak liquid production will occur at any time between now and 2015.
November 2007
It was quite some time before the ever cautious (and I think remarkably objective) Stuart came to a conclusion that peak oil might be near at hand, in his post "Is the Decline of Base Production Accelerating?"
Overall, while there remains a lot of uncertainty, seeing this acceleration of base declines makes me lean a little further in the direction that the Russian situation of slowing production increases in the face of greatly increased rig counts also hinted at. Specifically, it suggests that perhaps by sometime in 2008 we will have unambiguous declines in total liquids production, rather than continued plateau. I'm not certain at this point, but that's the direction I lean.
Many Oil Drum readers would have been more pessimistic than Stuart at the time, and with less caveats on their position. I think it’s fair to say many of us did not think crude oil or total liquids production could be higher, however slightly, in 2011 than ever before.
The International Energy Agency
While I think some of us may have slightly over-stretched in the timing or confidence of our peak oil predictions, it’s clear that we have been very close to the mark overall in raising awareness of this critical issue, one that more than five years later is still getting little more than zero response from Government.
So there is room for improvement in the accuracy of our forecasts. Some other important people really did miss the boat entirely, though.
In their 2004 World Energy Outlook, the IEA included the key chart below, with a forecast in their reference scenario of 121 million barrels per day in 2030. Every report since, they have been revising that peak figure down by as much as 5 million barrels a day each time, which has made for several fairly dramatic downward revisions in a row.
What I now find amazing is that Fatih Birol at the IEA has the gall to say recently that ‘I think it would have been better if the governments had started to work on it at least 10 years ago’. This despite his organisation arguing against the need to be concerned about peak oil more recently than that. The IEA has radically changed its tune now, which is welcome, but admonishing Governments for not taking earlier action should come with a significant ‘mea culpa’ of their own, since the IEA were the ones supposed to be providing the best advice.
Of course, the only people further from the mark have been CERA. This chart is still priceless:
Where Are We Now?
On his blog ‘Early Warning’, Stuart has updates again for the plateau following tragics among us. The chart above is from his April 2011 update (currently offline). Gail in her latest update has this view as well:
Compared to total production, the difference between 2011 and 2008 is marginal, but this is not ‘self evident’ decline, which is what I wrote five years ago in that Senate Inquiry submission about where I thought we would be now. (The one fairly weak caveat is that if there had been no financial crisis, and oil demand had remained strong, then we may be seeing decline now from a slightly higher level in between).
I think there are two main reasons why production capacity now can still be holding above its previous peaks:
1 – The high oil price environment up to 2008 spurred a frantic response from oil companies to develop previously marginal economic fields, with those decisions now bringing a delayed last gasp production increase.
2 – Actual decline rates for fields in production are at the lower end of expectations.
Likely it is a combination of both, but moderate decline rates must play a large part. If the worst case assumptions about decline rates from 2006 were correct, it would not have been possible to have production at this level in 2011, given the volume of new projects delivered since then.
In an impressive piece of recent analysis here, Sam Foucher & J. Michael Bodell have made their own comprehensive estimate of decline rates in 'Crude Oil and Liquids Capacity Additions: 2011-2015':
In matching our production capacity forecast with available production capacity history for conventional oil, the implied world decline rate for the resource base is between 3.4 and 3.6 percent. This decline range is at the low end of values used in the literature but it is consistent with the short-term decline rate used by the IEA (World Energy Outlook, 2010).
In many ways, that is good news, as although decline rates are likely to increase (slowly), they may be more moderate than most expected, which increases the chances that we can adapt on the way down.
Future Supply
Remarkably, we are now in a situation where some of the most thorough peak oil forecasts are closer to the IEA forecasts than to more pessimistic peak oil views. The 2008 Outlook from Kjell Aleklett’s group at Uppsala University in Sweden looks positively optimistic, although there are many caveats:
Sam and Michael's comprehensive post above also portrays a pretty moderate situation, even in their low case (shown) over the next five years. Their high case has production capacity still increasing a little to 2015.
Meanwhile, the IEA has effectively called the top on crude oil production, making them look almost pessimistic by comparison. How things have changed!
IEA World Energy Outlook 2010
Global oil production reaches 96 mb/d in the New Policies Scenario, the balance of 3 mb/d coming from processing gains. Crude oil output reaches a plateau of around 68-69 mb/d by 2020 — marginally below the all-time peak of about 70 mb/d reached in 2006, while production of natural gas liquids and unconventional oil grows strongly.
The IEA has wiped more than 20 million barrels per day off their 2030 forecast over the last five years, while some of the more comprehensive peak oil forecasts now see a plateau or no more than moderate declines for some time yet, bringing the two views closer together than seemed possible five years ago.
Rather more questionably the IEA do still see total liquids growing, albeit slightly, all the way to 2030. Equally, there are many here who would see the Uppsala Group and Sam's forecast as optimistic, but we should look carefully at what has happened over the last five years and understand how that has been possible before being too confident in such a view.
My view now is that resources in the ground may be sufficient to allow for global capacity to continue on this ‘undulating plateau’ a little longer, or for decline rates to at least be moderate in the short-term. But the geopolitics of the major oil producers, and Iraq in particular, could mean that actual production capacity falls (just a little) short of what resources in the ground might otherwise sustain. But it is only a hypothetical world where resource limits do not interact with geopolitics and such above-ground factors only become a concern when you're near the below-the-ground limits.
Who Gets the Oil?
It would be wrong to take much comfort from these forecasts though. Even by the IEA’s own analysis, the growth in demand from developing countries leaves OECD countries with declining oil consumption from this point forward (see 'IEA Calls Peak on OECD Demand'). That message has barely been heard, let alone accepted and acted upon by any OECD Government, despite the evidence already showing that trend in play for many OECD countries (as in this chart also from Gail):
In "Oil Supply Constraints on US Recovery", Stuart also explored this theme. The following chart of his extrapolates trends in oil consumption assuming that total global oil supply remains flat to 2015. The growth in demand from developing Asian countries and the oil exporting countries leaves the OECD facing pretty stark declines, even before global peak oil.
So the first phase of the financial crisis has already delivered a transfer of 3-4 million barrels per day of consumption from developed to developing countries. OECD countries are not likely to ever see that production back again and it's hard to see how imminent further OECD declines can be avoided. That realisation, which is yet to come, will be a shock on its own.
Future Demand?
In many ways, the supply side of the equation looks clearer now than it did five years ago. The demand side, on the other hand, is decidedly uncertain.
If the global economy, or China and some of its developing nation colleagues should find a way to steam ahead momentarily despite the extraordinary debt deleveraging that is underway globally, then resource limits will quickly put a cap on such growth. The timing is impossible to predict, but a continuing volatile cycle of firm demand and high prices followed by periods of demand destruction and collapsing oil prices seems all but inevitable now.
Oil Prices and Market Uncertainty
Oil prices will be unpredictable, and at times could be surprisingly low. Oil companies are their are own worst enemies and will keep producing flat-out until prices fall below the marginal cost of production for any given field. It's the future investment decisions which take the biggest hit and that impact on supply is not felt for years. The short-term market can easily be flooded by even a small drop in demand.
Such volatile oil prices seriously handicap commercial incentives to respond to peak oil. Without certainty on the minimum oil price, investors can get burned if the result of their extended product development arrives on the market at the wrong time, even though the long-term average price may be high. The extension of this argument is that we need the equivalent of an electricity feed-in-tariff for oil prices - government's need to set an oil price floor which gives investors some certainty. Government's can take the gap between their floor and the market price as a tax, which could be used to ameliorate the higher price spikes. I'm not naive about the chances of such a policy being implemented though.
Summary
Predicting the future has not gotten any easier. Here at The Oil Drum, we picked up early on one of the great themes of the 21st century. Others denied the evidence until well after it was staring them in the face. But it is much harder to see where things go from here.
The second half of the 20th century was defined by remarkable growth in oil consumption, population, credit and debt, and all manner of other things. Neo-liberal economists have become accustomed to getting out their rulers to make predictions of the future and holding all spell-bound with their macro-economic prescriptions. I think those days of extrapolating the past as a useful guide to the future are over, and the sooner we develop a new economic paradigm the better. The future is likely to be one of discontinuities and sharp transitions and our rudimentary models and bureaucratic systems will not be up to the job.
If deleveraging of the record amounts of debt in every corner of the global economy is not already enough to start a downward spiral (still unexpected by the mainstream), then a ceiling on oil supply and the inevitable price response to force declines primarily in OECD countries will trip us up anyway. That forced transition to declining consumption for OECD countries could feel pretty painful rather soon, even before global oil supply decline sets in.
The good news is that resource decline rates look lower than feared a few years ago, and the plateau may continue (certainly not to 2030 though!). In an engineering sense, we may be able to adapt at the pace required, but whether we can adapt our economies and credit money system in particular is a different question.
Looking ahead, the only thing I can say with any confidence is that the years and even decades to come are likely to be characterised by much greater volatility than we are accustomed to. It could be a very bumpy ride.
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Thanks a lot for this update. I have some questions.
First, it seems that there is a difference between peak conventional oil
and peak all liquids. The former seems to have happened around 2006 the
latter is still in question. At least this is what I was able to read off
the data. Second, even if oil production stays level in terms of barrels
there is the question of how much net energy that means. If unconventional
oil is on the rise it may be an indicator of peak net-energy from oil
at 2006 (I vaguely remember a post by Ugo Bardi on this difference).
Recall the study by Patzeck and Croft about peak coal. They say that 2011
is the year of peak energy-from-coal (not to mention peak net-energy-from-
coal). While tonnage may rise quality goes down to the extent that energy
goes down as well.
It would be profitable to highlight the net-energy questions as it is the
only number that really counts for us (as users).
-- Marcus
I think this chart gives a good picture of the changing composition of total oil production:
Most sources now show even crude oil at or just slightly above the level of 2006, although this does include tar sands which was not necessarily included in some of the 'conventional oil' models from earlier years. So it's not just alternative liquids that have held up the curve.
As regards net energy, I agree this is an important topic, but I think the composition of global oil production is only changing slowly (see the chart above) and so the net energy equation has also not changed dramatically over the last five years. Sure it will be getting very slightly worse each year, but it will be a slow squeeze too.
Net exports on the other hand, ie crude oil available to OECD countries, is already getting seriously squashed. It looks like it is going to bite hard relatively soon (a small number of years at most) and that could be the trigger for the next downward phase of the debt crisis.
Onshore conventional have been basically flat for around 35 years. The peak for onshore conventional actually happened 1979 unless something start to change.
I totally agree with your idea about net exports-
What is critical is the amount of fuel available for purchase on the world market, not the amount of global production.
Has peak net export happened yet?
It would be very interesting to see a chart of total monetary value expended for oil vs time (for USA at least).
This would reflect things like the amount of fuel available for purchase, the strength of the US dollar (or weakness), and the elasticity of the market.
Probably over time it will turn out that the onshore unconventional should be the "top" line, as is is the part that has growth potential still. Overall growth past 1975 or so has been a function of new sources of oil. How far will tar sands take us? Oil shales?
I'm not sure it matters, as with each new source there are new costs, and the price is related to the marginal cost of the last, most expensive barrel. I personally won't be surprised if there will still be a graph like that above in another 30 years, with another bar or two added, still percolating along at 40 or 60 or 80 mbpd, but with oil at $250 today-dollars per barrel. And, eveb that means significant changes. Most likely to the American way of life.
It may also be added that offshore conventional depends on very expensive production rigs, wich in turn depends on a high flow. Wich means they go out of production sooner than the rest. There will probably still be some nicking donkeys back over at Kern or any other real old super giant field when most of all offshore wells are plugged.
Great graph Phil! It tells a quick visual quantitative and historical story of how things are evolving in the direction of deep offshore and unconventional, we all knew was going on, but (I for one) had not seen before.
2005 was clearly an inflection point, since global crude oil (C+C) production effectively stopped increasing. Based on the HL models, global conventional crude oil production in 2005 was at about the same stage of depletion at which the US Lower 48 peaked in 1970 and at which the North Sea peaked in 1999.
I suspect that the primary reason for a global plateau, instead of the initial slow decline that we saw in the Lower 48 and North Sea, is a slowly increasing contribution from unconventional production globally, which was not a material factor in the Lower 48 and North Sea peaks. An additional factor may be increased depletion rates globally, because of increased use of techniques like horizontal drilling (which would boost short term production, but perhaps not materially increase recovery factors*).
EIA crude + condensate, rounded off to nearest one mbpd & Annual US spot crude oil prices:
2002: 67 mbpd & $26
2003: 69 mbpd & $31
2004: 72 mbpd & $42
2005: 74 mbpd & $57
2006: 73 mbpd & $66
2007: 73 mbpd & $72
2008: 74 mbpd & $100
2009: 72 mbpd & $62
2010: 74 mbpd & $79
There was a clear price signal from 2002 to 2005, as oil prices rose from $26 to $57. In response, global crude oil production increased by about 7 mbpd, a 3%/year rate of increase. If global C+C (crude + condensate) production had continued increasing at this rate, global production in 2010 would have averaged 86 mbpd, but lets look at what actually happened.
Annual oil prices from 2006 to 2010 inclusive have all exceeded the $57 level, and four of the five years have shown year over year increases in annual oil prices. In response, global annual crude oil production has so far not materially exceeded the 2005 level, and in fact we have seen a large cumulative shortfall between what we would have produced at the 2005 rate and what was actually produced.
But net oil exports are far more important to the oil importing countries, and we have seen a measurable decline in both Global Net Exports (GNE) and Available Net Exports (ANE). I define ANE as GNE less Chindia's combined net oil imports. ANE fell from about 41 mbpd in 2005 to 38 mbpd in 2008 and then down to 36 mbpd in 2009 (total petroleum liquids).
We don't have the 2010 data yet, but a plausible estimate is that ANE will be down to 27 to 30 mbpd by 2015. Given the above numbers, what is truly bizarre is the widespread conventional wisdom belief that generally rising oil prices are not related in any way to supply issues.
For more info, do a Google Search for: Peak Oil Versus Peak Exports.
*2004 article on this topic:
http://www.nytimes.com/2004/04/08/business/oman-s-oil-yield-long-in-decl...
(2005) Top Five Net Exports Update
I took the EIA data for total petroleum liquids for 2010 and then extrapolated the 2005 to 2009 rate of increase in consumption for Saudi Arabia, Russia, Norway, Iran and the UAE to come up with estimated (2005) top five production of 29.8 mbpd and consumption of about 8.0 mbpd, resulting in estimated 2010 net exports of 21.8 mbpd.
Here are the BP (2005) top five net exports data for 2005 to 2009, and the 2010 estimate:
2005: 23.8 mbpd
2006: 23.6
2007: 22.9
2008: 22.8
2009: 19.3
2010: 21.8*
*Estimated
Note that at the 2002 to 2005 rate of increase in net exports for the top five (6.3%/year), they would have been (net) exporting 32.6 mbpd in 2010, versus the estimated net export rate of 21.8 mbpd. The top five data continue to fall between Sam Foucher's middle case and high case. The wild card continues to be Russia, the only country where the production data are currently falling at the upper limit of Sam's projections.
Sam's most optimistic projection is that by the end of 2014, the (2005) top five will have (net) exported about half of their post-2005 CNE (Cumulative Net Exports).
Here are the detailed data for Global Net Exports (GNE) and Chindia's net imports for 2005 to 2009:
http://i1095.photobucket.com/albums/i475/westexas/Slide3-1.jpg
I estimate that 2010 GNE were around 44 mbpd and that Chindia's combined 2010 net oil imports were about 8 mbpd, which is probably a conservative estimate. In any case, a rough estimate would be that 2010 ANE (Available Net Exports), which I define as GNE less Chindia's net imports, were around 36 mbpd, versus 41 mbpd in 2005.
Here's a remark I made on those EIA crude numbers in April. See
http://www.theoildrum.com/node/7817/794815
Phil,
Thanks for the insightful update. If I understand your numbers you are looking at total liquids, regardless of source type. If correct in that assumption, I would like to ask people to think about this from a slightly different perspective. What is the amount of exergy in an average barrel of oil (taking into account the different finished products and their delivery to points of use)? What does not seem to be factored into this analysis is the effect of declining EROI as more non-conventional sources are exploited. The delivered exergy is becoming more costly due to declining EROI.
I submit that the potential impacts of a failing financial system (monetary and debt) that threaten production rates are actually a result of that declining EROI. The system is effectively moribund as the reliance on more unconventional liquids grows while the energetic cost of extraction and conversion of those liquids also grows. The floor to the price of oil must, in the end, reflect the total costs of extraction. The costs of finished products must reflect the cost involved in conversion (refining). These can never go down, except perhaps temporarily if a new technology is introduced - but that possibility has its limits too. Among those costs are the capital costs (monetary) of increasing production. Somewhere along this trajectory, the marginal costs of producing the next unit of raw liquid is simply too high to deem it a worthy investment to drill more. Then we could easily see a drastic decline rate in raw liquid production.
Unfortunately we do not have good data on net energy flows. Our only way to get at the metrics is by factoring gross by EROI ratios. And, more unfortunately, we have very little data on the latter. I think a number of researchers like Charlie Hall, Cutler Cleveland, et al have done a tremendous job getting some initial estimates, with continued refinements here and there. But we need what amounts to a cost accounting system measuring input joules at each stage in the supply chain to finally get some truer sense of just what the cost of exergy is. As I said above, my fear is it is already too late and the patient is moribund.
George
Question Everything
You've popped down the wrong tunnel. Go back to the sign reading "Conversion (refining)" and then squedaddle between the carrots and lettuce until you see the sign reading "Conversion (all)". This route deals with all the conversion issues, including such things as the amount of oil product needed to optimize the functioning of any given economic activity.
One of the more interesting stops along the way provides a picture of the benefit of scarce oil in terms of the reduction of congestion costs in those places where most people live and work. Rising fuel prices leads drivers, at the margins, to seek alternatives.
Consider the benefits accruing from those motivated by price to seek an alternative to driving. Some choose public transport, others walking or cycling, and many to move from behind the steering wheel to the passenger seat, a move made easier by the greatly reduced cost of communications characteristic of our times.
In the North American context, and elsewhere as well, the flow of goods and services is enhanced by the presence of fewer vehicles on the roads and from this increased productivity, the higher cost of fuel, of which less is required, is paid.
It is perfectly conceivable in this example that the higher refining costs of lower quality oil (i.e. lower eroi) is overcome by the benefit of a changed consumption pattern caused by higher retail pricing.
Bugs,
You are right to look at things from a whole systems perspective. But don't be too sure you know which tunnel I'm headed down from one abbreviated posting. I provided the link to QE so that those who haven't read much of my work could, if they so chose.
What I learned from Elmer Fudd:
1. Outcomes depend on more than physical inputs.
2. Outcomes may be enhanced by reducing physical inputs.
Bugs, you're a little ahead of yourself.
Your points have their place, but don't really address what George is getting at. He's in the very particular area of evaluating the supply, while this does not in any way show that he's blind to the issues you are interested in talking about.. but here today, this topic is looking at Oil Supply in particular.
I am also interested in seeing how EROIE and Oil Quality would affect the charts above.. and also would suggest that for completenes, this charting should also have a line that gives the deviation of oil production against population growth.
Admittedly, it's all somewhat academic. But that's not consequently a bad or unnecessary thing, is it? We're trying to find good, well reasoned information here.
Sincerely,
WWI Ace Snoopy.. (aka Joe Cool, or Jokuhl.. my old FlightSim Pilots Name)
i don't think I'm getting ahead of myself.
Consider these words:
The price the consumer is willing and able to pay will determine the worthiness of the investment, not the production costs. The capacity of the consumer to pay will depend on the productivity of the economy. Economic productivity depends among other things on efficient transportation of goods and workers. A higher oil price supports efficient transportation and thus bodes well for the economy.
Supply only takes on economic meaning in the presence of demand.
I don't see how anyone can speculate on the economic implications of the declining quality and quantity of oil on the basis of an idea, supply, that is meaningless in itself.
"A higher oil price supports efficient transportation and thus bodes well for the economy."
I think that statement carries some very rosy assumptions, and some stretched logic. It's built on some big IFs.
Beyond that, as George speaks about the selling price justifying the lifting costs, I think it's clear that he knows this doesn't happen in a vacuum. Efficiencies or no, there will be some harsh repercussions on the refineries, shipping co's and wells if there is a domino of crashing demand. I'm very pro Mass Transit and all the efficiencies we can muster, but that's no guarantee that the transition to these things might be trying to happen 15 feet out past the cliff edge.
Let's hope the great Animator is in a kindly and magical mood that day.
It would be nice if it worked that way, but it doesn't. Instead, those in the margins are pushed from the job market. No car = No Job. That's how it's been in just about every job interview I've ever been in. They don't want you to call in because you can't get a ride, and they want you available to come in if some one else calls in.
It doesn't make sense to own a car if you can't afford fuel cost. You would have to pay insurance and licencing for nothing. It's not impossible to get rides from people, but there is no stability. You can't count on some one else to get you to work every day.
In the city you can get away with using public transportation. In the rest of the country [USA] public transport is either non-existent or only operates a limited scheduled. I ride the bus as much as possible, but I still have to drive to the bus stop most days. It's a little too far to walk, and I refuse to ride my bike around traffic. [learned that one the hard way]
There is a bus stop right across the street from my apartment, but the bus only stops there a couple times a day and there are no stops after 6:00. My last class gets over at 7:30, so I ride the bus to a different stop and drive home. If I weren't able to afford a car, I wouldn't be able to take the class [calculus]. It's only offered at that time slot.
Just be careful not to confuse what is conceivable and what is actual, or even probable.
Some laws are immutable, such as the one which states that price changes lead to behavior changes. From the New York Times today:
http://www.nytimes.com/2011/05/18/business/18gasoline.html
I think it ironic that market rules are in effect imposing a depletion protocol on the major importing nations. Those that thought oil depletion required some sort of centrally planned response now find themselves in a world where the market may be producing something close in effect to the ASPO depletion protocol!
OTOH its somewhat strange for market advocates to find themselves in a world where their world view is producing a form of rationing as opposed to creating some new paradigm where market forces unleash human ingenuity and nuclear fusion for the masses
a form of rationing as opposed to creating some new paradigm where market forces unleash human ingenuity
Short term, vs long term...
there is a famine so food prices go up.
is that a solution? yes if you accept we live in a world where avoidance is impossible..... here is the interesting thing Long term means sustainable management of resources no matter what ideology is used to achieve it?
thats the thing so often these discussions get bogged down by some sort of ingrained ideology... sometimes subtilely.
I got seriously interested 2005/2006.
Thanks very much for this timely review - a bookmark for me.
Sophisticated financial instruments anybody? 'Tried and trusted methods'? hmmn ...
In the old days when British agriculture was crucial to national security and we had only just emerged from 'austerity Britain', we used to have 'Marketing Boards' to iron out the rapid boom and bust cycles for potatoes, milk and eggs. They worked, roughly. Somebody must have done the economics for them. Your suggestion might not be beyond the wit of international OECD bodies?
phil - "...government's need to set an oil price floor...". And we'll this recommendation will be coming out of Congress at the same time they're grilling the industry over price gouging? LOL. I've said it before and I still think many don't believe me but if 30 to 40 years ago the govt offered the industry a fixed price for oil, even if it were significantly below current prices, it would have jumped at the deal. There's already enough geological/engineering uncertainly in the process. Add the need to calculate the return on a $billion investment by projecting the price of oil accurately for the first 10 years of that project can almost seems delusionary. The big flush of cash during the price peaks doesn't come close to making up for the pain of the price valleys. Can anyone imagine the govt requiring consumers to pay an extra $10/bbl in 1986 when oil fell to less than $10/bbl? The world was trying to recover from a deep recession resulting from the oil price spike of the late 70's and desperately needed those low prices. But the low prices also led to less drilling which led to less supply and higher prices down the road. This cycle has always existed in the oil patch. But instead of cycling every 15 years or so now it seems to flip in a 5 year span or so. The recent boom/bust of the SG plays and NG prices is a great example. In the spring of '08 NG gets close to $13/mcf and then during the following winter it drops well below $5/mcf and broke the financial backs of many companies heavily invested in the fractured shale reservoirs. And now some folks expect the oil patch will rush back into the SG plays with checkbook in hand once prices start moving north again? It's very easy to remember past events when they're only a few years old. The oil patch readily remembers the slaughter at Chesapeake, Devon and et al. More importantly so do the capex sources.
If the U.S. government agreed to buy all the oil on the market at 150 dollars per barrel, we would be awash with oil. There is nothing quite like a government subsidy to create surpluses.
The oil industry would love this deal. Consumers could live with it, albeit with no economic growth.
Don - I'll counter your proposal on behalf of the oil patch: fix the price of oil at $75/bbl for the next 30 years. This would be a huge benefit for us in calculating our economic models for drilling investments. BTW: that's the price I use today doing my forecasts. I don't know of any company using prices anywhere close to current levels in their analysis. We've all be burned too many times by using the high end.
And, IMHO, $150/bbl might not lead us to being awash in oil. At least not conventional oil. When oil prices jumped in the late 70's it led to billions of $'s being wasted on prospects that had little chance of success but looked great when $35/bbl was run in the economics. I know it sounds simplistically stupid but it's still true: can't make a profit on a dry hole regardless of high the price of a bbl may be. As I mentioned in another post if the govt' wants to do something for the oil patch and the consumers they can put a floor on NG prices. Say $8/mcf for the next 10 years. Of course that would almost double the current price. But down the road when prices go above $8/mcf the govt could tax that at 100%. Trust me: the industry would be more than glad to trade that higher income for the minimum expectations. For one thing the SG players would go back into a drilling frenzy IMHO.
I agree Rockman.. oil companies are using a price way lower than current market price as their screening value for new projects, and it took them a long time into the last upward cycle to increase their old screening values from the old $15-20/barrel. For projects with a quick return, they do occasionally use much higher values (maybe even as high as $70-80 during the middle of the boom in some cases but only where return was fast). But now everybody can see risk again, and we've just proven how quickly prices can drop to $40 or less, so screening values are pretty low again and not likely to shift easily.
The question is, how much more oil could be produced if they had a guaranteed price of $75/barrel?
geology rules
+ entropy
minnie - If I get your drift: how much more oil would the oil patch produce if we up our price expectation to, let's say $90/bbl? IMHO not as much as many folks would think. It would allow us to drill for smaller and riskier propects. But folks need to remember: they are smaller and riskier which means we won't find as many (the riskier part) and there will be less oil discovered/$ spent (the smaller part). I use to have an old report that's long lost now. But it clearly showed much higher profits are generated from drilling efforts during low price times than high price times. The high prices for oil in the late 70's led to a boom in drilling that found relatvely little oil and eventually put hndreds of companies out of business. I've mentioned it before: we had 4,600+ drilling rigs running at the time and half those wells had little chance of commercial chance. Greed easily overwhelemd common sense back then. I know it sounds contradictory but the best rate of return I ever generated for a client was in the bust of the mid 80's when I as selling NG for 25% of the low price it's selling for today. NG prices were lower but drilling costs were even much lower. A well I ould drill and complete for $40,000 in 1986 could cost $600,000 today.
Rockman,
It is great that you are sort of opening up about the oil business and relaying oil business truths and telling good stories.
"fix the price of oil at $75/bbl for the next 30 years"
I've got a brother still in the oil patch (Schlumberger 30+ years now ThruBit) and he has been saying the same thing for decades. The dollar figure varies, but it is a common expression in the patch that a stable price is a good price.
"And, IMHO, $150/bbl might not lead us to being awash in oil. At least not conventional oil."
I agree. Raising the price has increased the rate of exploration in the past, but I think it's been a fractional exponent relationship for decades. Its been shown on this blog numerous times that rate of discovery has not matched increasing rates of exploration, going back to the sixties. Maybe WHT has a graph handy to show this.
Having formerly worked for Halliburton logging wells across the western U.S., I still talk to a few folks out there as well as interested folks in this part of the world. I'm constantly surprised (well, not so much anymore) by the lack of understanding of the scale, of the volumes we're dealing with, by almost everyone. I have had to explain to numerous people over the last year or two, that yes while the Bakken and associated Williston Basin discoveries are fabulous and have allowed ND to brag that it is the only state in the Union with a solid governmental budget, it just really doesn't do much to satisfy the demand of the U.S. as a whole. Sometimes I then get a response that oil shales are out there just waiting to be produced if only the government would allow it. Or the environmentalists. So then I usually just describe evidence that "the end of cheap oil is here." And ELM is great - most people get that concept quickly.
And yeah, geology does rule. I trust that no giant basin or field is able to hide from modern technology (WHT will also back that one), thus what we have already found is close to what we will get. Cornucopians abound but reality bites. It is blindingly apparent to you and me and many on this blog that what we used to called conventional crude production has peaked and that the demand difference is being made up using the uglier and more expensive petroleum hydrocarbons. But obviously not to all and that's why I think it is important to identify the portion of C+C that is the second C.
BTW, in the for what it's worth department, I've seen a couple of media mentions recently that have pegged the value of ethanol to the price of gasoline at over a dollar a gallon. It has been stated by one of our Minnesota U.S. Senators that if ethanol production was halted, the price of gasoline would rise by $1.50.
Basin discoveries are fabulous and have allowed ND to brag that it is the only state in the Union with a solid governmental budget,
AK's budget is still running in the black but our oil output is in decline so projections don't look near as rosy for us as they do for ND. We still are shipping quite a bit more crude than ND, but I think that is supposed to change pretty soon--less than a doubling of ND production knocks us one more spot down the list of top oil producing states.
But then from another perspective ND production has to increase six fold to match what we were shipping out of Alaska a couple decades ago or so--I never get replies from people proclaiming ND oil will save the day when I mention that last point.
I'm not sure I would say that ND will save the day, but I've seen projections of 2M bpd! I have no idea if that's possible, but I've seen projections of 1M bpd from mainstream folks.
And of course, there are 4-5 other areas like Williston/Bakken in the US...
The steep decline seen on the top portion of this chart shows the scary thing about the oil shale play--the color bands for individual wells can hold near the same width for a while at the top, indicating the best wells aren't falling off that fast but when all the declines are stacked one atop the other you get the precipitous fall. Three years of Brigham's prodution, they must be putting one heck of a lot of steel in the ground.
a bit over one million barrel a day look to be the shipping plans
The thing is, even if "consumers" could live with it, they would never tolerate it. At times of flush supply it would look like (and function as) subsidies to the rich. And we can't have that, except of course when we can.
It wouldn't be like, say, subsidizing agriculture to the hilt: unlike oil, agriculture is highly romanticized by a large cohort of fools who affect to aspire to the horse-and-buggy days. Big ag manages quite nicely to tuck itself under that halo. (And not just here, Europe is worse, most of all England with its mindless sentimentalism for a countryside that by law must forever remain embalmed as a dessicated corpse, not one iota of change permitted. Hence a lovely, classic old house I have in mind, having a small but ugly 1950s-era addition which the owners cannot remove because doing so would constitute change, requiring, these days, a level of planning permission and endless form-filling that an ordinary mortal can no longer hope to find the time or money to cope with.)
Nor would it be like subsidizing ballplayers and their owners with great gouts of public money, which also seems perfectly OK. Maybe this one is seen as working towards the spirit of the ADA, a sop to those too stupid to find anything to do with a spare Monday evening but drool over images of steroidally bloated and remanufactured beast-men cavorting about on a plastic rug. Be that is it may, it's certainly in the spirit of our contemplation of the tolerances and intolerances of "consumers" - namely morons with no conceivable duties or responsibilities.
It's all arbitrarily selective, and the sillier the social case might be for subsidizing a particular subset of rich folks, the easier it seems to be actually to do so. It just seems utterly futile to tilt at it.
paul - All true but if we didn't have futility to snuggle with how would we stay warm and protected from the boggeyman under the bed.
OK, its not a total price floor, but it's the thin end of the wedge on the way there. Does the US even index link its fuel tax?
http://www.thisismoney.co.uk/bargains-and-rip-offs/motoring/article.html...
I Think a price floor could work very well, the government would start to buy if oil fell below a given price, say $80. They could start to sell at say $110, they have massive stocks and could use this as a price stabilizer. May even pay off some of the national debt. They could sell to any country which cannot afford to have a stockpile.
ROFLMAO. They'd find a way to buy high and sell low. Guaranteed.
Agreed. Will they have a surplus, they will never use it to pay of debt. They will spend it. To the last dime. We have that situation in Sweden now.
Paul - Interesting. So I take it you've worked with govt contracts before? LOL. I know it's unfair and a cheap shot but in the oil patch one of the scariest phrases is still: "We're from the govt and we're here to help you".
Not just in the oil patch. I've heard that one from farmers too. It is a cheap shot in a way, but we've got so many arbitrary rules now that we've made our very own American 'Licence Raj'. It's a wonder anything gets made or sold any more... oh wait a minute, it doesn't any more, it almost all gets made overseas...
Rockman - I've said it before and I still think many don't believe me but if 30 to 40 years ago the govt offered the industry a fixed price for oil, even if it were significantly below current prices, it would have jumped at the deal.
If this is the case then is that not what the futures market was originally designed for, i.e. for producers to lock in a future sale price that at least ensures they can sell for a profit? With futures above $100 it should be possible for pretty much all producers to secure profitability down the line. Or am I missing something?
TW
watcher - A producer buying a futures contract doesn't guarentee a profit. It minimizes his potential loses. If I buy a futures contract for $100/bb and oil is selling for $90 at that time then I make $10/bbl on the futures but lose $10/bbl from what I had expected to sell my oil ($100/bbl). If oil is selling for $110/bbl then I lose $10/bbl on my futures contract but make an extra $10/bbl on my actual oil sales. But futuers contracts aren't free...you pay a commision. But there are more complicated hedges most oil/NG sellers actually use. The best way to think of it is as insurance: you don't make money if you house burns down but you don't lose that much either...if you're insured.
Bottom line: when oil/NG prices collapse companies lose cash flow and stop investing because they don't have the income to re-invest. A good example is Chesapeake: when NG prices collapsed. They were able to hang on better because they sold a large volume of NG in future contract sales. But they weren't futures...just contracted sales. So when Devon was selling their NG for $4/mcf CHK was selling much of theirs for $10/mcf. The folks who were buying the CHK hopefully had NG futures backing up their purchases. If they didn't then they got skinned alive.
