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Oil Limits, Recession, and Bumping Against the Growth Ceiling
Posted by Gail the Actuary on August 17, 2011 - 10:30am
The issues we are confronted with today seem to be a subset of the issues foretold in the book Limits to Growth back in 1972. At some point, the economy cannot continue to grow as rapidly as it did in the past. It appears to me that the most immediate limit we are hitting today is inadequate low-priced oil, but there are other limits lurking not far away–inadequate fresh water and excessive pollution, for example. When the economy cannot grow as fast, or actually starts declining, recession sets in. Governments start having debt problems. Financial markets start behaving strangely.
This issue is a difficult one to talk about, because there really is no good solution. I have talked to a couple of groups recently (one a church group; one a peak oil group), about this issue. This is a copy of the presentation I used (Bumping up against the Growth Ceiling (PDF) or Bumping up against the Growth Ceiling (PowerPoint). In this post, I will discuss my presentation, omitting the section at the end called, "Where do we go from here?" The full post and discussion can be read at Our Finite World.
The world is finite. We know that, logically, the amount of any resource extracted from the world’s crust cannot continue to increase year-after-year, forever. But most of us have never thought about the idea that economic growth might eventually stop because of limits we hit.
It seems to me that the financial problems we are reaching today reflect a fundamental mismatch. We have a financial system that requires growth. At the same time, world oil supply has stopped rising enough to keep oil prices down. This mismatch threatens to put a cap on economic growth, especially for large users of oil such as the United States and many European countries.
Let me start by describing why our economy needs economic growth.
Europe has used coal for about 450 years, according to Tony Wrigley. The use of coal helped reduce the amount of firewood needed (cream-colored area), and thus helped prevent deforestation. The use of coal also led to economic growth, because its energy could be put to many uses. According to Wrigley’s analysis, wind and water never produced a large share of the total energy supply.
In recent years, oil and natural gas have been added to the energy mix. All of these fossil fuels have helped increase the amount of food produced and the quantity of manufacturing done, and thus, economic growth.
The fact that we have had fossil fuel driven economic growth for such a long time–at least 450 years–has helped create the belief that economic growth is the natural state of affairs. It is easy to believe that it will always continue.
Our financial system today depends on the use of debt, and the repayment of that debt with interest. We don’t usually think of it, but in a growing economy, it is much easier to repay debt with interest than in a declining economy, because, on average, things are getting better over time. This is easiest to see for an organization like the government that funds its borrowing with taxes. These taxes tend to rise when the economy is growing, making it easier to repay debt and the interest on that debt.
The same principle works for other individuals and businesses. If an economy is growing, a person is more likely to be able to keep his job, to get a new job if he is laid off, and to get promotions, so it is easier to repay loans and the interest on those loans.
Of course, the reverse is true in a shrinking economy, or even a level economy. The loan plus interest leaves the borrower with less money left over for other things, so is more difficult to repay.
Reinhart and Rogoff wrote a well-known academic paper, and made the observation quoted in Slide 8, apparently not understanding why this relationship existed. It seems to illustrate the relationship that a person would expect, based on Slides 6 and 7.
Economic growth provides many types of benefits. If the economy is growing, people have jobs, and many are getting raises. People can afford to buy bigger homes, so home prices tend to rise. The stock market tends to rise, because companies are making increasingly large amounts of money, and people believe that they will continue to make more money in the future. The number of people employed tends to rise, because of rising demand for goods and services.
Governments find that taxes rise, even without raising tax rates, because citizens are prospering. Charitable organizations, like churches, see rising contributions.
With the use of fossil fuels, it was possible to greatly increase food production. Population grew in the same time period that fuel use grew. World population is now about 7 billion, compared to about 450 million in 1500 . Thus, population is now more than 10 times as high as it was in 1500.
In this slide, I show a few of uses of oil. Oil is especially important for growing and transporting food. Thus, its use helps explain the recent population rise.
The unfavorable outcomes shown on slide 12 are just the reverse of the favorable outcomes mentioned earlier, when there was adequate economic growth. We recognize them as problems we have seen during recent recession.
Next I would like to talk about how limited oil supply is constricting economic growth.
On this slide, I divide world oil production into two parts–oil produced by the Organization of Petroleum Exporting Countries (OPEC) and oil produced by Non-OPEC countries. OPEC countries claim to have plenty of spare capacity, but it is hard to see that such capacity actually exists from their actions. Neither OPEC or Non-OPEC production has increased very much since 2005, even when prices spiked very high in 2008. OPEC cut back production somewhat when oil prices dropped, but that is more or less expected, because at a low price, some extraction may no longer be profitable.
Readers should be aware that statements made by OPEC countries are not audited. When US oil companies were involved in the Middle East prior to 1980, oil reserves were much lower than today. After state-owned oil companies took over, there was competition to raise reported reserves. Some of these increases may be simple exaggerations; others may be correct, if a person includes oil that can be produced at a dribble a year, over many, many years. But we are likely kidding ourselves if we think the high reserves indicate spare capacity, or likely higher production in the future.
Also, statements about OPEC raising oil production aren’t necessarily very truthful. If they do raise production, it may only be to cover rising internal consumption, with virtually no impact on exports.
We often read that there is a huge amount of oil available, in the oil sands in Canada or in the oil shale in Colorado, for example. The problem is that not all oil is equivalent. Some oil is a liquid, and is easy to extract. Other oil is not a liquid, or is in very inconvenient locations. Our problem is that a lot of the easy-to-extract, cheap-to-extract oil from the top of the triangle was extracted first, and is now gone. What is left is mostly oil that is much harder to extract. As an example, some oil is very “heavy” and oil companies may need to use steam to heat the oil, and then collect the dribbles of melted oil.
To elaborate a bit further on why we can’t get the oil out, one problem is that quite a bit of the cheap oil has been extracted, and expensive oil (which we have plenty of) seems to cause recession. Economist James Hamilton has shown that 10 out of 11 of the most recent recessions occurred in conjunction with oil price spikes. (We will talk a more later about why high oil prices tend to cause recession.)
In order to justify extracting the very expensive-to-extract oil, companies need very high prices for a long time, so that they have reasonable confidence that prices will be sufficiently high when the oil is extracted and ready to sell. But oil prices don’t seem to stay high long enough–high oil prices seem to lead to recession, and recession brings them back down again.
I might mention, too, that there is a theoretical upper bound for prices. Just as you wouldn’t use more than one barrel of oil to extract a barrel of oil, at some point, the resources that go into extracting the oil become too high, relative to the benefit to be obtained from using that oil. If this happens, there is no point in extracting the oil–it makes more sense to leave it in the ground. For some of the oil resources, we may be approaching the too-expensive-to-extract limit.
The fact that world oil production is more or less on a plateau is not entirely unexpected. In many countries, oil production has risen, reached a peak or plateau, and then begun declining. If the world is the sum of production of individual countries, the world might also eventually get to a peak or plateau.
For the United States – 48 states (blue on Slide 17), oil production suddenly started declining in 1971, after hitting a peak in 1970. When we realized that there was a problem, we quickly got to work on extracting oil from other areas. We ramped up production in Alaska in the late 1970s (red “layer” on the map), and added a pipeline so that the oil could be transported better. The amount of oil obtained from Alaska has now dropped to less than half of its peak amount.
Eventually, we started drilling in the area designated as “Federal offshore,” mostly in the Gulf of Mexico (light green layer on graph). The oil from the Federal Offshore area is still increasing, but no one expects that it will bring us back up to the 1970 level of peak production. Last year’s oil spill occurred in the Federal offshore area.
The decline in US oil production had been predicted in advance, although oil companies did not believe the forecasts. M. King Hubbert had predicted in 1956 that oil production in the United States would peak between 1965 and 1970. In the same paper, he also predicted that world oil production would reach a peak around the year 2000.
Hyman Rickover, a four star admiral in the US Navy, gave a speech in 1957 in which he explained the importance of oil, and talked about the fact that oil supplies were expected to run short around 2000, and natural gas and coal not too much later. Because of the likely shortfall, he said the nation should conserve its resources and should tell its children about the upcoming problem, so that planning could be made for the difficult transition away from fossil fuels. Needless to say, schools have not taught much about this problem.
On Slide 18, I show oil production of two areas that were brought on-line after it became clear that US oil production was falling shortly after 1970. The top graph shows European crude oil, which is mostly oil from the North Sea. Its production was on a plateau from 1996 to 2001, but is now declining.
The bottom graph shows Mexican crude oil production. It was ramped up quickly after it became clear that US crude oil production was declining. The graph indicates that since 2004, Mexican oil production has been declining as well.
With all of these areas experiencing declining production, it is not surprising that world oil production has been close to flat. There theoretically is non-liquid oil that could be steamed out, and very deep oil that could be extracted at great cost, but all of this would require huge expense, long lead-times, and assurance that oil prices would be high at the time the oil was finally extracted.
Having flat (or close to flat) world oil production wouldn’t be a major problem, if world demand for oil weren’t rising. But what is happening is that countries like China and India are using a greater percentage of the available oil. Oil exporters are also using more, because their populations are growing rapidly. When these countries use more, this leaves less oil for the United States and other “developed” nations to consume.
I’d like to talk a little now about what happens when an economy doesn’t have enough inexpensive oil.
One thing that tends to happen when oil prices rise is that food prices tend to rise as well. This occurs mostly because oil is used in food production and transport. The fact that food and fuel prices rise at the same time causes a double problem for consumers, since food and fuel for commuting are both necessities. As a result, consumers tend to cut back on discretionary expenditures when oil prices rise.
Higher food prices can have other impacts as well. If people’s incomes haven’t risen and the increase in food price is severe, or if many are unemployed, there may be riots, and governments may be overthrown. We have already seen this in the Middle East and North Africa. If governments cut back on programs for the poor, as in London, this may further raise the potential for riots.
The graph shows that there tends to be a tie between world economic growth and growth in oil use. The tie may be less close after 2005, because of greater coal use in recent years.
Slide 23 shows the steps I see that lead from rising oil prices to recession. I might add that when discretionary spending drops–such as fewer trips to restaurants–employers tend to lay off workers. The fact that these workers have been laid off further adds to the cutback in the purchase of discretionary goods and further adds to debt defaults.
If many people are laid off from work, governments start finding themselves with increasing financial problems for several reasons:
- Lower taxes collected, because fewer people are working
- Higher expenditures, because there are more unemployed people
- Need for stimulus funds, to try to increase employment
- Need for funds to bail out banks and insurance companies
What seems to happen when there is a shortage of cheap oil is that the whole economy tends to shrink. The way I think of it is similar to making a batch of cookies. If a baker finds that he has a recipe that calls for four cups of flour, but he only has three, he needs to make a smaller batch. When he does this, he uses less of his other ingredients as well – sugar, eggs, shortening, and chocolate chips. If he had planned to use a whole bag of chocolate chips, he may only need to use part of a bag.
The economy seems to work in a similar fashion. If oil is too high-priced, the economy shifts to a mode of operation that uses less oil, but also employs fewer workers, uses less steel and copper, and uses less electricity. We call it recession.
Now I’d like to talk a little about what happens after an economy starts hitting the ceiling with respect to economic growth.
One thing that seems to happen is that oil prices seem to keep spiking.
The last recession ran from December 2007 to June 2009. This period started while oil prices were rising, before they hit a peak in July 2008, and ended after prices had collapsed and were again on the upswing.
We are now in the midst of another oil price (and food price) spike. We don’t know for certain that we are headed into a recession, but evidence is starting to point in that direction. Reported economic growth has been less than 1% in the first half of 2011. Given the past history of recessions being associated with oil price spikes, we shouldn’t be surprised if this spike leads to recession in the not too distant future.
Another thing that seems to happen as we start hitting limits is that private debt (blue on Slide 27) starts to decline. This is related to what I said on Slides 6 and 7 about the need for economic growth in order for debt to work out well. If oil prices are high, and recessionary forces are starting to hit, people don’t want to take out loans to expand their businesses, because it doesn’t look like there will be enough sales to support the expansion. Workers don’t want to move up to new bigger homes, partly because they haven’t gotten raises recently, and partly because future prospects don’t look all that good. Some credit card consumers find their cards cut off, because they have failed to make required payments.
Government debt (in red) tends to increase rapidly, but not rapidly enough to keep total debt rising the way it was prior to hitting growth limits. (Government debt in red is added to the private debt in blue, to produce the total debt.)
Government debt grows for a couple of reasons. First, tax revenues tend not to rise as rapidly, or to actually fall, because of higher unemployment rates. Second, government expenditures are higher, both for programs to help the unemployed, and for stimulus programs. This combination leads to the type of debt limit crisis that we recently experienced. Many European governments are experiencing similar difficulties.
We can’t know precisely how things will turn out, or exactly what the time frame will be. But at least some estimates are that things will turn out very badly. The shape of the graph shown in Slide 28 is sometimes called “Overshoot and Collapse.”
The problem we have is that the world’s population has grown to 7 billion people. If we substantially cut back on oil (or on fossil fuels in general), there is a question as to whether we will have enough food and water to support the 7 billion people alive today. If we had very many fewer people, we would have much less of a problem.
Some of the particular problems we are running into now relate to government debt, and inability to fund government programs for the unemployed at reasonable tax rates. It is not clear how these can be resolved. It is virtually impossible to raise tax rates enough to cover the cost of currently promised benefits, especially if unemployment rates rise even higher in the future. At the same time, cutting benefits can lead to riots–or even the overthrow of governments.
At this point, alternatives look like they will be too little, too late.
The closest substitute for oil is biofuels, but the ethanol we use today tends to use a huge amount of our corn crop, with very little ethanol yield. In 2011, ethanol is expected to use a little more than half of America’s corn crop. The energy content of a tank of ethanol is equivalent to the amount of food needed to feed a small person for a year. And of course, using a large amount of corn for ethanol tends to keep food prices up.
Most of the mitigations we hear about are electric–wind, and solar photovoltaic, and geothermal, and biogas. One problem with electric mitigations is that they don’t directly fix our oil shortage problem. The cars you and I drive today don’t run on electricity; they run on gasoline or diesel fuel.
Another problem with electricity mitigations is that they tend to produce only a small quantity of electricity. The layer I show as renewables includes all of the “new renewables” I listed above, plus wood scraps and sawdust, which are sometimes burned for electricity. The renewables line is getting thicker, but its growth is almost matched by the shrinkage in hydroelectric over the years. So in total, we aren’t getting very far, very quickly.
Also, I should point out that even if an alternate source of energy is called “renewable,” it doesn’t really mean that it could be maintained for very long, without the use of fossil fuels. Our electricity transmission wires are maintained using trucks and helicopters that use oil-based fuels. Wind turbines (and replacement parts for repairing wind turbines) are shipped using oil-based fuels. It requires fossil fuels to make solar panels.
Another issue is that alternative fuels are often expensive. If high-priced oil is leading to recession, it is difficult to see how even higher-priced alternatives will fix the situation.
Based on a longer post, from Our Finite World.
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Gail
At this point, alternatives look like they will be too little, too late.......
Most of the mitigations we hear about are electric–wind, and solar photovoltaic, and geothermal, and biogas. One problem with electric mitigations is that they don’t directly fix our oil shortage problem. The cars you and I drive today don’t run on electricity; they run on gasoline or diesel fuel.
The largest use of oil in the US is to transport people in cars and light trucks ( usually one person/vehicle) relatively short distances(40 miles/day) and consuming 1.5 gallons. There is great scope for reducing this dramatically by driving more fuel efficient ICE vehicles, car pooling, replacing ICE with EV or replacing short private vehicle trips by walking, bicycling or using mass transit. This will happen as oil remains expensive but does take time. One hundred years ago almost no one drove ICE vehicles, 20 years ago almost no one drove SUV's. In 20 years time almost no one may drive vehicles that use oil or if they do get less than 50mpg.
Another problem with electricity mitigations is that they tend to produce only a small quantity of electricity.
To replace all oil used in land transport would only need a small amount of electricity( 100GW what is produced today by nuclear).
Also, I should point out that even if an alternate source of energy is called “renewable,” it doesn’t really mean that it could be maintained for very long, without the use of fossil fuels. Our electricity transmission wires are maintained using trucks and helicopters that use oil-based fuels. Wind turbines (and replacement parts for repairing wind turbines) are shipped using oil-based fuels. It requires fossil fuels to make solar panels.
The amount of oil used to maintain transmission lines or transport wind turbines is tiny, that amount of oil will still be available for a long time or could be replaced by bio-fuels or synthetic liquid fuels.
There is actually a great deal more required than this simplistic statement would seem to imply. A few things that are required:
1. A political system in power that is strong enough to put rules into play throughout the country and enforce them.
2. A system to maintain roads, and raise sufficient taxes to pay for the maintenance of roads.
3. Replacement parts for vehicles used for transporting and servicing vehicles must either still be made, or must be imported, or must be stockpiled in large quantities.
4. Workers who work at all of these things must somehow have adequate food, clothing, transportation to work.
5. Computerized systems which maintain electrical transmission systems must also be in service. Replacement parts must be available, even if there is an interruption of international trade. And people who know how to operate and fix them must have adequate food, clothing, and transportation to work.
6. There need to be gasoline stations available for workers to use, to keep their cars and vans filled, and some way of getting gasoline /diesel to the various workers.
7. Someone must figure out in advance exactly what supply chains need to be maintained, and figure out how to maintain them, while at the same time cutting off irrelevant ones. Schools, medical care, police, and many other services need to be considered. In many places, people riot when they are without basic services.
1) Need to mine all the rare earth elements and bring them to the production facility.
2) Produce the turbines, panels and all the supporting electrical infrastructure.
3) Fabs needed to produce all the computer chips to run the systems and all the fuel needed to produce , maintain and get workers to those giant monoliths and back home (unless they sleep there).
High technology societies require massive energy gaps and long supply lines. Without very high EROEI energy systems, you can kiss your cell phones goodbye (other than for the kings and family - nobody to talk to).
As for too little too late:
The rare earth parts are not indispensable. They are very handy, yes, and increase performance, efficiency while reducing weight, size & cost, but wind turbines can be built without them.
In spain, right now (Real Time website) you can check that we are using some 16,2% from big hidraulic & wind (12,2% wind), and 20,6% from other low impact technologies (photovoltaic,thermosolar, cogeneration, microhidro, biomass..). This figure is low, as normally it is higher.
Electric Grid website (spanish, sorry!!):
https://demanda.ree.es/demanda.html
Yes, but is this really sustainable? How much was financed with tax payer funds and how much was manufactured using the last of the cheap fossil fuels?
It is one thing to have renewables up and running, even Abu Dhabi is making a super renewable city (Masdar), but it is another thing to do all that from scratch without the benefit of low cost debt, oil revenues, global supply chains and cheap fossil fuels.
Let us all close our eyes and imagine we are standing in a large field. We have 150 miles in all directions to get our resources. OK, now, make your high tech society.
Let's say that it costed from 0% direct subsidy (hidro) to 84% subsidy (PV), and wind is arround 66%. It is an oversimplification, of course.
As for wind, it was made using oil and natural gas. Why? because most plastics come from these sources, and these behemoths are steel, concrete & composites. The rotors, in order to be efficient & durable, have to be made of composites, and that means either oil or nat gas.
Except that this vision is as far away from reality as expecting a combination of corn ethanol, solar and wind to continue powering the system we currently have.
I don't know about you, but I have my eyes wide open and I'm actually standing among piles and piles of recyclable resources and we have the knowledge and technology right, now off the shelf that can be applied to build a somewhat lower tech, more equitable, and sustainable society from these materials.
We just have to admit that the current system is dead and that we need to stop trying to maintain it and get on with the business of building a new one with what we have.
To be clear we can't support as many people as there are now and we certainly won't be able to support growing populations. There are going to be a lot more people suffering the fate of the Somalis. They will not be building either high or low tech societies they will just die!
Closing ones eyes and imagining impossible cornucopian dreams in empty fields isn't very useful!
Cheers!
Fred
Cornucopia dreams? My point is that there will be limited resources to support high tech infrastructure, not unlimited.
I also agree that in some cases there will be the rotting infrastructure of our past glorious civilization to scavenge from.
I guess we can look forward to going through the garbage or, if you want to be more optimistic, cleaning up the mess.
And I don't need lithium batteries to go 35mph and 40 miles today in my LEV/NEV by myself to work and the grocery store, lead acid
batteries will be just fine.
You can generate Dimethyl ether( DME)
http://en.wikipedia.org/wiki/Dimethyl_ether
with a heat source and a hydro carbon source such a natural gas. You could also using nuclear (and others)energy generate hydrogen and combine it with carbon from the atmosphere to get DME. Burn this in diesel engine much as you would diesel. you do have to change the tank and the fuel pump out. Tank would be similar to propane tank. Not 5000 psi like natural gas tank.
Gail,
I agree that these 7 items (and others too numerous to list) are necessary for a modern society to function. Nothing is simple. You seem to imply that all of these (or maybe just a few) would not function once peak oil has been reached and the output plateau where the world has been since 2005 can no longer be maintained. I am not convinced that the world is quite so fragile. Once the threat is clearly perceived, governments will take action to develop alternatives and to maintain the system while adapting it to a lower energy future. It will not be easy and there will need to be shared sacrifice, but I don't think we will see a Mad Max world.
d coyne
I just do not see any possibility of any real form of shared sacrifice being widely adopted by the American public. Unfunded war for oil with absolutely no call for shared sacrifice being a prime example.
No matter. No American leader today, at least not anyone adequately covered by the mainstream media, has the guts to point out the hard truth and make a call for it.
Isn't it impossible to share sacrifice when we are talking energy. If the US powers down, then China and India consume the left over oil. They applaud it in fact. They are begging for it. There is no solution or policy that works except coordinated ones in oil consuming nations. Good luck with that. Have you seen Climate Change CO2 Treaties work in the past. Nope. Neither will coordinated energy policy. Oil is fungible and it will all be consumed until we cease to exist or we cannot extract it from the ground.
That is the perplexing and vexing problem.
Now what should be done is more public infrastructure to reduce oil dependency -- electric charging, electric rail, electric trucking, trolleys, you name it -- etc. That is not necessarily shared sacrifice as much as investment in the future.
The problem is that the future is not well understood by the majority of Americans. So they see public works as a waste of money. Maybe they are right. Maybe aliens will bring us 100 million more bbls of oil per day in a trans solar system pipeline -- once the state department approves it!
The only paths forward are inflation of core items like energy, food, etc. combined with salary and benefits cuts in the developed world. That is how oil demand is going to be reduced. Shared sacrifice is really code for shell the bottom and climb up gradually through the "Middle Class" stripping wealth and spending power one traunch at a time.
It is up to individuals to decide for themselves if they want to consume tons of energy or they want to consume less and save money. But this will all be for not and the economy will have to crash since no real energy policy is apparent at all in the US or anywhere for that matter.
So no. I do not see any hope for this system. It has to disintegrate. No body in government will try to enlighten the public.
Once I sat down to think about it, I figured out that any substitute for oil is really an "add on" to oil, because the amount of oil we have is pretty much fixed. Thus, biofuels raise world CO2 emissions.
As long as production is maxed out, any oil we don't use is quickly used by someone else. Our conservation efforts help someone else have more. It makes the situation very difficult to fix.
This is not quite true for coal and natural gas, because there the amount used is more variable. But for oil, where we are faced with essentially inelastic supply, there is a strange relationship that makes it very hard to really reduce world oil consumption.
This is a link to a post I wrote on the subject, that has not been on The Oil Drum. The results were more than a little disturbing.
How to Develop a More Rational Energy Policy.
It is WRONG to assume that a majority of Americans are joined at the hip to their autos and will oppose any expansion of Greem public transit.
Here is a study published by Transit4America :
http://t4america.org/blog/2011/06/21/republicans-and-independents-suppor...
Actually increasing numbers of Americans know that endless highway expansion
works or that gas prices will suddenly go back to 50 cents.
We need to trumpet this loud and clear!!
Here's the question I don't think they asked though. "If increased public transportation was avialable in your area, would you or your family use it?"
I/We tend to be for just about anything if it seems helpful as long it does not directly impact me/us. "1 cent sales tax to help widows and orphans?" Sure no problem. "We will have widow Winslow move into your spare room on Monday." What, uh No!
Just try and get a senator to pass a bill that requires people receiving SS or Unemployment benefits to use public transportation for 20% of thier travel. Could have a chance. Now add a rider to that bill that requires any senator who voted for it to use public transport 2 working days a week. You would either get no votes at all or (knowing how things tend to work in washington) It would pass, along with a second bill designating Limo services for senators as public transport.
