Drumbeat: May 15, 2013

Oil Shockwaves From U.S. Shale Boom Seen by IEA Ousting OPEC

The U.S. shale boom will send “shockwaves” through the global oil trade over the next five years, benefiting the nation’s refiners and displacing OPEC as the driver of supply growth, the IEA said.

North America will provide 40 percent of new supplies to 2018 through the development of light, tight oil and oil sands, while the contribution from the Organization of Petroleum Exporting Countries will slip to 30 percent, according to the International Energy Agency. The IEA trimmed global fuel demand estimates for the next four years, and predicted that consumption in emerging economies may overtake developed nations this year.

“The supply shock created by a surge in North American oil production will be as transformative to the market over the next five years as was the rise of Chinese demand over the last 15,” the Paris-based adviser to 28 oil-consuming nations said in its medium-term market report today.

The IEA Says Peak Oil Is Dead. That’s Bad News for Climate Policy

No one—aside maybe from survivalists who’d stocked up on MREs and assault rifles—was really looking forward to a peak-oil world. Read this 2007 GQ piece by Benjamin Kunkel—while we’re discussing topics from the mid-2000s—that imagines what a world without oil would really be like. Think uncomfortable and violent. Oil is in nearly every modern product we use, and it’s still what gets us from point A to point B—especially if you need to get from A to B in a plane. If we were really to see the global oil supply peak and decline sharply, even as demand continued to go up, well, apocalyptic might not be too large a word. And for several years in the middle of the last decade, as oil prices climbed past $100 a barrel and analysts were betting it would break $200, that scenario seemed entirely plausible.

But there was an upside to peak oil. Crude oil was responsible for a significant chunk of global carbon emissions, second only to coal. Only the shock of being severed from the main fuel of modernity would be enough to make us get serious about tackling climate change and shifting to an economy powered by renewable energy and efficiency. We’d have to because we’d have no other choice, save a future that might look something like Mad Max. We’d lose oil but save the world.

The World is Not Running Out of Oil – but Europe Is

Contrary to popular belief, peak oil alarmists and Greenpeace propaganda, the world is still and will continue to be for at least a century, largely powered by oil. And not just for transport. An endless number of consumer goods depend on a steady supply of petroleum products for their manufacture. As Marin Katusa, chief energy investment strategist for Casey Research points out, “A country without oil simply cannot continue to expand or even be competitive on the world stage.” Katusa explains, most of Europe’s oil comes from the North Sea region. A source where production has dropped to less than half of what it was in 2002. Much of the rest of it comes from countries such as Libya, Saudi Arabia and Nigeria, all countries threatened by political instability and social unrest. Europe could, of course, push development of its own potential oil resources. Or they could if the ludicrously inept EU Energy Road Map wasn’t studded with anti-fossil fuel pot holes and renewable energy cul-de sacs that are deterring investors.

It Doesn't Matter If We Never Run Out of Oil: We Won't Want to Burn It Anymore

Like whale oil in the 1860s, oil today has become uncompetitive -- even at low prices -- and that will only become truer with time.

No, Really: We're Going to Keep Burning Oil—and Lots of It

No matter how much we wish it were otherwise, the economics favor burning fossil fuels.

Peak oil, climate change and pipeline geopolitics driving Syria conflict

Syria's dash for gas has been spurred by its rapidly declining oil revenues, driven by the peak of its conventional oil production in 1996. Even before the war, the country's rate of oil production had plummeted by nearly half, from a peak of just under 610,000 barrels per day (bpd) to approximately 385,000 bpd in 2010.

Since the war, production has dropped further still, once again by about half, as the rebels have taken control of key oil producing areas.

Faced with dwindling profits from oil exports and a fiscal deficit, the government was forced to slash fuel subsidies in May 2008 - which at the time consumed 15% of GDP. The price of petrol tripled overnight, fueling pressure on food prices.

The crunch came in the context of an intensifying and increasingly regular drought cycle linked to climate change. Between 2002 and 2008, the country's total water resources dropped by half through both overuse and waste.

China Seen Boosting Emergency Oil-Storage Capacity, IEA Says

China will probably commission additional storage sites for its strategic petroleum reserve this year, boosting crude demand even as construction work on the program takes longer than expected, according to the International Energy Agency.

The nation, the world’s second-biggest crude consumer, will add 245 million barrels of capacity in the second phase of its emergency stockpile plan, the Paris-based IEA said in its Medium-Term Oil Market Report released today. That’s up 45 percent from the IEA’s original estimate of 169 million barrels. Completion may be delayed to 2015, according to the agency, which originally forecast the project would be finished by the end of this year.

Shell Targeted With BP in EU Price Fixing Probe for Oil

Three of Europe’s biggest oil explorers are among companies being questioned by European antitrust regulators about potential manipulation of prices in the $3.4 trillion-a-year global crude market.

EU Oil Manipulation Probe Shines Light on Platts Pricing Window

Two weeks after Royal Dutch Shell Plc and Platts changed the way more than half of the world’s crude is valued, the companies along with BP Plc and Statoil ASA are being probed by European antitrust regulators about potential manipulation of oil prices.

The investigation by the European Commission shines a light on how price reporting companies including Platts, the energy news and data provider owned by McGraw Hill Financial Inc., help determine the cost of raw materials used in everything from plastic bags to jet fuel. The suspected violations are related to the Platts’ Market-On-Close assessment process, or so-called window, and may have been ongoing since 2002, Statoil said.

Britain urges oil firms to comply with probe

LONDON (Reuters) - Britain expects oil firms to fully comply with a European Commission's probe into energy pricing and would be deeply concerned if prices have been driven up, a spokesman for Prime Minister David Cameron said on Wednesday.

WTI Crude Near Two-Week Low; Europe Probes Oil Pricing

West Texas Intermediate crude fell for a fifth day in its longest run of declines since December. Antitrust regulators are questioning European oil companies about possible manipulation of prices.

Futures traded near their lowest closing level in almost two weeks in New York. Crude inventories gained 1.1 million barrels last week, the industry-funded American Petroleum Institute said yesterday. A government report today may show stockpiles climbed 450,000 barrels, according to a Bloomberg survey. Royal Dutch Shell Plc, BP Plc, Statoil ASA and Platts said they’re being investigated after the European Commission conducted raids on their offices in three countries.

“The world will remain well-supplied,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “Higher prices lately have triggered a boost to capacity that will continue to outpace slack post-crisis demand growth.”

Nebraska could see another spike in gas prices

Drivers in the Plains states, including those in Nebraska, could be paying another 10 to 20 cents a gallon for gasoline in the next few days, and that's on top of the 15- to 20-cent increases of the past week, according to industry analysts at GasBuddy.com

“Most states have seen increases over the past week, and the national retail average reflects that with a 6-cent-per-gallon increase, but clearly, these states have gotten the brunt of it,” said Patrick DeHaan, senior petroleum analyst, GasBuddy. He was referring to North Dakota (up $0.19 per gallon over the past week), Kansas ($0.17), Nebraska ($0.16), Iowa ($0.15), Oklahoma ($0.14), South Dakota ($0.13) and Minnesota ($0.12).

Ex-Goldman Trader Saiz’s Fund Assets Drop 86% Following Loss

Vector Commodity Management LLP’s assets under management slumped 86 percent this year after losing money since 2011.

The energy hedge fund run by former Goldman Sachs Group Inc. trader Gilbert Saiz managed $43 million by the end of April, according to a letter to investors obtained by Bloomberg News. Its December statement showed assets of $318 million. Vector’s trading of mainly crude and oil products resulted in a 4.9 percent loss from January through April, the letter showed. A Vector executive in London, who asked not to be named in line with company policy, declined to comment by phone today.

Pertamina embarks on shale gas exploration

Indonesia’s biggest energy firm, PT Pertamina, will tap into shale gas exploration this year in the state-controlled company’s bid to discover unconventional natural gas amid dwindling crude oil production.

Pertamina CEO Galaila Karen Agustiawan signed the production-sharing contract of the Sumbagut block in North Sumatra during the inauguration of the of the 37th Indonesian Petroleum Association (IPA) convention in Jakarta on Wednesday.

Brazil Oil Auction Gathers Drillers With Taste of Africa

More than 60 oil companies are set to bid on exploration permits offshore Brazil, taking on risks of drilling in virgin waters after similar geology across the Atlantic in Ghana and Ivory Coast yielded major discoveries.

Contestants in Brazil’s first oil auction in five years range from Exxon Mobil Corp. and Chevron Corp., the largest U.S. producers by market value, to Brazilian startup Ouro Preto Oleo & Gas, a government registry shows. They’re betting that deep-water deposits off the northern coast hold reserves like those found thousands of miles across the ocean in Africa’s Gulf of Guinea. The two-day sale, estimated to generate as much as $5 billion for the government, started today in Rio de Janeiro.

Russia Seeks $2 Billion Gain With Oil Extraction Tax Increase

Russia’s Finance Ministry is seeking to raise $2 billion by raising taxes on crude output as the world’s largest oil-producing nation seeks to boost budget revenue, according to a plan presented to government officials.

A higher mineral extraction tax rate will be partly offset by a decrease in export duties, according to the document. The budget’s gain is based on an average oil price of $100 a barrel.

Anadarko’s Walker Named Chairman as Hackett’s Reign Ends

Hackett remade Anadarko through deep-water exploration projects in Africa and the Gulf of Mexico and more than $21 billion in acquisitions. Analysts are looking for Walker, 56, to extract more value from the oil and natural gas assets Hackett assembled, while helping the company move beyond an environmental lawsuit and its association with BP Plc’s 2010 Macondo oil spill in the Gulf of Mexico.

Greece to break up state-owned power company by 2016

ATHENS -- Greece's conservative-led government has announced plans to break up the state-run Public Power Corporation by 2016, as part of a privatization program demanded by the crisis-hit country's creditors.

Taiwan to sanction Philippines, send naval ships in fishing spat

TAIPEI (Reuters) - Taiwan on Wednesday recalled its envoy to the Philippines, froze applications for work permits and ordered military exercises in waters between the two sides to press its demand for an apology for the shooting death of a Taiwanese fisherman.

Andrew Weaver makes history in BC, becomes first Green in provincial legislature

Andrew Weaver — a University of Victoria climate scientist — has won his seat in the Vancouver Island riding of Oak Bay-Gordon Head becoming the first Green Party candidate elected to a provincial legislature in all of Canada.

B.C. vote shifted on one word: Pipelines

The NDP looked way ahead before voters went to the polls in British Columbia. Then it all changed. Why? One word: “Pipelines.” Or more precisely, two: “Kinder Morgan.”

Until two weeks ago it was the election of the NDP’s Adrian Dix to lose. Then he got greedy. Worried about an emerging Green threat, Mr. Dix sought to pre-empt the party by going greenier-than-thou, specifically by promising to ban significantly greater tanker traffic out of the port of Vancouver, which would doom the export of Alberta oil to the Pacific. This was a stunning turnabout on a clear promise to withhold judgement until the pipeline application had been filed with details made available.

His gamble failed and, more importantly for the future of the NDP, the Greens elected their first MLA. This will split the vote on the left for years to come.

Ex-BP Engineer Says U.S. Withheld Evidence in Spill Case

A former BP Plc (BP/) engineer charged in the first criminal case arising from the 2010 Gulf of Mexico oil spill said U.S. prosecutors withheld evidence that might clear him and urged a judge to sanction them.

Why natural gas exports would benefit clean energy

The renewable energy industry would benefit from higher natural gas prices--and higher coal prices, for that matter--since, as these fuels for electric power plants become dearer, renewable energy sources become more competitive. The costs for renewables are in the production and installation of the solar panels, wind towers and dams; the fuels--sunlight, wind, and water--are essentially free.

Fuel-Cell cars set to gain momentum in US, but will consumers want to pay for the vehicles?

Considered by many to be more efficient than even electric vehicles, fuel cells aren’t limited by the dynamics of thermodynamics, notes NextGreenCar, which enables them to achieve higher conversion efficiencies than conventional engines that only make use of 20 percent-25 percent of the fuel’s energy (as in gas-powered cars) – fuel cells can achieve up to 60 percent.

M-B-Hydrogen-FCVHowever, unlike a battery the reactants – fuel and oxygen – have to be continually supplied for an electric current to be produced.

Fuel cell vehicles have been known to have a driving range of up to 240 miles or more.

North Carolina May Ban Tesla Sales To Prevent “Unfair Competition”

From the state that brought you the nation’s first ban on climate science comes another legislative gem: a bill that would prohibit automakers from selling their cars in the state.

The proposal, which the Raleigh News & Observer reports was unanimously approved by the state’s Senate Commerce Committee on Thursday, would apply to all car manufacturers, but the intended target is clear. It’s aimed at Tesla, the only U.S. automaker whose business model relies on selling cars directly to consumers, rather than through a network of third-party dealerships.

Petrobras Besting Sugar Mills in Ethanol Boom

Petroleo Brasileiro SA, the state-run oil producer, stands to profit the most from Brazilian measures to boost ethanol output as rising biofuel supplies reduce the need to sell imported gasoline at a loss.

£11billion energy smart meter roll out delayed by a year because 'more time is needed for testing'

The roll out of energy smart meters in to 30 million UK homes is being delayed by a year because more time is needed to design and test products, the government has announced.

The £11billion project will start in the autumn of 2015, rather than next summer, the Department of Energy and Climate Change (DECC) said.

Homeowners Warm to Solar Power

When Linda and Jay Mathews moved back to their native California nearly two years ago — after 20 years in New York and Washington — they found their dream home in Pasadena. It had everything they wanted, plus a few items not on their shopping list. Among the latter: solar panels on the roof that keep their electric bill to about $100 a year, less than what they paid each month when they were living in the East.

Moreover, because the power generated by their panels contributes to the region's overall electric grid, they also receive credit for energy they produce but don't use — a policy known as "net metering," which adds additional savings to their overall electric costs.

US holds wind farm radar tests

The US Federal Aviation Administration (FAA) has conducted trials on technologies designed to solve the problem of wind farms’ impact on radar.

The tests were organised by the Federal Aviation Administration, Department of Defense, Department of Homeland Security and Department of Energy, and assessed by the Massachusetts Institute of Technology Lincoln Laboratory.

Fewer Rain Forests Mean Less Energy for Developing Nations, Study Finds

The loss of tropical rain forests is likely to reduce the energy output of hydroelectric projects in countries like Brazil that are investing billions of dollars to create power to support economic growth.

UN: Eat more insects; good for you, good for world

ROME (AP) — The latest weapon in the U.N.'s fight against hunger, global warming and pollution might be flying by you right now.

Edible insects are being promoted as a low-fat, high-protein food for people, pets and livestock. According to the U.N., they come with appetizing side benefits: Reducing greenhouse gas emissions and livestock pollution, creating jobs in developing countries and feeding the millions of hungry people in the world.

Potato may help feed Ethiopia in era of climate change

With unpredictable annual rainfall and drought once every five years, climate change presents challenges to feeding Ethiopia. Adapting to a warming world, the potato is becoming a more important crop there – with the potential to feed much of Africa.

Canada Sells Out Science

Over the past few years, the Canadian government has been lurching into antiscience territory. For example, they’ve been muzzling scientists, essentially censoring them from talking about their research. Scientists have fought back against this, though from what I hear with limited success.

But a new development makes the situation appear to be far worse. In a stunning announcement, the National Research Council—the Canadian scientific research and development agency—has now said that they will only perform research that has “social or economic gain”.

Crucial Carbon Dioxide Reading Revised Downward

One of the two programs that monitor greenhouse gases said on Monday that it had revised a reading from last week suggesting that carbon dioxide in the air had surpassed the symbolic level of 400 parts per million.

The new reading by the National Oceanic and Atmospheric Administration is 399.89 parts per million for the 24 hours that ended at 8 p.m. Eastern Daylight Time on Thursday. However, a second monitoring program run by the Scripps Institution of Oceanography continues to show a level of 400.08 parts per million for the same period — a historic level indicative of the rapid rise in human-produced emissions.

Biggest Emitter China May Not Import Carbon Credits for Decades

China, the world’s biggest emitter of greenhouse gas, will probably avoid importing carbon credits for two decades, as diplomats worldwide craft a new emissions market that will increase supply, the nation’s climate negotiator said.

Using offsets from outside China in that period is an “unlikely scenario,” Su Wei said in a May 2 interview in Bonn. “Rather, internally we will have a lot of offsetting credits.”

Cutting Carbon Dioxide Isn’t Enough

This effort should not be confused with ongoing efforts to capture CO2 and sequestering it at its source, for example, from outgoing flue gas from coal-fired power plants. That area is important, too, but it’s already being explored, and the technological demands are quite different.

Extracting CO2 from the atmosphere, even with its current level of 400 ppm, is very different—and in some ways more difficult—than extracting it from flue gas, where the CO2 concentration is much greater. But on the brighter side, extracting ambient CO2 from the atmosphere does not have to be anywhere near 100 percent efficient. Both of these factors imply different constraints on the extraction process that will affect its ultimate cost.

6 big challenges confronting the Arctic Council

During Wednesday's sessions, the conference agreed to let nations that are far from Earth's north to become observers to the council's operations.

The decision boosts rising superpowers China, India and Korea, which seek to mine the north of its untapped energy and other natural resources. The European Union also was tentatively granted observer status but must first address several questions about its bid, including concerns about its ban on Canadian seal exports.

Arctic nations must urgently improve rescue services - Canadian experts

OSLO (Reuters) - Arctic nations must urgently improve rescue services in the resource-rich region that is opening up fast to shipping, energy and mining companies, Canadian experts said on Monday.

As sea ice thaws rapidly, ships are increasingly using a shortcut between the Atlantic and the Pacific, and competition is intensifying for Arctic oil and gas - estimated at 15 percent and 30 percent respectively of undiscovered reserves.

Ice melt, sea level rise, to be less severe than feared - study

OSLO (Reuters) - A melt of ice on Greenland and Antarctica is likely to be less severe than expected this century, limiting sea level rise to a maximum of 69 cm (27 inches), an international study said on Tuesday.

Even so, such a rise could dramatically change coastal environments in the lifetimes of people born today with ever more severe storm surges and erosion, according to the ice2sea project by 24, mostly European, scientific institutions.

For Insurers, No Doubts on Climate Change

rom Hurricane Sandy’s devastating blow to the Northeast to the protracted drought that hit the Midwest Corn Belt, natural catastrophes across the United States pounded insurers last year, generating $35 billion in privately insured property losses, $11 billion more than the average over the last decade.

And the industry expects the situation will get worse. “Numerous studies assume a rise in summer drought periods in North America in the future and an increasing probability of severe cyclones relatively far north along the U.S. East Coast in the long term,” said Peter Höppe, who heads Geo Risks Research at the reinsurance giant Munich Re. “The rise in sea level caused by climate change will further increase the risk of storm surge.” Most insurers, including the reinsurance companies that bear much of the ultimate risk in the industry, have little time for the arguments heard in some right-wing circles that climate change isn’t happening, and are quite comfortable with the scientific consensus that burning fossil fuels is the main culprit of global warming.

“Insurance is heavily dependent on scientific thought,” Frank Nutter, president of the Reinsurance Association of America, told me last week. “It is not as amenable to politicized scientific thought.”

Chris Nelder: Conventional Wisdom About Clean Energy Is Still Way Out of Date



Oil Shockwaves From U.S. Shale Boom Seen by IEA Ousting OPEC

I would submit the shock will be the decline rates of these wells and the fact the the supply will not be actually there .

Well , nailed my colours to the mast there :-)


40% of -1.0 is -0.4
They could be right about the contribution of the US, but not in the way they think.

If there was a poll function on TOD a question, could be :

To what extend do you consider the IEA declarations as plain financial advertising (or call for investments) ?

1) Obviously this is in line with Maugeri report, IEA 2012, and when you consider for instance Rune Likvern study here, or Ayres article below, this is just plain bubble pushing/call for investment.
2) IEA has always been on the optimist side, and this has always been partly a political game, not really more than usual
3) not sure
4) No, this boom is real, and the barrel price will collapse due to over supply! Opec is done with !
5) Other, please specify

Robert Ayres article :

Or could it be more of a "game" to push the barrel price down ?
(which would be kind of counter productive for shale oil plays)

Why natural gas exports would benefit clean energy

I wouldn't be too sure about that. Until there is a breakthrough in energy storage I see two scenarios
1) wind and solar capacity built to exceed peak demand ... requires wasteful curtailment and expensive to finance.
2) wind and solar less than peak demand ... probably requiring gas backup as now.

Suppose natgas got prohibitively expensive say in 20 years when current wind and solar are still performing to specs. Without backup those assets could be stranded or the economy would have to change fundamentally. Up to now energy supply meets demand that would have to go into reverse.

The article hints at building more hydro. I suspect that is a limited option in most developed countries. It says coal won't make a comeback because it's out of favour plus we could add carbon taxes, EPA rules etc. Again I don't think so. Google Germany + coal revival. I also understand coal burning is picking back up again in the US as the gas price rises.

There is the third and most likely option- we adjust our demand to meet the variable nature of renewable electricity. It amazes me that people can't imagine a pretty decent civilization that doesn't depend on unlimited 24/7 electricity and the operative word is unlimited- we will probably have access to limited electricity using renewable electricity and limited storage options- so it is not like we will be plunged into the dark.

Sure we may have to engineer our products differently, accept greater variability in indoor temperature and families may not be able to disperse to four corners of a 4000sq ft MacMansion -but those changes are scarcely "end of civilization".

I think that "Doomer mentality" is greatest in the US because (a)few have experienced how a good part of the world lives (many of who don't think that they living in the end of time days) and (b) can't imagine an alternative to their current life styles. I can attest to this through personal experience- a power outage in the US creates far greater angst than a much longer and more frequent power outage in India.

I'm not worried about interruptions at home - easy to deal with - fun for the kids. My deep freeze can go days without power as I have a 30 quart container of ice in it - when it warms up I throw water softener salt on the ice - no power necessary. Everyone is capable of the small changes needed for unreliable power. My worry is the effects upon industry - there will be some that are unpredicted I am sure.

I agree; your 'third option' has the highest probability of actually occurring. And learning to live with intermittent power will not mean the end of humankind. It will be the 'End of The World As We Know It', though.

It's not going to be possible to maintain any rate of expansion, under that scenario. It means the end of growth; and that means we need to invent a new monetary system, because we won't be able to function on the debt based one we have now.

It's hard to see how even existing amounts of debt can ever be paid, if growth is finished. When we get to the point where we don't all believe each others lies about money anymore, this world economy becomes vulnerable.

" wind and solar capacity built to exceed peak demand ... requires wasteful curtailment and expensive to finance."

We have tremendous fossil fuel generation capacity which spends a large amount of time curtailed. The range from off-peak to peak hour demand can run in the neighborhood of 3x (IIRC). That means at times 2/3rds of our generation capacity is curtailed.

We have gas peakers that spend most of the year curtailed. They are used only on those peak-peak days when we're facing brownout conditions.

Over-building wind or solar would be a simple financial decision.

Would building an additional wind farm and throwing away its power when the wind was really howling be offset by the value produced when the wind is blowing moderately/normally? If so, the wind farm will receive financing.

Coal's revival is wishful thinking.

Yes, a bit more might be burned in the US as natural gas prices rise, but we're on track to close about half of our coal plants while not building replacements. Around 100 coal plants are on a short list for closure. There won't be existing capacity for a coal rebirth.

Germany's new coal burning plants are replacing (not adding to) the older plants that either have been or will soon be decommissioned. These new plants were planned and construction was started prior to the decision to close nuclear plants.

By 2020, 18.5 gigawatts of coal power capacity will be decommissioned, whereas only 11.3 gigawatts will be newly installed.

Furthermore those plants will be more efficient, releasing less CO2 per unit electricity produced than are the ones they are replacing. And the new coal plants are partially load-following.

About 40% less capacity and since the new plants can load-follow the amount of coal burned will likely drop under 50% of what is now burned.

Germany gets its natural gas from Russia. It would be politically dangerous to build their fossil fuel component around an undependable supply.

Good study on German coal power, current status and projection until 2050:


If you read German you also find good articles on "Bundesverband Braunkohle" (Association of German Lignite Producers):


Origin of NG burnt in Germany or used as chemical feedstock:

38% Russia
25% Norway
20% Netherlands
17% domestic production

Interesting. I check the Fraunhofer Institute for Solar Systems ISE periodically. At some point I'll set up a file storage location and grab some screen prints from their Electricity Production from Solar and Wind in Germany in 2013 pdf, but anyone can browse it without an issue.