Rockman - as a producer you wouldn't buy futures contracts but sell them. This way you would be able to lock in a certain price for future delivery of your oil. E.g. if the Dec 2011 contract is selling for $100 then by selling this you gaurentee $100 for your oil delivered in that month. Unlike producers, speculators are gambling because by and large they have no oil for delivery. But as long as you are producing at below $100 then you must profit from the trade. You could in theory sell as many contracts out along the futures curve as you deemed prudent to maintain profitability (as long as you can accurately forecast your production costs in the future). Yes there is a commission for this but worth paying when it's your business at stake if the spot price collapses and you have no hedge in place?
I guess in practice there might be a problem for the bigger players trying to lock in a price for all their future deliveries simply because of their size and therefore ability to find reliable counter-parties and not influence the price unduly. But in principle with a market as big as the oil one it shouldn't be a problem for most producers.
TW
watcher - I don't follow you. You can't sell a futures contract unless you have one that you bought. Maybe we're mixing apples and lemons. I can contract to sell my oil for the next 12 months at a certain price. That isn't a futures contract. It's a contract to sell my oil in the future. Let's say I'm selling 100,000 bbls of oil per month at some contracted price. ..say $90/bbl. So I buy a 100,000 bbls of oil futures at $90/bbl. So when my contract matures and oil is selling for $100/bbl I lose $1 million ($10 X 100,000 bbls). My futures contract is to deliver 100,000 bbls of at a price of $90/bbl. That's what a futures contract is: an obligation to deliver that volume of oil at that particular price. So I have to sell someone 100,000 bbls of oil for $90/bbl. That means I have to pay someone else $100/bbl for that oil. In reality the futures traders just pay a cash settlement: I write a check for $1 million. Now if 'm a producer I can sell my 100,000 bbls of oil for at $100/bbl and make that $10/bbl extra above the $90/bbl futures contract. So it's a break even less the commission.
Now go the other way. Oil is selling for $80/bbl. So now I buy 100,000 bbls of oil for $80/bbl and settle my futures contract for $90/bbl so I make $1 million. But the oil I do sell at $80/bbl generates $1 million less income than I would have gotten from selling my physical oil if oil for $90/bbl. I realities oil producers use a different system. I'll cut a deal with an oil buyer to sell my oil for $80/bbl for the next 12 months. But if oil goes above $80/bbl I get 20% of the difference. So the buyer gets 80% of the gain. But if it ends up selling for $70/bbl I still get my $80/bbl. This is commonly called a "floor trade". It sets the minimum price (the "floor") I'll get for my oil. And what usually happens is that my oil buyer will buy matching futures contracts to minimize his risk. And what I just described is a relatively simple deal compared to how many are structured.
You need to remember what a futures contract basically is: it's a bet on the future price of oil. Something like 99%+ of all the oil future volumes do not consist of physical oil...it's all "paper bbls" that don't exist in the real world. The analogy would be a football game: there is only one real game but you might have 1 million folks make a bet on that game. Thus you've generated a million "paper games". Only one game will be played but for the betters it's the same as a million games being played. There are literally billions of bbls/day traded in the futures market when there's actually less than 90 million bbl/day of oil sold. Buying a futures contract, whether you an actual oil seller or not, is a gamble. For every one making a $1 on a contract someone losses a $1. There is no such thing as a guaranteed profit on a futures contract. And it isn't a zero sum game because even if you win you still pay a commission. There's always a little more money lost then won because of the commissions. Actual oil sellers use the futures market to limit their down side but do it at the cost of not making as much on the upside.
I'm not really the best person to explain future trades. I know enough just to be dangerous. But we do have a few former traders floating around TOD so hopefully one might shed more light on the subject for you.
I can contract to sell my oil for the next 12 months at a certain price. That isn't a futures contract.
Yes, it is. That's exactly what it is. That was the original purpose of a "futures contract", not gambling.
"thewatcher" is talking about what Chesapeake did: locked in their pricing with futures contracts.
So, why don't more producers do that? They could go out 7 years - that's pretty good security.
Nick - CHK didn't lock in prices with future contracts. They sold their future production on a contract fixed price. I know that sounds like double speak. CHK agreed to sella volume of physical NG to a buyer for $X/mcf for a period of time. It was paper NG...it was the real thing. That's not a futures contract. Essentially they pre-sold much of the production at $10/mcf. Now the buyer who agreed to pay CHK that money might have bought NG future contracts to protect their position. That's a whole different game then CHK selling their NG under specific contract terms. CHK may have also bought NG future contracts. They might have made or lost money on that gamble...I don't know.
Rockman,
The original purpose of a "future contract" was exactly that: to have "sold their future production on a contract fixed price.". It still can be done, and many, many producers do just that.
Really, it's true. Hedging and speculating are byproducts.
Now, it's possible that CHK bypassed the commodities trading markets and wrote direct contracts, but they did the same thing.
Unlike an option, both parties of a futures contract must fulfill the contract on the delivery date. The seller delivers the underlying asset to the buyer, or, if it is a cash-settled futures contract, then cash is transferred from the futures trader who sustained a loss to the one who made a profit.
http://en.wikipedia.org/wiki/Futures_contract
Nick - I think we're agreeing to a degree but are talking around each other. I've had a lot of NG sold into the future based on specific contract terms. That had nothing to do with the NG futures market. And I know dozens of folks who have traded tens of millions of $'s in NG futures and never sold a cubic foot of NG. These are two different universes.
What CHK did was exactly that: they presold their NG to a buyer for $10/mcf and that deal had nothing to do with the futures market. Those buyers may have bought future contracts and CHk may have bought some also. But what saved CHK's butt was finding someone foolish eonough to agree to pay twice as much for some of there NG as it would eventually be worth. The buyers lost their butts...plain and simple. They only question is whether they had NG future contracts in place to ease the pain some.
Rockman,
I'm still not sure what you mean. Do you agree that someone can sell NG into the future using the futures market?
This conversation is a fine example of why foriegn language speakers find English so hard to learn.
As you move from one area of discussion to another, be the subject business, medicine , art, or whatever, you find that words which mean one thing to the general public are often defined in far narrower and sometimes VERY DIFFERENT ways by people within an indudtry or profession.
Sometimes the members of a particular profession or group of allied professions manage to more or less hijack certain words and redefine them in a way suited to thier own needs, thereby gaining control of a controversy by controlling the terms of the debate.
In economics, inflation is such a word-it means something considerably different to the man on the street than it does to an economist.
Another such word is "instinctive";the social scientists have managed , for the most part, to maintain the fiction of the blank slate mind , at least among themselves, by defining the word so narrowly that they can claim, among themselves, and those willing to allow them to control the debate, that humans display no instinctive behaviors-a position that I personally consider utterly absurd, as to me "instinctive" as an adjective to behavior means partly or mostly influenced by genetics, which is a far broader and more comprehensive definition.
We will just have to wait for those who sit in positions of influence and believe that all human behavior is culturally determined to die before there can be any serious debate within the social sciences in respect to this matter.
But a lot of them, happily, are dead already-anyone who is truly interested in this matter should read EO Wilson and Stephen Pinker to start.
Wilson is at Harvard and Pinker is at MIT.
You are way out of date here Mac. Pinker has been at Harvard since 2003.
Steven Pinker
Ron P.
Hi Darwinian,
Better late than never, at least I am up to date within a decade or so in keeping up with my reading in this area-I went with what is on the book jackets of my personal copies of thier work.;-)
Shoulda checked, of course.
As someone who taught English as a second language to groups of students from varied professional backgrounds, back when I was a college student in Brazil, I got a good chuckle out of that! So true dat...
Imagine being tasked with finding a way to get a conversation going with non native speakers of English when the class is composed of lawyers, doctors, engineers of various backgrounds, scientists, sociologists, economists etc... I sure learned a lot about both the English language and people in general. Too bad I didn't know about peak oil back then, it would have been a great topic for conversation.
CHK uses swaps, puts and calls to hedge themselves. the swaps are likely at least in part over the counter, although it is possible to clear them on ICE in certain circumstances.
http://services.corporate-ir.net/SEC.Enhanced/SecCapsule.aspx?c=104617&f...
(click the "entire filing" link and then CTRL+F and search for hedge. I think the bulk of the actual hedging program in on page 8).
My guess is that the reason why they go OTC and use options is the very limited liquidity in forward contracts in the futures market. I am 99.99% sure that the swaps are done with 2 of the large NYC investment banking firms.
Rgds
WeekendPeak
edit:
if you want to see the entire hedging program go to page 59. It gives you quantity, price and year of the hedges. good stuff. It makes it pretty clear that if you want to bet on the price of NG increasing buying CHK may not be the best way to get exposure....
Nick - Virtually no oil/NG are sold or bought in the futures market. As been reported by others 99.7% of the oil volume traded in the futures market doesn't exist. They are paper bbls. I've not sure of the numbers for NG but I suspect they are comparable.
Folks: you keep mixing apples and lemons in this conversation. Selling future oil/NG production on a long term contract is not a futures contract. If I sign a contract to sell 100,000 bbls of my oil production for $100/bbl then I will receive $10 million in future income whether future oil prices are $120/bbl or $70/bbl. If I buy 100,000 bbls of oil future contracts at $100/bbl and oil is selling for $120/bbl at settlement time I make $20 million less commission. If oil is selling for $70/bbl I lose $30 million plus commission. That is trading in oil futures. It is not selling future oil production under a long term contract.
And guess what? I can do both transactions at the same time. So in the two scenarios above I either net $30 million (20 + 10) or lose $10 million (10 – 20). Now get imaginative. You agree to buy my 100,000 at $100/bbl. But if you’re planning to resell my oil you’ve exposed yourself to a big potential gain or loss depending on future oil prices. If you pay me $100/bbl and the actual market price at the time of transfer is $120/bbl you make a profit. If it’s less than $100/bbl you lose money. So how do you minimize that volatility? You buy 100,000 bbls of future contracts at $80/bbl. So if oil ends up selling for $120/bbl you make $20 million on my contracted oil but you lose $20 million on your future contracts. So you end up flush on the transactions. But if oil eventually sells for $80 /bbl you loss $20 million on my contracted oil but you can sell your future contracts to someone who has 100,000 bbls of future contracts at $100/bbl. So you make $20 million on that trade. And again, you break even (less commission, of course). Remember virtually no oil exchanges hands in oil future trades…folks are just trading the paper bbls represented by the futures contracts.
This sort of split transaction is what refiners often do. I’m not an oil trader so I can just offer a generalized view of the game. But in reality the trades are much more complicated then what I just described. There are floor and ceiling trades, trades index to WTI. There are trades indexed to the prime rate or Liborg. Trades indexed
to a companies stock price, etc ,etc, etc. And a lot of combination trades of various angles. And guess what: we'll never see any details offered by the folks trading with each other. These deal structures are kept very secret. Oil trading is extremely competitive.
Again, oil trading is far from my area of expertise so all I can do is make generalizations.
Rockman,
Again, let me ask:
1)do you agree that someone can sell NG into the future using the futures market?
And,
2) if they plan to sell on the spot market at the market price, but they sell a futures contract at the price they want, what's the difference? Either way, they're protected against fluctuations in the price. In effect, they've locked in their price. Right?
Yes you can, assuming you are a credible counterparty with the ability to receive and deliver NG as well as have the finacial capabilities to do so.
The size you can actually execute on in futures is going to be quite limited. The reason why there is a curve - either backwardation or contago - in futures is because of the cost of carry versus cost of finance. So whether you make or lose money in a trade like that depends on if you can correctly predict storage costs as well as interest rates.
Rgds
WeekendPeak
If I buy 100,000 bbls of oil future contracts at $100/bbl and oil is selling for $120/bbl at settlement time I make $20 million less commission.
minor math goof, assuming 18 million is minor. (or maybe your broker is involved in money laundering) But great explanation, as usual.
No, you are a little confused here. Hedging is selling your product at a future price. The speculator takes the opposite side of the hedge. If you sell your product in the future via the futures market then you are hedging!
Well this is true but not too clear. The seller or the buyer can, if he wishes, insist on a cash settlement! No one must deliver or take delivery of the physical product. But it really doesn't matter. The hedger who sells his oil, or whatever, via a futures contract, can simply take the cash, if he made money, and sell his product at a loss, but the cash from his futures contract will make up the difference. If he lost money on his futures contract because the price of the physical went up, then he can take his profit from the physical and pay his debt on the futures contract. That is called hedging.
Ron P.
A minor (at least from a practical point of view) refinement:
Basic settlement of NG futures is physical.
http://www.cmegroup.com/trading/energy/files/EN-197.1_DeliveredNatGas_FC...
That is, if you have the right account for that. Most futures brokers who cater to retail will not give you the option to settle physically but that is a broker rule, not an exchange rule. Both CME and ICE are physical settle for a certain quantity of NG. Settlement on EEX is for a specific number of MWh: on normal days it is 24MWh, on dailight savings in the spring it is 23, in the fall it is 25. (or do I have that backwards?).
In reality there is much more liquidity and flexibility in swaps than there is in futures so more and more traded volume is no longer on exchanges where commoners like myself can easily see it.
/nitpicking.
Rgds
WeekendPeak
That is my point. Settling physically is an option, not a rule. You always have the option of a cash settlement.
The margin requirement is, on average, about 5 percent of the physical price. What would happen if you had bought a contract by putting down 5 percent of the price of the physical but had no more money?
It happens at on every expiration day, thousands of contracts expire without being closed. After all, things happen that might prevent you from closing a contract that you had every intention of closing before expiration. It happens. And thousands of speculators have no intention of buying or delivering the physical. They settle for cash. That is their option.
Ron P.
Margin rates are slightly different for hedgers vs speculators:
http://www.cmegroup.com/wrappedpages/clearing/pbrates/performancebond.ht... GAS&type=OutrightRates&h=2&reporttype=marginrate
Assuming 2,000 maintance margin it is about 41,870/2,000= 4.8% (yet another nitpick!). interestingly enough interproduct spreads (like being long June and short Sep) were changed about an hour ago. the CME increased those margins by about 33%.
Rgds
WP
Yes I know. I made that very point on Drumbeat a few days ago.
Well I said about 5%. I have seen it that low many times. It varies from time to time depending on volatility. Right now volatility is quite high and margins are about 8.5% while maintenance margins are about 6.25%. Well that is if oil is at $100 a barrel. Margins are a fixed dollar amount while oil, as you know, goes up and down. They have just been raised 25% because of high volatility.
The Meaning Of CME’s Margin Hikes On Oil And Silver
Ron P.
I'm just trying to add information to the collective.
Sigh.....
Rgds
WP
Hedging is selling your product at a future price.
Sure, and I should have used a better word or phrase. I had in mind the more complex maneuvers described here:
"A hedge financial term denoting is an investment position intended to offset potential losses that may be incurred by a companion investment.
Possible vehicles for a hedge investment include stocks, ETFs, insurance, forward contracts, swaps, options, many types of over-the-counter and derivative products, futures contracts. Public futures markets were established in the 19th century to allow transparent, standardized, and efficient hedging of agricultural commodity prices; they have since expanded to include futures contracts for hedging the values of energy, precious metals, foreign currency, and interest rate fluctuations."
http://en.wikipedia.org/wiki/Hedge_%28finance%29
Rockman - You can't sell a futures contract unless you have one that you bought
I think this is where you might be going wrong. You absolutely can sell futures contracts without buying them first. In fact this is pretty much how the market operates - lots of people wanting to buy and a matching number (matching done by the time-honoured tradition of price) wanting to sell. In a small way I trade these contracts myself by placing either up or down bets on the future price of oil.
Settlement of the sale of a futures contracts can be either by buying back the contract or physical delivery. As you rightly say the paper market is much bigger than the physical one and most trades are settled in cash.
The difference between speculators and producers/consumers using the futures market is purely motivation. The former are basically looking to make money by getting the price action right whilst the latter are looking to gaurentee either their profit margin (producers) or cost-base (consumers). A bit similar to the differecnce between people writing naked vs covered options - but maybe best we don't go there ;-)
Bottom line though you can sell futures contracts without buying them first.
And, sorry to disagree again, but contracting to sell your oil at a given price in the next 12 months is a futures contract! Even if you strip out the market makers/brokers etc and deal directly with an end user. The huge and complex futures market is really only an extension of this original innovation.
TW
Rockman has it right. The futures contracts that are listed are financial instruments used by risk traders (i.e. speculators) between themselves. The sorts of contract between risk traders and producers are different. (For the good reasons that Rockman has already given)
And, sorry to disagree again, but contracting to sell your oil at a given price in the next 12 months is a futures contract
This is where you are getting confused. This is just a contract. Every contract refers to the future. Futures contracts are a specialised type of contract, not any contract that involves something in the future. If I am paying you now, to do something now, that doesn't need a contract. If I am agreeing now, to do something later, for which you will pay me later, that is a contract.
I think this is where you might be going wrong. You absolutely can sell futures contracts without buying them first.
This depends on how much risk the regulator of the market wants to allow the speculators to take. While it is always possible in theory, it may be illegal in practice. I am pretty sure that Rockman has it right, and that it is illegal in the oil futures market. The volume of oil futures is just too large compared to the physical trade to permit it.
The one thing I remembered from the first oil crisis in the 70's was
"oil drives inflation and inflation drives gold"
I bet the farm (ok the suburban house) in 2005 and it has paid off well.
The price of gold crashed down in 1980, and the price of oil crashed down a few years later and then stayed cheap for years.
When the prime rate went up to 18%, nobody wanted to hold on to gold bullion and earn no interest. I used to get over 16% interest on my money market account, and I would borrow money at 12% on my credit card, then deposit it to earn the 16% on the money market account--a perfect way to make money without having any capital tied up.
I've seen long-term mortgage rates at 16 to 18% interest too, in the early eighties, and if inflation ever gets out of hand we'll see these high interest rates once again. The late seventies and early eighties were a crazy time for finance, crazier than anything seen during the last few years.
I think my best pull was a one-time offer from Citicard for a 1.99% cash loan for the life of the balance. After making sure I wasn't reading it wrong (usually, a cash advance is charged 18+%), I cashed it for 20K, and paid it back, faithfully, until it was gone. As you can imagine, there were one or two days of panic when realizing the banks weren't going to be open Monday, the due date, due to some stupid Federal Holiday and it's getting late on Friday ... but made it! I'm paying off my used truck still I bought with a credit card, at a nice 3.99%. Better to have the title in-hand than at some dumb bank.
Another scam, more recently, involves the presidential gold dollars - buy the maximum (per order)amount on a credit card that generates air miles, several timees over; the mint would even deliver them free (though no signature confirmation required!!!), and of course, the credit card has a 30-day grace period so it was free trips for everyone.
At the peak of the credit craze, I was able to get several large credit card cash advances (by check) for zero %!!
They relied on most of their customers not realizing that all future payments were applied to the cash advance, while high interest rate purchase balances were piling up.
Now, of course, they've caught on and they're charging a 3.99% up front fee.
One used to be able to buy US series I bonds 30k per person per year; we'd get 'em on mileage credit cards and each get enough for a RT ticket as a bonus.
More recently (last year), the government was selling $1000 boxes of dollar coins from the mint, free shipping, and taking credit cards. I used one with 5% back. Yes, I was buying cash at a discount, gotta love this country. Plus, a wooden chest full of the new dollar coins looks a bit like gold dubloons; you can put on a pirate hat and run your fingers through it saying "Arrrrr, what a fine treasure this be...".
Dopamine is where you find it, I reckon.
"It could be a very bumpy ride."
Could be.... That's the only prediction I make with certainty. It will be (already is).
Since I read Campbell and Laherrere in '99 I've taken any specific predictions for a "peak" with several grains of salt; the uncertainties are many (and the definitions of "peak" variable). Peak crude? C+C, unconventionals, EROEI, demand, other economic considerations, political unrest and military intervention, technology utilization, substitution, ELM, climate considerations, fickle populations, new discoveries, etc. ,,,,, all of these things affect production. Trying to nail down volumes and dates is an excercise in frustration, though I applaud all of those who make serious attempts to define and predict "peak oil".
What matters is the overall benefit to economies, total usable energy derived from all inputs, and how societies react to increasing constraints on energy and resource availablility. What matters most is how humans adjust their expectations. Perceptions trump Peak Oil.
Great point. I think most of us TODers have struggled with these issues over the years. We have become board with the simplistic realization of the "Hubbert Curve". We moved on to realize that real world conditions would cause a plateau, then in even more detail, the undulating plateau, the "ELM" effect, etc.
In the end, we are, and always will be, a small group who has the time or attention span to follow the reasons behind each undulation at the top.
The majority of the public will only be willing to "get it" when we are five years down the destructive decline, and there will not be anything they can do at that point.
Somehow I don't think that five years will be enough. The belief in the current economic system is so strong that most people will not make the connection between the disruptions to their lives with declines in oil production (or any other resource shortage type issue). The unemployed will continue to believe that their lives will get better once they find a job. The vast majority of middle and lower income types will continue to believe that they just need to work hard to get ahead.
Any new recessions, big bumps in inflation, lines at the gas station, shortages at the home depot, etc., will be blamed on the guy in the white house, the congress, the banks, China, terrorists, or whatever.
vast majority of middle and lower income types will continue to believe that they just need to work hard to get ahead
agreed, if only the government would *let* them work hard.
It seems that an increasing number believe they will get ahead if we just build a border fence and stop protecting smelt in the delta. If only we didn't have a socialist president, gas would be below $2/gallon and everyone could get a high paying job....etc.
I share the request for a conversion of the latest forecasts to the net energy view. My guess is that we are clearly off the plateau already.
If Iraq can ramp up fairly quickly the all liquids plateau will most likely extend to 2015 at a 4% decline rate for current production, or 2016 at 3.6%.
The wild card might be watering out of Ghawar north, which could be imminent.
While determining net energy will be nigh impossible, it may be useful to create an adjusted energy content curve. Hypothetically, if ethanol has an EROEI of 1 to 1 then it could be removed from the mix: no net benefit (inclusion only skews the numbers). Equating sands oil or kerogen to WTI doesn't make sense either. Adjusting for the pecentage of heavy/sour crude to light/sweet may not be accurate, but could be interesting to determining available energy trends. Of couse, good data is everything. Without it, predictions are really prophecies.
Wouldn't that be something to watch the talking heads trying to explain away a "Cantarell" scenario in the land of Saud.
eAstie - true but when have we heard the talking heads try to explain away the Cantarell scenario in Mexico?
Right. Is there any evidence that the talking heads know what or where Cantarell is, much less its depletion curve?
Somewhere, I have a "Ghawar Is Dying" button someone sent me. A few times, I've worn it for a day. Nobody (other than friends who have suffered my lectures since 1998) has ever had any clue what it means.
So I guess I'm still wondering if this is a reasonable summary of what the future might hold:
Peak all liquids: 2011-2014
Post-peak all-liquids decline rate: 1%
Post-peak crude decline rate: 2%
Post-peak available net exports of crude decline rate: 4%
If you've got it right we should be fine. We can adjust to a 2% annual crude decline.
The real discussion, IMHO, should not be about the date on which we passed/will pass peak but our adjustment strategies.
I think the more important number for the US is the 4% export decline and I would guess exports to the US will decline more like 6% due to China and India.
We can not manage 6% decline gracefully.
Time to build lots of nuclear reactors in ships at sea to make synthetic methanol to "export" to the US. Place the ships above a deep trench and if one goes bad sink the ship. A fleet of 3000 ships will give us all the energy we need.
We can not manage 6% decline gracefully.
That's not hard at all. The US has reduced it's net imports by 25% in the last 3 years.
OK, so that's 8% of imports per year, or 4% of consumption, very roughly.
And the US only had to have 4% of its working-age population leave the work force, and nearly double the unemployment rate of those who are still counted as being in the work force. Yeah, easy.
How easy will the next 25% of imports be? And the next?
the US only had to have 4% of its working-age population leave the work force, and nearly double the unemployment rate of those who are still counted as being in the work force.
The economy is back where it was when oil consumption and imports peaked several years ago, as measured by production. Why measure by production? Because that tells us something about changing oil intensity of the economy, and how easily consumption can be reduced.
How easy will the next 25% of imports be?
US production is rising, so it doesn't have to all come out of consumption.
Consumption isn't that hard to cut: average US MPG is only about 23 - raising to the level of a Corolla would cut about 3M bpd, or 1/3 of our current imports.
The average US household has slightly more than 2 vehicles: just moving most of the driving to the more efficient vehicle would make a large difference. The problem: people don't like to make minor changes, like giving up their one-passenger SUV for commuting to work, and using their teenager's Corolla instead.
And the next?
Actually, the last 1/4 will be the easiest, as people move to Plug-in Priuses or Leafs. They may have to carpool while they wait to buy a Prius for their next vehicle.
Carpooling...the horror.
I didn't talk about "the economy", just about people's livelihoods. What's the new buzzword? They have become "decoupled".
Carpooling? Why carpool when you have no job to go to?
Edit: It's off topic, but the economy being "back to where it was" means that it's at least 8% below trend -- below where it should be. That's more than a trillion dollars. "Not hard"..?
I've benn using the word "disenfranchised" for a few years to describe the permanently unemployed. I think it gives a good sense of what is happening to people.
I didn't talk about "the economy", just about people's livelihoods.
Ah. The way it was phrased, it seemed to suggest that unemployment was the cause of the decline in oil consumption. If that's not what you meant, then that's my mistake.
the economy being "back to where it was" means that it's at least 8% below trend -- below where it should be. That's more than a trillion dollars.
The point: the US is using 25% less in imports for the same GDP as before. We do also have a business cycle to deal with...
Oh, right. I forgot. The "jobless recovery."
Something that we need to consider is the possibility of a "jobless future".
The more we learn to do our work with autonomous/semi-autonomous machines the less human labor we will need to produce what we want/need.
We're going to have to decide whether we want to continue down the current path in which a very few become extremely rich, some do OK, and some suffer or whether we would rather do things a bit differently.
Spread the work a little wider and spread the product of work a little flatter, perhaps?
Well, assuming we have the energy/resource abundance to support the future you envision (which I think is unlikely in the extreme), I would certainly vote for a version of that solution.
The powerful folks at the top of the heap will probably object...
For every new Yacht a rich guy buys, how many SUVs need to come off the road. LOL.
The new capitalism.
Politicians and economists don't seem to be able to adapt even to 0% crude decline.
That were true for Japan.
My impression about nazi Germany is that they expanded until they initiated the second world war to cover an underfunded government and give the people victories, both essential to keeping the nazi party in power. Loss of power could have meant death for the nazi leaders in the harsh political climate the nazis and communists had created togeather as they had competed for power with violent means. It were even harder to pull back after the war started and they litteraly funded the nazi economie by plunder and mass murder of competing consumers. Oil and other strategic resources immediately became a war goal as they tried to win and then to live for a year, a month or a few days more.
Phil,
Thanks for this extremely readable, timely and honest review of previous forecasts and the current situation.
I agree that we are looking at a period of much greater volatility (temporal variation) going forward. But it is important to recognize that we are also looking at a period of much greater spatial variation as well. In the developed world we complain about the ups and downs (well, mostly the ups) of oil and gas prices but in various parts of the developing world people are already suffering through reduced supplies of motor and cooking fuel. The rich can ignore the problem for just a little bit longer as the world's poor begin to fall off the wagon.
I also want to reiterate westexas' emphasis of net exports. Global production levels are meaningful at the global level but every importing nation has to get it's fix from individual suppliers and the amount those nations consume internally is hugely important.
Here in the US we are blessed to have friendly Canadians to our north who have not yet figured out how to pipe their syncrude to the West Coast, leaving us as their main customer. Western Europe has a similar situation with a huge infrastructure already in place to ensure deliveries of oil (and gas) from the North Sea, Russia and North Africa.
Japan and to a lesser extent Great Britain are, I think, the OECD canaries in the coal mine. Japan's connections to energy providers are entirely legal and monetary while the UK is less integrated into the European fossil fuels network than they should be. It will be interesting to see what sort of legal and monetary manoeuvres each will have to make to power their societies going forward.
It will definitely be a bumpy ride for many in the world.
Jon
Thanks Jon.
Now it's not just net exports (as the oil exporters keep more), but even more significantly, stronger demand from China and south-east Asia in general. Stuart’s graph of where OECD consumption could be headed between now and 2015 is pretty stark (even assuming flat global supply).
With the Conservatives in power with a majority govt., I would think it is just a question of time before the pipeline is built through Kitimat to service world consumers, as this is what the oil companies want and they own the Govt. 5 years? Will west coast drilling (Hecate Strait, Queen Charlotte Sound)be far behind? There is much protest against the offshore drilling prospects, but we are still pretty fat and happy. A hard decade will change things pretty fast.
Regards....paul
I think you're right - with the Canadian Conservatives having a majority that allows them to do pretty much as they want, they will probably slip approval for the Kitimat oil sands export pipeline through as quietly as possible. They would prefer to get the pipeline finished and those supertankers heading to China before the next election.
All the Western provincial governments are quietly behind it, too, although they may not necessarily admit it. There will be a lot of money going into various government pockets in the form of taxes on that oil activity, not to mention a lot of jobs.
As far as west coast drilling is concerned - I don't hear a lot of enthusiasm for it from the oil companies. I expect that's probably because they don't think there's a lot of oil there.
Perhaps one way to look at it is to see how much of economic activity is focused on energy production.
This is by no means perfect, and obviously a US focused datapoint :
http://seekingalpha.com/article/237675-historical-s-p-500-sector-weightings
Rgds
WeekendPeak
Excellent article. Many thanks.
Great Post
Anyone not convinced of a peak in Global oil production in the next few years may be interested at what the figures are for all the oil producing countries.
In the years 1995 to 2000
69 Countries increased in production by a total of 8,840,000
33 Countries declined in production by a total of - 937,000
Between 2000 and 2005
60 countries increased in production by a total of 12,090,000
42 countries declined in production by a total of - 3,904,000
Between 2005 and 2010
47 countries increased in production by a total of 6,522,000
55 countries declined in production by a total of - 5.095,000
The figures really do speak for themselves.
Hi Jaz - do you have a citation or source attribution for your data? I would like to include this information in my PO talk and essay as an alternative way to show production peaking - simple accounting like the megaprojects analysis. Some folks have a difficult time with depletion curves, entropy, and math modeling - but arithmetic is generally understood by anyone who has balanced a checkbook.
Hi Jaz:
Your summary is great and very convincing to any layman.
Would you please provide the details of your above numbers for both Countries increase in production and decrease in production. My email is rifatshihab@yahoo.com
Graph form of the same concept:
Derived from BP Stat Review.
BigDoug and Rif
Sorry nothing special just good old EIA production data, but I guess if their data makes things look bad, then things are bad.
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=53&aid=1&...
Download to excel, then you can put in a new column at end of each year to do an average production for each year.
Delete all regional data such as central and south America, then sort data as you like.
At the end column you can minus one year from any previous year, I did 5 years as yearly there is a bit too much noise.
KLR data goes back much further and done on a yearly basis, but still shows the devastating trend over a longer period of time.
I also did graphs of the different time spans and they show very clearly how decline volume is growing as increase volume is shrinking. Clearly shows how peak oil is marching through ever country, you have a seesaw which was once loaded on the up side, now it is pretty well balanced.
Just make sure you save a new sheet before deleting data as you may want it, such as seeing how many countries produce no oil whatsoever.
Will tidy it up and send it. Have not done this for C&C as anti peak oil people argue that other liquids will take up the slack. They had better hurry.
Limits to the production of Liquids is of course not constrained by geology, nor economics. Especially when governments, choosing to fund at a loss, mandate their production. We can unprofitably produce liquids from coal, and various plants, for quite some time. We can even "liquidate" our economy and capital in order to do. And, are doing so already.
So, not just here at TOD but more broadly there needs to be a much, much more rigorous use of the terms Crude Oil vs Liquids.
Because it matters. It matters alot.
Natural Gas Liquids only contain 65% of the BTU of crude oil. Unconventional oil production of course draws on enormous amounts of other energy inputs. And then of course there are Biofuels--the savior of the western political class that's all too happy to report increases in "liquid fuel supply."
I wrote about these issues earlier this year, at TOD, in Secrecy By Complexity: Obfuscation in Energy Data, and The Primacy of Crude Oil.
Let's recall, monthly highs in global crude oil production have taken place many times since 2005, and exceeded previous all-time monthly highs. What matters are annual averages. For all years through 2009 no annual average of global crude oil production exceeded the 2005 annual high. Only with last month's very volatile upward revisions from EIA did we learn that the 2011 annual average basically matched the 2005 high. But we await more revisions (which continue to be large in both directions).
What will the rear-view mirror show? Two things.
1. Peak Crude Oil.
2. That we have continued to increase production of synthetic fuels from all manner of unprofitable processes, funded by governments, in order to maintain the Auto-Highway complex.
However, the least we could do as explainers of these issues is to accept that the distinction between Crude Oil and Liquids is hard, and not trivial.
As far as I'm concerned, peak crude oil, with its dense 5.8 million btu, is all that ever mattered. I'm reminded of such in many ways. Here's one: each year at Davos, Dan Yergin is asked about peak oil. Each year he has a different answer, the latest being that there's no peak oil because natural gas is now plentiful.
G
The average for C&C from Jan 2011 going back 12 months was 73,863,557.
Which is higher than any other previous 12 months.
http://en.wikipedia.org/wiki/Significant_figures
You are right, that should have been 73,863,557.3426 barrels. ;-)
.3427 :-)
r4ndom
This is a small detail but important psychological detail, if people see production going up they are not overly concerned.
Only once production starts to fall will most people take notice.
If you want the big picture look at my post above a fifteen year slow march of peak oil claiming one country after another. The graphs produced by these sets of figures are quite dramatic in showing the increase in decline numbers.
If westexas did a similar plot of ALL exporting countries over the same period it would show an even worse picture.
No, no, no, it really is .3426 because in binary .3427 is .01010111101110110010111111101100
Just kidding, and you can thank Microsoft for being so imprecise >;^)
Wow we are surging. Thanks for the update. I was worried for a minute that oil production was stagnant. ;-)
This is a very good point, indeed. If it costs $100 / bbl, then it means it takes more primary energy to produce that bbl of oil.
So we are likely converting either more natural gas, coal, or oil to make the expensive oil. Thus we have Enron-style(TM) accounting.
For example, I can say I am worth $1 million dollars. But if the dollar is worth 1/2 of what it was last decade, then we know the reality of the situation.
Better though to not face reality anymore, it could rattle the markets.
Anyone know how much oil is used to build a drilling rig for use in Refugio, TX vs 100 miles out in the Gulf of Mexico?
I think when we try to explain peak oil to virgins, it should include a historical picture show that takes you from wood frame drilling rig to modern day rigs (something like the Troll platform should do). Then ask them to think about where this is going, and how much they will need to pay to continue this game.