In case after case Green public transit ridership has EXCEEDED expectations and projections. Here in New Jersey the Midtown Direct train service added to
previous Hoboken-only service doubled and more rail ridership. The Hudson-Bergen Light Rail completed a number of years ago now rivals the Northeast Corridor for ridership. The Riverline Light Rail ridership has exceeded expectations.
After years when it was perfectly obvious that a Rail option was needed to
go to Meadowlands events since they caused major traffic jams on Route 3 going
to the Lincoln Tunnel, the first opening of Meadowlands Event Rail service
had so many thousands of people that NJ Transit was totally overwhelmed.
Salt Lake City is expanding its public transit system due to its great success.
The key to increased ridership for Green transit is frequency, speed and affordability. If, as the Brooking Study says, it takes 90 minutes to
take a bus to another bus to a van to get someplace you can drive in 50 minutes
nobody except the car-excluded will use it.
This is why it is absolutely crucial to RUN THE TRAINS AND BUSES!
If you have service gaps of 2 hours, or even an hour, if it only takes an hour to drive even in traffic people will drive.
The advantage of Light Rail systems is that they are almost always on a more
frequent schedule than Commuter Rail such as every 10 or 15 minutes.
The disadvantage of Light Rail systems is that they are almost always totally
Local rather than Express making every possible stop.
This kills point to point speed over any distance.
So the other essential point to effective Green Transit is a combination of
Local/Express service. I.e. Some trains/lightrail for local stops and other
trains for less frequent but faster for long distances Express service.
The Shinkasen trains in Japan work this way.
The high-speed bullet trains run on the same tracks as normal Rail but have
passings at stations to allow them to bullet past.
Before Trolleys were destroyed in the USA by the GM/Firestone/Chevron conspiracy
every city in the US including Detroit had trolleys which could actually take you from New York to Boston with transfers.
My mother was raised in Washington, DC and took the trolleys everywhere from
the age of 12 before they were destroyed.
There is no reason we cannot restore Green Transit in the USA.
We really have no choice or as James Kunstler says, we will not be going anywhere!
Here we go again with the "polls". Gosh, with 77% support for those bike lanes - far more than the mere 55% often counted as a "landslide" - we should be seeing them all over, not just in artsy or university towns. And huge fusses like the one over the Brooklyn bike lane should be getting laughed aside long before they ever attract national attention.
I picked on the bike lanes because day-to-day staffing is not required; there is little "operating cost". So they should be ridiculously "easy" to put in, as compared to buses or trains, which require staffing at tremendous expense at all hours they are to be used (hence the widespread "never at night or on Sunday" policy, making transit best suited to hermits.)
I can't help but think that the "poll" results demonstrate little more than interest-group self-delusion engendered by the unicorn method of poll construction. The unicorn method, for example, fails to adjust for bias arising from the widespread "this stuff is all wonderful for somebody else to use" mentality. It also fails to adjust for bias arising from failure to confront the vexatious question of whether actual, as opposed to merely hypothetical, willingness-to-pay might ever exceed zero.
Thus, the unicorn method consistently leaves us mystified as to why, with such a huge landslide of "support", the stuff just isn't getting built all that much in the real world. So rather than wallow fatuously in airy hypotheticals, we might ask, say:
When we look around, do we actually see those bike lanes, or do they exist only in a la-la land hallucinated by pollsters and inhabited by unicorns? And even if we do see some, do they connect up, or are they just uselessly isolated bits of urban bling for the mayor to brag about at "conferences"?
When we look around on a Sunday morning, or around midnight, or at other odd times when many of the peons must travel to or from work, do we see any buses, trams, or trains? Do they even run out to where said peons - who cannot conceivably compete in the downtown real-estate market with the offices of $1000/hour lawyers - can actually afford to live? Or, again, are they just urban bling for the mayor to brag about at "conferences"?
And of course, the money question on "operating costs": under straitened economic circumstances, how many more $100,000/yr (wages+fringes) congenitally-tardy transit drivers are we really able to afford on the taxpayer's dime when both ability and willingness to pay (in the real world, not the pollster's unicorn planet) seem to reach new lows with each passing quarter? (Indeed, it seems like we're getting a lot of yammering about transit cuts in the big cities, although politicians do often define "cut" as failure to increase by leaps and bounds.)
I have been using Green public transit since 1996, i.e. for 15 years.
In that time punctuality within 5 minutes has been well over 95%.
In the midst of the blizzard early last Winter when virtually all roads in
New Jersey were closed and people were not driving my neighbor took his
usual train to get to New York City right on time and then returned on
schedule on a 3:30 PM return train when his office was closed due to cars
not being able to drive to work.
For my current Green commute I ride a shuttle van provided by my Company
which is sometimes late due to accidents and traffic but with excellent
service provided by the shuttle drivers who go out of their way to serve
their customers.
I do not understand why you wish to lob personal insults against conscientious
workers who in my experience provide stellar service.
What exactly is wrong with providing good jobs paying $100K including benefits
to Americans desperate for work if those jobs provide a major public benefit in reducing oil usage, greenhouse emissions and land usage?
Is it better to provide $100K including benefits to endlessly repave the miles upon miles of asphalt required for our current auto-addicted Transit?
All towns and the State of New Jersey faced major additional costs for snow removal on top of the existing gargantuan costs of autos as it is.
The trains ran through the snow with 12 times less track to clear than the
football field of asphalt required for 5 cars.
I have no illusions that it will be easy to kick the US auto addiction.
But it is absolutely essential and halfway steps like "cash for clunkers"
Stimulus funding for more highways, or $7500 subsidies for affluent electric car buyers are the totally wrong strategy.
Transit ridership was setting new highs in 2008 when gas first broke $4 per gallon. But then just when people were turning to Green transit, 150 cities
cut their public transit service. Ironically in a number of cases due to
deals with Wall Street for revenues in exchange for derivatives which were then
called in...
I exclusively walk or ride my bicycle - in Wisconsin - as a consequence of losing my license 3 years ago. I put MANY serious miles on my bicycle - and I can tell you that I am almost the ONLY serious rider here. The FEW riders I see - are recreational. Tires and tubes need to be replaced almost every 2-3 months due to use. Serious use. We have a few bicycle lanes and trails here- most are used for recreation - walking dogs, a brief, short walk, or recreational bicycling. Further, bicycling is growing increasingly dangerous. Inattentive drivers, those on cell phones, those distracted with food/children. I am lucky to be alive - and have had some words with inattentive drivers. No one wants to give up their cars - and most can't live without them - perhaps to the benefit to those of us who can.
enicar - it is certainly going to be a lot more difficult to reduce auto addiction and provide Green Transit options in more rural areas.
I am presuming that you do not live in the Milwaukee or Madison Metro areas so there is probably zilch Green transit outside of biking and walking available.
Here is Milwaukee's rating by Brookings:
http://www.brookings.edu/~/media/Files/Programs/Metro/jobs_transit/jobs_...
It is not impossible to support reasonably safe bicycling in rural areas-
look at Ireland for 100 years before the boom!
But the easiest progress will be in Metro areas.
Wisconsin DID have trolleys outside of Milwaukee or Madison before
the auto addiction took over, see:
http://www.trainweb.org/twerhs/wisctrolleys.html
All bike-riders and Green Transit advocates might be interested in the
BetterWorldClub which is modeled after the AAA but primarily to support
bicyclists and Green Transit. They provide pickups and support for bike
breakdowns, bicycle maps and other services, including even (ahem)
auto towing. But their basic purpose is to get away from auto addiction.
http://www.betterworldclub.com/
I think this is going to be a real issue, in the long run. It isn't just the new bikes we need, but the replacement parts for them, because they wear out fairly quickly. As our roads get worse, this will be even more of a problem.
If we can't make bicycle tires with local materials, then we have a major problem. We would almost be better off, figuring out early on that bicycles are not sustainable with local materials, and move on to something that is--horse drawn cart with wooden wheels, for example. But this will be an expensive alternative, because you have to feed the horse, and keep replacing wheels that break, so few will be able to afford it. Most will walk, and perhaps pull a little wooden wagon behind them.
Gail,
I really can't imagine why long distance transportation will have problems. Rail is efficient and can be electrified, and can also be electrified when necessary. Local can go by plug-in hybrid truck1. Wwater transport is even more efficient, and can find substitutes for oil.
Substitutes for oil for water shipping? Pshaw, you say.
No, really. Substitutes include greater efficiency, wind, solar, battery power and renewably generated hydrogen.
Efficiency: Fuel consumption per mile is roughly the square of speed, so slowing down saves fuel: in 2008, with high fuel costs, most container shipping slowed down 20%, and reduced fuel consumption by roughly a third. For example, Kennebec Captain's ship carries 5,000 cars from Japan to Europe (12,000 miles) and burns 8.5 miles/ton of fuel at 18.5knots, for a total of about 1,400 tons of fuel. At a 10% lower speed of 16.6 kts, the ship burns 21% less fuel (about 300 tons).
Size brings efficiency: the Emma Maersk uses about 320 tons of fuel per day to carry 220,0002, tons of cargo, while Kennebec Captain's ship uses about 60 tons to carry about 23,000 tons (see here ), so the Emma Maersk uses roughly 60% as much fuel per ton.
Other substantial sources of savings include better hull (I've seen mention of "axe cleaver" designs - anyone seen details?) and engine design (very large (3 story!)marine diesels can get up to 50% thermodynamic efficiency), and low friction hull coatings (the Emma Mærsk saves about 1.3% with special paint, and bubbles work too).
Container shipping fuel efficiency rose 75% from 1976 to 2007, in an era of very low fuel costs.
Finally, reduction of oil consumption brings a kind of reverse-Jevons efficiency. Currently, some 34% of shipping tonnage worldwide is devoted to transporting oil [source http://www.unctad.org/en/docs/rmt2006_en.pdf , p.16]. If we reduce oil consumption, we reduce the need for shipping. Similarly, world coal trade was about 718Mt in 2003 [source http://www.worldcoal.org/bin/pdf/original_pdf_file/global_coal_market_price(01_06_2009).pdf , p2], at the same time as total world trade was 6,500Mt, so that coal was 11% of world seaborne trade by weight.
Continued at http://energyfaq.blogspot.com/2008/09/can-shipping-survive-peak-oil.html
Very good comment. Btw, world coal trade at 718 Mt could be replaced by 7180 tonnes of reactor grade uranium. A single ship (nuclear powered would be feasible) could service the entire world's sea transportation needs for uranium.
I think this sums up in a nutshell what your problem is--a lack of imagination (and underlying understanding) of how the various systems fit together. The financial system and the political systems are very important, and somehow everything must fit together.
The saying goes, "If you only have hammer, then you tend to see every problem is a nail."
As long as you assume some magical way of making what limited supply we have fill all of society's needs, without causing any disruption in other systems, then everything works together. We are already having riots in London. Things just don't work the way you think they do in real life.
Ecosystems are typically quite robust due to diversity, complexity and the adaptability of the species within it. Whenever a species fail, other species fill the vacant niches. The global economy may have its weaknesses, but the problem is absolutely not in diversity and complexity. The problems lie where we have mono-cultures and constructs that is "too big to fail".
Nick's views are valuable, as he is the best here at pointing out the diversity of ways things can be changed to adapt to problems. Skeptics need to counter his diversity arguments by quantitative analyses on whether the alternatives suffice. Then we may reach a good synthesis. However, your dismissal does nothing to contribute to the discussion.
Don't forget - I see no reason not to include nuclear in that diverse set of solutions. It's not what I would personally prioritize, but it will be used, I'm sure.
I think this sums up in a nutshell what your problem is
I understand your frustration - I disagree with a lot of your arguments. On the other hand, getting personal doesn't help.
--a lack of imagination (and underlying understanding) of how the various systems fit together.
That's amusing - that's exactly what I would say about you. I think you're failing to think outside the "oil box".
Here's an example of this kind of thinking: "The interface between finance and energy will prove to be the most important determinant of the way the Greater Depression we are rapidly moving toward will play out in practice. For those here who may be unaware of peak oil, the point is that global oil production appears to have reached a production peak that it will not be physically possible to exceed. ...Energy is the master resource without which no activity, economic or otherwise, is possible."
http://theautomaticearth.blogspot.com/2008/12/debt-rattle-december-7-200...
This kind of deeply unrealistic oversimplification is a remarkably good example of "everything is a nail"!
I agree that the financial systems are important - I just don't agree on the impact of PO on financial systems. The fact that The Automatic Earth has been spectacularly inaccurate with their economic predictions is good evidence of that.
In November 08, they were advising people to short the stock market: "Sell equities, real estate, most bonds, commodities, collectibles (or short if you can afford to gamble)". This strategy would have lost a lot of money in the last 2 years.
Similarly, in 2009 she said the Dow would crash that year, and reach 1,000 in 2010: instead, the US stock market was up up for the year. She predicted sharp, dramatic price deflation - as of December 2010 all measures of prices showed growth.
For the year of 2010 the Dow gained 11%, on top of an 18.8% gain in 2009. The S&P 500 was up 12.8% for the year, with its best December performance since 1991. In 2009, the index gained 23.5%. The Nasdaq finished 2010 with a 16.9% gain after soaring 43.4% in 2009.
Here's a prediction from November 2008: "We appear to be beginning a market rally at the moment, which should lead to precisely this set of trend reversals. Such a rally is only temporary relief however. It may last for a couple of months, but then the decline should resume with a vengeance." http://theautomaticearth.blogspot.com/2008/11/debt-rattle-november-29-20... . Now, we're in the middle of a medium sized correction - I'm sure she's pointing to that as evidence of TEOTWAWKI.
The saying goes, "If you only have hammer, then you tend to see every problem is a nail."
Exactly - everying is not energy related, and especially not oil related!!
As long as you assume some magical way of making what limited supply we have fill all of society's needs, without causing any disruption in other systems, then everything works together.
I'm not suggesting that a transition away from PO will be absolutely smooth.
We are already having riots in London. Things just don't work the way you think they do in real life.
That's completely unrealistic. Western society has weathered much, much larger disruptions than PO.
If the US were to take a WWII mobilization in answer to PO we could address almost any imaginable shortage in weeks - literally, and convert away from an oil based economy far more quickly than oil production will drop.
How about you make a prediction Nick. You are full of a million "we can's" so lets read what you expect. Monday morning quarterback for someone else predictions is easy. You would not have the gonads though, that is not what a shill is all about.
What world do you live in. Appears to be the average world...the average vehicle, the average person, the average price. Which of your "we can", "we could" etc have come to fruition. WWII mobilization, get real, who is paying you to continue that garbage. You've been at it for years and the economy is still deteriorating, FF burning is continuing to rise along with unemployment and atmospheric CO2.
I occasionally say what I expect: gradual adaptation to PO, very slow economic growth in the OECD/US, and growing CO2 emissions. It's worth knowing that TEOTWAWKI is very unlikely (except, of course, if the worst runaway positive feedbacks of climate change happen...).
It's also worth knowing that the technical means are in our grasp to solve our problems - they're scalable, affordable, etc. Will we as a society choose to override the minority that is blocking beneficial change in the way we should? Probably not..
OTOH, coal consumption in the US is falling, and windpower and EVs are growing reasonably strongly. All is not lost, quite yet.
Is that the best you have Nick?
The economy is tanking, energy consumption is falling. Coal exports are the highest since 1992 and expected to continue rising.
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
Read that.....midsize SUV sales up nearly 50%. Ev's pffftt
To claim windpower and EV's caused coal consumption to fall is just the tactic of a paid shill.
http://205.254.135.24/coal/
Above is the first link I Googled. Tell me if the EIA don't think the future is rosy for coal.
The USA produced over a billion tonnes of coal 2010, what is going to reduce that by an appreciable amount in meaningful time period? You deny the numbers and an economy that depends on it.
The economy is tanking
Not really. The stock market is falling, but the overall economy is at worst roughly "stagnant". Of course, stock markets don't like stagnant...
Coal exports are the highest since 1992 and expected to continue rising.
They're still not very high. OTOH, I agree - I'd prefer coal stayed in the ground.
midsize SUV sales up nearly 50%.
Midsize SUVs are what station wagons used to be.
Look at the other data: large cars down 7% YTD. Large SUVs down 8%.Small cars up 17%. Could be better, of course, but that's not too bad.
Ev's pffftt
uhmm...that doesn't seem very specific...
As someone likes to say, people tend not to understand the exponential function. That applies to new things like EVs: they appear to start slow, and pick up speed later surprisingly fast.
To claim windpower and EV's caused coal consumption to fall is just the tactic of a paid shill.
A shill for what???? I don't think coal companies would be very happy with what I have to say. Further...it's the truth: windpower displaced coal.
Tell me if the EIA don't think the future is rosy for coal.
This is what that link says: "First-quarter 2011 coal share of power generation lowest in over 30 years ".
You deny the numbers
Ah...which numbers?
and an economy that depends on it.
Yes, I disagree that in the medium term we need coal: we don't.
And so on, and so on. I have a hard time understanding why TOD people are so US-centric. The US isn't the world. PO should be a global phenomenon, right? And the global economy is improving, overall, and energy consumption is going up.
Of course, carbon emissions will keep rising for the forseeable future, also mostly due to non-US consumption.
Are you joking? Or, do you just not know any better? The European economy is in toilet and it does not seem to be getting any better.
Imports of all OECD importing nations in Thousands of barrels per day. Does not include exporting nations of Norway, Denmark, Mexico and Canada, but does include all OECD importing nations. Per the EIA.
Also in the second quarter of 2011 even the imports of the rest of the world have dropped considerably. The Chinese bubble is about to burst.
Behind a pay wall but available via Google.
The Great Property Bubble of China May Be Popping
The world economy is not improving. The world economy is on the verge of collapse.
Ron P.
Global growth is projected at some 3% this year. The Chinese will obviously have their recessions and bubble-bursts eventually, just as everybody else has had since time immemorial. So what? Europe isn't "in toilet" - some European countries just have too large a national debt and/or deficit. That's going to clear up one way or the other.
The world in still in a deep recession, global growth will come nowhere near 3 percent this year regardless of what is expected. Real growth is now non-existent in OECD nations. The only increases are happening in oil exporting nations and China and India. Don't expect India to increase any this year and China's increase is artificial, based on building houses, malls and office space that will never be occupied.
You are hilarious. The economies of the world cannot grow unless the oil supply grows. We have been on a plateau for six years. The next trip is down.
The point is Jeppen, that all the world, particular Europe, is in the exact position as the US. And several European countries are much worse off. To pretend that the US is worse off than Europe is absurd and anyone who follows world events is well aware of that fact.
Ron P.
"The world in still in a deep recession, global growth will come nowhere near 3 percent this year regardless of what is expected."
You know, more than half the year, and most of the 3% growth, is already in. What you say is tantamount to forecasting an extreme drop in output in the last four months of the year. Three days ago, Citigroup cut their global growth forecast from 3.4% to 3.1% for 2011, and from 3.7% to 3.2% for 2012. That may have to be adjusted down further a few points, but you've gone completely ballistic. What deep recession!?
"Don't expect India to increase any this year"
Why not? Their growth was recently estimated, by themselves, to 8.2% for the year.
"China's increase is artificial, based on building houses, malls and office space that will never be occupied"
Do you really believe China's 9% growth is artificial? For real? Despite increasing real wages, soaring auto sales, good infrastructure and energy projects and so on? I think you draw way, way, WAY too big conclusions from the bad news articles you read.
"You are hilarious. The economies of the world cannot grow unless the oil supply grows. We have been on a plateau for six years."
Here is the real global growth data for the last six years: 2005: 3.4% 2006: 4.0% 2007: 3.7% 2008: 1.7% 2009: -2.1% 2010: 3.7%. So, during this oil plateau and financial turmoil, real global growth has been some 15%. Now, again, tell me how the economies of the world cannot grow unless the oil supply grows. You obviously have NO contact with global economic statistics whatsoever!
"The point is Jeppen, that all the world, particular Europe, is in the exact position as the US."
No. Large parts of Europe are perfectly fine. OTOH, some parts of Europe are worse off than the US. True, developed markets will post a lack-lustre 1.5% growth this year, but emerging markets, comprising half of global GDP, are NOT in the same position. While they are also expected to drop, from 7.8% in 2010 to 6.4% in 2011, that will be 80% of global GDP growth this year. Emerging Asia is quite a bit less dependent on exports to the West now than in 2008. That is one good consequence of the crisis. The US is swiftly losing its role as the world economic engine.
Nonsense! The world sits on the brink of disaster. Did you see the August 22 cover of Time?
This Week In TIME: The Decline and Fall of Europe (And Maybe The West)
And Germany knows it: German minister advocates austerity, warns of 7-year global recession
We are all in this together. If the countries in trouble go down then Germany and France go down with them, followed shortly by America. But Europe is far closer to the cliff than America. That is not to say that we are not close to the cliff also, because we are, but not nearly as close as Europe.
Ron P.
"We are all in this together. If the countries in trouble go down then Germany and France go down with them"
How do you define "go down"? A GDP drop? Bancruptcy? By what mechanism would Germany "go down" if, for instance, Greece and Italy does?
And no, we're still not all in this together. I showed you, with hard numbers, how much nonsense you were talking. You ignore all that and keep saying I'm talking nonsense, supported only by your interpretation of news items and your deeply held belief in PO. Tiresome.
I supported everything with my original posting of data from the EIA. Oil is the lifeblood of the world's economy. The crash started in 2008, paused for about a year and now is set for the second leg down. It is all because the availability of oil is declining and the price of what is left is increasing. Read this. This will be the most important article you read in your life.
Energy and Human Evolution
Ron P.
"I supported everything with my original posting of data from the EIA."
Actually, that supported nothing at all.
"Oil is the lifeblood of the world's economy."
So, you refuse to acknowledge the great decoupling that is ongoing, with 15% cumulative global economic growth (and rising) at an oil plateau? Instead you prefer to make an arbitrary link between oil decline and the financial stress put on a few economies by housing bubbles and undisciplined national budgets.
And then you throw in this 15 year old nonsense article for good measure, an article whose author doesn't know the first thing about demographics. Btw, global population growth has since shrunk to 1.1% and keeps shrinking, and this is not due to resource scarcity as those with the most resources at hand have the lowest fertility rates.
The economy is becoming decoupled from the energy that drives it? Yes, I definitely refuse to believe that is possible. There can be temporary spurts of growth but basically we have an energy driven economy. The industrial revolution was made possible by extrasomatic energy, energy from coal, oil and gas. If you think the economy can be decoupled from the energy that drives it then you are beyond hope.
The age of the article is not important. The point is that there was nothing in the article that required any data from current events. The article was all about the connection between evolution and energy. If you think that connection requires input from current events then you are sadly mistaken.
Overshoot was written over 30 years ago and it is just as relevant today as in 1980.
But the very fact that you call Dr. Price's article nonsense just goes to show how far you are removed from reality. Tell me what is nonsense about this quoted paragraph? And how might it be worded differently if it had been written yesterday rather than in 1995?
Ron P.
You're sticking your head in the sand, Ron. I didn't show that energy was decoupled from the economy, but that OIL is decoupling from the economy as we speak. I did it with hard numbers, but you refuse to acknowledge this. Actually, you avoid the core of the argument like the plague and go on about side issues and try to confuse the issue instead. It gets tiresome. Tell me if you want to get serious about this, otherwise you can have the last reply.
This would be funny if it wasn't so sad. The idea that oil can be decoupled from the economy is unbelievably absurd. Virtually all transportation is powered by oil. Planes, trains, trucks, ships and automobiles are all powered by oil. And you are going to decouple the economy from transportation? Give me a break!
If you had bothered to read "Energy and Human Evolution" you would see the absurdity in your "decoupling" remarks.
Ron P.
The statistics is in. This isn't about "can", it is about what is. And the fact is that economic growth has decoupled from oil consumption growth. You argue about this as if it wasn't history.
Perhaps flight will always need liquid fuels, but that little proportion can be covered by what oil remains, CTL, NGL, biofuels or synthesized fuels. And if not, the world economy can keep improving without flight. All other transportation is becoming increasingly more efficient, powered by alternatives and replaced with more local sourcing of goods and so on.
You are a fairly intelligent person. So I am at a loss to understand why you are quoting theautomaticearth to Gail. Clearly you understand that Gail doesn't write that blog.
If you have a beef with what Gail writes why not quote her?
