Monday open thread
Posted by Yankee on May 8, 2006 - 1:27pm
Today is commenter and contributor appreciation day (because I declare it so). On TOD:NYC, peakguy and baloghblog discuss relocalization. Chris at TOD:UK covers parliament's reaction to the current energy situation in the UK. Engineer-Poet writes a letter to US voters about gas prices. Robert Rapier takes on the 60 Minutes report on ethanol last night. Odograph discusses the mileage that his Prius gets. Khebab takes on Norway at GraphOilogy. Jerome a Paris is looking for input on the current draft of "Energize America - A Blueprint for U.S. Energy Security". Yes, I know some of these have already been reported in earlier comments, but check them out if you haven't seen them! And if you'd like to nominate a blog post of your own for commenter appreciation day, go ahead and put it in the comments.
Some Detailed Views on Norway's Oil Production
http://mobjectivist.blogspot.com/2006/01/norway-offshore-depletion.html
What I described as the "Iron Triangle" (see below) was in full force Sunday (the 60 Minutes piece on ethanol) and this morning on Good Morning America (where the CEO of Conoco Phillips was interviewed).
The gist of the 60 Minutes piece was that we can continue driving our SUV's, but they will be powered by something new.
The Conoco Philips guy more or less said, don't worry, as soon as the geopolitical situation settles down, oil prices will fall by $10 to $20 per barrel. He did have one interesting statistic. Total major oil company profits are about 10¢ per gallon of gasoline.
The two stories together gave Americans a warm fuzzy feeling that high energy prices are just a short term transitory phenomenon--no reason to change your lifestyle.
http://www.energybulletin.net/15126.html
What the mainstream media are not telling you about the recent runup in oil prices
Excerpt:
"I think that we are seeing an "Iron Triangle" of sorts defending the status quo concept of ever expanding energy supplies: (1) most housing, auto, financing and related companies; (2) Most MSM companies that are selling advertising to Group #1 and (3) some major oil companies, major oil exporters and energy analysts that are working for the major oil companies and exporters.
The housing/auto group wants to keep selling and financing large homes and SUV's.
The MSM wants to keep selling advertising to the housing/auto group.
In my opinion, some major oil companies are afraid of punitive taxation, and some exporters are afraid of military takeovers. This group of oil companies, exporters and their analysts provide the intellectual ammunition for the other two groups, i.e., promising trillions and trillions of barrels of conventional and nonconventional oil reserves."
I agree with you on the Iron Triangle.
I was at the AOCS conferenceand heard a talk by Rick Redash of PIRA Inc. on Natural Gas supply.
It was an amazing display of misdirection and calming statements. The overall message from PIRA is that NG prices will be dropping in the future because of all the projects that are now being worked on to deliver supply. My notes are not real detailed here but basically new fields in the lower 48 are going to be tapped, Canadian and Alaskan fields are being ramped up and pipelines in Texas and Canada being planned to deliver this NG. Sounded wonderful unless you had been reading TOD and new how difficult each of these projects would be to ramp up simultaneously.
I do remember the statement that a 52 inch pipeline is on the books to deliver all the Alaskan and Canadian gas to the Chicago area. Might be 1 line or split as it comes into the midwest. My quotes based on memory. "This is a really big pipeline. So big that there are currently no steel mills in the U.S. to roll the pipe. As soon as these plants retool, there will be a number of U.S plants doing nothing but making pipe for years to allow this pipeline to go in". But I sat in the audience thinking, right this project isn't going to get done. All we have to do is dedicate almost all the steel capacity in the U.S. to this one project, to the exclusion of all other pipe. There was mention of all these scattered fields that could deliver NG if the pipelines are built. He glossed over decline rates completely and said that the LNG ports were over scheduled. Too many because the domestic supply would be so robust in a year or so.
The message was that there are large reserves and plans to tap them and plans to deliver to the market. So prices should moderate, supply will be sufficient to run fertilizer plants, if they haven't already left the country, and a short term switch to coal should bridge any electricty gap. So if there is an energy crunch in the future it can't be due to the energy sector because we have all these plans. Shortages would be due to lack of steel, or NIMBY issues, or lease restrictions , EPA, etc. etc. As soon as people asked hard questions the answers became very vague and imprecise.
One of those talks that if you knew detailed information you could spot the gaps but if you didn't know anything about NG supply, it was very reassuring. Most people in the audience were users of NG, Lipid chemists, or investors in biodiesel plants. Few were hard core energy insiders IMO.
Much discussion there about biodiesel vs ethanol versus other liquid fuels. This was a lipid conference so many more details about biodiesel from vegetable sources. First some details from a talk by Frank Gunstone from St. Andrews University.