These folks are decidedly pro-solar and renewables. The data for the first quarter of 2013:

Change in Electricity Production: First Quarter 2013 versus First Quarter 2012

Uranium       -0.9 
Brown Coal    +2.1 
Hard Coal     +6.7 
Gas           -2.6
Wind          -2.7
Solar         -0.5
Run of River  -0.5

(All Measurements in TWh)

This data is on page 5 of the report.

I'm not sure this is entirely encouraging. Hopefully we'll see the renewable numbers increase and the coal numbers decrease over time. If you browse the entire document renewables are still just barely making a dent, despite the occasional day where the sun shines and the wind blows.

They've added numbers for April. Things are getting a little sunnier now, so that has helped.

The sooner all coal have been burtn the sooner the switch to renewable energy will occur

The weather has been really bad in the firste few months over here.
Overcast sky all over Germany. Very low wind. I already was starting to get depressed because of the weather, and I was not the only one!
And electricity exports hit new all time records in the first quarter.
Out of a total power production of about 70-80 GW, Germany exported about 5-10 GW at any time!

Last years march or april was so sunny, you thought climate change had suddenly occured and shifted summer 2 to 3 months ahead of its time.

And if I remember correctly, there were two new large brown coal power plants put into production while the older ones they are supposed to replace were not yet shut down (AFAIK that's planned for later this year).

You can get up to date (2hrs delay) charts of production and import/export here:


The site is not available in English, im afraid. And it does seem to have problems with older data right now.

Thanks for the link and input Gerry. Hopefully the coal plant retirement will bring the coal part of the equation down, and better weather will bring the renewable part back up, and we will see a slow but steady improvement in their contribution to the overall picture.

I think it would also be nice to see whatever issues are causing the export of energy to be addressed, in the hope internal use might increase and thus drive down the retail cost of electricity for the German people. This would definitely smooth the path to a renewable future.

You can get more data here:


It's a kind of bird's-eye view of german energy consumption.

Their reports are mostly charts, so they should be usable despite being written in german.

They do have english versions of the reports, but I haven't checked those.

The best compilation is "Tabelle zur Stromerzeugung nach Energieträgern 1990-2012" on the front page:


Here you get a nice overview of trneds in the production from various energy sources. It is a pity that they do not publish all their data in English, the quality is very good, there is good documentation how they compile the data, they admit discrepencies and they usually publish corrections.

Bob W, despite Germany's advances in renewable energy they are on track to extract and burn all of their economic supplies of fossil fuels. They are all the way down to their lowest grade of coal, lignite or brown coal, and burning it more efficiently does not reduce the total amount of CO2 they dump into the atmosphere. They are an industrialized country that is running out of their domestic fossil fuels first which is pushing them to adopt domestic renewable energy sources earlier than everyone else. They foreshadow what all successful countries will do: consume all cheap domestic sources of energy first externalizing their pollution and then transition to more expensive domestic sources which will be the renewables. China is doing the same thing but at a much higher speed, nearly concurrently. Whatever is cheapest, most profitable will be done.

Don't mistake short term adjustments for long term realities.

The nuclear reactors shut down are largely in the eastern part of Germany and soft coal is being burned there while alternatives can be put in place.


Actually, I disagree with both of you. Not completely but in several smaller but important issues.

1. Over here, the eastern part of Germany is equal to the former socialist part (GDR). The nuclear reactors they operated were shut down in 1990 [1] and are now basicall study objects for the dismantling of reactors. If we don't mess this up as we did our pv panel production we should be able to make quite some money dismantling other countries' reactors.

2. If Fukushima hadn't occured, we would still be phasing out our nukes in 2030 or later. The original plan called for phaseout until 2022. After the conservative-liberal coalition gained power in 2009, they changed plans to a phaseout after 2030 in 2010.
Our great chancellor sucks at governing, she's really bad in leadership, but extremely capable of maintaining power, mostly by not having a personal point of view but rather changing direction by 180 degrees if neccessary to maintain power (and she's really great in eliminating politicians from her own party who might threaten her power).

Thus she once again turned directions and forced her party to agree on a plan that would shut down a couple older plants immediately and phase out nuclear power entirely until 2022 (a few weeks earlier than the original plan from 2000).
If the conservatives should get a landslide victory in the 2013 federal elections (god forbid!), we might be heading a phase out of nuclear power after 2030 again. Depending mainly on lobbying. Actually, I wouldn't be surprised if we should experience a large scale blackout as false flag operation to remind us simple folks that nuclear power is really needed!

3. The "Energiewende" is not a grand scheme to transform a highly industrialized country running on fossil fuels into an even more advanced country running on renewable power.
Basically it's built entirely on the EEG law which was introduced in 2000 by the then government of social-democratic/green coalition. And actually it was forced by the greens on the social democrats (SPD) as part of their coalition contract. SPD politicians do have their fingers deep in the pockets of fossil fuel power companies.

The EEG did have preceding law, but those were mere scapegoats by the then conservative government and the four largest power companies: Look we're doing something for the environment (while still getting 99% of power from nuclear and fossil sources).

Since 2000, every government tried to adapt the EEG to the changing prices of wind and solar generators and tried to infuse some of their own ideology.
Sadly, the last few years under the liberal-conservative government were by far the worst. Not because of reduction of feed-in-tariffs. Reduction of feed-in-tariffs is one of the major goals of the EEG since it's inception.
The damage ist done by slashing feed-in-tariffs faster than the falling price of the panels and - way more damaging - by the uncertainty the government causes in terms of regulations and tariffs and - most damaging - by imposing the cost of the transition to renewable energy on smaller companies and private homes.

Currently about 0,05 € (0,065 $US) per kWh (called EEG-Umlage) are used to pay for the power generated by wind, solar, biomass,... under the EEG.
The madness:

a. Companies consuming more than 10 GWh of electricity per year were exempt from paying EEG-Umlage. Recently this threshold has been lowered to a mere 1 GWh!
This is done to prevent those companies who are competing globally from problems caused by high power prices. A great example for successful lobbing because in France with their "cheap" nuke electricity the price has gone up while in Germany the price has gone down. [2]

The price for electricity for industrial customers is based on the price of electricity on the European Energy Exchange [3]. Power provided by renewables is traded at a market price of 0! (regulated by law (EEG)). The increased production from renewable sources has caused the market price of electricity in Germany to fall continuously, driving the price for industrial consumers even lower.

b. Off-Shore wind farms (owned entirely by large companies, mostly the four large electricity producers) which are not yet connected to the grid

c. Conservative media outlets blame the rising cost of residential electricity on the "expensive and useless" renewable sources, neglecting that the liberal-conservative government is to blame for a large part of the burden that is imposed on homes and smaller businesses. If large consumers were paying their fair share and the Energiewende would be managed half as effectively as we Germans a said to be, the EEG-Umlage would be about half what it is now.

If we Germans are considered to be a planning, effective and well organized people and we geht this transition to renewable energy messed up as we do right now, just consider what will happen to other countries!
The forces of BAU are way stronger than most people think, that's why I highly applaud the efforts of those who promote the DIY approach to get solar and wind power up an running.
Some here at TOD seem to do ist, I regularly pay a visit to Tom Murphy and Gary Reysa[4], but there are many more who would need to be recorgnized.

Luckily our government may have started something they were trying to prevent from happening:

By slashing feed-in-tariffs for small residential PV (currently <=0.15 € / kWh [5]) below the current electricity price for residential customers (abount 0.23 to 0.30 € / kWh depending on contract and consumption), the government inadvertedly has given businesses a huge incentive to develop cost effective storage systems for single homes.

In a spark of intelligence, the federal government briefly considered subsidizing such storage systems to make them economically viable right now. Sadly this effort has been blocked ("we don't have the money") and will most probably not be discussed again before the 2013 federal election in september.


Sorry for quoting only sites in german, but the translated versions don't have half as much information and detail. Maybe Google Translate can help.

List of nuclear reactors in Germany

Eurostat: Power prices for industrial customers



Is expected to be below 0,15 € / kWh by the end of 2013
Even lower for generators > 10 kW
10kW is about the size of a generator that can be built on the roof of an average German single home.

Very interesting points gerryst. It is interesting to glimpse the role of power politics in power production...but of course why wouldn't there be?

Would you have a ballpark figure of an average consume electricity bil for a winter month? Or, per Kw/hr? (That would make more sense). Just curious.


When I was living in Munich a few years ago our average was ~50 Euros/month (3 people, 120 m2 apartement), which is probably typical. I don't think anyone in Germany gets their meter read more than once a year, so no seasonal information.

I've been keeping track of our electricity use for the last 18 months. It does not vary that much really. Summer months are about 10% lower in use than winter months. This is probably because we used our clothes dryer even in summer (and I do need to get my girlfriend to stop doing this).
We have an average of 140 kWh per month for a household of two. This is a little below the national average, probably because we have new appliances which are very efficient. We don't have a TV (I opposed, would be a waste of time), but my girlfriend really likes baking with the electric oven (as my hips tell...).

Heating and hot water is done by natural gas as about 50% of households do. You can look up more info on this at AG Energiebilanzen, link is in the thread further up.
We use about 5,500 kWh of natural gas for heating (hot water for the shower and tap is not included) for a flat of about 75 m² (~ 800 sqft) built in the mid 1990s. We're definitively below the national average on that because my girlfriend is literally hot. As soon as the weak winter sun shines into our flat, she complains about hot weather and would open the windows to cool down if I weren't so dam thrifty. The heating is actually not set for heating, merely to prevent freezing.
I guess most of our heating bill is caused by airing the room as the flat is too old to have an automatic ventilation as most houses built after 2000 have.

We don't use air conditioning because it's not really needed in our climate. There's about 1 or 2 weeks in summer where air conditioning would be nice, but very few people use one.

I don't have have any data on seasonal consumption of electricity right now, but total peak production varies from about 40-50 GW in summer to about 80 GW in winter IIRC.
Depending on which source you trust, the average household electricity usage is about 1,000-1,500 kWh per capita while the entire electricity consumption per capita is about 6,000-7,000 kWh per year.

You will be able to see seasonal variation at the Agora Energiewende link further up. Unfortunately their oldest data currently available is from december 1st 2012 and the charts can be set to a maximum of 31 days at the most.

Google Translate does an acceptable job with this site, but you still may need to translate single words manually.

You can get more data on power production and - especially - generation capacity at the European Energy Exchange:

hi gerry,

I think you are a little bit too pessimistic. :-)

1) We how already to much base load power. Another nuclear U-turn is prevented by the large percentage of modern coal power plants and the fact that nuclaer and coal capacity is usually owned by the same company.

2) A PV installation of 3-5 GW per year is IMHO ok, the 7 GW did not lead to competitive PV companies in Germany an cost too much money. Slower but sustainable is better, here my hope is that small industry with high percentage of own consumption will fuel the demand in the next years.

3) The real enemy for the large utilities is onshore wind in the next decade. The large utilities do not have the good sites and the farmers have no problems to get money from fellow citizens or their local banks to run repowering projects. The next 15% reneable electricity from onshore wind can not be prevented IMHO.

4) A CDU majority with more than 50% is unlikely and as partner in a coalition in autum 2013 I expect the SPD, so good chance for some adjustments like SPD give up their tax plans, CDU makes concessions in the field of reneables.

Greetings from my Austrian exile. :-)

Great post, gerryst. Thanks. You wrote:

"...The forces of BAU are way stronger than most people think, that's why I highly applaud the efforts of those who promote the DIY approach to get solar and wind power up an running.
Some here at TOD seem to do ist, I regularly pay a visit to Tom Murphy and Gary Reysa[4], but there are many more who would need to be recorgnized."

I think some of us realized early on that the powers (forces) that be are quite clueless about any paradigm that doesn't have growth and profit at its core. Too many cooks making claims on the recipe, all in service to complexity. We, collectively, seem locked in this cycle.

The point I came to was to take the "one day at a time" approach: Today, I won't use electricity produced with fission or fossil fuels. Of course, this purist stance is problematic since all of the things I use to attempt this were produced using fission and fossil fuels, and if one uses goods and services outside the home, one is supporting the use of fission and fossil fuels in most places. (We also have a diesel generator which almost never gets used.) But we do the best we can, while we watch society at large muck things up. Their cooks aren't welcome in my kitchen.

I expect many in Germany will reach this point, if only based on costs. In our case, the costs have, for the most part, been paid forward and locked in, excepting future battery replacement, upgrades, and maintenance; much easier to plan for in an uncertain world, less subject to political changes and society's vagaries, largely out of the control of corporate interests which I have no interest in supporting.

If you want something done right, do it youself.

Quite the cornucopian offensive going on in the media, I see. Full speed ahead for the oil economy!

...especially in view of a slowdown in the Bakken oil parade. Latest monthlies just out show production rising a meager 3k from 715k to 718k for march. The last 6 months (10/12-3/13) have seen a rise in production of 5%, the previous 6 months ( 4/12-9/12), the increase was 25%. The IEA, cornucopian and wrong, as usual.

NPR regurgitation:


This isn't hype any longer--it's hypodermic needle into mainstream consciousness.

"U.S. shale oil will help meet most of the world's new oil needs in the next five years, even if demand rises from a pick-up in the global economy,"

NPR of all sources is shooting people up with the really good cornucopian stuff. If truth is not important, why not claim it will more than replace oil depleting from the major exporters, Saudi Arabia and Russia?

Regurgitation is the proper word. It is not like NPR is trying to mislead anyone. They are just regurgitating what other people tell them. The NPR people by and large do not understand science & engineering.

This is amazing. . . . it is the blind leading the blind.

Who's the IEA person Maria van der Hoeven?
"After completing her secondary education she trained as a primary-school teacher in Maastricht. She went on to gain a secondary teaching certificate in English, after which she attended courses in higher management for non-profit organisations at the Institute of Social Sciences and business management at the Open University in Heerlen."

Oh great . . . we have 1st grade teacher telling a cluess NPR reporter what the energy situation is. What could possibly go wrong?

"On 11 March 2011, Van der Hoeven was appointed Executive Director of the International Energy Agency.[5][6] Her opponents have voiced concerns that he lacks expertise on energy matters, while her supporters point out that her work as Minister of Economic Affairs included many energy issues, and that she has extensive contacts with major OPEC members.[7]"

LOL! So the fact that the clueless 1st grade teacher gets spin from 'major OPEC members' is viewed as a good thing?!??! UGH!

I wrote something on her - a couple of months ago - can't find it but perhaps the search function will save the day.
In short: your comments are probably somewhat justified.

As a Minister she wanted to start a discussion on teaching intelligent design in school. Fortunately she was laughed out of court. Dutch politics aren't quite as ridiculous as some US states'. She was probably promoted away *evil_grin*.

She's a creationist? Well, that explains everything. How can someone that scientifically illiterate be in charge of science policy like energy?!?! Ugh.

Spec, just think of the advantages... she will never question anything her handlers feed her, she will just happily tell the world that all is well! They couldn't have gotten a better person for the job. I have a very strong suspicion she was hand picked.

Good point. She'll just do what they say. Like George Bush.

Have you ever looked at who's on the US House Science, Space, and Technology committee?


Take the chairman for instance...Lamar Smith - he's a "Christian Scientist"

The religion's adherents, known as Christian Scientists, subscribe to a radical form of philosophical idealism, believing that spiritual reality is the only reality and that the material world is an illusion.[5] This includes the view that sickness and death are illusions caused by mistaken beliefs, and that the sick should be treated by a special form of prayer intended to correct those beliefs, rather than by medicine.

So the head of the House Science, Space, and Technology committee...doesn't believe in science. Care to guess what the rest of them think if the chairman doesn't believe in science?

I don't see a basis for your suggestion that Lamar Smith doesn't believe in science because he is a Christian Scientist. The Christian Science Monitor, the journal of the Christian Science church, publishes a lot of good science related articles and is frequently linked to from TOD.

The newspaper is not the religion. The newspaper is often named the most objective paper in the country. There's a thick firewall between the news coverage and the religion. From the very beginning, it was intended to appeal to secular readers as well as others.

But Christian Science itself does have some issues with science, particularly with respect to medicine, and I don't think Substrate is wrong to question Lamar Smith's credibility on scientific issues.

You just have to do a quick search for his name and find plenty of verification.


The new chair of the House of Representatives science committee has drafted a bill that, in effect, would replace peer review at the National Science Foundation (NSF) with a set of funding criteria chosen by Congress. For good measure, it would also set in motion a process to determine whether the same criteria should be adopted by every other federal science agency.

Independent peer review is one of the foundations of real science...he's against it. The reason being is that he does not believe in climate science and most of the anti-climate change science, paid for by the oil industry, can not stand up to peer review. So if you get rid of peer review - the pseudo-science then carries the same weight as the real, verifiable science.

BTW - This committee also had Todd "Legitimate Rape" Akin on it last election cycle.

Paul Broun on that committee is quite the crazy

“All that stuff I was taught about evolution and embryology and the Big Bang Theory, all that is lies straight from the pit of Hell,” Broun said. “And it’s lies to try to keep me and all the folks who were taught that from understanding that they need a savior.”

Bill Maher skewered him:

I thought we needed a savior because of our sins. Funny how I could have grown up a Christian (Presbyterian) and not heard anyone refer to evolution even once as some sort of problem keeping me from being saved. I had my own litany of things I had done which were quite adequate on their own.

yeah- and Norway has a farmer running the oil- and energy-ministries who is infected with the "Drill Baby Drill, drill ... c'mon for Pete's sake Baby drill, drill .. ..drill"-ebolavirus.

"The International Energy Agency... is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD)... The IEA was initially dedicated to responding to physical disruptions in the supply of oil..."...

"The Organisation for Economic Co-operation and Development... is an international economic organisation of 34 countries [corporate oligarchies] founded in 1961 to stimulate economic progress [unsustainable growth] and world [1%] trade..."
~ Wikipedia

All these fancy titles and obfuscating acronyms nested, like a lot of things, within each other like a matryoshka shell-game.

"The shell game (also known as Thimblerig, Three shells and a pea, the old army game) is portrayed as a gambling game, but in reality, when a wager for money is made, it is a confidence trick used to perpetrate fraud. In confidence trick slang, this swindle is referred to as a short-con because it is quick and easy to pull off."
~ Wikipedia

"This is amazing... [ellipsis edited] it is the blind leading the blind." ~ speculawyer

NPR and FOX News vary very little in content.

NPR just seduces the liberals much much more effectively...

They both post cornucopian economic forecasts, as does nearly everyone else.. but the similarities really end there.. they're hardly doing the same juvenile junk that Fox is.

Practically everyone out there talks nice to the money people, since everyone wants to be in their favour.

yes its all hand the the pumps lads! no get this straight , its not "peak oil" - its peak demand !

Never let on , never admit and never mention Peak Anything ! ****

Its always from now on going to be "peak demand" , after all Whale oil never ran out did it ? no! it was peak whale oil demand ! *

* this can be argued as truth for a given value of truth, factors such as price causing the demand fall because people cannot afford it are all in line with Peak Demand thesis. ** and ***

** that a supply has reached a peak and therefore market forces push prices up to match supply with demand can also be be accomodated . "the market is well supplied with oil" is a common refrain, that the oil price can go beyond the average mans/womans affordability will not be mentioned.

*** I'm sure some wit mentioned that we could import whales from Venus as at the time it was believed to be just a slightly hotter , steamier version of Earth, after all we could use Jules Verne's space gun to get there.

**** Also we never ran out of stones either did we , we use an awlful lot in construction still but its a bit hard to run your car on them.... or to make war , although I suspect after WWIII we'll be doing just that .



I still never understand the supposed distinction between peak oil and peak demand. Peak oil and peak demand have always been the same. Even with the original Hubbert predictions with his crude model, the only reason there would be a peak is that eventually the cost of extracting higher production exceeds what the market will bear. The only real thing that slows oil production is lack of money and then ultimately running out of oil. If you offered $100 million/barrel after we burned through 75% of the total resources, I'm sure production people would invest enough to create a new even higher peak since they would still turn a profit. But that just won't ever happen because there will not be such demand.

Saying "No, it is not peak oil, it is peak demand." is merely a way of saying "I was wrong but I've got a way to weasel out of admitting that I was wrong."

" Peak oil and peak demand have always been the same. "

Correlation, not necessarily causation. Certainly running out of cheap oil and the resulting price rise to bring the 'next easiest' to market can dampen demand. But demand can go away for other reasons.

Let's say someone figured out how to make medium sized cars and pickup trucks much more efficient, 80 MPG. Demand would go down while supply stayed constant.

A better EV battery (about double today's range) and demand will decouple from supply.

I agree with Spec on this one. When demand goes down but the price remains high (as we have seen with oil) then 'peak oil demand' and 'peak oil supply' are really the same thing. Of course, one can very justifiably argue that oil prices have stayed high because demand from China et al is still growing. Or, as WestTexas puts it, China et al is outbidding the West for oil. In a world with plentiful supply, one part of the world isn't 'outbidding' the other part. So again, to acknowledge 'peak demand in the OECD' is to implicitly acknowledge peak oil.

Let's say someone figured out how to make medium sized cars and pickup trucks much more efficient, 80 MPG. Demand would go down while supply stayed constant.

Not true under ordinary circumstances, due to Jevons' Paradox. Lowering the cost to drive via efficiency would increase the demand for driving, and pressure supply.

Of course Spec is right. When oil gets scarce the price goes up and it goes so high it kills demand. If that is as high as production ever gets, and it will happen when price is high, then that is peak oil.
Peak oil is the peak of world oil production regardless of the cause.

Ron P.

Not so sure about that.
To me PO is the point at which the rate of extraction of a resource Ceteris paribus, and that last C.P is what makes production so hard to follow independently, because in fact production is completely intertwined with other factors such as dollars, consumption, other BTU sources etc. To make things worse a number of the variables surrounding production are reflexive.

If earth gets hit by an asteroid tomorrow and 95% of the population is toast, and oil consumption is down by 99% obviously oil consumption will be down and may have peaked but I think to me (and probably I am not alone) that is not the essence of peak oil.

To me peak oil is something tied more closely to geological factors - but even there geology is not alone. If it weren't for technology we would not be getting any oil out and as technology keeps marching on (again, to some extend a reflexive relationship with oil) that intersection keeps moving out until one day it won't.


Not so sure about that.

I am sure about that.

If earth gets hit by an asteroid tomorrow and 95% of the population is toast, and oil consumption is down by 99% obviously oil consumption will be down and may have peaked but I think to me (and probably I am not alone) that is not the essence of peak oil.

Even if oil production peaked because 95% of humanity got wiped then that would still be the peak of the production of oil. It simply doesn't matter why the production of oil peaks, that is the peak. One cannot say, "Oh that peak doesn't count because that peak was caused by such and such."

When the production of oil peaks, that is when the flow rate of oil out of the ground reaches a level and starts falling, never to reach that level of production again, that is the peak of oil production. To say that the peak don't count as the peak because of what caused it is truly some kind of double speak that I simply cannot comprehend.

Ron P.

You may want to re-read what I wrote.
I think that if you were to lower the emotional content of your posts your credibility would go up significantly.


I wrote: Peak oil is the peak of world oil production regardless of the cause.

You replied: Not so sure about that.

I replied back: I am sure about that.

Then I replied to the rest of your post in detail. I read every word of it and replied to your entire post. There was no emotion in my post. Astonishment yes, but emotion, no.

I wasn't aware that I had a credibility problem. And that is not a very nice thing to say. We should not resort to cheap shots on this site.

Ron P.

It may not be a very pleasant thing to read but I think it would be difficult to disagree with my observation that you scream and yell (in internet terms of course, by bolding, caps etc) rather than actually address the point the other party makes.
Nuance may not be your strong point but I do appreciate all the data you bring to this site.
In short, you often act like a bully on this site and I don't like bullies. I like facts - which you often bring to the table - and logic.
I'd be happy to discuss in person. I'll bring a bottle of bourbon or two if you contribute glasses.


As an occasional visitor from the softer sciences, I rather agree with WP's criticism. Love Ron's data, not so crazy about the attitude, the all caps, boldface, the "My Goodness," etc.

OTOH, as I get longer in the tooth, I also understand frustration after battling the same issues over and over again. Not throwing any rocks here, just throwing in my two cents.

With every new generation, the reset button is pushed and everything is new again... the lies and deceptions reset to true and real... One tragedy of the human species is perhaps its limited life-span. By the time some things are figured out, it can be too late to do (as) much about them. I imagine that members of countless generations before have said essentially the same thing. Perhaps they said that too. And so on...

(BTW, I appreciate Ron's 'emotional' content.)

To me a lot of these discussions that quite often come up on PO forums (and I fully agree with Ron view on PO definition), comes from the fact that the "Hubbert extraction model" is considered quite often as a "geological thing".