You could add in the energy in terms of electricity and natural gas that it takes to extract, refine, and distribute that oil.
Some folks have calculated that we could drive an EV for more than 20 miles on the electricity embedded in a gallon of ogas, convert the NG to electricity and drive another ten.
That's more mileage than we average from a gallon at the pump.
Thank you very much for this update.
I have one real concern with much of the information that is coming across the web these days and that is that there is not enough information on what data is being used for the National Oil companies assets and production.
Many believe that the data that the National Oil Companies supply is badly overstated and if it is being used in the projections here could give a false projection of what actual future declines might look like.
The second thing that worries me is that there doesn't seem to me to be a good way of identifying if the increases in current production, from horizontal wells?, will be at the expense of future production which would cause a much steeper decline rate in the (near?) future.
My personal guess (educated?) is that when Saudi Arabia goes "Cantarell" (soon?) most of the world is going to be completely surprised and panicked. Between reserves overstated by maybe 40-50% and greater than historical draw downs by horizontal wells I don't really know what to think of the ME future production projections.
I also think that including things like refinery gain and biofuels in "future projections" as separate variable items without considering that without the underlying crude oil they will not exist is questionable for decline projections of all liquids.
I just hope I live long enough to see what really happens and when! I do enjoy living in "interesting times".
jon - all valid points especially since many of us believe we'll see hell freeze over before we get confirmable data from the NOC's...especially the KSA. But don't lose sleep over Ghawar going "Cantarell". Two very different reservoir drive mechanisms and thus very different decline curves. But that doesn't mean it won't show a much steeper decline than the KSA (or anyone else) offers. The horizontal wells you mention may well be giving a false optimism. Individually such wells could eventually offer a "Cantarell" decline profile but collectively the field won't.
If you're under 60 years old I'm sure you'll be seeing some "very interesting times". Not necessarially fun times but very interesting.
I really enjoyed reading this article. And I see we share a favourite blogger in Stuart too :)
I think you come across as a moderate, thoughtful individual and most of your points are overlapping quite seamlessly with mine.
There are two things I'd like to add, however.
Sam Foucher's recent analysis relies on the (increasingly obvious myth) supposed 'Saudi spare capacity'. As many readers here, as well as a serious peak oil analyst like Staniford himself, have pointed out the whole point of a spare capacity is to use it to bring down prices when they are hurting the economy and/or to make up for unexpected losses.
Saudi Arabia failed the first critera twice, both in 2008 and in 2011. They failed the second, which is arguably even more damning, after Libya.
Unless one believes the Saudi have a death wish(which they don't because they used their once real - and substantial -spare capacity as late as 2004 to bring down oil prices, and that was the era when $60 dollar crude was considered 'expensive'), then the only other reasonable explanation is that they want to maintain the high prices as long as possible and continue to feed lies to the world about their supposed 'spare capacity'. After all, they have nothing to win by coming clean.
This is why I have trouble with Sam's recent(too optimistic) analysis, although I think most of the other stuff he wrote was spot on there. My point being is that since your post was so good, frankly speaking, I had wished a comment on this or two, but alas nobody can please everybody.
I still think Kjell's analysis is the better bet so far, of the two. But I am surprised you didn't mention Hirsch, whose 2012-2015 estimate still seems to me to be the best (and by far the most moderate) estimate. He refused to forecast in earlier years precisely because he is such a cautious man.
The second point I'd like to raise is the concept of 'peak economical oil'. We've now reached a stage where we cannot have sustainable growth(from an economic perspective) without immediate high oil prices. This ultimately brings down the economy. It might take 2-3 years, but it will do that in the end. And that simply means that we are now hitting the ceiling time and time again, which basically implies the closing phase of the 'undulating plateau', however long or short this phase may be.
So there are now two issues to keep track of, the pure geological aspect, which is still the main point but much less so than a few years ago, and the economical aspect: the fact that we cannot have growth without very, very damaging oil prices which will self-correct and then rise until they can no longer rise and it's just a big slide downwards until we find and implement a workable solution.
P.S And as the post of Westexas shows: one cannot only blindly look towards production. Internal consumption in 2011 and onwards will be higher and higher as the years pass by than up until now(especially Saudi Arabia).
There was a piece on the news this morning that the Saudis need a minimum of $85/per brl. to sustain their newest multi-billion dollar governmental social/welfare initiative.
Yes, good point. This is part of 'peak economical oil'.
And then there's the whole paradigm of volatility feeding and creating further volatility.
When oil prices are high, inflation goes through the roof, as do food prices et all, which creates poverty and which in itself spurs people to act, to cross the barrier of fear into the unknown.
In other words, this is the unforseeable 'X-factor' that so many fail to remember. As we are now at the closing phase of the plateau, it would be foolish, in my humble opinion, to think that the curve from here onwards will be mostly (or even completely) shaped by geological and economical factors.
As uncertainty ensues, chaos will foster.
Alas, Libya, Egypt, African food riots, Pakistan power shortages, Eurozone defaults etc etc.
As we've reached peak economical oil, and as times henceforth will increasingly be scarred by very thin margins of safety, all bets are not off but most bets are pointless.
At least for the time being, there is a coupling between economic profits/growth and oil price. As I'm sure you've noticed lately, the price of oil has started back down (not because of any new oil coming on line) but instead due to lowered profit expectations in turn dropping down stock market valuations (a correction). So there is an interconnected feedback loop there, at least for the time being based on current oil supply and price.
In fact, on CNBC they mentioned on one of their panels unanimously that oil investors will be very wary of over exceeding the previous high (147 in 08) due to the negative effect it had on the economy. (An interesting admission since previously they blamed only the mortgage meltdown)
I mention this because of your comment,
Not sure I agree because of the above feedback loop. However, obviously this plateau of crude production can only last so long. Either due to increased Chindia demand or when supply drops off plateau in a descent, with supply further constrained, a new feedback loop will change to something else - not sure what yet.
Right now the US is achieving tepid growth, but once oil scarcity raises price or availability to the point of eliminating any and all growth, then look out. That will demand some real creative QE slight of hand by Bernanke & Co.
If you want to know why the price of oil has fallen, just look at the what the dollar index has done in May. It's taken a fairly strong leap and oil moves inversely to it.
I share my fellow posters' appreciation for this post.
I wonder if anyone would like to elaborate or speculate about this phrase from the conclusion:
"the sooner we develop a new economic paradigm the better"
Are there any promising moves in this direction?
No, there are no moves (promising or otherwise) in this direction. As Leanan and I and several others have noted in comments, there is a firmer grip than ever on BAU. The harder it becomes to maintain BAU, the harder the powers that be will struggle to hold onto BAU.
Eventually BAU will become attenuated and then be replaced by a new BAU that uses a lot less oil than we do now. What will trigger this change is most likely to be higher oil prices. We're living with gasoline around four dollars a gallon, and we can live with $5 and probably $6 per gallon, which would trigger off a new and more severe recession. We'll get economic decline, but it will not be smooth.
My prediction for the government-reported unemployment rate during 2020 is twenty percent--and rising. With any luck, I'll live to see 2020 and vote in that election for somebody who will probably become the first U.S. dictator through imposing a permanent emergency--maybe a declaration of war against Venezuela or somebody else with oil. The next ten years are, IMO, likely to be far more "interesting" than the past ten years have been.
Up until now there has not been enough pain to cause a breaking of the old economic paradigm. But the future holds pure economic pain in plenty, rising unemployment and eventually rapidly rising prices--i.e. a return to double digit inflation such as we have not seen since the late seventies and early eighties.
Enjoy the last of the "Good Old Days." They are now. Store up memories. Build a library of books while you can still afford to buy them. Economize, Localize, and Produce.
"Eventually BAU will become attenuated and then be replaced by a new BAU that uses a lot less oil than we do now."
Correct. There is no step change from the current BAU to the glorious (or apocalyptic) future. There is a transition. Note that I am assuming relative peace here, a nuclear slugfest or pandemic could make a step change. Those are about as likely as an asteroid impact.
Look at the change from a horse-based BAU to the car-based one. Or the transition from horses to tractors on the farms. Sailing ship to steam ship. They are gradual taking 20 to 40 years. The internet was the exception, but that largely levered existing technology (phone lines) to start. I used Genie's bulletin board until 1995 when I went back to college where they had internet access. By the time I was done, it was available at my new home.
Even cell phones took 20 years. Gordon Gecko had a "cell phone" in 1987. It was the size of a brick, and probably only worked in part of Manhattan. I still don't have one, though fairly soon I expect the current owners of the local landline to abandon this area as it it too rural to pay for the maintenance.
(As an aside, I can get Verizon coverage at home, but not AT&T due to an inconvenient hill. At work I get AT&T but not Verizon. I don't know what their problem is, but I'm tempted to invoke 'existence precedes essence' and be done with it.)
Get a TracPhone. Works on all major networks. Especially good in marginal/rural areas (if you don't talk too much ;-)
No contract, no bill, and you don't even have to be "you".
Yes. Good one, Don.
What does "a new economic paradigm" mean?
Is it something different than being more efficient and replacing, eventually transitioning off fossil fuels?
Bob - Just my dumb guess but yes...something very different then the efficient and well thought out ideas you've presented in the recent past. I'm still hanging on to my pessimistic expectation that we'll still focus more on reacting to the crisis than planning for it. And reacting in a less than compassionate manner.
I've no doubt that we'll react more than respond ahead of the curve. We're a not well enough evolved species to get our homework done the day before.
Were we good at planning and solving our problems before they're sitting in the seat next to us we would have followed Jimmy Carter's lead back in the 1970s.
But what I think people are missing is the elasticity in demand. You and I both lived through the gas crunch that doomed Carter. We know that people found all sorts of clever ways to cut their fuel usage. People were sleeping under their desks, renting a couch in town, whatever in order to cut down the number of days they commuted per week. I know people who found a place to park their RV in the City and stayed close to work 2-3 nights per week.
The data I've found says that the average number of people per commuting vehicle is under 1.1. We can cut our commuting fuel usage 10% by putting two people in a car one day a week. (In the '70s we built the 'Park and Ride' lots along the highways. They're still there and now there's the internet for making arrangements.)
RVs can vacation at a park 50 miles from home rather than on the other side of the continent.
All of this is 'real damn quick' conservation which will be triggered by fuel prices reaching a comfort ceiling.
The price of gas has cut me back from going to town once a week to once every ten days. I can cut further.
We can get through a few years of tight supplies via this sort of conservation across almost all areas where we use oil. Prices rise and we'll cut out the unnecessary flying and wait longer before replacing our carpet.
In the meantime the low MPG ICEVs will go to the crusher at a higher rate than normal and the high MPG ICEVs will be patched together so that they can stay on the road for a few more years as we bring more 40-50MPG units into service.
And then, if I read the tea leaves correctly, we'll have affordable EVs and cheap renewable energy to power them. The average life of a US vehicle is somewhere around 12 years. In a decade we could switch out our fleet of personal vehicles if fuel prices adequately encourage us.
We could beef up our train system and perhaps even get some high speed rail running off electricity. The CA HSR route from SF to LA could be built in a decade. (China builds them quicker.) Each HSR link takes cars off the road and planes out of the sky.
I guess I look back to the other times 'when the sky was going to fall', like Y2K. We didn't really get started in time, but we muddled through. I just can't find the reason why we couldn't pull it off one more time....
"And then, if I read the tea leaves correctly, we'll have affordable EVs and cheap renewable energy to power them."
If only that was possible....My tea leaves are not nearly so optomistic.
Actually...we have them now.
Both the Prius and Leaf are cheaper than the average new car.
Does that "average new car" include SUVs and such? It's one thing for them to be cheaper than a van/SUV that can carry the whole family plus the hockey or soccer or camping gear. But that's apples to oranges. Are they cheaper than cars with a similar (lack of) carrying capacity? (And what about the median new car; do very expensive cars skew the average?)
Does that "average new car" include SUVs and such?
Yes. that's "light vehicles".
It's one thing for them to be cheaper than a van/SUV that can carry the whole family plus the hockey or soccer or camping gear. But that's apples to oranges.
The average number of passengers in a US light vehicle is 1.15. There really isn't that much carrying of large loads.
do very expensive cars skew the average?
A little, but median data is harder to find, and the median and average probably isn't greatly different.
Bob, if we are in a situation where people are sleeping under desks, renting couches in town etc, who is going to have the money AND confidence (that they will keep their job) to buy an EV?
In tough time everyone keeps their wallet closed. The cheapest per month thing you can do, if you existing vehicle is paid off, is keep it and drive as little as possible. You will see the average vehicle life increase as people hold onto their vehicles until "things get better". Laying out $20k plus for an EV is fine if you keep your well paying job, but that is a shrinking group of people.
There is much more to the problem than just the weekly fuel bill, but that is the only part an EV addresses.
In this austerity scenario, just how is renewable energy going to be cheap? The cheapest energy will remain coal, and any CO2 tax/cap and trade schemes will be discarded for causing undue financial pain for questionable future benefits - the politicians can read those tea leaves just fine.
HSR will be a colossal waste of money - ten years to build a line from LA to SF? The Union Pacific and Cdn Pacific lines were built 10x the distance in half the time, over a century ago.
HSR is the most expensive way possible to do rail - it is the Concorde of trains - huge cost just to save some time. In a future recessionary scenario, people will be happy to spend more time (which they will have) and less money (which they won;t have). A trip from LA to SF that takes 2hrs longer and saves $100 will look pretty good to most people, and many businesses too.
The game plan needs to be to extract not only maximum work out of every GJ of energy, but maximum benefit for the $spent, especially public $. Standard "express" rail will deliver more people per line per day at far lower cost than HSR, and can be built much faster. If we couldn't afford HSR in the boom times of the "oughts", we certainly can't now.
The California HSR project was silly from the beginning, but has become truly bizarre. The first segment was approved, after endless idiotic bickering, in December:
http://www.huffingtonpost.com/2010/12/02/california-highspeed-rail_n_791...
You should be able to locate the brain-dead "first segment" fairly easily. Borden is a blip just north of Fresno and Corcoran (main industry, a state prison) is about 80 mi NW of Bakersfield. The segment is about 65 miles long.
I'm taking bets on how long before it is either abandoned or the first segment stranded.
I went to the Cahighspeed rail site - head in the cloud stuff.
They expect to be able to do the 438 mi from LA to SF in 2h 38minutes, with ten intermediate stops! That is an average of 164mph
Assuming three minutes lost time for each stop (decel, stop, accel), you have lost 30 minutes, so only have 2h08minutes to travel, which means a running speed of 202mph!
That train will be frighteningly expensive to build, but it seems as if that is the whole point.
The route is 50 miles longer than driving I-5, and given that is a seven hour drive, why the rush to make it an under 3hr trip?
Instead, a 130mph train, that runs a non stop service, will do the same trip in 3:40, and wayyy cheaper. Shorten the route by going the same as I5 and you have it down to 3:20.
For the cities along hwy 99, you just need a good intercity that hits 100mph between them and you are faster than driving - and hardly anyone flies form Fresno to SF, unless they are flying onto somewhere else anyway.
Perfect is indeed the enemy of good here.
Yes. And/or, put it in the I5 ROW and make it even cheaper.
See the not-so-crazy, after all, idea of my long-time friend and colleague, Joel Crawford:
Interstate Rail
Perhaps a little slower than we might prefer, but worthy of brainstorming.
Interestingly Paul, if you go to a store in Tokyo that sells furniture you will find a piece of furniture not readily available in the US. It is shallow "dresser" that holds a thin futon, clothes, personal grooming products, a blanket
and is put in the entranceway/hallway to people's apartments/homes so that they can rent that space for 4-5 nights per week so people don't have to commute long distances. I first noticed the in the early 90's, but apparently
they have been around a long time. In talking to some people there is/was a belief that this increased discretionary spending because it allowed young single people not to have apartment rentals and long commutes. On the weekend
they could return "home". In the US household formation was very different through the 1930s-1940s going back to the colonial period. teens and 20's did not think they were going to rent/own, they found living arrangements and saved.
The current housing model has been foisted upon us for a long time, and is part of the social and economic engineering that Madison Avenue, partnered with the government and business to make happen. We now suffer from its unintended consequences.
In tough time everyone keeps their wallet closed.
Depends. In the Great Depression, business investment in productivity improvements stayed high - that was part of the labor problem. I think we can expect that energy-consumption reducing investment will stay high.
In this austerity scenario, just how is renewable energy going to be cheap?
As far as PO goes, why is this important? Wind and solar are important for reducing CO2 and other pollutants, but either way we'll have enough electricity.
Coal-electricity is not cheap. We pay a huge subsidy in hidden costs via our tax dollars and health insurance premiums. The actual, all-in price of coal is likely somewhere around $0.20/kWh.
Wind-electricity is cheap. Geothermal is affordable. Solar is getting affordable and will become cheap.
People will 'sleep under their desks' on a temporary level if oil prices to the sort of sudden spike that might happen. That's the sort of elasticity that prevents us from closing up shop and moving to caves the day gas hits $5.
People will make those sorts of sort term adjustments while they wait delivery on a more affordable-to-drive car, be it an EV or a 50MGP hybrid.
Over several years we will adjust consumption downward while we adopt technology which allows us to do what we want to do with a different energy source.
The pool of employed people is not shrinking, it is growing and has been growing for many months.
Slow rail will not replace air travel. People do not want to spend 8-10 hours on the train to get from SF to LA. They will (based on what is happening in Europe) choose rapid rail if it adds little or no appreciable time over flying. (As oil prices go up air fares will increase.)
----
As for CA, we're looking at a necessary cost looming in our near future. Based on population growth we are going to either have to build more highways and expand our airports or build high speed rail.
High speed rail is 1) cheaper and 2) runs on electricity.
Coal-electricity is not cheap. We pay a huge subsidy in hidden costs via our tax dollars and health insurance premiums. The actual, all-in price of coal is likely somewhere around $0.20/kWh.
That sounds plausible, though I'd love to see data: got any?
Unfortunately, those external costs aren't likely to be internalized any time soon. If they are, then wind power and gas generation will take off.
On the rest - sounds reasonable.
Unfortunately the data is hidden behind a pay wall. I did see a more detailed article somewhere, I'll see if I can dig it up.
Here's the link to the wall-protected version if you care to purchase.
http://onlinelibrary.wiley.com/doi/10.1111/j.1749-6632.2010.05890.x/full
Thanks.
Yes, if you happen to find a more detailed article somewhere, I'd be delighted to see it.
Since it is behind a paywall I can't double check, but the quote above says "pollution around power plants". If this is so it is still ignoring the costs of all the CO2 being dumped into the air for every living creature on the planet to share in.
If you include that cost of removing the CO2 from the air by sequestering it, the cost of all the buildings and land that is going to be destroyed with a rise in sea levels, the compensation to the people killed and left starving from increasingly extreme weather events destroying lives and crops and the costs of countless other unintended consequences, well then coal does not seem quite so cheap.
Just because something is cheap for the person or company that only cares for the present day and their bottom line, does not mean the net cost to society is cheap. If all externalities were counted that coal would stay safely in the ground where it would be left until we can deal with it responsibly. And by that time we will realise that renewable energy is cheaper so it can stay down there forever.
The actual, all-in price of coal is likely somewhere around $0.20/kWh.
Bob, you are correct that coal has high external costs, but unless we see action by government to internalise them, which we won't, then as far as buyers are concerned, it is cheap, and will likely remain so.
Wind-electricity is cheap.
Wind electricity is only cheap in the sense that the marginal cost of production is near zero. However, to in terms of ROI, in the absence of subsidies, wind is not a great investment, which is why there is much more coal and NG being built today. To use Rockman's idea of a fixed oil price, if you were to be offered a fixed future price for every kWh produced, and delivered to the load centre (e.g. a city) you would need a higher price to get your ROI for wind than a coal plant. It needs a higher average price to be profitable, so I disagree that it is "cheap".
People will make those sorts of sort term adjustments while they wait delivery on a more affordable-to-drive car, be it an EV or a 50MGP hybrid.
Ask the owner of a struggling small business if they are willing to go further into debt on a new vehicle? In tough times, they will just stay the course. I deal with this on a regular basis with businesses like hotels that are not willing to invest in water and energy improvements, regardless of the payback, unless someone else (government or the Utility) will pay for them. Their no1 priority right now is not spend any capital until the economy improves. people who are uncertain about their job security will do that same - if you lose your job you still have payments on a car that you no longer need to drive very much - that is not a low risk strategy.
Slow rail will not replace air travel. People do not want to spend 8-10 hours on the train to get from SF to LA.
This is very true, but irrelevant. I am not talking about "slow" rail, I am talking about "not high speed" rail - there is an important difference. In my post upthread I said nothing about a 8-10hr train ride, I am talking about slowing it down from 2 1/1 to 4 1/2 hrs. You will cut the construction costs by 50-70% in the process and allow many more people the affordability to take the train.
The train does not have to be as fast as a plane, it just needs to be significantly faster than driving. High fuel costs will take care of air travel by themselves.
As the design speed of the rail line increases, the cost of construction and energy increase exponentially, but the value of time for people is linear. So as you go faster, you increase the fare cost exponentially and price more and more people off the train.
The idea is not to have a government subsidised alternative for those who currently can afford to fly, it is to have a train service that most people can afford to use. If you save 10,000 people a day from driving LA to SF, you actually save much more oil than saving 10,000 people flying.
Paris to Marseilles on the TGV is 489 miles, and the non stop trip is 3 hrs , for an average speed of 163mph. Looking at the schedules, each intermediate stop adds 8-10 minutes. The cheapest fare is $132 each way, for the 3hr 20 min trip (2 stops). Trains leave once per hour.
According to Google maps, you can drive it 7hrs. If you have a car that gets 40mph hwy, at US fuel rates of $4/gal, it will cost you all of $48 to do the trip. if you are travelling with someone else, it is $24 each. And what is the non-car transit like at the destination end? how do you survive the Bay area without a car? So a couple or a family will almost always drive.
Who will take the train? Tourists, and business travellers. so you are subsidising people who either do not live there, or can afford to fly anyway - how is this really a public benefit?
The proposed Ca train is much faster, so will probably cost $200 each way (unless subsidised) whic makes the equation even worse.
But slow it down to an average speed of 120mph, and run non stop, and our 489 miles trip takes 4hr 10min (1 hour longer) will probably cost half as much, and trains will likely run more often, as more people can afford to take them. That $65 saving for an extra hour is pretty good, especially considering that a mobile business traveller can still be productive, so the "lost" time is minimal.
Also, the faster the train goes, the less capacity the line has, in people per hour, as the headways between trains get larger as the speeds get higher. The actual maximum for people per hour per line occurs at around 60mph.
Rail transport is great, it is the obsession with "high speed" that is the problem - it just costs too much. If 120mph is not fast enough for you then pay the cost of flying.
High speed rail is 1) cheaper and 2) runs on electricity.
Yes, but medium speed rail is cheaper still, you can build more of it sooner to serve more people, and it still runs on electricity.
A couple of quibbles:
Wind power may not be as cheap as dirty coal and NG, but it's still very moderately priced.
As a practical matter, I don't think passenger rail will ever compete on cost. It's really selling safety, and having someone else do the driving.
Yes wind power is moderately priced, but it is not always available at the moderate price when you want/need it. Mid afternoon on a still hot summer day, there is no moderate priced power, and certainly not from wind.
Passenger can absolutely compete on cost. When you look at it from the point of view of someone deciding not to own a car at all, then trains are competitive with renting a car, even from Zipcar. So if that means someone goes carfree, or a family goes from two cars to one, or a company downsizes their fleet by 10%, or sends the guy by train insead of plane, then the trains are competitive.
Having someone else drive, so you are free to do whatever, is a huge bonus - that is why for business travel, the idea is to make the trains faster than cars, and more comfortable and productive than planes.
The ability for trains to go downtown to downtown is a huge bonus especially on shorter (<200mi) trips. Planes just can't compete with that for any business traveller other than a private jet.
When two cities are linked by a train dt to dt, you can bet that office development will happen preferentially in the dt, rather than suburban business parks - there becomes value in the accessibility and convenience of the train.
When I lived in Britain the dt to dt ability of the trains was great - they are overpriced (this is Britain, after all), but it was the de facto method of travel, unless you had some really good reason to drive it, as the drive was always longer and more frustrating than having a beer and playing chess on a train!
Mid afternoon on a still hot summer day, there is no moderate priced power, and certainly not from wind.
That's a slight exaggeration. Yes, wind power tends to be a bit lower in summer, but it doesn't go away completely.
When you look at it from the point of view of someone deciding not to own a car at all, then trains are competitive with renting a car, even from Zipcar. So if that means someone goes carfree, or a family goes from two cars to one, or a company downsizes their fleet by 10%, or sends the guy by train insead of plane, then the trains are competitive.
Ah, but going car free requires a complete transit system, not just rail. That's much, much more expensive than commuter rail: either extending rail to very low volume locations, or running expensive buses 24x7.
The ability for trains to go downtown to downtown is a huge bonus
I agree absolutely. Commuter rail is wonderful (I use it daily), and dt to dt rail is wonderful. But, of course, that handles only a small % of all driving, and doesn't allow the elimination of cars.
Yes, wind power tends to be a bit lower in summer, but it doesn't go away completely.
I don't know about that. Here is the wind power produced last August in the Bonneville Power Administration area, which covers 300,000 sq. miles in Washington and Oregon, Idaho and Montana, and had 2700MW of wind capacity at the time;
For the 72 hrs it averaged137MW, or 5% of capacity.
let's take a closer look at 25 Aug;
For the 24hrs it average just 5MW, or 0.2% of capacity, and with four one hour intervals of zero generation
If that isn't what you call "gone away completely" then I don't know what is.
Clearly, the system has to have 100% back up for wind capacity, or else go into curtailment mode. In any case, your EV wasn't getting charged by wind on those days.
Ah, but going car free requires a complete transit system, not just rail. That's much, much more expensive than commuter rail: either extending rail to very low volume locations, or running expensive buses 24x7.
No, that's not what I'm saying. I'm saying for an individual, or many of them, to be able to live carfree, not the entire city. You don;t need to run trains/buses all night, and you don;t need to extend them to all areas -people on the outskirts can make other arrangements, but if you have 75% of the population covered by transit, then that's enough.
Trying to be all things to all people will never work -you want to be able service most of the transit needs, for most of the people, for most of the time.
When you can't they can take a taxi or rent a car. Part and parcel of the decision to not own a car. many people in London live like that.
Commuter rail is wonderful (I use it daily), and dt to dt rail is wonderful. But, of course, that handles only a small % of all driving, and doesn't allow the elimination of cars.
Yes, it is wonderful, but we are talking inter city here, not commuter. Also, we are not talking the elimination of cars, they will still be there, we are talking about the ability to choose to do stuff without them, and also to replace flying.
I think inter city rail is a good match for EV's.
I would agree that trying to retrofit a transit system that involved zero cars would be quite a task, and that is certainly not what I am proposing.
Here in England we had a bitter winter with a long period of high pressure when there wasn't a breath of wind over most of the country. This is the time when most electricity is demanded and in this instance practically zero wind power was able to assist with capacity. Wind can only be a back up power supply; in Germany, which has the largest wind generation capacity in Europe, not one conventional power station has been stood down.
Yes, it does seem like it was a good winter fro British skiers!
With wind, I don;t regard it as "backing up" a power supply, as this implies some kind of reliability. I think of it as a way to "save fuel" - when the wind is blowing, you can power down something else - that's all.
Wind the wind is blowing at might and not much else is using power, you end up with a surplus, and if you can store it (hydro) or export it then it can be sued for something. If you can't the surplus is just wasted. That is what is happening in the BPA area now - their transmission lines are at capacity from the hydro, so the wind generators are having to shut down or just dump their power to ground.
The trick is to build enough wind power that whenever the wind blows, it can be used, but not so much that you regularly have to dump it. That level seems to be around 20%.
The o ly way you cen retire a fuel station is to either replace it with another one (or hydro) , or the system load has decreased. No grid manager would ever rely on wind to fill a gap, that is asking for a blackout!
No grid manager would ever rely on wind to fill a gap, that is asking for a blackout!
You should look at the plans presented by the various ISOs in N. America. They assign capacity credits between 6 and 24%, or between 20% and 80% of average output.
I can't stop myself from thinking that in the Bible one of the most used expressions for futility is trying to "catch the wind". An old expression going around in the ME at the time the book was written. I think that expression will be proven again.
Paul,
The comment to which I was replying was "Mid afternoon on a still hot summer day, there is no moderate priced power, and certainly not from wind." That's a much more general statement than "it is possible to find 24 (or 4, or 72) hour periods in the summer where there is very low wind power output".
ok, on to details:
the Bonneville Power Administration area, which covers 300,000 sq. miles in Washington and Oregon, Idaho and Montana, and had 2700MW of wind capacity at the time
Here's a map of their wind farms: http://www.transmission.bpa.gov/PlanProj/Wind/documents/map-BPA_wind_int... , from http://www.transmission.bpa.gov/PlanProj/Wind/ .
We see that about 5% is about 70 miles from the rest, about 7% are about 40 miles away, but most are within a circle of a radius of about 20 miles.
This wind resource isn't that large, and it's in a very small area, so it makes sense that it would have a fair amount of variation.
Clearly, the system has to have 100% back up for wind capacity, or else go into curtailment mode. In any case, your EV wasn't getting charged by wind on those days.
Sure. 100% wind wouldn't be optimal - probably you wouldn't want wind's market share to exceed 60%. The balance could come from hydro, solar, biomass, geothermal, wave, even (gasp!) nuclear.
The important point: it's not that hard to produce all the affordable clean power we need.
I'm saying for an individual, or many of them, to be able to live carfree, not the entire city. You don;t need to run trains/buses all night, and you don;t need to extend them to all areas -people on the outskirts can make other arrangements, but if you have 75% of the population covered by transit, then that's enough.
Trying to be all things to all people will never work -you want to be able service most of the transit needs, for most of the people, for most of the time. When you can't they can take a taxi or rent a car. Part and parcel of the decision to not own a car. many people in London live like that.
1) the London system includes a lot of buses - inefficient, oil-powered buses.
2) the number of people in London who can go without a car is a very, very small percentage of all those in the UK. The same is true of the US and Canada. Rail is great, but it's only a small part of the solution to PO.
Nick, you did say the wind doesn't go away completely - my point is that there indeed times when it does. Every summer we can find a day, or several days, where there is no wind. Chances are that it will also be hot, and demand will be very high. And with high demand and the cheapest marginal source (wind) producing nothing, I think it is reasonable to predict that power prices will be high.
BPA's current wind is in a close area, so let's look at somewhere that is far away, at the same time. The Ontario wind farms have 1170MW capacity, here is what they produced, corrected to Pacific time, on those days;
Averaging just 15% of capacity over that 7 day period. I think it is reasonable to say with wind that we know there will periods each summer, where we get effectively zero contribution from wind, and can't even call on wind from somewhere else, as they are getting zero contribution and equally high loads. If the network planners for sumer peaking areas are working on any% above zero, then they are eating into their reserve margins.
Sure. 100% wind wouldn't be optimal - probably you wouldn't want wind's market share to exceed 60%. The balance could come from hydro, solar, biomass, geothermal, wave, even (gasp!) nuclear.
You misunderstood me here - I'm not saying 100% wind, I'm saying that the wind fraction is, has to have 100% backup. So the system has to be able to meet its peak load, with zero contribution from wind, while still maintaining an adequate reserve margin. I agree it is not hard to produce a lot of clean power, I am just saying the reality is, just like a sailboat, there will be times when we are becalmed.
1) the London system includes a lot of buses - inefficient, oil-powered buses.
Yes, it does, and I never had to use them once, the tube got me almost everywhere. i did ride on one once, just because you can't visit London and not. The buses could be much more efficient series hybrid buses, etc. They do run fairly full.
2) the number of people in London who can go without a car is a very, very small percentage of all those in the UK. The same is true of the US and Canada. Rail is great, but it's only a small part of the solution to PO.
Actually the proportion is about 20%, it has dropped from 50% in 1970;
According to the UK Census, there are still 20% of men and (amazingly) 40% of women who "don't drive". When I lived there I knew a few such people, and that ratio (2x women than men) was about right.
So, it's not a very small percentage, and it used to be much larger - it could become so again.
I expect the % of households in the US without a car to be well under 10%, and any rise is recession caused.
Also, Zipcar etc allow houses to not own cars. The head of Zipcar estimates that for every three members, one less car is owned than before. A friend of mine in Toronto falls into this category - doesn't own a car, and this is made easier by being able to use Zipcar when needed, but she routinely goes for weeks without it.
you did say the wind doesn't go away completely - my point is that there indeed times when it does.
Sure. I thought we were talking about seasonal averages.
BPA's current wind is in a close area, so let's look at somewhere that is far away, at the same time. The Ontario wind farms
Ah, this is great. I haven't had a chance to compare these two datasets. Could you do a quick calculation and see what the R-squared is for their correlation??
Thought you would like that.
There is no correlation between them - they are, literally, all over the chart. Here is the year's data set;
24% of the time, both are in the less than 20% capacity corner, and 9.5% of the time, both are less than 10%.
The PNW is a better wind resource, and has more time at high generation levels;
Do you want me to email you the dataset so you can play with it?
Actually, the scatter plot looks a tad anti-correlated.
If we assume that Ontario full capacity is more easily reached, then the density plot should look more like this:
But since there is a denser area in the real data towards high BPA capacity and low Ontario capacity, this indicates an anti-correlation. This is good in a way, because what it means is that if the wind is not blowing in one region, it is blowing somewhere else. The heat energy delivered to the earth is constant and so the kinetic energy (i.e. wind) must be relatively constant. This requires an overall conservation of wind densities across all regions of the earth.
Isn't this cool stuff? Yes.
This is cool.
I agree - the correlation looks slightly negative.
And yes, we need to model this properly - we need to look at the underlying phenomena, which is heat transfer from the equator to the poles (complicated by geography and coriolis effects, of course). That would suggest that total wind power won't vary much.
Heck, that's similar to solar: over the whole globe it varies very, very little. That might seem just a distraction detail, given the distances, but countries like the US benefit from "smearing" the solar peak over several time zones.
That would be great! Is this hourly data for calendar year 2010 for both? An old xcel format would be great - I actually prefer importing data for analysis into 1-2-3!
But 1st - would you have a chance to calculate whether the correlation is positive or negative (as WHT says, it looks a bit negative) and the R^2 (even if it's very small)?
Or some sort of covariance matrix would work.
To generate a no-correlation graph, what I applied was Z = exp(-a*x)*exp(-b*y) which is a mix of independent probability density functions for wind distribution. By definition this becomes a joint PDF as a prouct of marginal PDFs.