But if you want to quote people lets look at your stellar technical analysis.
http://energyfaq.blogspot.com/2009/05/do-electric-vehicles-cost-less-to....
Yes, ladies and gentlemen. Nick thinks EVS will cost less than ICEs because they contain no points or carburetors. And somehow catalytic converters are a maintenance issue. It's 1986 all over again.
You are a fairly intelligent person.
Well, thanks!
I am at a loss to understand why you are quoting theautomaticearth to Gail.
1) It illustrated my point well. I find theoretical arguments without examples boring and uninformative.
2) I can't find any other intellectual underpinnings for the idea that oil has some remarkable value that can't be replaced by other forms of energy.
3) I think Gail agrees with it. Actually, I think she can speak for herself: Gail - do you?
they contain no points or carburetors.
I forget what this logical fallacy is called - it consists of finding a small error, and suggesting that it invalidates the larger argument. Actually, I'd remind you that there a surprising number of carburetors still on the road....
So exactly what you just did with the Automatic Earth?
Except the errors by the Automatic Earth are minor timing errors.
And your technical errors demonstrate a severe lack of understanding of anything that has to do with car maintenance or repair.
The latter exposes your lack of expertise to an embarrassing degree.
Which by the way still has nothing to do with Gail or Gail's writings.
Just saying.
http://www.edmunds.com/nissan/leaf/2011/tco.html?style=101301094
http://www.edmunds.com/toyota/corolla/2011/tco.html?style=101372440&zip=...
:edit
http://en.wikipedia.org/wiki/Carburetor
Oh please do tell me how many carburated cars are still on the road. It really does add to your credibility...
Please counter an argument without personal attacks.
All the best,
K.
the errors by the Automatic Earth are minor timing errors.
They're enormous errors: timing is of the essence when it comes to forecasts, and these aren't minor differences. TAE continually predicts disaster, and continually is proved wrong. They reveal that TAE is detached from reality.
tell me how many carburated cars are still on the road
As for carbureted cars (note the spelling), my point was that there are still a lot of old cars on the road, including a lot of 20 year old cars. There are a lot of old Crown Vics on the road. The larger point: who cares? It's quite clear that EVs will have much lower maintenance costs.
Thank you for the comparison of Total Cost of Ownership, where we see that Edmunds agrees that a Nissan Leaf EV is $1,700 cheaper to own over 5 years compared to a Toyota Corolla.
Try again.
Leaf True Cost To Own* $36,645
Corolla True Cost To Own*$34,363
And that's including the $7.5k rebate.
Try again.
Leaf Maintenance 5 year total $2,316
Corolla Maintenance 5 year total $2,882
A $500 dollar difference after 5 years.
But that's probably only because the Corolla is fuel injected.
Leaf True Cost To Own* $36,645
I'm puzzled: the link you provided gives $32,668 for the Leaf. http://www.edmunds.com/nissan/leaf/2011/tco.html?style=101301094
It's true: Edmunds estimates Leaf maintenance costs significantly higher than I would. Any idea what the $1,339 for year 5 includes??
What zip code is it calculating? That changes the TCO.
I dunno. Tires? Not a new battery cause the Corolla shows the same jump as well.
I would think tires wouldn't be more than $600 at the very most.
Very puzzling. How would we find out Edmund's methodology?
Cars.com does a TCO that utilizes a national average.
http://www.cars.com/nissan/leaf/2011/pricing/
http://www.cars.com/toyota/corolla/2011/pricing/
Leaf 5 year total cost of ownership $34,851
Corolla 5 year total cost of ownership $31,547
That too includes the $7,500 rebate.
Maintenance costs
Leaf $1,605
Corolla $1,671
I also looked up a 20 year old Crown Vic. Seems even with the carburetor the Leaf is still more expensive.
And another one
http://db.theautochannel.com/db/newcarbuyersguide/toc_results.php
State New York New York
Year 2011 2011
Make Nissan Toyota
Model Leaf Corolla
Series SL Base
Trim 4D Hatchback 4D Sedan at
Segment Eco Compact, Sedan
Market Price $34,525 $16,521
Rating NA Average
Depreciation $23,465 $10,407
Fees & Taxes $-3,919 $832
Finance $4,599 $2,146
Fuel $4,468 $11,098
Insurance $7,883 $7,736
Opportunity Cost $416 $533
Maintenance $1,885 $1,917
Repairs $1,834 $1,834
TOTAL $40,630 $36,503
Not looking good for the Leaf. Hate to see one of these that calculates the cost of a new battery pack every 7 years.
Well, I think we have several takeaways here.
First, these companies don't really know what to make of EVs, and they aren't trying very hard to learn about them. We see that the maintenance costs are almost identical on Edmunds, and the repair costs are in fact precisely identical on the "autochannel": $1,834 for both. That's obviously a default cost, which hasn't been customized for a new tech.
2nd, they're assuming very high rates of depreciation: in 5 years the Autochannel assumes about 65% depreciation for both. Further, they're depreciating the sticker price, not the net price, when the net price is the true market price. The true lifecycle cost, over a much longer period, will improve the Leaf's picture.
3rd, even with these imperfections, we see that the 5 year cost is really very close: Edmunds is $2k less or more depending on zip code (and in most zip codes the Leaf is less): at worst that's only $33 per month per more : that won't make anybody lose their job because they can't afford to commute.
I agree the TCO estimates need to refined for EVS. You missed another big error. They are assuming you are paying for gas using the empg numbers from the EPA.
That said, without the tax rebate and including the costs for a new battery pack every 7 years or so a Leaf is no where near cost competitive. Carburetor or no Carburetor.
Well, the savings from fuel are likely to be about $1,800 per year: that's $12,600 every 7 years. That will pay for a very nice battery, with a fair amount of change left over.
Even without the savings from eliminating all those other components (including the carburetor...!).
-------------------------------------------
Seriously, any idea where we can get good, detailed data on the real costs of car ownership?
Hi dcoyne78
Thanks for your comment.
re: "Once the threat is clearly perceived, governments will take action to develop alternatives and to maintain the system while adapting it to a lower energy future."
I am curious: Do you have any evidence that suggests this is or will be the case?
The evidence I have gathered suggests entirely the opposite. Both the current and previous administrations know full well about "peak," and are not only not telling the truth, they are actively suppressing much-needed research and planning, particularly in the areas of ways to organize to meet basic needs.
Here's the evidence I draw upon:
re: A. Robert Hirsch is a member of the NAS, and lead author of the first DOE report on peak oil in 2005.
http://www.energybulletin.net/stories/2010-09-16/exclusive-interview-rob...
Peak oil : A conspiracy to keep it quiet in Washington, says Robert Hirsch
Interview with Robert L. Hirsch (2/2) - LINK to full text of original
B. David Fridley.
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)
http://www.energybulletin.net/node/50055
Hi Aniya,
I have no evidence, simply hope. I was not very clear however and can see how my statement about the threat being clearly perceived was misinterpreted. I agree that governments are aware of the problem, but are not making the public aware (maybe they are concerned with panic or hoarding). What I meant is that once the gravity of peak oil is clearly perceived by the public then they will demand that governments take action. If not right away then as things deteriorate. My hope is that action will be taken soon which is why I applaud the work that Gail is doing. Where I differ with Gail is that I do not think investment in renewables, trains, energy efficiency, and a more efficient power grid is a mistake. It seems that her position is that it will all fall apart quite rapidly and that 50 or maybe 100 years from now there will be no international trade (or much less), that food and water will be severely constrained, that we will be unable to manufacture or maintain modern machinery, electronics, communications and so forth.
I think that people in general will start to realize that there are limits to growth and my hope is that they will start to act more rationally when this becomes apparent. Imagine that a majority of people agreed that peak oil was imminent and that peak fossil fuels was 5 to 10 years from now, what would happen? Some think we would descend into anarchy or a police state. I hope that society moves to a World War 2 type of urgency (without the actual war and other bonehead decisions such as internment of citizens .) The perceived threat might cause society to pull together and do what it takes to solve the problem, humans can be creative and there is much that could be done to create a more sustainable society.
d coyne
The evidence is there that leaders are aware, on some level, that society is behind the peak oil curve, though I think they're also aware that any possible response will be inadequate, too little, too late. There's a major move on in Georgia to add a penny sales tax to address these issues, expanding light rail regionally, etc. The proposals, unfortunatly, also plan to direct funds to highway expansion and improvement. Many of those involved have expressed an awareness of the situation, and a sense of urgency, though they also seem to indicate that they are a bit late (30 years?) addressing this issue. Voters will decide next year.
On the Federal level, while I don't expect elected officials nor their partisan appointees to scare the public into accepting action on these issues, the Military has been the most obvious conduit of awareness and action, much the way it was the incentive for building the Interstate system, at least in the area of alternatives to fossil fuels. Perhaps this is the Govt's stealth method of breaking the news and testing/funding the means to mitigate our energy/climate change disfunctionalities.
I expect that many elected officials are more aware of how poorly positioned the US is to deal with our looming energy conundrum than many think, and when the polls indicate that awareness and acceptance among the electorate is at high levels we'll see many more politicians adopting these issues as their own, but certainly not before the next election cycle winds down. Of course, by then it will likely be glaringly obvious that we're in deep sh@t. They will then be in the uncomfortable position of explaining away their failure to see this coming. Ring the bell on another round of blaming the other guys. So it goes...
If the Tea Party and their like make major gains in 2012, it's game over, IMO.
To be frank, there are existing examples of decoupling (growth without using more resources)
http://www.unep.org/resourcepanel/decoupling/files/pdf/Decoupling_Report...
P113."A more remarkable trend can be observed in freshwater (Figure 8.5). For most of the last 10 years, China achieved absolute decoupling between freshwater consumption and economic growth. During 1998–2007, total freshwater consumption varied within a small range between 290.1 and 306.2 billion m3."
That is the good side. But there are some bad sides about it. First, this is achieved mainly because absolute resource limitation. I understand the importance of water conservation because I was raised up in a city with only 4 hours of tap water supply each day. There just simply not enough water, you goanna to conserve it or you will not have drinking water for the remaining day. Now the situation bettered, but memories don’t easily fade away. Older generations still adopt an resource efficient way of living.
Nowadays, government use a lot effort to promote water conservation. (On the street of Beijing, you can see pictures of an old grandpa or a per-school girl standing near water tap, because she and he are two of winners of “water saving citizen” contest and designed some best ways to preserve water. Such commercials cost a lot, but the bus company is gov-owned, so they just reduce their profit to promote water conservation). However, the lifestyle of newer generations is significantly more resource intensive. They just don’t have the experience of resource limitation.
Second, because more and more Chinese have chance to visit advanced OECD countries, they start to question the rational of resource conservation. I read one post on Chinese forum by a Chinese student in the states. “The Americans are f**king electricity, yes they are f**king it.” (Translate: Americans are wasting electricity just like they can get high from it). Many Chinese lose faith in resource conservation after exposed to western life style. “Why should we conserve oil to power westerner’s big car?” was a common expression during time of Climate talks in Denmark. (In China, Climate change is often discussed together with energy conservation) Chinese government try to reduce the impact of FF limitation by strongly promote hydro-electricity, building nuclear reactors, using electrical high speed railways. And government companies are up-regulating gas and diesel prices to reduce usage. However, the new so-called “citizen’s voice” (not many, but backed with related businessmen, have a lot means to express their ideas) are against it. They want to remove hydro-power plant to restore original sight, get rid nuclear power plant away from their home and take airplane instead of HSR. And they want opening of import of “cheap oils” from smugglers and other sources (once from Iraq, now might be Iran or somewhere else). This is greatly hindering the effort of resource conversation in China. With stronger-than-ever resource shortage, it is very hard to predict what will happen to Chinese resource management policies.
[citation needed]
I think that something similar to the above quote is actually true. The catch is that you need to keep the electrical system operating, and it is almost as likely to fail if we have oil supply problems (or financial problems that affect several systems at once) as the oil supply system itself.
It is very much related to the discussion early in the comments. It theoretically only takes a little oil to keep the electrical system operating, but there are so many connections, that it would be very easy for everything to fall apart.
If the financial system fails, it is hard to run an electrical system without paying the workers.
i've often wondered if the peak of population looms
and our time is bright but short just like a fleeting flower blooms
and maybe there's no going back the tipping point's been crossed
'cause we're all of us the most we'll be - peak people
http://thepeakoilpoet.blogspot.com/2011/08/peak-people.html
I often think of our population situation. I then wonder what is the population level that Earth can carry for the following two classifications:
1) Kings and serfs
2) Middle class society
Now, if we look at history, the population levels before fossil fuels were very low. To make that worse, most of the population was poor! The average middle class person today uses more energy than kings of past. Not a rosy outlook for 150 years from now when the last usable bits of fossil fuels are being fought over.
Heck, we didn't really do that good during the great growth period! Look at all the poor, wars, yeast-like consumption, etc.
Maybe it is time for us to grow up.
Good luck with that. From where I'm sitting (U.S.) the great mass of humanity is willfully, unteachably ignorant and science-hostile, myopically selfish and short-term centric, bases their "reality" upon ancient childish superstitions, unwilling to think for themselves or consider new ideas (much less take any positive action), and are as incapable of seeing the futility of our current growth-based paradigms as an amoeba is of self-evolving into a sentient species. And the U.S. is one of the most technologically advanced societies on earth.
The status quo will continue... until it can't.
You are right, it does not look good. Hopefully, there will be pockets of success. Well secured communities that are able to maintain and even progress the knowledge that took so long to acquire.
People often ask - what is our purpose. Well, if you think about it, we have about 65 million years till the next extinction event. If we are not off this planet by then... Reset time.
Therefore, any solution that does not involve the progress of knowledge is admitting defeat to our main programming objective - survival of our genetic code.
you said it, brother.
Um, 65 million years?! Nope, we happen to be on the cusp of a major mass extinction event, reset time is right now!
Unfortunately the full article is behind a paywall...
BTW last weekend I was out kayaking on my local coral reef and found myself paddling through hundreds and hundreds of large pink jellyfish a somewhat unusual occurrence in the past but something I see more and more often these days.
The jellyfish are making the most of our destroying the things that eat them. We are going to have to start learning recipes for jellyfish soon, it'll be all that is left.
NAOM
We are in the midst of a major extinction event that corresponds to the rise and growing population of our species beginning around 10kya and accelerating from that time. A strong case for this hypothesis was made by Richard Leakey and Roger Lewin in their 1995 book "The Sixth Extinction". Highly recommended reading. (Book Review)
You need to think positive!
http://www.youtube.com/watch?v=u5um8QWWRvo
Don't send out tsunami like vibrations...
/sarcasm
Well said, I'm afraid.
This is my feeling too. No matter how much I hint to otherwise sensible people that we are entering a critical period re energy and resource supply in general: they don't want to hear. Always the very smug - dare I say that about friends - response is that technology will sort it all out and I am being a doomster and a depressive (possibly true that one) to take such a negative position. I sometimes wonder if they might be right. And a handful of people around the world being very careful with resources does not replace a world economy based on resource exploitation and consumption as a way of life. Today if you don't buy things you are just as much out of the loop as if in the middle ages you said you actually didn't believe in god. We are told that without consumption the economic sky will fall in and we will all be damned to hell.
I was watching Bloomberg earlier and the sense of relief is palpable. With Gaddafi going (nearly) and Libyan crude soon to be available again the stock markets are rising. Everyone is smiling and seemingly believing they see a sunny economic upland stretching away to the far horizons: again! Optimism is a wonderful thing and I wish I possessed it.
Tank,
I want to take issue with you two classifications. It seems to me that there never was a time when there were only kings and serfs. All kings had a retinue of attendants. Some attended to the king's immediate pleasure. Others attended to running the king's estates. And there were stewards of various aspects of the various royal estates. There were also nobles who had their own estates with similar labor structure, but pledged to fight in the king's wars. This structure can be matched up against today's structure of corporations. There are a lot of points of direct correspondence in job description. Just as the Corporation model of organization has produced both bad and good for the modern day serfs, so also there were, from time to time, kingdoms where the serfs were allowed, even encouraged, to prosper.
And as for middle class society: That has existed only in recent times so we have much more hard facts about it. A middle class society has never existed without concurrent existence of a lower class and an upper class. This country (USA) had wealthy people and families from well before the war of independence. And it had both slaves and freemen who didn't compete well in the labor market.
Yes, but try to sum that up for something easy to write down! :)
I use "Kings and serfs" to represent the pyramid structure, yes, corporations are the same.
I use "Middle class" to represent a more flat, advanced society that consumes energy on par with their group (not ridiculous amounts like the rich use but not so little that there is no running water or waste removal).
If anyone has a better description that is just as easy to post, please let me know. I kind of like the "Kings and serfs" but the "Middle class" tag could go.
Hi Gail,
Nice summary of the problem, though somewhat pessimistic regarding solutions. Note that the close association that exists between GDP growth and oil growth does not indicate which is the cause and which is the effect. Most economists would think that the GDP growth causes an increase in oil demand which then leads to oil growth. Without the growth in oil supply prices rise and over time there are a number of responses such as increased fuel efficiency (my Prius is twice as efficient as the Camry it replaced), and substitution (converting from oil heat to natural gas and making the home more energy efficient). It took many years for oil output to surpass the peak it had reached in 1979 as oil use dropped in the 80s due to efficiency improvements. Also remember that although alternative sources of energy use oil, it is not the case that there will be no oil, there will be less oil and as it becomes more expensive it will be put to its most productive use, such as to build renewable energy and service transmission lines and build trains, etc.
My point is not that it will be easy to transition, just that throwing up ones hands and saying it can't be done is not going to get us very far. Also between high growth and negative growth there is the no growth (or very slow growth) situation and maybe that will work fine. There was debt in the slow growing world prior to the industrial revolution. Once we move aggresively to get population under control (encourage one child families, become less homophobic so that gay marriage is socially acceptable) maybe we can gradually transition to a slower or no growth world. We will need to get the undeveloped world closer to a European living standard first however and that will require a great deal of creativity, it is certainly worth striving for.
D. Coyne
Getting the undeveloped world closer to the European living standard implies huge use of fossil fuels. I don't really think it can be done, but if it can, it will, by definition, mean that the rest of the world has to decline in living standards, so there is enough to go around. So this by itself would imply significant decline for the developed world.
I think if we were to go back to the pre-industiral period, we would find that debt was used much less extensively than it is today. Homes and farms were inherited, not bought with 5% down, for example. Land was in many parts of the world not owned by individuals, but owned in common. Lloyds of London was funded by the pooled wealth of wealthy individuals, not by debt. And of course, there is the quote I gave in Slide 8. Reinhart and Rogoff define "inflating away" debt as default as well, and the countries which were not growing tended to default on debt.
My point is that the problems we have are here, right now. They have to a significant extent been transferred to the governmental sector, so that they are hidden from view. Talking about fixing them in the future may very well prove to be too late, and we may not have the resources to fix them, if we wanted to.
Excellent presentation Gail!
Amen, Gail.
It would take more than five Earths to be able to sustain the world population if everyone consumed resources at the same rate as the United States: http://www.naturalnews.com/z022890_world_population_china_debt.html
But... that won't keep anyone from trying to accomplish the logically impossible (and irreparably wrecking the environment in the process, thereby reducing the earth's carrying capacity even further).
Hi Harm,
In 2008, Switzerland had 3 times lower CO2 emissions than the US. Let's say the world realizes there are limits to growth and does better than switzerland as we move to a more sustainable mode of living. Let us also assume that as we recognize these limits we choose to have fewer children, in many European countries population would be decreasing if there were no immigration (see natural population growth). Developed countries need to lead the way in developing a sustainable model, less developed countries will move towards this more quickly because the model will exist and they can skip the resource wasting and environmentally destructive 20th century model. They may have to because the fossil energy resources won't be cheap enough to follow the previous model.
Clearly things must change, I am guessing that when I say we should attempt to get everyone's living standard to a European level that you assume I mean that resource consumption would be at the European level. My suggestion is that if everyone's resource consumption in the developed world decreases, (by using less and recycling, becoming more energy efficient, and moving to no carbon energy) while increasing living standards in the less developed world maybe we can get to one Earth (rather than 1.7 Earths). It would help if 50 to 100 years down the road we move to a negative world population growth by choosing to have fewer children. Remember that increased living standards and education in the less developed world is a key component of getting population under control.
D. Coyne
The idea that we are using 1.7 earths now is pure nonsense, as far as I am concerned, because it assumes that you can continue to use fossil fuels, and it will not be a problem.
If we are talking about sustainability without fossil fuel resources, we are using a huge multiple of the earths' resources--probably more like 10, so reducing our use is much more problematic.
I think the folks who put together the 1.7 earths estimate were looking for an outcome that people would feel like was a reasonable one to work down from, whether or not it had any basis in fact.
I saw a simulator that revealed no matter how much you bike, walk and eat from your organic garden -- even if you never fly a plan -- just being an American in that infrastructure -- we require 3-4 earths.
I do want to say that I personally do ride my bike and eat low meat diet and vegetables from my garden not because I think it will save the world but because I want the exercise, I want to be healthier if possible, I want to personally save money, and I like to garden. But even if these things were applied very widely, I imagine we still would need 3-4 earths given our military, infrastructure, and other trappings of "modern" society.
Hi Gail,
The 1.7 came from assuming that the 5 earths estimate above was correct and then assuming we could use CO2 emissions as a proxy for resource use (which is admittedly a very rough estimate). In 2008 CO2 per capita emissions in Switzerland was 3 times lower than the US so I took 5/3 which is around 1.7 as a "European" resource use. I also do not assume having less oil necessarily implies higher resource use nor do I assume that riding an electric train instead of a large SUV implies a lower standard of living. It seems that you assume all petroleum must be replaced by biofuels (I am guessing that this is where the factor of two increase comes from) and I make no such assumption. Standard of living can be maintained with far fewer resources than are used at present.
D. Coyne
I think you are asking the US to compress its suburbs onto a Euro footprint. Now how will that come about? This is not a game of Sim City. There is too much land in the US; too much historical access to oil and autos. If Europe had that land and access to autos then they too would have sprawled all over the Continent. Europe existed before autos, and made more compact cities with more compact housing units. It is historical growth that helps the EU.
But the EU is tightly packed with folks; all the fossils are mined; and the farmland exploited. The EU burned tons of fossils over its lifespan.
The dilema is not avoided by asking the US to quit using oil. Oil will be used by India and China. The Global rate of oil consumption will not change one drop.
Finally, to compress oil usage in the US would require tons of capital investment and no one will even budge on putting up that money. Think about it: Michelle Bachman is waving a $20 bill and revving up the masses that gasoline in the US must be $2 a gallon. That is the pulse of the United States. More cheap gas. More asphalt. More sprawl. More of the same. Despite the rhetoric, America is not a dynamic place at all. It is so stubborn and entrenched that even if the capital were given by God to rebuild itself on the Euro footprint, people would riot with Tea bags on their foreheads.
Hi Oct,
I agree that the current political climate in the US makes it unlikely that we will move towards sustainability soon. A large proportion of the US population lives in relatively densely populated areas where better public transport is possible. As we get beyond the current plateau in oil output and liquid fuel becomes more expensive there will be more demand for an increase in public transportion. I agree that any oil saved in one place will be used somewhere else. There is limited oil and the amount consumed cannot be greater than what is produced so we agree there as well. If the investment in other forms of transportation doesn't happen as you suggest it won't, we will be driving less and walking and biking more. My hope is that we do choose to invest in public transport as well as walk and bike more.
According to the Federal Highway Administration 79% of Americans live in
urbanized areas. According to Brookings study of Green public transit and jobs
70% of working age Americans in 100 Metro areas live only 3/4th mile from
a transit stop.
Salt Lake City, Utah in deeply conservative Utah is expanding its light rail
system because it has been so popular and successful.
The Republican Mayor of Charlotte, NC who got a tax increase passed to
build Light Rail there is popular due to the success of the Light Rail.
Ditto the Republican Mayor of Tempe, AZ, who was skeptical of the Phoenix to
Tempe Light Rail but now is a major supporter since, he says, it has brought
development to poor abandoned areas by transit stops which Tempe had been
trying unsuccessfully to revive for years.
Republican Cincinnati is building streetcars.
Maryland outside Metro DC is planning a Purple Lightrail Line which will
connect Amtrak, MARC and 2 Metro lines across suburban Maryland.
Is it enough?
NO!!
But the potential is there if we support it!
On the other side of the ledger, visiting Florida this week I see a lot more
adult bike riders than I have ever seen since my family moved here in 1971.