Whereas if you had to classify it in a scientific field, it would be something like "typical human behaviour modeling regarding resources extration/consumption", under geological constraints of course, this goes without saying, but the point is that the Hubbert model is as much a modelization of "above ground" as "below ground" (the oil does not come out of the ground on its own, or with very few expceptions). With a broad hypothesis that could be summarized as "a useful resource is extracted by modern civilisation more or less as fast as possible" (and which has proved to be more or less correct).

In fact one could say that the Hubbert model is as much "economics"(in the sense study of human usage of resources, resources transformation and trading, one of economics definition) as it is geology, and perhaps even one of the most "scientifically sound" "economics" that has been produced.

Is it correct to say that conventional oil production has peaked?

If we can take out the oilsands and the tight oil from the data, I suspect that the once-in-human-history event of peak conventional oil is close at hand.

Let ask you, if you went out this morning and found someone had replaced the engine in your Civic/whatever and you now got twice the gas mileage you were getting would you double the amount of driving you do per year?

How many people do you think would no longer drive their "13,000" miles and start driving 26,000 year after year after year?

Jeavon's Paradox is one of the most misused concepts we have. Unless use is being significantly suppressed by cost use isn't going to soar if efficiency, or anything else, leads to lower costs.

Yeah, but you are over-simplifying it as well. If the price of gas dropped in half then people would start buying V8s again and oil consumption would increase. And people that are not driving at all would start driving because they could now afford it. And even existing users would do more weekend trips & such.

I'm not convinced that people would return to buying big V-8s. And I'm not convinced that many people are not driving because of gas prices.

I can see that there would be some increase in driving, but I doubt many people yearn to spend hours behind the wheel but don't due to fuel costs.

I certainly do not see even a remote possibility that a 50% drop in fuel cost would double mileage driven as those who misuse the Jeavon's thing like to state.

The price of big screen TVs has fallen a very large amount. How many people do you know that now have two or three running at the same time in their living rooms?

Refers are twice as efficient as they were not that many years back. Know anyone with two refers in their kitchen?

I'm not convinced that people would return to buying big V-8s...I certainly do not see even a remote possibility that a 50% drop in fuel cost would double mileage driven as those who misuse the Jeavon's thing like to state.

You haven't been paying any attention to the news the last decade! Every time gas prices drop here in the USA, sales of big cars, SUVs and trucks picks up again! When gas prices go up, small, fuel-efficient cars increase.

The price of big screen TVs has fallen a very large amount. How many people do you know that now have two or three running at the same time in their living rooms?

Refers are twice as efficient as they were not that many years back. Know anyone with two refers in their kitchen?

I know several people who now have several (3-4) big-screen TVs on at the same time in their house at the same time, albeit not in the same room. And often the CRT type that one replaced simply moves to somewhere there wasn't a TV before.

Just like when many buy a new energy-efficient fridge, the old one simply moves to the garage where it continues to run. BTW, I do know somebody with two refers in their kitchen. And they're somebody who thinks of themselves as green.

I question your data.

Knowing one or two people who are running big screen TVs or have two refers in their kitchen does not mean that everyone does.

For a 50% drop in price to double use, everyone would have to play along.

Oh, so I answer your questions and now you say my answer isn't valid?!!! You asked if we know someone who had the TVs or fridges. You didn't ask if I could show that everyone did. Why ask the question if you already know you're going to reject the answer?!!!

And, again, I question if you've been paying attention to the news for the last decade. How could you not have seen the numerous reports that big vehicle sales increase when gas prices drop? And just because they don't exactly double when prices drop by exactly half doesn't make my point totally invalid.

Example coming in next reply

The issue is whether a gain in efficiency results in the efficiency to be totally offset by an increase in demand.

We know that there is some suppressed demand and if prices drop demand will rise somewhat.

If 50% of all drivers switched to EVs would the remaining drivers drive twice as much as they now do? Not 10% more, not 20% more, but 100% more.

Bob - have you been registered on this site in the past under different names? I see you've been registered for only 3 days but your style is virtually identical to someone that shows up for awhile every now and then, but appears to register under different names - perhaps not you but someone who works with you?

Not only is his style the same, but he's blasted out over 120 comments in that time. He asks for one data point and then when I answer with one, I get told that only one data point is worthless. Well, then why did he ask for it?

Aug, because it's his job.

I come and go...

Jevons paradox will generally occur until a different limit comes into play. In this case oil use would probably increase in the business sector until the efficiency gains were lost to new use.

Though it might take some time to occur it is the most likely outcome in my mind.

The core idea that seems to stick with you is that energy policy as we currently practice it under a Capitalist system is a zero sum game. Energy that is saved in one way or place does not stay 'in the ground'. Demands for energy of all kinds are so high it ensures any supply economically available will be utilized somewhere. Greater efficiency does bring along a host of benefits; but actually saving energy is not one of them. [That's why it's considered a paradox.]

If the price of gasoline decreased to $1 / gallon, and stayed there for 20 years, then the behavior would repeat like in the 1990's and 2000's: people would become less fuel efficient. They would move farther from cities looking for cheap housing because cheap transportation enables suburbia. Subsidized gasoline encourages growth like is witnessed in many oil exporting countries. The same thing happens when efficiency is doubled while price remains the same or decreases. If price increases sufficiently, then improvements in efficiency will be offset and behavior as Jeavon's Paradox indicates will not occur. The price increases could be in other parts of the economy, such as food.

Jeavon's Paradox probably will not occur for the remainder of this century because peak oil, peak natural gas and climate change will put upward pressure on the price of energy and food sufficient to overcome any gains in efficiency.

And oil consumption that is indirect, from the consumer's perspective, would also shift in response to changing price signals.

To give one example, if the price of oil dropped in half, oil intensive vacations would start to seem more attractive, from a price standpoint. The flights, the taxis, the buses, the fuel used by the cruise ships, the fuel that is used to grow, process, and transport food and drink - all would become cheaper. The average traveler wouldn't think that they have responded to cheaper oil by consuming more. They simply got a good deal on a vacation that god knows they have been needing for who knows how long. Heck, they didn't even have to fill up the tanks on the family cars while they were away. Less gas used than last month.

Not just that...fuel costs are a part of the cost of everything we buy. So the real question is...if prices at the grocery store and the mall drop, and people have more money in their pockets because they're spending less on gas, will they buy more stuff? My guess is yes.

Looking at the charts in Gail's post from Feb 6th (Why is US Oil Consumption Lower? Better Gasoline Mileage?), consumption corelates fairly closely with price (inversely). As long as prices were dropping or remaining flat, consumption was increasing. I'm betting discretionary uses go up significantly when the price of fuel drops as a percentage of income. That's the ratio that matters the most, IMO.

Perhaps, but total US miles driven have continued to drop as the economy has recovered post 2008.

The economic recovery hasn't transferred to the general populace 100%. Unemployment has not been effected proportionately and many people are still considered underemployed (they are part time and want full time).

Just because there has been an economic recovery does not mean that everyone has more cash in their pockets - the slight uptick in consumer spending in March was attributed to people reducing the amount they save so a slight change in habits and not more disposable income.

Incomes and fuel prices haven't improved much, and if one considers the number of people who've dropped out of the work force, discretionary income per capita has likely dropped significantly if one excludes the top 10%; income increased barely 6%, overall, since 2007 (CBO). Gasoline? Roughly doubled since April, 2007 (EIA).

Using April, 2007 is cherry picking. You used the lowest month of the year.

During the second half of 2007 the average price of gasoline was only (roughly) fifty cents lower than it is today.

I'm not cherry picking, Bob. I went back 6 years from the most recent month, (pre-recesion, and not the low for 2007, which was Jan. at $1.43. April was back up to $2.25 - EIA). I really wish you'd get to the point. If you are contesting that incomes haven't risen nearly as fast as fuel prices in recent years, then do so.

Well, you happened to pick the lowest month of the year, considerably lower than much of the rest of the year.

My point is/the point I seem to remember making, it that while the economy has recovered since the 2008 recession, meaning that many people are in better financial shape and fewer in worse shape, miles driven per year has been declining.

"Well, you happened to pick the lowest month of the year, considerably lower than much of the rest of the year."

That is a pure falsehood, Bob. Read my previous post again. April was $.62 higher than January.

"My point is/the point I seem to remember making, it that while the economy has recovered since the 2008 recession, meaning that many people are in better financial shape and fewer in worse shape, miles driven per year has been declining."

Also false, if one looks at realistic indicators. From Ron's link, near the bottom:

10 Scenes From The Economic Collapse That Is Sweeping Across The Planet

The most recent Supplemental Assistance Nutrition Program (SNAP) statistics of the number of households receiving food stamps shows that 23,087,886 households participated in January 2013 - an increase of 889,154 families from January 2012 when the number of households totaled 22,188,732.

If you think adding .89 million more households to the SNAP program in the last year indicates that "many people are in better financial shape and fewer in worse shape", I'll submit that your POV is a bit skewed. Many folks are having to choose between food and fuel, and the number has been increasing = fewer miles driven. If, indeed, the economy does have an HONEST recovery, I'll bet my best PV panel that they'll be back in their cars again. Many will have to, just to get to their jobs (you know,, the ones they don't have now).

Bob, you are, to try to nicely say so, while forgiving the moderators, full of s**t.

The so called recovery has occurred while the vast overwhelming majority of people are not in better financial shape. Though you claim otherwise. I suspect you know this is the case.

So why do you make these false claims?

Only the very few top % are seeing gains, while the 90+% are not.

Please explain what point you are trying to prevail upon us?

Bob, again, it simply doesn't matter why world oil production peaks, that will be the peak. If fifty years after world oil production peaks, someone looks at a chart and says: Right here in 2017, (or whenever), that is when oil peaked and it started declining by about 2 percent per year for three years but the decline rate picked up after that and began declining at about 4 percent per year.

Then someone pops up and says: No, that's when demand peaked, not when production peaked. Then everyone looks at him like he is crazy. And suddenly this future Bob W realizes what a silly statement he just made.

Ron P.

I don't think you understood what I said.

I said that peak oil could be set by price driving down demand.

But also that peak oil could be set by the emergence of a viable substitute.

In one case commodity price creates the peak. In the other the peak is not set by commodity price but by a lack of interest in the commodity.

Peak slide rule, peak typewriter, and peak Kodak film were not caused by price increases for any of those things.

More desirable substitutes emerged and killed their markets.

sorry you did n't really confuse man made things with natural resources ?

really ?

oh come on man!


Whale oil use did not peak and decline because of the price of whale oil.

Lamp oil use did not peak and decline because of the price of lamp oil.

Horse riding did not peak and decline because of the price of horses.

Sails did not disappear from ocean going freighters because the price of wind rose.

I suspect we are short years away from "ultimate peak oil production" and a significant reduction in the price of oil. We are pretty danged close to an acceptable substitute that will largely replace the role oil plays and do so for a price significantly lower than the extraction/refining costs of our cheapest sourced oil.

And then nuclear power replaced oil.

Oh wait . . . it didn't.

The problem with what you are suggesting is that, like economists always do, you presume a substitute will magically appear because that has always happened in the past. But there is no such rule saying that will happen. That happened because we went through some 300 years of amazing scientific awakening. With the exception of dark energy, we now have a really really good understanding of all the basic physics of the universe. We know the energy behind every movement, sound, heat, light, etc. There just isn't a new energy technology on the horizon. We've been using oil for 150+ years now and the during the whole time people have been looking for possible substitutes. We've got some but the market has shown us that none of them have been attractive or cheap enough to get people to switch. Only now that oil is becoming scarce and thus more expensive are some of those alternatives gaining traction. Cheap natural gas is getting some attention. Battery powered EVs. But those are both together less than 1% of the market at this point.

So if you are looking for a miracle, don't count on it.

We are pretty danged close to an acceptable substitute that will largely replace the role oil plays and do so for a price significantly lower than the extraction/refining costs of our cheapest sourced oil.

Well, please tell us what it is. BTW, I drive an EV and advocate for them. But it is going to be a long hard slog to transition over to them. EVs are expensive up-front and it is difficult to get consumers to accept them.

Nuclear power didn't replace oil because nuclear power is not a replacement for oil. We've not used a significant amount of oil to produce electricity for many decades. We switched over to coal.

I do not assume a substitute will magically appear.

In the case of oil an alternative has mostly appeared. Right now we could move most drivers to EVs and PHEVs and cut our personal transportation oil use by at least 75%.

In the case of nuclear cheaper alternatives have appeared and more are coming on line. That's why some nuclear plants are going bankrupt.

At one point we got less than 1% of our electricity from coal. Over years that grew to over 50%. Don't confuse the small market penetration of an emerging technology with where it will end up after an ample amount of time.

The entry cost of EVs and PHEVs is high. But that cost is falling and will almost certainly continue to fall.

Look at any of the technology we use today. Initial purchase prices were generally high and market penetration low. Computers, cell phones, GPS, digital TVs, calculators, etc. The list is long.

I have an EV, I'm an advocate for EVs, and I live in Silicon Valley and work in the Silicon Valley Engineering biz. But the facts are what the are. The Federal government puts $7500 on the hood of every EV and we still struggle to sell them. And that tax-credit won't last forever.

The price of EVs will fall a little bit . . . there are efficiencies to be gained from mass manufacturing, improved designs, new battery chemistry mixes, etc. However, the price drops will only be incremental. Comparing to "Computers, cell phones, GPS, digital TVs, calculators, etc." is a bad comparison since those got cheaper by shrinking space and energy needed to represent a bit down. But a bit is an ethereal abstract idea with no mass such that it could be shrunk as small as possible. Cars have to move themselves and people with real mass. The cost drops will not be the same.

Don't get me wrong . . . EVs will catch on because their cost will drop and the price of oil will rise. But between those two reasons, EVs will eventually catch on because oil prices will go up much higher thus making EVs look better in comparison. The cost drops will play the smaller role.

Nissan just dropped the price of the LEAF by $6,000 in the US and made some improvements in range at the same time.

GM has recently stated that they think they can reduce the cost of the Volt by as much as $10,000 when they release the next model.

"Computers, cell phones, GPS, digital TVs, calculators, etc." is a bad comparison since those got cheaper by shrinking space and energy needed to represent a bit down.

Making those things smaller and more energy efficient was not what made them cheaper. Improving manufacturing processes and economies of scale made them cheaper. While they were getting incredibly better.

The same is likely to happen with EV batteries, which is what makes EVs/PHEVs expensive. Most of an electric vehicle is identical to a gasmobile, all the doors/tires/windshield wiper stuff. The difference is that right now EV battery manufacturing is in its infancy.

BTW, when Nissan dropped the purchase price of the LEAF sales shot upward.

Nissan just dropped the price of the LEAF by $6,000 in the US and made some improvements in range at the same time.

A little bit of that price drop was dropping some of the more advance features to create a no-frills base model. The vast majority of that price drop was opening up the factory in Tennessee and thus getting cheap labor and reduced currency issues. Only a very small part was actual reduction in EV component cost other than the opening of the USA factories.

Making those things smaller and more energy efficient was not what made them cheaper. Improving manufacturing processes and economies of scale made them cheaper. While they were getting incredibly better.

That is exactly what makes them cheaper. You get more transistors in the same area. Thus you can make a new chip with the same functions on a much smaller die. With a much smaller die, you can fit far more of them on the same size wafer. Or you can build the same size chip as earlier generations and pack it with much more functionality. Some of it is capital investment and automated factories. But much of it has the relentless shrinking of transistor sizes following Moore's law.

The same is likely to happen with EV batteries, which is what makes EVs/PHEVs expensive. Most of an electric vehicle is identical to a gasmobile, all the doors/tires/windshield wiper stuff. The difference is that right now EV battery manufacturing is in its infancy.

No, it just doesn't work that way. There will be incremental improvements but what happened with digital electronics just won't happen with batteries which actually need to store volumes of physical ions instead of ethereal bits. I wish it were different but it just isn't. And we are not in the infancy of Li-Ions. We've had them for some 20 years now. They certainly are still developing and hopefully there will be a breakthrough. It is theoretically possible for someone to discover a much better chemistry mix but that may or may not happen. There is no solid roadmap to it.

GM has recently stated that they think they can reduce the cost of the Volt by as much as $10,000 when they release the next model.

Bob W, you will have to wait a little while as the next generation of the Chevy Volt will not be released until 2015 as a 2016 model.

Don't forget the green credits Tesla earns as a result of government mandate. So at the stroke of a pen EV costs could rise substantially.

Forbes: Tesla Delivers Promised Profit

The Los Angeles Times this week suggested Tesla could earn $35,000 per vehicle and $250,000 million this year selling excess “green credits” to other automakers through a California program that requires a certain number of pollution-free cars per manufacturer. And, in fairness, Telsa did records $68 million in such revenues this past quarter, or nearly $14,000 per car.

The $35K figure is fiction.

The ZEV credits are certainly not going to disappear anytime soon since they have been successful in getting EVs on the market. And better still, they have helped make California the home of the first successful new U.S. car company in nearly a century.

If the figure were really $35,000 it would be cheaper for them to license Mitsubishi to build them iMievs and re-badge them and then sell them for $1.

There are no equivalent or better substitutes for petroleum. The only reason why demand is down is because price is up because supply is limited. However our current society is based around the idea of perpetual growth. That a natural resource limitation could curtail population or industry is unthinkable, a heresy. So the strange arguments that we are voluntarily limiting petroleum use.

Whale oil use did not peak and decline because of the price of whale oil.

But the production of whale oil did peak. That was indeed peak whale oil. That is the point that you, and others, simply cannot seem to understand. It simply doesn't matter what caused the peak, the peak is the peak. End of story.

Ron P.

I vote with Ron.

Whale oil production, UK coal production, number of draft horses, etc. all peaked at some point in time.
The fact that their peaks did not present the world with a major problem is not the issue.

Similarly, the peak of global oil production will be the peak, regardless of whatever set of factors converge to cause it, and regardless of whether or not the peak turns out to be problematic.

So far, we've already witnessed peak production of several important resources/'commodities', none of which has presented a significant problem because we had alternatives which were improvements.

Whether this pattern (of finding improvements) can continue remains to be seen: it appears that finding alternatives to/replacements for liquid petroleum, conventional natural gas, phosphorus, topsoil and fresh water may prove to be difficult.
This could put mankind into the unprecedented situation of going backward, rather than enjoying the benefits of improved technologies/resources.

"unprecedented" being within living memory, or...? Because it took humans some time to reinvent analog computers: the Antikythera mechanism of ~1st century B.C. only reappeared in the 14th century A.D.

Yo forbin, I carved a perfectly functional slide rule out of a piece of granite sticking out of the side of a mountain. Well, not really! But I did give my son a slide rule for his birthday last year. He really got a kick out of working with it.

I did write an OpenGL program sliderule, for my kids to see. I doubt anyone who never used a silde rules will "get" logarithms. They barely played with it at all. I din't know you could still find physical ones.

I din't know you could still find physical ones.

Oh yeah, some really nice ones at that. You can buy vintage, used or modern reproductions.

Google: Vintage Instruments: Slide Rules and More

There's lot's of other similar sites.


Or you can download a slide rule app for your iPhone or iPad:)
I kid you not:)

I have one, I kid you not. The one I have has a good help tool that shows you how to do various operations, which seemed to me to be a good way to learn.

I still have the one I used at school. I have also inherited my dad's engineering rule which has a lot more scales on it. My year was the last to use them, electronic calculators were rapidly becoming cheaper.

Yup, I use one to work out baker's percentages. A lot easier to see what is going on than a calculator app.


Written by Bob W:
I said that peak oil could be set by price driving down demand.

No. A high price means the demand is present. A high price means oil companies will extract harder to get, more expensive resources. If demand drops suddenly like it did in 2008, then there is a glut of oil which drives down the price. The low price discourages exploration, the adoption of substitutes and eventually encourages demand to increase. That is the driver of the Stair Step Descent Model. An oil price shock damages the economy, the economy drops, the economy starts to recover, supply and demand for oil intersect creating another oil price shock and further down the economy goes until it switches off of oil or collapses. The world is on the rising edge of the plateau which makes the period between the shocks larger.

But also that peak oil could be set by the emergence of a viable substitute.

No. For that to happen the viable substitute would have to be cheaper and at least as versatile than crude oil. There is nothing cheaper and more versatile. It does no good to consider hypothetical scenarios that are unrealistic.

Peak slide rule, peak typewriter, and peak Kodak film were not caused by price increases for any of those things.

What is the substitute for crude oil that is cheaper, more versatile and can scale up long-term to an equivalent of 76 Mb/d? Electricity is inferior.

Set the price of oil at $50 per gallon, hold it there, and we will recognize that as the day that oil peaked. Demand will drop and never recover.

For that to happen the viable substitute would have to be cheaper and at least as versatile than crude oil. There is nothing cheaper and more versatile.

It costs about one-fourth as much per mile to drive with electricity as with oil in an efficient vehicle. The only saving oil's boxers is that EVs still cost a bit more to purchase and ranges are a bit low. The viable substitute is appearing.

It really doesn't matter how much energy is in a glass of oil. Most of that energy is wasted when used to move a vehicle. What counts is cost and electricity wins.

A price control below the cost of the marginal barrel of oil would create shortages that pressure demand to decrease. The lower price would encourage increased consumption but shortages would prevent it. That is still peak oil.

The battery in an EV or PHEV is less durable than an ICE car. Instead of assuming a huge amount of driving to make the economics look appealing, assume the vehicle is driven 2000 miles per year. Then the battery lives beyond its 10 year warranty with a range of 20,000 miles and dies from age at low range without providing the economic advantage. It is the cost of the gasoline and fuel tank vs. electricity and battery. To last 30 years and 60,000 miles, the cost of the ICE vehicle is the original purchase price + maintenance + gasoline. For the EV the cost is the original purchase price + maintenance + 1 or 2 batteries + electricity. I am guessing that EV's and PHEV's eliminate more than half of all drivers around the world due to the high price of the batteries and driving less than Americans.

Using 80 gallons of gasoline per year at a price of $4.00/gallon, the fuel costs $320/year or $3200 after 10 years. That is not enough to buy even one EV battery. If the ICE has an average fuel consumption of 50 miles/gallon, then it is 40 gallons of gasoline per year, $160/year and $1600 after a decade. An EV battery must be very inexpensive and durable to beat a steel gasoline tank. EV's and PHEV's are presently in the realm of the wealthy and might always be so.

IMO, your example conflates short and long run effects. This increase in my discretionary income would be allocated across increased driving and other things that boost utility. Net effect on gasoline demand would be minor, as you say. But propogate this result across the economy and you would have knock-on effects such as Spec describes below.

It is probably overstating the case to say that energy efficiency has no value in conserving resources. But the key insight of Jevons is that the main result of efficiency is to accommodate a greater number of uses, and users.

My complaint is how some people use Jeavon's in a ham-handed manner in an attempt to call all increases in efficiency worthless.

Our light bulbs are in the process of becoming about 12x more efficient. Will people install 12x as many lamps and turn them all on?

Our desktop computers with CRT monitors are being replaced with 4x more efficient laptops (and even more efficient tablets). Are people buying 4x as many laptops and running them all at the same time?

The average driver in the average car spends about $150 per month for fuel. (13,000 miles, 25 MPG car, $3.50 gas.) If their car stared giving them 50 MPG would the extra $75 per month spent at the mall create enough knock-on to cause an additional 20 gallons of gas to get burned each month?

I understand and somewhat agree with you. If you zoom out a bit things may change a little though. If your MPG doubles and you drive 10% more you will have consumed less gasoline. However, assuming markets are efficient (and they are pretty efficient I think though far from perfect) in theory the price of gasoline should now decline a bit. So although YOU may be driving only a little more because of your increased MPG perhaps the price is now low enough so another marginal consumer will take the jump and buy a car, thereby driving up the total # of gallons.
I think that Jevon's dilemma is to some extend applicable in markets which are not saturated. With respect to your computer and lightbulb example though I agree that probably the increased efficiency may translate into lower total consumption because as it is how long one keeps one's computer turned on is likely not a function of electricity cost. With respect to light maybe somewhat. Although objectively lighting is not a huge part of residential power consumption (look at your fridge, washer/dryer, dishwasher) there seems to be a wide spread awareness that lights on = $$.


The big picture is, and has always been, whenever there's a surplus of anything, especially energy, someone finds a way to exploit it, sell it, profit from it. When I helped my neighbors cut their electrical useage; blew in more insulation; caulking, etc., they went out a few months later and bought a bigger hot tub, a freezer for the garage, and an ice maker for the kitchen. Now they're complaining about their power bill again. I told them to stuff it.

A graph with a single data point isn't very telling.

I count ten graphs in Gail's post with many data points. Maybe you should actually check it out?