Then add some constraints that makes x+y=constant and you could get something that generates an anti-correlation.
Z = exp(-a*x)*exp(-b*y)*exp(-c*x*y)
This ends up looking like this, which has stronger excursions along the y-axis than the previous plot.
This is a strong anti-correlation.
Web/Nick, have emailed both of you the data set so you can play with it to your heart's desire(s) - the stats are above my level now.
Post it in a future drumbeat, I'll be interested to see how strong the anti correlation is.
Paul
then the super-grid is the tech we are looking for.
Well, it's one option, but it's not the only way, and may not even be the best way.
If you are talking about adding transmission to move wind power back and forth across the country, it is a very expensive proposition, and the capacity has to be reserved for wind - if you load it up with conventional power, it is not there when you need it.
Certainly grid expansion is needed at the bottlenecks, but that is a far cry from the super grid.
I think we need to find way to use the excess wind energy when (and even where) it is generated, but that too, is proving difficult.
Thanks!
I had a link for BPA data http://transmission.bpa.gov/business/operations/Wind/default.aspx
But I don't see hourly data like that which you sent me, just #9 for 5 minute data. Where does the hourly data come from?
The 5 minute data overloads the spreadsheets - max you can graph in Excel is 32000 data points and the 5 minute year is 120,000!
I actually emailed the guy at BPA and asked if they had hourly or half hour and he said no, I would just have to filter it.
Which I did, just took out the numbers from the hourly data points. Strictly speaking, I should have averaged each hour, and used that, but, for looking at a whole year, I think this is close enough.
Was a bit of effort to get it into its current form, but I think the data set is workable now.
You owe me a beer for this!
LibreOffice can handle up to a million rows but really you need a dedicated number cruncher for that sort of size.
NAOM
Well, I took a look - the actual average for the first 6 months was 789.6 and the hourly point sample average = 784.3. That's not bad, but I guess we should use the hourly average.
Now, I'm not clear on some definitions: ""TOTAL BPA CONTROL AREA LOAD (MW; SCADA 45583)" is the total net generation? Why is the total of Hydro and Thermal Generation larger than Load?
The BPA Control Area Load load is quite simply what gets used within their network area. If you compare that with the total production (=wind+hydro+thermal) the difference is what gets exported - a lot!
This is how California does renewable generation - they get someone else to do it and buy it from them (and claim it as their own, of course)..
The averages can be a bit misleading, in my opinion. We have two different objectives - overall kWh produced per week/month/year, which is where we displace "fuel" (incl hydro water) and then the instantaneous production - which is where we are concerned about needing backup.
Because the power output goes up as the cube of windspeed, the big production days are relatively few, but very big. I think the median production is a better indicator, though it does depend on what you are using it for.
hmmm. The BPA average load was 6.0GW, while the hydro output was 7.1GW and the thermal output was 3.9GW. Now, if BPA didn't have an export market we have to assume that the thermal generation, being more expensive, would only be used rarely.
That means that most of the thermal output is what's being exported. I don't see how California is actually importing renewably generated power. It looks like CA is importing fossil fuel power.
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I compared the BPA and Ontario data: the correlation is indeed negative, but the R^2 is small - only .004. So, most of the value of combining the areas comes from the law of large numbers: variance rises roughly half as fast the mean, so that low output events would be reduced by very, very roughly 50%.
I got -0.05533728 for a Pearson correlation coefficient from the data that Paul sent me.
I used columns H=Ontario and I=BPA from Sheet 1.
So agree that it turned out negative although it is predictably weak, because the overall scatter is strong.
I will have to chew on how to analyze it in other ways.
-----
After chewing:
The BPA data is very strange. It has a flat tail which really shouldn't happen unless it is being modulated artificially. The Ontario data looks like the regular Rayleigh that is expected.
This doesn't explain all of the anti-correlation but makes it a bear to physically analyze due to likely artifacts in the BPA data.
Web,
I take it your x axis is % of MW capacity?
It is possible that wind power is being modulated- There are likely quite a few days when the wind is too strong, and they shut down, or, as is happening right now, the transmission capacity out of the area is maxed out by the hydro and the turbines are forced to dump load or shut down. There may even be more local transmission bottlenecks too.
With another 6000 MW of wind to be built there, these issues will get worse, until more transmission (or local load) is built.
Thanks for the graphs - I've long since forgotten how to do things like a Pearson correlation.
In answer to your question as to why it is the way it is, I went and plotted the predicted v. actual wind;
And I'd have to say their predicting is pretty good!
I also had a poke around the BPA website looking for raw wind data, but they don;t have any, though I can ask for where they get it from.
I did find this article about their prediction process;
http://www.bpa.gov/corporate/WindPower/docs/wind_forecast_technical_1130...
Now, most of their turbines are in the Columbia Gorge, so they will all behave the same way. And, it seems that what often happens is they get a "ramping" event, as marine air pushes inland and is concentrated in the gorge, and the ramping happens very quickly. From the look of things, there are obviously times when the wind is very low, and it seems the geography does a good job of quickly concentrating available wind into high wind, but there are times when you are becalmed. Since the Ontario wind farms are more spread out, and over open country, I would expect a greater distribution.
The paper does mention some cyclic day/night variations in summer, so my suggestion is to do your histograms on seasonal blocks, and see if they come out any different. Similarly for correlating with Ontario, the effect of winter fronts at BPA will not be much in Ontario, but summer day/night cycles might have better correlations.
I am trying to get hold of more data from a couple of other areas (e.g Texas) so we can get a "continental" picture - I'd really like to answer the question about whether the wind really is always blowing somewhere.
I plotted the data from the graph you gave me, from spreadsheet columns H and I; if you say it was %capacity then I trust you.
Web,
Looks like I jumped the gun about curtailment - they are doing it right now, but that is actually the first time they have had to curtail the wind farms (there will be the inevitable lawsuits, I'm sure) .
http://info.bpa.gov/afterhours.aspx
Anyway, there have been no curtailments in 2010, so it looks like the data is the data - obviously a great place for wind energy at C. Gorge, possibly because it is *not* a Rayleigh distribution?
Glad you and your bike survived that tornado - that'll make for a great fireside story!
Definitely not a Rayleigh as it has a very fat tail.
The cross-correlation function:
Max anti-correlation at zero lag
Hmm, interesting graph, though I need a bit more explanation to fully understand it. What are the units on the x axis?
What's with the lines at +-0.02?
What does this tell us about moving energy back and forth between the two places - is it viable?
is there any difference in correlation between summer and winter data?
moving energy back and forth between the two places - is it viable?
Yes. There's a small negative correlation, which helps - that means there is a small tendency for low output in one location to be balanced by high output in the other.
More importantly, the lack of positive correlation means that any time one is low there is a 50% chance that the other one is high. That means that the frequency with which the whole system is low is reduced (very, very roughly) by 50%. Or the depth of the deficiency is (very, very roughly) only 50% as large.
When we reduce the size or frequency of low output events we greatly reduce the cost of providing backup for them - we can use lower cost generation because lower efficiency or greater fuel cost is less important (for instance, diesel generation is extremely cheap capital-wise but expensive fuel-wise: if we only have to use it for 48 hours once per year the fuel cost doesn't matter); or we can use DSM more easily because a reduced frequency of use reduces the impact to the consumer; or we can reduce the amount of overbuilding of wind capacity required; etc.
So - every time we expand the size of the system we reduce it's cost. Every doubling reduces the overhead of backup by very very roughly 50%.
Certainly the "lack of positive correlation" (sounds like a politician there!) is a good thing for wind, but keep in mind we have two wind farms serving two loads, not serving one load. Sure there may be times when A is producing and B is not, but what if area A needs that power, that still leaves B short. Now, with a three hour difference, and say a 12 hour peak period, then you will have six hours where A or B does not ned that power, so you will have 50% chance to wheel from one place to another - though we are talking a distance of over 2000 miles!
I do agree that the less often you need peaking power, the easier it is to provide, and need not be as expensive as you say. Just run the engines on natural gas, like this beast. 48.7% efficiency - better than any SCGT and at the low end of CCGT. Don;t have costs though, but probably cheaper than turbines in this power range.
So - every time we expand the size of the system we reduce it's cost. Every doubling reduces the overhead of backup by very very roughly 50%.
Not quite. You still need the same capacity of backup, because there are still times when there is either no wind in both places, or none in one, and no surplus power from the other, which gives the same result. BUT, with the second, anticorrelated wind farm in the picture, you will need to run your backup less often, so you will save fuel and runtime, but not capacity.
Which comes back to my central theme with wind - it displaces fuel, but not capacity. More and varied wind farms in more and more places will displace more fuel more often, but little, if any, dispatchable capacity can be displaced.
This does lead to an interesting question when wind gets up into the higher % of contribution...If you have enough wind MW that, for a "windy week" you are standing down coal plants, you run into restart/reheat problems, or you are idling the plants hot, which is wasting fuel. One answer to this question is to shut down the coal plants, of course. But the coal industry's answer may well be to go to coal gasification, which can then be run in engines like the Jenbacher, or in gas turbines. You can store some coal gas, or even use NG for quick startup while the gasifiers get going (about 1/2hr) More expensive, for sure, but I don;t expect the coal industry to just lay down and die!
The cross-correlation and autocorrelation functions are related to the idea of kriging, where you try to figure out where good mining or oil prospect locations are based on sample locations. If you can find positive correlations at some distance you have a better chance of succeeding with a test drill. same thing for global climate change studies when they try to fill in missing locations.
The function I used was pulled out of R and I don't think it worked real well because the data has to be temporally sorted which I don't think it was in this case. One series was sorted by wind speed and the other paired up with the time stamp. So I think it messed up with a true cross-correlation against time lag.
Well, the BPA, or any seller, gets to decide which sources they will sell, and Ca wants the renewables, so that is what they get. BPA is happy to sell high to them, and keep the cheap thermal for itself.
I'm not saying it makes sense, but then, very little in California does anyway.
If BPA didn't have an export market, thermal would be reduced dramatically, right?
It already has been, for the current conditions - thermal is near zero.
However, in August it is a different story, the river flows are down, they are drawing on storage, the BPA load is higher - so at that time of year, they are running less hydro, and often only at peak times, and the thermal is the baseload. Quite a balancing act, but its easy to do when you have so much hydro.
Since there is no carbon trading scheme - the smart thing to do is use the thermal yourself and sell the renewable to someone who is silly enough to have imposed such an ambitious renewable target that they only way they can meet it is by imports - which is Ca, of course.
Ca is a state, that, much like the USof A itself, has trouble living within its resource means - and they are starting to pay the price, for both water and energy.
It already has been, for the current conditions - thermal is near zero. However, in August it is a different story
We should take a look at the data - that doesn't sound right, given how much larger hydro output is than local demand.
the smart thing to do is use the thermal yourself and sell the renewable
Or pretend to.
I'll plot up the data later today. BPA typically exports 40% of its production, but more in spring freshet when a;ll the rivers are running full.
Or pretend to.
Not sure what you mean here? In electricity trading you never get the actual electrons produced from a specific source, but you can assign the consumption to whichever sources you like, but you can;t assign more than a source produces, and consumption must equal production, all the time.
I see no problem with them selling the wind power to those that want to pay extra for it. You can pay extra for the same thing with everything from wine to airline seats, why not electricity?
I see no problem with BPA exporting to CA, but it certainly looks like both sides are providing misleading public relations: BPA is mostly exporting thermal power, not hydro.
Again - hydro has no marginal cost, so if demand were to be limited to BPA's demand, the thermal would almost entirely go away. The arrival of an export market means firing up the thermal generation: the hydro would be used either way.
Nick,
You have to remember that BPA does not own all the generation , and does not own any of the thermal, they are the grid operator, who also happens to own a bunch of hydro facilities.
What we actual;ly have here is a pretty "efficient" market, with a bunch of buyers, and sellers, and different sources, within the BPA.
On the wholesale market, anyone (the generator) can sell to anyone, usually the highest bidder. If the Ca utilities want to buy wind and hydro power (because they are forced to by the RPS), then that's what they specifically ask for - BPA can sell to them if the Seattle and Portland utilities don;t want to pay the premium. The thermal goes to whoever doesn't want the renewables.
In the spring, hydro can and does out compete thermal - nothing wrong with that. Now, because BPA has only limited transmission, when they get to that point, someone else has to give up, that is what is happening now. so we have rationing by transmission capacity. If the thermals (or wind) wanted to build their own lines, they can party on, but they choose not to, and accept the seasonal curtailments - cost of doing business.
Here is the picture for all of last year;
So just remember, the Seattle, Portland and other distributors are all customers too. Anyone can buy the "organic" electricity if they want, but like real consumers, not everyone thinks it is worth the money!
The thermal goes to whoever doesn't want the renewables.
And, as you note, electrons are anonymous - you can't tell their source.
If we look at the chart, we see that there are very few periods where hydro can't cover the full local load. I'm not clear on the various contractual relationships but it seems pretty clear that as a practical matter the thermal is being exported: if there was no export market, no one would buy the thermal. CA may be willing to pay a premium for the hydro, but that in turn creates a market for local thermal generation to replace it.
If we look again at the chart, we see that exports and thermal track each other pretty closely except where hydro has a big surge in production and thermal disappears for about 4 months. But, where hydro is lower, thermal rises to the level of the exports.
So, the thermal only exists for 8 months of the year because of the export market. If the export market didn't exist, there would be very little thermal generation during those 8 months, right?
If the export market didn't exist, there would be very little thermal generation during those 8 months, right?
Sure, but the market does exist, and the BPA was created, in part to manage this. I don;t think it's reasonable to say "if" the export market didn't exist, because if it didn't then some of these plants would not have been built in the first place. It's a bit like saying what would a farmer do if they couldn't export their produce?
The local market used to be greater - there was a substantial aluminium smelter there somewhere, which closed down because the power was getting too expensive. Other manufacturing has been driven out of the PNW for the same reason - they have "exported" their production elsewhere.
I should also add a good proportion of that thermal (almost 1000MW) is biomass power plants associated with sawmills and pulp mills. They have wood waste to burn regardless of whether power is being generated or not.
Looking at the chart, you could equally say that local load is always greater than thermal, and the hydro is what is supplemental
CA may be willing to pay a premium for the hydro, but that in turn creates a market for local thermal generation to replace it.
Yes, that is part of the problem with creating state RPS in an interstate market- when people are mandated to buy a specific part of the market, whoever buys it first, makes the other part of the market cheaper for everyone else. The best gaming strategy is clearly to wait for those with RPS to buy, and then pick at the (non renewable) scraps left over. The same amount of electricity will be produced and used, but Wa and Or are making lots of money of Ca's desire to label themselves green - who is smarter here?
This is why I maintain a broad brush carbon tax is the better way to go - you can't game that system.
I don;t think it's reasonable to say "if" the export market didn't exist, because if it didn't then some of these plants would not have been built in the first place.
That's an excellent point: was any of the hydro built in response to the export market?
you could equally say that local load is always greater than thermal, and the hydro is what is supplemental
The power source with zero marginal cost will always be used first. That means that if the export market didn't exist, the thermal would be dropped first.
Think of it this way: every marginal increase in power demand in Sacramento is met with increased production from BPA thermal power plants.
a broad brush carbon tax is the better way to go
I agree very strongly.
The problem: a carbon tax is effective and simple. It will move us away from FF, so FF industries fight it desperately. Renewable subsidies and carbon trading are less effective, so they're less of a threat and so more acceptable.
I don't, know which was built for what. In keeping with the American tradition of Balkanizing things, many of the dams are "federal owned", but some are not, the thermal plants are privately owned,. as are the wind farms, some of the transmission is BPA and some is not,. etc etc The federal dams may have been built as "stimulus" projects, irrigation diversions, who knows what. I'm not sure that there's any point trying to unravel it.
I agree thermal would be dropped first if the export market were to dissappear, but since it is there, always has been and always will be, it's an academic point. The farmer might eat his organic tomatoes himself if there was no export market, but if a buyer will pay the premium, he will sell them and eat the seconds himself. I see no reason to treat electricity any differently - every place is interconnected (except Hawaii and Alaska) so there is always an export/import market.
I agree that when Sacramento is only buying the renewables, they can only buy as much as is produced, and something else will come on to supply the local market. That is how the "renewables market" works, just like organic tomatoes. neither has led to a decrease in production of non organic product, though it seems to be making it cheaper. There will always be someone who buys on price, not principle, so there will continue to be a market for the inorganic electricity. Until it is taxed appropriately, of course.
The carbon trading systems are no better, and just create cost and commissions for traders, they may lead to a cap on carbon, but that cap will also be the floor too. Agreed absolutely about why the legacy industries fight a carbon tax. so it has been as ineffective as subsisides etc.
Here in BC they gave exemptions to said industries in return for their support of the carbon tax!
What has been effective - sort of- is a complete moratorium on coal fired generation in BC, unless it employs full CCS. So there is not one coal fired plant here, but at night time we buy coal power from Alberta and Wa. However, BC is a major producer of metallurgical coal - all of which gets exported to China/Japan/Korea - carbon tax exempt, of course.
The amount of game playing going in is truly saddening. I think a real financial crisis/depression is needed to so that all gov'ts have to cut away all this crap in order to survive - we are not there yet.
I agree. I pray Solar Energy will become cheap sooner rather than later.
..and what if it doesn't become cheap? How do you gauge when it is WORTH the Price?
We're so fixated on Cheap. What investments did you make in your life where you realized that the 'cheap purchase' was clearly not the one you needed to be looking for? Education? Nutrition? the House? the Car? the Kids' Bikes? their Dentist?
I think that's the calculation that we have to consider around energy. Just like with Cheap Junk Food, we had a good run gobbling up cheap junk, and maybe we never even sensed or were burdened by those costly externalities, or we never connected them to these cheap calories.
We have to connect the dots and not just look at Dollars/Watt.
Price as a lone metric has drawn us to make some very bad choices.
It would be awfully nice if we could get wind and solar cheaper than dirty coal (even without internalizing external costs like CO2, other pollution, etc). Of course, that's mighty difficult, but I think that's what the other poster had in mind.
I suppose we all agree that if we only had a number that gave any sort of fair accounting for the damage wrought by coal, then Renewables would already appear as hands-down winners.. but even putting it all into monetary terms lets the argument happen on 'Their' court. It dangerously narrows the focus to our arbitrary trading schemes, and not the other critical aspects of life. This, I think makes it easy to create 'false winners' by cheapening out the invisible externalities. I think it's essential to broaden that discussion, and do so in a way that shows these as intrinsic issues, as opposed to nagging 'moral' ones, which many are all too happy to dismiss as preaching.
It's a question of considering values that go beyond cost. Some people put a high value on Handmade Goods, some will pay good money for quality food, or for enriching experiences, cultural and social connections and for Education. Many people understand that there are things that you simply need to pay real money for, if you want real goods, real value.
It's important not to degrade things because they are expensive, as if that odd contradiction were some kind of law. Even a poor suitor will try to get a real gold ring, or show up with real Roses.
The 'cheap energy' argument is a handy distraction, in my opinion.
Speaking from an economist's point of view, the HUGE problem is that the external costs of burning coal have not been internalized. For this reason, many economists have been advocating a stiff carbon tax for some decades now.
Of course, politicians only listen to economists when it is in their (the politicians) interest to do so. Because a carbon tax--like most taxes--will tend to retard economic growth it becomes another third rail of U.S. politics: Touch it and you die.
Now there are ways to get around the growth-retarding effects of a stiff carbon tax, but those ways are unlikely to be implemented. Politics is the art of the possible, and in the U.S. carbon taxes (even low ones) are impossible, at least for now and the foreseeable future.
yes, yes and yes.
Because a carbon tax--like most taxes--will tend to retard economic growth it becomes another third rail of U.S. politics: Touch it and you die.
I think that's a bad way of framing the issue. The real problem: resistance from legacy industries, especially in the remarkable form of the Koch brothers.
A moderate carbon tax will likely enhance growth in the US, if introduced slowly and predictably enough to not shock the economy. There are multiple reasons for this. The markets needs stability, and the current deficit pose a risk on many levels, and a carbon tax would be a much less damaging way to bolster government income than higher taxes on income. Also, a carbon tax would actually internalize some costs that aren't directly targeted, such as road congestion, traffic accidents, particulates pollution and so on. This would mean direct savings for the US economy, which curbing CO2 releases in the US alone won't in itself.
However, if the US threw it's weight behind mandatory national CO2 taxes with a globally agreed floor on climate summits, it would probably get its way and it would be a global optimization that wouldn't just shift oil consumption elsewhere. Also, due to price elasticity of oil, the taxes would suck a bit of the oil profit out of oil producers' pockets and put them in importing nations' tax coffers.
The "conventional wisdom" says that carbon taxes will increase prices and also reduce real economic growth. Conventional wisdom rules in politics, and politics makes the tax laws.
Thus the green movement in general (not only advocates of carbon taxes) is seen in the U.S. as antigrowth. And to be antigrowth is to be beyond the fringe--utterly outside the mainstream and hence irrelevant.
Of course, I do not believe in the conventional wisdom of economics--and I never bought into it.
I'm not convinced that this is the conventional wisdom. I think most economists would agree that taxes are needed, and most would agree that a CO2 tax would be one of the less disruptive taxes.
Also, internalization of external costs is a quite accepted as a form of optimization in economics. I think you would be wrong to dismiss conventional wisdom of economics.
Economists--almost every single one--strongly favor the internalization of externalities through taxes and subsidies. Probably 95%+ of all economists strongly favor real economic growth in real GDP. Thus they have come up with plans to minimize the growth-inhibiting characteristics of a carbon tax.
The conventional wisdom is "Do what it takes to maximize economic growth, up to the point where full employment is achieved." So long as we have this fixation on economic growth as the solution to all our economic and social problems, protection of the environment takes second place--a very distant second place.
Of course CCS is a theoretical possibility--but hardly anybody is doing it. To keep electricity cheap, most economists would advocate continuing the burning of coal. (There are some environmentally aware economists; they are few and far between and far outnumbered by the growth-at-any-cost school of thought, which is the essence of conventional wisdom in economics today.)
"So long as we have this fixation on economic growth as the solution to all our economic and social problems, protection of the environment takes second place--a very distant second place."
I smell a whiff of moldy straw - all our problems - but that quibble aside, for useful public-policy purposes we'd need a set of alternatives that the public at large could imagine swallowing on a scale large enough to matter. That would need to involve full employment at something that could be seen as minimally decent jobs, or an adequate substitute. We've had a lot of angry picket signs and yelling up at the State Capitol lately, condemning the destruction of the middle class. So I would infer unhesitatingly that, for example, condemning large numbers to live as medieval peasants, as seemingly advocated by some doomers in pursuit of their wholly imaginary Arcadia, couldn't conceivably qualify as a valid option.
Indeed, there seem to be few if any qualifying alternatives in sight. For further example, sackcloth-and-ashes stuff about buses, bicycles, toolshed-size houses, and so on, as encountered in these parts, wouldn't go over hugely better than medieval peasanthood. Plus, motivation to venture into the unknown or potentially-miserable as opposed to applying presumably tried-and-true remedies such as restoring growth is in short supply. Set against major numbers of people not having incomes, we can expect the abstract state of the polar-bear population in the far reaches of the back of beyond to be off the radar screen except to specialists and stamp-collectors of "species", although we will of course forever be burdened with quasi-religious zealots and those seeking cudgels to beat tiresomely upon evil wicked businesses.
So really, when we get down to brass tacks, what's a public-policy wonk to do?
Clearly, the public will never agree to a voluntary reduction in growth, a steady state, or a permanent lower level of economic activity. However, growth will stop and there will be a decline regardless of what one thinks about sackcloth and ashes. The question, really, is how does one manage an economy in a steady state mode either at the current or lower levels. I don't think bicycling and transit is sackcloth and ashes even in climes more severe than Amsterdam and Copenhagen like you do. Besides, people will do what they have to do which may include bicycling and, gasp, walking even in terrain and climates that are not ideal. Many people do it right now and don't seem to suffer all that much. I know I have personally commuted by bike in all kinds of weather and it really wasn't that big a burden.
But yeh, you are correct that the vast majority of the people are too lazy or unfit to take on much of a muscle powered commute to anything other than maybe their mail box at the end of the drive way. I have even heard about people who drive their car to the end of the drive way to pick up the mail.
There are places like Portland which are at least trying to move to a situation where every day needs would be within 20 minutes by bike or walking for everyone. This seems like a useful goal even if it does not solve all problems associated with a downshifted society..
I don't think there are many people advocating medieval peasantry as a policy prescription. People are just talking about communities where it is possible to reduce one's dependency on the auto. As far as misery goes, it is lack of alternatives that is causing the misery.
Climate change, of course, is not just about what you call the abstract notion of polar bears disappearing. It is also about viable supportive agriculture disappearing and potential mass suffering. Riding a bike in hot weather might be uncomfortable. Not eating is suffering.
Of course, some would argue that this whole discussion is just silly. We are not really going to care if people are bicycling or walking when the big dieoff occurs.
In the mean time, certain cities and towns will continue to take steps to make the auto not so ubiquitous and make it easier to get one's daily needs taken care of without having to drive all over town. It is about choice and it appears more and more people are making different choices.
Btw, even if peak oil and climate change were not an issue, there would be a tremendous increase in the health of the population if a lot more people got off their ass and used their legs and bikes once in awhile. Maybe exercise would seem miserable for awhile but as their health improved and their waist line decreased, they would eventually see the benefits. Commuting by bike, for example, is a twofer. You get to work and you are done with your exercise for the day by the time you get home. Survival of the fittest.
Not when environmental damage inhibits growth and costs money. And in the case of climate change and fossil pollution, it most definitely does. The main issue, except for the irresponsible US stance on this matter, is that this is a tragedy of the commons and thus require collaboration between states, and the world community seems not mature enough to pull that off if the US doesn't take the lead.
Garrett Hardin said there was a unique solution to the tragedy of the commons: "Mutual coercion, mutually agreed upon."
IMHO, there is no way during the next dozen years that the U.S. will agree to "mutual coercion, mutually agreed upon" in regard to CO2 emissions. Thus we are going to stay in the social trap of the tragedy of the commons.
Americans hate to be coerced, and they have always hated taxes. Only a dictator of the U.S. (coming within 12 years, IMO) could force a rational scheme on the U.S. in regard to carbon taxes. So long as we are a republic, the anti-tax (any tax on most anything) forces will win.
And there's no guarantee that a dictator would force carbon taxes or the like. Indeed, many of the world's dictators have been (pseudo-) populists. Thus, a dictator might well be "hired" (as it were), along populist lines roughly paralleling "drill, baby, drill". The very point of the "hire" would be to do something at long last, by bypassing a presumed petty, squabbling, useless, expendable, do-nothing Congress. As I keep saying: like it or not, the folks yelling their heads off on the steps of a number of State Capitols are not demonstrating for toolshed-sized houses or astronomical electricity or gasoline prices. They're quite explicitly demanding a restoration of middle-class life as they knew it.
Also, BTW, there's little reason for either the American public or a dictator to care a whit about preachy European Union bloviation on such matters. There's little if any downside to turning a stone-deaf ear, and should the EU's ongoing strenuous efforts to blow itself up financially succeed, there will be none at all.
On the whole, no particular incentive, domestic or foreign, to bring in carbon taxes or the like.
I suppose the point was that if solar energy became cheap, the decisions would become no-brainers or at least much simpler. As matters stand, with it being rather pricy, somebody has to decide when it has become "WORTH the Price", if enough of it is ever to be installed to make a difference. A threshold like that can only be set arbitrarily, which leads to endless unsettlable arguments - as we are indeed seeing out there in the real world, like it or not.
Now, as Don Sailorman says below, it should help to internalize external costs, but even that is fraught. It will turn out like EROEI, where you can get different answers depending on where you draw the boundaries, i.e. which costs you include or don't include, which indirect benefits you include or ignore, in analyzing competing approaches.
So in real life, it tends to become a Rorschach test of philosophy more than anything else. Thus we often see energy arguments used heatedly as proxies for pre-existing philosophical views about other matters. For example, someone might profess to hate cars or suburbs or whatever for aesthetic reasons. Since society at large is mostly disagreeing with, or at least not caring about, the aesthetic aspect, it's convenient to try to advance the argument by hanging it on an energy hook instead.
So true.
Surprisingly, even very conservative economists (e.g., Cato Institute) and oil company veterans will agree that there should be a certain minimum charge for external costs. I've seen $1/gallon several times.
And perhaps that's a reasonable figure, or perhaps not. I tend to bin it with other Suspiciously Round Numbers such as 2C for AGW. Always hard to tell which of those embodies some rough reality, and which are merely slogans.
With people like that (very conservative economists (e.g., Cato Institute) and oil company veterans), we can assume they rounded down.
1 gallon of gasoline results in about 9 kg CO2. To produce 1 kWh of electricity using coal, you let out about 1 kg CO2. So if that $1 internalization was all about CO2, coal electricity should be taxed at approximately 1/9 = $0.11/kWh. That would be a nice push for alternatives.
It would be enormous - in the utility world tenths of a penny are huge, so a carbon tax of $.11/kWh would have an enormous impact.
It seems Matt at 'crudeoilpeak.com' has done a new post which, finally, does not focus on Australian domestic concerns. It's quite interesting and it's tangential to this current disucssion on forecasts:
ASPO: 2020 crude oil production down by around 8 mb/d
http://www.crudeoilpeak.com/?p=3297
This is an interesting comparison. The Oil Conundrum crude oil projection closely follows the Uppsala projection even though mine is based on a completely different approach (a scientific and statistical model) than what they use.
The WEO outlook is higher based almost completely on fields yet to be discovered, which they place more optimism on.
finally a reasonable post on the topic, this idea that oil production would fall off a cliff passed peak always sounded against any sensitive analysis of existing records. The plateau will last longer than expected and decline will be slow, hopefully leaving time to adapt to new technologies like electrified transportation, other technologies, like biofuels, coal to liquid, natural gas, fuel efficient cars and others will help to mitigate the pain during the transition.
the rest is literature...
Thanks again for the post
That is sort of the picture I have juxtaposed in mind too.
I see President Obama sitting in the driver's seat, staring only at the rear view mirror (the one shown up top). I see him pressing harder on that Arctic drill-baby-drill pedal and saying to himself, "so far so good". I see the US Congress sitting in the back seat of that car, praising his "yes we can" attitude. Yes we can just keep pressing forward as if nothing dramatic has happened.
There is no hard stone wall to be hit as we slide smoothly over the hump and glide gracefully down the decline side of Hubbert's mad car race.
Except that, like the frogs in the gradually warming kettle, there will be an "Oh oh" moment when we finally realize it's too late to jump out. We're cooked and there's nothing we can do about it at that point.
sb - Slow morning so I'll toss in another analogy for your consideration. Yes...not a cliff...never thought it would be...old oil fields typically show very low decline rates once they're well past their prime. Cantarell was a big exception, of course, but it is very unique.
So back to our undulating plateau which is really more of an undulating down slope IMHO. An occasional little hill to run up and over but still heading down into the valley of despair. But cornucopians have an expectation of us being able to hit the brakes and stop our decent. Might be "drill, baby, drill" or some new God-send of an alt or whatever. But here's the new spin: the down slope is also very wet and slippery. So when we start applying the brakes we don't stop but start hydroplaning. Maybe a momentary sense we've improved our situation but it doesn't last long. Some short term apparent improvements can turn into more problem than solution, (as some folks describe Iraq, for instance.)
So there's my offering for a new visual of PO: A long term down slope with a few up bumps along the way but wet and slippery making any effort to radically reduce our speed downward impossible. IOW: the DUH slope. As in Downward Undulation Hydroplaning slope
Rockman - what you say makes sense. If there is no route other than oil to get where we're trying to go.
You're a guy who knows that stuff breaks and sometimes you have to cobble together a new solution.
Homer Simpson calls it the "D'Ohh" moment:
Descending 'Over Hubbert's Hump
;-)
Careful. Verbal arguments don't help. Subsystems can experience a collapse. Have a look what happened in Iran before the fall of the Shah, during the 2nd oil crisis:
http://www.crudeoilpeak.com/?page_id=2425
The bumpy plateau is an upper oil-geological bound. If this is accompanied by socio-economic unrest or other problems, as we experience just now, this can quickly lead to steeper declines.
I call your attention to the words "against any sensitive analysis of existing records".
Problem is, existing records will be pretty useless in determining post peak oil decline profile.
About the only thing we can be certain of, it won't be gradual and well controlled. Certain countries will go to the wall as financial and societal pressures break them - freeing up their consumption for others to mitigate the decline. Games will be played to make this happen to certain countries and regions benefit.
The decline rate that you personally see may well be very cliff like.
I find myself struggling with this too. By most projections we're somewhere between -4 and 4 years from the post-peak production decline (depends on how you measure "oil" as Gregor points out above), yet we have so little clue how the decline will manifest itself. Will it be a decade long plateau? Will it be sharp drops with brief periods of stabilization? Will it be a 1-4% smooth decline?
It's a bit troubling to me that this very important question - what the decline will look like - has gotten and is still getting little attention and not enough analysis is going into it, and the analyses that do exist disagree in fundamental ways.
I think the evidence is that underlying decline rates are at the lower end of expectations, which says that from a resource only point of view that the post-peak decline could be moderate, leaving plenty of time for adaptation. Lots of ways for above ground factors/feedback loops to make it worse though..
Decline and depletion are different though. Decline is lessened by improved extraction via super straws, but depletion is increased. So instead of a pay me now scenario, its a case of pay me later. But later will be in the form of a great shock to the world economy from reduced exportation. The two major exporters are Russia and KSA. Once one of those has dramatic drops in production like what happened to Mexico via Cantarell, maintaining BAU will be difficult.
Yes. Critical to remember that.
Also, ELM, which I think most all here accept as valid, combined with disparate purchasing power (and military power) between importers, makes it seem unlikely that many of us will experience the downslope as smooth and gentle, whatever raw production looks like.
True, ELM as well.
dou;
We all have some philosophical angles we want to fit into our predictions, or vice-versa, but don't forget that the historical oilfield data we can look at that shows that nice Gaussian Curve, this reflects fields that have brother and sister fields around them (in a global sense), so the arrival and departure of their individual productivity is generally not too dire an issue. They don't each create significant feedback loops in the world economy the way an overall downslope might.
Whether it's price signals, straining working classes, or some obscure hiccups as some upstream industry discovers it's back has been broken, there are a number of unreasonable ways that we might hit a cliff with all this. Might.