As of 2005 There was a total of 135 million metric tons of lipids cycled through. These are from Fish, animal and vegetable sources. Animals are via rendering and is becoming a smaller % each year. OF that 135 M metric tons about 80% went to food, 14% to oleochemistry and 6% to feed and other. By 2020 these numbers may have to increase by 40% just to keep up with population growth.
A significant chunk of those lipids and fats are part of a food stream, not dedicated lipid production. There is significant potential to increase lipid production by planting more oil seed crops. A lot of comes from corn but it is a poor oil producer (<6% oil typically in grain) compared to something like an oil palm. Really 2 sources accounted for the fast majority of oil seed lipids in 2005, soybeans and oil palms. 2005 was the first year that palm oil was greater than soy oil.
That growth in palm oil is really critical because oil production for palms is up to 5 tons per acre per year while soy beans are less than one ton. There can be an increase in non food grade lipids much faster than lipids from food sources would indicate.
Lastly for today. A talk on biodiesel showed that the EROEI for biodiesel from bare ground to in the tank is 3.2-1. I believe this is for soybeans in the U.S. Very positive and much better than ethanol. The biodiesel numbers include fertilizer and all input costs.
More later on this conference when I have time.
In which regions are these oils produced? Whose diets and ecosystems is this ramped-up production going to affect?
Ramped up production will benefit the diets and the ecosystems of Americans.
Savvy?
Please do try to avoid being an overly enthusiastic and uninformed shill for every bio feedstock that comes down the pipe.
With palm oil, that comes from poor places too, so inadequate calories for food can be a problem there like Brasil. All in all, biofuel of all types hits a limit way before the quantity that allows driving SUVs on long-range commutes.
We had better plan on turning off TV then if this reporting is correct:
http://www.monbiot.com/archives/2006/05/02/feeding-crime/
Highlights:
"Each hour increase in television viewing", it found, "was associated with an additional 167 kilocalories per day"
"Researchers in Finland found that all 68 of the violent offenders they tested during another study suffered from reactive hypoglycaemia: an abnormal tolerance of glucose caused by an excessive consumption of sugar, carbohydrates and stimulants such as caffeine(6)."
"The number of violent incidents caused by inmates in the control group (those taking the placebos) fell by 56%, and in the experimental group by 80%."
In response to a question regarding oil prices, he asked how many in the audience thought that either the US or Israel would attack Iran (about a third of the audience raised their hands). He said that he agreed with everyone who raised their hands. Before the attack on Iran, he said he was expecting to see $80 oil next year. After the attack, he said that we would of course see $100 plus oil in the blink of an eye.
His single biggest investment is in the tar sands play. In response to a question about what energy stocks he would recommend, he responded that he would divide the money between quality coal companies and the tar sand play. He said he likes long life reserves; he doesn't like to deal with depletion. Notice that he did not recommend any conventional oil and gas companies.
He said that we need every single form of alternative energy (he is not very enthusiastic about ethanol from corn). He noted that the ethanol industry must have a lot of political influence to get a 54¢ per gallon subsidy and a 51¢ per gallon tariff on imported ethanol.
Firstly, his arguments relating to reserve growth here, where he states "We start in 1980 with 667Gb of reserves in the world. Over the course of 24 years (1980-2004), we pump out 609Gb of that, leaving us with 58Gb. To that we add the amount discovered in the period 1980-2004 (i.e. 339Gb), giving us a total of 397Gb in 2004. Clearly, something has gone seriously haywire because the actual reserves in 2004 are 1189Gb, i.e. 792Gb more than we should have if discovery is the only way to increase reserves."
Second, his decision to stop posting anything new because he has come 'to the conclusion that peak oil is a non-event, which has no significant impact on [his] daily life'. (My own view is that this probably marks the peak ;-)
Finally, can anyone point me to a source which gives expenditure by oil companies on exploration and research over the last, say, twenty years. Some time back I came across the assertion that expenditure on exploration is much less than it was (20?) years ago; I was challenged about it and I'd like to be able to back it up.
This could last for a short while, but eventually and inevitably the gas line sputters and delivery of fuel slows, regardless of our effort on the throttle. Then the slide begins, and it is from this position, looking in the rear view mirror, that we both appreciate why (at the time) all that peaking seemed like a non-event, and why we should have maybe eased up on the throttle earlier.