Gail's stuff tends to have pretty severe limitations. Cherry picking specific datasets and horizon of analysis is one (two actually) of them. Or think of the whole issue about that all graphs have to start at zero - Y axis only. X axis is not mentioned. Why not start every graph at the start of the universe? (hint: because that is not the purpose of a chart). Remember the whole "oil debt which cannot be repaid" thing?

Let us wait and see how the current financial debt situation really works out. Quantitative Easing is what is holding down interest rates and holding up the stock market and commercial investment in homes. Without it, the economy would be in tough shape. But it can't continue indefinitely in the US, and I don't think it can continue indefinitely for the other countries that are using it (including the Eurozone, Japan, Britain, and Switzerland.)

Gasoline usage is down because there are still a lot of people who are underemployed or who have dropped out of the workforce.

Debt=Asset. For every bond the treasury sells somebody else now has an asset on their balance sheet.
QE may have an effect on interest rates but is highly unlikely to be the only factor Rates in the US have been decreasing since the early 1980's. The ten year has gone from 16ish% to less than 5 until QE came along and now we are at 1.7ish so to blame QE seems, frankly, uninformed.
Will at some point this game come to an end? undoubtedly, but it is hard to see how this would be in anyone's interest.
QE sucks assets out of the systems but banks are never reserve constrained anyway, but they are capital constraint so unless there are lending opportunities it doesn't matter, especially with the fed paying interest on reserves.

I know lots of traders and trading desks who went out of business on betting that JGBs would back up to "normal" levels. Pretty much all of them got carried out because of the negative carry on the trades, which, on a day to day basis doesn't seem much but over time literally kills you. The sneaky part is on the repo side of trades of course.

Let's assume the fed announced tomorrow that they will stop buying 85bn of assets every month. Chances are the market would be down a couple of thousand points over the next couple of days, mortgages would be at 6%+ and as a result the NAV of retirement accounts would be receiving a significant haircut.
Although likely over time there is no way around recognizing that we are not as wealthy as we think we are in the short term nobody would be voting for that outcome.
And no, there is no energy debt. You buy oil and you pay for it otherwise you won't get the next shipment. End of story.


Interest rates on bonds are at the current lows for the same reason the stock market is at current highs, you have to put your money somewhere.

U.S bond yields are low as they are seen as the best of a bad lot and are dumping them there for security - actually I think Germany is the best of the bad lot as people were paying them to hold their money (not sure if they still are).

Personal interest rates have been brought lower by central bank policies such as Q.E. and lowering the interest rate.

The stock market is doing well because people think it's doing well - there's little substance to the rally (although the price to earnings ratio is not as bad as previous bubbles). I'd imagine a lot of investors are already planning their exit or have already begun their exit and the market is being driven ever upward by the latecomers who'll end up losing out.

The messed up thing (or interesting thing, your choice, is that i'm having the same conversation with Ron upthread. Different topic, same concept.


When is a peak a peak debate? I'll steer clear of that one, too many cooks spoil the broth.

I'm not sure we can't continue forever, or at least for a very long time. What is disturbing to me is that the Gov't is issuing bonds, the Fed is buying them with no money, and the Fed is owned by the banks. Is there a conflict of interest there?

In theory the Fed must sell off the bonds to zero out it's balance sheet. But what if they don't?

We are going down the rabbit hole, and seem to be falling fast. Wait! What are those jars on the shelves along the side of the hole?

"Drink me?"


The Fed is owned by the banks but the banks don't get to share significantly in the Fed's profits. IIRC member banks get a 5 or 6% dividend on their capital (looks good now but for many, many years that was pretty bad) and the rest of the profits , which is 95%ish goes back to the treasury.
It is is issueing bonds that the treasury (not the fed) creates money. One moment there is no bond, (and no money), the next moment a bond pops into existence and, to balance that entry, a corresponding cash entry is created. Voila - money!
I don't know why the fed should or would want to zero out it's balance sheet. Is the balance sheet currently large by historical standards? Yes, no doubt.
The relationship between the government and the banks is an interesting one. What most people don't understand is that de facto it is banks, not the government through its agents, which creates money. Or, to make it more concrete, when you go to the bank for a 100,000 mortgage and get it you just created 100,000 in new money. Debt creation=money creation and the inverse holds true as well, and that is what the fed was so afraid of in 2007-2009.
Similarly with a credit card. When you go to the store to buy a bottle of bourbon for Ron and charge it to your credit card you just created money out of thin air. The merchant receives 50 bucks from the bank in its checking account offset by an IOU from you. When you make the IOU disappear by paying off your credit card bill you removed 50 bucks out of the money supply.

However, a more significant issue than the size of the balance sheet of the fed (and yes, size does matter up to, or beyond a point) is that the implicit connection between interest rates and growth is that if interest rates are higher than the growth rate of an economy at some point the entire economy is interest. Also, not all interest rates are created equal. Although short term rates for lots of instruments are close to zero longer term rates, especially the ones which are not secured, or not so secured are significantly higher.
There are a couple of things which are concerning to me. First of all, the fed now explicitly targets longer maturity rates, something which pre 2008 was pretty much determined by the market participants. Secondly the treasury is going to issue floating rate notes. That means that they are going to sell, for example, a 10 year bond where the interest rate changes every year. That is similar to a homeowner taking out an ARM to purchase a house, and we know how that ended.

In order for this scheme to be sustainable the growth rate has to be higher than interest rates for the reason given above, and that is a big reason why it is crucial to keep rates low. But like a balloon kept under water, the risk is that if rates start going up at a point where the fed doesn't have a lot of control the interest rate cannot only go over the growth rate, but become a drag on growth.


Banks make money at the re-discount window;

money flow =

Gov't loans non-existent money to Fed, creating money


Fed loans non-existent money to banks, creating money


Banks loan non-existent money to customers, creating money.

We could write a book 3 volume treatise on this. Or, at least a pretty significant major posting. Maybe it belongs on TAE?


The big picture is, and has always been, whenever there's a surplus of anything, especially energy, someone finds a way to exploit it, sell it, profit from it.

I agree, and that's why yesterday I posted something to the effect that humankind always goes full tilt, with little or no consideration not to. That's why Jevons Paradox is accurate. People generally do not say to themselves, "Oh, I could take advantage of this situation but instead I'm going to conserve the planet's resources." The nature of humankind is maximize advantage at every opportunity, and those that do make huge profits.

We interrupt the Teapottempest briefly to repeat an important message from Mother Earth:

"I don't care about any of those details. A molecule of new carbon dioxide in the air, from any source whatsoever, will require me to murder more of your grandchildren. If you don't have any, no problem, I'll murder somebody else's."

We now return to our regular programming.

Our light bulbs are in the process of becoming about 12x more efficient.

My personal data does not match this.

60watt incandescents at my house have been replaced with 800 lumen 3000k (or 2700k) ~12watt LEDs.

robert@debian:~$ echo $(( 60 / 12 ))

5x for me.

Yeah. 5x less is closer to what LEDs pull. Sorry, memory fail....

Concerning the light bulbs:

Fluorescent tubes is about as good as LED.

The improvement over the old power saving lightbulbs are fairly small and mostly a bonus because of the polutants in them.

The LEDs are getting better, but there is a long way before they get cheap. Also the LEDs must be cooled efficiently - so LED lightbulbs that emit the same lumen as the old incandecent include a heatsink - that is costly also in production cost. Incandescent or flourescent do not cost as much resources. Not at all.

When you include the general quality of LEDs (their RAL value, their longevity, their cost) - I do not believe in them unless you have too much money. I have tested many types and they simply do not have the long life claimed - unless you buy something like OSRAM or another quality brand. And when you buy those the high cost invalidates the savings when used.

The flourescent tubes (for E27 socket) today has finally matured and become reasonably cheap and with a good RAL value - clearly the best choice from my experience if you want low power.

they simply do not have the long life claimed

None of the LED light bulbs I have purchased have yet to fail or burn out. For me they excel in applications where they are frequently cycled on-and-off (and where the CFLs would quickly burn out).

I have 10 installed, from a variety of brands and manufacturers, in applications from porch lights, bathroom, living room, ...even aquarium lighting.

The most recent was a 800 lumen 3000k bulb for my son's room.


Good point. You can't compare LEDs and any other light source using one criterion. Lifespan, cost, resources are all totally different. The only thing we can say is that the people selling them will want to put them in as good a light as possible. Same goes for arguments for electrical cars vs. combustion. People get caught up in a very narrow definition of cost and these variable costs give a very skewed idea about total cost of operation.

'unless you have too much money..'

Sorry, my experience has been very different. I don't disagree that many of the new models are still quite pricey, but I have gotten some of the pricey ones and some of the cheap ones, and have yet to see any burn out.. I find them highly durable and versatile. Frankly, I think they'll end up turning the whole Light Bulb Scene entirely on it's head.

In my recent, brief employment at the Home Depot, we carried a Phillips 40 watt equivalent (8w actual) that is being steeply subsidized from $21 down to $5 by Efficiency Maine, and I've gotten several of them.. one of the key differences from this to a CFL is pointed out by the one I dropped off a 12' ladder onto concrete, due to some poor packaging by a colleague. The Diffuser glass was shattered, but I plugged it in and it still worked just fine. I've now taken several of them and just broken the Diffusers off right away, putting them into Track Lights with a little custom reflector as a very bright and reasonable replacement for the old Par 20s.

Yes, you do have to make sure they won't get overheated, as with the CFL's.. but beyond that, you're looking at a bulb that you may very well never have to change (unless you really bought a cheap off-name brand, at which point you get what you pay for..)

It is difficult to compare; you need to know the exact energy equiv. in manufacturing, the total cost (including any subsidies), and in addition factor in 'other' environmental detriment, such as mercury used in CFLs.

I suppose some part of the problem is made worse by the impact of monopoly power by manufacturers, and now knowing how much of cost is going to the capitalists, and how much to laborers, etc.

I just inventoried my home, and there are zero incandescent bulbs, and 80% LED today. The remaining CFLs are 3-way bulbs, and I have not yet found an LED 3-way.


The remaining CFLs are 3-way bulbs, and I have not yet found an LED 3-way.

There's actually a perfectly good reason why you haven't been able to find any >;-)

All About LED Bulbs, Part 3: The Dimming Dilemma
Can an LED bulb dim? Yes, but… What about 3-way LED bulbs?

The 3-way LED bulb question is easier to answer - there aren't any, at least from the major LED bulb makers (Philips, GE, et al).

Like dimmables, creating a 3-way LED bulb is not a matter of adjusting power to the bulb to change the brightness but sophisticated (and expensive) circuitry to control the lumens output.

But now that we'll soon have a 100-watt bulb, I'm told a 3-way LED bulb also may make its initial appearance in 2013.

With more efficient light bulbs you yourself may not install more lights, but someone else who never used them is starting to install them.

There seem to be LEDs in practically everything. These days I switch the lights off and there are still little pin-points of light at chargers and sockets all over the place.

Research Report of Global and Chinese Light-Emitting Diode Industry, 2009

With gradual enhancement of the luminous efficiency and application technologies, the application of the light-emitting diodes has been transferred from the initial indicator lights to screens, such as the landscape lighting, backlight, automobile lights, traffic lights, lighting areas, etc. The application of the light-emitting diodes is now in diverse development. It is predicted that the average compound growth rate of sales of the display light-emitting diodes will be above 15% in 2006 to 2010 and the annual average compound growth rate of sales of the landscape lighting will reach over 35%, with the annual average compound growth rate of sales of the backlight light-emitting diodes at more than 30%.

In 2010, many patents in the light-emitting diode industry will expire. Chinese enterprises are expected to break through the shackles of the intellectual property rights from European, American and Japanese giants. They should make good use of huge market bases and abundant labor resources in order to occupy a place in the global light-emitting diode market.

But the key insight of Jevons is that the main result of efficiency is to accommodate a greater number of uses, and users.

Yes, but we are not talking about increase in efficiency. We are talking about abandoning oil as a personal transportation fuel. 10 years from now only fools will buy gasoline cars.

personal transportation

That is the most persistent BAU of all: "personal transportation"

I already telecommute four days a week, which eliminates driving to work every week to 1 day in 5 (80% reduction).

Just imagine if more and more workers and employers did telecommuting for 'office jobs.'

I think it would be evolutionary, and fuel use, commuter traffic? ...would plummet accordingly.

Thank you. It does appear that Jevon's paradox is applied too broadly at times, so efficiency, I think, will play a very big role in the face of increasing scarcity and expense. Ultimately, the limits of efficiency will be reached and the core problem will have to be addressed: The ratio of resources to the number of people.

If there are shortages, peak demand as a propaganda tool will fail. It only fits at the peak and fat tail when the decline rate is gradual making high prices sufficient to cause demand destruction.

Forbin wrote:

**** Also we never ran out of stones either did we , we use an awlful lot in construction still but its a bit hard to run your car on them.... or to make war , although I suspect after WWIII we'll be doing just that .

I don't know if you're aware, but you're echoing Albert Einstein here:

I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones - Albert Einstein

Peak demand is not going to drop the price of oil below the cost of extraction, no matter how low it goes. If the cost for the next barrel rises to $175, the price of oil will not go to anything below
$175 (plus a bit of profit for the investors). Even if everyone drives EV's or takes public transit. And everything made from or depending on oil for its manufacture or providence will be priced based on that reality.

And, if no one can afford $175 oil, then no oil will be extracted.

Just saying.


Peak demand is not going to drop the price of oil below the cost of extraction, no matter how low it goes.

But there is no set cost for extraction. We have what is called the marginal barrel of oil.
Search: The Marginal Cost Of Oil Production

Wikipedia has this definition for marginal cost of production:

The change in total cost that comes from making or producing one additional item. The purpose of analyzing marginal cost is to determine at what point an organization can achieve economies of scale. The calculation is most often used among manufacturers as a means of isolating an optimum production level.

A lot of oil is produced for less than $10 a barrel. A lot more oil is produced at a much higher cost per barrel. If the price of oil drops below the marginal cost per barrel then, after a while, that production will stop. But then the marginal cost will drop and oil at the new marginal cost will continue. Of course total production will drop as it becomes uneconomical to produce oil at lower prices.

Also wells that have already been drilled will continue to produce even if the company is losing money because the price of oil dropped. Most of the capex will have already been spent. They are losing money but they would lose even more money if they simply shut a producing well down.

The marginal cost per barrel is rising however. It is now about $100 a barrel. If the price of oil drops much lower you will see less new oil come on the market.

Ron P.

What I meant to say, or thought I had said, is that, whilst no doubt oil will be pumped if it costs less than the market price, if it costs more than market, it will stay in the ground. If there are still some wells pumping 10-12 bpd at $25/barrel, they will keep on going as long as the owners make a profit. Absent a profit, they still will shut 'em down.

And, of course, no new wells will be drilled until they can sell it for more than cost of drilling and pumping.

I agree that below $100/bbl new wells will be fewer in number. Just check out Bakkan fields!

What the cornucopian folks, and the media that buys in to BAU, refuse to understand is that oil simply cannot go much below where it is today without having a dramatic impact on production, which will limit supply, and of course we all know what happens then.

Sorry I wasn't more clear.

OTOH, when you say, "They are losing money but they would lose even more money if they simply shut a producing well down," I would note that if the ongoing cost of producing the oil (cost for maintaining the well, fuel for the pump, and salaries for various workers, plus transportation costs) is more than the price they can charge, then they will stop pumping. At some point, they might cap the well, depending on how they view the future. No capitalist will continue to send good money after bad for very long.


I don't know the exact amount of capex that is spent in drilling or in the case of tight oil, drilling and fracking, but I would bet it is well above 90%. The cost of producing oil from an already producing well, on land, has to be less than $10 a barrel. Stripper wells were operating, producing less than 10 barrels per day, when oil was $10 a barrel. They ran on a timer and would pump but a couple of hours per day. But to be fair, there were a lot of stripper wells that were shut down back then that were restarted when the price of oil got much higher.

The point is already producing wells that are shut down because of the low price of oil are never producing very much oil. And every well must be shut down at some time or another.

Of course the cost of operating an offshore platform is much higher, depending on the type of platform. That is manned or unmanned. After every hurricane in the gulf there are usually always damaged producing platforms that are shut down because repair would cost more than they would get from the oil they would recover. Of course all those wells were always way down their decline curve.

Ron P.

It is not just the oil economy, it's a full-on cornucopian offensive in all areas of progress and technology. The future is bright, dammit!

Even climate change won't be a big deal, according to this group with the really cool name of "Ice2sea". Rising sea levels not as severe as feared, study finds

I had a hard time reading it what with my marketing and propaganda alarms going off non-stop.

It's been clear for a long time that "rising sea levels" would backfire as a "worrisome consequence" of excessive carbon burning.

While the eventual rise will be significant, it will happen very slowly from the point of view of human subjective experience. And the necessary adaptation - move slowly inland - is nothing a human brain can stay excited about. It's not like the value of beachfront property is even falling.

In contrast, acidification will transform life in the seas this century, knocking huge holes in food webs, and is essentially irreversible once it occurs. Most laypeople haven't even heard of it. Hell, most climate campaigners don't know about it.

Rising seas probably shouldn't make the top-ten list of CO2-caused problems, and it's a terrible issue to "lead" with, because anyone can see that the ocean isn't rising very fast. And the slow rise is a perfect opportunity for human minds to dismiss CO2 as a problem.

Agreed, acidification, drought, deforestation, storms and the inability to grow food will be bigger issues much sooner.

What struck me is just how quickly the happy talk propaganda machine will take any crumb, even if they have to just about make it up, and plaster it far and wide. The relevance of what is said/published/broadcast is not of major importance, as few seem to be able to concentrate long enough to digest it anyway - just find something optimistic and sort of connected to something sciencey and pump it out as fast as possible.

I think you have put your finger right on the real danger. A sizeable fraction of CO2 released from fossil fuels so far is in the ocean (and some in forests). A substantial loss of existing carbon sequestration capacity (rate) would be equivalent I guess to a very sudden out-gassing. I see quite a bit of literature on acidified oceans but do not know whether biotic sensitivity can be measured, predicted or quantified?
The signs do not look good - who knows, this one could usefully frighten still-growing industrial civilisation enough to slow down the rate of carbon emission? (A bonus of a slow-down would be a rapid reduction in methane currently at levels in the atmosphere 2.5-fold the pre-industrial levels and responsible for 20% of humanities recent GHG forcing.)

The BBC gave a different slant on the story in that the 69cm higher limit was 10cm than the previous higher limit the IPCC predicted.

The Ice2Sea study gets written up as an improvement on previous studies with supposedly more accurate predictions.

The BBC's take

Interestingly, one conclusion is that the very scariest scenarios look less likely.

In connection to the "rest of the economy," and in line with what I said above, the floor price for gold is probably about $1350 to $1500 per oz.


If we must tie the dollar to a commodity, why must it be gold? Why not, say, silica?

Glass Dollars! A wonderful concept. It shows that you can break the economy, whilst gold implies you can merely bend it.


As usual, it is worth looking at what ice2sea actually said, rather than how Reuters summarized them. From their web-site and report:

1. The projections were based on a "medium range" emissions scenario (A1B). Current emissions are tracking way above that scenario. Further, the standard emission scenarios don't include carbon cycle feedbacks (release of CO2 and methane from tundra, soils, forests, seabed etc.)

2. They used a model which tries to assess regional impacts based on the global climate model, and then adds up the expected melts in each region. This basically ignores any global feedback mechanisms (e.g. melting ice itself enhances warming and changes ocean circulation patterns).

3. The range 3.5-36.8cm is a "most likely" estimate of sea level rise from ice melting by 2100. They then add thermal expansion to get 69cm in 2100. But there is a huge spread around that "most likely", with a long tail.

4. They used a method of "expert elicitation" (basically polling experts) to try to assess the spread and an upper bound. However the collective opinion of the experts was that THERE IS NO KNOWN upper bound... the tails just continue up into multiple metres. The experts collectively thought less than 5% chance of melt-contribution > 84cm, which would be a total rise of > 1m. This is not very reassuring.

5. The ice melt doesn't suddenly stop in 2100. No it keeps melting, and sea level keeps rising, for many centuries to come.

Thank you for the analysis. My comments were mostly about how the report was presented, but I think their report was well suited for such spin, whether that was intentional or not. I guess I have a hard time treating things like surveys of experts as serious science, and catchy names smell like marketing.

yes there is a lot of talk maybe too much...kinda like the bush years....maybe there is some bad economic news coming up...like the FED can't continue doing what it is doing...so they are trying to get ahead with positive news for the markets and the best they can come up with is oil and that the deficit is way down...to bad they are only half truths...

The Bakken data for March is out this morning.
ND Monthly Bakken* Oil Production Statistics (Bakken Only)
ND Monthly Oil Production Statistics (All North Dakota)

Total wells were up in the Bakken by 145 and up in North Dakota by 153. But production hardly moved. Bakken production was up by 3,754 bp/d to 718,791 bp/d. All ND production was up by 3,790 bp/d to 782,934. Barrels per day per well in the Bakken was down by 3 to 132 and bp/d per well in all ND was down 1 to 94.

Bakken and North Dakota barrels per day. The last data point is March 2013.

Bakken BP/D photo BakkenBPperD_zpsfb344bbb.jpg

Ron P.

I've concluded that the underlying problem is that the Oil Cornucopians come from Fantasy Island, where oil wells don't decline, so they have no conception of depletion scenarios.

Back here in the real world, every increase in oil production sets the stage for the inevitable subsequent decline, as the annual volume of declines in production from existing wellbores increases in tandem with the overall increase in production, until production from new wells can no longer offset the declines from older wells, AKA as a production peak. But as noted above, oil wells never decline on Fantasy Island.

From the Director's Cut: Search: Welcome to the North Dakota Industrial Commission, Department of Mineral Resources Then click on: Director's Cut - 05/15/2013

March weather was much worse than February with three major storms. The drilling rig count increased slightly but the number of well completions dropped by 30 to 140. That number of completions is above the threshold needed to maintain production so oil production rate rose slightly, up 0.5% from February. Operators are gradually picking up the pace as summer weather begins while continuing to push higher efficiency and cost cutting measures. Uncertainty surrounding federal policies on taxation and hydraulic fracturing regulation continue to make capital acquisition more difficult, but the new USGS recoverable reserve estimate has bolstered confidence in the long term. Over 95% of drilling still targets the Bakken and Three Forks formations.We estimate that at the end of March there were about 440 wells waiting on completion services.

He says well completions dropped to 140 but the data they published shows that Bakken well additions increased by 145 and total North Dakota wells increased by 153.

Anyway it now appears that the number of additional wells needed each month to just keep production levelis is from 130 to 135. And that number will increase as production increases.

Also another important thing to take away from this is that wells waiting to be fracked increased form 375 to 440. They are drilling a lot faster than they are fracking. But I understand that thawing ground is causing a lot of pot hole problems and the counties are closing some roads. This is slowing things down because there fracking requires loads and loads of fracking water and mixing materials.

Ron P.

The pause in production during the winter and early spring of 2013 is like 2011. The winter of 2012 was mild allowing production to charge upward.

OK that curve is starting to look really damn familiar...


Oil and gas exploration and production companies posted lower profits per barrel in the first quarter compared with the year-ago quarter, but net income per barrel was slightly better compared with the fourth quarter.

Refiners had a better showing — their net profit per barrel in the first quarter was more than double that metric in the first quarter of last year and slightly higher than the fourth quarter of 2012.

Interesting trend.

Tad Patzek has posted a new blog this morning, first one since early January.

Search: LifeItself: What If There Is Peak Oil?

The Spring 2013 Semester has just ended and I am beginning to see light in the tunnel. So I can restart writing my long-neglected blog. Many things have happened in the four months since my last entry: Thousands upon thousands of innocent people have died in wars and ethnic/religious strife. Most of these wars have as background access to oil, gas, and drinking or irrigation water. More narrowly, Shell decided not to go back to the Arctic in 2013, and Statoil and ConocoPhillips are waiting on Shell to go to the Arctic. According to mass media, the world is awash in liquid hydrocarbons everywhere. Or is it? The question I have been asking myself repeatedly is: How do I explain things to people who in general are not interested in learning and understanding the things I am trying to explain?

The rest is a great read. He rakes all those recent "We will never run out of oil" articles over the coals.

Ron P.

Tad is a very wise person. I especially liked:

So here is the dirty little secret of our civilization: It runs on power, or energy per unit time, not on energy. The scientifically illiterate English majors, economists and politicians, simply cannot comprehend the fundamental difference between a quantity (here energy) and its time derivative (here power). This is how skipping algebra and Calculus I terminally confused leaders of an otherwise advanced nation.