When you said you were glad to see a 'reasonable' post, it triggers a bit of middle-class 'code' for me, since my tribe seems to insist on being reasonable, nice and pleasant. "Noone expected a breach of the Levees.." GWB
I'm not saying I am all sold on a disastrous ending.. but I do think we need to look that the disastrous potentials if we are going to be in any way able to prepare for some of their aspects. It's why I ask the Doomers to speak with 'It Might' instead of 'It will', and ask the rest to avoid saying "It never will"..
They don't each create significant feedback loops in the world economy the way an overall downslope might.
Of course, those loops can also be negative feedback: individual field decline doesn't raise market prices, but global decline does. Price increase raise production and lower consumption, facilitating adaptation.
For instance, in the US production has bottomed out and started rising, while consumption has topped out and declined sharply.
Could you elaborate on the brother and sister fields and how that relates to a Gaussian curve?
Sorry, no, unfortunately not. Only physical shortages will force governments to change course.
Here is an example from Australia, where the new budget for 2011 spends 1.7 times more for highway duplication than rail development.
13/5/2011
Australian 2011 budget allocation road/rail will not mitigate oil crunch
http://www.crudeoilpeak.com/?p=3266
Only physical shortages will force governments to change course.
In the US, public policy has brought us both the Prius (from the PGNV program) and the Volt. I'd say Israeli public policy brought about the Nissan Leaf.
Those are big developments.
Things that fall off a cliff upon the systemically-derived definition of 'collapse':
Thing - Cliff of collapse
usability of silicon glass - dropping it from a sufficient height on a hard surface
acceleration potential and speed - empty petrol tank
oil well production - curtailing economic inputs
computer, Internet, light bulbs - power outage
taking a breath - suffocation or drowning
your ability to walk - breaking a leg
living body mass - death
These are systemic examples, as opposed to the linear thinking and blinders which dominate the playing field of mainstream petroleum production analysis. These are why there will be a die-off, and perhaps near-extinction.
Hi 710
re: "living body mass - death"
Thanks for the reminder.
Time to get up and take a nice, brisk hike somewhere.
Several years ago I attended a lecture by Nansen Saleri at MIT, where he spoke in favor of the "undulating plateau" of oil production. The evidence he had for it was comprised of the production profiles of several oil fields he showed in his slides, whre the decline was very gentle. His argument was that the secondary and tertiary recovery methods used on most oil fields are expensive enough and slow enough to ramp up, that we can't help being slow to set them up, and so since secondary and tertiary methods can account for most of the production of a field, the result is a gentle decline.
In retrospect, I think he was right. That does appear to be what is going on. That also explains why he was going on that tour. Secondary methods involve a large outlay of capital which Saudi Aramco could not do in the face of a worldwide campaign to get weaned off oil.
This is hardly a cornucopian argument. We still need to get off oil, just not in such a way as to bring oil producers into a panic. And an "undulating platueau" still means a radically undulating price for oil, with all attendant economic consequences. But it is good news.
Areas of the world that are seeing increased oil production and will see no EOR to keep the "undulating plateau" going:
Bakken formation of northern US - steep decline in each well that is not reduced much by secondary fracturing.
Brazillian deepwater, pre salt/sub salt - repressuring reservior not economic.
US deepwater GOM - same as Brazillian problem
Canadian tar sands - by mining they already get 100% of the oil and THAI (higher EROEI) creates huge emmision problems, while SAGD leaves tar behind that is very low concentration .
US fractured shale plays (Eagle Ford) - same problem as Bakken
Nigerian, Angola, other West Africa deep water - same problem as Brazilian deepwater.
Other oil production areas of the world have been using various enhanced recovery methods for years, including Iran (used steam injection during the 1970's under the Shaw's rule) and KSA which has been injecting sea water and nat. gas for decades, while using horizontal wells for ten or fifteen years.
EOR going to give us undulating plateau? Not likely. Many fields will not use enhanced recovery since the cost of implementing that techonolgy will rise as price of oil increases, thus keeping it a "horizon technology". Some recovery techniques depend on cheap price of natural gas, such as steam injection, and if natural gas rises to oil price or above then steam becomes uneconomical in many applications.
Unless oil can have a continuing rising price, which the economy cannot withstand, do not expect this finite resouce to maintain constant production. It will decline as the economy slowly declines and price fluctuates.
Canadian tar sands - by mining they already get 100% of the oil and THAI (higher EROEI) creates huge emmision problems, while SAGD leaves tar behind that is very low concentration .
You have this the wrong way round. Higher EROEI means lower emissions.
The price of oil has dropped a little these past couple of days and the optimists are trying to see this as a structural realignment. This seems to be what keeps happening: the price continues to rise in the usual jagged progression and every time there is a drop it is heralded as a window on the future - faith!
The reality seems to be that a combination of banking induced economic decline (probably prompted by energy unaffordability - but this not acknowledged of course) plus natural disasters, and concurrently the introduction of some very expensive new liquid fuels and the hopes built on gas fracking, are allowing, at huge cost, the economies of the world to stagger along on a plateau of business as usual while the pundits wait for the economic gurus to construct the magic finance trick that will allow the good times to roll again.
The fact that energy production is very slightly increasing - at huge cost - is for me a symptom of oil's decline. If it really was so abundant all this shadow boxing and tricking with energy mirrors wouldn't be necessary.
The Hubbard peak is not a peak any more than the expansion incline was that near vertical step pyramid we see in our mind's eye. Oil production ramped up over decades and now it is levelling slowly off while we fight like demons to squeeze, grow, blast and melt enough new oil out of the ground to con ourselves that we continue to live in normal times: we don't.
The THAI process to extract bitumen from tar sands uses air injected into the formation and the bitumen ignited to creat an underground fire that drives the shorter H-C chain bitumen out. Some of the bitumen is combusted (oxidized) in the process to create the heat and gas flow that brings the bitumen to the surface through the grid of collection pipes. When the liquified bitumen (somewhat upgraded) reaches the surface at atmospoheric pressure a lot of combustion gases are released.
Because these gases are created in a high heat, high pressure and somewhat deficient oxygen condition, lots of emissions (pollutants)are created. These include oxides of Nitrogen, CO, CO2 and of course H2O (not pollutant but an emission). Because the external energy input is very low (some of the bitumen is combusted underground to make the process work, maybe 20%) the EROEI is higher than mining tar sands. But these emissions previously mentioned must be dealt with if the process is to be used. Some have suggested using nat. gas incineration to eliminate NOX and CO, thus lowering EROEI, but still above mining.
I hope there is an ecological breakthrough, but in last Sunday's Sunday Times (UK) it was mentioned once more that world oxygen levels are actually falling, not relative to other gases but literally reducing. We are told this is as yet of no threat to humans, but the reduction is apparently man made and a result of our economic activity.
So not only are we adding pollutants, we are also lessening the gas that all life depends on. Well done humankind!
This is worrisome in conjunction with the dropping phytoplankton in world oceans. Given howmuch they have reduced it is a miracle we have not seen O2 levels dropping off earlier. If this is a begining trend then good morning to you all.
Do you have any sorce?
I think this is the article he's referring to. It's talking about world ocean oxygen levels falling due to warming surface waters.
http://www.timesonline.co.uk/tol/news/environment/article7010378.ece
They are not talking about oxygen disappearing out of the atmosphere, they are talking about the oceans becoming anaerobic due to plankton blooms. The former is nearly impossible except over geological time periods (millions of years), the latter has occurred on a fairly large scale in the prehistoric past and in fact is the source of most of our oil.
However, it's mostly just routine main-stream media fear-mongering. They like to panic people from time to time to improve sales. The Baltic and Black Seas are anaerobic in their depths, have been throughout human history, and are probably generating new oil even as we speak.
I threw the paper out I'm afraid, but I don't remember it stipulating ocean oxygen levels, rather atmospheric ones.
I may of course be wrong, but I was shocked and since I have known about falling O2 levels in seawater for a long time I really do believe I was reading about the atmosphere. I also don't believe this was scaremongering because the article stated that at the the present depletion rate there would be no effect on humans for centuries, but it was the very idea that oxygen levels are actually falling due to human activity that shocked me. It shouldn't affect any of us, but just stating that alludes to the same complacency that is also generally applied to energy supplies, namely - it won't happen to me so I needn't be concerned.
The former is nearly impossible except over geological time periods (millions of years), the latter has occurred on a fairly large scale in the prehistoric past and in fact is the source of most of our oil.
pray tell, how are you not talking about
over geological time periods (millions of years)
when you say
the latter has occurred on a fairly large scale in the prehistoric past and in fact is the source of most of our oil?
Oh you substituted the word prehistoric past which generally though not always indicates a fairly recent past in which humans may even have been involved for geologic time periods which always indicates very long time scales which can predate life itself. Nice and disingenuously nuanced.
they are talking about the oceans becoming anaerobic due to plankton blooms which compares in scale to The Baltic and Black Seas are anaerobic in their depths, have been throughout human history, and are probably generating new oil even as we speak how?
They are not talking about oxygen disappearing out of the atmosphere, they are talking about the oceans becoming anaerobic due to plankton blooms
You have been know to convolute or at least over compartmentalize your facts whenever you write on this subject. Last I heard the oceans had a great deal to do with the amount of oxygen in our atmosphere and your stealthy shifting of terms like prehistoric and geological diminishes my faith in your summary--as, unfortunately, I've no idea what time frames or percentage change in atmospheric O2 the article was or was not referring to.
The tone and quality of fact presentation in the article may well have been of the fear mongering variety but I can't tell until I read it, you wouldn't happen to have a working link to this Sunday Times (UK)article you would be willing to post would you?
Luke, I really think you are nitpicking. Prehistoric times are times before history was recorded. True that usually means times when humans existed but written language did not exist so they recorded no history. But it could mean Jurrassic times. Those times were prehistoric also you know. ;-)
But you are correct, the Baltic and Black Seas are obviously not generating any new oil as we speak. Oil is not generated at the bottom of seas but deep inside the earth where the pressure is great and the temperature is quite high. "Coffee pot temperatures" is the term usually used.
But you should have just pointed out that error and left it at that. Let's not get overly dramatic about this.
I am really trying to say: "Let's not get too damn serious about this." We are only talking about the end of the world as we know it, so the least we can do is not get too serious about the matter. ;-)
Ron P.
Luke, I really think you are nitpicking.
yeh I get that way, I was about to change my phrasing at the end of that paragraph to maybe something about Rocky really being ol' president 'Slick Willy' in disguise ?- ) but you handled it better
--nice twist on the oil generation angle, I really only was referring to the relative volumes of the seas being mentioned.
But you are correct, the Baltic and Black Seas are obviously not generating any new oil as we speak. Oil is not generated at the bottom of seas but deep inside the earth where the pressure is great and the temperature is quite high.
Maybe I should have been even more nuanced and subtle and said, "The Baltic and Black Seas have started the process of generating new oil even as we speak. Or I could have said that they are now forming an organic mud that may in future become kerogenic shale, and which may eventually be buried deep enough by geological processes, and become hot enough, to be turned into oil. That might really have driven Luke nuts.
I don't know for sure that they aren't actually generating new oil even as we speak. It isn't completely obvious. I'd have to look at the geology of them to be sure, and that would be a lot of work for a completely off-topic excursion.
Luke, you are getting too nitpicky in your criticisms. True, I am using these words with a fair bit of precision - I used "geological time" because the Earth's oxygen levels do change very slowly, but have been known to change a lot over long periods of time - millions to billions of years. They haven't changed much over the period of human existence, though.
I used "prehistoric past" because the type of anaerobic sea conditions that lead to oil formation occur a lot faster, and I know of instances where they occurred in human prehistory. The overall time frame for oil formation is over the last 500 million years or so, but some oil has been formed in the last 5000 years.
I didn't want to turn it into an advanced petroleum geology course, but I wanted to keep it somewhat exact and nuanced since there are some people here who know exactly what I am talking about, in more detail than I do, and they are even worse nitpickers than you are.
I'm used to writing technical documents where precision of language can be critical, rather than popular news items where reporters ramble on about things they don't understand and often completely mislead the public. This results in a somewhat different style of writing which can be harder to follow. If you don't understand what something I said really means, just ask.
The fundamental point that I was trying to make clear, though, was that atmospheric O2 levels are not at short term danger of collapsing. Ocean O2 levels are somewhat different.
the latter has occurred on a fairly large scale in the prehistoric past and in fact is the source of most of our oil.
gimme a break Rocky-nothing in that sentence differentiates the prehistoric past time frame from the geological time periods (millions of years) since you are talking about the huge plankton blooms that caused oceans to become anaerobic hundreds of millions of years ago which gave us the oil we are burning today. I am quite aware the process is ongoing whenever and wherever conditions permit. Scale was my quibble with your Black and Baltic Sea examples.
I'm guessing you did not read the Times (UK) article that Ulpian referred to-I certainly haven't been able to find it on the web, but you shot from the hip
and said
They are not talking about oxygen disappearing out of the atmosphere, they are talking about the oceans becoming anaerobic due to plankton blooms.
Obviously in this article oxygen disappearing out of the atmosphere is exactly what they are talking about.
I'd hazard a guess the Times article was based on this or some similar piece. By and large the article I linked is level headed and factual but it goes for horror movie jolt with at least one paragraph. It also could connect a few of the dots better, but that would dectract from the jolt they were looking for. Notice, I said I'd hazard guess on what the Times piece was based I didn't summarize it sight unseen ?- )
The fundamental point that I was trying to make clear, though, was that atmospheric O2 levels are not at short term danger of collapsing. Ocean O2 levels are somewhat different. Important point that can get lost in the numbers shuffle. As far as I can tell they are talking O2 drops beyond what gets combined in combustion CO2 of up to 10ppm (I could be mistaken) in a very short time frame. But then overall O2 concentration is over the 209,000 ppm. With only about twenty years of monitoring O2 concentrations in the atmosphere lots of hard to explain dips and bumps might be expected, but that does not mean that such can be discounted offhand, especially if there are a lot more dips than bumps.
gimme a break Rocky-nothing in that sentence differentiates the prehistoric past time frame from the geological time periods (millions of years) since you are talking about the huge plankton blooms that caused oceans to become anaerobic hundreds of millions of years ago which gave us the oil we are burning today. I am quite aware the process is ongoing whenever and wherever conditions permit. Scale was my quibble with your Black and Baltic Sea examples.
No, I'm not talking about huge plankton blooms, I am talking about formation of organic mud under anaerobic conditions. This is an ongoing process, which is why we have as much oil as we do. It occurred on varying scales - the Black and Baltic seas probably being typical. It occurred all over the world Sometimes it was bigger, sometimes it was smaller, seldom did it involve an entire ocean. In rare cases a freshwater lake resulted in the formation of oil, but in the Middle East it occurred on a vast scale over very long periods of time. It is just business as usual for Mother Earth.
I'm guessing you did not read the Times (UK) article that Ulpian referred to-I certainly haven't been able to find it on the web, but you shot from the hip
No, I did read it, and it started off,
So I dismissed it as typical mainstream media fear-mongering. The goal is to sell newspapers, not inform people.
If I want to read anything about this subject, I'll read it in a peer-reviewed scientific journal. I only listen to people who know what they are talking about. Everyone else I ignore.
The human history goes back longer than the history of the Baltic Sea. Just over the course of milennias it changes so much you need to make regular mas just like you do on a daily basis for the weather. It is a thing that has to do with beeing regulary covered by 3 Km of ice. A decade ago we builta bridge over to Denmark where our stone age ancesters used to walk.
But I have often thought just in time for the hedgehogs to develop into inteligent life, they will have all the oil they need in whatever they will name the bottom of the Baltic Sea. And create a second round of climate change.
Technically speaking, human history is considered to be the time period since writing was invented. The time before that was human pre-history. Actually, it is quite difficult to determine which goes back farther - human history or the history of the Baltic Sea.
Because these gases are created in a high heat, high pressure and somewhat deficient oxygen condition, lots of emissions (pollutants)are created.
A substance created within a process is not an emission. An emission is something which is emitted from the process. THAI generates a different mix than other processes and consequently it has different separation requirements. Just as you will find different equipment upstream of the injection well for different processes, you will find different equipment downstream of the production well. The emissions levels are set by the government, not by the process.
While THAI requires rather more processing on the gas than SAGD, the oil and water separates rather better.
The THAI process to extract bitumen from tar sands uses air injected into the formation and the bitumen ignited to creat an underground fire that drives the shorter H-C chain bitumen out
This is oversimplified. The bitumen is cracked and the coke is combusted, while the short chain cracking products are produced. It is inefficient at cracking and so requires further upgrading, but the THAI product is a lot closer to syncrude than other oilsand products, so the upgrading costs (and associated emissions) are lower.
The problem is that you can't figure this out by just talking about it. Who is this guy Saleri, is he the same guy who wrote "The World has Plenty of Oil" a couple of years ago? He is talking to a group of students at MIT and it appears that he doesn't present a robust argument. I don't see any model. I don't see any reference to a set of data. Those days are long gone that we believe in rhetoric and a weak assertion.
Sure, there is a phenomena known as reserve growth. Lots of evidence points out that reserve growth is much bigger in the USA than the rest of the world, likely due to more conservative reserve estimates.
Perhaps. But we've got a problem here that has no easy answer. In the context of a one-shot lecture like that, what, with respect to a "model", could the audience practicably distinguish from magic, or from more "talking about it"? Right, so the lecturer claims to have a "model". Whoopee, and the cold-fusion guys on the other thread likewise claim to have a model. But what possible set of tools could the audience conceivably use to validate whether a black box the lecturer lays claim to is useful - or even exists - with a reasonable amount of time and effort?
Who is this guy Saleri anyhow and why doesn't he have anything to back it up with? He's just jabbering away and he has nothing to say but the fact that he worked as some sort of bureaucrat.
So what do we make of this very slow decline? I would say, no need to do anything until 2030. By which time who knows what energy technology will be available. $0.50 per peak KW solar PV? $0.02 per KWhr solar thermal? TMSR (thorium molten salt reactors) from China with $0.01 per KWhr? The future looks bright and we have plenty of breathing room.(?)
Well, without any growth in China and India.
I'd say it could just as likely be the calm before the storm.
Growth in Chindia are not the only ways this could be undermined. You can hope for your desired price-points for renewables or a workable Thorium system to appear and save the day.. but that sort of 'what if' approach to the future seems dangerously passive in my view.
If the oil decline is slow enough, we have no worry but AGW since adjustments and alternatives will appear by market forces alone. (Nuclear solutions, however, need patron governments. We really should mobilize to research an array of nuclear breeder options, rather than chasing the impractical tokamak fusion option.)
Well that IF is exactly the point, though, isn't it?
edpell is suggesting that we can 'just sit there', it'll resolve itself, when given the uncertainty of either the overall rates of decline that are coming or the bumps that could hit independent of decline and, unannounced, knock out our go-go juices, along with perhaps the industries that love them, that we do ourselves a disservice to look for more reasons to justify 'just sitting there'..
The point is looking at an aspect of your energy dependence and figuring out what you would do if it didn't show up for work tomorrow.. ie, resilience in the face of uncertain energy supplies.
Regarding decline, the number of fields, our ability to develop at least some new fields and oil sands resources, and also backup solutions such as CTL, should give the economy plenty time to adapt and us to draw down our use in an orderly manner.
Regarding bumps, it seems to me that the oil production and distribution is very, very resilient due to the sheer number of wells, refineries, tankers and so on, and their worldwide distribution.
I'd say start right now, very aggressively, to find alternatives to burning oil.
That will make the slope even more shallow and leave us more oil for essential uses later in the century and into the next.
The problem in he reasoning of many here is that they look at the world oil production just like if it was a single field. New discoveries, even is they are tailing off, slow down the decline, which doesn't happen in case of a single field. There is oil country that have been under-tapped for years like Iraqi and Libya. Heavy oil comes in to play slowly and of course enhanced oil recovery.
So now if we have a long plateau before the decline it doesn't mean that it will be a day at the beach either, as pointed out many times, demand is growing fast in emerging countries. But demand will shrink in developed countries especially in US where people won't be able to afford their wasteful habits with their junk $ and ballooning debt. Use of more efficient cars, introduction of natural gas for transportation, plug-in cars, electrified public transportation, alternative vehicles like tilting narrow cars or hydrid scooter can drastically reduced oil dependency while maintaining our mobility. Advanced biofuels will take their share as well as coal to liquid even if they are not panacea. Also reducing our need for cars in our lifestyle will only bring benefits, as cars seriously degrades the quality of our life in many aspects. I don't exclude oil shock ahead as we had in the 70s and in 2008, but again it won't be the end of the world, oil shocks have proven to stimulate creativity, they are wonderful times in this regard. But sure, some countries will suffer more than others, some will sink, and then ? there is countries in the hole today like Somalia, Afghanistan, civil wars have devastated africa during decades, who cares ? the world keeps going.
On the long term electrification of transportation is the answer, because electricity is clean and can made from many different sources unlike gazoline. But electric car are not ready to become mainstream before sometimes.
I don't think many of these oil depletion analysts even know about the mathematical concept of convolution. It's a standard technique used by engineers and scientists to incorporate a continuously varying input level (in this case, multiple sequential discoveries) and apply a transfer function (in this case, an extractive pressure). Convolution is at the heart of Oil Shock Model. So of course you raise an important point.
Incidentally, climate scientists also use convolution in their own physics modeling. However, properly applying convolution in that case has bad consequences for CO2 levels (hint: up, up, up). Contrast that with the fact that it may have some positive implications for a slower decline in peak oil. The point is that you can't cherry pick on how to apply science to the problem.
The heuristics that Staniford has applied to the problem with his infatuation on blind curve fitting has directed TOD down some dead ends. Take a look at his second plot in this keypost. It shows a strong deceleration in crude oil production by 2006, going negative in 2005. This didn't happen and it is the result of pure extrapolation, the bane of a trend watcher's existence. It actually helps to do some actual problem modeling, which I recall criticizing Staniford for not doing when he used to post on TOD. Wonder why he stopped posting here.
Hello Phil,
Thanks for this post, and for some of the useful comments it inspired.
Just to touch upon what you say here:
"...it’s clear that we have been very close to the mark overall in raising awareness of this critical issue, one that more than five years later is still getting little more than zero response from Government."
1) According to Robert Hirsch and David Fridley (in public comments), the "zero response" in the US is deliberate.
http://www.energybulletin.net/stories/2010-09-16/exclusive-interview-rob...
Interviewer: What happened after you published your 2005 report on ‘peak oil’ for the US Department of Energy (DoE) ?
The people that I was dealing with said : « No more work on peak oil, no more talk about it. »
Interviewer: That was in 2006, under Bush administration. Has anything changed with the Obama administration ?
It has not changed. I have friends who simply won’t talk about it now. So I have to assume that they are receiving the same kind of instructions.
http://www.energybulletin.net/node/50545
“(Steven Chu, US Secretary of Energy) was my boss. He knows all about peak oil, but he can't talk about it. If the government announced that peak oil was threatening our economy, Wall Street would crash. He just can't say anything about it.
-- David Fridley, scientist at Lawrence Berkeley National Laboratory, quoted in an article by Lionel Badal (see Peak Oil News, 10/28, item #23)
2) Our effort to nevertheless make use of the possibilities of the (hopefully) democratic system is here: www.oildepletion.wordpress.com
Our thinking is that if the NAS weighed in - (perhaps similar to the IPCC report for GCC?) - at least local governments could have an objective assessment to point to. (Since they don't seem to read TOD.)
Our local airport expansion, along with ice-rink under construction, are examples that come to mind of sadly misguided expenditures made at the municipal and county levels.
3) Apparently much of the national water delivery infrastructure is aging, and in need of an overhaul, upgrade and/or replacement. At what energy cost? I ask. It seems no one knows.
In other words, we also need "ELP" on the national level, and carried out in such a way as to support "L" on the "very local."
The NAS might be a way.
You make some good points.
Unfortunately, the budget crisus on the local and national government level has caused a few programs that could reduce fossil fuel use to be eliminated or scaled back. Witness the Republican controlled US House of Rep. eliminating all money for high speed rail, while cutting back already allocated funds for transit new starts and upgrading existing intercity rail corridors. At the same time Congress refuses to increase the gas tax which has not kept up with highway expenditures. At least 1/3 of cost to rebuild, maintain and expand roads is from general tax revenue (on a national and local basis).
And states like Minnesota plan new billion dollar stadiums that are largely paid for by tax payers and located miles from the center of the city and transit routes, and require hundreds of millions $$$ in road improvements. I don't think MN governor Dayton ever heard of peak oil, or if he has knowledge of it he rejects its implications.
Until someone at the top of government speaks load and frequently about peak oil, the political establishment with try to continue BAU at all costs. Some localities can make small efforts to negate the effects of PO (bike lanes, encourage transit use, end subsidies for suburban sprawl) but the heavy lifting must be done at the state and federal level.
Hi mb,
Thanks for your support.
re: "I don't think MN governor Dayton ever heard of peak oil, or if he has knowledge of it he rejects its implications."
Well, here's your chance! Simply:
1) Download the petition;
2) Gather as many signatures as you can, within, say a two-week period;
3) While simultaneously sending the link to all your "new train" colleagues;
4) Storm the governor's office - no wait, I mean...organize a press conference and present the signed petitions. Or, something along these lines.
The staff person at my very own Congressperson's office said: "The Congresswoman knows all about peak, and she will not do anything unless she hears from constituents."
Kind of funny, I thought: would they fall back on the same defense if there was an incoming asteroid?
In any case - this is actually doable. The NAS can be directed by the President OR by Congress OR by any State legislature.
re: "Until someone at the top of government speaks load and frequently about peak oil, the political establishment with try to continue BAU at all costs."
Well, here's an argument:
1) Even IF the "top of government" person would speak - the political establishment will still try to continue BAU.
2) There needs to be a "tipping point" number of concerned citizens - not a huge number, just the "just right" number - to start talking and keep talking.
The "top of gov" person needs this if he/she is to last more than the blink of an eye once he/she utters the word "peak."
The "top of gov" person needs to have the argument laid out for him/her that: 1) In case this is true, you'll be the one who at least tried to do something; 2) It's just a study - what are the facts, anyway? i.e., is geology real?
if what David Fridley is saying about Chu is true, then Chu should resign in disgust, and then tell what he knows. At least that way he is doing his nation a service - as it stands, he is doing his nation a disservice, in about the worst possible way.
Imagine yourself in that position. You know about looming Peak Oil problems, including Export Land Model predictions for the OCED. Instead, you talk about how painting rooftops white will save on energy costs in the summer months, help alleviate global warming problems, etc., which is paraphrasing some of the things he did say at a TED presentation a few years back. In a stretch of kindness, you hope he is speaking in code for those that are aware enough to understand the implications of his public thoughts. What kind of scientist is that? What kind of citizen, person? He should resign alright, but we should be the disgusted ones.
Hi D3PO
Yes, it's definitely a challenging position Chu's in.
At the same time, the truth is ineluctable. (to quote St. Euxpery, I believe.)
re: "What kind of scientist is that?"
You touch on something here that goes right to the heart of a huge, huge problem I see.
I have spoken with working research scientists in academic settings who, believe it or not, really think that if Chu is not talking, this means "peak" must not have such dire implications - (as the ones that are obvious, i.e., the ones that such educated people immediately see when I simply present the brief version of the facts as we know them).
i.e., If Chu doesn't talk - there must not be a problem.
It's truly astonishing.
It's truly sad.
I've also spoken to others with the same rather enviable credentials who simply pass the buck as scientists: "Not my field," "It's not a scientific problem," "We have plenty of time," "Humans always adapt," and so forth.
In contrast, how I see it is something like this: Here we have representatives (my interviewees) who are at the pinnacle of what is really the pinnacle of scientific history - I mean, here we are.
If science can't handle this...?
If scientists compartmentalize to this degree...?
If you, who have reaped the benefit of the best of the world's educational institutions and funds, i.e., you who have the intellectual tools to analyze the facts...If you will not deal with this...
who is supposed to?
Exactly, Aniya. If I were in Chu's position, I'd tell the truth, then resign before Obama (and his supporters, whom I assume represent the PTB status quo) have a chance to dismiss me. It's easy, actually, for an academic. He can go back to Berkerly, or wherever. The worst case is someone comes knocking at the door, or he's out in a park one sunny day, someone opens a car door, smiling at him (to paraphase Max von Syndow's character in Three Days of the Condor). Yes, it's that serious. But, it's worth it. I could never live with myself if I knew and didn't tell the public. I actually feel sorry for him, the poor SOB.
Hi Paul,
Thanks. I've several times made the argument that waffling, hinting, and indirect addressing of "peak" is worse than saying nothing at all , because waffling-type of talk obscures. (Went back and forth w. Rockman about this, although I think my last reply was one he didn't see, since the discussion was confined to one particular DB, as per TOD protocol.) Essentially, I share your view.
In any case, it's hard to tell exactly what people know, even when they know - (if you know what I mean). Peak is so emotionally difficult...
Another possibility is that he "knows," and just doesn't think about it in the right way.
Dave Cohen wrote a couple of excellent articles that analyze Chu's approach. Here are links: http://www.energybulletin.net/node/48397
http://www.energybulletin.net/node/48457
I think he knows, and thinks that his department is addressing it.
If you don't assume that PO means TEOTWAWKI, then you think of it differently - simply a problem to be solved.
Hi Nick,
Thanks for your reply.
There's yet another position and argument, namely,
1) The current trajectory *is* TEOTWAAWKI.
2) However, the current trajectory may be modified.
3) The question is: what is required for this modification in order to produce something other than catastrophe?
re: Chu. Well, did you read Cohen's two articles? (I don't mean this to sound confrontational - it's more like I wonder if you also read the part about Chu's presentations and his approach.)
My take on it is that your interpretation of Chu's position is not a fair re-statement, based on his (Chu's) talks.
re: "Problem to be solved."
Here's how I see it:
1) Is a switch from an LTF infrastructure to an electricity-based infrastructure possible?
2) If so, what are the inputs/costs: energy, materials, people.
My studies say the answer to #1 is no.
This is *not* to say that some version of 1 is possible, however...we also run into the following:
If humanity has access to an infinite and usable form of energy, then...we still run into the other "limits," including pollution, GCC (a form of pollution, in a way), earth's other resources, ocean depletion, etc.
How to - become the species smart enough to...?
That's the question.
is a switch from an LTF infrastructure to an electricity-based infrastructure possible?
Absolutely it is possible. What is not possible is to do it with the same amount of personal autonomy that we have today.
Assuming we use technology as it stands today for batteries, ev's etc, then;
- intra urban personal transport would be by ev's, bikes and commuter rail. There will be more rail and less cars than today, but I expect cars (ev's) would still dominate, just because that is what American cities are set up for. Still, the urban freeways would make great rail lines! People will, by necessity, localise their lives more than they are today.
- intra urban goods transport would be by e-trucks, and possible use of the urban rail lines at night time. Instead of optimising for just in time, it will be optimised for most efficient transport
These two factors suggest a city more pleasant than today!
For inter city, it will almost all be rail - air travel is gone, of course. All the freight will be rail. Some drivers will still take their 100 mile range Ev's and use rapid charging along the way, and this is fine, But, assuming electric passenger rail is built, most intercity travel will shift to that.
I sound like Nick here, but I see no technical why it can't be done.
In this electrified world, people will travel less, and consume less "goods",but more "services". This is pretty much what Jeff Rubin is predicting.
The problem is, of course, that most people see this as a lesser lifestyle than today, and no one person/city/state/country wants to voluntarily take a step back and risk economic contraction when everyone else is going forward. Certainly the rich people see that they have the right to buy/use fuel as they have the money, and any legislated restriction/end to this will be seen as socialism.
If we can find a way that does not involve economic contraction, we have a winner, but I'm not sure that it is possible - the economists on this site don't seem to think so.
I tend to think that the problem can be solved by working both ends against the middle. For long distance travel, EV rail is a great solution, and high-mileage cars and buses can help the transition.
Locally, moving to car-free high-density zones for shopping and mixed-use areas could help. I can't help but notice that new high-end malls are often "walkable" outdoor malls, even in highly varied climates. Here is one such I've been to:
http://www.bridgestreethuntsville.com/images/bodyimage-information.jpg
Of course this mall, like most, has a large parking lot next to it. No problem -- start with park-and-shop to increase the density of the shops and illustrate how nice and convenient the experience can be. Next, go to park-and-ride -- move the parking lot further out (and fill the old one with shops), with parking closer to home, and have streetcars to make the rounds.
Park-and-ride is already popular at times where I live, for major events "downtown" where just getting in and out is a pain.
Add some up-stairs apartments and interconnect a few such zones with light rail and bike paths, and you've got a start at TOD. Put a Zipcar lot next to the park-and-ride and it's more broadly appealing.
To date, this is a niche approach, but it is not terribly unusual. The list of car-free zones is surprisingly large:
http://en.wikipedia.org/wiki/List_of_car-free_places#United_States
And it's growing. The list orginated on J.H. Crawford's site:
Carfree Cities
We moved it to Wiki for purposes of wider access, but all the folks involved in the original effort are, typically, overwhelmed with other projects. If you know of missing or erroneous entries, feel free to edit.
Hello Kalliergo
Some issues:
We have to be able to maintain the roads. We have to be able to maintain the electrical grid, and the roads and entire material make-up of the grid. Road maintenance requires heavy equipment, powered by diesel. To assume a change-over to such equipment powered by the intermediary of electricity, we then need to figure costs for such equipment, if such equipment exists.
None of that is difficult with electric vehicles. Anything ICEs can do, electric motors can do better.
People who are pessimistic about dealing with Peak Oil wonder: which processes happen to use oil today, because of historical accident, and which truly have to do so? What part of manufacturing, transportation etc, is specifically reliant only on oil?
So many things run on oil - can we possible replace oil in all of these applications?
The answer is yes, primarily through electrification of surface transportation and building heating. Aviation and long-haul trucking can be replaced with electric rail and water shipping, and aviation will transition to substitutes.
This will proceed through several phases. The first is greater efficiency. The second phase is hybrid liquid fuel-electric operation, where the Internal Combustion Engine (ICE) is dominant - examples include the Prius and, at a lower price point about $20K, the Honda Insight. The 3rd phase is hybrid liquid fuel-electric operation, where electric operation is dominant. Good examples here are diesel locomotives, hybrid locomotives, and the Chevy Volt. The Volt will reduce fuel consumption by close to 90% over the average ICE light vehicle. This phase will last a very long time, with batteries and all-electric range getting larger, and fuel consumption falling.