These appear to be bike riders out of economic necessity rather than choice-
they are riding dangerous bike lanes on major roads in all likelihood because
they cannot afford a car or borrow a friends.
So they are adapting....
Unfortunately there are increasing bike accidents as the bike lanes cross
entranceways to McDonalds, Taco Bell, Burger King and strip malls.
There is even a "trolley" bus from Tarpon Springs to Clearwater Beach which
never existed before. It is not a true trolley and woefully inadequate but
shows at least some inklings of the right thing...
Same story in Tucson, AZ, USA. I've been commuting for some time now, and although it's a pitiance, the increase in bikes with me has been constant since at least 2008. And yes, clearly economic necessity in most cases. No job, no car.
Hi,
yes absolutely.. the way the footprint concept works does not take
limits of non renewables into account! (see below for an answer)
Concerning Switzerland:
the "official" number is that one uses 5.6 global ha annually but only
1.3 ha biocapacity are from within Switzerland. (i got it from a swiss government agency last year and a text from a few years older).
this has decreased from 1.5 to ``now" 1.25 during the last 20 years.
thus the rest is imported!
Furthermore, knowing that roughly 60% of the electric energy in Switzerland is renewable (hydropower) and electric energy makes
23% of the total energy mix .. (thus 1/7 of the energy is at best renewable and the rest is imported)
one finds that the energy consumption alone .. requires a factor of 6-7 more global ha at least!
thus the 5.6 global ha should be multiplied by this number.. and we find a footprint of 30 global ha
or an overshoot of 25! (30/1.25)
I am sure the numbers for other rich countries are very similar..!
regards Michael
in case:
.. here is what Wackernagel answered about this question:
The Footprint does not measure sustainability, but biocapacity. How much we have, how much we use.
We consider ecological services to be the limiting factor for human activities.
So we add up all the mutually exclusive hectares needed to provide the ecological services we use
If we want to burn oil, we need ecological services for eliminating the waste, hence the carbon Footprint.
Oil we consider to be an economic asset (like gold in the bank, or jewelries in the safe). But using the oil for burning puts a demand on biocapacity.
If we can no longer access oil, then we might try to use biomass for energy. This will shift our demand. And most likely increase our demand on biocapacity.
So Footprint does not speculate how future demand will be, but just documents how much biocapacity is used currently to provide the demanded services. But of course we can translate scenarios about future outcomes into Footprint and biocapacity figures. This helps us to truth-test such scenarios.
Also, I would strongly recommend all nations to keep good accounts of how much oil the have. Footprint does not provide this info.
Hope this helps. Mathis
Mathis Wackernagel, Ph.D.
President
Global Footprint Network
mathis@footprintnetwork.org
tel.: +1-510-839-8879 x 305 (-0800 GMT)
www.footprintnetwork.org
Thanks for your response. I am sure people will be interested in your overshoot factor of 25 for Switzerland. A person wonders where the US would be--I don't want to think about it.
Hi Gail,
good point. I will probably work a little on this during the next couple of months
(with the uranium/nuclear story being kind of finished for now ..
with the upper production limit i estimated in
"the end of cheap uranium" (http://arxiv.org/abs/1106.3617)
Now I (one?) needs more data to become more accurate.
So.. time to switch to something else
like "overshoot in Europe quantified" or similar
will let you know regards
Michael
ps..
of course, if you or someone is interested in this subject to start some work together
please let me know
Off topic, of course, but the article in your link is based on a theoretical exercise of little value, with conclusions about shortages that are less than worthless (i.e. misleading). Uranium is abundant and mining will be scaled if it needs to be scaled. Your analysis of current plans cover, well, only the current plans. (If you want to discuss this further, let's go to a drumbeat.)
As I said,
the data will tell.
Nevertheless, what is an undeniable fact:
uranium mining in Europe is terminated, despite super large demand (20ktons/year roughly).
Also in other places around the planet.. Ontario, as well as in several former high productive regions in the USA and so on.
Despite the uranium price being high.
yes, I am happy to defend my article and its findings here at the oil drum.
So, your conclusions is based on the speculation that environmental regulations and NIMBYism will prevent the abundant uranium reserves from being transformed into supply to markets? That's ok, even though I disagree. Btw, uranium prices are not high.
I don't understand your comment.
All kind of regulations (often based on what people want and what they do not want) exist.
One could perhaps include this into the EROEI value.
Do you think it is a good idea to have the Grand Canyon as an ``untouchable" nature preserve
for future generations or should it be opened to uranium mining (near by?)
for the uranium price..
depends how you define high and low price.
if you look at the graph you find that it is high to 1990-2003 standards
http://www.uxc.com/review/uxc_PriceChart.aspx?chart=spot-u3o8-full
if you mean with respect to the price of the kwhe .. yes, that is a different story.
Grand Canyon? Isn't much of recent uranium mining ISL? That leaves virtually no traces above ground.
Again, I'm satisfied that we agree that uranium is abundant. I won't debate the political factors here. You may be correct that such factors will make uranium peak, but I've always argued that if we need (really need) nuclear power, then politics will change.
Regarding uranium price, the 1990-2003 standards isn't representative. If you look at a graph of real uranium prices since WW2, you'll find the current spot price just about average. There is no real trend, and there are still mines with 20% uranium content. Factors that drive prices upwards is the end of the megaton-to-megawatts program, as well as China's stockpiling for their aggressive civilian nuclear reactor programme. In 2010, China imported 32% of the world uranium production, while having less than 3% of world installed nuclear capacity.
Boy, the Chinese plan ahead, don't they?
In the pre-industrial world life for everyone was, by contemporary standards, awful. No dentists and no useful medicine. Only the very rich could rely on regular food and warmth in winter, the rest depended on placating a vengeful god in order to secure a good harvest. And that's without factoring in warfare, rape and pillage.
Very rich Romans had running water, swimming pools and wonderful food, and heat in the winter of course - oh, and relative political and economic stability for a number of centuries and genuine leisure with relaxations we could recognise - but not much in the way of medicine, and travel was still hard and relatively slow. Today virtually all of us in the west live far more comfortable lives even than the most contended wealthy Romans, but for how much longer if we squabble and kill to maintain the unsustainable? Urban Romans had the benefits of food and oil doles, and cheap or free entertainments, but still, most people toiled long and hard on the land, or in the mines if they were particularly unlucky. Hollywood has us thinking Romans all drifted around in togas between lying on couches and feasting: they did, the top one percent.
By the way, in the middle ages very few people owned their own land, and the same went for the later Roman period, by which time the free holdings of the republican period had been taken by the very rich and serfdom already existed in embryo form. Serfdom meant a vegetable patch belonging to you, if you were lucky, and other than that long days spent toiling on the lord's land. Wealth was land, and the very few rich had most of it: we seem to be heading back in that direction actually!
Far easier said than done. Only a government with dictatorial power can order a one child policy. Even then, as in China, population momentum will keep the population increasing for about half a century.
A fossil fuel plateau, and a resource plateau, that lasted forever could possibly result in a no growth world. But the plateau will not last forever, it will soon start to decline and the natural resources like water, topsoil and timber are already declining with a vengeance. So no growth is not an option, we will have steep negative growth whether we like it or not.
Now that would require that the undeveloped world increase its fossil fuel use to the level of Europeans. World oil production would need to at least double for that to happen. Not bloody likely.
Ron P.
China is one example; what about Europe, on the other hand, with many countries showing voluntary population declines? The situation is always pitched as "a problem" but there are as many positives as negatives. For example, every time someone says, "European population decline is A Problem," I respond, "Would Europe be better off today with 100 million more Europeans than there were in 1975, as the US has had?" Europe does NOT have to create new jobs, for example, just keep the ones it has. I think the increasing number of retirements is helping to reduce Europe's overall unemployment, as there are fewer, rather than more, workers to replace retirees. Europe does not have to invest in constant new infrastructure but can allocate resources to upgrade the ones it has. And, the decline in population will allow Europe to take advantage "assists" from the natural world - increases in amount of water filtered through wetlands, for example.
Individually too we can encourage the "one or none" mindset towards having children, since the plain truth is that any more than two children starts to restrict the resources a typical family can offer towards setting the children up in the current economy. And I am not talking about trivial little expenses like more clothes and celebrity sunglasses - I am talking about basic shelter, food, educational needs. If parents truly understand the economic situation will continue to be very difficult for the foreseeable future, they may will choose to have fewer offspring.
Europe's population decline needs to be examined via a different set of assumptions and values. It isn't being studied well.
pellice
I found it interesting to go to World Bank for fertility rates - we can click on the GRAPH option and get an interactive chart and draw graphs for the EU as a whole and/or for individual countries.
Most EU countries have seen a steep decline after 1970 and been at or below the 'replacement rate' since the mid 1970s (i.e. replacement is ~2.0 per woman). Spain's downward transition interestingly was about 10 years later. Eastern & Central Europe have seen a sudden decrease after 1990 to below the replacement rate.
http://data.worldbank.org/indicator/SP.DYN.TFRT.IN
Darwinian is of course correct about population 'momentum'.
Interestingly, perhaps, before the post-WWII 'Oil-Age', the per capita energy-consumption in the 'first' industrial country, Britain, barely rose, if at all, from the high level established by 1900, based on coal, until the 1950s. Population in Britain was levelling out during that period although fertility rates were still higher than 2.0. Population has continued to rise recently despite 'replacement' being below 2.0 for 30 years, apparently mostly because immigration exceeds emigration. (There are large population flows).
Phil - do you know of any organization or institution that is studying the dynamics and effects of population decline in Europe and elsewhere? It is a subject of extreme interest to me, but I do not know where to go to find research on it.
And, while "momentum" will be more the rule than the exception, I would imagine that in some European countries the momentum is now in the other direction.
pellice
I guess you could be right but the short answer is "I don't know".
There does seem to be quite a bit of activity at the EU level (including research and data base creation) focusing on the two issues of ageing populations (changing demographic profile) and net migration.
I have just had a look and in 2002 there was something called the European Population Committee that produced 'Papers'. http://www.coe.int/t/e/social_cohesion/population/no_2_the_european_popu...
That seems to have since morphed in to separate initiatives by the European Commission.
For migration and immigrant numbers and integration, for example, see http://ec.europa.eu/home-affairs/news/intro/docs/110720/1_EN_ACT_part1_v....
For ageing & the demographics database see SHARE website: http://www.share-project.org/
best of luck
If you get some definitive stuff I would be pleased to see: my spam protected address philsharris2[thousand]2[at]yahoo[dot]co[dot]uk
This assumes no increase in efficiency and no increase in the use of non-fossil fuel energy such as solar, wind, geothermal, hydro, and nuclear. I did not assume either that it would be easy or even likely that the undeveloped world would reach average European standards of living, I do think it is worth aiming for.
Are you saying you would like the world to go massively nuclear in an attempt to get everyone up to European standards? Now, what population level are you talking about? Seven Billion or so?
No I said massively non-fossil fuel, society would need to weight the benefits and risks of expanding nuclear. Population can rise to 7 billion and then start to decline as it has started to in Japan and Eastern Europe (considering birthrate minus death rate or natural population growth).
I have to point out something.
We are looking at population rate decline in Japan as our guide to how advanced societies will behave in the future?
If we look at why the population is negative in Japan we can see some major reasons (I lived there for many years):
1) Many women don't want to get married and have to quit their jobs to take care of the house and kids - very much like becoming a live in maid. They want a better, more challenging life.
2) The whole society has become very individualistic in the sense that the government and the individual's company can take very good care of even a single women. They have full security, excellent health care, life long employment, great retirement and an overall great standard of living.
But, what will the world look like after the Limits to Growth? Will we have all this cheap energy and endless vats of milk and honey resources to consume?
I think we will be going back to the farms, living with our family members and having as many children as we can because why? Because without all that advanced technology and rich government support, the more kids the better to ensure the fields and elderly are taken care of.
Without advanced technology, powered by huge energy gaps and plentiful resources (all well planned), we are back to basics. Expand when the resources allow, contract when they don't.
I would like to hear from members here what they imagine humanity will look like after the fossil fuels are gone. Population levels, structure of societies, levels of technology, etc.
One can spend a lot of time dreaming up what is possible, and what is unlikely (the way we currently live).
Tankingthinker, your observations about the quality of life in Japan is very interesting. All we ever hear are gloomy pronouncements about an aging society and low birthrates. But what I am hearing from you is that these two factors are coinciding with much better living standards for the Japanese and much more satisfaction on the part of women with their lives (and presumably men as well).
So I don't see why you don't want to apply your observations to the rest of the world. Europe is moving in this direction as well. Population decline means a slighter draw on resources, and perhaps decline in the developed world can help to offset the resource draw in the rest of the world, particularly if the glorification of large families is curtailed in favor of some PR in favor of "none or one" as a way forward to prosperity for those children who do inherit the earth.
It is not a question of what I want but what is possible, given the energy and resource picture.
My feelings are that "policies" or simple fixes are not going to make any difference. Kind of like putting on your seat belt before going over a steep cliff.
We will try to burn everything, everywhere in an attempt to survive. Resource wars are very likely as it becomes clear that we are now in a zero-sum game and soon to be in an aggressive game of musical-chairs.
The Limits to Growth era is going to be a very interesting period in human history. A time when the baby is all grown up and must ween from Mother Nature's breast. A time I call The Great Lesson.
So, I wish I could develop a scenario in my head that allows a nice soft landing where we all continue to use the current global economy and capitalism as the way towards sustainability but the numbers just don't add up.
I think this conclusion is evident to many who seriously research the situation. However, I am looking forward to the challenge and think there will be pockets of optimism.
In a book I read awhile ago, on household formation, in the 19th century those farms had 2 20 somethings that were not family members living with them as staff/hands/servants to help with the land/crops/buildings/kids.
I would suggest that in transition, those wise enough to have those farms will not have to be baby machines, there will be a lots of 20-40 somethings with US Lit degrees trying to survive.
I think there are massive blind spots in this discussion, which should be obvious, since predictions range from happy to sad. I'm thinking that Africa will go bust because of bad attitudes, like killing NGOs and electing idiots and arming children. I'm thinking China will pull in the drawbridges and do all the things that are suggested as wonderful but politically implausible here, because China isn't burdened with democracy.
And before you get all in my face about democracy, I'm just aligning my thoughts with the ancient greeks, who realized that once people can vote themselves proceeds from the next generation's work, they will, and corporations will encourage them to consume until they do. Hence debt, which is not going away.
I think the population crash will be almost soft, with much complaining but little rioting, and the Tea Party will subside, and the reason is that we'll be tending to sit around on our whiz bang computers and yak about the world and ooh ash what's on YouTube (which is my candidate for best world saver) JUST LIKE WE ARE HERE!
And that's a good thing. Rly.
Not to be too bleak, but who told you there is anywhere else for us to go? Who exactly is underwriting this "recovery" that some people believe is necessarily on the other side? I'm not picking on you in particular, but this assumption of eternal and increasing prosperity doesn't seem to be based on anything when you take cheap fossil fuels out of the equation.
Yes I do think it's important to understand game theory and how it applies to individuals, nations, etc.
Wall Street bankers, for example, don't care if their million dollar bonuses come at the expense of people, in fact they probably celebrate it. Americans won't care if a hundred million Chinese starve, and the Chinese won't care if Americans are stranded in their SUVs and trucks.
If you don't use fossil fuels, somebody else will to gain a comparative advantage in the short term, an advantage which may just prove to be the difference between life and death.
We are only capable of thinking of the well being of ourselves, kids, and possibly grandkids. We aren't capable of anything else, it's a natural limit. It's why the concept of limits to growth is ignored in the first place. And even then, individual survival is what matters to most people most of the time.
Ok, let me put it another way: who here wants to die tomorrow so that a random 5 year old halfway across the planet can enjoy a lifetime of plentiful resources?
That's what I thought.
There is nothing to "do." Only prepare in whatever way we can. And there are no right or wrong answers.
This is exactly what I posted above. I did not get a chance to read yours yet. Right on! Nothing can be done. We can only prepare.
Oilman understands reality in terms of biological law-which is not subject to reinterpretation by courts or being rewritten by legislatures.....
Hi Heels,
Well when I used the term transition, I meant from an unsustainable to a sustainable society. I by no means think this means a recovery to some imaginary eternal increasing prosperity. I envision moving towards a no growth world once less developed regions catch up to the developed world. Meanwhile the developed world tries to reduce resource use while maintaining living standards as much as possible. Once population stabilizes and then begins to decrease maybe we can maintain living standards. Many have commented that much more fossil fuel use is implied by an increase in living standards for less developed nations, I would respond that an agressive move towards solar, wind, geothermal, hydro, and other low carbon energy sources may enable such a transition to occur.
I think it is worth trying to work towards a sustainable world and think too much doom and gloom makes people give up hope rather than facing problems and trying to come up with solutions. So when I suggest "not getting very far" I am assuming that a transition is possible, there are many who disagree.
D. Coyne
I suggest you read this:
http://www.unep.org/resourcepanel/decoupling/files/pdf/Decoupling_Report...
currently, human development is heavily coupled with resource. You can not raise living standard siginificantly without consuming more resource.
That doesn't tell us what's possible - it just tells us the behavior of Business As Usual.
D. Coyne,
I think your argument works if one considers a decent standard of living to be sustainable. Perhaps this is the fundamental that you and (i.e.) Tankingthinker disagree on? Is that what you are calling a European-level society? Any standard of living is sustainable for some inversely related size of size of population, right? The question to me then becomes, can that equation (population x standard of living <= 1 earth) function against the (population * available energy/resources of 1 earth = economy = standard of living) equation? Are there enough people left under a sustainable standard of living, to maintain the infrastructure required to achieve that standard of living? Is there enough energy available from renewables to maintain our current level of technological advancement (i.e. refining silicon or carbon fiber) in order to perpetuate those renewable energy systems indefinately? I pray there is, but it seems very much open for debate.
Hi dcoyne78
re: "Note that the close association that exists between GDP growth and oil growth does not indicate which is the cause and which is the effect."
GDP is a measure of growth, as such it is, strictly speaking, an abstraction.
Oil growth is the amount of oil consumed by the economy; the direct "consumers" of the oil are: 1) oil-consuming machines 2) Other machines that nonetheless use oil as input.
Energy input is required in order to have machines that people use, AKA "symbiots."
Given a certain "starting amount" of energy input, for example, from coal, then, once new oil-eating machines are produced, those, in turn, require maintenance - to "eat" more oil, or, to put it another way: the new oil-input machines require oil to keep running. Any new machines on top of these machines, also require oil.
Try to grow anything without energy input - anything in the material world, that is. I personally can't think of an example. So, it seems the causation is fairly clear: energy is required for growth, oil is the form of energy X percentage of machines (symbiots) require, Therefore: a relentless decline in oil supply is trouble.
re: "Without the growth in oil supply prices rise..."
This is the scenario many assume and would like, the one you describe, namely steadily increasing rise in the price of oil.
There is no reason at all to think this will occur, as opposed to, say, greatly increased volatility. Do you have any evidence to show this course is more likely than volatility?
Eloquent +10
Very well said. No creature on this planet can grow without surplus energy inputs. Imagine a bacterium. To divide it needs to reproduce its genome by a factor of two. That requires energy. Once energy inputs are only great enough to maintain the population are lost (i.e. those energy resources required to repair DNA and proteins and membranes and swim around for food) the bacterial population reaches a static level of growth and even begins to consume its neighbors for the embodied metabolic energy until the population winds back down to zero and all thee usable energy is consumed.
The only hope for the bacteria is to sporulate -- which is to protect itself from a harsh environment and hope you are blown to a place with more plentiful energy resources.
This is all well known and inescapable but it will jar you emotionally when you first ponder it with Oil growth and decline.
Sporulation happened in human history when various folks migrated to the New World.
Aniya,
There's no reason we can't eliminate oil entirely, and use electricity from wind, solar, nuclear, etc.
oil is the form of energy X percentage of machines (symbiots) require
No, it's really not.
The machinery to harvest, store and convert wind energy into food fertilizer and transport is very scant. The ecology of oil is so pervasive that the ecology of wind cannot thrive in its place on demand at the whim of anyone or any country.
I don't know - wind turbines are growing, and EVs are growing faster.
I am continuing my 2 decade long endeavor to reduce and eventually eliminate the use of propane at my house. My current effort is to replace my 23 year old microwave oven with a convection/microwave oven that can better replace my propane powered oven. I acted proactively but others will have to be compelled to change by high prices, shortages, unemployment or death.
Consider what may happen as fossil fuels become expensive or scarce. When a diesel well pump breaks, it could be replaced with photovoltaic panels powering an electric well pump or a wind turbine powering a mechanical or electric pump. The farmer who does not replace it would be subject to high prices, shortages or fuel theft. If the productivity from farms declines, food would become expensive or scarce. Corn is becoming expensive because it is being used to make transportation fuel, ethanol. Consumers will plant gardens to compensate allowing compost and urine to begin substituting for industrial fertilizer. Corn can be preserved by freezing which would shift the heat energy used in canning to electricity. It can be dried in a solar drier and turned into cornflour reducing demand for wheat.
There are many possible responses, and I can not begin to imagine all of them. To some degree substitutes, adaptations and efficiency gains will compensate for declining fossil fuels. The degree is uncertain.
Hi Aniya,
You are correct that energy is required for the economy to function and some of that energy is oil. When there are changes in economic output the amount of energy required changes as well. I am guessing that you contend that less oil use results in less economic output and that this is the cause of the smaller economic output. I think as output decreases and more people become unemployed they drive less and this causes the drop in demand for oil and oil output. Most of the oil used is for transportation and the machines are cars for personal transport. The oil shocks of the seventies and early eighties resulted in a large decrease in demand for oil due to high prices. Change the machines from cars to electric public transport and there is less of a problem, increase fuel efficiency from 25 to 50 mpg and there is also less of a problem. This doesn't happen overnight but over a decade or so from 1975 to 1985 there were changes in behavior which reduced oil demand.
I agree that there will continue to be oil price volatility so "steadily increasing" should have been "increasing". Would you agree that oil prices are likely to rise (on average) in the future? In other words, given that there will be some variability in the price of oil, would you expect the long term trend in oil price to be positive? I would based the price trend over history. It is possible that as supplies become constrained that average prices will rise enough that other forms of energy will become viable substitutes and under these circumstances prices in real terms might even fall, I think this is quite unlikely over the next few decades, but 100 years from now maybe.
Good morning Gail,
The new graphics are very engaging. Good old Homer choking out Bart!
Thanks for this fine presentation. I wish you would do a comprehensive roadshow in our Province. It just seems so obvious. However, except for a few 'in the know', not one person of my circle admits or recognizes the fact of oil depletion and limits to growth!
A couple of things. The graph comparison of oil production and economic growth never fails to astound me. And the Chefurka graph and shark fin curve of overshoot will always terrify. The implications are not pretty.
It looks fairly obvious that the present financial doldrums are following the script. I don't see a way out. Just an assumption on my part, of course.
The reduction of personal debt in recession was a surprise. I just assumed that it (debt) went up as needs increased without the coin to fill them. However, I can see that when you fall off the wagon credit sources no longer exist.
In our house we have always been somewhat old fashioned with regard to debt. We don't buy unless the money is in the bank. Our mortgage was always based on being able to pay it if we wern't working for awhile, and then pay it off asap because in Canada we don't have the stupid deduction for interest....(nor cap gains on home sales). While we are positive people, we have always believed in having a chair to sit on when the music stops. We never assumed the musical chairs of economics was a game of certainty.
I grew up on stories of the great Depression. My Mom was so poor as a child in New Brunswick she had just gum boots to wear with her school dress, and never talked about it, ever. My Dad talked about life in Minn when his Dad could only find work killing pigs in a slaughter house. My Grandpa talked about how the pigs screamed because they knew what was coming. They always gardened and traded food...had a somkehouse, etc. It was a hard life. Why would anyone assume the elevator only goes up? Do they believe the tv commercials? Don't they watch the news? Has no one heard the expression, "there but for the grace of God....."?
Thanks again.....Paulo
I am one of those who believes the adjustment will be difficult and far more traumatic than many think. People like me are "too pessimistic". I find it odd that folks who think so never consider they might be too optimistic. Americans like to be "hopefull" and "optimistic". More than once, I have had optimism result in vastly underestimating the reality of the situation.