“A country without oil simply cannot continue to expand or even be competitive on the world stage.”

We're not quite at a stage where we're without oil yet but the prices are definitely hurting. The E.U posted it's 6th straight month of contraction at -0.1% for the last quarter, France is at -0.2% (now technically back in recession) and Germany has recovered slightly to grow at 0.1%. The UK and U.S are leading the pack with +0.3% and +0.6% respectively for the last quarter.

The U.S is possibly the most worrying. The UK and Europe are going forward with quite strong austerity measures and have been doing so for a significant period. The U.S has only just begun it's attempt at austerity and has a very large QE program running (for how much longer no one knows) so the slow rate of growth may find itself running even slower in the coming year.

Australia is managing to keep it's growth going but is now finding it's budget in deficit to the tune of $19.2 billion. They're predicting they can pull themselves out of it by 2016 but if commodity prices continue to fall they may find that not happening.

Obviously this isn't all due to the price of oil, however it's certainly playing its part.

Debt to GDP for the US has stabilized and is dropping. So the deficit issue is not as bad as assumed by most.

However austerity measures have been introduced and not all of them will be revoked so some downturn in economic activity should be expected throughout the year.

The U.S technically should be performing better than it is - the fact that it is not is worrisome as if their economy starts to slow then who will pick up the slack. In reality the U.S consumer who is the driver of the economy is not benefiting proportionately from the economic rebound - if real wealth in the populace is eroded no amount of QE will keep the economy going.

The U.S is far from out of the woods yet - the saving grace is that there is free flowing capital in the world right now and it needs to go somewhere. The U.S is the obvious safe haven, if it proves to be shakier than imagined then bond yields will go up and the U.S' deficit will be far less manageable.

Alas, what you say is true. The general attitude regarding austerity won't go away and cause policies to reverse, so we will be feeling the effects of them.

One of the missing drags might be student debt. The generation just starting work (those that actually got jobs), isn't spending much because they got big student loans.

Some consumers are seeing the effects of the "recovery". Profits to owners of capital have gone up, which trickles to those who own enough stocks.

enemy of state:

The only reason debt to gdp is "not as bad" as people think is because the debt is not real and can't be paid back. Specifically, the United States does not pledge any particular asset behind Treasury debt that is owed to the private banks. Rather, it pledges that it will continually waste more energy. The wasting process itself allows for a continual debt rollover.

As such, for our current global economy to function, Treasury debt must rise to infinity, and interest rates must drop to zero. Debt must always rise to infinity and debt to gdp must continually expand. Either austerity or paying down the Treasury debt ends the global financial system as we know it.

It is no wonder our energy policy is such a mess. People have no clue what they are talking about and bogus information is spewed all the time confusing people. Example:

Considered by many to be more efficient than even electric vehicles, fuel cells aren’t limited by the dynamics of thermodynamics, notes NextGreenCar, which enables them to achieve higher conversion efficiencies than conventional engines that only make use of 20 percent-25 percent of the fuel’s energy (as in gas-powered cars) – fuel cells can achieve up to 60 percent.

1) Fuel cell cars ARE electric cars. They just also include a fuel cell stack for generating electricity.
2) Fuel cell stacks are nice but they are LESS EFFICIENT than battery electric cars. Their advantage is fast refuel and longer range.
3) EVERYTHING is limited to the dynamics of thermodynamics. He is thinking about Carnot's theorem which is a subset of thermodynamics.

That is three blatantly false things in very first sentence! *sigh*

The problem is near the very top of this article, if you think the alternatives are fossil fuels or 'renewables and efficiency', then that is indeed a scary world.

However, the real world contains nuclear power, and that can clearly substitute for all fossil fuel usage without causing any environmental damage, including CO2, into an inconceivably distant future. No whiz-bang breakthroughs are needed. Current reactor designs can get most of the way, with 'deep-burn' technologies (fast neutron reactor with Uranium and thermal neutron, molten-salt reactors with Thorium) making the 'fuel' supply virtually infinite.

Fast reactors have already been built (Russia has operated the BN600 for 30 years, and GE has a completed design called PRISM for a small fast reactor). Prototype MSR's were designed and built in the 1960's. The MSR's require some engineering work, but nothing extraordinary, and no new Physics is required.

The only thing preventing this from beginning now are: irrational fear of radiation, entrenched fossil-fuel interests, and a lack of visionary leadership.

It will happen though. China first, then the rest of the world.

The problem is near the very top of this article,...

The problem is at the very top of what article. You need to find the "reply" button or if you are talking about one of the links Leanan posted, tell us which one.

Ron P.

Naw, what's holding nuclear back is price.

Since nuclear is close to our most expensive way to bring new capacity to the grid (only new coal is more expensive) people are really unwilling to accept the problems it brings with it.

From Nuclear Costs in Context, the worst of nuclear, i.e. the large-cost overruns for the first-of-a-kind EPR design in Finland is coming in at around $6B/GWe. But, the South Koreans have sold plants to the United Arab Emirates for $3.5B/GWe. They add:

When we turn and face the sun, costs jump. Based on the proposed Moree Solar Farm, this large solar PV facility with no storage or back-up (i.e. not a true baseload solution) comes in at $19.6 billion per GWe. A concentrating solar thermal plant (based on the Spanish Gemasolar plant) with molten salt storage back-up can be had at a cost of $25.1 billion per GWe.


Meanwhile the Chinese are delivering new nuclear based on the Westinghouse AP 1000 design for reported domestic cost of as low as $1.7 billion per GWe. So, if we want zero-carbon generation at scale, we would be foolish in the extreme to reject nuclear from consideration on capital cost grounds.

We also need to ask ourselves why regarding these high costs, especially when they can vary so much between jurisdictions? I am sure the political environment has a great deal to do with it.

Unlike wind and solar, where cost is ultimately driven by the inability to control output and the diffuse nature of the energy flows being harvested, high nuclear costs are driven by regulations and the consequences of the politics of fear. Since these factors are human-imposed, and not imposed by physics, they can be changed. If the political environment improves, many small-modular reactor designs on the drawing boards, with assembly-line production and beneficial design features affecting costs (higher power density, core operating at or near atmospheric pressure, passive decay heat removal, etc.), we have tremendous potential to bring costs down even more in the future. The cost asymptote is very small as the cost of fuel per kWh is next to zero for high burn-up designs, and power densities can be brought up to the practical limits of material science. In fact, the marginal cost for current nukes (decades-old, inefficient LWR designs) is only about $0.02/kWh, using about 1% of the potential energy of the original uranium. Nuclear can go a long way forward with aggressive new technology development beyond what is already rather impressive today (1 GW-year of electricity on 30-40 tons of fuel).

Have you included the costs for dealing with the waste? If so, what value did you assume for those costs?

IIRC ratepayers have been assessed fees throughout the lifetime of the NPP to cover at least a very significant part of the decommissioning costs.

Estimated totals for Kewaunee which I've read seem to be somewhere between 0.65 and 1.0 billion dollars. Some of that comes from the fed taxpayer, but most comes from the fund Dominion inherited when it bought the plant. They have 60 years to return the plant to a green field state.

The fact that we don't have any process in place to either store the waste long term, or reprocess it, simply adds to the uncertainties, and thus potentially the costs, of course.

Even if one is adamantly opposed to nuclear power on principle I think it would still be a good idea to formulate and implement some sort of policy in this regard. I'd favor reprocessing it, but if everyone just wants to bury it that's fine too. Leaving it just lying around seems like a less than optimal solution, but I suspect that's pretty much what we'll do.

Since there is absolutely no program to do anything with it, I'm pretty skeptical about appraisals of what it will cost. Further, in a world were the debts we have accumulated are so far beyond any ability to pay them I'm even more skeptical that there is actually anything that will be available to fund it anyway, regardless of ratepayers have paid for these last many decades.

I think skepticism is well-founded here. I believe the current fund for Kewaunee is intact and available, and will be drawn upon for the decommissioning. The question will be whether it will be enough, of course.

There was a big concern about decommissioning funds a couple years back. A lot of the collected money had been invested and with the 2008 stock market crash those funds had dropped well below projected costs.

The market is more than back now.

The "market" is a part of the tertiary economy, an abstraction becoming ever more divorced from the reality & resource based primary and secondary economies.

Right. And the economy is going to collapse on December 31, 1999.

Well, that's one less commenter I have to bother responding to.

The market did crash, in 2000, and again in 2008, the latter coming close to bringing down the entire global financial system. Only extraordinary actions by the central banks of the world averted a full scale financial catastrophe.

I, and others, would maintain the intervention only papered over fundamental flaws in the current monetary and debt systems of the world. I think Twilight makes a valid point which you have not responded to in a meaningful fashion. Which is out of character. I may not agree with what you have said in other posts, but you have made reasoned and pertinent arguments in them, at least.

Bob W appears to be at around stage 2 on the Ladder of Awareness

No, Bob W arrived at stage 5 a long time ago.

Being aware of how many problems we have does not mean that one has to assume that we will fail to solve enough of them to squeak by.

I'm afraid too many choose the easy route of depression rather than look for solutions.

For those who arrive at Stage 5 there is a real risk that depression will set in. After all, we've learned throughout our lives that our hope for tomorrow lies in our ability to solve problems today. When no amount of human cleverness appears able to solve our predicament the possibility of hope can vanish like a the light of a candle flame, to be replaced by the suffocating darkness of despair.

Nice selective quotation, since what you posted is simply a caution and not the actual point of the article at all.

Further, your attempt to equate the recognition that much of the predicament we find ourselves in has no "solution" with paralyzing depression and inaction is false. And exactly counter to what the linked article was all about - perhaps you did not read it. There are many useful things we can do, in changing ourselves, trying to reduce our impacts and trying to leave something for future generations. But none of these will save the system we have, or anything close to it. Recognizing that is not depressing, it just is.

It is clear to me from your many recent posts that you do not really recognize limits nor understand the connected nature of the crisis we face (as your above comments on the economic situation show), which is why I posted the link to that article.

It is clear to me from your many recent posts that you do not really recognize limits nor understand the connected nature of the crisis we face (as your above comments on the economic situation show), which is why I posted the link to that article.

Not only is Bob not at stage 5 he doesn't seem to be aware at all! As can be deduced from his quote below...

why would we need to reverse our growth?
Bob W

“The greatest shortcoming of the human race is our inability to understand the exponential function.”

― Albert A. Bartlett

Although a few yeast railing against the crowd will not make any difference, it is better to die trying than atrophying.

Tremendous... another broad, sweeping extrapolation about the economy based on a tiny, carefully circumscribed slice of data.

And yeah, it's crashed at least twice since then.

Twilight, Maine Yankee was decommissioned to greenfield status, on time and on budget, using nuclear industry funds that had been set aside during plant operation. AIR it cost around $300,000,000, perhaps a little less. It is curious that I so often read that greenfield decommissioning has never been done, and that we don't have a real idea of what it would cost. Indeed, no matter how much I bring it up, the experience of Maine Yankee continues to be ignored. It was Maine's only nuclear power plant, IIRC 1.3 GwE, I helped during the decommissioning.

My comments were not about decommissioning, although that is an important issue/cost. My comments were about dealing with the waste. I didn't have a lot of time to look, but it appears that Maine Yankee's waste is sitting in dry casks on site?

If that is the case, it's certainly better than sitting in pools, but it has not been dealt with by any means. That waste will remain dangerous far longer than the casks will remain intact, so I would view it as another example of kicking the costs and the consequences down the road.

Yes, the spent fuel is in dry cask storage - ME Yankee is suing the Federal Gov for breach of contract. The Fed Gov took their money to pay for long term storage, but did not take the waste as agreed. The gov continues to keep the money. A major political problem here.

Well, I have an issue with the concept of building the things and generating the waste before working out a way to deal with it safely. Too late.

Also, it wouldn't matter if they gave the money back, as that would do nothing to solve the problem. And it will be a bit more than a political problem to any creatures, including humans, who are trying to live in the vicinity of it when those casks start to fail. They will pay for the costs of our comforts.

The problem with the waste storage was not one of physical principles or even price - eg there are places that have been identified that have been shown to be stable for tens of millions of years, as well as being perfectly inaccessibble to future humans. The problem I believe is a political one.

Imagine that you have bought compact flourescent bulbs - each of which contains 5mg of mercury, which does not have a half life, and indeed if released into the environment will be converted to methyl mercury and will remain extremely harmful essentially forever. Imagine your compact fluorescent can permanently impair the mental development of several children for their entire life, in a measurable way. Imagine your bulb can poison a lake's foodchain so that all its fish are dangerously inedible. Then imagine the people who sold you on the technology, who know, as you do, that there are perfectly practical and safe ways to ensure the bulb is disposed of safely - who agreed to take the bulb at the end of its life in order to reuse the mercury - refuse to do so and indeed make it illegal for anyone to do so because of an ill political system.
Do you think this is an unfair characterization?
Imagine you have enough arsenic to kill 1000 people. Now imagine you have enough spent fuel to kill 1000 people. Which will be safer in 10 years?
Now think of natural gas - what is worse - 30 gigawatt years worth of CO2 and methane irrevocably released into the atmosphere, where it will change climate, acidify the ocean, and possibly ultimately contribute to the extinction of the human race? Or 30 gigawatt years of spent rods, the entire fuel supply burned by Maine Yankee while it was in operation, supplying power sufficient for 1.3 million homes for 25 years, located in dry cask storage in a small field in Wiscassett, unable to overheat since spending a couple years or more in cooling pools, unable to change the climate or acidify the ocean.
Note - the bogey man is not coal - its just the most carbon intensive of many sources of carbon - all of which, the way they are used today, pose a great risk of irreparable, grievous harm. I illustrate with gas because coal, gas, and nuclear are the most directly competitive forms of baseload out there insofar as supporting the industrial base that is necessary at this time to keep us all who are now alive, remaining alive, and I am tired of hearing gas characterized as an ecological savior. It is made primarily of a powerful greenhouse gas, and when burned turns into a long lived greenhouse gas. Its greenwashing is more manipulating of the masses - and the more of it we burn the more our long term chances go up in smoke. To keep most who are alive, alive for the long term - to give their children a fair chance - well - I'll stop here rather than get worked up about what is not happening.

Our approach to the disposal of nuclear waste is a clear example of "perfect is the enemy of good enough". The focus of research seems to be on building a repository that would ensure that not a single atom of waste could escape over tens of thousands of years. We could dispose of waste nuclear fuel in an abandoned hard rock mine (lots of those in Canada!) which would be magnitudes better than leaving it in pool storage or dry cask storage but we won't do that because we are focused on finding the perfect solution. My imperfect solution could theoretically result in waste leaking out over a long period of time but the RATE at which waste could leak would very small. The risk to humans would be very small in comparison to the risk that people face from radon gas leaking into their homes from rock/soil that naturally contains uranium or thorium. It's a real shame that more people don't understand the concept of relative risk.

But what we have actually done is to ensure that ALL of the waste will be eventually released into the local environment where it is located.

The idea that it's ok to leak it out slowly is absurd - do you think it goes "away" when you do that?

BTW, plutonium and uranium are heavy metals that are, like mercury, extremely toxic in a conventional sense. They just have the added bonus of radioactive decay.

Yes - but a decay that is not different in kind from what living organisms have evolved with since the beginning of life - whereas we expose ourselves daily to chemicals that have never been seen before the advent of industrialization.

Some of the long term deleterious genetic changes that are now being recognized as being passed down through generations are absolutely chilling when you consider the body has had no opportunity, apparently, to develop repair mechanisms to compensate for the damage some artificial chemical species are causing - a recent example is a paper published on the multi-generational effect due to parental exposure to tributyl tin - a nasty toxin used in bottom paint for decades and still used on military ships - the children and grandchildren of fishermen heavily exposed to this stuff tend to be soft and fat in a characteristic way - due to a genetically altered metabolism caused by an exposure that occurred long before they were conceived - when I read the article I recognized the look they were talking about as I have worked on the ocean for decades.
Twilight I do not mean to be pointlessly argumentative with my examples above - and certainly recognize there are many ways to look at a problem. I have a strong science background and have also worked in the nuclear industry for a time - I feel everyone with a concern about nuclear power would benefit from working in a plant during a refueling - with full access to all the workings - whether they were for or legitimately against nuclear power, they would have an opportunity to see first hand how well they are run in the US - some people imagine they are run like so many human undertakings - with continuous pressure to cut corners - to take shortcuts etc. In my personal experience, for what it is worth, they are not run like that. At least not here in the US. Here we have a rather remarkable system of operation and management in place that has evolved for the better over time, even though the industry has been hampered by an adverse political climate that has prevented replacement of the fleet. The designs are old - as safe as they are in general, they can be made orders of magnitude safer. (Ironically Fukushima, as I understand it, would likely have been shut down and replaced had not anti nuclear lobbying efforts been so effective.)
I think it really comes down to a proper assessment of relative risk, as noted above, and the ability to show confidence in the math, the design and engineering, and operation, where confidence is due. To me the problem is not the cost of nuclear power - as the cost is an artifact of a decades long struggle to damage the industry by tactics to delay, to increase costs and regulatory burden, to purposely make it non- competitive with hydrocarbons, to mislead and terrify the general public. The problem is 40 years of lost technological development and a dysfunctional political system that has effectively prevented the application of the one extremely reliable carbon free source of baseload power that is capable of powering the manufacturing industry of the world, wherever that industry may be, even in areas that lack water, powering that industry that is absolutely necessary to provide for supplies of goods necessary for survival of the masses - fertilizer, insulin, insulation for homes, etc., that is absolutely necessary to bridge the gap to widespread and cost effective renewable power.
Some of us lose track of the fact that yes the world is in overshoot and is vastly overpopulated - but everyone out there who is now alive deserves to continue living as much as us - and if we are to save ourselves - given a choice, it must be in a humane way - and just because we are relatively wealthy in resources, compared to the rest of the world, and have a few acres and a few PV panels up - we should not advocate the hurried dismantling of an industrial system that has many deep rooted problems, but for the moment is feeding a vast amount of people, and supplying them with the necessities of life -
But therein is the quandary - we must hurriedly dismantle the largest sources of greenhouse gases if we are to prevent the mother of all disasters -
I can only conceive of one way of doing that - that results in the least harm to those who are least able to protect themselves - and that is an aggressive "all of the above" approach to energy transition - an approach that mitigates the most harm, the most risk to humanity, and includes a large component of new design nuclear power.

IIRC ratepayers have been assessed fees throughout the lifetime of the NPP to cover at least a very significant part of the decommissioning costs.

Do the fees handle the waste issues of a TEPCO/Fukushima or Chernobyl?

No, the fees were definitely designed to pay for a normal decommissioning.

The larger issue, of a Chernobyl or Fukushima, IMO comes down to the potential lethality of radiation spread by these (or other) nuclear accidents. My initial impression was these events surely caused widespread death. I have since adjusted my assessment, based on my own review of the medical and scientific data currently available. Clearly there is tremendous controversy on this issue.

We disagree on this, obviously. I think there is probably little point in belaboring that disagreement. In summary, I feel large scale evacuations and land abandonment as a result of these two accidents was, in hindsight, unwise and actually counterproductive to the preservation of life and the maintenance of the human condition.

Clearly my perspective is open to honest and genuine disagreement. I understand this. I am, despite what I just said, willing to debate this further, but we've done this before. I doubt either will convince the other. I see no harm in allowing this to be a continuing disagreement.

In summary, I feel large scale evacuations and land abandonment as a result of these two accidents was, in hindsight, unwise and actually counterproductive to the preservation of life and the maintenance of the human condition.

And each time this idea comes up I ask the authors about how their move to these areas is coming along, as land there should be inexpensive due to the 'fools' who left.

I've yet to have the 'its safe crowd' demonstrate the safety with their own existence.

This is not a valid argument. A move, from any one location to any other location, is a substantial undertaking involving numerous considerations - financial, personal, professional, and familial, to name but a few.

The pertinent issue is whether I would be willing to travel to, spend time in, associate with individuals from, or consume food grown in, either of these areas. From my current understanding of the health risks associated with the levels of radiation currently seen in the overwhelming majority of the areas encompassed by Fukushima and Chernobyl, I would be willing to answer in the affirmative to those questions.

Now, whether I could afford to do this is an entirely different matter. If, however, someone were to provide me with the funding, well, we could definitely have a conversation. I would actually really like to visit these areas, and talk to those who remain behind, have dinner with them, and generally hang out with them. My understanding is, at least in Fukushima, there is a social stigma associated with being from the area. I would be interested in challenging that stigma.

I don't personally know anyone from either area, and I certainly would be hard pressed to find the funds to make such a trip, even assuming the three governments involved would allow it, but if you have access to funds and influence, let's talk. :)

This is not a valid argument. A move, from any one location to any other location

Really? Sez you.

I sez different.

Why EXACTLY is your magical sez better than mine?

With respect to potential lethality, given the substantial evidence of bystander effects and genomic instability caused by ionizing radiation over multiple generations, I always find it astonishing that intelligent people attempt to draw relevant conclusions from only a few years, or a few decades, of data.

That sounded harsher than I meant it to sound, and I apologize for that, but I just can't understand why our species would take this kind of risk. It just seems much simpler and prudent to try to craft some kind of steady state economy with a much smaller population. Even if we have no idea what that would look like, the downside just looks way better from a public health standpoint.

One gets used to harsh when one takes a stand in this area. Just goes with the territory. Doesn't much bother me.

To your point on lethality, bystander effects, and genomic instability across generations, intelligent people can disagree. I've read through the medical literature on DNA damage across generations of cells. These appeared to be largely induced in vitro. When the experiments attempt to reproduce these phenomena in vivo, the effects are much less noticeable, if they exist at all. Cells operating within a living entity have clearly developed elaborate, and largely effective, mechanisms for removing damaged cells, and for repairing DNA damage. Trying to find damage caused by radiation three or four generations downstream has proved very difficult when the whole animal is involved. At what point does one reasonably say it's not likely? How does one prove a negative?

But, truly, my discussion on nuclear is largely a digression. For those paying attention I clearly am just fine with the current attempts to transition to wind and solar. I fully admit I don't understand how the new systems would function from a market point of view. How does one make money at it? If one is using technologies which, when operating at their peak, essentially drive a market price of zero?

There has been discussion of this in past DBs. I'm content to just watch and learn. There's clearly some sort of disruptive change going on. Just because I can't quite grok it doesn't mean it isn't real and valid.

I keep my eye on Germany, as you can see upthread. There are some new posts this morning that I'll read through on my break, probably at lunch.

"If one is using technologies which, when operating at their peak, essentially drive a market price of zero?"

While we've all hashed over this a few times, I think it will take a good bit more experience on all sides to see what really shakes out.

It seems from my perspective that what you're looking at is not that PV or Wind Generated Electricity 'creates an intrinsic value of Zero' for it's product on the market, but that this method of generation has a physical operating cost of near zero, and it can undercut other generators with that difference, while it still bears a financing cost, as well as other levels of Labor and Maintenance.. but some of the overwheling expenses on Legacy Generators are simply missing from the Books for Solar/Wind.

The product (Electricity, that is) is still in demand and will continue to be, so after the adjustment period (whereby Solar has its economic teeth firmly through the jugular of their competitors, admittedly with the help of subsidies that make the Financing costs managable to varying degrees, exactly as they were intended to do..), Renewables will be able to and have to find the price that they need to charge for the power they can provide, and then, the competition will be between different forms of Solar, Wind and whichever can do THAT the most cheaply, or with whatever other advantages come into play.

It seems from my perspective that what you're looking at is not that PV or Wind Generated Electricity 'creates an intrinsic value of Zero'

Very true. There is definitely value in the product itself. It's the pricing that's got me puzzled. I think Weekend Peak covers some of it pretty well below. It seems to me renewables need some new sort of paradigm. A standard investment is pretty straightforward - investors/banks put money up front on an expectation of a return. But with wind/solar that return looks pretty dicey at best (other than the subsidies/credits). When they're firing on all cylinders the electricity market gets saturated, driving down the price. The older generators will ultimately lose that battle, but I can't see how the renewables actually win it - they're getting pretty much zip along with the old dogs. Everyone starves.

With some sort of storage (pumped hydro, batteries, what have you) you could potentially sell at a later time, but you're selling off peak. At peak you're making nothing, off peak you're making a reduced rate. This doesn't seem to make sense from a production point of view, but I'm sure I'm missing something. All the connections, and wiring, and transmission infrastructure, is funded by the return the old dogs were making. That stuff is all needed (and all the other stuff you mentioned too). So perhaps it just becomes a government managed utility again, with a guaranteed profit for the providers (once the old dogs are dead). But that, of course, pretty much rules out competition and a drive for efficiency. Or so I would think.