The last phase is, of course, all electric vehicles, which are are slowly expanding, and being implemented widely (Here's the Tesla, here's the Nissan Leaf). Electric bicycles have been around for a long time, but they're getting better. China is pursuing plug-ins and EV's aggressively. Here's an OEM Ford Ranger EV Pickup, and a EREV light truck (F-150).
Here are electric UPS trucks. Here is a hybrid bus. Here is an electric bus. An electric dump truck. Electric trucks have much less maintenance.
Kenworth Truck Company, a division of PACCAR, already offers a T270 Class 6 hybrid-electric truck. Kenworth has introduced a new Kenworth T370 Class 7 diesel-electric hybrid tractor for local haul applications, including beverage, general freight, and grocery distribution. Daimler Trucks and Walmart developed a Class 8 tractor-trailer which reduces fuel consumption about 6%.
Volvo is moving toward hybrid heavy vehicles, including garbage trucks and buses. Here is the heaviest-duty EV so far. Here's a recent order for hybrid trucks, and here's expanding production of an eight ton electric delivery truck, with many customers. Here are electric local delivery vehicles, and short range heavy trucks. Here are electric UPS trucks, and EREV UPS trucks. Here's a good general article and discussion of heavy-duty electric vehicles.
Diesel will be around for decades for essential uses, and in a transitional period commercial consumption will out-bid personal transportation consumers for fuel.
Mining is a common concern. Much mining, especially underground, has been electric for some time - here's a source of electrical mining equipment. Caterpillar manufactures 200-ton and above mining trucks with both drives. Caterpillar will produce mining trucks for every application—uphill, downhill, flat or extreme conditions — with electric as well as mechanical drive. Here's an electric earth moving truck. Here's an electric mobile strip mining machine, the largest tracked vehicle in the world at 13,500 tons.
Continued at http://energyfaq.blogspot.com/2008/09/can-everything-be-electrified.html
As Nick points out, anything ICE's can do can be done by electric motors, sometimes small ones, sometimes larger. And much can be accomplished simply by infill of our sprawled built environment, reducing the time and energy necessary for daily life.
Do it right and you can even walk or pedal to some of your destinations (once the flying monsters that rule the streets are tamed).
Wanting less and chasing less would help, a lot, also.
It's not rocket science; we've already figured it out. The hardest thing to change is the human mind. Who knows? Maybe a wave of enlightenment, or sheer terror, will help us make that change.
"Of course this mall, like most, has a large parking lot next to it. No problem -- start with park-and-shop to increase the density of the shops and illustrate how nice and convenient the experience can be."
The earliest stage of this, where I am, seems to be putting in a parking structure on the mall parking lot, with the space freed up filled in with shops and apartments. As time passes, the land can become too valuable for surface parking, so it can happen even without heavy-handed government forcing.
However, the streetcar-shuttle thing would be more problematical - too much time-consuming hassle, easier just to shop elsewhere. They keep trying versions of it downtown, but it's too much waiting around and too much hassle. All that really keeps the downtown going is the university students, who are something of a captive audience. The selection in the shops tends to reflect that; family shopping is mostly to be done elsewhere, on the conveniently accessible (for now) periphery.
Hello Paul,
Thanks for your reply.
I find your post neatly captures two important concepts, each of which pose a conceptual - and real-world - obstacle to the other.
re: "is a switch from an LTF infrastructure to an electricity-based infrastructure possible?"
PAUL SAYS: "Absolutely it is possible."
And then, further below, Paul says:
re: "If we can find a way that does not involve economic contraction, we have a winner, but I'm not sure that it is possible."
This is exactly the heart of the matter.
What I'm saying is this: To date, there has been *no* "top-level" analysis, which answers the following questions:
1) Is the change to an electricity-based infrastructure possible?
2) If so, what is the input required? In terms of *oil* - (please note this) - finance, person-power, and so forth, to make this change.
3) Can such an electricity-based infrastructure be maintained, assuming it can be established?
4) What about the fact that oil enters into every aspect of electricity generation and delivery?
5) Can we continue financial growth in any case?
Can we switch our current systems of financial growth, population growth, growth in consumption - to something that produces net *non*-growth?
Perhaps. My point is: Without an *actual* analysis, one cannot make the claim that an all-electric infrastructure is possible, that we have enough oil to put it in place, and then...how to maintain it.
Here are some relevant references:
http://ourfiniteworld.com/category/financial-implications/
http://cassandralegacy.blogspot.com/
http://www.peakoilassociates.com/POAnalysis.html. I will quote first sentences of several sections and enumerate for the sake of clarity. I recommend the full article.
(I'll also quote one paragraph from page 41, because it re-states these points.)
1) Non-Fungibility of Energies
Efforts to manage the Peak Oil crisis will be limited by the difficulty in substituting one form of energy for another (without making expensive and time-consuming modifications).
2) Interdependence in the Production of Energy
The production of each type of energy is highly dependent on other types of energy.
3)Inflation and Scarce Capital
High energy costs will generate rising inflation in most sectors of the economy. As inflation and unemployment increase, individual investing will shrink, resulting in reduced capital formation.
4) Limits of Market Economies
Corporate enterprises exist mainly to make financial profits. Over last two and half centuries, abundant coal and oil energies bolstered expanding economies and corporate profits, and over the last century oil, natural gas, and technology explain the expansion of economies for the last century.
5) Pervasive Ignorance about Energy
The public and leaders in business, industry, government, the media, and even some scientists in the energy field remain ignorant of many basics about energy and society.
Page 41
Some scientists have forgotten several basic realities about energy. First, because energy can neither be created nor destroyed, energy cannot be invented. Second, energy must be consumed to produce energy. Third, a great deal of energy must be used to concentrate renewable energies. Fourth, the production of electric energy does not address the transportation and food production problems facing the U.S. Fifth, other energies depend on oil for their production. Finally, the world is consuming enormous quantities of oil.
I think the biggest issue is that renouncing oil will likely mean economic contraction, and no government wants to run on that.
I'd like to think there has been some high level analysis done somewhere, though it is likely confidential.
Actually, maybe the bigger issue is that it may require a fundamental shift in the nature of or economy and lifestyles. Look at the off gridders, the trick is to be happy with what you have (including freedom from the grid) rather than wanting everything you can get. That is the exact opposite of the American (or any other country) dream of "having it all"
I will home in one matter of detail for this discussion. You do talk about LTF as liquid transport fuel, and I consider we can replace all land based transport with electric. Aircraft are gone, and boats will have to be sail and solid fuel, but both of those are proven.
Now, for building the roads, farming etc, I call those "industrial" uses of fuel, and I don't propose to replace all of that, or not right away, anyhow. Farming will continue to get less fuel intensive (and you can go electric like this guy - Nick would love this) and earthmovers, etc could go to solid fuel, but I'd stick with ICE's (which can run on solid fuel).
By taking transport off oil, we have reduced the demand by 80+%, and the remainder could be be reduced, and what's left met by alternative fuels (NG, ethanol, methanol, biodiesel, biomass). Remember that in WW2 over one million vehicles were converted, in the space of two years, to run on woodgas, so it can be done.
So, getting liquid fuel/combustion engines out of land transport can be done, and that is the main challenge IMO. Getting it out of every single thing can;t be done, unless we give up a lot of those "things"
We can achieve an 80% oil reduction by getting out of land (and air) transport. Getting the remaining 20% will be much harder, and I am happy to wait until after the 80% is achieved before worrying too much about that.
if we are looking for a 100% solution, at some acceptable lifestyle, I don't think we will find it. But do 80% and great, by then, what is an "acceptable lifestyle" might have changed enough to do away with most of the remaining 20%.
But we can;t let the really hard parts (like earthmoving equip) stop us from doing the rest - perfect is the enemy of good here.
I really don't think there's any use for oil that can't be replaced with something roughly as good or better.
Air travel is obviously the most difficult, but even there we can see the outline of solutions.
1) 3x greater efficiency is possible, and synthetic FF-free fuel is unlikely to be more than 3x as expensive per gallon, and
3)We're going to have fossil fuels for many decades, should we want them, albeit at lower levels than today - we have time to find the cheapest and most convenient way to replace aviation FF consumption.
---------
First, while jet fuel is probably the hardest use for oil to replace, there are a number of ways to use it more efficiently. Short term changes include buying more efficient planes; reducing use of older, much less efficient planes; filling planes more fully; longer and more gradual descents, reducing powered flight time; reduced time in the air waiting to land; electric "tugs" on the ground); and a long list of others - ( http://www.nytimes.com/2010/10/09/business/09air.html?_r=1&th&emc=th ). This might be expected to reduce fuel costs by roughly 1/3.
In the long term, design changes can reduce fuel consumption by 70%:
"CAMBRIDGE, Mass. — In what could set the stage for a fundamental shift in commercial aviation, an MIT-led team has designed a green airplane that is estimated to use 70 percent less fuel than current planes while also reducing noise and emission of nitrogen oxides (NOx). http://web.mit.edu/press/2010/green-airplanes.html
and
"the team has found that the SUGAR Volt concept (which adds an electric battery gas turbine hybrid propulsion system) can reduce fuel burn by greater than 70 percent and total energy use by 55 percent when battery energy is included. Moreover, the fuel burn reduction and the ‘greening’ of the electrical power grid can produce large reductions in emissions of life cycle CO2 and nitrous oxide. Hybrid electric propulsion also has the potential to shorten takeoff distance and reduce noise. "
http://www.boeing.com/Features/2010/06/corp_envision_06_14_10.html
2nd, fuel is only very roughly 40% of airline costs, and oil is only part of the cost of fuel (jet fuel is higher quality, and therefore more expensive). Combined with the efficiencyies discussed above, this means that if oil prices were to rise by 100%, airline ticket prices would only go up by 25%. That's not going to stop people from flying.
3rd, it's very unlikely that oil prices will rise by 100% in a sustained fashion. First, oil prices above $150 would slow down economic growth (if not stop it entirely). 2nd, all of the major uses for oil have substitutes that are cheaper when oil rises above rpugly $80. If oil prices went to $150 and stayed there for any length of time, consumers would move to carpoooling, mass transit, hybrids, EREVs, EVs, rail, heat pumps, etc, etc, very very quickly. Both of these effects would keep prices from rising further, and probably reduce them from that peak.
The Green Freedom project promises synthetic fuel for $4.50 per gallon, pretty close to where we are today.
30 years is enough time for aviation to become more efficient - that will keep it going another 20-30 years. 50-60 years is enough to develop and streamline substitutes like biofuels, synthetics liquid fuels (from renewable electricity, hydrogen from seawater electrolysis and atmospheric carbon), or liquid hydrogen.
If they can get anywhere near 70% reduction, and Green Freedom is anywhere near practical, we could see synthetic fueled jets with operating costs equal to those of today's airlines.
Hi Nick,
Thanks.
re: "If oil prices went to $150 and stayed there for any length of time, consumers would move to carpoooling, mass transit, hybrids, EREVs, EVs, rail, heat pumps, etc, etc, very very quickly."
1) Do you have any evidence that suggests the high prices will remain steady, rather than volatile?
2) Consumers may *wish* to move to all these options, but will they have the money/jobs/means to do so?
Except for carpooling, assuming one has a car and a job, these items you list require their availability. Their availability, in turn, requires large-scale manufacturing, delivery and maintenance.
re: "synthetic fuel" - How are the inputs at all feasible in a scenario of decline in oil supply?
re: "We're going to have fossil fuels for many decades, should we want them,"
Who is the "we"?
Who will secure supplies?
Who will be able to afford supplies?
How will shortages impact the entire system?
Then, we have the financial system. And we also have the military expenditures that are currently financed on credit that cannot be re-paid.
I would like to see you address the issue Paul raises about a shrinking economy, overall.
This seems critical to me. For one thing, it directly impacts the new products you propose people purchase.
It seems that one very critical aspect is how to re-organize ways of meeting basic needs in the scenario of a shrinking (or collapsing?) financial system, when the changes cannot include a lot of new input into the system, materially (and financially).
It seems that one very critical aspect is how to re-organize ways of meeting basic needs
I think a better starting point is a very frank assessment of what the basic needs really are, for people, and for all levels of government. When you are not trying to have everything, and pay people enough that they can have everything, and retire and still have everything, then you can get by on less.
Unfortunately, the whole economy and government is geared to more, and that just won't last.
I don't know if the financial system will collapse, the dollar will still be there, as will the Fed, but it wouldn't hurt for the big players to go under - they will not be missed, I expect.
1) Do you have any evidence that suggests the high prices will remain steady, rather than volatile?
I'm not quite sure what you're getting at. Are you thinking that volatility will reduce incentives to move away from oil? I don't think that's the case - if prices swing between $50 and $200, consumers will very quickly get the idea that oil is not something to be relied upon.
Further, it's clear that OPEC now wants prices to stay well above their old price band - I'd say $75 is now a floor.
Consumers may *wish* to move to all these options, but will they have the money/jobs/means to do so? Except for carpooling, assuming one has a car and a job, these items you list require their availability. Their availability, in turn, requires large-scale manufacturing, delivery and maintenance. re: "synthetic fuel" - How are the inputs at all feasible in a scenario of decline in oil supply?
You're assuming your conclusion. If declining oil supply can be dealt with, it can be dealt with, and the economy won't decline.
Hi Nick,
Thanks.
re: "I don't think that's the case - if prices swing between $50 and $200, consumers will very quickly get the idea that oil is not something to be relied upon."
1) I'm not sure the "average consumer" pays attention to oil price in the way you suggest they might and accurately interprets its meaning.
For example, just today, I heard yet another commentator on KPFK/Pacifica radio espouse his theory that Republicans with the economy to be in trouble for political reasons; that rising oil prices are due to speculation; "The Saudis are making out like bandits" - overlooking the consumer side of it, and not understanding the role of stability - (lack of interruption of supply) - in delivering oil to the global economy, and so forth.
2) Does it matter whether or not " the idea that oil is not something to be relied upon" - ?
What are their options and who is going to supply those options?
The suppliers, ie., producers of goods and services, have to be able to make investments.
re: "Are you thinking that volatility will reduce incentives to move away from oil?"
I was thinking of incentives on the part of corporations and manufacturers, policy-makers and the public, in terms of the public supporting policies that might lessen oil shortfall impacts. So, yes, I'm thinking that volatility is harder to interpret and act upon than is a steady price increase.
re: "You're assuming your conclusion."
I differ with you on this.
I'm trying to say: There's an intersection between the "machine food" (fossil fuels) available to the many "machine species" and what the human species calls "the economy."
re: "If declining oil supply can be dealt with, it can be dealt with, and the economy won't decline."
Here's the question:
#1 Is it possible for "declining oil supply to be dealt with"?
#2 If so, does this "dealing with" *require* an economic decline?
#2A Does it require an "economic decline" on the part of some sectors of the economy?
#2B Does it require an overall "economic decline"?
#3 How would it be at all possible to continue economic growth?
I'm talking about "these items you list require their availability. Their availability, in turn, requires large-scale manufacturing, delivery and maintenance."
In the material world, we are talking about material throughput.
Earth resources, extracted via energy/machines, made into stuff, delivered by more machines that "eat" more oil.
I'm not sure the "average consumer" pays attention to oil price in the way you suggest they might and accurately interprets its meaning.
Sure. Still, the first oil shock seems like a fluke, and the 2nd starts to make the consumer feel like this is an ongoing problem. The 1973 shock produced very little change, the 1979 shock produced a lot.
Does it matter whether or not " the idea that oil is not something to be relied upon" - ? What are their options and who is going to supply those options?
For personal transportation, options include high MPG ICEs, hybrids, PHEVs, EREVs and EVs. The average MPG in the US is about 21; there are a lot of options that are much higher.
There's an intersection between the "machine food" (fossil fuels) available to the many "machine species" and what the human species calls "the economy."
And that intersection is pretty loose. Cars can go high MPG or electric; trucks can go NG; HVAC can go to heat pumps; etc, etc, etc.
<#1 Is it possible for "declining oil supply to be dealt with"?
Absolutely. We have substitutes for all uses of oil.
#2 If so, does this "dealing with" *require* an economic decline?
No.
#3 How would it be at all possible to continue economic growth?
Oil consumption declines for low value uses and where substitutes exist: personal transportation is the biggie here. We have a lot of low value consumption that can go away without hurting economic growth - 50% of consumption.
I'm talking about "these items you list require their availability. Their availability, in turn, requires large-scale manufacturing, delivery and maintenance."
But not oil. Manufacturing uses little oil even now. Delivery and maintenance need a little, at the moment.
In the material world, we are talking about material throughput. Earth resources, extracted via energy/machines, made into stuff, delivered by more machines that "eat" more oil.
Actually, a lot of mining is electric, even now. The rest uses a small % of overall oil consumption: there's more than enough to spare while we transition away from oil.
Hi Paul,
Thanks for your reply.
re: "You do talk about LTF as liquid transport fuel, and I consider we can replace all land based transport with electric."
The issue - (one of the issues) - is: At what cost? What input in terms of oil? What input in terms of money, labor and organization?
What does it take to manufacture *all* those "transport" vehicles, of whatever type?
This is, in part, what the 2005 "Hirsch Report" addresses. They take time into account. Here is an excerpt from the executive summary and two sentences from the conclusion. Please note: We are also talking about generating large amounts of electricity, and delivering it. And maintaining the delivery systems.
http://www.energybulletin.net/node/4638
Dealing with world oil production peaking will be extremely complex, involve literally trillions of dollars and require many years of intense effort. To explore these complexities, three alternative mitigation scenarios were analyzed:
• Scenario I assumed that action is not initiated until peaking occurs.
• Scenario II assumed that action is initiated 10 years before peaking.
• Scenario III assumed action is initiated 20 years before peaking.
From the conclusion:
In summary, the problem of the peaking of world conventional oil production is unlike any yet faced by modern industrial society. The challenges and uncertainties need to be much better understood.
re: "Remember that in WW2 over one million vehicles were converted, in the space of two years, to run on woodgas, so it can be done."
All I can say is: we need to look at the actual numbers and real data. And then, say "OK, what is required to get from Point A to Point B? Time, money, materials, energy? What about the hard limit of no growth?"
To do something, one needs the ability to do it. Material input, labor input, and so forth. For your agriculture example alone, you are talking about the replacement of how much with what?
At what cost?
About the same cost as ICEs. A plug-in Prius will cost about the same as the average new US light vehicle.
What input in terms of oil?
Very little - manufacturing uses little oil.
What input in terms of money, labor and organization? What does it take to manufacture *all* those "transport" vehicles, of whatever type?
Again, about the same as ICE vehicles. A Nissan Leaf is slightly above or below the average new US light vehicle, depending on whether you include the rebate.
This is, in part, what the 2005 "Hirsch Report" addresses.
No, it really doesn't. The 2005 Hirsch report doesn't include EVs at all. It barely includes hybrids - it's preferred solution to PO is liquid substitutes, like CTL!!!
Hi Nick,
Thanks.
re: "At what cost?
Nick says: "About the same cost as ICEs. A plug-in Prius will cost about the same as the average new US light vehicle."
I'm attempting to address the issue of the cost to replace the entire vehicle fleet over some specified time period.
re: "No, it really doesn't. The 2005 Hirsch report doesn't include EVs at all. It barely includes hybrids - it's preferred solution to PO is liquid substitutes, like CTL!!!"
I believe the issue here is to then look at the following:
1. Manufacture, delivery and maintenance of fleet replacement.
2. Over some specified time period.
3. At some specified cost, including oil use as input. (Cost in the sense of both financial and material inputs.)
4. How to handle increase load on electrical system with EVs and how to quantify this.
Until someone comes up with actual numbers, you are overlooking the magnitude of the substitution issue.
re: "it's preferred solution to PO is liquid substitutes, like CTL!!!"
Yes, I understand.
This report was looking at how to keep the present system going in order to "buy time" for something else to happen.
My personal view is that the authors see collapse as the only alternative to this.
In any case, please see my points above. If one does not speak of overall collapse, then one speaks of particular sectors "collapse" - i.e., going away.
Is there a way to prevent this from triggering general collapse?
Is there a way to "collapse" certain sectors and still have people being alive and well?
Gee, a three way conversation here, with three different subthreads - getting hard to keep track of.
Normally its just Nick and I going back and forth on these old threads!
It seems to me, Aniya, that you are trying to answer too many questions at once. It is not possible to answer all of things like'
-will oil prices be volaitle?
-will the economy shrink?
-how much does it cost to maintain wind turbines etc?
-what oil uses can be replaced by electricity?
There is a range of answer to all of these - prices will be volatile, but how much? Economy is likely to shrink, but how much and how fast?
Wind turbines cost what they cost - maintenance really is minimal
And we can replace almost any oil use with something else - for a price. It is a case of which iones will be repalced first, which iones not at all, and which uses will be discontinued.
I think we can actually make changes to electrified transport and adjust our economies, but there are some serious adjustments to be made.
For example, the US spends 16% of gdp on health care, compare to 6-8% for all other OECD countries - perhaps a lesser standard of health care, and lower pay to health care workers, is in the future?
Equally, the amount of lawyers in the US - perhaps in the future, people (and lawmakers) will be more pragmatic and there just won't be as many opportunities to create lawyer work as there is today.
Or maybe defence spending is diverted to these projects, there are many possibilities, but all involve giving *something* up, and no politician is will;ing to run on such a plan.
If we want to maintain transport at the current level, something else has to be given up - either range (with EV's) or $ (with GtL, CtL, etc), or autonomy (rail transit)
Assuming one constant - high oil prices/dwindling supply - there is quite a spectrum of potential futures available. You can't analyse them all, but we can look at some obvious ones - subsitute liquid fuels, EV's, abandon personal vehicles and have rail transit, etc.
The only thing we can be sure of is that NONE of these scenarios will play out in isolation - there will be all happening at once, but different countries may choose different priorities.
As for the collapse scenario, well, I think that debt and banking systems etc are likely to be the cause of that, and oil/transport won;t make much difference from here on.
But being the engineer I am, I ignore the banks etc and look for solutions - we have plenty of them, but it is a question of what importance will be placed on them, and what other things we are willing to make less important or give up entirely.
Hi Paul,
Thanks. You're so right - and I jumped in without sufficient time to devote to the conversation. (I won't do this again.)
I'd like to address two of your points:
1) Paul says: “And we can replace almost any oil use with something else - for a price.”
I'm trying to say: it's not simply "price" in the way we are used to thinking about price.
"Price" can be set and used in a financial system in tandem with "debt" to enable "transaction" - so, there's a real sense, in which "price" then becomes "not real" or perhaps better stated as "not real for long."
In other words, using my conceptual outline example to illustrate: the immediate "transaction" that is debt-financed *may* be yes - a real transaction in the real and material world. However, there are other possibilities: it may be subsequently 1. taken back. by the lender of the debt amount. 2. Or, the next transaction is not able to be made. so that 3. the original "transaction" is not able to be maintained.
On the larger scale, I probably shouldn't use this one, but it's the first one that comes to mind: Let's take the example of large-scale military invasions that are debt-financed.
If one decides it's time to stop, then...one is left with the issue of how, in the material world, to get the military, including machines?, safely back. (As just one aspect of it. Not to minimize any others.) In other words, how does one extract oneself/theirselves (in the case of large-scale undertakings, such as invasions) from debt-financed endeavors?
So, in the case of looking at the feasibility of a change from an LTF-based infrastructure, which BTW, is global and interdependent, to an all-electricity based infrastructure - this is quite an undertaking, if it's even possible. That's my main point #1.
When you begin to talk about "price" and you are also talking about how to create something material in the material world, you also have to take into account the sense (I attempt to illustrate) in which "price" becomes and/or is "not real."
In other words, it's not simply a matter of "price" - it's a matter of material possibility and feasibility in the material world.
What I'm also saying, as my main point #1 - is that no one anywhere that I have seen, is doing what amounts to a "top-level" analysis about the feasibility of this project: Switching industrial global economy to an all-electricity based infrastructure.
Neither have I seen anyone, anywhere, doing a "top-level" analysis about how to differently re-organize the current human population - (or, even pop. of USA) - in order to best cope with the apparently done deal that #1 is not possible - or, if it is, would it be "global" and "industrial" and "a growth economy" - growth being the current assumption overall of our current system. (Not to say there are some ideas. Just no analysis that intersects with the kind of thing Nick is talking about.)
I'm also trying to say that there is a general limit to the project, since infinite growth is not possible.
Re: Paul says: “but all involve giving *something* up, and no politician is will;ing to run on such a plan.”
I like the way you talk about specific examples. Healthcare can shrink; war expenditures into plowshares, etc.
OK. So, then, the question is: prior to the politicians' running: is there any way that someone, such as you (with your engineering bent) - can start to do this analysis?
That's what I'm asking. With each proposal, what are the consequences for each sector? What do you do with the problem of people impacted - how do they eat?
(I normally don't "defend" lawyers, but I will say - beats revenge murder, etc.)
What are the priorities?
It seems to me there are really two big questions: the "Is it possible?" is about whether there is such a thing as "true sustainability" when it comes to the multiple machine species and human reliance upon them.
Then, if you answer "yes" - which it seems you want to do (who wouldn't) then, the question is: how?
re: Paul says: "The only thing we can be sure of is that NONE of these scenarios will play out in isolation "
It seems to me this very important point highlights the fact that we are looking at danger of collapse. Or, as I still maintain - likely trajectory of same.
The systems that comprise the scenarios are inter-dependent.
These inter-dependencies are material ones, in the material world.
One has to get people, water, food and things from point A to point B. (And, for waste, visa-versa in a sense.)
I jumped in without sufficient time to devote to the conversation. (I won't do this again.)
Not necessarily a case of insufficient time on your part, it just that trying to analyse and solve the "whole problem", at once, can't be done
I'm trying to say: it's not simply "price" in the way we are used to thinking about price.
Absolutely agreed. I think often the price will be "convenience" and "autonomy". A country that abandoned personal vehicles altogether for electrified rail would likely save in $ terms, but people would perceive they are paying the price in inconvenience, time, etc.
I should stay away from using "price" as many people just see it as money, but if you say "give up" or "sacrifice" or "tradeoff" etc, then people think they are automatically going to be worse off - and suspect that they are being asked to take the medicine so that someone else won;t have to.
one is left with the issue of how, in the material world, to get the military, including machines? Fortunately, the military are pretty good at that sort of thing. You can be sure they have a plan, several of them, for how to get out as fast or slow as is needed.
I agree I have not seen a top level analysis of how to electrify the modern economy, but I find it hard to believe that someone, somewhere hasn't done so. At the very least there should a person or persons in the Dept of Energy looking at this question. They will have contingency plans for short term crises, of course, but as Nick has said, a lot of that involves substitute fuels - they are faster to implement than changing everything to electric.
is there any way that someone, such as you (with your engineering bent) - can start to do this analysis?
Sure there is - if someone was going to pay for it then I (or many others, too) can do it. However, it is, as we have discussed here - a many headed beast - even just drawing up the terms of reference would be an exercise in itself.
The technical/engineering part is actually fairly straightforward, the harder part is how to pay for the change, how does it affect the economy, what happens if there is a depression/crash while this is happening, etc.
The "Is it possible?" is about whether there is such a thing as "true sustainability" when it comes to the multiple machine species and human reliance upon them.
Two different things - total electrification is much easier to achieve if you are still allowed to use non-oil fossil fuels, as your supply is effectively unlimited, for the near term, at least. To only use renewable fuels is a an additional supply constraint that changes the whole equation. Total energy use will have to be lower, and more resources (% of economy) put into energy production, which means giving something else up - like maybe TV and Hollywood, and a few other luxuries, including air travel. Or give up a lot of people...
The interdependencies are large, but many of them are for non critical items. Effectively we have to determine an oil-free standard of living "budget",. that is something below what we have now, and work out how to stay within it. That involves lots of tradeoffs in order to keep the water running, food available, lights on, etc The things that might be given up are large houses, various consumer goods, cars, fast food, and so on. Two examples that come to mind of real life oil constrained economies are Cuba, and Switzerland in WW2. They were forced into an almost oil free existence, and managed it.
The trick is, to make the oil free existence better than today. I think it is not to hard to come up with a plan to do that, and I would love to do so). I think it is almost impossible to get people to voluntarily agree on any such plan (and I would not want that job!). In WW2, the agreement was involuntary, and on the basis that rationing etc would stop when the war was over. Now we would be asking people to do something that no country has ever really done, and the outcome is far from certain - easy to see how some people would be fearful of that, and how others would seek to make a name for themselves by playing up on that.
BUt it can be done, of that I am certain, and it much better to jump than be pushed!
Paul/Aniya - I do appreciate the source of your sentiments. Well though out as usual. Except in the one area I tend to harp about: implementation. As I've pointed out before TOD abounds with clever folks with innovative ways to deal with the situation. But almost always it requires the public to volunteer for the effort. Given the general public really can't grasp the technical issues how do you get them to support any useful idea? This is a public that will spend as much money feeding their families take home junk food twice a week for what they would spend to feed them nutritious meals for a week. There are countless other examples we all know so I won't burn up this space with them.
So now we're left with forcing the public to accept these hypothetical solutions. And only the govt can do that. But these are the same politicians who keep their jobs by not imposing tough choices on the public that elects them. Not saying folks shouldn't offer their solutions but I'm not all that interested in those ideas...I know they are out there along with many other potentially useful approaches. What I long to see is a doable plan to get the public/politicians moving in the right direction. Today the path is being drawn by a combination of self interest and market forces. And I've yet to see such drivers deliver long term solutions to any problem.
I agree Paul: better to have some control over your future by jumping then being pushed...even if the fall might kill you. But if can't convince someone to jump and you don't have the means to push them then they'll stand on the tracks and be run over by the train. And even at that last second when they realize you were right and they were wrong they are still out of time. And they are still just as dead.
I agree - national public policy is needed: carbon taxes, stiff regulation (CAFE), etc.
Legacy industries' propaganda and political manipulation are the primary barriers to change. Those industries want to divert attention to ineffective, feel good individual efforts.
I think we all have to act, but we can't limit it to our own energy consumption. We need to act on our society, with whatever levers we have. My thoughts:
First, we give money to the politicians we like. Have you donated $50 to your senator, while making clear what public policy you want?
2nd,
We educate other people about the sources of our problems, which include the kind of manipulation I posted above: corporate ownership of media; and private financing of elections.
Hi Rockman, I am amazed that you are still reading this old thread - as I said above, often it is just Nick and I going back and forth at this point.
I quite agree with your thoughts about implementation - the best plan in the world is useless if it can't/won't be implemented, and, therefore, it is not the best plan.
There are many plans that involve everyone "giving up" something for the common good, and some countries like China, Cuba, Singapore have been able to do that. But in the western countries, and particularly the US of A, that is seen as not only socialistic, but giving up some of what people have worked hard to achieve.
Most changes in the past have been to something "better", from horses to steam trains to cars, landlines to cellphones, etc. The only way I can see people and gov agreeing on some "plan" is if everyone thinks it is an improvement. The problem is that if the improvement is in things like clean air, health, free time, reduced oil imports, will people think that outweighs having to give up their car? - not likely.
If I had an answer I'd be letting you know, and it';s not like I don't think about it whenever I'm on a long drive, or on the occasions where I travel to LA, while stuck in jam on a "free"way. And I'm sure that many minds greater than mine have/are grappling with the same problem.
The fact that no one has been able to come up with a publically/politically acceptable plan suggests there isn't one, until everyones expectations change. One example, if everyones expectation of vehicle range would change to accept 100miles, we could all be driving Ev's next year - after all, that is much more than a horse ever got before needing to refuel.
If we have a crash/depression, and things get really bad, then what might be seen as a backward step today might be an improvement then. But, of course, if we are in a depression, we won;t be able to build our way out if it.
It is possible to come up with a plan that involves "reasonable concessions" , and you could implement that in most countries except America. But, since America is the toughest nut to crack, its an irresistable challenge - that's why many of us are looking for ways to do it. IF someone can crack the nut, they win big, if they don't, then well, who knows. But this thinking seems entirely in line with the current fed gov approach - just try to keep things going the way they are as long as possible, and hope for some kind of tech breakthrough. But that in itself is a reflection of American values - where the important thing is to keep the chance alive to win big - and that has worked up until this point.
What is needed is some kind of near miss - the equivalent of the train coming, but on the other line. Best thing would be another OPEC embargo or wider MENA trouble to seriously disrupt oil supplies. Then when the American people are faced with a stark choice of sending their favourite sons to war, explicitly to secure the oil for their SUV's maybe then the tough questions will be asked. Until then, the only thing that is widely acceptable seems to be the status quo, but with more oil!
There are many plans that involve everyone "giving up" something for the common good
Paul, that's a false choice. The US could easily raise the CAFE regulation to 62MPG in 6-7 years, and leave consumers with vehicles that have a total cost of ownership that is no higher than today.
The problem is resistance from the car and oil industries, both direct and indirect.
Paul, that's a false choice. The US could easily raise the CAFE regulation to 62MPG in 6-7 years, and leave consumers with vehicles that have a total cost of ownership that is no higher than today.
Sure that could be done, and achieved - but how many SUV's, full sized PU's and seven seater minivans would be able to meet 62MPG?
That's the choice - people can have very high mileage cars today, you just can;t have very big and high mileage at the same time - something has to be given up. And given the SUV's, PU's and Minivans make up the majority of new vehicle sales, even though the total cost of ownership of those is about 2x that of a Corolla, Civic, etc, I'd say people are voting with their wallets that cost of ownership is not their top priority, and hasn't been for quite some time.
Same for EV's - even accepting, for the sake of this argument, that the total cost of ownership is no higher than a similar sized ICE, the problem is that so many (American) people don;t want a similar sized ICE, they something big. We are asking them to give that up in return for 62mpg.
Unless, of course, you have something up your sleeve for a PU that get's 62 mpg, in which case you should be talking to Detroit, not me!
Current US CAFE regulations differ by size: all classes could reduce fuel consumption by more than 50% while maintaining the same lifetime TCO (even adjusted for the value of time). Google the current discussion by the EPA.
You'll have to give me some specific reference for talk about future CAFE, all I got is a whole bunch of bureaucrat speak for the existing stuff.
That aside, the fact that there are different standards implies the choice is still there - higher mpg for small cars, lower for big. Most people will still choose big, unless the standards are so stringent that they are not made because no one can meet them, and that won;t be allowed to happen.
And, of course, we have this gaming of the system with the Flex Fuel credits, which further devaluates the whole process.
But to really have a significant effect on oil use, the standards for all smaller vehicles really need to be 62mpg, or zero gpm (i.e. electric, cng or other non-oil).
Merely improving the gas guzzlers to better than they are today does not solve the problem. someone who goes from obese to just overweight is still not healthy.