Personally, I believe we will muddle through for a while with each period of "muddle" followed by ever decreasing standard of living. It appears to me many commenters are above what I call "the water line" in that they are not in desparate situations yet. They aren't drowning hence the optimism that some, relatively, simplistic solution will arrive in time to prevent their demise.
Decades ago, I saw population as the problem. I thought population control would be simple. Then I realized I was thinking in American terms not global terms. I see this as a flaw in many comments and the result of far too many years of "America is the world" type thinking. Asis all too evident, Americans can't even agree on the simplist of things, in the whole scope of things, like immigration, abortion, marijuana, etc. Hence we elect aging adolescents to political office and marvel at their inability to agree on anything other than "cut the poor, diabled, children, elderly and any other group that I don't need to keep my job". The old "queen bit" ie: let them eat cake. Who needs them anyway. Don't cut my benefits, cut the other guys.
We can't even agree to talk about the problems let alone define what they are. I like your writing as it comes closer to recognizing the scope of what we face more than most others. Thank you.
Let's face it, the crisis is so dire that nobody wants to talk about it.
In fact, I almost never talk about this with "normal" people. Only forums like this have people that are open to reality.
No politicians, no media, no financial gurus even broach the subject. It is like watching FOX news ignore Ron Paul after his second place finish.
I try to just enjoy the now because it just might be the best of times, before The Great Lesson.
Fascinatingly, a piece of this is broadly discussable in my mind. Zero growth. I have endeavored to discuss this within the local government space for the past years, and now in the 3rd
year of decline (which is worse than zero growth), they now can concede that there is going to be 10 years total of "zero growth" or "decline", or maybe it is just going to be forever. At this
point the discussion is what services are we really going to be providing? zero pot holes for the SUV's? More bus shelters?
I agree. There is a lot of ignorance among most people about the economic situation we are in. People think it is just another crisis and then buissines as usual. But what we are facing now is much much bigger than any previous crisis in the last century. It's a global problem now.
Ik ben het met je eens.
I often put it to people this way: if oil is at 105 with 9% unemployement, where do you think oil is going to be when unemployement is at 6%, and what do you think that will do to the economy?
m.v.g.
WeekendPeak
Ponzi hates stagnation.
You are trying to convince religious people about limits to growth? That is equivalent to trying to convince a religious person about evolution. Good luck!
I like hearing Ron Paul speak about cutting everything (we actually don't have any choice but it will seem like there is a mission) but I worry because he is a creationist. How can Peak Oil and Limits to Growth be a problem when the world is only 6000 years old? See the problem? God will just print more, like our Fed prints more money.
Many wells have already been capped due to not being economically viable. The statement above seems to suggest that they may have to be capped in the future but none have been.
"Might" also eventually get to peak? I contend that they ALL will because they are non-renewable by nature. If they are still full and capped then they have already reached peak.
Excellent graph showing the GDP growth vs. % of oil production growth. I guess it is true that energy powers economy (of course we all knew that but it brings home the point very well).
There is one ingredient of your recipe that never changes - the debt. Thus, maybe you can use the egg for that analogy. No matter how small the recipe gets, you still have to crack that darn egg.
Not all religious people are equivalent. The group I was talking with was from the liberal end of the spectrum. They had no problem with what I was talking about at all. I am sure none of them even considered the idea that the world was made 6000 years ago.
By the way, over the years, I have had quite a few inquiries from pastors, wanting to use some of my material as part of their sermons or as hand-outs. Anyone who thinks all churches are alike hasn't checked out the more liberal ones.
Of course not all churches are the same. There are over 33,000 denominations for Christianity alone!
I contend that not only do we all have religion, but we all have a unique religion based on our unique experiences. However, let us not digress.
Yes, I agree that there are many liberal religious folks out there. Of course, I was being facetious, but not about Ron Paul, that worries me.
Nonsense. The people with no religion number in the millions including yours truly. I know you probably didn't mean that and just misspoke, but you should be more careful. Accusing non religious people of being religious is not something we take kindly.
Ron P.
Oh, please don't get me started. ;)
Firstly, I would like to use my definition of religion, even though, with a deeper discussion, it works even with the old definition.
God: the unknown
Religion: man's interpretation of the unknown
So, I think you can agree that my argument holds true.
Let's take this definition from the Internet:
re·li·gion/riˈlijən/Noun
1. The belief in and worship of a superhuman controlling power, esp. a personal God or gods.
2. Details of belief as taught or discussed.
You may not like it but the second definition also holds true, even Atheists believe things, irregardless of what they say. They hold the belief that their world view is correct or at least consistent. That using an evidence based, scientific principle is the way to live their life best.
I neither believe nor disbelieve the existance of what most folks refer to as a "God". While I "believe" certain things, such as that my dog loves me, this doesn't constitute religion. Religion is a state of mind when one doesn't have to admit they're wrong about certain things; magical certainty. I admit that I could be wrong about everything :-0
Some define religion as something with a grand meta-narrative that explains everything. Darwinism certainly meets that criteria.
Communism would, Evangelical Christianity would as well.
Never heard that definition before. However there are religions that claim to explain everything, Scientology comes to mind. But Science does not claim to explain everything and never has. Great minds have worked on "a theory of everything" (as it applies to quantum physics), but no one has come close to producing such a theory. And no one has ever claimed that they did.
Nonsense. Darwinism, or natural selection, claims only to explain the evolution or change in biological life over time. It makes no claim as to where life first originated. And it does not deal with the physical universe at all. That is the science of biological evolution, often referred to as Darwinism, makes no claims about geology, astronomy, physics, or any of the sciences outside the biological sciences.
Your accusation that Darwinism tries to explain everything is something that you know is not true. You made that statement while holding full knowledge that is was simply not true. Therefore that makes you... But we have come to accept this as normal coming from creationists who wish to slander evolution.
Ron P.
Actually I think the darwinian concept of evolution is a meta narrative that is EXTREMELY pervasive in all the sciences, and if you have read
recent cosmology writings you would see that clearly. I was at CERN a month ago meeting with the Secretary General of CERN and a meeting
with the Director of the ALICE experiment on site. One of the fascinating part of that discussion was the admission that the experiment
description is fundamentally flawed, creating the situation of the Big Bang today is not possible since space/time is set, when the Big
Bang happened it was not. The Cosmos has evolved since the Big Bang, or so they would say.
While I am a theist, there are few creationists would recognize me as a creationist. I think the last bit of text was ad hominem, but i would
respond by saying that there are many theists who are possibly a little more informed/educated/open/empirical then you possibly are
familiar with, all of them are not shoeless living in a "holler" being informed through cable tv.
Schoff, Darwinism, or evolution, is not remotely related to the big bang theory. As far as Darwinism is concerned, it makes absolutely no difference whether the big bang theory is flawed or not. So my question to you is, why do you bring up a totally unrelated subject when discussing whether Darwinism, or evolutionists, claim to know everything there is to know and therefore is a religion?
You are terribly confused Schoff. You seem to think that Darwinism has some connection to the big bang theory, therefore if you can shed doubt on the big bang theory you can show that evolution, or natural selection, is somehow flawed.
Schoff, the evolution of the cosmos has nothing to do with Darwinism or biological evolution. The evolution of stock car racing has taken us from racing on the beach at Daytona Beach to the asphalt tracks we have today. But only a fool would confuse the evolution of stock car racing with evolution of the species simply because they share a common word, "evolution".
You said "Some define religion as something with a grand meta-narrative that explains everything. Darwinism certainly meets that criteria." Again, you knew, when you made that statement you knew that that statement was false when you made it. You know that Darwinism makes no claim to knowledge about geology, astronomy, physics, or any of the other physical sciences. You knew your statement was false when you made it. Therefor that makes you....
And I truly hope that you realize that "evolution of the cosmos" or "the big bang theory" has absolutely nothing to do with Darwinism, or biological evolution, or natural selection. And I hope you realize that Darwinism makes no claim to any knowledge in that area. But if you do not, if you think "evolution of the cosmos" or "the big bang theory" is somehow related to Darwinism, then any debate with such a person is hopeless. We must have standards you know.
Ron P.
again, i suggest you read some contemporary writings in the field of cosmology.
"Sense and Goodness Without God: A Defense of Metaphysical Naturalism" by Richard Carrier
is a very good book that summarizes some of the state of the art thinking in the sciences with regards to evolution
as the organizing principe of the universe.
but returning to my earlier argument, whether restricting this principle to biology, or the cosmos, evolution is a grand
meta narrative as it organizes the field into a paradigm that all future work and observations are made to fit into.
Many have made the observation that this sounds a bit like religion.
The question would be is this the nature of humanity? Do we need this as individuals or as groups, as Taleb might
put it - "narrative fallacy".
What is interesting in the mathematically based sciences like Physics which has used math for say 400+ years is the
ability for that community (with some pain according to the historian Kuhn) to abandon earlier paradigms or at least
recognize that they 1) don't really work well for this and that, and 2) don't really know how to connect special
relativity and quantum mechanics, and xyz - ie they are disjoint.
Again in the ALICE context, sitting through a presentation at RPI, hearing the physicist say: "....the reference model
doesn't really work, we need to figure out what replaces it..." is an entirely different experience than one has
in the biological sciences.
This is getting downright silly. Anyone who keeps insisting that Darwinism involves the study of the cosmos is woefully misinformed at best.
Evolution is everywhere, everything evolves. The airplane has evolved, step, by step, by step, from the bunch of bicycle parts the Wright brothers put together to the massive giants Boeing produces today. But to call this Darwinism is beyond the pale. Evolution has been the organizing principle behind the development of the airplane. Only a damn fool would call this Darwinism however.
You think, and keep insisting over and over, that because the study of something contains the word "evolution" that this means it is also Darwinism. No, Darwinism involves biological evolution only.
Schoff, you must know this but because you keep insisting, over and over, that this is not the case, you only make yourself look downright silly. And stop using a hard carriage return at the end of the lines in your posts. This causes the one and two word lines we see in all your posts. The software automatically wraps all lines at the proper point.
Ron P.
There is no such thing as Darwinism. There is only evolutionary biology. Darwinism was a tacky name used by creationists to make it sound like some wacky 150 year old theory by "some lone English dude".
Biological evolution is a subset of a common effect seen in nature where physical forces cause patterns and organisation over time... but to compare biology to stars is a fools errand. The conection between the two are simply too vague to be a meaningful comparison. It's like comparing a biscuit to an ocean because they both contain water.
AND STOP CALLING IT DARWINISM!
The definition of Darwinism is as Darwinian says it is, technically and specifically, but the usage if the term is constantly expanding and you will find no shortage of serious thinkers who are expanding the discussion of ideas and facts associated with of the term.
Of course it can be argued-technically and correctly- that these people are talking about applications and implications, etc, of Darwinism, rather than Darwinism per se.
This is a fine example the way our language gradually changes in lots of cases.
In another generation, an introductory biology lecture will use the expanded definition more than likely.
Sorry Mac, but this is just not the case. The word "evolution" has always meant the change over time of anything. And the word Darwinism" has always meant biological evolution and nothing else. From Dictionary.com the full definition for both words.
Dar·win·ism - noun
the Darwinian theory that species originate by descent, with variation, from parent forms, through the natural selection of those individuals best adapted for the reproductive success of their kind.
There is no second definition for Darwinism. If someone uses the term to mean something else, then they are simply using it incorrectly. The word itself, according to the dictionary, has not changed.
ev·o·lu·tion - noun
1. any process of formation or growth; development: the evolution of a language; the evolution of the airplane.
2. a product of such development; something evolved: The exploration of space is the evolution of decades of research.
3. Biology . change in the gene pool of a population from generation to generation by such processes as mutation, natural selection, and genetic drift.
4. a process of gradual, peaceful, progressive change or development, as in social or economic structure or institutions.
5. a motion incomplete in itself, but combining with coordinated motions to produce a single action, as in a machine.
It could not be clearer from these two definitions. The #1 definition above clearly explains that the word "evolution" simply means changing over time of anything. It has always been that way. The word itself has not "evolved" at all. And neither has the word "Darwinism".
The word "evolution" originated sometime between 1615 and 1625, over 200 years before even the voyage of the Beagle. Also from Dictionary.com ...
Origin: 1615–25; < Latin ēvolūtiōn- (stem of ēvolūtiō ) an unrolling, opening, equivalent to ēvolūt ( us ) ( see evolute) + -iōn- -ion
I truly hope this settles it.
Ron P.
Edit: There is a term called "Social Darwinism" that refers to the survival of the fittest of social ideas. Most Darwinist are not Social Darwinist however. Biological evolution is something totally different from survival of the fittest of social ideas.
That the universe can see and explore itself through the instrumentality of an organism is fascinating. That the organism, evolved within the framework of thermodynamics is preoccupied with acquiring energy and maintaining bodily integrity is not surprising. The light of the universe does not shine in everyone's mind and maybe the irresponsible pursuit of an everlasting corpus and its adoration will destroy the true flame that should be guarded religiously.
Some define religion as something with a grand meta-narrative that explains everything. Darwinism certainly meets that criteria.
Communism would, Evangelical Christianity would as well.
Well looks like you got started even though you didn't want to. ;-) And your post is nonsense.
You just make up meanings to words and say that makes your case. You remind me of Humpty Dumpty in "Through the Looking-Glass" When I use a word,’ Humpty Dumpty said, in a rather scornful tone,’ it means just what I choose it to mean, neither more nor less.’
No dictionary defines the meaning of God as "the unknown". But to you it means just what you choose it to mean, neither more nor less.
I looked in several dictionaries and could not find that definition anywhere. But religion is often used as slang to signify "obsession" like "Fishing is my religion". Obviously when you stated that "we all have religion" you were not talking about fishing or any other such obsession.
Of course atheist believe things. I believe it will rain next week. That is an opinion and is not religion in any sense of the word.
We all have "opinions" that may be right or wrong. But if you expand the word "religion" to mean "opinions" then the word becomes so broad as to become meaningless. I think you are perhaps the only person on earth that would expand any belief, such as any opinion, into religion. I don't believe Humpey Dumpty should be allowed just to make up meanings of words, and I don't think you should be allowed that latitude either.
Irregardless is not a word.
Ron P.
Ah, yes, the whole world come down to our interpretations of the meanings of things.
To have a proper debate we would all have to agree on the definitions of basic terms, even though that would still bring disagreement on meaning.
I like the use of World View. It combines all the beliefs, experiences, indoctrinations, investigations, etc. and what I like to call the brain's operating system.
Like I said, don't get me started. I beg you... ;)
I realize the word religion brings an automatic response in people, and that the response is unique to each individual. Sometimes a gut retching fear, humor, disgust, etc.
I like to look from outside the box and see how the brain works both individually and in groups.
Religion is one of the best grouping systems ever. It keeps group members in, outsiders out, teaches group culture and allows excellent group control.
Language is also great at grouping but has one major flaw - it hampers external trade. Religion allows for accurate trade with strong grouping.
Our world view is simply the digitization of our complex analog world. We build thresholds to define a coherent overall meaning of things.
Ron,
To amplify on your use of Humpty Bumpty: In the actual telling of the story, Humpty Dumpty did not even make up a definition. The word meant what he intended to mean even if he was incapable of telling anyone what that intent actually is/was. And so it is with folk theology. Proper intellectual theology is a bit more difficult to deconstruct, but it, too, has been deconstructed. Of course, I heartily recommend you not get involved in attacking intellectual theology. The steps in demolishing intellectual theology are far to numerous to be presented in this forum. This is a folk theology only scene here. And the larger argument is a fundamentally boring exercise.
Geek, nonsense, it's not boring at all. And it is just so much fun. ;-)
Well, that is correct of course, but so is peak oil denial. But nevertheless we carry on in the face of hopelessness. What else can we do? In spite of the hopelessness we must combat ignorance of science denial on every front. We would be negligent if we failed to do so, regardless of the hopelessness.
Now I know you may say that peak oil denial is not the same thing as denial of science. But I think it is, or at least very closely related to denial of science. When any belief, or denial, is based on ideology instead of the scientific facts then....
Oh hell, never mind.
Ron P.
"But nevertheless we carry on in the face of hopelessness. What else can we do? In spite of the hopelessness we must combat ignorance of science denial on every front."
Amen.
(I really have to light a candle, right away)
"Irregardless is not a word."
It is if one believes it is....
No, if you can't use it in scrabble then it's not a word. ;-)
Ron P.
Just use regardless instead, which is the same thing. LOL
ir·re·gard·less [ir-i-gahrd-lis] Show IPA
adverb Nonstandard .
regardless.
Origin:
1910–15; ir-2 (probably after irrespective ) + regardless
Can be confused: irregardless, regardless (see usage note at the current entry ).
Usage note
Irregardless is considered nonstandard because of the two negative elements ir- and -less. It was probably formed on the analogy of such words as irrespective, irrelevant, and irreparable. Those who use it, including on occasion educated speakers, may do so from a desire to add emphasis.
Well then, consider me not guilty of irreverantlessness :-/
Ghung I used irregardless once and people attacked me. Join the club. ;-)
Its a word where I come from-language changes.
Most of us wwould smile quietly at the usage of the woird "afeared" , used by royalty in Shakespeare's time, and still used by some of my nieghbors here in the hills.
None of us would have smiled in the presence of the Queen using this word.
If you hate the taste of wine
Why do you drink it until you're blind?
And if you swear that there's no truth and who cares
How come you say it like you're right?
Why are you scared to dream of God
When it's salvation that you want?
You see stars that clear have been dead for years
But the idea just lives on
In our wheels that roll around
As we move over the ground
And all day it seems we've been in between
The past and future town
We are nowhere, and it's now
-bright eyes
Gail - thanks for the comment on religious people.
I have been constantly mystified by the frequent attacks on religious thought on TOD. I have attended a church here in Texas which is definitely not liberal. In fact most of the members of my Sunday School class would deeply resent being called liberal. Especially me.
Yet our class openly discusses issues such as resource constraints, climate change, etc and worries about them from the standpoint of taking care of our fellow man. We have learned together about evolution, deep time, and quantum physics. Our class of 40 people is all college educated and includes 5 PhD's. I have not met anyone in our church who thinks that the world was made 6000 years ago. But the stereotyping of religious people as being scientifically illiterate on TOD is constant.
It puzzles me. Sorry.
I wouldn't worry too much about being attacked. We all have our own unique world view.
Your church sounds very cool. I would love to hear how you define your group belief system.
Is it cherry picked and modern, strict and fundamental, or a combination of many different things?
I am fascinated with what people believe and how they are able to defend their world views.
I have a hypothesis so crazy I'm ashamed of myself. Even though, due to some of my other research on learning, I think I would be successful proving it, I question the ethics of conducting the experiments. It could result in strange behavior.
Please don't try this at home!
Ever hear of dual boot computers? It is when you are able to boot say Linux or Windows on your computer because both OSs are fully loaded, yet separate, in memory.
Well, I feel humans can actually define more than one world view and be able to boot into whichever one they want. Imagine being an Atheist one day and a Theist the next.
Sound impossible? Imagine the consequences if it were proven, using MRI and advance CT scans...
"Well, I feel humans can actually define more than one world view and be able to boot into whichever one they want. Imagine being an Atheist one day and a Theist the next."
It's called bipolar disorder ;-)
lol. Or, multiple personality disorder, like Sybil.
Yes, this proves the brain is able to do this. That is why any experimentation must be carefully controlled.
I have thought about the many controls that would need to be put in place like a mentor to guide transitions, tapes and other media from the "base" world view, etc. Crazy stuff, I know.
The difference is that it would be done by someone who knew what was going on and understood how to manage the different perspectives, whatever that would entail.
Additionally, it would be a professional experiment and the subject would have the backing of PhDs that could prevent anyone from saying they were a fraud or insane.
Wait a minute, this would make a cool movie.
The evidence that your theory is correct is already ample-the theory you propose is already basically considered and accepted , in somewhat different form , and is referred to as cognitive dissonance.
Only a very few of us are not subject to cognitive dissonance to at least some degree..I am constantly finding new examples of it in my own thinking even now in my so called golden years.
On a grand scale, the concept even applies in an awkward sense at the highest level of the sciences.When two different theories of reality conflict, the working scientist works with whichever theory best suits his own work-even though he knows it must be in error in some fashion.
Hence we have people NOT subject to cognitive dissonance in this particular case trying to formulate a grand theory unifying the physical sciences.
Well said.
Now, I wonder if anyone would like to try to actually build two complete world views in their brain for scientific testing.
The risks are actually too great but the implications for religious believers are significant.
Would that person now have two souls? Which soul is correct? which copy of that person is sent to heaven? The believer's to heaven and the atheist's to hell?
I'm not too worried, people are very good at defending their world views, no matter how far they stray from rational thought.
??? Really Mac, where do you get this stuff? I think you may be confusing science with theology.
RonP.
"Ponzi hates stagnation.
You are trying to convince religious people about limits to growth? "
For that matter, try convincing economists. Exponential growth forever! Woohoo!
Strawman.
Thanks Gail for your excellent efforts on a thorny and gut-wrenching subject.
If I may I would propose the following 30-second slightly revised summary of your presentation.
The current financial crash (which really started in 2008) follows the a pattern as all financial crashes before it.
1) There are more calls on wealth (money, bonds, insurance contracts, debts,...) than there is wealth. That is the financial markets are essentially ponzi schemes with the fractional bank at its core.
2) This fact is obscured so long as total wealth is increasing (hence the need for economic growth).
3) Financiers get greedy and push things to the limit, especially when there is no regulation.
4) 'Something' (rapidly rising energy prices, sub-prime mortgage default, bond market confidence, hedge fund fraud...) happens, but what precisely that 'something' is, is not the ultimate cause of the crash.
Note: I saw this explanation on a blog on the Economist website. My apologies for losing the name of the contributor.
This is the best comment on the thread. I commend Gail for finally starting to consider debt. But she still thinks oil is the center of the universe and that's a bad assumption. She still has not learned correlations are not causation.
"When the economy cannot grow as fast, or actually starts declining, recession sets in. Governments start having debt problems."
No, no, no Gail. Debt growth is the direct cause of economic growth, and debt saturation is why we're in a recession today. Call it peak debt.
We won't know if we are past peak oil until growth comes back. That is because it is impossible to separate out demand destruction from higher prices and from peak debt.
I, for one, welcome peak oil as soon as possible. It means we will likely also be past peak pollution and peak population... a better, healthier world.
You really gotta start payin' attention, dude. Gail has been hammering the relationship between Peak Oil and debt since the beginning; for years.
And folks can disagree whether the chicken comes first or the egg. Gail has her view and Nate has his on the other side.
But you need to pay closer attention to what people are writing if you want to make intelligent criticisms.
You have reading comprehension problems, because you are so breathless to have the authors recognize you. I acknowledged the link, but it's BACKWARDS. FAIL.
"I commend Gail for finally starting to consider debt."
You haven't been reading Gail's posts over the years it seems. She has focused on the debt issues and their relationship to peak oil for years, more so than most peak oilers.
While our systems are inextricably linked in hyper-complex ways, I think that they will eventually force each other into MOL states, declining slowly at first, then ceasing to operate at all. I also think that inflection points are much closer than most folks realize. Too many bases of growth (resources) are peaking now and at some point debt becomes meaningless. Poof!
For starters, one person’s debt is another person’s asset.
I think that the connection between debt and oil (an input in the economic process) is problematic. One (oil) is a physical input into the economic process whereas debt is a man-made concept. And the meaning of that concept changes all the time depending on a number of things, some related to economic inputs, other which are determined by other factors.
Oversimplification is not helpful in understanding extremely complex and reflexive relationships.
Rgds
WeekendPeak
The fact that one person's debt is another person's asset causes huge problems. Banks, insurance companies, and pension plans depend on debt to be paid back. If it isn't, the whole pile of supposed assets falls down.
I agree with your basic premise. but in a way when the asset gets wiped out so does the liability and the NET effect on society is zero although individually there likely are severe injustices.
Explicit default is similar to it creeping cousin - inflation. Whenever inflation does not equal zero there is a defacto wealth transfer between saver to borrower, albeit in a more gradual fashion than in a straight out default.
Rgds
WeekendPeak
"...the NET effect on society is zero.."
Not so sure, WP. All endeavors, whether successful or not, consume finite resources. Case in point:
Never-opened Vegas hotel may be imploded:
Thes folks don't want to repair/refit this nearly completed structure because there's already a glut of space in Las Vegas:
http://www.thestreet.com/story/11185238/builder-mgm-resorts-wont-fix-uns...