Based on what gerryst is saying upthread, the current attempts by the German political establishment have created a bit of a Frankenstein. Ulenspiegel is basically optimistic the mess will all get straightened out. Hopefully he's right, but it sure looks like a dodgy proposition at this point.

Like you said, guess we'll just have to see how things develop. Not enough data to get a good bead on it yet. But conceptually it definitely leaves me with a bit of a confused grin. ;)

I think your analysis is skewed by only considering the extreme "integration points". Zero production, and max production. At zero production revenue is zero, at max production price is low -because of the way pricing at the margins works, so revenue is low. But what about half way in between, a decent amount of power produced, but not as much as everyone would like, that should produce some decent revenue.

Then there is the fact that many producers and consumers determine it is in their interest to be able to determine their price/cost, so will sign power purchase agreements. Almost all utility scale solar has a power purchase agreement (price for the power) signed before construction starts. We can see that there is a net benefit to society, and for power users to have the juice available -and affordable, so mechanisms will be put in place to allow this to happen.

This is also true of something like oil. Most trades under long and medium term contracts, not at the instantaneous spot market price. Both consumers and producers have found this predictability advantageous.

I think your assessment of my analysis is quite on point. As I grapple with the ideas behind a transition to a renewable energy base, I'm taking my own standard approach - define the boundaries the best I can, then work my way towards the middle. You're a few steps ahead of where I'm at.

To follow on with what you (WP, jokuhl, and others) have introduced, and to ask the question that is on my mind then. I believe I grok the basic ideas behind how energy/power is bought and sold in the current marketplace. What I still don't quite have a grip on is the nature of the type of energy which renewables bring to the table. I can understand an oil, gas, coal, or even a generic electricity future. I think I get the idea behind the financing, whether it is via a hedge or a more direct investment.

What I don't get yet is how do you sell a renewable energy package to an investor or banker? Whether it is an up-front agreement prior to plant construction, or a futures offer, my perception is one has to essentially promise to deliver x amount of energy on y date. In other words, the unit has to be a known or reasonably predictable or standardized quantity, no?

If I buy a medium or long contract for oil, it's for a set amount, to be delivered on a certain date. I know what the amount will be, and I know the date. It's the price that I'm betting/hedging.

With renewables, how can one contract for a set amount on a set date? I have no idea how much electricity will be generated at a point in time with wind or solar. I can know with reasonable certainty how much energy I can generate from a barrel of oil once I possess it. I will get that energy whenever I choose to use it. I also can envision purchasing a bulk amount of electricity from a renewable provider, but it seems to me I have to pretty much take that when it's available. It just seems an inherently less attractive option, if my business requires on-demand juice.

That's about as far as I've gotten at the moment. Do these questions make sense? I haven't gotten into the more complicated potential to manage this sort of contract via some more exotic sort of derivative. I'm just trying to get the fundamentals down at the moment.

TemplarMyst wrote: "Ulenspiegel is basically optimistic the mess will all get straightened out."

Actually, my position is a little bit more nuanced. :-)

I do not believe that the problems will all get straightened out nicely, quite contrary, I expect a higher level of problems before some politicians take action and I do not see that PV production will survive in Germany, all the investments/subsidaries were a waste of money, the burning of biomass and biogas for baseload is also an expensive mistake, the biofuel was, too, IMHO. y

The main issue is that the market design is faulty when we have an high percentage of reneables; part of the problem is that the renewables, esp. PV, were much more successful than expected and no tool was in place to enable a sustainable slower growth. PV caused much higher costs at the beginnnig than anticipated (nobody expected 7 GW/y) due to too high FITs and the high FITs did not let grow solid companies in Germany. In addition, the German market for electricity is an energy market, not a power market, so the chance that the problem simply vanishes or could be corrected by the market is nill, IMHO.

On the bright side we already see that the problems are discussed in depth in academia and good think tanks (like agora-energiewende), solutions, some are quite "minimally invasive", are proposed. So there is a chance that the EEG will be modified after the federal election.

Another positive aspect is that wind power has reached a status that allow owner of wind turbines even to operate without FITs, many new projects are not applying for FITs, which have some (finacial) disadvantages. Also, the ownership structure of wind power is positive -farmer suppoted by citizens and local banks, and creates potential that is not in effective reach of FF-lobby groups.

My hope is that the additional wind power (3 GW/y) in combination with PV on SFDs and on buildings of small/medium sized industry will have enough impact: the sneaky feature of wind is that is destroys very efficiently FLHs of conventional power plants and hopefully force the utilities to search for alternative business models. As long as the reneables have feed in priority, the conventional power plants lose when they can not produce much cheaper than wind, with 14000 (600 kW)turbines that will very likely be replaced in the next years by 8-10000 3 MW turbines (+20 GW, +50 TWh), I expect real pressure. VDE studies (VDE is not very green) expect already for 2020 around 25 GW conventional that have <200 FLH/y.

Apologies Ulenspeigel. I did over-generalize your position. It was just a quick remark intended to point out you had a (subtly) more optimistic view than Gerry ;)

Thanks for the additional perspective. I'm still working through all the ins and outs of the renewable vision, as you can tell. And this DB is fading slowly into the past. I'm going to keep on mulling things over. Between yourself and Gerry you've given me quite a bit more to chew on, in particular in terms of the politics. I'm sure the general topic, by it's nature, will be an ongoing one around these parts, and more will doubtless be said :)

Clearly my thoughts are in line with Catalyzt's above, but I have appreciated your approach which genuinely seems open minded.

I think that the statement "current attempts to transition to wind and solar" begs the question of transition what to wind and solar? This is where the issue of the connectedness of the crisis we face comes in - I do not see it as a case of several distinct major problems to be solved, rather as multiple facets of a single problem. The economic problem, the climate problem, the population problem, the political problem, the oil problem - these are all parts of the fundamental issue, which is that we discovered and learned to exploit an enormous stored energy source.

We've depleted that source (standard PO issue) and now must learn to live once again on the real time energy flows from the sun. Only now there are too many of us to do that and we've done an awful lot of damage to the natural systems that once sustained us while we used that stored energy.

Given that viewpoint, I don't entertain seriously any of these ideas for maintaining the world we built with stored energy using real time flows, nor of "fixing" one symptom while ignoring the others. These concepts are fundamentally flawed.

For example, people talk about how much solar energy reaches the planet and how easily it could substitute for fossil fuels. To me, it seems obvious that the solar energy that reaches the planet is already doing something (even if we don't understand what), and diverting that flow to other uses will have an impact.

Anyway, I think wind and solar will have a big role in our future, as they will again be pretty much the only energy sources we will have. But I don't believe they will support anything like the systems we have now.

Not in any real fundamental disagreement on the interconnected nature of the problems we're facing. Personally, I think the climate issue is much worse that generally accepted (even around these parts). I wrote up a post a while back on just how bleak I thought things might be (I call it the Hail Mary post).

Hopefully things won't get that bad. If they do we're probably just toast, pretty much full stop. If they don't I'm inclined towards encouraging a move to an urban, electrified, rail-oriented civilization, with an intense emphasis on efficiency. Even there, though, there are just too many of us, I think. Only really ethical way I can think of to deal with that is to see people have fewer kids. Which does seem to happen as their affluence goes up, but the rate of decline from that just gets washed out completely by the overall rate.

Well, anyway, the wife and I decided to not have any kids. We have friends who made the same decision. Maybe that'll become more common, but dang, the numbers just don't look good at this point.

As the saying goes, though. If we don't take care of our problems, Mother will...

Had I understood what I do now years ago, I would have foregone having children. It is such a tough row to hoe for them - such a challenge to find their place and find happiness. I will let my children know that there is no pressure to have grand kids. So much for evolutionary success, but somehow, some things are more important. Had I not had them I imagine my kids would have been born somewhere - if there is any truth to Brian Greene's superstring landscape, M theory and the physical representation of and implications of the mathematical concept of infinity.
(The most difficult cosmology book I have ever read, mathematically, was Roger Penrose's Cycles of Time - the man is in his 80s and appears to have lost none of his ability whatsoever).
Sometimes a good popular physics book can take a mind off the world's problems -

Just to add some info to the general discussion:
The economics of wind/solar are fundamentally different from those of fuel based power generation.
The bulk of wind/solar costs are upfront in the form of capital expenditures for the plant and the connector to the grid.
Connection costs can be significant btw because wind/solar have to be built where the "fuel" is whereas FF based powerplants have the fuel come to them and can be built close to demand, or to connectors to demand.

Because W/S costs are so frontloaded the biggest cost tends to be financing, whether it be debt or equity. The equity part is often partially covered by people who need tax credits, and often the manufacturers of the equipment are equity tax partners in the project. On top of the equity partners is debt - usually a mix of short-term and long term with varying rate resets along the way. Banks who provide the debt capital generally will only do so if production is hedged to the extend they are exposed. And of course as a producer you have to execute the hedge with the trading desk of the bank which provided you financing even if you can hedge cheaper somewhere else, driving up your effective debt financing costs and thereby lowering the return on equity.

That leaves an option like payout for the remaining stakeholders which limits the type of investors who are comfortable with that - often private money like hedge funds, PE funds and family offices.

Another huge difference between FF generation plants and W/S is that W/S are price takers, not price makers. An FF plant can produce on demand but a W/S facility produces when it can and hopes somebody wants to buy whatever they produce.


The tax credit may be the most valuable thing produced by a wind turbine - given that the actual product - electricity - may be produced when it is not of any use given that demand may be less than what necessary baseload capacity provides, and the tax credit is for substantially more than what wholesale electricity often sells for.
A tax credit is not real in a physical sense though - it serves to transfer limited resources from one portion of the power industry to another while costing the government income. Other than perhaps PV, I am unaware of a per kwh tax credit on any other source of electrical production.

Yes - renewables and coal of all things. Thanks for the links.

I don't get the coal thing - I have no idea what coal could be getting PTC - makes no sense to me. I wonder what the history behind that is.....

edit: I asked my good friend google about PTC and coal and as it turn out coal which comes from Indian reservations, or used on Indian reservations is eligible for PTC.

Point taken r.e. in vitro vs. in vivo; and I admit to bias in that I have both a chronic illness and a structural deformity of unknown etiology. Both of my disorders were almost unknown earlier in industrial civilization, and I was in utero during a period when nuclear weapons were tested extensively.

Of course, I will never know if there is any causality behind that (very vague) correlation; there are many other possible culprits. I fear there is a lot that we will never learn because it's hard to do multigenerational longitudinal studies with human subjects, or even modestly long studies. It's not really profitable and probably never will be.

Thanks for your thoughtful and respectful reply... and ya, I realize this is a digression from your main point. I'm having a look at the German posts as well a little later today.

I certainly understand the bias, given the additional information. I hope things are as well as they can be, given the circumstances!

I try to be as thoughtful and respectful as I can. It's tough at points, of course. We all get fired up and passionate about things. Completely understandable. I think the posters on TOD are, by and large, pretty respectful, and they are certainly thoughtful, but even here we frequently devolve into shouting matches. Just the nature of the beast, I guess.

Did you get a chance to go over the German posts? As you can see there's a bit of follow on to them in this thread. Just saw a couple of new ones. Will have to wait to reply to those - back to work, at the moment ;)

Existing nuclear plants in the US are going bankrupt. Paid off nuclear plants.

One closed in Wisconsin eight days ago. A couple of weeks earlier the decision was made to not repair Crystal River reactor in Florida. The cost of repairs would make it unable to generate a profit. Oyster Point is closing in 2010 rather than pay for scheduled repairs.

We've got at least three other existing reactors in financial trouble along with the two San Onofre reactors which may stay offline due to repair costs.

Turkey doesn't suffer from the sorts of regulation difficulties you declare. An open bid for several new reactors there resulted in a low bid of $0.21/kWh.

The UK is presently offering a 20 year guaranteed price of $0.125/kWh for new nuclear. And has discussed extending that price guarantee to 30 or 40 years. The company offering to build says that they can't build without a 20 year guaranteed $0.15/kWh.

I'm sure if we removed all safety regulations and let the nuclear industry build at the lowest possible price, with taxpayers accepting the liability, we could churn out some cheap electricity. Until the puppy melted down on us....

I guess the USA will be nuclear free and ...... China?

goto China and tell them that nuclear power is dead

and coal for that matter - they aint listening


And not just China, of course. We'll just have to see how things go. We will probably abandon nuclear here in the U.S., at least for now, but it doesn't seem to be going anywhere in other parts of the world, as you say.

Bob has a point about the cost, but the economics which forced Dominion to close Kewaunee are based on the current price of natural gas, so far as I can tell. The denizens of TOD have been hotly contesting the cornucopian view of that resource consistently.

Personally I think utilities will face the piper sooner rather than later on natural gas. It will go up in price, and adjustments will have to be made. Hopefully we'll have built out enough renewable capacity to be able to provide some options when it happens, but per my note upstream about Germany I have to wonder.

Yes, the cost of electricity from natural gas and wind are causing financial problems for reactors. Especially for 'stand alone' reactors. Reactors built in clusters can spread some of their costs.

An emerging problem for nuclear is the dropping cost of solar. We're now seeing 20 year PPAs for solar at around ten cents per kWh. This is a major problem for a merchant reactor.

Ten cent (and dropping) solar pulls peak hour ceiling prices down very significantly as peaking plants get pushed out.

If a nuclear plant is losing money during off-peak hours they depend on high peak merit order pricing to generate some large gains so that their average kWh price is profitable. Dropping the peak ceiling from 35 cents to 10 cents is going to be disastrous.

We've seen how a relatively tiny amount of solar is pulling the peak hour wholesale price of electricity down to that of off-peak electricity on sunny days in Germany.

It doesn't take much to pull down the ceiling. Only enough to cover what the seldom-used gas peakers would produce on a hot sunny day. If the expensive gas peakers aren't called on no one gets the extra high rates during those hours.

Hopefully all these trends you refer to will continue as you've described. Again, last I checked the wholesale cost of electricity in Germany was down, but the retail cost is up, in many places significantly, somewhat eroding Merkel's support.

That all may be due to poorly thought out or implemented subsidies and governmental policies. In fact I suspect that to be the case. If so, adjustments could be made there.

However, the bottom line decrease in electricity produced by wind and solar in the first quarter, and the increase in brown and hard coal, as referenced above, are troubling.

Germany has had a long term electricity pricing problem. It goes back well before the move to renewables and the decision to drop nuclear.

The German utility industry is dominated by a very few very large companies who hold something like monopoly power over the price of power.

While wholesale prices have been going down those savings are not being passed on to retail customers.

If a nuclear plant is losing money during off-peak hours they depend on high peak merit order pricing to generate some large gains so that their average kWh price is profitable. Dropping the peak ceiling from 35 cents to 10 cents is going to be disastrous.

Ah, but economics adjusts. If solar PV keeps growing like crazy then the 'peak hour' rate may switch to being the night-time hours when everyone's solar systems no longer put out power. But it will still probably spell doom for nukes. What is needed is power that can be dispatched. Hydro and natural gas will be much better for that.

Germany now has a couple of mini-peak periods on sunny days. Mornings before the Sun kicks in and afternoons after the Sun retires for the day.

Late night prices will be kept low by the presence of wind on the grid.

Dispatchable generation and/or storage will wipe out those mini-peaks and likely almost level the price of electricity around the clock. Any generation that can't produce close to the cost of wind and solar is in trouble.

Ten cent (and dropping) solar pulls peak hour ceiling prices down very significantly as peaking plants get pushed out.

Bob W, interesting impacts you mention. Some impacts that one would not necessarily think of.

The traditional utility business is starting to suffer an immense shakeup. The old models are crumbling quickly.

Most of us are very surprised at little renewable energy plus the inclusion of cheap natural gas it has taken to impact things so greatly and so rapidly.

Financial institutions are starting to talk about fossil fuel companies perhaps being very poor investments. They're talking about trillions of dollars in stranded assets.

Have you considered submitting an article on recent advances in renewable energy to the Oil Drum editors? If nothing else, it would save you from having to repeat the same information over and over again. You could just post the link to your article.

And any comment on the following?

Re: No, Really: We're Going to Keep Burning Oil—and Lots of It (Uptop)

4) Costs of renewables. To counter my statement that the cost of renewable energy is not yet equivalent to that of fossil fuels, Lovins cites two examples -- or, rather, one-and-a-half examples, because even he admits that wind power is only sometimes competitively priced. But a couple of anecdotes don't answer the question I raised, which is the typical or average cost of renewables versus that of fossil fuels.

The question is difficult to answer, because the cost structure of renewables and fossil fuels are different. But the U.S. Energy Information Agency does model the "levelized costs" for new power-generating facilities (levelized costs, it says, are "a convenient summary measure of the overall competiveness of different generating technologies"). According to the most recent EIA estimate, new natural-gas facilities in 2018 will cost an average of $67.10/megawatt-hour, whereas typical wind systems will cost $86.60/MWh, a substantial difference. Solar photovoltaic systems fare still worse. They will cost $144.30/MWh, more than twice as much as natural gas.

Again, this type of comparison is difficult to make. It is not easy to decide which factors to include or leave out. But it is hard to conclude, as Lovins does, that renewables are now cheaper than oil and gas without making a raft of unusual assumptions.

I have a comment - the main problem here is our economic mindset.

The low hanging fruit of solar is solar thermal. More specifically, domestic solar water heating. When a home installs a solar water heater, it typically pays for itself in 2-7 years depending on climate. Tax rebates can accelerate this. This captured solar energy is not measured because it shows up simply as a reduction in the quantity of fossil energy used. Our economic system is unable to value things, including energy, that are not traded. So when it is said that renewable energy is not competitive, this is a fallacy, because installing a solar water heater would benefit almost every home and business in the country. Once that is done, then we can worry about the competitiveness of solar electricity. Of course, that argument is biased because fossil fuel-sourced electricity does not pay for hardly any of the externalities it produces, especially CO2 emissions.



Solar electric hot water is likely near parity with solar thermal; less complex, though the panels require a bit more space. We're heating all of our DHW with surplus PV; working much better than I ever imagined, and we use a lot of hot water. I can hear the relay cycling as I type (click on,,,, click off). In our case, it turned out to be very low-hanging fruit.

I'm afraid some of us require fairly tall ladders to reach that low-hanging fruit.

From Halifax's Solar City FAQ:

How much will participants pay for each installation?

That depends on the size of the system and system design. For materials and installation, we estimate a total cost per homeowner of approximately $6,400-$8,000 plus any financing costs. This includes currently available rebates and HST. The Solar City Program will manage the various incentives that may exist in Federal, Provincial or utility programs and ensure that any savings realized through these programs are passed on to the homeowner to reduce the cost of installation.

Source: http://www.halifax.ca/solarcity/

So that's six to eight thousand dollars after subtracting all applicable rebates, for a system that would likely satisfy half our daily needs. Our Nyle heat pump water heater ($1,100.00 installed) supplies one hundred per cent of our household requirements and consumes, on average, two kWh per day, i.e., less than what might be required to operate a circulation pump and back-up electric element.

The Nyle draws anywhere from 400 to 700-watts when in use (power demand moves in sympathy with the temperature of the water circulating at the bottom of the tank). From my perspective, a Nyle powered by a PV system would be an unbeatable combination.


Solar photovoltaic systems fare still worse. They will cost $144.30/MWh, more than twice as much as natural gas.

14.4 cents/kWh appears to assume the system costs $4/(rated watt) and lasts 20 years.

$4/W * 1000 W /(1000 W * (85% efficient inverter & wiring) * 4.5 h/day * 365.24 day/y * 20 y) = 14.3 cents/kWh

The electronics might not last 20 years, but the PV panels, mount and wiring should last longer. The EIA's cost estimate seems a bit high for 2018. $1.88/(rated watt) would break even with the estimate for natural gas. They seem to assume the balance-of-system costs will not decrease. For utility scale solar larger than 10 MW installed in 2011 the cost of installation was $2.8/W to $3.5/W according to Tracking the Price of U.S. Grid-connected PV by David Appleyard, Chief Editor, Renewable Energy World International, April 8, 2013. The LBNL study concludes, "... the lowest-priced third of the large commercial roof-mounted systems range from $3.6/W to $3.8/W." The EIA's price estimates are already out of date.

Given their historic optimistic estimates for fossil fuel production, I wonder what price estimate the EIA used for natural gas in 2018.

China, post Fukushima, cut their nuclear goals by about one-third.

They have decided to build no new inland reactors. That's probably a combination of safety and cooling water availability issues. They will build new reactors only at more remote coastal areas, away from population centers and sources of fresh water.

China has put a cap on the amount of coal they will burn starting in 2015. The cap will be 3.9 billion metric tones, the amount they burned in 2011.

At the same time China has increased their 2015 solar target from 5 GW to 31 GW. They have also greatly increased their target for wind generation with (IIRC) a goal of 200 GW by 2020.

China intends to halt their rise in CO2 prior to 2030 and begin to reverse it.

China has announced that they want to be one of the world's leaders in the fight against climate change.

Well, last I checked they still have 28 or 29 reactors either on the drawing board or under construction at this point. So it's not they're just abandoning the technology outright.

I commend their goals and aspirations, and wish them well, in their drive towards solar, wind, and other renewables. Damming up more rivers might not be the best solution, but I think they're looking at that option too.

So far their track record on pollution is pretty abysmal. Let's hope they can turn that around soon. It would benefit us all, I think.

Oyster Creek is being decommissioned in 2019 due to man-made economic reasons. It is licensed to operate until 2029, but environmentalists have succeeded in passing a requirement to reduce the temperature of the cooling water put back into Oyster Creek. This would require the installation of cooling towers at considerable cost in order to continue operation for another 16 years. This phony environmental issue is the main reason that the operator is choosing to decommission the plant early. On the other hand, by 2019, it will have been in operation for 50 years, which is beyond its original design life. Further, it is a GE BWR very similar to Fukushima, so it is probably good to retire it.

The arguments about disposing of nuclear waste are similarly bogus -- the primary difficulty in disposing of nuclear waste is the political inability to decide on the location of a national repository, rather than any actual technical difficulty.

Increasing the water temperature in a stream is hardly a phony issue. If the increase is significant it will cause damage to the stream ecology.

At some point we have to draw the line. We have to decide to quit damaging more and more of what is left of our intact environment and start reversing things.

The problem of disposing with nuclear waste is that we haven't found anywhere that would safely secure that waste for it's hazardous lifetime. We thought Yucca Mountain was a solution but then the geology became questionable.

And even if we rammed our current nuclear waste down the throats of those who live around Yucca Mountain we would need more Yucca Mountains if we continue to use nuclear energy.

Oyster Creek's reactor has been operating for 44 years already, so continuing to discharge warm water will not disturb the stream,s ecology more that it has already. Oyster Creek is an insignificant U-shaped artificially dredged arm off of Barnegat Bay. Fish are sometimes killed when the plant shuts down suddenly and the water temperature drops, but the impact on Barnegat Bay is minute. Even in a small state like NJ, the geography affected is tiny relative to the state.

Long lived highly radioactive waste can be buried deeply in mine shafts or purpose dug facilities. Either future civilizations will have the ability to safeguard them, or, lacking in energy sources, they will have insufficient energy available to dig them up and injure themselves.

In addition, we haven't made a serious attempt at reprocessing this waste in recent times. In lieu of developing new technologies which might, or might not, be able to do this, it probably makes the most sense to bury it in deep repositories, as suggested.

If Yucca Mountain is not the right place, let's find one that is, but I haven't read anything which has convinced me Yucca is an inappropriate geological location. IIRC we have a potential repository in Arizona or New Mexico which might work too. And there are other potential sites as well.

"I haven't read anything which has convinced me Yucca is an inappropriate geological location. "

Today it is an appropriate location. Tomorrow (as in 20,000 years from now) is a harder call. It's located in Walker Lane, which is seismically active. If a fault shifts the water table could rise, submerging the waste and letting it disperse. If an ice age returns, that valley could fill up and the same problem occurs. The arguing is over how likely those events are.

No location is perfect. Which risks are acceptable is a great source of heated debate.

Indeed. A debate which, I'm sure, will go on for some time. Nothing wrong with that, I suppose. I'm making an assumption that burying it is preferable to just storing it above ground, like we are now, but I'm not sure that's a solid assumption either.

Easterners are the primary producers of this toxic waste in the U.S. Bury it under your own land. You can buy solar power from us.

I live in Illinois. I believe we have more reactors than any other state, IIRC. I live about 20 miles from the decommission(ing) Zion NPP. I believe there is waste stored there to this day, though I know they are well along in the decommissioning process.