"M. King Hubbert's Lower 48 Prediction Revisited"
By Jeffrey J. Brown (Westexas) & Khebab
http://www.energybulletin.net/13575.html
HL = Hubbert Linearization Qt = Total Estimated Recoverable Reserves
Several large regions/countries have peaked in the vicinty of 50% of Qt (based on HL): Texas; Lower 48; Total US; Russia and the North Sea. None--not one--has shown higher production than what was observed in the vicinity of 50% of Qt.
The world is at 50% of Qt. Oil prices are trading in a record high (nominal) trading range. World oil production is down slightly, but it is down, and US imports are down substantially since late February of this year.
i.e. His 15 minutes of limited fame came and went without anyone paying any lasting attention. La-dee-dah.
And about his reserve growth post -- he cherry picks his data to make himself look like he is on to something.
http://www.powerswitch.org.uk/portal/index.php?option=com_content&task=view&id=1742&Item id=2
gives a reply to Powerswitch from Uk Energy Minister Malcolm Wicks. They acknowledge Peak Oil, but expect it after 2030 as they rely on IEA projections. So still head-in-clouds. Very sad.
Does anyone have info on the seasonal consumption of electricity? My sense is that the dog days of summer draw the most juice. It would seem that the rail-based coal delivery system will be worth watching as the temperatures heat up. Also, this source lists out current and planned wind power generation: http://www.awea.org/projects/
Is there a similar reference for coal and gas plants?
Stories of coal delivery problems...
From Otter Tail:
The key factor contributing to the earnings guidance revision for 2006 is curtailed generation related to reduced coal shipments to Big Stone and Hoot Lake Plants as a result of rail transportation issues.
Source: http://biz.yahoo.com/prnews/060501/cgm091.html?.v=2
Also from Otter Tail:
The Big Stone Power Plant in northeast South Dakota, which is partly owned by Otter Tail Power Co., dwindled to a 10-day stockpile of coal in early 2006 compared with the typical 30-day supply, said Charles MacFarlane, Otter Tail's president.
http://www.aberdeennews.com/mld/aberdeennews/news/14406186.htm
From the gulf coast :
Union Pacific Railroad, targeted by a lawsuit filed by Entergy Arkansas, says it did all it could to keep coal moving to Entergy and other customers last year despite bad weather and damaged tracks, even to the point of turning down new business as the company tried to catch up with delayed coal shipments.
Source : http://www.nola.com/newsflash/louisiana/index.ssf?/base/news-24/114596034764020.xml&storylist=lo uisiana
(I have to stop saying things like that or I'm going to lose my rep as a curmudgeon.)
It would help a lot if the police would aggressively enforce speed limits against guzzling vehicles.
Miles Per Cob
That editorial - by Tom Daschle and Vinod Khosla - was one of the dumbest things I have ever read. I am working on a response for my blog right now.
RR
For instance...
"First, Brazil uses sugarcane to produce ethanol. It is hands down the best crop for making ethanol."
-False.
"Second, they showed a brief shot of Brazil's highways. You know what I saw? No Hummers. No SUVs. No pickups. No large vehicles of any kind."
-Yeah, also false.
"...in Brazil out in the field hacking down sugarcane by hand. Then, they showed a clip in the U.S. where they were harvesting corn by tractor. One requires fossil fuel energy inputs. One requires cheap manual labor."
-False again. The ethanol industry in Brazil is highly motorized. Perhaps you should've watched CNN presents or Dateline when they went to Brazil.
"If Rather had bothered to do a bit more research, he would have found that even if we turned the entire corn crop into ethanol, it would provide less than 15% of the annual motor fuel demand."
-And if YOU would bother to do a bit more research, you would find that if we turned the entire corn crop nito ethanol -stover included- we would make a significant dent in imported oil (note I did not say demand).
"How much does he think ADM has profited, as a result of a government-created and heavily subsidized industry?"
-So how much do you think the oil, coal and gas industries have profited from their government-created and heavily subsidized industries?
"The cost of ethanol in the U.S. is consistently and substantially higher than the cost for gasoline. The only reason you don't see this reflected at the pumps is because of the subsidy."
Again with the subsidies; the cost. Help me out here RR.
You end your blog asking its readers to "consider a recent report by Lester Lave and Michael Griffin, from Carnegie Mellon University.
I too, will ask TOD readers to consider a recent report by Lester Lave and Michael Griffin, from Carnegie Mellon University: http://www.issues.org/18.2/lave.html
This report however, penned by the same authors no less, was produced for the National Academy of Sciences. It's title "The Ethanol Answer to Carbon Emissions - When the United States gets serious about the threat of global climate change, it should turn to ethanol to power cars."