To get the US to se only what oil it produces itself requires a 2/3 reduction in use. Getting Pu's from 25 to 35mpg is only a 29% reduction. To get them to a 2/3 reduction you need to go to 75mpg, and then somehow do the same for planes, train and ships.
Obviously, we don;t, you start electrifying things instead, and get them to 0gpm. And with cars, that means smaller cars - a 100mile electric PU would be so expensive that no one will buy it.
So, I return to the original theme here, that almost any plant to use significantly less oil, with current technologies, will involve people reducing, to at least some extent, either vehicle size or miles driven.
specific reference for talk about future CAFE
I'll look.
Most people will still choose big
Yes, a fleet-wide CAFE was much better. Still that could be enforced by a carbon tax.
To get the US to se only what oil it produces itself requires a 2/3 reduction in use.
If you look at all liquids, the US is now only importing 48%!
Getting Pu's from 25 to 35mpg is only a 29% reduction.
How about going from 15 to 35?
a 100mile electric PU would be so expensive that no one will buy it.
Far better to have an EREV type PU.
Well, I think we can summarise this by agreeing that;
There should be much higher CAFE standards, and written to minimise the current system gaming going on,
The Us has made some reductions in oil imports, though I think this is mostly recession driven, rather than efficiency driven. Still, a reduction is a reduction
The EREV's are the best of both worlds, for now. They are then end point of every thought exercise I have on the passenger vehicle issues, with the exception of the LSV's. Assuming, of course, that appropriate transit, both intra and inter city, has been built where suitable.
EREV's are the only way that people will be able to keep the big vehicles, so they will still need to be taxed out of commuter existence. Pu's are great for PU'ing, and in most other countries that is what they do - there is no need for them to be freeway commuting to the office.
Hello Rockman,
Thanks for bringing up a vital point.
re: Rockman says:
"What I long to see is a doable plan to get the public/politicians moving in the right direction."
The following is the doable plan.
You and everyone you know simply does Step 1.
Step 1: is to have Congress and/or the POTUS and/or *ANY STATE LEGISLATURE* to request the NAS to look exactly and precisely at the global oil supply - current condition, current/impending decline AKA peak oil, the impacts of same and policy options.
www.oildepletion.wordpress.com
You can do this, together with simply only say 3 of your colleagues. Further, you can take the signatures from the site as examples of concern and have a meeting with your Congressperson and/or State legislator. "Immediate investigation needed," you say. "If it was an incoming asteroid - what would you do? Sit there?"
Step 2: This takes the onus off the politicians. Then peak and it's import become a matter of scientific fact.
Step 3: The NAS lays out options *based upon* the facts - not fantasies.
There are currently many NAS studies that directly relate. These can be used to come up with a strategy for "better coping."
The NAS panel remains in place as the crises worsens.
One nice feature of the NAS process is that they allow input. We have plenty of that.
re: "Given the general public really can't grasp the technical issues how do you get them to support any useful idea?"
I believe I understand your point.
At the same time, here is my argument: it's not necessary for the public to grasp technical issues.
Look how we got here, is my argument: people buy cars, (or fast food), without knowing how to build (or, with some exception, repair) their own cars.
Most people, as you accurately point out, do what's right in front of them.
And, there are important other factors at work.
People influence each other in ways that we are beginning to study and understand. (References when I get a chance. There are some good ones out there.)
We can make positive use of those influences. See: MADD, the Locavore movement, etc. Culture can change.
My two cents is that male culture (to take a particular strata of culture), in particular, has an enormous potential for positive influence.
Aniya,
So the NAS does a big study on it, and conclude that Peak Oil is coming, and maybe even give a date, but then what? They will, of course, argue for more study, because that is what scientists do. Politicians will argue about the recommendations. Industry will say they are being made anti-competitive by a bunch of scientists who have no idea about business.
The average person in the street, who doesn't understand the science, only understands that oil prices are going up, and jobs etc are going down.
I don't think this is the answer. It is the equivalent of the the army commander waiting until he knows exactly where the enemy is, how strong etc etc before doing anything, and then the initiative may be lost.
Personally, i don't think there is time to wait for more studies, the time is to make decisions based on what is known now. And I think we know enough;
Regardless of peak oil, we have passed peak net exports from here on the supply is rationed by price. I think that is all that needs to be recognised, and no amount of domestic drilling etc will materially change that.
So, if the current high oil lifestyle is to continue, it will get very expensive, and fewer people have the money to afford that. Where to from there is not a question for the NAS, it is a question for people and government.
But the first thing is to face up to the question and have the debate - that is what is not happening in government or public circles (other than TOD, PCI, TAE, etc).
I'm afraid I agree with Paul - as a practical matter, government is PO aware. All we have to do is watch the Daily Show set of presidential anti-oil clips to realise that.
We are stuck because of opposition from legacy industries - car and oil, mostly. The opposition is mostly indirect: financing the Tea Party attack of governmental power and regulation, for instance.
Agreeing with me is nothing to be afraid of!
The gov is indeed peak oil aware - it is just not aware of any (politically acceptable) solutions. And there is the choice - there are solutions, but most are not politically acceptable, and if they are, then the opposition is very effective at scaremongering to turn the tide so they aren't.
One of the problems with democracy, I guess. A benevolent king would just be able to say "make it so"!
Agreeing with me is nothing to be afraid of!
Oh, it's just sad to acknowledge that our government is the captive of legacy industries.
One of the problems with democracy, I guess. A benevolent king would just be able to say "make it so"!
We need more democracy, not less. Our problem is that legacy industries have managed to subvert democracy by buying elected officials and misinforming the voters.
Autocracy almost always makes things much, much worse - decision making in a narrow circle is much less well informed, and much more vulnerable to influence from special interests.
It's just sad to acknowledge that our government is the captive of legacy industries.
Very true. Here in BC the biggest legacy industry is logging. It used to be "lumber", but many of the sawmills have closed down and now it is just "logging" and exporting raw logs to the US and China. For reasons I don't understand, exporting raw logs to the US does not count under the "softwood lumber" export agreement.
Anyway, all thee legacy industries need to do is claim the prospect of (further) job losses and they seem to get anything they want. Not saying we shouldn't have a lumber industry, but it doesn't need to be babied.
Short term "jobs" seems to trump almost anything else with the politicians these days, even when the short term jobs are very short term, often with out of province contractors etc.
it is no wonder that video games have become such a growth industry - there is very little else for young non-university educated men to do. And if they all go to university, there still won't be much for them to do!
Hi Aniya, Paul, & Nick,
Paul states:
I fail to follow this logic. Who is the "we" that knows enough? Certainly not the general public or the MSM. How should the "debate" be framed if not via the one single institution that was established explicitly to address matters of science that should inform public policy?
Seems pretty dismissive to me that this "bunch of scientists" are not competent to assess fossil fuel supplies, alternative energy issues, influencing factors, and the consequences of such. It would be interesting to see this idea presented to directly to the NAS.
Nick states:
So, we need more democracy but the most democratic institution we have for analysis of scientific issues should not be used? How should we counter balance the subversion of democracy by legacy industries? What is this big fear of having NAS undertake this task? Should we be paralyzed because we fear the NAS will not do a "perfect" job.
I've said before that I admire Nick's spirit to solve our problems and his thorough research skills. I've joked in the past that when I'm elected god and supreme commander of the planet, that my first act will be to designate Nick as the Ultimate Grand Energy Czar. Fairy tales are fun, but they don't accomplish much.
Great "solutions" are mostly useless without well defined goals and strong motivation. Goals and motivation are seldom present without a strong appreciation for the problem. This is a long discussion itself - hopefully it is somewhat self evident.
I'll contend that the "Problem" is far from understood by any meaningful segment of the population - much less our decision makers. I would love to see Nick and his fellow travelers put their creativity to work trying to figure out how to make the problem actually understood by the general public. Of course, I support Aniya in her bid for getting the NAS involved. So, what testimony would you give to this group if you had the chance? Personally, I like to talk about the corporate disinformation that makes the tobacco affair look like child's play.
Many TOD folks see the PO/CC/etc issues as the equivalent of an approaching asteroid (assuming we continue with BAU) - is this a proper analogy? Who is qualified to make a credible judgement of this threat?
Although I trust Nick when he points out the progress being made in many areas, I simply can't conclude that these examples are sufficient in scope and timeliness to prevent some pretty nasty consequences.
And, yes Nick, I give money and write letters to elected officials. And, yes, I agree with you that individual actions are of limited value - we need broad private, public, and corporate support for change. The question is: How do we achieve that?
Hi Dave,
Thanks for your comments - i think you are misinterpreting some of what i said, so let me clarify;
Who is the "we" that knows enough?
By this I mean that the knowledge/technology exists, among the scientific community, the oil, auto, electricity industries, etc. We don't need to wait for some amazing new technology to be developed - i think enough has been developed to move forward with what we have - otherwise we will wait and argue forever. computer costs have been going down, and technology improving, for decades, but we didn't wait until now to adopt them.
Certainly not the general public or the MSM
Yes. This is why their needs to be a real, honest debate about this.
How should the "debate" be framed if not via the one single institution that was established explicitly to address matters of science that should inform public policy?
Because this is not really a scientific question - it is more an economic question about what kind of society/lifestyle etc that is achievable moving forward. Look at what has happened with the climate debate - the antis just keep questioning the science and derailing any agreement. IF the NAS did a study on peak oil, given that OPEC countries won't reveal their true data, then the same thing will happen - the antis will say "we can;t be sure" they may even call for more (never ending) study just to delay any change - what would the NAS say to that?
I am not saying the NAS can;t be involved, they should have input, but they should not be in control - unlike climate change, their is no definitive scientific answer we are looking for. There are resource constraints to be estimated, but the real question is how do we live with them?
Seems pretty dismissive to me that this "bunch of scientists" are not competent to assess fossil fuel supplies, alternative energy issues, influencing factors, and the consequences of such. It would be interesting to see this idea presented to directly to the NAS.
I'm sure they are competent to address the scientific issues - this being the case, I would hope they have recognised their importance and are already addressing them - they should not wait to be asked. I am not being dismissive, I am saying that is how the legacy industries will be dismissive - you know they will say that sort of thing, and that the scientists want to destroy jobs etc. The auto industry did that to opposed and delay unleaded fuel, safety standards etc, the tobacco industry did it. They will do it again.
Btw, the NAS is not actually a democratic institution, it is a meritocracy (as it should be) - you don't get to vote for who is on it unless you are a member.
As for Nick being the UGEC, yes, I would support that, though I would like him to do more on rail transit, but that's just me.
Great "solutions" are mostly useless without well defined goals and strong motivation. Goals and motivation are seldom present without a strong appreciation for the problem. This is a long discussion itself - hopefully it is somewhat self evident.
I think we are all in agreement on this. It is hard to motivate people when they neither understand nor appreciate the problem. There is a large and powerful group trying to perpetuate this un-appreciation of the problem. I welcome the NAS in this debate, but I don't think they will be able to change the game, for the reasons outlined above.
Many TOD folks see the PO/CC/etc issues as the equivalent of an approaching asteroid (assuming we continue with BAU) - is this a proper analogy? Who is qualified to make a credible judgement of this threat?
No one is "credibly qualified" - get ten experts and you will get 12 opinions - one of them is likely to be correct, but how do we decide? It is like a an exploring party going into unexplored territory - you have to be prepared as best you can and have the best leadership you can, and trust them to do the best thing - I am not sure we have that at all today. But I am sure that if we definitively try to predict the future, we will be wrong in at least part.
I think we can safely assume that oil will not run out, but will keep getting more expensive. The US can have as much as it wants, it just has to outbid everyone else - this is an economic problem, not a scientific one. Until other countries start imposing export bans, like they did with food, and then we have a political problem, not a scientific one.
And if we want to get society to agree to a less oil consuming lifestyle, then we have a complex problem, in deciding what that should be, how to get there, and dealing with the inevitable winers and losers. That is the task of government and the people, and expert groups like NAS etc are part of the process, but ultimately it is up to government to make the hard decisions - no one said it would be easy.
Captain Kirk always asked for Spocks' scientific advice, and took it on board, but he has to make the decisions and lead his ship and crew. The US government can and should seek scientific advice, but it is there to make decisions by and for the people. Right now the government is hopelessly divided and seems incapable of deciding anything, and that would include whether to listen to the NAS or not.
How we change any of this - I don;t know!
Hi again Paul,
re: Paul says:
"I agree I have not seen a top level analysis of how to electrify the modern economy, but I find it hard to believe that someone, somewhere hasn't done so. At the very least there should a person or persons in the Dept of Energy looking at this question."
Aniya replies:
This is the very first point I attempted to make.
In fact, both Robert Hirsch and David Fridley have said the opposite, in public interviews.
They say there is a direct edict to *not* address peak. This means the DOE is *NOT* addressing it.
The DOE is a public agency and it's work is accessible. They can try to hide things, as it appears someone did when the initial "Hirsch Report" came out. Please see http://www.energybulletin.net/node/12772
"Hirsch Report back on DOE website
by AF
Hirsch Report (PDF)
Several weeks ago the risk management study into Peak Oil known commonly as the Hirsch Report disappeared from the website of the U.S. Department of Energy's National Energy Technology Laboratory. After enquiries by Energy Bulletin editors the report has been returned to the website, albeit in a new, and temporary location."
However, since they are a public agency, hiding doesn't work in the longer term.
Re: Paul says:
"They will have contingency plans for short term crises, of course, but as Nick has said, a lot of that involves substitute fuels - they are faster to implement than changing everything to electric."
A replies:
Do you have a reference that shows the DOE has contingency plans?
A,
I don;t have a reference for those plans. Someone did refer to them here a few weeks ago, in that their "plan" for dealing with an oil embargo was to let pricing sort it out. I find it bard to believe that is as far as their plan goes. there would have been cold war era plans for this sort of thing, maybe updated, maybe not, but I'll bet they exist, somewhere, gathering dust.
Greetings, Paul,
I'd like to respond to just one point in this space.
re: "You can be sure they have a plan, several of them, for how to get out as fast or slow as is needed."
I'm *not* talking about a plan.
I'm talking about the material, physical means to carry out the plan, in the real and material world.
You've put the military in using oil. But wait, there is not enough oil to get them out. Now what.
That was my attempt at analogy. (I generally hate analogies and avoid using them.)
The military will do whatever they need to get the oil they need to get out.
This is an organisation that has a fleet of planes whose job it is to fly fuel around!
If they are in a real bind they will get the people out and leave the equipment behind, but that's not the end of the world - not much ground hardware is used from one conflict to another anyway.
And the military, unlike politicians, are pretty good at keeping an eye on their situation to gauge when such action might be needed - every forward base will have some sort of contingency plan for a withdrawal - emergency or otherwise. If you are the general in charge of thousands of lives, you assign at least someone the task of preparing the plan to get them out.
I'm talking about the material, physical means to carry out the plan, in the real and material world.
That's not the problem. The problem is opposition from legacy industries.
Aniya,
You're right to concentrate on the physical reality: do we have enough resources to get to work, ship supplies to manufacturing plants, and deliver products to customers?
Fortunately, the answer is yes: all of these things can be made more efficient over night, and the more important things can outbid the trivial things (like single occupant commuters in SUV).
Ultimately, electric transportation and HVAC doesn't cost any more than oil-based. Wind power doesn't cost more than coal (at least coal that scrubs sulfur).
I'm attempting to address the issue of the cost to replace the entire vehicle fleet over some specified time period.
I addressed that: hybrids, PHEVs and EVs won't cost any more than the average new light vehicle today. A Prius is competitive with a pure ICE at $3/gas. The whole fleet can be replaced through attrition at a cost that is roughly the same as our ongoing BAU cost.
4. How to handle increase load on electrical system with EVs and how to quantify this.
This has been addressed: the existing US grid can handle the load for a fleet of 80% EVs. There's a lot of unused capacity at night, and EVs don't use that much: .3kWh per mile x 2.4T miles (80%) = 900TWh. 900TWh / 8,760 hours per year = 82GW, which is only 19% of current avcerage generation.
Well, I've read some of what Chu has to say. I haven't taken the time to read the referenced quotes, because it doesn't really matter.
I believe that the answer to #1 is yes, and If I were Chu I would take a practical problem solving approach.
I think that GCC is definitely pollution, not a limits problem (though of course it's possible to frame it that way. I agree that GCC is an enormous problem - probably the problem that will frame the 21st century. I don't think that the rest of the LTG problems, including PO, really compare.
Hi Nick
Thanks for keeping up the conversation.
re: "I believe that the answer to #1 is yes,"
Could you please read my posts in response to Paul?
re: "I don't think that the rest of the LTG problems, including PO, really compare."
Are you referring to my hypothetical scenario of infinite usable energy being made available to the human species?
If so, then...it's easy to make the case that we have reached and are reaching the limits to vital earth resources, upon which our species depends, for example, vital resources for agricultural production.
If you're referring to the LTG studies themselves, don't they look at the energy input/oil input as the important issue in modeling?
Could you please read my posts in response to Paul?
Well, I did. It covers a lot of ground. We might want to start with something smaller, like whether electrification is viable.
it's easy to make the case that we have reached and are reaching the limits to vital earth resources, upon which our species depends, for example, vital resources for agricultural production.
Not really - I'd say that's not at all simple. It depends on the resource, and nature of the proposed effect.
the LTG studies themselves, don't they look at the energy input/oil input as the important issue in modeling?
No, unfortunately they don't. They lump all resource inputs into one thing, instead of breaking out energy in general or oil in particular.
Hi Nick.
Here's one study.
http://www.energybulletin.net/stories/2011-02-15/earth%E2%80%99s-limits-...
Aniya,
When you referred to LTG studies, I thought you were referring to the Club Of Rome simulation - that's what my comment applied to.
a couple of thoughts about the Post Carbon Institute study:
-I'm not sure I would call it a study. It doesn't do extensive modeling or quantitative analysis - it's more of a survey. Here's what they say: "THIS REPORT IS INTENDED as a non-technical (emphasis added) examination of a basic question: Can any combination of known energy sources successfully supply society’s energy needs at least up to the year 2100?"
-It's details don't actually support it's conclusions: the section in wind ( http://www.postcarbon.org/new-site-files/Reports/Searching_for_a_Miracle... page 40) actually supports the idea that wind has very good net energy. It notes that wind has some challenges, including intermittency and geographical distribution that doesn't alway match up perfectly with demand, but there's no indication that these can't be solved (and in fact they're not hard to solve).
HI Nick
Thanks.
I need to do some research in order to answer.
My apologies.
re: Wind.
The issues, again, are as above: manufacture of turbines, maintenance of same, maintenance of grid, maintenance of road, in other words: the same point I made originally: to change from an LTF based infrastructure to an electricity based infrastructure.
What is required?
Actually, we don't need to go to wind power to get rid of oil. For better or worse, we have plenty of coal and NG for the next 30 years. China might be an exception. On the other hand, their energy consumption is likely to fall dramatically very soon: they can't keep building the way they have been at 50% of their economy.
Wind power is mostly an AGW solution, not a PO solution.
HI Nick
re: "For better or worse, we have plenty of coal and NG for the next 30 years."
Again, I see critical issues:
1) Conversion to accommodate, either on the energy extraction side, i.e., in CTL or NG to liquid, or, in converting end use to use coal or NG directly.
Cost of conversion.
2) We may have plenty, assuming what?
A) current rates of consumption? B) for what end uses? C) with what loss of return on energy invested?
Re: "Get rid of oil."
Until we look at actual numbers regarding use, at actual relationships (inter-dependency: example: oil required for coal and NG production/extraction, deliver, etc.) this is a generality we can't address.
Conversion to accommodate, either on the energy extraction side, i.e., in CTL or NG to liquid, or, in converting end use to use coal or NG directly.
That's not what I have in mind - while CTL will get used, especially in China, I don't expect it in large volumes. NG will get used in transportation, especially in fleet applications like trucking, but that won't be an extremely large percentage of consumption.
Efficiency and electrification are the way things will go: coal and NG will be used to generate power.
We may have plenty, assuming what? A) current rates of consumption? B) for what end uses? C) with what loss of return on energy invested?
A) current rates of consumption. Wind power will grow, and provide the incremental amounts needed for growth in power demand.
b) electricity.
c) not applicable: EVs are much more efficient than ICEs.
Re: "Get rid of oil." Until we look at actual numbers regarding use, at actual relationships (inter-dependency: example: oil required for coal and NG production/extraction, deliver, etc.) this is a generality we can't address.
Little oil is needed for coal and NG production, extraction, delivery, etc. Heck, much coal mining is electric already. So is oil and NG pipeline transportation.
That's very easy to demonstrate. Heck, personal transportation uses 50% of all consumption in the US - that's the elephant in the room.
personal transportation uses 50% of all consumption in the US - that's the elephant in the room.
Yes, add in the fuel used for trucking (about 2mbd) and air travel (another 2 mbd) and you are closing in on 3/4 of all the oil usage, without even touching on railways, shipping, agriculture or industry.
Even just halving those transport usages would save more oil than the US produces today.
Trying to eliminate 100% of oil use will get in the way of eliminating the first 50%.
Lets get started!
Yep, beginning at the neighborhood and local levels.
Making this work from the top down is almost certainly hopeless; we don't have the leverage and the forces of resistance are concentrated at the top.
But many, perhaps most, of the most effective things we can do can work perfectly well on a bottom-up basis. Transport fuel consumption is near the top of the list.
At those levels, we have real power, at least in many places. Why, if all our neighbors understood the problem the way we do... That's the hurdle we haven't been able to clear.
But, although time isn't on our side, developing events are, in a perverse fashion. When I began seriously "evangelizing" about PO, PowerDown and localization, in the mid- to late-nineties, nearly everyone I talked to was either a techno-cornucopian, a BAU-forever naysayer or a green-renewables true believer. That is not the case, any more. Turns out a few years of hints of a darker future make some people more receptive to stories they didn't, previously, want to hear.
We need to be better story-tellers.
[Standard disclaimer: I am not hopeful, just stubborn.]
I'm not sure if being better story tellers, by itself, will do it.
PO hasn't been on my radar screen until five years ago, but resource efficiency in general (and especially water) certainly has. And I have seen people and places that put all their efforts into doing personal/local environmental initiatives, and ended up with very little to show for it. Meanwhile their neighbours who didn;t give a fig, have enjoyed trips in their luxury SUV, etc. One woman (this is five years ago) described herself as an "exhausted environmentalist", and aI think that was a pretty good description.
What I think is needed are real world examples of a community that has successfully localised and at least, minimised their oil use. And this does not mean Marin County style, where you make your money in the fossil fuel economy, and then exclude everything from where you live to claim it is "green"
It means a way where people/town are able to make a good living in such an economy, without relying on stored/imported wealth.
These days everyone is flooded with messages, opinions and "analysis" from all quarters, portraying all points of view - how do they know who to listen to? The only reality of peak oil, to them, is that it is getting more expensive.
A successful real world demonstration is needed, such that people will say -"that is the sort of town/economy/governance" that I want. The story alone won't do the job, but I can;t see how to get any town/city/state to go "all-in" on the localisation and minimisation, either.
I'd say Better Place, and the countries that are embracing it, are probably the best examples.
I disagree there - they are examples of lots of press releases. In Australia, for example, there are things like this;
More research into stuff that we already know is not an issue, and won;t be for at least a decade, if not longer.
Meanwhile, the Leaf, and Volt, are not set up for changing batteries, and there are no other cars on the market yet that do., and I'm not aware of any plans announced by the carmakers to make them so.
Better place is an idea, and a good one, searching for implementation. It has had lots press, photo ops etc, but if none of the carmakers have signed on, what is the point?
Originally, I thought the Transition Towns movement might be onto something, but you seem to end up with a lot of retired people growing backyard food (not that there is anything wrong with that, just that it is not the solution to the biggest problems) or places like San Francisco signing on, that are nothing like what the TT movement is supposed to be.
I think it is just too hard, at present, for any community to make the break required - though I would be happy to be proven wrong.
I was really thinking Israel, and maybe Denmark. I think Israel is dead serious about implementing Better Place - they hate, hate, hate the idea of sending their money to (mostly ME) oil exporters.
Nissan has signed up to produce the cars - that looks real to me.
Well, of all places where I can see the democratic government being autocratic enough to push hard for a paradigm change, and getting the support of their people, I'd say Israel would be the place.
They have been very out there on their water management, and I hope they can do the same on their oil management too.
If Nissan is on board then great - I should not assume that because they won't do it here, that they won't do it somewhere else.
It most assuredly will not. It's just the first task confronting us. Because no community is going to take the necessary steps until it hears and understands our story.
Well, everything but cars--a 24/7 upper-class automobile slum. I know. I live here (with my bike, the ferry, public transit that has been gutted, and a Smart car that has been driven 4K miles in the past two years).
Marin is only a model for preserving open space and limiting sprawl. Of course, in our economic system (and with our prevailing planning models and horror at the mere mention of density), doing that has resulted in communities where the majority of workers can't afford the average apartment rent and so must commute from far away... while they can afford the gasoline.
I can't either (and I've been struggling with this for a long time), but I know that, if it is ever going to happen, it will begin when a critical mass of opinion leaders in some community, somewhere, truly hear and buy into our story. Ergo, we need to be better story-tellers.
You live there eh? - nice place,to be sure, but from an economic point of view it is indeed based on the cheap "guest workers" coming in from Sonoma county.
What are your thoughts on the SMART train?
Seems we are in agreement that we need to tell the story better, but that it seems no matter how well we have done so to date, it hasn't really achieved much of substance. And for an example of not substance is "green consumerism" - it has been an abject failure - consumerism is the problem!
For the record, the only time I have had real success in getting place to adopt serious water efficiency measures is when they have either had a crisis, or have had a near miss. Nothing else gets its it front and centre. The approach of normal municipal water utilities is to do anything to maintain the supply and avoid water restrictions, so people, and even the government, are often not aware of how close they are to problems. This is not to say they should adopt a "sky is falling approach", but you can;t hide from reality for too long - yet that is what the governments of the world are doing with PO.
I think it's important to note that the US isn't doing nothing at all:
The Prius was a result of government action, and the Volt and Leaf are very good developments.
The US is raising the automotive CAFE - not enough, but significantly.
Wind and solar are growing significantly, even if not as much as is needed for mitigating AGW.
The US is investing in a smarter grid, and pushing utilities: they're all required to offer time-of-day pricing right now, though they hide it so well that most people don't know it, even on TOD...
I think it's important to note that the US isn't doing nothing at all:
This is true, and the examples you mention, with the exception of the smart grid, are good things, but are really just scratching the surface. This is not entirely the government's fault, as you say, the legacy industries are blocking a lot of change.
I am not quite sure why they are not pushing the TOD rates. Flattening the load curve benefits coal and nuke plants at the expense of SCGT, so I would have thought the legacy generators would be all over it, but they are not, and neither is anyone else, not even the green groups. I just don;t understand that one.
Solar might be growing "significantly" but it is still "insignificant" - and something needs to change before this changes. Even a carbon tax won't do it because the current subsidies for solar are larger than any carbon tax is likely to be.
That said, you know that I think oil is higher priority than carbon. if half the effort/ money put into wind and solar had instead been put into oil efficiency measures, I think the US would be in a better position, economically and environmentally, than today. The US can;t be held captive on electricity or even carbon, but it sure can on oil.
There is much more that can and should be done on oil, and may people, veen the AWEA, think that clean electricity can somehow lessen oil dependence, and it just aint so.
Marin doesn't really have a native economy. It's a luxury bedroom community for overpaid San Franciscans, coupon clippers, and a significant chunk of the word's rich and famous who find life here attractive and laid back.
We could have a real economy, with serious attention to agriculture in West Marin and the establishment of appropriate local industry around our town centers, but things are going to have to get a lot worse before anyone will listen to wild notions like that (the last real manufacturing business I know of, a paper cup factory in Corte Madera, recently closed).
I was a central player in the (very small) "green" opposition to the SMART train, several times. I oppose it for a number of reasons:
A. I don't think we should be encouraging and subsidizing 60-100 mile commutes, by any mode. Sustainability requires substituting accessibility for mobility.
B. It's a dumb train. It would serve mostly park-and-ride focused stations (the feeder transit will never be built) and, for the foreseeable future, has no chance of terminating farther south than the San Rafael downtown transit center (thus, not making it to the Larkspur Ferry terminal, because Larkspur is fighting tooth and nail). It's truly a Train to Nowhere.
C. It's doomed to long trips, long headways, poor-to-nonexistent evening and weekend service. The route is single-track and has to deal with a number of problematic grade crossings during peak commute hours. Coupled with the fact that it doesn't serve origins and destinations in effective fashion, it is extremely unlikely to get close to the projected ridership.
D. There is back room scheming going on to leverage SMART's rail improvements and maintenance to revitalize freight service--reincarnation of the NWPRR, which would further impede pax travel, and seriously impact all the neighborhoods that have popped up along the ROW since freight service faded away.
E. It's funded by a sales tax, the most regressive of the options for paying for such things. In one of the early campaigns (when it was coupled with a freeway widening project), we called it the "Sneaker Tax," pointing out that the train would be paid for by working-class mothers buying shoes for their kids, for the benefit of a relatively few highly-paid commuters. As it's turning out, the lack of a direct connection to the ferry will likely make it unattractive for the yuppie commuters.
Anyway, as we told everyone during the campaign in which the proposition finally passed (they combined Marin & Sonoma into a rail transit "district," because they knew they'd never get a supermajority to raise the tax in both counties individually, and Sonoma has a large enough population to carry the combined vote), the recession is assuring that they are waaay behind on projected revenue. They continue to make happy noises (not counting explaining lopping off the northern and southern ends of the route), but holding one's breath waiting for the first train to roll would result in turning funny colors.
Quite. Every year, here, we have the Bioneers Conference, at which Paul Hawken and a few hundred of his fellow "environmental entrepreneurs" get together to enthuse about how we can "save the planet while getting rich." Those stories are easy to sell, and many believe them, but they are part of the problem, not the solution. I stopped going, because the anger and frustration that silliness provokes is bad for my health.
Nope, we need to refine our story until power-down, localization, doing less with less, etc. appear more attractive than the alternative--and the reality of the alternative must be brought home.
I guess it's no wonder we're having a hard time, huh? But, what else are we gonna do? We'd feel guilty if we gave up, so... duty calls.
I spent a bit of time in Sonoma in 09, trying to do water conservation stuff there - moderate success only, but a nice area for sure, which has a sort of native economy, which is really SF tourism.
When I first saw the train line I thought that it should be used for passenger service - and I still do. But the Smart train is a terrible concept - it is about the most expensive way possible to do it, and, as you say, financed in the worst way.
I love trains, but it gets my goat up that, because they are always government projects, people seem to think the money is "free" and always want a cadillac solution.
They want a Euro style 70 mph train, with washrooms etc, when your average is just five miles between stops? And all, the hundreds of millions in trackwork and so on - it will end up being too expensive for those it was originally meant for.
What is needed is a few of the Parry type "trains", and run one pair in opposition north from SR to Cloverdale and the other pair south to wherever, and call it a day. They are less than $1m each, self powered, moderate speed (55mph) and because they are so lightweight, minimal trackwork is needed - their axle load is a fraction of the DMU's and freight trains, and they are no faster than the freight trains.
Only problem is, of course, they can;t meet the FRA standards for buff strength if freight trains are running on the same line.
Ca politics in unbelievable, so much game playing, and they can only get away with it because they skim a bit off the top of sooo many people that the people don;t notice it, or don;t complain enough.
Nope, we need to refine our story until power-down, localization, doing less with less, etc. appear more attractive than the alternative--and the reality of the alternative must be brought home.
The key is making it not just appear more attractive (in a marketing sense) but making sure that it actually is a better way to live. I think people will only see that when the reality of the alternative actually hits - until then we are labelled as "sky is falling" types.
I should point out that the slow decline for oil may be good
news, at the same time it is predicted (by Patzeck and Croft)
that we are at peak (energy from) coal. This means that while
we could in principle replace some use of oil by electricity
(eg electric cars), this will put stress on our electric grid,
which is supported mainly by burning coal. Thus, the decline
curves may look fine individually, but taken together they might
be just as bad.
-- Marcus
Hi all,
I remember reading a few years ago how certain oil companies have leases in the Gulf of Mexico that they could actively drill, yet don't do so because they keep asking for more areas to be opened up and want to appear as if the areas available are not enough to help reduce gas prices if drilled. How true is that still today and can anyone point me to info on the Web about it?
Thanks,
Hiram
H - My company has undrilled leases in the OCS of the GOM today. It doesn't matter if the feds open up all their lands to leasing or none at all. If we drill our leases it will be because it makes economic sense. And any other company with fed leases would say the same. They are other reason companies might push for more leasing oportunities but drilling existing leases has nothing to do with that desire. As far as reducing gas prices I assume you mean gasoline and not NG. If there were 2 billion bbls of oil sitting under ANWR and we could start drilling there tomorrow it won't have any effect on gasoline prices for a couple of years at a minimum IMHO. And beyond that? I don't know...maybe yes...maybe no. Lots of factors come into play beyond just developing some new oil fields.
Peak Oil is in the Rear View Mirror, it was 2006. Below is a chart of Crude + Condensate based on the JODI database. Now the JODI database is not complete but I have figured a way around that problem. Only four major oil producers do not report their production to JODI. They are Gabon, Equatorial Guinea, Sudan and Syria. I have used EIA data for those four countries. Combined they produce about 1.37 mb/d, down from almost 1.5 mb/d in late 2007. So any error in the EIA data will not make much difference.
If a country doesn't report, JODI just inserts a zero for that month's production. I have carried the last month they reported forward so the numbers are not exact, but close enough. Also any such omissions in the historical data I have averaged the last month that was not reported with the first month they started to report and came up with a good guess. But this only happens rarely. Some very small producers are still missing but I estimate that 98 percent of all production is reported in the data.
World oil production in thousands of barrels per day from January 2002 thru March 2011. The peak year, in case anyone was wondering, was 2006.
Below are the yearly averages. The average for 2011 is only for the first three months.
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 World 63,572 66,828 70,533 72,111 72,502 71,784 72,033 69,697 70,650 70,799Ron P.
Nice work, Ron. Could you update this regularly, ala Rembrandt?
Yes, thanks, Ron.
Updates would be much appreciated.
Yeah, thanks guys. I have lots of other revealing data from this JODI database. I will be posting it on drumbeat in the next few days. There are lots of things that we need to be aware of with this JODI database. Though it is far from perfect it is the best one we have. I will be pointing out the pros and cons of it in the next few days. With one very notable exception, Venezuela, I think it is far more accurate than the EIA data, which seems to be going away in the near future.