I'm hoping we actually develop our own solar, honestly. Not that I mind doing business with other folks. It's just I'd like to see us do a bit more locally. ;)

I just can't imagine where in the world you could put something and keep it secure for a quarter of a million years. That's 2500 centuries; or about 10,000 generations. That's longer than Homo Sap has been on this planet; and about 25 times as long as our post neolithic civilization. That's a long time.

"high nuclear costs are driven by regulations and the consequences of the politics of fear"

Regulations deal with making plants safer.

Which safety features do you think we should take off our nuclear plants in order to make them cheaper?

It is not a question of removing safety features from nuclear plants. It is a question of standardization and consistent regulation. Determine the best practices known at the time, define the standard and specification, and build the plant. Changing your mind in mid construction will likely not improve the safety of the facility, but it will substantially increase it's cost.

Regulations were streamlined a few years ago.

There are standardized designs.

The cost of nuclear reactors is the cost of construction and the cost of financing for all those years prior to the plant initiating a cash flow.

Both new nuclear and new coal produce very expensive electricity simply because they have great big "mortgages" to pay off.

I don't think pro-nuclear people understand how cheap wind generation has become and how cheap solar generation is getting. And they don't seem to understand that we can run a perfectly fine grid with most wind and solar inputs.


“Let me state unequivocably that I’ve never met a nuclear plant I didn’t like,” said John Rowe, who retired 17 days ago as chairman and CEO of Exelon Corporation, which operates 22 nuclear power plants, more than any other utility in the United States.

“Having said that, let me also state unequivocably that new ones don’t make any sense right now."

“I’m the nuclear guy,” Rowe said. “And you won’t get better results (than) with nuclear. It just isn’t economic, and it’s not economic within a foreseeable time frame.”



"On July 30th (2012), the Financial Times published an interview with GE’s CEO Jeffrey Immelt on the future of various energy alternatives.

For decades, GE has played a significant role in many sectors of the energy business. It makes huge electric generators for electric utilities. It sells wind turbines. It sells solar installations and it recently added oil patch activities to its roster of companies.

It has also been a leading supplier of nuclear power generation equipment. So for one of the leaders in that last space to suggest that nuclear isn’t a competitive solution now or going forward is a significant statement.

Mr. Immelt expressed his view that it is almost impossible on a cost basis to justify investing in nuclear power plants for the future. ”So I think some combination of gas, and either wind or solar … that’s where we see most countries around the world going.”"


Did those prices include elimination of the Price-Anderson Nuclear Industries Indemnity Act, a subsidy put on the backs of victims of nuclear power and taxpayers?

Those clever bean-counters in the free-enterprise insurance industry were unfortunately ignored back when the nuclear industry was being born in the 1950s, and we wound up with Price Anderson and the fine print nuclear exclusion in every homeowner policy written since then.
Then Wall Street took a look in the 1970s and decided it was a risky investment too -- even before Three Mile Island turned a billion-dollar asset in a brand new reactor into a multi-billion liability in a matter of hours. (Something Tokyo Electric Power Co. has also learned more recently.)
The insurance guys properly assessed Black Swan events a long time ago in regard to commercial nuclear power, but they were ignored.
I am disturbingly amused by today's conservatives who continue to support nuclear, decrying Solyndra while backing five times the taxpayer-backed loan guarantees to build just two new reactors down South, where peak demand for air conditioning can be better met by wide adoption of photovoltaics, a technology where costs are rapidly declining.

I'm definitely in the pro-nuclear camp, however I don't believe we have enough experience with fast breeder or Thorium reactors to start building commercial power reactors. There needs to be enough experience with research reactors to be able to confidently design a reactor that is going to be goof-proof and reliable without having a bunch of top reactor experts watching over it. Energy companies want most of the responsibility for operating a reactor to go to the nuclear plant operators and they will have relatively few reactor experts in-house. As most Western countries have significantly downsized reactor research we are not at all on track to deploy new reactor types. China will do it but we will not.

During the short period of time that I worked on fast reactors we were classifying "incidents" in kilotons of TNT. Unless they have gotten more clever about that in the last 30 years I'm not going to be a fan of fast reactors.

It sounds like the fast reactor designs you worked on had a positive and large void coefficient of reactivity. I can't imagine such a reactor would ever be built for power production - they are intrinsically dangerous and completely unnecessary.
I have never heard that that sort of design feature is intrinsic for fast reactors - surely the design work has advanced beyond that point?
A lot of designs are just a starting point - what is possible with the current state of knowledge, and really only serve to inform what direction the research must take to produce a feasible design.

This may be refering to the sodium-water reaction in the event of boiler tube failure. This could potentially be explosive (kg's not tonnes of TNT). It was for this reason that Sodium FBRs included an intermediate heat exchanger and very robust boilers on the steam generating side. This solved the problem, but ruined the economics.

Modern solutions for the sodium FBR centre around supercritical CO2 power cycles on the secondary side, which is far more compact and doesn't suffer the same violent reaction in the event of tube failure. If Lead, helium or CO2 are used as the primary coolant, all the problems associated with sodium are avoided, neutron spectrum is harder (better breeding or actinide burnup) and with a gas, a direct cycle can be used, substantially reducing cost.

The economics of compact gas cooled fast reactors may ultimately be superior to light water reactors.

Thanks -
the Russians have been using lead cooled reactors - IIRC in a sub -

Not that I'm too huge of a fan of geoengineering our way "out" of climate change, but would it make sense to start filling up depleted non-oceanic basins to reduce sea levels? Not that it would make much of a dent but it might start to make sense to refill for example the Salton sea and and the Aral sea at a certain point.

Any thoughts?

Other possibilities are canals from the Mediterranean to the Qattara Depression or to the Red Sea.

There used to be some interest in a Qattara hydroelectric mega project IIRC, it was supposed to produce power, change the local climate for the better, help green the desert, etc - but the idea died along with its proponent I think. How would a canal from the Med to the Red help? Increased evaporation? I wonder if evaporation reduces the level of the Red Sea much.

Sorry, I meant from the Med to the Dead Sea. There is already a Med to Red Sea canal -- the Suez. I think there has also been a Red Sea to Dead Sea proposal, which would be longer but the intervening terrain is flatter.

As an Israeli, I can comment!

No canals. Both the Dead-Red and the Dead-Med proposals involve going over important aquifers, and the risk of the canal leaking into it is intolerable. Pipelines, however, with their inherent fail safes, are an option.

A Med-Dead pipe would involve the Gaza Strip, and so is a nonstarter. But Jordan and Israel have agreed to build a Dead-Red pipeline.

The pipeline would provide some energy profit from the 400 meter drop into the Dead Sea. That energy would be enough to get some of the water desalinated for towns along the Dead Sea coast line. But more importantly, the sea water coming in would cover the Dead Sea's salt flats, preventing the wind from kicking the salt up and around, and creating a local microclimate where evaporation from the Dead Sea comes down as dew in the morning and slowly rebuilds local aquifers and builds up a slightly better ecosystem. And it increases the area's net albedo, moderating temperatures.

It will happen. It must happen. Israel, Syria, and Jordan need the Jordan River's water too much not to build this pipeline.

Increases the net albedo? I woulda thunk those salt flats that you don't want exposed have about the highest albedo around.

Thanks for sharing, I'd never heard of this proposal. Couple of concerns immediately come to mind though. By draining salty Med water into the closed Dead Sea won't it (the Dead Sea) become even more hypersaline...any potential problems with this? Also, in an arid climate I'm skeptical that the morning dew will have any effect on the recharge of local aquifers.



The water is always at the saturation point for common table salt, so adding sea water won't add to it, although it might change the water's composition enough to make salt harvesting less profitable (both sides of the Sea have operations to harvest magnesium salts and bromides from the salt, and common table salt is not a profit center.)

Evaporation and dew are incredibly important to microclimate areas like this. This is why Jericho and Ein Gedi stayed populated all this time despite being right by the Dead Sea.

Death Valley. Build reservoirs above it in the mountains and use them for pumped storage. Install giant floating/tracking PV barges to reduce evaporation.

Ahhh but would the evaporation cause rain upon the plains of the US of A or just wash out on the east coast?

(or would the extra water vapor help to force global warming?)

I still like the idea of putting PV on big rafts. A simple cabling system could keep the panels aligned with the sun, the panels would stay cooler, and if the water was clean and fresh, simple pumps could wash the panels down periodically. You'd have to figure a way to keep the seagulls off ;-)

Interesting idea for vertical axis mounts. I had been thinking of merry-go-round like things, but this should be much cheaper.

A thirty foot diameter above ground pool, some plastic dock floats, some racking, a small 12 vdc winch... You could float a lot of watts of PV. A single $99 controller would keep it all aligned. Add a ballasting system (pump and flood) to adjust elevation some. Use PVC pipe for a pivot (6" sch. 40 should do). Hide it all from the neighbors with bushes...

Aha- An idea at last! Good to hear an idea for once instead of all those fuzzy opinions drifting around in an immense whispy cloud of uncertainty. Let's go on with the Ghungraft concept, so important to the boredom level of this reader.

Pumped Hydro- the storage we know works. Make lotsa pumped hydro ponds all over the place, Float huge Ghungrafts on all of them, not just PV, but real choice vacation houses, where you can fish, watch aquatic life flourish, and the adjacent scenery go up and down on a sorta slow heartbeat of the civilization as the wind blows and the sun also rises. Thinka the money to be made.

PS. I tried to think of a Ghungraft in my pond. Simply couldn't make it work unless I mowed down all those trees I planted 50 yrs ago and then bulldozed the southern hills. Too strenuous for an old guy-ah well, will try to think of something else.

Combine the washing with the seagull prevention.


There are plans in both the US (California) and India to install PV panels over water canals. Double use of real estate and shading would reduce water evaporation.

Transmission costs would have to be figured in....

That brings back to mind the notion I've had around Electric Rail, where the Right of Way for the rail corridor coincides with that of an HVDC system, allowing for easy maintenance access to this transmission system, and along with it, use that immense amount of long and narrow land area to consequently install long and narrow PV Arrays, feeding both the HVDC grid as well as the Electric Rail Service, and again, having that railway exposure to great amounts of the PV equipment would help facilitate both needed repair work, but also keep the valuable materials in these systems in places where they would be relatively better observed and protected from theft or vandalism. In addition, the proximity of PV along multiple areas of the Rails means there are distributed power sources to be available for remote work and to moderate transmission loading over these great distances. It should be possible to allow isolated reaches of rail to remain energized in an emergency where other parts of that system have been knocked offline. (of course Wind and other Generators would continue to feed into this setup, too, not just solar..)

As with one of Amory Lovin's themes, this makes multiple uses of all three systems, gaining economic advantages of tying them into a common structure and geography together.

HOW those PV might be employed is yet another opportunity, since this Long-term Weatherproof material could provide Roofing for Railway Buildings, for the tracks themselves as 'Covered Bridges' in snow country, and Shaded work and Passenger areas in hot 'Sun Country'.

Death Valley. Build reservoirs above it in the mountains and use them for pumped storage.

Ah yes but this is one of the driest areas on Earth with very little rain. Why would you bother pumping water uphill in a dry area when you can do it in wet area. If it's really wet, like Hawaii for example, you wouldn't even have to pump any water uphill, just collect rainwater like most dams do.

Dax (above): "...geoengineering our way "out" of climate change, but would it make sense to start filling up depleted non-oceanic basins to reduce sea levels? Not that it would make much of a dent but it might start to make sense to refill for example the Salton sea and and the Aral sea at a certain point..."

I've suggested this before whenever someone talks about large geoengineering projects, usually tongue in cheek. Death Valley is well below sea level, only a couple of hundred miles from the coast, and from space looks like a damn fine candidate for large scale pumped storage, if only it was full of water. I know,, it's home to a few unique species, but it wouldn't be the first time ;-/

How will this help with ocean acidification, drought, deforestation, storms and the inability to grow food. What negative impacts will such a project have? How much energy will it take, and will doing it contribute even more CO2 to the atmosphere?

You cannot quit, and you cannot win.

You cannot quit, and you cannot win.

If you run, the beast will catch you! If you stop, the beast will eat you!

Therefore, you must dance!

Well at least that does annoy the beast and tend to confuse it for awhile...perhaps giving a few of us a chance to exit stage left >;-)

There is no exit. Though you know the beast is coming, can you look and see the beauty of nature, bring joy and love to another, create something of value, before it arrives? The beast was always going to get each of us anyway. An for most of the planet, we are the beast.

The biggest such proposal, dating back a century involves the Qattara depression:
Qattara Depression Project

The large size of the Qattara Depression and the fact that it falls to a depth of 133 m below mean sea level has led to several proposals to create a massive hydroelectric project in northern Egypt rivalling the Aswan High Dam. This project is known as the Qattara Depression Project. Plans to use the Qattara Depression for the generation of electricity date back to 1912

It has also been proposed to dam the southern opening to the red sea, and once evaporation has lowered the sea level enough generate hydro power (IIRC something like 50GW) maintaining the level against evaporation.

We seem to be talking about a very large weight of water in any of these proposals. Has anyone considered what effect that might have on the geology of the land? Would it cause earthquakes in California and Arizona, for instance, to fill Death Valley with water? At 8 lb per gallon for pure water, how many gallons per acre foot, and how many acre feet are we talking about here?

We are not, after all, just making lakes, ala the TVA. We would be creating seas.


Do some math.

Calculate the volume of these areas. Rough estimates will be enough.

Take a look at how high water can get before it starts to leak out. Multiply the area at that level by about half the distance to the bottom.

Calculate the volume needed to be removed from the world's oceans in order to drop levels one foot. The area of the World Ocean is 361 million square kilometres/139 million square miles.

The Aral Sea has lost 80% of its original volume, which according to Wiki currently stands at 6 cubic miles. So bringing it up to its original volume would add 24 cubic miles of water, or 126,720 mile^2-feet of water. Or just over 1.09 inches based on 139 million square miles of ocean.

Never said this was any kind of solution to the issue, but even just one less inch of sea level rise could mean a lot of damage cumulatively in coastal areas.

The Aral Sea has lost 80% of its original volume...

Per Wiki:
Formerly one of the four largest lakes in the world with an area of 68,000 square kilometres (26,300 sq mi), the Aral Sea has been steadily shrinking since the 1960s after the rivers that fed it were diverted by Soviet irrigation projects.

Viewing it now, it is hard to believe the Aral Sea was once the world's 4th largest lake.

Were they like that to begin with? Like wetlands? Otherwise, I'd suggest leaving it alone and start living in harmony with nature and help it get back on its feet. That's likely to be the most energy-efficient.
Go permaculture maybe, and consider even forming a (tree, etc.-)planting/re-naturalization/guerrilla gardening/etc. group that goes around turning things around.

There's a documentary on the Salton Sea by the way. Have you seen it? Pretty nuts, and reminds me of another docu, Darwin's Nightmare. Darwinian should do a docu called Darwinian's Nightmares and crowd-source/co-produce it via TOD. Count me in. I can do some concept and graphics; Leanan/Modzilla can direct; Jokuhl, balanced critique. ;)

Bob W: Are/Were you from Doomstead Diner? How about catering?

ROI of Corporate Lobbying

Big Fossil
Lobbies for


Interesting article in today's Financial times "Why the World Faces Climate Chaos" by Martin Wolf I don't know how to get it on the web, but I think he distinctly shows why nothing has been and probably will be done.

Finding it is really easy! In my case I really don't want to sign up to one more site that wants my information or my money... furthermore by now I'm pretty sure I know what he knows.

10 Scenes From The Economic Collapse That Is Sweeping Across The Planet

Hey folks, read this article. It will blow you away.
#1 27 Percent Unemployment/60 Percent Youth Unemployment In Greece
#6 The Collapse Of Chinese Power Consumption
#7 Horrible Economic Data Coming Out Of The Second Largest Economy On The Planet (China)
#10 The Tremendous Suffering Of Hundreds Of Millions Of Desperately Poor People That We Never Hear About

The collapse started, in my opinion, in 2008 and has only gotten worse. I don't think it will be a stair-step collapse, it will be a slow-slide collapse.

Ron P.

Economically I think we can fairly easily see a prolonged period of stagnation or decline. I don't see the U.S pulling much beyond the 2-3% they're managing at the moment, the E.U is not even going to near that. 2-3% is not sufficient growth to maintain the U.S system and will see a large proportion of the population disenfranchised. Europe is in worse shape with even it's strongest economies stagnant. This period is baking in problems for the future that will make a return to serious growth even harder.

The exceptions in the developed world are Australia and Canada (there may be others). Both are taking advantage of their mineral wealth to grow but without solid consumer markets in the E.U and U.S creating demand for factory output they are doomed along with the rest in the long run.

The hope is that the developing world will take up the slack in terms of consumers but I think that is highly improbable. All the BRICS nations have posted lower GDP growth than in previous years showing obvious signs of being affected by the global crisis - other developing nations are surely suffering a similar affliction. If things do not pick up in the U.S and E.U significantly it is likely the trend to lower growth figures will continue.

But the Dow hit 15,000 today. Doesn't that mean everythings gonna be ok? (..or does it mean that slo-motion train wrecks might just be REALLY good for GDP?)

But the Dow hit 15,000 today. Doesn't that mean everythings gonna be ok? (..or does it mean that slo-motion train wrecks might just be REALLY good for GDP?)

Jokuhl, I think this may answer your question:

The Wall Street Journal’s Fed expert Jon Hilsenrath said central bank officials have mapped out a strategy for winding down the monthly $85 billion bond-buying program, although the timing is still being debated. This stirred fears that a reduction in central bank liquidity will hit equity markets globally.

Look at that last sentence: stirred fears w/out QE would hit world stock markets. Ah, yeah, without 85 billion a month or even close to that filtering down into the markets, sure that might make for more buys than sells, but once the QE source is gone, down she will go in a heap, so very good reason for investors to be fearful.

To your point Ron, http://www.washingtonpost.com/business/recession-in-eurozone-extends-int...

Recession in eurozone is now the currency bloc’s longest, surpassing even 2008-2009 crisis

The European Union statistics office said Wednesday that nine of the 17 EU countries that use the euro are in recession, with France a notable addition to the list. Overall, the eurozone’s economy contracted for the 6th straight quarter, shrinking by 0.2 percent in the January-March period from the previous three months.

With a population of more than half a billion people, the EU is the world’s largest export market. If it remains stuck in reverse, companies in the U.S. and Asia will be hit.

The annualized contraction in the eurozone, based on this quarter’s figures, of around 0.9 percent contrasts with the equivalent expansion of the U.S. of 2.5 percent. Meanwhile, China, the world’s No. 2 economy, is growing around 8 percent a year.

“The Achilles heel for the German economy right now is the weak demand for investment goods” such as industrial equipment and factory machinery, (although Germany has not gone into recession yet).

Guillaume Cairou, CEO of the consultancy Didaxis and president of France’s Club of Entrepreneurs, said the news that the country is in recession merely confirms the difficulties its businesses have long experienced.“The situation of companies on the ground is grave and more serious today than in 2008,” Cairou said in a written statement.

Alright, so maybe you are wondering if the EU is doing the same as the Fed, i.e. QE. And the answer is: Yes, see below.


ECB to launch second wave of euro 'quantitative easing'

For second time in two months European Central Bank is to flood markets, with 1% three-year loans that may amount to €1tn

The European Central Bank will on Wednesday step up its campaign to stabilise the euro, forestall a new credit crunch and shore up troubled banks by flooding the markets with hundreds of billions' worth of easy money for the second time in two months.

Although the policy "may mitigate the [eurozone] periphery's funding needs for some time to come, it is clear that several officials are concerned about the impact of liquidity provision upon risk-taking activity," said analyst Neil Mellor of Bank of New York Mellon. "There is a genuine fear that unprecedented lending could even generate 'zombie' banks … The greatest risk is that in swelling its balance sheet, the ECB has become increasingly hostage to the fortunes of the eurozone economy and loans that are of unknown discounted value."

What about another developed country, like say Japan?


Japan aims to jump-start economy with $1.4tn of quantitative easing

And where is US QE right now?

Fed looks to QE exit, investors react

So what exactly was the news? The Wall Street Journal’s Fed expert Jon Hilsenrath said central bank officials have mapped out a strategy for winding down the monthly $85 billion bond-buying program, although the timing is still being debated. This stirred fears that a reduction in central bank liquidity will hit equity markets globally.

Look at that last sentence: stirred fears w/out QE would hit world stock markets. So I got curious about China, and whether or not they are using QE also. Here’s an article from March of this year:


China: Quantitative Easing Policies Like “Quenching Thirst with Poison”

Beijing, March 13, 2013 – China won’t engage in any “currency wars” by depreciating the value of the yuan through monetary easing policies to shore up the economy, as some major economies have done, said a former deputy central bank governor on Tuesday.

The easing policies conducted by some major economies, such as Japan, are similar to “quenching thirst with poison”, she said at a press conference.

“Printing more money and devaluating the currency could be useful to promote economic growth over a certain period. But if a country doesn’t have a sound economic structure or strong growth momentum, it would be poisonous to depend on a looser monetary stance,” Wu said.

That last line says it all; if a country doesn’t have a sound economic structure or strong growth momentum... Well, folks that’s the problem with high priced energy, it stifles momentum rendering economic structure weaker. In China their primary energy source is coal, so the price of oil is not hitting their emerging economy like it is the developed one’s like the EU, Japan and US.

So is this the final gasp of empire in which oil price in developed country’s above 100 dollars spells such a lack of growth, the only alternative is taking on massive debt and QE? I’m beginning to wonder if we are closer to the edge of a cliff than a real recovery.


Japan's policy to devalue it's currency has obviously increased costs of imports - LNG was up 26% and coal up 13% between November and February.

Regarding China - they don't need to devalue their currency through QE as they set the exchange rate keeping it artificially low. China is not printing money but they are ensuring a healthy supply of government money gets thrown around to keep things on the the up and up. They have been reigning in that money over the last couple of years to cool down their growth but it's still substantial.

World crude oil production has increased a little bit over the last several years. Economies will be stressed more when it decreases gradually and then a lot when it decreases faster in several decades. Imagine a big Hubbert curve with a plateau that persists for 20 years.

I don't think it will be a stair-step collapse, it will be a slow-slide [snowball] collapse.


The so called shale oil/gas revolution is Ponzi Scheme hype.

The entire US shale industry has thus far invested over ONE TRILLION DOLLARS of capital to drill shale wells. To this day, the production rate reaches only roughly 2M barrels of oil and 27 BCF shale gas per day, or a combined market value of $90*2M + $4 * 27M = $288M per day, or $105B per year. Mean while the whole industry continue to spend $135B per year just to drill wells to replace rapidly declining production from shale wells.

This is an un-sustainable Ponzi Scheme, supported thus far by lies of the industry in exagerating ultimate recovery and profitability.

Search for what Arthur Berman and Bill Powers have to say about the shale bubble.

Mark, What's the scoop, did you get kicked off of Seeking Alpha for being too anti-cornucopian?

You are welcome here in any case.

Mark, glad to see you are posting here. Hope you stay around for a while. I followed your articles on "Seeking Alpha" and still read your "Stock Psychology" blog. You are spot on about the Bakken.
Search: Mark Anthony Stock Psychology

Ron P.

Canada says it may take EU to WTO over oil sands dispute

The E.U. attempting to control imports of Canadian Oil Sands products for being 'highly polluting'. What effect would that have on the price of fuel in the E.U.? Does anyone know if Canada is a significant supplier to the E.U.?

I am very certain that Canada is not a significant supplier of fuels (liquid or otherwise) to Europe.

Canada is being foolish. Just sell it to U.S. China, Japan or India who do not care about pollution.

New from Congressional Research Service [CRS] ...

U.S.-Chinese Motor Vehicle Trade: Overview and Issues

Because of the industry’s importance to the U.S. economy, the rapid rise of China’s auto assembly and auto parts industries in recent years has raised concerns among some Members of Congress.

In 2009, China overtook the United States to become both the world’s largest producer of and market for motor vehicles. In 2012, assemblers in China sold 19 million vehicles, and forecasts project more than 30 million vehicles will be sold there in 2020. Every year since 2010, General Motors has sold more cars in China (through exports and its joint ventures there) than in the United States.

The Chinese government has made the development of its auto and auto parts industries, including “new energy vehicles,” a major economic priority, and has implemented a number of industrial policies to promote and protect Chinese auto firms with the long-term goal of making them globally competitive.

U.S. officials have raised a number of concerns over Chinese investment restrictions related to new energy vehicles (NEVs), such as hybrid and battery electric vehicles. A Chinese government list of 400 cars eligible for the energy-saving vehicles program is reportedly restricted to vehicles produced in China, and a 2011 sales tax exemption to boost sales of such cars is similarly limited. … U.S. industry representatives contended that such policies would force U.S. companies to transfer their intellectual property in order to participate in China’s NEV market.