While I agree with others here that if we humans can stop spinning our wheels and eliminate the massive ongoing wasting of resources, we can minimise the pain of rebalancing our situation, here on Planet Earth. I just don't see it happening on anywhere near the scale required to avoid the cliff. As for your response to my comment below regarding simplification, the increasing complexity you describe is quite Tainteresque, no? Different actors, different technology, on a larger scale, but the fundamentals are the same. And this time, the foundational resources that all societies/economies require to grow really are running out, and they ain't comin' back.
We humans will fight it to the end, but I expect massive simplification of our systems in the decades ahead.
I would be willing to bet that the net impact of the whole effort would be to add to GDP, first for the cost of putting up the building, and second for the cost of the taking the building back down.
That tells you what a poor indicator GDP is. It is similar if you injure someone and send them to the hospital. A net increase in GDP.
Agree. When people bring out the example of how war increases GDP what seems to be lost is that in effect you are running your balance sheet through your income statement. When I offer to come to their house and burn it down in order to create value I get strange looks. I once cut off a hedge fund manager's tie in a meeting to make the point that destruction does not create value. He did not come back.
Another crazy example of GDP math is that for example the cost of hauling waste is ADDED to GDP rather than taken away. The more externalities the economic process produces the more GDP increases.
Crazy.
All that said, from a pure asset/liability point of view debt destruction of non-government issued debt has no real impact on a nation's wealth in the narrow sense. In the bigger picture though I agree that as resources are consumed without creating any utility the world is worse off.
Rgds
WeekendPeak
LOL! I think I've just fallen in love with you!
"For starters, one person’s debt is another person’s asset."
Only if:
1. The systems necessary to the repayment of the debt (i.e.: growth in energy production) continue to function in a way which allows repayment.
2. The debt is an 'honest' one, without more claims upon it than it will eventually be worth. Unpayable debt (defaulted) becomes another person's liability, especially when socialized as we've seen recently. As you said, "Oversimplification is not helpful in understanding extremely complex and reflexive relationships."
Understanding that our complex systems are in the process of decomplexifying (simplification) isn't an oversimplification.
"I think that the connection between debt and oil (an input in the economic process) is problematic...."
Yeah, tell that to an oilman trying to borrow the CAPEX for his next big project. Certainly "problematic". Back during the debt debate in Congress I went to get fuel for my tractor. The pumps had plastic bags on them. Next station: same thing. I went in and asked why, and if there was a shortage. The owner told me his credit line had been put on hold pending the outcome of the debt debacle. He couldn't order fuel. It seems that the credit/debt monster is linked to oil, from the well right up to the gas pump. Without debt, oil doesn't get to market. Without oil, debts don't get repaid. Pretty simple really.
I think that one of the issues is that we (the west) are simply considerably less well off than the number of dollars (or euros for that matter) indicate. Gail is correct in that the truism of my statement “one person’s debt is another person’s asset” is problematic in the case of default, but in a way default, for lack of a more accurate word, is exactly what is needed. We simply don’t have the wealth we think we have.
I’m not so sure that society is simplifying. Many things I run across on a daily basis are increasing in complexity all the time. Computers and other electronic toys, financial derivatives, oil exploration methods etc.
I think that one potential explanation for the feeling that we’re simplifying is that we (in the west) are effectively on the short end of the stick. When you go to Asia or South America though the feeling is quite different. Every year things are better than the year before, more plentiful and easier to get. Haagen Daz in Singapore and Hanoi. Scottish salmon in Hong Kong.
We have been using oil to move a 5 ton SUV with a 100lb suburban to the mall to get the latest ipod while in Hanoi you’ll see 3 guys a and 2 chickens on a scooter going to the factory to make that very ipod the houswife is buying. No wonder they have Haagen daz while we are going on staycation.
Rgds
WeekendPeak
You THINK. Wow, what an impressive argument. It doesn't even need any data to back it up.
Yes, I think. And generally I’m actually pretty good at it.
“I think” is not an argument. It is a description of a mental process.
No data is required to observe that oil and debt (or capital for that matter) are intertwined, but that they are by far the only elements in the chain from extraction to consumption. Think for example of the labor input, not just in terms of physical labor but also in terms of intellectual capital. The technology to extract oil or the thought which went into creating a set of rules and laws which enable society to get to resources and utilize them while maintaining law and order.
You see, no data required to come to certain conclusions, merely the ability to see and understand connections and interactions.
Rgds
WeekendPeak
“No, no, no Gail. Debt growth is the direct cause of economic growth, and debt saturation is why we're in a recession today. Call it peak debt. “ Posted by mkkby
Should read: Debt growth is a direct cause of economic growth, which however cannot happen if there isn’t a sufficient and growing supply of cheap energy.
When the cheap energy declines, the growth declines also, and you find your self going deeper in debt, as greater debt creates (at first) a decreasing amount of growth...and eventually the crowth stops anyway and contraction sets in.
Antoinetta III
"which however cannot happen if there isn’t a sufficient and growing supply of cheap energy"
Did you just sleep thru the last 2 bubbles? No data to back your opinion. FAIL.
Here I implore you:
Take oil out of the equation and plot out your daily life and make a list of the things you did that did not require oil inputs.
That is the end of the discussion. Everything traces back to oil. Except perhaps sleeping in the dirt under some tree clippings or catching fish with your bare hands.
A lot of things use oil. They don't require oil.
I got to work today on an electrical train. My office is electrically air conditioned. I have an electric scooter in the corner to get home with, should I want to. Those systems don't care if the electricity comes from wind or fossil fuel.
The electric train is made from oil. Oil was used to build the machine, lubricate the parts and transport them from the myriad partners in the supply chain to the assembly factory. The workers who operate the train and built the train all used oil to get to work. The power grid is maintained by helicopters, diesel fueled trucks and machines that dig holes for poles that are oil powered.
The whole darn thing is oil. The industrial ecology of the world uses oil as the energy source.
The world you speak of requires a rebuild of every car, train, factory bus, component part and food source to not contain large qtys of oil.
That is Gail's point I think.
It may have been possible starting in 1970 but we decided not to and here we are: Nothing to be done.
The electric train is made from oil. Oil was used to build the machine
No, it's really not. Manufacturing is primarily run on electricity.
lubricate the parts
That's a tiny percentage of oil consumption.
transport them from the myriad partners in the supply chain to the assembly factory.
That can go by electric train as well.
The workers who operate the train and built the train all used oil to get to work.
Some do now. They don't have to.
The power grid is maintained by helicopters, diesel fueled trucks and machines that dig holes for poles that are oil powered.
Utilities are converting to electric vehicles as fast as they can - they like the idea of "eating their own cooking". Here's an electric utility boom lift. Here's a consortium of utilities considering a bulk purchase of plug-ins (and a good article). Here's an individual utility buying electric cars. Similarly, utilities are buying hybrid bucket trucks and digger derricks. Here's a large commitment by two major utilities .
The world you speak of requires a rebuild
Somewhat. OTOH, we have such surplus of waste that there's plenty with which to do it.
Not all utilities are converting to electricity. AT&T chose natural gas.
AT&T to put 8,000 natural-gas vehicles on road, March 11, 2009.
Yes, that's a sensible short/medium-term strategy for large vehicle fleets.
The down side of the peak population curve is likely to be really ugly. Not to be hoped for, and as likely to lead to a new Dark Age as to a better world.
Debt is certainly part of the story, but it is only part of the story. I wrote about it in at least two previous posts. The most recent ones are
The Link Between Peak Oil and Peak Debt-Part 1
and
The Link Between Peak Oil and Peak Debt- Part 2
You might also go back and read my financial forecast for 2008, (which turned out to be right)
Peak Oil and the Financial Markets: A Forecast for 2008
and my follow up post, explaining why I had seen what was coming.
Delusions of Finance: Where We are Headed
Note that in the earlier posts, I talk about a coming, bigger debt unwind.
I don't think you can assume Shrinking Economy implies Shrinking Debt. Here is a scenario that would be a counterexample:
1) Shrinking economy caused by fossil fuels becoming relatively more scarce. This manifests when uses for cheap FFs are no longer profitable with more expensive FFs.
2) Wages decrease as there is less demand for labor. Prices fall generally. Not so much for FFs. Monetary policy prevents outright deflation generally. However wages decrease while fossil fuel prices remain unchanged except for swings caused by occasional events and disasters.
3) Because of lowering costs of other inputs, the energy producing sector grows relative to other sectors. This growing sector can repay the interest on the money required to finance it ( which is really quite low because of monetary policies )
4) Because some sectors are growing debt continues to exist. There are arguments about whether the price of energy should be included when measuring inflation for monetary policy purposes, and about whether there is inflation or deflation. Depending on how you view things in this debate, the price of energy seems quite stable or is increasing slightly. But what is obvious is that wages are falling, maybe not yours if you are lucky, but generally the middle class shrinks.
Simoleons per barrel doesn't change. When this comes up against shrinking availability of energy, ( loans are payable in currency not energy, i.e. we're not loaning you a barrel of oil and expect to be repaid with a gallon of interest, we're loaning you simoleons repayable in simoleons ), when this comes up against the shrinking availability of energy, instead of deflation, we'll get monetary easing that ensures loans can be repaid.
Nitpick: Prices fall generally... Monetary policy prevents outright deflation generally.
Deflation is defined as a fall in the general level of prices.
Main point: If consumption is falling (faster than production), so is the price. Two consequences: First, the energy sector has difficulty paying back the debt already taken on, based on prior expectations for price. Second, the energy sector decreases its rate of investment, to match decreased demand. Instead of investing in the hope of increased sales, it would only replace a percentage of existing assets as they depreciate.
Now, if energy prices aren't falling in a shrinking economy, it must be because production is falling as fast as consumption. Therefore energy companies' total incomes are reduced anyway. So they have incentives to reduce investment and debt whatever happens to price, in a shrinking economy.
There's also a second-order effect. Banks become much more reluctant to lend in an environment of generally falling prices. It would be much harder to persuade them that they will get their money back.
Yes, the energy sector would "grow" relative to other sectors, by shrinking more slowly. Its debt would also shrink.
Other point: The most important functional effect of "monetary easing" in this situation is to create inflation. As Gail points out so graphically and you accept, debt is easier to repay when nominal income is rising. The problem is that it is very hard to achieve a moderately high but stable (say 6%) inflation rate. Especially when your economy is shrinking.
Monetary easing is a bit like nitro. Mostly it works OK, in small quantities. But sometimes you get the effects sooner and bigger than you wanted, and sometimes you don't get 'em at all, until you go up close to see what's wrong...
(Calculation of inflation rate: in normal times with 2% growth and 2% inflation, debt is repayable because income is rising at 4% nominal. If growth goes to -2%, we need 6% inflation to get nominal incomes back to 4% overall, so keeping debt repayment the same proportion of the household budget as before.)
Thanks for the thoughtful reply. I'll try to answer it point by point as best I can. Remember that the scenario was not a prediction, only a counterexample to 'lowering growth implies lowering debt'. I only need to defend it's plausibility, not it's certainty or even it's likelihood.
Maybe a better way to say this is that generally, because of lowered demand caused by, for instance, a needed resource that was previously cheap becoming relatively expensive, prices are lower than what they would have been without this event. This is a deflationary force effecting the economy broadly. This force need not cause actual deflation if it is kept in check by another force such as easing.
Consumption = Production within a few decimal places because there's no place to put excess production. Leaving stuff in the ground seems like a better idea than keeping it above ground somewhere. Consumption may fall far short of some prior expectations without actually falling much or at all. Therefore prices may fail to meet certain prior expectations without falling much or at all.
What kind of interest rates did the energy sector get on it's current debt? Was it really all that high interest? And if the debt were to seem expensive to pay back now, what would prevent it from being refinanced? If I were lending money, Shell would seem to me to be very likely to be able to repay it's loans. Without an economic upturn, interest rates will remain very low. In times like these the US pays less than the rate of inflation on it's debt. People are looking for a safe place to store their money, and are even willing to take less than inflation ( pay a little bit ) to store their wealth.
The energy sector doesn't need huge returns to get investment. It just needs to be a relatively good investment and the money will flow. If the interest rate is near zero, then it's easier to wait for prices to rise. When prices rise higher rates aren't a problem.
If you can do better than what banks are currently doing with their money, then you win. If you are a giant resource extraction company, you're a safer bet than most others.
Monetary easing is an inflationary force which pitted against deflationary forces may balance out to create no inflation at all. The sector need not shrink at all and even if it did, it's debt need not shrink if the value of the debt shrank faster. This need not stop until new energy sector investment does not pay off in EROEI terms.
For it to go nitro, you need the economy to go nitro. At that point you can rein it in. This may never happen if the economy going nitro is linked to oil prices going nitro and reining it in first.
Here is where those lending money will have to change their assessment of who is credit worthy. Some will be able to repay their loans and some will not. ( the bar / interest rate will be low enough to ensure this )
I couldn't have picked someone better than Homer Simpson to symbolize Peak Oil :)
Hi Gail:
One of the characteristics we are beginning to see is one of "ringing" (and old process control theory term I dug up) where, when the system lacks adequate damping or the time delays of negative feedback are too slow compared to the system dynamics.
While everyone knows how rapidly the oil price climbed from early 2007 to the peak in 2008 and then collapsed to a low at the end of 2008, they are less aware of the longer-term averaged trend.
The price quickly rebounded until July 2009 and then has been increasing at a different pace until recently.
What the longer term average suggests (now) is that when short-term prices spike in conjunction with a longer-term average that exceeds $90/barrel, the limits within the economy (and the distribution of income) begin to kick in. Even with the recent suppression of the price of WTI, this effect is visible.
I'll see if I can post this graphic when I update pricing information this afternoon.
As you've probably noticed when speaking to various groups (that wish to hear the information), they see the short-term effects (like the rapid change in gasoline prices) but don't grasp the effects of exponential math. When in a bubble or participating in a bubble economy, it can be pretty daunting to see it.
Take gold, for example. The shape of the price curve has all the classic symptoms and shape of every other bubble that has burst. But the how and why it will burst won't be because the market is suddenly flooded with gold. It will likely burst because of a collapse somewhere else in the economic/resources system. A 70% pa growth rate is not sustainable where the price doubles every year.
It can and does paint a bleak picture...if you want to keep doing more of the same following the BAU approach with exponential growth.
I stress that we still have time to make some choices (though that time is running out), though it is unlikely that we'll escape the pain of some pretty radical changes to how we conduct ourselves in the future. The difference is whether you wish to feel empowered in working towards a different goal or just swept along with very little say in the matter.
The only way for gold to collapse in terms of dollars is for the value of dollars to skyrocket! Good luck with that!
At gold's current trajectory, it would project to be more than $3500 ounce next year at this time, more than $7,000 oz by mid-2013, $15,000 per oz by mid-2014 and more than $30,000 oz by 2015.
But in the end, both the utility of the dollar and gold are but creations of man's imagination and fiction or imaginary value for use in trading, when you have enough to trade and it is otherwise useful in trade. But because you can't eat it, drink it, or procreate with it, nor does it make a particularly good or useful projectile or weapon, it will eventually fall because those things really necessary to life become more valuable than "shiny objects."
If this were to happen, it would be because the dollar has become essentially worthless, not because of the intrinsic value of gold. I certainly can see that happening before gold becomes valueless.
I wouldn't be so sure. It's clearly in bubble territory now, but the buyer motivation is a bit different than the usual greed-based speculation. Gold demand today is mostly being driven by fear --fear of USD collapse, EU sovereign defaults, peak debt, threat of inflation, etc. Like it or not, gold is still considered "hard money" and a means of wealth preservation by a great majority of people (and central banks) as it has been for thousands of years. This is not likely to change anytime soon, and disparaging it as just another "shiny object" completely misses the point.
Yes, eventually, gold is likely to revert close to it's long-term mean (unless of course, all faith in fiat currencies collapses, thereby leading to a global depression the likes of which we've never seen). Even so, it may well have some steam left. I was worried gold was already in bubble territory 3 years ago when it hit $850 an oz, and am now kicking myself for not having recognized its (now obvious) potential, thanks to the market crash, QE, etc. Could have more than doubled my money by simply exchanging greenbacks for "shiny objects". Oh well, experience keeps a dear school...
Just think about where investors went during the crash last week. They went to gold, US treasuries Swiss franc and a few other places.
If the too-big-to-fail US currency tanks, gold may be the buy of last resort that people turn to in an attempt to save their wealth.
Gold has been used for thousands of years and has proven the test of time that our human brains really respect the stuff, even if we can't eat it.
Sure, food would be better if one is hungry but as soon as that passes, there needs to be a way for the motivated to differentiate themselves. Gold makes beautiful jewelry, is very rare, easy to form, does not corrode, impresses just about anyone that holds it in their hands, etc.
It might not be the best investment right now but buying some and burying it in your back yard is not a bad idea.
Does anyone really think the global economy is going to get back to aggressive growth and stay that way for an extended amount of time, with us knocking right up against our peak crude production limits? I don't.
When and where the gold price will stop? Difficult to answer, but what I can say with a very high degree of probability is that the Dow/Gold ratio will reach the 1:1 ratio (personally it is not a question of "if" 1:1 will be reached, but "when"), as it always had:
http://3.bp.blogspot.com/_cW4kucEGIgI/STWyrHN7mtI/AAAAAAAAA3s/wo_USOcWSd...
http://1.bp.blogspot.com/_IEvPDYSlOTg/SX45AT6ngbI/AAAAAAAABzs/O7hGtHepTn...
http://1.bp.blogspot.com/_OpWmYZm7O8I/StyMuBUGyBI/AAAAAAAAA3Q/Ifibgq49Kp...
The only difference in the last 100 years with respect to the previous years is that, with the progressive abandonment of the gold standard, the volatility of the Dow/Gold ratio exploded, but the ratio behavior has not changed much (it always came back to 1:1).
Apart from that, my 2 cents to the discussion is that the final underlying message of gold is reminding us of the limits of growth (this is my personal view). Look at the Gold production using USGS data:
http://mazamascience.com/Minerals/USGS/output/e42b984cd87f15aa41064ae64d...
I do not know whether the 2001 production level will be the peak gold production level, but whenever there was a peak in gold production the price started to spike. It is not by chance that (temporary) peaks in Gold production were very close to (temporary) peaks in Oil production. In this regard, I want to highlight that if we had very cheap energy at our disposal, we could easily recover gold from sea water or from gold synthesis:
"The world's oceans contain gold. Measured concentrations of gold in the Atlantic and Northeast Pacific are 50–150 fmol/L or 10–30 parts per quadrillion (about 10–30 g/km3). In general, Au concentrations for Atlantic and Pacific samples are the same (~50 fmol/L) but less certain. Mediterranean deep waters contain higher concentrations of Au (100–150 fmol/L) attributed to wind-blown dust and/or rivers. At 10 parts per quadrillion the Earth's oceans would hold 15,000 tons of gold.[45] These figures are three orders of magnitude less than reported in the literature prior to 1988, indicating contamination problems with the earlier data.
A number of people have claimed to be able to economically recover gold from sea water, but so far they have all been either mistaken or crooks. A so-called reverend, Prescott Jernegan ran a gold-from-seawater swindle in the United States in the 1890s. A British fraudster ran the same scam in England in the early 1900s.[46] Fritz Haber (the German inventor of the Haber process) did research on the extraction of gold from sea water in an effort to help pay Germany's reparations following World War I.[47] Based on the published values of 2 to 64 ppb of gold in seawater a commercially successful extraction seemed possible. After analysis of 4,000 water samples yielding an average of 0.004 ppb it became clear that the extraction would not be possible and he stopped the project.[48] No commercially viable mechanism for performing gold extraction from sea water has yet been identified. Gold synthesis is not economically viable and is unlikely to become so in the foreseeable future."
(See http://en.wikipedia.org/wiki/Gold#Occurrence from more details)
Therefore, if new (cheap) sources of energy will not be found quickly, expect Gold to skyrocket further and further.
One of the issues with gold production is that more and more of it is coming from reprocessed tailings rather than virgin ore. It is considerably cheaper to comb through a big pile or dirt than it is to dig more shafts and put infrastructure in place. I know a CEO/owner of a mine in SA who thinks that cash costs for gold (which are right now somewhere between 400-600/oz, depending on the mine) are probably more in the 1000 range if the gold had to come out of the ground rather than from tailings.
Rgds
WeekendPeak
I've been doubling my very modest nest egg quite successfully by filling the barn with various items useful to my lifestyle-fertilizer for instance. Furthermore, I CAN eat that , indirectly of course.
Nuts bolts and screws purchased five years ago -more than doubled .
Shotgun shells-more than doubled.
Spare electric well pump-more than doubled.
Older 4x4 granny geared real truck bought for potential repair and use on the farm at scrap price-more than doubled.
Filling the barn (or garage/shed) with directly useful materials I do believe is a great investment, and I am following you on that. I also like small diesel engine equipment like rototillers
or compact tractors as diesel can both last in storage (12 years so far in my experimentation), and where I live is made out of soybean (though you have to figure out how to get it to 165 degrees).
Unlike you, not having the depth of your farming experience, my 10 year project has been learning the various skills and teaching them to others in the community, this weekend I'll be teaching
the rather esoteric skill of earthbag building.
I toss in my vote with oldfarmer and schoff. The real gold is junk, and do we have a lot of it! Learning how to use it and teaching how to use it ought to be the real growth industry.
I think one of the problems that economists missed is the fact that the response time for adding to oil supply is very slow. So even if you get the price up to $150 barrel, you don't get corresponding new supply for several years. And of course the new supply requires considerable capital investment as well. This delay is part of what makes the response what it is.
I wrote about this issue in How limited global oil supply may affect climate change policies.
There is also a corresponding effect where the increased price of oil (already at market and already extractable) means that the cost of future potential supply has to be just that much higher just to pay for itself and to meet ROI targets.
You can hide the cost of expensive oil in with plenty of cheap oil, at least for a while. Not so if it all is expensive.
It's interesting to me that the subject of gold sparks such an emotional response. Inevitably, the subject of whether or not the rise in the price of gold describes a "bubble" or not sets off a "flaming" discussion on any online forum on which it appears. Clearly, there is a bare nerve exposed here.
As I see it, the chase here is that we have an unprecedented situation now where the industrialized world is ending due to resource constraints. But during their existence, the global industrial economies of the world have created an absolutely enormous stockpile of wealth. The problem is that almost all of this wealth is denominated in DEBT. And the value of debt is declining, indeed it is poised to crash precipitously. This debt based wealth will have to find a way to shoehorn itself into tangible assets, but there aren't enough tangible assets available to absorb all this wealth. Therefore, much of this debt based wealth will simply be destroyed; vaporized. In the meantime, tangible assets of many categories will continue to increase in value relative to debt based assets (remembering here that the U.S. dollar is very much a debt based asset).
Environmentalists have the simple slogan:
"Reduce, Reuse, recycle"
The US which is world's largest oil consumer using 25% of the world's oil has
a huge ways to go in terms of reducing our oil usage. As has been noted
in many articles on the Oildrum, Europe and Japan use 2-3 times less oil per capita than the US. The major reason for that is that Europe, Japan, and Taiwan
actually run Green public transit- an integrated system of Rails, light rail, buses, vans and bikeways which mitigate the need for energy wasting private
autos. The energy efficiency of 2,000 lb cars carrying even a 200 lb person is
only 10%. This is not counting the football field of asphalt for every 5 cars
as estimated by Lester Brown which has to be maintained at an enormous cost in terms of maintenance and also 10-12 times the land consumption.
Despite all the auto industry myths that the US is "too vast" to support Green public transit this is really not true. In fact according the Federal Highway Administration 79% of Americans already live in urbanized areas.
The Brookings Institute study May 12th showed that incredibly enough
70% of working age Americans ALREADY live only 3/4 ths mile from a transit stop
in 100 Metro Areas.
http://www.brookings.edu/reports/2011/0512_jobs_and_transit.aspx
Unfortunately the problem is that the frequency and connections of existing public transit is abysmal. The same Brookings study points out that only 30%
of working age Americans could get to a job in less than 90 minutes!
Major Metro systems like NJ Transit, the CTA, MARC in MD, the PATH downtown lines from NJ to NY either run NO weekend/ off-peak service or so infrequent as to be unusable. This does not take huge sums of money to fix - for example the
TOTAL NJ Transit operating budget to run all the trains, lightrail, buses and shuttles in NJ is only $300 Million! The cost of just one highway interchange from the Garden State Parkway to I-78 cost $78 Million!