JODI reports what is reported to them. That is, they query every country and ask them what their production was for that month. Most countries report what they actually think their production actually was for that month. That is exactly what JODI reports. So if someone is lying then JODI simply reports that data, lie or truth. To my knowledge only Venezuela lies, every month, to the tune of about .55 mb/d, on average, of what they actually produce. They exaggerate on the high side. One would think, that being a member of OPEC they would lie on the low side. But they are obviously not worried about exceeding their quota.
Anyway, more on that later.
Ron P.
I too appreciate your work and look forward to future updates.
Your the man, Ron!
This would once again seem to be consistent with Deffeyes' (HL based) prediction.
And as everyone else noted, great work.
In any case, as you know the key point is the inflection point in 2005. Based on EIA data, if global crude oil production had continued to increase at the 2002 to 2005 rate, we would have been at about 86 mbpd (C+C) in 2010. Based on the JODI data for 2002 to 2005, we would have been at 89 mbpd in 2010.
Incidentally, I was wondering if you have had a chance to do a Thunder Horse update lately?
The peak month according to JODI was Feb 2006, very close to Deffeyes peak point.
Yes, I update Thunder Horse the first of every month with the latest data.
Thunder Horse oil production, June 2008 thru February 2011.
Ron P.
So, based on monthly production (annual average would be lower decline rate), the main producing structure is showing about a 50%/year decline rate. The silence from BP regarding the collapse in production from their poster child for deepwater GOM production remains deafening.
Thanks for this graph; I have been looking for a recent update for a while.
Two comments though; One don't look a gift horse in the mouth, but the x-axis would be better of with calendaric dating rather than the number of the month. Makes a lot easyer reading.
Second; most graphs I've seen puts the peak a little higher, bumping around at the 73 mllion level. JODI seems to be c:a 1 million barrles short. Is it those nations not reporting you were talking about, or any other reason?
Jedi, the JODI database is not complete. Even with my substituting EIA data for the four countries that do not report there are still quite a few very small producing countries that do not report. Combined they produce perhaps 1 to 2 percent of all world production or about one million barrels per day.
And yes the chart would be a lot easier to read if it had dates inserted on the X axis. But I just have not figured out how to do that. I have tried using the XY scatter method but just cannot get it to work with a lot of data. I went to every web site Google could bring up in an attempt to figure out how to do it. None were very much help. Most used Office 2007 or later in their explanation. I use Office 2003 and will not put out the $150 bucks or so to upgrade. So until I get this thing figured out I will continue to post without dates.
Sorry about that.
Ron P.
Heh, no worries. This kind of data is gold. I just glue on the dates in a photo editor. I use GIMP btw. Real good stuff for beeing absolutely free.
Have you looked at LibreOffice? It may offer some helpful features and is completely free.
NAOM
Good advice. Advanced, robust, mature, compatible, open-source, cross-platform, free.
And relatively painless transition (except for Base, depending upon your DBMS experiences).
Adding my voice to the chorus of appreciation(and rightly so): nice work!
And yes, I agree that seeing updates on this would be awesome indeed.
Cheers.
Interesting, and thanks for this analysis.
IEA (Fatih Birol) also say 2006 was peak year for crude: do you think they are working off the JODI database, or other sources which produce the same conclusion?
More and more, EIA is looking like the outlier here. It really doesn't smell right: they have 2005 as peak year, broadly consistent with others, but then rush out those late huge revisions to OPEC (mainly Saudi) production, which no-one else agrees with - not even the Saudis themselves - and which just happen to create a new peak in 2010. And then announce there will be no more data published.
The next logical step is a huge campaign from the usual suspects (Exxon, CERA, Lynch et al) to the effect that the Peak Oil myth is shattered, and oil is on the up and up. All backed up by their own datasets of course.
DrNick, thanks for the post. I am not really sure what is going on with the EIA. I do not believe in giant conspiracy theories. However there could be an agreement by people in the department to "just not to talk about it anymore." And there was that leak that the US pressure the IEA over oil supply forecasts. And then Dr. Robert Hirsch said his department, the DOE, told him « No more work on peak oil, no more talk about it. »
Anyway, yes, peak oil was in 2006. So far anyway, there is no doubt about that. But more importantly, peak net oil exports was in 2005, six years ago. That means oil available to all importing nations peaked in 2005. Though some nations have been able to outbid others for the oil the competition can only increase. It is just a matter of time before the very serious consequences of peak oil begins to be felt.
Ron P.
Peak Oil is in the Rear View Mirror, it was 2006.
Darwinian
If that is the case, what are the additional 100 million vehicles since 2006 fueling up with?
http://oica.net/category/production-statistics/
Did it occur to you that many of them might be kept at home while Daddy writes a new resume', or that there are a goodly number of Jetliners that are no longer making their old runs?
I don't know about life in OZ (you're down under, I seem to recall), but there are a lot of trucks and big cars for sale at the end of the driveways around here..
jokuhl
Yes it did.
http://www1.eere.energy.gov/vehiclesandfuels/facts/2011_fotw670.html
The miles traveled is almost back up to the 2007 high of 3.03 trillion miles, the difference of 0.03 is just 1%.
Darwinian still has to explain how 100 million extra vehicles are driving around the world on less oil.
Clearly his assertion that the world production peaked in 2006 is illogical.
Peak oil will not be taken seriously unless people like him admit when they are clearly wrong.
It's not clear to me that the fact that there are "more vehicles" (I'll assume that's true) proves, or even implies, that Ron's assertion is either incorrect or illogical.
Lots of different things happen to the stuff we call C+C after it comes out of the ground. And, for some uses (quite a few, actually), there are non-petroleum alternatives.
Imagine, for instance, that high oil prices drove some non-transport users to other energy sources, and/or that various users (including some vehicle operators) acquired more efficient equipment.
Or imagine that jokuhl made a point that you didn't investigate sufficiently to warrant dismissing: The VMT numbers you point to are for the U.S. only.
I don't know, maybe all those new vehicles are burning NG/ethanol/bio-diesel/whatever. Maybe a third of them are EV's. Probably not, but I don't think you checked.
Anyway, bottom line: There are way too many variables in this equation for you to justify your conclusion without even recognizing most of them.
k - I'll toss in perhaps the biggest variable especially re: China. If I recall correctly China now produces more vehicles then the US. And at last report China was starting up a brand new coal-fired power plant EVERY 3 WEEKS as well as killing 30-40 coal miners every week (month?). Although I understood AGW long before that term was in common use, it doesn't change my expectation that much of the oil fueled economy will be replaced by coal. IOW Peak Oil won't have exactly the same time line as Peak Gasoline/Diesel.
Maybe a third of them are EV's. Probably not, but I don't think you checked.
Kalliergo one thing for sure is you certainly did not. Try 3% by 2015
http://www.prweb.com/releases/electric/vehicles/prweb4545594.htm
http://www.thegreencarwebsite.co.uk/blog/index.php/tag/global-auto-sales/
I did read this some weeks ago and did take this into account.
http://earlywarn.blogspot.com/2011/03/global-biofuel-production.html
and I did make this point a little while back.
http://www.theoildrum.com/node/7831/799258
However these quantities would not fuel all the extra vehicles, anyway we both agree that total liquids is more important than just C&C as many vehicles can be adapted to use Butane and Pentane.
I didn't make my point clearly enough.
Number of vehicles, and/or total VMT, aren't so closely linked with C+C production that an increase in one or both necessarily means that C+C hasn't peaked.
That's all.
A peak in conventional crude is not necessarily the same as a peak in all liquids. Or a peak in EROEI. Or a peak in oil per capita. You have to understand the terms and analyze each case. Where are oil sands counted? Ethanoal? Bio-diesel? Oil shale? Shale oil? Over time contributions change.
That still doesn't change the fact that number of cars and amount of fuel are only loosely coupled. It takes only a few minutes of investigation to see that China's net consumption is up, and that is where the car markets have grown most. And that's a new market, so you don't have as many old cars going to scrap, so it's not yet to any sort of equilibrium.
Peak oil won't be taken seriously until we're way past peak, as gas prices rise. What difference can it make whether the peak of crude or all liquids was in 2005 or won't be until 2015? It'll be academic only.
That still doesn't change the fact that number of cars and amount of fuel are only loosely coupled. It takes only a few minutes of investigation to see that China's net consumption is up, and that is where the car markets have grown most. And that's a new market, so you don't have as many old cars going to scrap, so it's not yet to any sort of equilibrium.
Paleocon
Your statement contradicts itself, cars and amount of fuel are only loosely coupled.. then you say China's net consumption is up due to more cars on the road.
http://en.wikipedia.org/wiki/Automotive_industry_in_India
And we see India's oil consumption has gone up step in step with it's vehicle number increase.
I could find the same data for every single country, the more vehicles a country has the more oil it uses. The only exception may be Brazil, due to it's massive ethanol production.
Loosely coupled is a correlation. It is not definitive, nor necessarily linear.
I know your arguing for the sake of arguing, but since we're dealing with weak arguments, I'll throw in an anecdote and claim proof by testimonial:
Two years ago I drove a lot and used a lot of gas. I also had a 15 year old. So I got a new car. Now my house has three drivers where it once had two, and three cars where two had been. Indeed, we drive a few more miles. Yet our gas consumption is significantly lower. By your logic, that cannot be.
Simply, I drive the most and now I have a far more efficient vehicle. I handed down the less-efficient one (large, cheap, and durable) to the teen, who has neither time nor money to drive a lot. Net result is more miles driven, but not much, because many teen one-way trips replace previous adult round-trips. My consumption, personally, is cut in half, so net consumption overall is lower.
Just scale it up by a few million, crush a bunch of clunkers and sprinkle around higher-efficiency vehicles, and voila - more cars, more miles, and less consumption.
Paleocon
Firstly your comment that peak oil will not be taken seriously until prices start to rise is something I have said before.
C&C is not as important as total liquids as vehicles which run on LPG are already in use and no new or expensive technology is required.
http://www.drivelpg.co.uk/about_lpg.php
Your suggestion that fuel efficient cars may have had an impact on US consumption (1mbd less) is difficult to defend considering the sales figures.
http://autos.aol.com/gallery/best-selling-cars/
I have not done the calculations but the increase in bio ethanol production has a lot more to do with it.
http://autos.aol.com/gallery/best-selling-cars/
Just found this, which pretty much fills the gap between consumption high in 2006 and 2010.
http://oilprice.com/Alternative-Energy/Biofuels/U.S.-Ethanol-Production-...
Now the increase in global bio fuel production could account for perhaps 40 million vehicles, the other 40 to 50 million really have to be powered by the total liquids produced from petroleum products.
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=53&aid=1&...
Which now is around 87 million barrels per day compared to 84.5 in 2006.
jaz,
Someone presents some numbers and you attack the messenger. Why are you not attacking JODI?? They are their numbers?
What about attacking Dr Fatih Birol, he has come out and stated the same as Ron, peak oil in 2006. He probably used the same numbers. You can view him saying oil peaked in 2006, here at the 36 second mark of his interview.
http://www.abc.net.au/catalyst/oilcrunch/
Your source of information is an estimation of miles travelled, yet the first 3 months of the year clearly show a decline of 3.2% of the miles travelled compared to the same 3 months of 2007.
http://www.fhwa.dot.gov/ohim/tvtw/11martvt/11martvt.pdf
Assuming the reduction in storage, clearly indicated around the world, plus the fact that the US is only using ~20% of total liquids, there is ample evidence that Ron is correct and you need to prove your point.
Some months ago Darwinian tried to back up a point of his by using an IEA prediction of Iran's oil output in 2015. A little hypocritical considering how much he rubbishes their work, would you not say?
He was quite happy to use this data set in 2008 and 2009
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=57&aid=1&...
when it looked like it was proving his assertions right, now these figures clearly show him wrong he is off to some other data set.
Jumping from IEA to EIA to JODI to pick the data you want, hardly makes for convincing argument.
I never took Fatty Birol seriously when he said peak oil 2030, why the hell should I now he says 2006?
I believe that oil production per capita has been in decline for some time. Isn't the fact that oil production is not keeping up with population significant whether total production is increasing or not?
In some ways, nothing is more significant, except, of course, net energy per capita.
Not at all.
For instance, US oil consumption is the same as it was in 1979, but GDP is 2.5x higher and manufacturing is 1.5x higher.
Things get more efficient, and eventually oil will be replaced.
For instance, I just heard on the radio that Frito-Lay is beginning to buy Smith electric trucks for it's 20,000 truck fleet, and expects to reduce it's fuel consumption by 50% in 10 years: that's 7% reduction per year.
Just think of the energy that could be saved (and the lives) if they stopped making that crap.
They will stop, of course. The only question is when.
Just think of the energy that could be saved (and the lives) if they stopped making that crap.
True dat.
They will stop, of course. The only question is when.
I hope you're right. For better or worse, it won't be because of their fuel costs.
Every now and then you read an article, or watch a documentary, or maybe even see a posting about a subject that just rings true. This TOD contribution is definitely in that category.
I was wondering if anyone knew where to our more about the the Kjell Aleklett group’s work at Uppsala University in Sweden. Like what assumptions where made in their predictions? For instance, what is their opinion of reserve capacity in KSA (just noticed Leiten has raised a question on spare capacity above too) .
Best thing to do is read Hook's recent thesis from Uppsala. Lots of details in there:
http://www.tsl.uu.se/uhdsg/Personal/Mikael/Licentiat_Thesis.pdf
Thanks for the link Hubble, much appreciated
Re. the Uppsala World Outlook 2008 and Sam/Michael's outlook above:
How many Trillions of Dollars would be necessary to make those production projections come true ?
Once conventional production peaks in a given region, there may not be a realistic oil price that can keep conventional oil production on an upward slope. Consider the Texas & North Sea case histories that I frequently cite. The first chart shows the 1972 Texas peak lined up with the 1999 North Sea peak (C+C). The second chart shows production on the horizontal scales with US annual spot crude oil prices on the vertical scales. Note that these two regions--which were developed by private oil companies, using the best available technology, with virtually no restriction on drilling-- accounted for about one out of every eleven cumulative barrels of crude oil produced globally through 2005.
When I confronted Michael C. Lynch with these two case histories in a Peak Oil debate on a PBS program in 2006, Lynch basically pretended that these regions don't exist. He said that regions like Texas were clearly places where he would not drill. As I have previously noted, on Fantasy Island oil fields don't deplete.
Sir, if you have a prospect on that Fantasy Island lease I sure would like to look at it.
Maybe Michael Lynch can give us a tour while riding on one of his pet unicorns.
Thanks WT.
"there may not be a realistic oil price that can keep conventional oil production on an upward slope..."
I wonder how many of the "yet-to-be developed" and "yet-to-be discovered" projects will be developed and productive at all. If I'm not mistaken, Yergin has been saying we will need trillions to go after the rest of the crude.
Counting birds in bushes, but running out of buckshot... ;)
Hey there aardy...long time no see. Maybe Yergin is right about needing trillions to go after what's left but going after it doesn't mean you'll find all you thinkyou will. There may be a few big nuggets left to find. But the expectation that huge capex deployment will generate a proportional increase in production proved to be very elusive over 30 years ago. And that's when we had a lot more conventional grease to find then we do now IMHO. The drilling boom caused by the oil embargo and subsequent price spike of the 70's was far greater than anything we've seen recently. By 1979 we had twice as many rigs drilling in the US as we just saw in the recent peak activity. And did those trillions (in today's $'s) generate new big reserves proportional to the monies spent? Not even close. I don't have the hard numbers to offer but I was hip deep in the effort since I started my career in 1975. Being just a puppy geologist I barely understood what was going on. But it turned out to be the most destructive period for the oil patch that I've seen in my 36 years. The boom mentality (stupid greed by any other name) led to many worthless prospects being drilled at exorbitant costs. And to make matters worse there was the global recession caused a huge drop in oil consumption causing an even bigger drop in oil prices. So even many of the companies that did have some success were also crushed by the loss of cash flow.
We don't even have to go back 30 years. Just a few years ago there was another feeding frenzy over the shale gas plays. And companies threw capex at those projects like there was no tomorrow. And then when NG drop from $10+/mcf to less than $4/mcf it turned out there actually was no tomorrow for many companies. What has always happened in the oil patch from the very earliest days was the expectation of higher prices led companies to drill riskier and smaller prospects because the economics look good...on paper. So guess what happens when companies started throwing huge chunks of capex at riskier and smaller projects? Not unsurprisingly the success rate goes down (the riskier part) and the reserves that are found tend to be smaller than recent efforts had yielded. Rather logical, eh? I suspect some folks think that higher prices allow companies to go after big reserves they knew were out but couldn't justify. The opposite is true when you look at the capex poured into the DW GOM, Brazil and offshore Africa. Those plays kicked into high gear when oil was selling for way less than half of what it's selling for today. If there were fields with 500 million bbls of URR oil hat could be developed when oil was $45/bbl why would companies be waiting for higher prices to develop such fields?
Yes: More capex will be expended and more wells will be drilled and more conventional oil will be produced. But I think the Yergin crowd will be very disappointed with the amount.
Thanks for sharing your experience and opinion Rockman. So we should expect the normal market feed-back systems to become unstable and less reliable going forward, regardless of whatever projections come out of the blackhole of truth(government or industry and their affiliates, if there is really any difference between them anymore).
I'm sure the people who believe in, and rely on Yergin and company will be disappointed, but I still wonder if the Yergins really believe most of their own projections - their favorite "above ground" factors must be hard to quantitate in their cute little projections...
Anyway, at some point I expect Yergin will pull a Fatih Berol: "... maybe we should have started working on this crisis ten years ago..." and both he and Fatih, having completed their assignments, will be rewarded no matter how things proceed.
The government's line, "No one saw this coming" will be repeated endlessly on MSM by the Joe Bidens and the public will continue to drool on thier laptops and ipads.
But elsewhere in the world, below the attention span of the industrial piggies real life goe on.
Re. this regular discussion of electric vehicles, it helps to be aware of some basic facts which are relevant to the comparison with internal combustion engines.
Most governments tax motor fuel a lot and tax electricity a little, or not at all. People all seem to think an EV will be "cheap to run". Is it cheap to run with the calculations re-done using the ex-tax price of fuel, and used in an energy-efficient ICE vehicle (like the Skoda Fabia Greenline, which I don't think is yet sold outside Europe)? Not very.
One thing EV buyers do is trade a plain, simple fuel tank for a battery bAnk. How will the monthly lease payments on the battery bank (about £15,000 today for a car) and the electricity costs of an EV compare to the monthly ex-tax fuel cost for the ICE? Usually the fuel costs for an ICE are lower, especially with a very efficient diesel vehicle.
Only if all these costs are accounted for can one compare EVs and ICE-based vehicles from a government or societal perspective.
In cold regions, a further issue to solve is heating an EV in winter. It drains the batteries. The interior of an ICE vehicle can be heated by waste heat. Does the quoted energy consumption of an EV take account of this? No, the range would then look even less good versus an ICE vehicle.
Current costs matter very little -- if gas and diesel are always cheap, why worry?
If you get into realizing costs, probably neither vehicle makes much sense.
EVs are a potential transition step to permit a car-centric culture to perpetuate in a world of declining fossil fuels. It's a given that an ICE will fail at this task. It is not a given that EVs will succeed.
Issues like range and heating are other aspects of the car status-quo, and yet it changes anyway. Why don't we promote efficiency instead of the status quo?
For transportation, that means do less of it, and what gets done, do in appropriate vehicles. If a lot of people are going the same way, that's a train or tram. If some are, it's a bus. If a few are, it's a car-pool. If one is, it's a bike or micro-car. If the destination is close, all the above could walk.
For lightbulbs, the Holy Grail is 10W or so for 800 lumens for $20 bucks in an Edison medium form factor. That form factor was designed for cost-effective production of an early incadescent bulb. Why make CFLs wrap their tubes? Why make LEDs cram a bunch of power in a point source? Why not come up with efficient fixtures for those bulbs instead?
For cars, if we want to make rapid progress, the problem isn't even the efficiency of the "best" vehicles in the discussion above. It's the utility of vehicles for the last few percent of the "worst" needs. Address availability of a second car and the use-case coverage of the first can get a lot smaller. I think you could readily argue that insurance for 3 cars should be little more than for two, if you have two drivers. Ditto for taxes -- three cars will get driven only a little more than two would.
Thought experiment: if you gave every household a small TDI four-seater or EV, and a metro bus/rail pass, and a bicycle or two, but added a 100% fuel tax, how would lifestyles change? How would consumption change? Would it really matter if the car were an EV or TDI? If after 1 year they had to give one mode of transportation up (including a personal car they could still have), which would be given up?
It is not a given that EVs will succeed.
There's no particular reason to think they won't.
Why not produce EVs? They don't need fossil fuels. Cars are 99% recycled, so the resources for making them aren't a problem...
Most governments tax motor fuel a lot and tax electricity a little, or not at all.
In the US, both are taxed about the same - not very much.
Is it cheap to run with the calculations re-done using the ex-tax price of fuel, and used in an energy-efficient ICE vehicle (like the Skoda Fabia Greenline, which I don't think is yet sold outside Europe)?
Actually, it is. Of course, if you want the most efficient vehicle, you'll get an e-bike.
EV's are not the same as ICE vehicles, you're right.. but the contemporary advantages of ICE cars also include a vastly developed system that builds and supports them and their many, many moving parts.
I think ALL power costs are vulnerable to getting higher, but at least with an EV, you can feed your car wind, solar, or whatever you must. You might still have to make other adjustments, like living closer to work, at which point you might find you can then walk or bike there, and the car is redundant, save for weekend errands..
The heating might not be such a big deal. We have internal heating systems.. and one could concievably even EXTEND the battery life by putting Pedals down under the dash for activating your heating system, AND helping the batteries push the car a bit! (Again, you might end up thinking 'Why don't I just ride my bike?')
As for running an AC in an EV.. the answer is definitely get on your bike, and head it towards a cooler place to live.
I think ALL power costs are vulnerable to getting higher.
Heck, it only takes a one-time investment of about $2,000 worth of wind power to run an EV forever.
That is a slight oversimplification there.
If you build that wind turbine in the PNW today, you can't even get the power out of the area as there is no spare transmission capcity. You need an investment in transmission, and storage, and an alternate power source (if is not there already), so to just put up a kW wind turbine somewhere is the equivalent of saying you just need an oil well somewhere to power an ICE car - both are very much dependent on a reliable supply system, not just the production of the energy itself.
If you build that wind turbine in the PNW today, you can't even get the power out of the area as there is no spare transmission capcity. You need an investment in transmission
That $2k figure includes transmission.
storage
We're talking about EVs, here. They provide most of the storage needed, in the form of the battery.
an alternate power source
Yes, we're likely to stick with plug-in hybrids like the plug-in Prius and Volt for quite some time.
We're talking about EVs, here. They provide most of the storage needed, in the form of the battery.
Yes, but what if the wind is not blowing when you plug them in, that is when you need storage and/or an alternate electricity source.
i do agree, of course, that for "normal" type cars, PHEV's are better, though I would like to see more acceptance of electric low speed cars. My municipality just approved a bylaw last night allowing them on all roads up to 50km/h speed limit (31mph).
Given there is only one road (the only "highway" that has a higher limit, and the longest you can drive otherwise end to end is 10miles, you can get all around town in one of these things no problem. The for a trip to the ferry and into Vancouver, just take the bus. I expect there will be a good response to these things, especially given that electricity here is 2/3 the price of the US and gasoline is 4/3 the price!
Yes, but what if the wind is not blowing when you plug them in, that is when you need storage and/or an alternate electricity source.
Most EV drivers will have some flexibility about charging. For instance, if you plug in after work there's a roughly 16 hour period during which charging can happen. If your battery holds more than the power needed for a single day's driving, then you can charge at any time over several days.
Finally, of course, if you have a PHEV then you can choose to only charge when power prices are below a certain point.
I like NEVs too. I'd very much like to see many more forms of EVs available, from e-bikes to e-scooters (I have one) to Segways (I want one) to enclosed NEVs.
I don't disagree, but as that goes, I think the price of PV could similarly adjust UP, and not just keep getting cheaper as people hope, dream and insist on.
These might be the good, old days for Affordable PV.
Even if this cost for PV is all front-weighted with a nice long cheap tail, it's still a big pill to take for most people, and so the statement 'Power is expensive' still applies. 'In the long run' arguments are about as helpful to someone living hand-to-mouth as the oldie, "If we had Bacon, we could have bacon and eggs, if we had eggs.."
Lots of folks are having 'If' for breakfast already, and the Dow-Jones rises don't really change it for them.
I'm thinking of wind power, which is about 1/3 as expensive as PV at the moment.
I have read on TOD that the expensive gear boxes on wind turbines wear out after only a few years--and then they have to be replaced.
Do you have any numbers on this phenomenon?
I've seen discussions many times, but no industry statistics. Certainly gear boxes are a key maintenance item. Vestas had a major problem with a batch of turbines installed offshore several years ago - gave them a financial problem for a while.
The tech involved in mechanical power transfer and conversion (transforming kinetic energy rotating on a horizontal axis and varying frequency in the wind turbine blades to electrical power with the correct grid frequency, voltage and power factor, etc) is changing quickly. There are many different solutions, including direct drive, innovative gears, superconducting wiring, etc, etc, etc, etc, etc.
Two final thoughts:
1) the costs involved are included in wind farm maintenance costs of about $.005 - $.01/kWh. There aren't any big surprises or mysteries here.
2) the tech is evolving quickly, and costs are continuing to fall.
There are a few studies on reliability, and gearboxes. A common theme is that gearboxes seem to fail for reasons that are not obvious (i.e. not manufacturing defects) and often it is the bearings. I think this just reflects the harsh operating environment of large and variable stresses.
An up to date study here, with an amzing linear relationship of availability to age;
http://www.gl-garradhassan.com/assets/downloads/GL_Garrad_Hassan_memo_on...
and a commentary here from a wind turbine mfr;
http://www.clipperwind.com/pdf/PDF_MTBF.pdf
The O&M cost of 1c/kWh makes an appearance in there somewhere.
One approach is to go direct drive, which means larger polyphase generators, this eliminates the gearbox, but not the bearings, which seem to be the weak point.
I don't know how you could eliminate bearings - other than in an economist's world, of course!
"I don't know how you could eliminate bearings"
You don't have to eliminate them, just fix them. If the engineers under-designed the bearings for whatever reason, it will be obvious when looking at large numbers of nearly identical failures. Then you sit down with the bearing vendors, pour a box of bearing debris on the table, and ask them how to fix it.
In the interim you super-instrument a test windmill or two and look for the harmonic (or whatever) that ate your bearings. You might be able to engineer it out, or you might have to brute force it. Or even change the way you operate the other systems to protect the bearings. For instance, what if the the problem is increasing blade pitch too rapidly at low RPMs? That you could fix with a programming change in the windmill's control box.
These big windmills are still pretty new. It'll be another 10 years before they are mostly debugged.
I've been through this drill with canned rotor pumps at work. After 20-odd years with the old style pumps, they thought they understood them, and the new style pumps would be wonders of reliability. Wrong. Scaling them up in size created whole new failure modes never before dreamed of. Mostly related to bearings, but there were other issues too.
Such is engineering. The models are no better than the input data. And sometimes when you are on the cutting edge, you have to guess, and sometimes you bleed. If it's only cash, count yourself lucky.
Thanks.
I don't know how you could eliminate bearings
Well, just eliminate mechanical contact with magnetic supports! "Just"....
You mean like an air bearing
I know these are used on microturbines, where your spin speed is 100,000rpm, and the gravity load is small.
A wind turbine shaft is exactly the opposite, so I don't think it would work, though I'm sure it has been looked at.
A mag field is possible, and would be quite an engineering feat. Probably cost more than the rest of the turbine put together.
I think that, for now, the turbines are "good enough" to deploy, we certainly should keep improving them, but I don;t think we need to wait to put the existing designs up.
Yeah. I was just having fun.
Putting a seemingly unsolvable technical problem in front of an engineer is about the best bait you can get. But every now and then, we do solve some such problems, though I can't see it in this case.
"As for running an AC in an EV.. the answer is definitely get on your bike, and head it towards a cooler place to live."
Sure. Let's all 300+ million of us in the US pile into the narrow Pacific coastal shelf from about San Fran on north. Then we can enjoy decent, safe peak summer temps, and yet not need to risk our necks by riding that bike - or, for many older folks, even by just walking - on winter ice. Better still, amidst such a crowd, we might not be able to move around much at all, problem solved, LOL.
This may come as a surprise, but many people lived (and even drove) in the non PNW parts of the country before auto AC was developed. Not as pleasant for cruising on a summer day to be sure, but people still did it.
I drove in Tucson, AZ without AC in my 1971 VW Bus until 1975-1993, when I moved to a much cooler part of AZ. Not always pleasant, but it can be survived. I grew up there and my parents drove 1961-1978 without AC also.
Yes, there is a reason why many of the VW's (and Airstream trailers) have white roofs - it keeps them cooler.
Some people claim that driving with thew windows down creates more air resistance load than the AC load, though this study by Car and Driver found that AC used much more fuel than rolling down the windows.
AC is a luxury, and a very nice one, but not a necessity.
"AC is a luxury, and a very nice one, but not a necessity."
Perhaps. But back in the Good Old Days, if you were feeling faint from the stifling heat bottled up in the car, or if you had a couple of wasps buzzing your head or eyes that came in through the open windows or vents, you could stop along the roadside and deal with the problem. But that would be a fairly bad idea on a modern freeway (Interstate, Turnpike, etc.) Far, far more sensible to accept an extra penny-a-mile cost and run the A/C - if you can afford the trip, you can certainly afford the A/C.
I live in the PNW, but east of the mountains and my car has no AC. Growing up in Wisconsin we had no AC.
Heaters we put great stock in. For the six days a year AC might be nice up here we can live without it.
"Growing up in Wisconsin we had no AC."
Sure, but I was tweaking J. about that bicycle thing. You had plenty of hazardous ice/snow in winter. About the only place in North America that (mostly) lacks hazardous ice/snow in winter and (mostly) lacks dangerous summer heat/humidity is the Pacific Northwest. Much the same thing in Eurasia, you get a fairly mild maritime climate in The Netherlands and nearby areas, plus it's one of the flattest places on Earth, so it's close to optimal for the bicycle thing.
Elsewhere, for most people, the bicycle will be seasonal supplemental transportation.
Actually, the parts of the country that are hot enough to be reasonably free of hazardous ice in winter (consistent with the bike thing) were fairly sparsely populated before the invention of A/C, although A/C in buildings came first and surely promoted the population explosion. Metro Phoenix is huge nowadays, but the historic downtown is barely larger than a stage set. Atlanta isn't as bad but the historic area is still small.
"..into the narrow Pacific coastal shelf from about San Fran on north."
For a seemingly well-travelled guy, you sure look to some very narrow ranges in your imagination.
I'll stick to Maine, I think. I won't need A/C probably at all, and if it's getting too icy, I'll put the front skis or fatties on my Trike, or I'll just call in sick and go play. (I'm my own boss, so I have an in with MGMT)
"All 300million.."
For crying out loud Paul. Enough whiny hyperbole already!
"I'll put the front skis or fatties on my Trike, or I'll just call in sick and go play."
The discussion here is at its best when it is about more than the rare idiosyncratic circumstances of a handful of individuals. The problem with calling in sick every time it snows, once or twice a week, is that it's such an offbeat luxury that it hardly scales at all, and certainly not enough to make the slightest difference in the scheme of things. So it's pointless even to bring it up.
.. no less than the exhausted Strawman of taking every BB that's mentioned and 'Rigorously Challenging' it by making sure that it must apply to the entire population of the Country.
You are not working towards creating a 'best' conversation with this unending tactic.
.. and since it all stemmed from THIS comment,
"You might still have to make other adjustments, like living closer to work, at which point you might find you can then walk or bike there, and the car is redundant, save for weekend errands..
..it then seems clear that biking was presented as ONE of many variants, and not the sole solution in which all 300 million must enjoy our new Northern California Free-range Utopia.
You radical.
now if all the people posting here actually got up and DID something, would that make a difference?
(me included)
Switched to B^3 transport, boot, bike, bus. Superinsulated the fridge. Working on other plans.
NAOM
Not much.
It's great to do - it makes one feel good, and sets a good example - but really we need public policy, not private initiative.
At the level of national public policy, trying to relegate solutions to Individual Efforts is disengenuous, just a feel-good distraction.
Unless every individual starts doing it and networks of like minded people form, which then pressure government. Which is exactly what we are starting to see. It also doesn't hurt to be ahead of the curve for your own benefit.
Government is reactive and is usually far behind the latest zeitgeist. Expecting them to do this stuff without people wanting and doing it first is a hiding to nothing.
I think most people on here are "doing something". You have to in order to stay sane.
"trying to relegate solutions to Individual Efforts is disengenuous, just a feel-good distraction."
That's a strange position for you, the most 'can-do, no problem' poster that I can think of. As Richard says above, it's very unusual to expect that this would be led by the government. They move when the writing is already on the wall, when there's enough critical mass in place to enact a new policy direction. They fly a few test-balloons about renewables all the time, but unless there's enough public buy-in, they can't dream of keeping such things aloft.
Unfortunately, we still get a LOT of cheap miles and KWH from traditional sources, so not enough people are ready to support that changeover. That's why your platform of 'it should be no problem' usually rings pretty hollow for me. It MAY be doable, but it's also a HUGE problem.
This is a very complex thing, so my perspective shifts depending on what part of it I'm dealing with, and who I'm talking to.
If I'm talking to someone who thinks nothing needs to be done, I'll stress that it's a Very Important Problem. If I'm talking to someone who thinks PO is TEOTWAWKI, I'll stress solutions. As you can imagine, on TOD the 2nd perspective operates much more than the first, except with regard to AGW, which I think is rather more important than PO.
At the level of national public policy, I think that people who stress individual efforts (political candidates, pundits, etc) are mainly contributing to a trivialization of the problem: national public policy is needed: carbon taxes, stiff regulation (CAFE), etc. I think they are acting, mostly unconsciously, in support of the legacy industries whose propaganda and political manipulation are the primary barriers to change. Those industries want to divert attention to ineffective, feel good individual efforts.
I think we all have to act, but we can't limit it to our own energy consumption. We need to act on our society, with whatever levers we have.
First, we give money to the politicians we like. Have you donated $50 to your senator, while making clear what public policy you want?
2nd,
We educate other people about the sources of our problems, which include the kind of manipulation I posted above: corporate ownership of media; and private financing of elections.