I did watch the CNN special. They showed the same thing. Brazil's roads covered with small, compact cars, and I commented on it at the time. That's a big reason why their per capita energy usage is 1/6th of ours. Their agriculture industry is far less mechanized than ours, which is a big reason their fossil fuel inputs are lower. Sugarcane is a far, far superior crop to corn for growing ethanol, and is certainly the best crop that can easily be grown in bulk. For these reasons, Brazil's situation is not remotely applicable to ours.
You seem to have a terrible misconception, and I want to clear it up right now. I believe I have done so once before, but I am a patient man. If you continue down this path, then it will be clear that you are not sincere, but instead you are just trying to protect your ethanol investments from criticism. Here goes:
I am not defending the use of oil or gasoline. Understand? I want to see us develop sustainable solutions. Grain ethanol - which is where my attacks have been focused - is not that solution. So, your diatribe against the oil industry is misplaced, and I am sure I have pointed this out before. But, until you can start making ethanol without using these fossil fuels, you really have no reason to complain about the oil industry. Without it, we wouldn't even be having this discussion about ethanol, because fossil fuels are the enabler for ethanol.
Finally, note that your "recent report by Lester Lave and Michael Griffin" addresses cellulosic ethanol. Need I remind you that this was the topic of my graduate school thesis, and that I support continued development of cellulosic ethanol?
RR
If you would actually take the time to read my posts, you would find that they are coherent and based entirely on fact.
That's not to say I don't have a little fun along the way.
When you hammer the industry a la EROEI, susidies, GHG emissions etc. it's always ethanol.
When you get called on it, suddenly it becomes grain ethanol.
You say sugar cane is "hands down the best crop for making ethanol" which it's not -hemp or switchgrass is- something I would expect you to know seeing as how cellulosic ethanol was apparently your graduate thesis.
Your studies also should have covered that when ethanol is produced from these feedstocks, massive amounts of natural gas or chemical fertilizers is not needed.
On Brazil, you would have your readers believe that ethanol production is successful in that country because the poor are out working the fields by hand i.e. no fossil fuel usage as compared to the U.S. industrial behemoth. And yet somehow... you don't see the giant semi trucks hauling massive loads of sugar cane or the combine-like harvesters working the fields.
Makes sense I suppose, because apparently there's no SUVs or pickup trucks in Brazil. Who says this stuff???
Lastly, the oil industry is what it is.
Don't think for a second, that I'm going to sit idly by and let anyone bitch and moan about the teeny tiny handout that farmers receive as incentive to help us move away from utter reliance on the despot regimes funding those who would destroy us.
When you hammer the industry a la EROEI, susidies, GHG emissions etc. it's always ethanol.
When you get called on it, suddenly it becomes grain ethanol.
Sorry, but that's just a load of crap. I have written positive articles on cellulose ethanol. The problem is that this is not how ethanol is made today. It is made from grain. So, when I say "ethanol", and don't qualify it with "grain", I am talking about grain ethanol because that's the way it's manufactured.
You say sugar cane is "hands down the best crop for making ethanol" which it's not -hemp or switchgrass is- something I would expect you to know seeing as how cellulosic ethanol was apparently your graduate thesis.
You see, you are wrong about that. Switchgrass might eventually be the best, but right now it isn't. It is too difficult to get the sugars out to turn them into ethanol. Sugarcane has easily released free sugar. That's why switchgrass isn't taking over the market for ethanol. Yet. You are presuming certain scenarios for the future, and assuming the future is here already.
Your studies also should have covered that when ethanol is produced from these feedstocks, massive amounts of natural gas or chemical fertilizers is not needed.
You really don't know too much about this, do you? Switchgrass still requires a very energy intensive distillation. That is the most energy intensive step in the process, consuming large amounts of natural gas.
And yet somehow... you don't see the giant semi trucks hauling massive loads of sugar cane or the combine-like harvesters working the fields.
I am sure they have some mechanization. But much less than we do. Do you want to argue that point?
Makes sense I suppose, because apparently there's no SUVs or pickup trucks in Brazil. Who says this stuff???
I will ask you two questions. You saw the specials. Did you see any large vehicles in either one? I have them recorded (except for the Dateline piece). Tell me where you saw them, and I will confirm. I will give you a hint: There were none shown. I am sure they have some on the road, but the number is few. So, 2nd question: Why do YOU think their per capita energy consumption is 1/6th of ours. And a follow up: Given that, do you really think Brazil's situation is relevant to ours?
Don't think for a second, that I'm going to sit idly by and let anyone bitch and moan about the teeny tiny handout that farmers receive as incentive to help us move away from utter reliance on the despot regimes funding those who would destroy us.