If we first run our existing public transit with frequent 24x7 service, add shuttles for the last mile, and then revive key sections of the 233,000 miles
of existing Rail in the US as well as build light or commuter rail down key
highway medians the US, like Europe and Japan, could easily cut our oil consumption by 50% or better.
I like to remind my friends that one of the greatest things about living in America is the level of waste. ... Really, I mean it. ... We can reduce our level of consumption of everything to one half and still lead lives that would be the envy of the rest of the world.
The problem in the US is not a shortage of minerals or food or energy or housing but a longage of expectations fostered by our debt-financed, corporate and political system that requires production and consumption to pay off debt. (Thanks to Nate Hagens for the phrase "longage of expectations".)
From what I see in urban Seattle, the generation of people in their 20's and 30's are developing a very different set of expectations than the generation before them. Younger people are driving smaller vehicles if not walking or biking, living in smaller spaces, delaying having children, renting instead of owning, spending their money on experiences and good food rather than consumer goods. It reminds me most of European urban living where a high quality of life requires a much lower level of consumption.
I'm not disagreeing with Gail's premise at all. The current Business As Usual is not sustainable. What people often miss, however, is that there is a generational change underway and that the upcoming generation may not want or miss the current BAU.
In other, less well endowed countries there will undoubtedly be much misery in the years ahead (see Somalia today). But in the US at least, there are (and always have been) many ways to live within our still bountiful resources. It won't necessarily look like what many people think of as 'normal' today. But for some of us it will be a very welcome change.
Be the change you want to see in the world.
Jon
"We can reduce our level of consumption of everything to one half and still lead lives that would be the envy of the rest of the world." Posted by jonathan callahan
And if we did, unemployment would go through the roof. That’s part of the trap we’re stuck in, all that waste supports probably tens of millions of jobs.
Antoinetta III
Better get started on reducing waste. We have to flush the waste-producing jobs out of the system. That is exactly the reason why we turn to efficiency when the recessions set in. Remove waste.
It depends who makes the remaining half.
More than 80% of US spending is spent on goods and services produced in the USA. Cut spending by 50%, and tens of millions of jobs will be lost. No two ways about it.
Being utterly simplistic on my part, So that 20% represents say the Chinese manufactured goods, and energy imports from Canada, Mexico, Venezuela, Nigeria etc.
Where is that 20% going now, savings? Let's assume it has no positive effect. Now I have to find 30% more. Is there another 30% of pure waste out there? Do I
remove 90% of the financial industry and get say 12% there? In re-employing those physicists, mathematicians, and MBA's to actually create product/infrastructure/knowledge
do I get any positive effect there. How about some efficiences in Medicaire/Medicaid or healthcare in general, pick some other fields. People can still be employed
without being focused on consumption oriented industries, but you do lose 28 year olds making $750k in NYC in that process.
I do realize this is a heretical line of thought......
Jon,
I found your comment a welcome antidote to the fatalism I see all too often on this issue. I also spotlighted it in this post over at my site:
http://www.collide-a-scape.com/2011/08/17/rooting-for-collapse/
Keith
Keith,
I'm glad to see there are some readers who aren't rooting for collapse.
One of the points I try to make is that the world was, is and forever will be a very heterogeneous place. If global trade slows down it will become even more so. There are many places, especially in the New World where I am very optimistic about the kind of life my kids will be able to live: low on debt, low on consumption and low on internal combustion engines but high on community spirit, environmental health and overall happiness.
One of my solar power buddies likes to say: "The party is over! ... Let's throw a better party."
Jon
Being convinced of the inevitability of something and "rooting" for it are very different things. I don't begrudge others their optimism.
A big part of our higher oil usage in the United States relates to how spread out we are--both within cities, and between cities. Unless we move closer together, and the businesses move with us, it is hard to make a very big dent in our oil use for commuting.
I know that where I live in a suburb of Atlanta, adding trains would be only modestly helpful, because commuting is in all different directions, and there is hardly a concentration of people going anywhere. The way subdivisions are laid out means that it is often a half a mile (kilometer) walk, just to get to the edge of a subdivision (and a somewhat major street).
Carpooling would seem to have the best chance of working to save gas, if people were motivated to trade wasted time for the money saved. But this would take a lot of effort to set up too.
So, smaller cars could cut consumption in half, carpooling could cut consumption in half, moving closer to work or getting a job closer to home could cut consumption in half. I guess we're doomed.
Let's be realistic, shall we?
Basic stock-and-flow model. Current vehicle fleet replacement is about 6% per year. If the current fleet average is 22 mpg and new vehicles average 38 mpg ("50 mpg", after exemptions and other nonsense), and the fleet stays the same size, then in about eleven years, fleet mpg is 30. In 34 years, 36 mpg. This does not halve consumption, and it doesn't do it next year, either.
If 30% of drivers carpool, increasing occupancy from 1.2 to 2.2 for 30% of their trips (80% of trips to and from work), we get maybe nine percent. Not half. And the assumptions (30% and 30%) are pretty extreme.
Moving closer to work ... ah, now we're talking. Reduces the vehicle fleet, the number of trips per vehicle, and the average length of trips. But again, this will play out over decades, re-adjusting land values in the process.
However, a large fraction of land transport is for business purposes. Reducing number and length of these trips would mean a reduction in business activity, over and above the decline in activity from reducing the size of the car fleet. Which is one of Gail's points.
Nevertheless, doomed or not doomed - it ain't about levels so much as rates of change. Descend 200 m to the ground in 6.4 seconds: doomed. Descend 200 m in 200 seconds: not doomed.
Does growing poverty ever get us a decrease or technology? Do I first cutback my entertaining trips to Europe, slipping to Walt Disney World auto trip, then Hershey Park, and finally
playing angry birds on my new roku for the rest of my life? I'm old enough to remember music stores everywhere, then blockbusters everywhere, then borders everywhere, now
their products are on my ipod, roku, kindle, and the local AMC just closed, is that because my wife and I like the slightly late Amazon Video service for movies in the comfort
of our home? I've been investing in technologies that enhance the bricks and mortar experience for women's clothing, talk about a totally frightened industry.
50% of vehicle miles come from vehicles less than 6 years old.
Ownership of older vehicles can rearranged: Dad gives the SUV to the low-miles teenager, takes back the Corolla for commuting to work.
If 80% of those drivers not now carpooling carpool for 80% of their miles driven, with just one other person, we can cut consumption by 30%.
Replacing today's cars with smaller cars is expensive. Moving closer to work is expensive or doesn't work very well--two worker family, closer for one is not closer for the other.
Our financial problems are ones we are hitting today. It makes it difficult to even wait six months for solutions to be implemented.
Hi Gail,
I don't think anyone is claiming that it will happen overnight. There are some cars being replaced all the time, if the price of gasoline increases (my expectation is that that oil prices will generally rise, though there will be volatility) more people will choose fuel efficient transportation, often the price will be less than the big SUV. Building light rail, trains, and HVDC transmission along with wind, solar, geothermal, and nuclear would be a good way to put idle resources to work and a lot better than highway constuction.
About 50M cars turnover every year in the US: it's not that hard for someone to replace their SUV with something better. The average used car price is about $8,500. http://www.niada.com/PDFs/Publications/2010IndustryReport.pdf
Until Corollas prices rise quite a lot over current levels I'll have a hard time agreeing that the average person can't trade to something more efficient.
Some people can trade to a car that is more efficient, but basically the stock of cars we have is pretty much fixed, and changes slowly over time.
If buyer A trades in his fuel inefficient car for a more efficient car, then the stock of cars for other people to buy includes one more fuel inefficient car, and one fewer fuel efficient car. It is only possible to pull out what fuel efficient cars you have from the pool--but then that leaves the inefficient cars for someone else. Maybe the fuel inefficient cars will settle out to drivers who drive less, and that will bring the average fuel efficiency per mile driven up a bit. That would seem to be the best you can do, given the stock of cars we have today.
There is an enormous range of utilization for cars. There are taxis that are driven 100,000 miles per year, and there are many cars that are driven 1,000 miles per year (mine, for example).
In Tokyo, IIRC 20% of fuel consumption comes from about 5% of the vehicles. Switch 5% of the vehicles to EVs, and you've eliminated 20% of the light vehicle fuel consumption.
In the US, 50% of miles driven come from vehicles less than 6 years old. 6 years is not that long.
Let's think outside the oil box.
@Nick
First, thanks for for being a thoughtful counterweight here. Assuming some incremental efficiency is gained in response to the rising oil prices. Is there any doubt about the fact that no matter how much efficiency gain is brought in that 84 mbd oil will be consumed at the most 'optimal' price point. if you gain efficiency in US the remainder of 'low' priced will be consumed else where until the optimal price is reached.
So far what has happened is every time oil prices have spiked (above say $130) the economy has gone into recession. So what happens when the decline sets in. oil prices keep spiking until global economy contracts enough but all the while we keep consuming the max produced oil. that is the best market based solution. For any kind of mitigation away from oil to work the world(not just US) would have to NOT consume oil when price is low. somehow I don't see that happening.
Now imagine what happens to the financial market when they start to price in this long streak of recessions one after another.
Desi,
Yes, I expect all "low priced" oil to be consumed by somebody or other. On the other hand, if we keep prices from rising with the use of alternatives, then at least we won't use the "high priced" oil, of which there is quite a lot.
Each oil shock has produced responses: CAFE regs, replacement of oil for electrical generation, dramatically higher CAFE regs, hybrids, EVs, etc. Gradually alternatives will ramp up.
Now, alternatives like EVs have "barriers to entry": they take a large investment to develop and ramp up. GM spent $1B on the EV-1, another $1B on the Volt, and more $ ramping up manufacturing of the Volt. Eventually economies of scale will sharply reduce EV prices, and at that point there will be an effective ceiling on the price of oil - a ceiling that will gradually fall. As it does, oil consumption will fall with it, faster than it would under a BAU scenario in which people just deal with rising oil prices by cutting back on manufacturing, driving, etc. (aka conservation aka demand destruction).
Eventually oil will be irrelevant to the economy, just as kerosene now is to interior lighting.
Atlanta is actually a very interesting case and is often used as the classic case of suburban sprawl by Urban Planners and Public Transit professionals.
The overhead picture of a set of its incredibly convoluted exit/entrance ramps snaking over and under 6 lanes highways is the icon of sprawl.
Atlanta ranks 91st out of 100 Metro Areas in the Brookings Study:
http://www.brookings.edu/~/media/Files/Programs/Metro/jobs_transit/jobs_...
Does this mean Atlanta is forever hopeless for Green public transit?
That will be up to the people of Georgia and Atlanta Metro Area to decide between racism and sustainability.
I did not realize until listening to an NPR story that the major reason Atlanta
is 91st in terms of public transit as ranked by the Brookings study is that despite numerous proposals and attempts to extend public transit into outlying suburbs those attempts have been repeatedly opposed and thwarted by the desire of white enclaves to keep other races out.
See:
http://www.blackcommentator.com/106/106_transportation_racism.html
However this does not mean Atlanta has any shortage of rail tracks even if
these are currently used primarily for freight - quite the contrary Atlanta is
a FREIGHT rail hub:
http://www.logisticsatlanta.com/rail_map.asp
It is definitely the case that sustainable public transit of the future
will have to be different than the surviving rail public transit which only went into and out of inner city cores during peak hours primarily for commuters.
For example where I work in suburban New Jersey (Basking Ridge with HQ in Summit, a major rail hub) there are a number of reverse commuters who come
from New York City or other points East to our Corporate Offices to the West.
The NJ (should we really call it New YORK) Transit system is ill-equipped for
this although increasing numbers are making it work. The last Eastbound NYC train
close to my office is at 5:03PM with the next one not scheduled until 8:30PM!
The assumption of course is that all public transit rail riders want is to go
TO New York in the morning peak hours and FROM New York in the evening which is
actually false.
Moreover I myself along with about 20-30% of our local Rail riders are not going to New York but points within suburban New Jersey, again repeatedly
denied by NJ Transit planners and spokespersons.
This is easily remedied by simply RUNNING public transit, in particular Rail which is not caught in auto traffic and is much cheaper for society than driving, where it already exists!
As far as density it is quite obvious that Atlanta has the density to support
highly used Green public transit. Moreover experience in community after community such as parts of New Jersey which have built public rail transit is
that once it is built it will attract transit-oriented mixed use development like a magnet. Jersey City after NJ built the Hudson-Bergen Light Rail is being
transformed from abandoned warehouses/slums to Corporate Offices and Yuppie high income condos. This has also happened in Phoenix, AZ, Salt Lake City, UT,
Charlotte, NC - deeply Republican areas where city officials have realized that
Green public transit has been a major boon to their communities despite deep opposition at first from highway subsidizing fellow Republicans.
(In alliance with highway construction Unions ;-) )
And Green public transit is actually embraced by a great majority of Americans who know that endless highway expansion has NOT solved their congestion problems which cannot be physically solved by 2000 lb private cars which have to
maintain a car length for every 10 MPH of speed for safety and require 12 times
the land use of a Green electric energy efficient train.
See:
http://t4america.org/blog/2011/06/21/republicans-and-independents-suppor...
The best EROI for the USA right now is to redirect funds for endless highway
expansion and maintenance into Green Public Transit.
We should NOT be subsidizing 1 million electric cars at $7.5 Billion or more
highway lanes, or electric charging stations for 1 ton private autos.
Those will be supported anyway for the affluent who can afford them.
We primarily need Green public transit via rail, lightrail, buses,vans and bikeways.
What you end up with in Atlanta, if you expand the system is one where people have to drive to a train station and park their cars. Then they need to take multiple trains to get sort of close to their destinations. At the other end, there may still not be public transit (or even sidewalks), so there is a need to walk a long distance in the streets.
Maplewood New Jersey is one of a number of towns which provide shuttles
to their train station. No parking or driving required!
Sidewalks can be built.
They are a lot cheaper than endlessly repaving roads, parking lots, and sustaining the whole incredibly expensive infrastructure of traffic cops,
traffic courts, ambulances, insurance, auto repair etc of our auto addiction.
Gail, I understand your pessimism and frustration, but enormous change can
come very quickly. It is our task to see that change comes about before it is too late.
I have been an activist since my cousin visited in 1969 on the first voyage
of Pete Seeger's Sloop Clearwater, sailing to cleanup the Environment.
My brother and I were spellbound until the wee hours of the morning as our
cousin told us about radioactivity in the Arctic, water pollution, air pollution
mind-boggling problems we had no idea existed.
Since the Clearwater started sailing in 1969, the Hudson is clean enough to swim in during the Clearwater Festival. You can see our cities without smog, the Berlin Wall has fallen, Apartheid no longer reigns in South Africa,
we have the first Black President in history (even if he has stabbed us all in the back!)
If we know Green Transit is critical for surviving Peak Oil and Climate Change
then we need to make it happen!
Worldwide I am totally convinced that we are facing upheavals which dwarf any
seen before in history, 1848, 1917, 1968.
Eqypt was only the beginning...
Green Transit as opposed to our current auto addiction is crucial.
The key thing is to make people aware of that and direct energies towards it...
In my University days, a couple of decades ago, for the first year I used public transport to travel cross-country: 20min walk to station, 15min by train, then 45min by bus - a total of 160min per day. In second year I bought a car (4 cyl, 1.2L) for a total of 50min per day. A huge saving of time.
At the end of first year over the vacation I got a job in the CBD: 20min walk to station, 30min CBD express train - a total of 100min per day. By car about the same, but he train is less stressful than stop-start traffic.
My personal experience is that for commuting to the CBD, the train is better, but as soon as you try to go cross-country, the car wins hands down. For my whole working life I have traveled to work by 4 cyl car, both here in Australia and the UK, because the route has always been cross-country.
Sure I could do cross-country by public transport, but I really wouldnt want to because of the time/convenience factor. I think that is a difficult barrier for most people to overcome and I suspect I personally would sacrifice other discretionary expenses, before I gave up the car.
Could I do it in an EV ? Yes quite easily. If/when the economics makes sense.
Overview of oil price in correlation to bourse indicators
1 March 2011: Brent crude oil price was at 111.17 USD and WTI crude oil was at 97.15 USD.
At the same time the Norwegian OSEFX bourse index was at 436 points, and the Dow Jones index was at 12 318 points.
17 August 2011: Brent crude oil price is at 110.55 USD and WTI crude oil is at 87.50 USD.
As for now the Norwegian OSEFX bourse index is down to 375 points, and the Dow Jones index is down to 11 410 points.
Not much movement on the oil prices there for the last 6 months… but stocks are down!
http://www.jouleunlimited.com/about/overview
Free of the land and resource constraints that hinder biofuels, Joule will directly target fossil fuel replacement with unprecedented volumes of renewable diesel, at a fraction of the land use incurred by current methods. At full-scale production the company projects delivery of up to 15,000 gallons of diesel per acre annually, at costs as low as $20 per barrel equivalent including subsidies.
love the work you have done and the presentation but don't count out technology yet.
The analysis by Wrigley of historic energy consumption in the UK is interesting. It looks like wood consumption peaked about about 22,500 terajoules, which is equivalent to about 250MW (assuming electricity is about 3x as useful as wood's heat output).
The UK has about 1.5GW of wind output on average, so it's current windpower output is about 6x as large as UK wood potential. And, of course, that windpower output can and will be dramatically increased.
Not our (many times greatgrand) father's windpower.
Do we need oil?
Nah.
Again, there is this puzzling assumption that oil can't be replaced, that it is somehow magically necessary for industrial/modern civilization. Oil has been cheap and convenient for the last 100 years, but the industrial revolution started without it, and modern civilization certainly will continue without it.
• 130 years ago, kerosene was needed for illumination, and then electric lighting made it obsolete. The whole oil industry was in trouble for a little while, until someone (Benz) came up the infernal combustion engine-powered horseless carriage. EVs were still better than these noisy, dirty contraptions, which were difficult and dangerous to start. Sadly, someone came up with the first step towards electrifying the ICE vehicle, the electric starter, and that managed to temporarily kill the EV.
Now, of course, oil has become more expensive than it's worth, what with it's various kinds of pollution, and it's enormous security and supply problems.
• 40 years ago oil was 20% of US electrical generation, and now it's less than .8%.
• 40 years ago many homes in the US were heated with heating oil - the number has fallen by 75% since then.
• 50% of oil consumption is for personal transportation - this could be reduced by 60% by moving from the average US vehicle to something Prius-like. It could be reduced by 90% by going to something Volt-like. It could be reduced 100% by going to something Leaf-like. These are all cost effective, scalable, and here right now.
I personally prefer bikes and electric trains. But, hybrids, EREVs and EVs are cost effective, quickly scalable, and usable by almost everyone.
Sensible people won't move to a new home to solve this problem. That would be far, far more expensive than replacing the car. It makes far more sense to buy an EV and amortize it over 20 years at a cost of less than $2k per year (about the amount they'd save on fuel), versus moving to a much higher cost environment (either higher rent or higher mortgage).
• As Alan Drake has shown, freight transportation can kick the oil-addiction habit relatively easily.
We don't need oil (or FF), and we should kick our addiction to it ASAP.
The only reason we haven't yet is the desperate resistance from the minority of workers and investors who would lose careers and investments if we made oil and other FFs obsolete.
Some might ask, what about our current debt problems?
Debt is a symbol, a marker - what matters is the underlying productive capability of our economy, which will be just fine. Could we screw up the management of our economy, and go into a depression? Sure. But it's not likely.
Don't these transitions take 50 years?
The transition from kerosen to electricity for illumination took roughly 30 years. The US transition away from oil-fired generation took very roughly 20 years. The transition away from home-heating oil was also faster than 50 years (though uneven).
The fast transition from steam to diesel locomotive engines is illustrative. There were a few diesel locomotives in use in the U.S. during World War II but steam dominated in 1945. However, the steam locomotives had been very heavily used during World War II, and they all wore out at approximately the same time the first few years after 1945. When steam locomotives wore out, they were invariably replaced by diesel in the mid 1940s. By 1949, almost all steam locomotives were gone. There were still some steam locos made in the late 40's, and they were still in service in the 50's but dwindling. The RR's also relegated the steamers to branch line and switcher use - replacing the most used lines with diesel first as you would expect. Cn rail retired its last steam engine in 1959.
Other, very slow transitions are not a good guide to the future. For instance, the transition from coal could be very slow, because there was no pressure - it was a trade up, not a replacement of a scarce resource. In other words, most of those transitions occurred because something new & better came along - but the older system was still available and worked just fine. Oil may become very expensive very fast and that would provide us an incentive to switch over much more quickly.
Unfortunately, we have more than 50 years worth of things we can burn for electricity. Fortunately, it doesn't look like we will. For instance, coal consumption in the US dropped 9% last year, about half of that due to loss of market share.
The transition from heating with wood to heating with coal took a lot more than fifty years. Electrification of the U.S. from small beginnings in the late nineteenth century to finishing rural electrification during the Great Depression took at least forty years.
Sure. These involved an enormous amount of infrastructure. On the other hand, EV/EREV/HEVs are manufactured on the same assembly lines as ICE vehicles, and roughly 75% drivers in the US have access to an electrical plug where they park.
If we mobilized all our resources as we did in World War II with the single objective of getting off fossil fuels as fast as possible, wouldn't the transition still take at least twenty years, and probably longer than that?
It would be much easier than that. A transition to EVs requires only a change within the automotive industry (for most drivers).
I refer you to Gail's slide 14 above. The price tripled, and consumption (which to a first approximation is the same as production) changed ... not at all. Well, it increased very slightly, but the change isn't significant.
In the short run, yes, we do need oil.
Past performance is no guarantee.
Two points about past transitions. First, in each case, the transition was to a new technology that was clearly better (for intended use) than the old. Much better, at the time. Not so with EVs: they might turn out better than ICE vehicles in a couple of decades. Maybe. Doesn't help us now.
Second, past transitions occurred in a environment of growth, when making new investments was a good idea, and banks would lend. Now? Provide the rate of decline is not too great, the pain of transition won't kill us. But the rate of change is key.
This is the Fundamental Attribution Error writ large. Post-Industrial Capitalism is set up to use oil in large amounts. It's the system, not a conspiracy.
Oil has two key functions in industrial society.
1. As an energy source, primarily transportation. (over 60% of use).
2. As a chemical feedstock to make a thousand different plastics and products that have physical shape, mechanical properties or
chemical properties that are finely tuned to their end use. It is incredibly useful stuff.
We could use alternative energy sources for most of the energy uses. It would require a massive ramping up of the alternative energy supply and a retooling of massive amounts of social infrastructure to employ the alternative.
However
The retooling would write off an incredible amount of fixed assets currently viewed as part of GDP, and would curtail growth for decades.
There is no alternative energy supply that can be ramped up far enough and fast enough to both replace oil, and provide the embedded energy needed in the retooling.
There is zero political will or economic imperative to even try.
The second use problem is intractable, and more fundamental.
Peak oil is peak economy, because of the way we designed and operate the economy.
It would require a massive ramping up of the alternative energy supply
Replacing all personal transportation with EVs would only require growth in power supplies of about 20%, spread over decades.
a retooling of massive amounts of social infrastructure to employ the alternative.
EV factories are pretty similar to ICE factories. They drive on the same roads (except maybe concrete, instead of asphalt).
The retooling would write off an incredible amount of fixed assets currently viewed as part of GDP, and would curtail growth for decades.
That greatly understimates the amount of money spend maintaining fossil fuel supplies. Energy is a huge industry already, and such a conversion wouldn't change that much.
There is no alternative energy supply that can be ramped up far enough and fast enough to both replace oil
As noted above, it wouldn't take much additional energy.
provide the embedded energy needed in the retooling
Manufacturing EVs doesn't take much more energy than ICEs.
"The second use problem [chemical feedstock ] is intractable, and more fundamental."
No it's not. That's the easy one. Organic chemistry started with coal tar, and can go back there. Nylon can be made from corn cobs, and slightly tweaked plants that can make polymer precursors are being researched as we speak. If you can make methanol (wood alcohol, hint hint) you can build the entire chain. And that's not even counting all the tricks you can with natural gas. (Make ammonia, then cyanide, then acrylics and polyurethanes.)
And let's not forget castor bean oil. From http://en.wikipedia.org/wiki/Castor_oil
Castor oil has numerous applications in transportation, cosmetics and pharmaceutical, and manufacturing industries, for example: adhesives,[37] brake fluids,[38] caulks, dyes,[37] electrical liquid dielectrics, humectants,[37] Nylon 11 plastics,[37] hydraulic fluids, inks,[37] lacquers, leather treatments,[37] lubricating greases, machining oils, paints,[37] pigments, polyurethane adhesives,[39] refrigeration lubricants, rubbers,[37] sealants, textiles,[37] washing powders, and waxes.