In 2010, China placed an embargo on the export of rare earths and then added export duties. These restraints affected especially Toyota, which, at the time, produced more hybrid vehicles (such as the Prius) than any other automaker. It has been asserted that China’s rare earth export policies are leading some rare earth users, including some automakers, to move operations to China, and subsequently to transfer technology to Chinese firms.

China’s demand for motor vehicles is likely to continue growing rapidly because its population of 1.3 billion is just beginning to have the financial resources to purchase automobiles.

It appears clear from China’s Five-Year Plans that building up the size and quality of the auto assembly and auto parts industries is a very high national priority. Moreover, China’s long-term plan—its feasibility as yet untested—is to leapfrog over gasoline-powered internal combustion engine technology into new energy vehicles, such as electric and fuel-cell-powered cars.

also Regulation of Fertilizers: Ammonium Nitrate and Anhydrous Ammonia

New from GAO ...

Climate Change: Future Federal Adaptation Efforts Could Better Support Local Infrastructure Decision Makers

The federal government invests billions of dollars annually in infrastructure, such as roads and bridges, facing increasing risks from climate change. Adaptation--defined as adjustments to natural or human systems in response to actual or expected climate change-- can help manage these risks by making infrastructure more resilient.

According to the National Research Council (NRC) and others, infrastructure such as roads and bridges, wastewater systems, and National Aeronautics and Space Administration (NASA) centers are vulnerable to changes in the climate. Changes in precipitation and sea levels, as well as increased intensity and frequency of extreme events, are projected by NRC and others to impact infrastructure in a variety of ways. When the climate changes, infrastructure-- typically designed to operate within past climate conditions--may not operate as well or for as long as planned, leading to economic, environmental, and social impacts.

For example, the National Oceanic and Atmospheric Administration estimates that, within 15 years, segments of Louisiana State Highway 1-- providing the only road access to a port servicing 18 percent of the nation's oil supply--will be inundated by tides an average of 30 times annually due to relative sea level rise. Flooding of this road effectively closes the port.

Decision makers have not systematically considered climate change in infrastructure planning for various reasons, according to representatives of professional associations and agency officials who work with these decision makers. Report

and Oil and Gas Management: Continued Attention to Interior's Revenue Collection and Human Capital Challenges Is Needed

Interior's collection of oil and gas revenues. In September 2008, GAO reported that Interior collected lower levels of revenues for oil and gas production in the deep water of the U.S. Gulf of Mexico than all but 11 of 104 oil and gas resource owners in other countries and some states. In July 2009, GAO reported on problems with Interior's efforts to collect data on oil and gas produced on federal lands, including missing and erroneous data. In March 2010, GAO reported that Interior was not taking needed steps to ensure that oil and gas produced from federal lands was accurately measured and was not consistently meeting its goals for oil and gas production verification inspections.

Interior's oil and gas management on GAO's high risk list. In February 2011, GAO added Interior's management of federal oil and gas resources to its list of federal programs and operations at high risk for waste, fraud, abuse, and mismanagement or needing broad-based transformation. GAO added this high risk area because Interior (1) did not have reasonable assurance that it was collecting its share of revenues; (2) continued to experience problems hiring, training, and retaining sufficient staff to provide oversight and management of oil and gas operations; and (3) was engaged in a broad agency reorganization that could adversely impact its ability to effectively manage oil and gas during the crisis following the Deepwater Horizon incident.

Feeding the World Population Sustainably and Efficiently With Ecologically Intensive Agriculture

Conventional methods of agriculture and cattle-breeding cannot feed the world population. They are not sustainable, pollute the environment, are responsible for reducing biodiversity and have a damaging effect on human health. In order to guarantee food security for nine billion people in 2050, there is a pressing need to intensify agricultural production.

... Ecological intensification of agricultural production should take place in particular in the South, in developing countries, where small farmers are still responsible for half the world's food production. The highly developed North, in fact, needs to 'extensify' its agriculture and animal husbandry. This would involve less exploitation of limited resources such as fossil fuels, without affecting food security, he says.

Professor Tittonell refers to the generally accepted calculation that between now and 2050 the world-wide demand for food will increase by 70%. He is firmly convinced that conventional agricultural production will be unable to meet the needs created by that increase, one reason being that the growth in use of nitrogen-containing fertilisers is gradually reaching its limits. However, Tittonell regards the exploitation of fossil energy as even more discouraging.

His calculations demonstrate that feeding nine billion people solely from conventional agricultural production will cause the world's oil reserves to be totally exhausted within about twelve years.

Saudi Arabia looks to NREL for solar monitoring expertise

Saudi Arabia is planning to move aggressively into renewable energy, with plans to install more solar and wind power in the next 20 years than the rest of the world has installed to date. The Kingdom of Saudi Arabia is working with the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) for training and expertise in measuring its solar resource.

It's a crucial part of Saudi Arabia's plan to spend billions of dollars over the next two decades to install more than 50 gigawatts of renewable power in the country and meet at least 30% of its electricity needs with solar energy by 2032. That's more gigawatts of renewable energy than were installed in the entire world as of 2012.

The overarching goal is to double electricity capacity by 2030 and have half of that energy originate from renewable sources such as wind, solar, and geothermal. The kingdom is expected to write a number of large contracts in 2013 alone.

The Saudis also plan to make a big leap into concentrating solar power (CSP), the cousin of solar PV technology. In fact, 25 of the 41 gigawatts of planned solar energy will come from CSP.

Why Saudi Arabia? Why does a nation that has huge oil reserves want to become a leader in renewable energy?

"Saudi Arabia is determined to diversify its energy sources and reduce its dependence on hydrocarbons," said Wail Bamhair, the project manager for the Saudi team that visited NREL. "Renewable energy isn't just an option, but absolutely necessary. We have the means to build renewable energy, and we need to do it."

"Saudi Arabia is determined to diversify its energy sources and reduce its dependence on hydrocarbons," said Wail Bamhair, the project manager for the Saudi team that visited NREL. "Renewable energy isn't just an option, but absolutely necessary. We have the means to build renewable energy, and we need to do it."

Oh, you mean you finally woke up to the fact that your reserves are depleting at faster and faster rates, your internal consumption is growing by leaps and bounds, and maybe you even grok that because of climate change you won't be able to keep emitting CO2 at current rates for very long! Am I right?

Well who ever woulda thunk we'd live to hear such statements, from of all people the Saudis.

How do you say 'schadenfreude' in Arabic?

الفرح بحزن الآخر, المتعة المستخلصة من رؤية يعانون أو يعيشون بمشكلة

Yet another piece of data that Saudi Arabia is struggling to keep exports up because of domestic consumption is eating away at production.

And one wonders how much of that increase in domestic consumption is from increasing energy needed to produce the oil. Would make sense for them to substitute renewable energy for production as the EROEI of oil goes down.

Similarly, North Dakota needs to get off diesel and switch to electric drilling rigs and trucks.

New report identifies strategies to achieve net-zero energy homes

... Gaps—and strategies to overcome them—are summarized in Strategies to Achieve Net-Zero Energy Homes: A Framework for Future Guidelines, a new publication from the National Institute of Standards and Technology (NIST) based on the discussions at a 2011 workshop convened by the agency.

The report breaks out three categories of challenges: design, technology and equipment, and the needs and behaviors of homeowners and the building industry.

Using Cattails for Insulation

A growing number of homeowners are insulating their walls in order to lower energy costs. They opt for the cheap variety, polystyrene. Yet there are environmentally-friendly alternatives: Cattails, for instance, are superbly suited as a natural insulation material.

"As one of nature's swamp plants, cattails are resistant to molds and are very well equipped to deal with moisture. The leaves of the plant have a fiber-reinforced supporting tissue that is filled up with a soft sponge tissue. Through this special construction, they are extraordinarily stable and possess an excellent insulating effect. This effect is also preserved in the finished products."

The researcher already has such a product. The panel features a low heat conductivity of 0.052 W/mK (watts per meter and Kelvin). It delivers excellent fireproofing, soundproofing and heat insulation, and is relatively permeable, but sufficiently tight so that, with most applications, one can dispense with a vapor control barrier. Most of all, the material can cope with high pressure parallel to the panel surface.

The Best Thing Obama’s Done This Month

For instance, think about how you use the mapping apps on an iPhone or Android device. That glowing blue dot places you in time and space, enabling you to know not only where you are but how to get somewhere else. In more than 450 cities around the world, when you look for mass transit options, the routes and even departure times for the next train or bus show up on that interactive map as well.

That glowing blue dot exists because of a series of executive decisions made by Presidents Ronald Reagan and Bill Clinton, who decided to progressively open up the data created by the satellites in the Global Positioning System to civilian use, enabling a huge number of location-based technologies to make their way into the palms of citizens around the world.

Now, we may see even more life-changing technologies as a result of open government data. Last week, the White House released an executive order that makes “open and machine readable” the new default for the release of government information. Although people who care about open data were generally quite excited, the news barely made an impression on the general public. But it should: This is perhaps the biggest step forward to date in making government data—that information your tax dollars pay for—accessible for citizens, entrepreneurs, politicians, and others.

A Storage Power Plant On The Seabed

... "Imagine opening a hatch in a submarine under water. The water will flow into the submarine with enormous force. It is precisely this energy potential we want to utilize,"

"We envisage that this type of storage plant will function well in conjunction with, for example, wind farms. At strong wind conditions, excess electricity is sent subsea to pump water out of the storage tanks. In periods with little wind, energy can be obtained from this underwater plant instead. The same applies to solar generation: the pumped storage power station can contribute to constant electricity production at night time when there is no sunshine to run a solar power plant," says Rainer Schramm.

In addition to the number of tanks, the sea depth also determines the effectiveness of the plant: the deeper the equipment is located, the greater is the pressure difference between the sea surface and the seabed, and the more energy is stored in a single tank.

"This is part of the reason why we want to try out the technology in Norway," says Rainer Schramm. In his native country Germany the sea is too shallow for the system to be profitable, but there are many parts of the world where great water depths are located close inshore, such as the marine areas around Italy, Portugal and Spain, as well as North and South America.

Wow. That is a very interesting spin on pumped-hydro. And a great way to capture and store spare energy created by off-shore wind turbines.

Should put a turbine on the air vent as well, would work a little like regenerative braking in hybrid car, every little bit of energy helps.

On the other side, that drawing gives a whole new meaning to the phrase "not to scale". Pressure hulls that take a constant ramp up of atmospheres and then back to 1, are extremely expensive to build and maintain.

Scientist Studies Methane Levels In Cross-Continent Drive

... "Methane is the strongest human greenhouse gas on a political or short timescale, and also has more bang for the buck in terms of addressing climate change," said Leifer. "This research supports other recent findings suggesting that fugitive emissions from fossil fuel industrial activity actually are the largest methane source. This clearly indicates a need for efforts to focus on reducing these methane emissions."

The researchers found the highest methane concentrations in areas with significant refinery activity, and in California in a Central Valley region of oil and gas production. Methane levels near refineries were not uniform, varying greatly from spot to spot and at different times. Nighttime concentrations were dramatically enhanced when the winds died down, forming a calm, shallow atmospheric layer near the surface, according to Leifer.

Perhaps the most surprising discovery was made in the Los Angeles area, where the study highlighted the importance of geologic methane emissions in the North Los Angeles Basin, centered on the La Brea Tar Pits. Rough estimation of emissions from the data suggests 10-20 percent of the methane emissions from Los Angeles could be natural geologic, influenced by the vast number of abandoned wells throughout the area.

Nuclear Terror in the Middle East: Lethality Beyond the Pale

... Iranian cities -- owing to geography, climate, building construction, and population densities -- are particularly vulnerable to nuclear attack, according to a new study, “Nuclear War Between Israel and Iran: Lethality Beyond the Pale,” published in the journal Conflict & Health by researchers from the University of Georgia and Harvard University. It is the first publicly released scientific assessment of what a nuclear attack in the Middle East might actually mean for people in the region.

Its scenarios are staggering. An Israeli attack on the Iranian capital of Tehran using five 500-kiloton weapons would, the study estimates, kill seven million people -- 86% of the population -- and leave close to 800,000 wounded. A strike with five 250-kiloton weapons would kill an estimated 5.6 million and injure 1.6 million, according to predictions made using an advanced software package designed to calculate mass casualties from a nuclear detonation.

Estimates of the civilian toll in other Iranian cities are even more horrendous. A nuclear assault on the city of Arak, the site of a heavy water plant central to Iran’s nuclear program, would potentially kill 93% of its 424,000 residents. Three 100-kiloton nuclear weapons hitting the Persian Gulf port of Bandar Abbas would slaughter an estimated 94% of its 468,000 citizens, leaving just 1% of the population uninjured. A multi-weapon strike on Kermanshah, a Kurdish city with a population of 752,000, would result in an almost unfathomable 99.9% casualty rate.

Full Report (large pdf): http://www.conflictandhealth.com/content/pdf/1752-1505-7-10.pdf

the report doesn't even count the global 'collateral damage' [not to mention global economic collapse] ... Regional Nuclear War Could Trigger a 10-Year Nuclear Winter

According to a study titled Climatic Consequences of Nuclear Conflict: Department of Environmental Sciences from Rutgers University, "A minor nuclear war with each country using 50 Hiroshima-sized atom bombs as airbursts on urban areas, could produce climate change unprecedented in recorded human history [...] New climate model simulations [...] show that the smoke would be lofted by solar heating to the upper stratosphere, where it would remain for years."

Even the smallest nuclear exchanges modeled show a plunge in temperatures that would be bigger than the Little Ice Age (approximately 1600-1850), but unlike other climate change events, the effects of a nuclear winter would be felt almost immediately (if the sun doesn't reach the ground anymore, it won't take long for temps to drop significantly).

Someone's channelling JHK ...

"Apocalyptic Journalism" and Why We Need Reporters to Face the Reality of Our Crumbling Society

... Most of today’s mainstream corporate-commercial journalism is royal journalism, using the term “royal” not to describe a specific form of executive power but as a description of a system that centralizes authority and marginalizes the needs of ordinary people.

The royal consciousness of our day is defined by unchallengeable commitments to a high-energy/high-technology worldview, within a hierarchical economy, run by an imperial nation-state. These technological, economic, and national fundamentalisms produce a certain kind of story about ourselves, which encourages the belief that we can have anything we want without obligations to other peoples or other living things, and that we deserve this.

... There is a growing realization that we have disrupted planetary forces in ways we cannot control and do not fully understand. We cannot predict the specific times and places where dramatic breakdowns will occur, but we can know that the living system on which we depend is breaking down.

Does that seem histrionic? Excessively alarmist? Look at any crucial measure of the health of the ecosphere in which we live—groundwater depletion, topsoil loss, chemical contamination, increased toxicity in our own bodies, the number and size of “dead zones” in the oceans, accelerating extinction of species and reduction of bio-diversity—and the news is bad. Add to that the mother of all ecological crises—global warming, climate change, climate disruption—and it’s clear that we are creating a planet that cannot indefinitely support a large-scale human presence living this culture’s idea of the good life.

We also live in an oil-based world that is rapidly depleting the cheap and easily accessible oil, which means we face a huge reconfiguration of the infrastructure that undergirds our lives. Meanwhile, the desperation to avoid that reconfiguration has brought us to the era of “extreme energy” using even more dangerous and destructive technologies (hydrofracturing, deep-water drilling, mountain-top removal, tar sands extraction) to get at the remaining hydrocarbons.

Where we are heading? Off the rails? Into the wall? Over the cliff? Pick your favorite metaphor. ... we’re in trouble, not in some imaginary science-fiction future, but in our present reality.

In short, we live in apocalyptic times.

Unfortunately except for a handful of science writers most journalists that I have read, tend to demonstrate a complete lack of critical thinking skills and come across as being both mathematically and scientifically illiterate. Not exactly the group of people that I expect, will be able to help the public at large understand and deal with the serious issues we face.

we’re in trouble, not in some imaginary science-fiction future, but in our present reality.

Yeah, just listen to the 6:00 O'clock news!

While those that think, write, or teach apocalyptically are assigned to the fringe, there's been a lot of stuff lately from folks I can't quite consider 'fringe'. Earlier this month:

The End: Walking Away from Apocalypse with Guy McPherson

...on how thinking/teaching apocalyptically was incompatible with the job of tenured professor at a major university. And earlier this week, Carolyn Baker:

Preparing For Near-Term Extinction

Drumright’s thesis is simply that we must accept that “humanity has now crossed numerous irreversible climatic thresholds,” and “that by so doing, we have ushered in intractable near term extinction (NTE) of most of life within the next several decades.” In other words, NTE is a veritable certainty, and our existences on this planet as a human species is about to end. As I write this article, I am going to assume that NTE is valid and certain.

Four years ago I made a conscious decision to spend the rest of my life preparing for the collapse of industrial civilization and assisting others in doing the same, but the conscious preparation in which I have been investing my time and energy was preparation for something dramatically less catastrophic and smaller in scale than the extinction of our species. Whatever images of collapse we hold in our minds, they tend to include a long, protracted demise alongside a number of “cliff events” followed by a significant die-off of humans with a dramatically reduced population of survivors who sooner or later will cooperate to create fledgling communities and a new way of life profoundly informed by the demise of industrial civilization. Meanwhile, as the images of collapse in our minds have danced, paraded, shriveled, expanded, and metamorphosed millions of times, an entirely divergent and more terrifying scenario was congealing in the external world which rendered our most valiant collapse-preparation efforts paltry by comparison."

Now, it's Greer to the rescue:

The Pleasures of Extinction

Well, it’s here. The latest apocalyptic fad is near-term human extinction, or NTE for short: the claim that humanity, along with most other life on Earth, will inevitably be extinct by 2030 at the latest.

Alas... Saved by the fringe. Anyway, I suppose I can give a pass these days to whomever makes their living in what some may refer to as journalism. Whatever the point of all this is, whatever the outcome, my response is pretty much the same. I'm certainly convinced that there's little to be gained at this point from a sudden mass awareness of humanty's situation. Keep'em entertained; the show must go on.

Okay, I did skim Baker's piece, I'm glad you linked to it, but this is a perfect example of why I'd rather throw in my lot with TOD than with "mainstream" doomerism, if such a thing exists and that's what this article represents.

Not a lot of data there. Even if we are facing NTE, the hospice metaphor seems a bit tortured-- hard to compare something unprecedented such as a potential near term human extinction with a known event like death from cancer. Maybe it's similar.

And many of us don't prefer the comfort of hospice. F*ck comfort-- seeking that is the kind of distorted thinking that got us into this mess in the first place.

And is it just me, or is this a particularly rocking edition of Drumbeat? Damh, it's gonna take me DAYS to sort through all the great posts in this thread. Thanks, y'all.

These technological, economic, and national fundamentalisms produce a certain kind of story about ourselves, which encourages the belief that we can have anything we want without obligations to other peoples or other living things, and that we deserve this.

That about sizes it up. I'm not even sure there will be moderation or contemplation of what we are doing once a climate change threshold is passed, another economic crash occurs or we are on the backside of peak oil. The mindset is one gear only, all out, pedal to the metal, and those that cannot make the grade just get out of the way for those still in the game.

'Fish thermometer' reveals long-standing, global impact of climate change

In a Nature study published this week, UBC researchers used temperature preferences of fish and other marine species as a sort of "thermometer" to assess effects of climate change on the world's oceans between 1970 and 2006.

They found that global fisheries catches were increasingly dominated by warm-water species as a result of fish migrating towards the poles in response to rising ocean temperatures.

Just in from Politico:

The Senate has just confirmed the nomination of MIT physics professor Ernest Moniz for Energy secretary in a 97-0 vote. He will replace former Secretary Steven Chu, who left his post in April.

Anyone know anything about Ernie? Does he at least have a clue?

What I could read about Cyprus Institute indicates he should be familiar; no indication in what I have read so far as to how he is positioned.


If he was unanimously confirmed by the Senate, I seriously doubt that he has a clue.

If he was unanimously confirmed by the Senate, I seriously doubt that he has a clue.

I 2nd the motion, but even if he did have a clue before he gets in like we all thought Chu did, what difference does it make when we all know an R led House will do absolutely nothing regarding climate change policy? Besides whatever happens to people once they get into an office position on Capitol hill is a curiosity because they always seem to lose their voice. Chu was a big disappointment in my view and I'm sure the new guy will be even less effective.

Well, he seems to be an advocate of nuclear power

The country must also replace its broken nuclear waste management system with a more adaptive one that safely disposes of waste and stores it for centuries. Only then can the public's trust be earned.

Puzzling over that adaptive requirement...

You know, adapt. Spread the low level stuff around mix it into pavement, raise the background level a little. Everything will adapt to the higher radiation levels. As for the high level stuff, everyone else dumps it into the ocean, the oceans of the world have been taking it for years what's a little more?

replace former Secretary Steven Chu, who left his post in April.
Anyone know anything about Ernie? Does he at least have a clue?

Meh. Who cares about cluedome?

Did Chu rise to TOD clue status?

There was a tritium leak the other day...surprised no one posted about it:


More than 100 gallons of water containing radioactive tritium has leaked from a discharge pipe at the Catawba Nuclear Station near Lake Wylie, South Carolina, and could reach groundwater, the Nuclear Regulatory Commission said on Wednesday.

Such cracking is common for aging nuclear plants, according to the NRC, but agency officials and others question why Duke and Progress Energy, which operated Shearon Harris before being acquired by Duke last July, waited a year before addressing the issue.

"To have a crack in a reactor vessel head that went undetected for at least a year, that's very troubling," said Jim Warren, executive director of utility watchdog NC WARN, a frequent critic of Duke and Progress.

Seems Duke's aquisition of Progress may not have been a bargain. Chrystal River was another lemon that came with the deal. Shearon Harris is a Westinghouse PWR commisioned in 1987 and had it's license extended 20 years (until 2046) in 2008. It's about 20 miles upwind of Raleigh.

A bit of nuke plant trivia from Wikipedia:

On February 19, 2008 Progress filed an application with the Nuclear Regulatory Commission (NRC) for a Combined Construction and Operating License (COL). It seeks to build two 1,100 MWe Westinghouse AP1000 pressurized water reactors. Although the NRC has already certified the AP1000 design, the application review is expected to take about 36 months. The new reactors would not be operational before 2018.[6]

Expansion of the plant will require raising the water level of Harris Lake by 20 feet,[7] decreasing the size of Wake County's largest park, with the Cape Fear River as a backup water source.

On January 22, 2010 officials at the Nuclear Regulatory Commission announced the electrical generator from the damaged Unit 2 reactor at Three Mile Island will be used at Shearon Harris.[8] The generator was refurbished and installed during a refueling outage in November, 2010.

Duke withdrew the application for the two new reactors earlier this month.

Everyone seems to agree one reason is a sluggish demand growth forecast. Opponents also suggest high predicted generation cost and the ongoing federal lawsuit regarding the safety of the AP1000 reactor design.

Ash from the Toba supereruption in Lake Malawi shows no volcanic winter in East Africa at 75 ka


The most explosive volcanic event of the Quaternary was the eruption of Mt. Toba, Sumatra, 75,000 y ago, which produced voluminous ash deposits found across much of the Indian Ocean, Indian Peninsula, and South China Sea. A major climatic downturn observed within the Greenland ice cores has been attributed to the cooling effects of the ash and aerosols ejected during the eruption of the Youngest Toba Tuff (YTT). These events coincided roughly with a hypothesized human genetic bottleneck, when the number of our species in Africa may have been reduced to near extinction. Some have speculated that the demise of early modern humans at that time was due in part to a dramatic climate shift triggered by the supereruption. Others have argued that environmental conditions would not have been so severe to have such an impact on our ancestors, and furthermore, that modern humans may have already expanded beyond Africa by this time. We report an observation of the YTT in Africa, recovered as a cryptotephra layer in Lake Malawi sediments, >7,000 km west of the source volcano. The YTT isochron provides an accurate and precise age estimate for the Lake Malawi paleoclimate record, which revises the chronology of past climatic events in East Africa. The YTT in Lake Malawi is not accompanied by a major change in sediment composition or evidence for substantial temperature change, implying that the eruption did not significantly impact the climate of East Africa and was not the cause of a human genetic bottleneck at that time.

More data to fine tune climate models with.

Ash doesn't stay airborne long enough. It is the sulphates that matter (can stay in the stratosphere for a few years). Perhaps it was a low sulphur eruption?

IIRC, the 'bottleneck' was established by mitrochondrial DNA showing common ancestry to just a few at about 75KYA.

If not caused or contributed to in a major way by that eruption, they science will have to find another cause, I guess. Not that it matters...