Finding 10 million barrels a day of liquid fuels is a lot harder than them chemical feed stock problem. Prices for derivatives will go up as cheap oil runs out, but finding something to toss in the gasifier is not unsolvable.
Plastic consumption can be made more efficient by reducing packaging and wall thickness; other materials can substitute; and it can be recycled to reduce virgin material needs by 99%. Plastic is a low-volume high value use which can outbid other uses for a very long time.
One can produce very simple hydrocarbons from any source of hydrocarbons, and build them into any compound your heart might desire. There are various kinds of feedstocks would work. Some are more convenient or slightly cheaper than others. Whatever fossil fuel is convenient will work; biomass will work just fine, or hydrocarbons can be synthesized from seawater, atmospheric CO2 and renewable electricity (air, fire and water!).
Certainly plastic packaging can be reduced, often dramatically, but I would caution on wall thickness. Our local supermarkets went the thinner the better with their bags. The result was bags that were so thin that they could only hold one or two items without breaking. Bag fillers were using double bags all the time. The end result was more bags used and the used bags were totally useless for re-use. Now they are back to using more robust bags and the bags can be re-used. Ok, I know there are other solutions to supermarket bags but I am using this to point out that these policies need a little caution. I often find packers put bagged stuff into a bag before putting it into a carrier - argh, I gave up trying to stop them, it caused too much of a scene!
NAOM
Good point. The proper thing is redesigning structures to reduce density while maintaining strength (human bones are a good example: they're hollow, and even the tubular structures are mostly empty space internally)
Nonsense. Total ethanol production in the U.S. came to a record 13.23 billion gallons in 2010 but because of the drought it will not come close to that this year. That sounds like a lot but it is actually only 863 thousand barrels of oil per day.
About one third of US corn crop goes to produce ethanol. If we used 100 percent to produce ethanol we would get about 2.5 million barrels per day. And we would have no corn products for food.
We are at or very near the production limits of us agricultural production. Climate change will like lower that in the future. And you believe that we could easily come up with 10 million barrels per day? Absurd!
In Indonesia the Orangutan will soon become extinct because they are cutting down the forest to plant palm oil plants. Turning to bio diesel will utterly destroy the environment for everything except humans.
You bio fuel folks are living in a totally anthropocentric dream world.
Ron P.
Ron,
I think you misunderstood what he was saying: he said finding 10M bpd would be very hard, not easy. He was saying that feedstocks are the easier thing.
Perhaps so. I guess it was the rest of his post that threw me off. He wrote:
We can build an economy with corn cobs and alcohol. I really don't think so.
Ron P.
Yeah, he wasn't thinking of the whole economy - just plastic and other things derived from the petrochemical industry.
The most promising approach to biofuels is algae reactors. They need only sunlight, brine, and CO2, and waste no agricultural land.
Have you seen good evidence that they can be cost effective?
I have a trusted friend in the business, but he can't open the kimono yet. I'll see what I can dig up. Regardless, it can't possibly be worse than corn ethanol.
Algae biofuel is currently uneconomical at about $8 per gallon. But costs of production will come down, and costs of petroleum will go up.
http://www1.eere.energy.gov/biomass/pdfs/algalbiofuels.pdf
http://www1.eere.energy.gov/biomass/pdfs/algal_biofuels_factsheet.pdf
http://www1.eere.energy.gov/biomass/pdfs/algal_biofuels_roadmap.pdf
High prices are a problem, whether they are for gasoline or for substitutes. They sink the economy, used in the way we use them today. If we can go to a much lower standard of living, perhaps a small amount will play a par. I don't think people have understood the fact that we cannot put a vastly disproportionate share of resources into producing an energy source. We end up with much less energy in total, and a falling standard of living.
My understanding is it does not take disproportionate resources to grow algae, as reflected in the $8 per gallon price. That seems a price that our current transportation system could adapt to. And I expect the price to come down as the technology improves. And I expect the transportation system will become more efficient too.
I refer you to Gail's slide 14 above. The price tripled, and consumption (which to a first approximation is the same as production) changed ... not at all.
Consumption in the US has fallen by 10% in the last 3 years (while GDP has recovered to the point it reached when oil consumption peaked in 2007), and it continues to fall. Production has risen (both C&C and all liquids), and net imports have fallen by 25%.
In the short run, yes, we do need oil.
I agree. In the short run. Of course, we tend to underestimate what can be done quickly. Commuters can cut their consumption by 50% overnight with carpooling. Water transportation can cut it's consumption by 50% in minutes by cutting speed 20%.
Past performance is no guarantee.
No, but it's illustrative. It opens people's thinking to new ideas, like the idea that oil can be replaced. It's been replaced for many functions in the past, and it's in the process of being replaced right now for it's current uses.
First, in each case, the transition was to a new technology that was clearly better (for intended use) than the old.
We can point to many energy transitions that were sideways or down. Going from wood to coal was a big step down: harder to find and transport, dirtier - a pain in every way. Coal's only virtue was it's abundance. The transition from EVs to ICEs took a while - only when ICEs started to electrify did they become competitive. And, of course, we hid the external costs of oil from consumers: freeways (built by "engine" Charley Wilson after he went from President of GM to Secretary of Defense), pollution, overseas wars, etc. I'd argue that ICEs were never better than EVs - they just appeared that way.
Not so with EVs: they might turn out better than ICE vehicles in a couple of decades. Maybe. Doesn't help us now.
EVs are better right now. Have you driven one? They have better driving performance (better acceleration, better handling), and lower total lifecycle costs.
past transitions occurred in a environment of growth, when making new investments was a good idea, and banks would lend.
Not really. The transition from horses to rail occurred mostly during the Long Depression from 1873-1890. The move from horses to tractors and automobiles continued at a very good speed during the depression, as did general electrification. The transition away from oil for electrical generation accelerated during the 1979-1981 recession(s), and CAFE standards rose.
This is the Fundamental Attribution Error writ large.
Interesting idea, but no. Oddly enough, suggesting that I'm blaming the victim is both the classic kind of disinformation that industry supporters tend to indulge in, and it's also an unsupported ad hominem assertion which actually kind've fits the description of the Error.
Post-Industrial Capitalism is set up to use oil in large amounts.
We choose to use oil for trucking, instead of rail. We choose to use very low MPG SUVs and pickups for commuting. We choose to underprice fuel.(these mostly apply to the US of course, except for trucking).
It's the system, not a conspiracy.
"Poor Exxon. They used to be the oil company that everybody loved to hate. This spawn of the Standard Oil breakup had it all: Obscene profits, the Exxon Valdez, a mean CEO who sneered at clean energy, blatant funding for climate deniers.
But now, the new ExxonMobil is just not that special anymore.
It turns out that all the big oil companies are buying elections, paying front-groups to spread lies about climate change and dumping their tiny investments in clean energy while continuing to put out soft-focus ads touting how green and socially responsible they are. And they just don’t seem to care that much about preventing oil spills either.
In these days of peak greed, you have to drill pretty deep in the oil patch to find the worst of the worst.
A real gusher
Well, after coming up with a bunch of dry holes, the environmental and government-reform movements seem to have found the activist equivalent of Old Spindletop: Charles and David Koch."
See http://transitionvoice.com/2011/02/more-reasons-to-hate-the-koch-brothers/
I have my doubts. An EV is cheaper than an ICE only when driven excessively. Calculate the cost of an EV assuming it is purchased used, 4 years old and with 60,000 miles on the odometer. The owner drives it 2,000 miles per year. Six years later, after driving it 12,000 miles, the battery needs to be replaced. For people on low and fixed incomes (unemployed, retirees) the EV is more expensive because the battery and electricity is far more expensive than a steel fuel tank and gasoline when driven moderately. Reducing driving will not greatly increase the lifetime of the battery. Unless the batteries become cheap, a large fraction of the motoring population will be denied cars. The original owner, who drove 15,000 miles per year, only saves money if he can continue his extravagant expenditure on transportation.
An EV is cheaper than an ICE only when driven excessively.
No question: EVs cost a little more up front, so the more you drive, the more cost effective they are. I primarily travel via train, and only personally drive about 1,000 miles per year, so the investment in an EV wouldn't pay off any time soon for me.
The owner drives it 2,000 miles per year.
Well, as you note the average US new car is driven about 15,000 miles per year, so this is pretty unusual.
The original owner, who drove 15,000 miles per year, only saves money if he can continue his extravagant expenditure on transportation.
I don't know why that's extravagant - that seems to be bringing in a moral, judgemental perspective that's unnecessary. After all, if they charge at night using wind/nuclear, their CO2 footprint is very, very small.
Hi Blue Twilight,
It may be different for EV's but my 2004 Prius has 140,000 miles and the battery is fine, I doubt it will ever need to be replaced. The battery warranty on the Nissan Leaf is 100,000 miles or 8 years, I don't think it would need to be replaced at 72,000 miles. I agree that not much money is saved in such a scenario even if the battery does not need to be replaced.
Great article Gail! Very succintly stated and backed up with graphs and data.
At some point it would be of interest IMHO to do an article on what is projected to occur financially when oil supply descends from its current extraction plateau. There must be a threshold of years of descent, price of oil or limited supply that spells collapse for non-opec countries, particularly the US.
At present, it would seem the mitigating fiscal fix-its such as stimulus and QE's are in their end game due to a political landscape that is putting the brakes on greater debt and risk (of hyper-inflation). Without mitigation it would seem the economy will move faster towards collapse? Any conjecture on that idea?
It is not clear to me that peak oil will occur the way people envision it to--slowly down, based on geology.
It seems to me that one possibility is that the political system will break, and that is what will cause the downfall--of the financial system, of oil extraction, and of a lot of other things. It is hard to say that very explicitly in a post, but a related post is How can a government fix its debt problem? It has not been on TOD.
The FSU collapse as an example in the link was informative, and suggests the above scenario has credence. Something big must fail first, so it would seem the political system breaks, followed quickly by the rest of the complexity. In the case of FSU they muddled through somehow (with a lot of hardship) but in a world with increasing oil production at cheap prices. If some collapse to our (US) political system occurs, and cheap abundant oil is no longer available, then what happens? Permanent collapse, followed by small Kunstler type communities banding together? Seems so Sci-fi-ish, its hard to imagine. But I guess that's where we're headed at some point.
always seemed likely to me. I mean the above ground factors can only depress the geological peak. This whole price accordion plateau thing screams systemic limitation.
I have a question!
Albert Edwards (a famous bear analyst at Societe Generale) was recently quoted in an article in CNBC saying that he sees hyperinflation and failing markets for government debt in the next decade or so (he was vague on the time frame). O.K., nothing new for us TODers there, but here was the shocker for me (it shouldn't have been a shocker I know, but since I live in Japan, it was!):
He said, the "first to crack, really crack, will be Japan". O.K. The Japanese government won't be able to borrow money, no matter how much they print. Fine, fine. Headed for the wall, and all that. I agree, but will Japan necessarly be the FIRST country to enter hyperinflation and debt-service disaster??? That is my first question. What do you guys think?
Second question: Do you think that other countries can/will mitigate this disaster? If it happens that other countries' debt markets are still viable, is it possible that they would help? Or make things worse somehow? Or do nothing?
I do see lots of empty shops and offices in the town where I live. It is quite clear that there is a huge economic problem, like a beast, sleeping, under the surface of the ordinary town. All those "vacant" and "For rent" signs are spooky when there are so many of them.....but having the shops occupied means (and this is even worse)that they would be building new ones. This trashing of the landscape is the only way down the horrid ladder we've climbed up. By falling. Go figure.....
I'm probably not the best to answer but here are my thoughts anyway.
Given the complexity of the situation and our systems, it seems hard to make any good projections of future development. The economic system alone has huge surprise in store, just this week there were two rather unexpected events, Venezuela demanding physical delivery of it's 10ton reserves and a Swiss National Bank borrowing from emergency funds, while Swiss is considered to be the best there is.
So, in my view, any projection is kinda worthless. Chaotic systems cannot be calculated in advance, as any minor change in initial conditions will have big changes in outcome.
Japan may be the first to hit the dirt, but it is not a given. However, the situation in Japan does look bad. Interventions by the central banks and the PTB seem to have less and less effect. An unwillingness to buy Japan debts is a possible outcome.
Also, it doesn't look like any other nation can mitigate completly. If you live in a place that has a low dependency in oil, things might not too bad for you. Any nation in the first world and Chindia will be affected.
The requiered changes just don't fit in the short timespan. It looks completly impossible to me, as you have a infrastructure, large economies of scale, and interwoven systems that have been growing for what? 60 years? 100 years?
I do see markets existing and providing services. We like to trade. If we don't wage war at each other, we trade. Hell, sometimes both at the same time. I don't know what would be traded, food and essentials, perhaps, or how price will be determined.
There will be a market in some form or other as long as humans exist but if that would help Japan? Since ressources should be pretty short everywhere and problems around any corner, it would be hard to help, even if people wanted to. Its human nature to hoard in an emergency. I don't know how people could help in any big way, even if they wanted to.
There are an increasing numbers of empty shops here as well. It was hardly noticable at first, but the pace has been picking up.
I like your observation about the beast, sleeping under the surface. I had the same impression.
It's weird situation. Nobody is mentioning it but everybody is edgy. The weather is a huge part in this, too.
Oh well, interesting times.
Personally, I just bought 10 chickens. Getting some more in a few days. I will have to eat some of the roosters soon. Never killed a chicken before. I would have never thought I'd be seriously considering to raise my own chickens or try to build a 12V system for my place.
That is something PO has in its favour. Your life my become shorter and quite possibly brutal, but at least it's not going to be dull. Creative descent
One question is why all the "vacant" and "For rent" signs? We have many here but they follow a pattern. Many have a high rent and local businesses cannot afford what is being asked. There is a new mall around a Walmart but it has many empty units for that reason, the occupied ones are all from out of town. Some owners, in other areas, look at what is wanted for these and take the 'I can get that too' attitude and stay empty. Down town, there are many units and the rent wanted is sky high, they cannot be afforded by a business that wishes to make any money at all and even some of the big businesses in that area are struggling (the only ones that are getting by well are those who actually owned their property before the town became popular). Other units are in areas where I wonder where the business would come from, there is little passing trade and the few units that are taken are out-of-towners that I expect to see closed before long.
Affordable units are like hens' teeth, if I could find one I might take it. I was looking last year, but couldn't progress because of other issues, and it was hard to find anything that I could project enough profit to cover all start up costs after paying rent. Again, people were looking at what the high end units were asking then trying to get the same for somewhere that just was not worth it.
Perhaps those "vacant" and "For rent" signs would go away if owners accepted that a lower rent earns more money than no rent. Perhaps many people would be tempted to try and get a business going if they could obtain a unit at a reasonable rent. When they talk about the 'market rate' do they really mean the rate that the market will pay and thus occupy those units or what they would like to drive it up to to maximise their profits? No developer should be allowed to develop a new development until they achieve 90%+ occupancy guaranteed for at least 5 years, with rent control, in their existing properties.
NAOM
In Japan inflation will not be a problem. Ten Year govt bonds are yielding 1 % so Japan has not been having any problems borrowing money.
Very useful presentation.
One thing that seems missing (unless I somehow missed it) is the extreme importance of growth as an escape hatch for employment.
Big businesses make and sell most of the stuff we use to live, yet they do so with a shrinking proportion of the available labor force. That's mostly due to automation. Automation will not be going away, so long as we permit Big Business to rule the roost. Hence, without economic growth, the prospect is for constant rapid expansion of unemployment/deterioration (small businesses pay worse and tend to go under) of remaining employment. As it stands, we need something like 4-5% growth just to tread water. With zero or negative growth, the system encounters rebellion within a generation or two, due to people's sheer (literal) survival needs.
This effect is specific to capitalism. A not-for-profit economy can value employment for employment's sake, at least up to a certain but meaningful point. But profit-seeking businesses cannot, if they are allowed to be the main engine of the economy.
So, growth isn't just about making loans easier to repay. It's also about creating a counter-trend to the system's innermost drive, which is to make more stuff with fewer hands. As long as the pie expands, those cast out retain some prospect of finding new survivable situations. When shrinkage really sets in, watch out...
It's quite dangerous, too, given how deeply indoctrinated we are to blame other people and things for this basic conundrum.
Well said, Michael.
You are right about growth being important for creating more jobs. I have been corresponding with some folks in China, and I know that there, that is especially an issue. If people are unhappy now, but have brighter prospects in the future, it helps. And, as you say, if jobs are generally going away, growth will help offset this tendency.
Without enough jobs for people, it is very difficult to keep the whole system operating. The tax system doesn't collect enough revenue. There are too many people collecting unemployment insurance. Very soon, debt starts getting to be totally unmanageable.
The other part of high unemployment is that there is a tendency toward riots and overthrow of political systems, especially if benefits get cut back.
I think another way to put it is to repeat about capitalism what somebody else said in yesterday's Drumbeat thread about nuclear energy (in that amazing sub-thread about thorium-powered cars): it doesn't scale down. For all the ways the system benefits from growth, the truth is that the liabilities and risks it faces under conditions of of shrinkage are much more intense for its primary beneficiaries. When the economy shrinks, it can't be very long before the irrationality of the system presses itself upon people's consciousness, one way or another. Conflicts that are mild and containable in "normal" times turn severe. Hence, growth is not just an aid to debt repayment, but a primary defense mechanism.
How ill is that, from the ecological perspective?
I'm very interested in thinking through how this is all tied into the use of non-renewable energy supplies over the past 450 years, and look forward to reading more from Gail on this.
Put 10% in the gov't, 10% in the military, 10% in jail, and 10% on welfare....pretty soon most people have a place to be. :)
When 90% of the people farm, stratification of society is pretty limited. When 2% farm and a few percent manufacture, income redistribution to enable goods distribution is a pretty critical chore. You'd think bankers would be washing the farmers' tractors for coins, but that doesn't seem to be the case.
Gail, I did not see you use the graph comparing world crude oil discoveries and world crude oil consumption vs. time. When you show people that we have been consuming more crude oil than we have been discovering for the last 26 years, people tend to understand the problem with supply.
I don't usually use that, because there are different types of oil (heavy oil etc), and the discoveries only relate to liquid oil.
I have a problem with just basing our analysis on liquid oil. Also, secondary and tertiary recovery methods can theoretically increase recoveries. So I really don't like reserve based methods. My expectation is that a lot of what other people think are reserves will ultimately be left in the ground.
Futures Skid Amid Global Growth Worries
There is a video on this page where Marshall Sonenshine, Sonenshine Partners chairman/CEO, talks about "deja vu all over again", referring to the 2008 collapse of course. He talks about credit drying up in Europe and other things that puts the economy at the brink.
Sooner or later folks will realize that the whole world is bumping up against peak oil and other resource depletion. It's happening right now, things are starting to collapse. Growth will never return.
Anyway the market is very worried today, everything is falling including the price of oil.
Ron P.
Except for the price of gold, Ron;-)
The gold price is only $9 below platinum this morning and looks to pass platinum soon. Gold has traditionally been lower. I suppose platinum, like silver, is being constrained due to its industrial uses.
Hi Ghung-
I don't understand why you would say that the price of platinum would be RESTRAINED by its industrial usage-maybe you mean that platinum is simply not viewed as a store of wealth and a viable currency in the way gold is viewed.
In this case I think you might mean that price of platinum is not RISING along with gold prices as it is not being hoarded by fearful individuals and crntral banks.
Am I close?
Yeah, Mac, platinum tends to rise less or fall during downturns due to lower industrial demand and fewer folks buying platinum jewelery. Most folks don't view it as a store of value as much as they do gold, and to a lesser extent silver. I'll bet most folks don't know that the US Mint produces a Platinum Eagle, which I consider one of the most beautiful coins.
Most days, I can drive less than 30 miles and sell gold or silver at 5% under spot. It may take a few days to sell platinum coins: one generally needs to take bids, though some buyers will convert it on demand. I'm not sure about institutional buyers, though platinum shares (ETFs) trade the same as GLD, SLV and other ETFs. Anyway, I wouldn't mind having a few Platinum Eagles buried in my back yard ;-)
Correct. The parabolic rise in Gold prices is panic, pure and simple. However silver can't stay down for long, once people realize that one dust speck of Gold is equal to their monthly salary they will turn their attention to Silver.
Gold seems high versus industrial metals, but I'm not sure the lot of them are much too high versus stocks. Instead, it looks to me that gold and silver versus oil are a little high, but stocks are way high compared to all those.
I've long watched the DOW = gold arguments, and if that pans out to be a attractor then either gold has a long way to go up or the DOW has a long way to go down. But I think that equality was derived when the DOW was mostly US industrials, rather than multinational production and marketing businesses, so the the linkage is likely tenuous.
Still, people have been saying gold was overpriced for years now, and I've happily sat on mine and watched it appreciate. Silver too. And yet I didn't buy either as in investment, but as a hedge against really hard times in the future. Really, things aren't as bad as I thought they might get. Yet, anyway.
I have sent links to my post to a few reporters I have run into. If readers know reporters, they might send links to them as well.
The major tipping point will be global grain supply
Zerohedge is reporting the Macondo well is leaking again.
Interesting article but sounds like it is trademarked by the 'peak demand' movement sponsored by the 'save globalisation' wall street foundation ? I am wondering if more research should be done first into the trade and production trends of rising freight network costs on local OECD manufacturing production (a consumption/production 'gravity' model), and it's likely impact on oil demand in consuming nations (local manufacturing production needs oil). Firstly we have to note the weighting factors of oil usage - roughly 0.23 for industrial usage in the states, and then factor in growth of local manufacturing against local consumption demand via a network flow analysis, the gravity element applied by peakoil and price acting as a trade tariff effect on global trade.
Peak demand comes from people not having jobs, so they can't buy goods and services made with oil. We have exported a huge number of jobs to countries like China and India. China and India don't have any problem with lack of demand. They have demand both from the manufacturing and transport they are doing, and from workers having paychecks to pay for goods made from oil.
I'm afraid I don't understand all your lingo in what you are saying.
I really liked the long-term vision of this article, Gail. I think it is important to understand (and you mention this) how fossil fuels in ever increasing quantities (but ever depleting) as production spread from England to the US, the world, caused people to naturally expect growth. We were conditioned to naturally expect something that is fleeting, only a few hundred years, to continue.
The result is whipsawing humanity through not only an energy crisis but a crisis of the environment and a crisis of thought, as our leaders cannot clearly articulate the problem and even academics cannot clearly say what is happening because the ramifications are too awful. At least that is what everyone thinks.
But they don't have to be. I myself have somehwat given up on the idea of preparation, buying precious metals, land, etc. PArtly it was Fukushima that did it....I left all what I had (not that much but a little) behind and have started fresh and not exactly flush....
But this whole thing has changed me, really changed me. I think we cannot prepare, we cannot expect much except from what we can borrow and beg from others in return for something we can provide, also fleeting: a flute, a bag of rice, an old pair of jeans. We live briefly anyway. There is a freedom that happenend to me after Fukushima, I'm not afraid anymore, I will go and I will manage....I think of my life as a beetle's life now, just as long as the season allows.
Thanks for your comments.
I think that there is also a chance that what happened at Fukushima could be repeated around the world, if we can't keep up society sufficiently to take care of spent fuel and properly decommission the nuclear power plants at the end of their live. I wrote an article back in December 2010 on Our Finite World called Why oil shortages may make nuclear a less viable option pointing this issue out. I wrote an article in March called, Is loss of electricity a risk for spent nuclear fuel?
What you call a plateau is in fact a peak anyway.
If you talk about 450 years of fossil fuel extraction, we are way behind the 1000 years of the roman empire.
In evolutionary terms, what we are doing here is not a drop in an ocean.
There is no such thing called "down" !
Of course but we do not measure things that happen during our lifetime using geological time. What may be a peak using geological time could very easily be a plateau using human lifespan time.
We are concerned with our welfare today, and the welfare of our children and grandchildren, and the fate of the world as we know it today.
What historians may say about us a thousand years from now, or a hundred thousand years from now, is not of major concern to us right now.
Ron P.
hm, in some thousand years maybe we will be called the "Winnie Poohs", those who took all the honey....
Just a temporary oversupply
If you're polite you'll simply die.
To every species there's a season
Our petri dish was large and that's the reason
But now the agar is declining
So off yourself and quit your whining.