If you worked through the math, you would see that what you believe in is a pipe dream. I hate to tell you, but Santa isn't real. The handouts from ethanol are HUGE: Anywhere from $4.00 to $7.00 per gallon of gasoline displaced from the market. There are much better uses for that money than putting it into a fuel that has a marginal energy return.
Would you like to take up the debate in my blog? We can have 3 rounds. You make your case, I make mine, and then we can have a couple of follow-ups. It will give you a chance to get the message out, and it will give me a chance to destroy your claims in a public forum and expose you as a pseudo-expert who learned what he knows from various web sites. But one caveat: Claims have to be well-referenced. "False", and "Who believes this stuff?" won't cut it. You game?
RR
I commend you, Robert, for making the offer. Surely Stryker will rise to the occasion and jump at the challenge?
"I repeat: The situation in Brazil is very, very different. The ethanol yield from sugarcane is much higher than from corn, which reduces the amount of fuel required for the distillation. "
This is patently false. The yield per ton of sugar cane is less than
for corn although the yield per acre is higher. Yield per acre only
affects the energy used to grow the crop not the energy of distillation
as you state above. What's different about Brazil, which gets over an
8:1 return on energy input (Macedo 2002) is that they use bagasse to
power the plant instead of fossil fuels. Although I am not a fan of
corn, using corn stover to fire boilers, or distiller's solubles to
produce methane to power the plant are both viable means to eliminate
all fossil fuel inputs for distillation. India chooses the methane
route, Brazil the biomass fired boiler routes. Neither needs fossil
fuels. All it will take is natural gas to go over $12 per million btus
and all the US alcohol plants will install methane digestors rather than
just the new ones going in. There is already one US plant that feeds is
mash byproduct to cattle, produces methane from the manure to run the plant.
"This is not the case with most substrates. Let me know when someone in the U.S. builds a process that doesn't require a healthy input of fossil fuels."
Using corn as the primary source of ethanol as a fuel is intellectually
dishonest since corn is a minority crop in world alcohol production.
"I repeat, BTU's are not a valid form of measurement in determining the efficiency of liquid fuels. Ethanol's high octane and better efficiency as a fuel more than compensate."
"Not according to multiple published mileage studies. BTUs and not octane push your car down the road. Gasoline burns with a very high efficiency."
False. Gasoline is essentially refinery waste after producing everything
valuable from oil. Everything else gets dumped in gasoline; over 400
different chemicals on any given day. As a result engineering for
gasoline has to deal with widely varying fuel characteristics and must
be done for the lowest common denominator. It is a rare gasoline engine
that tops 20% thermal efficiency. Alcohol, a single substance, capable
of taking high compression rates has been proven in D0E studies to top
40% thermal efficiency yielding 22% better mileage than DIESEL in a
modified diesel engine. Btu's are not a measure of fuel's work. Btu's
are a heat measurement and heat is a waste byproduct of engine work.
Alcohol turns much more of its energy into work and less into heat. If
Btu's were all that mattered you'd put diesel in your tank or better yet
candle wax since they have higher btus.
The point is that fuel qualities and their exploitation is what makes for MPG. The current Saab 9-5 flex fuel vehicle in Sweden has a variable turbocharger so it can generate high compression when running on alcohol. It advertised the same mileage whether on gas or alcohol if it is driven the same way (instead of enjoying the thrill of more torque and horsepower on alcohol.) In
essence on accelration is has better mileage on alcohol and when
cruising slightly lower mileage. It is a big compromise over an alcohol
only engineered engine. Nothing like proof on the ground to diffuse
hyperbole about btus. Reports in auto magazines without professional
drivers to reduce the vaiables, show a small loss but certainly nothing
on the order of btu projections.
University of Minnesotas studies on unmodified gasoline cars running 30%
alcohol had a range of results from less than a 2% mileage loss up to
over 10%. The big difference appeared to be in the sophistication of
the vehicles software with the Ford Taurus having the best results. I
have never lost more than 12% mpg in an vehicle I converted and that
includes carburetted vehicles in the 80's.
All of this is fully documented in my book Alcohol Can Be A Gas due out
later this summer.
"For ethanol to compete on an efficiency basis, you would have to have unburned hydrocarbons coming out of your exhaust. But well over 99.99% of the gasoline is combusted in the engine. Given that ethanol only has 70% of the BTUs of gasoline, it can't make up the difference via efficiency."
Sorry that's incorrect. The exhaust has been processed by the catalytic
convertor, that's why you don't have much more hydrocarbons coming out of
the exhaust. Ethanol typically runs more than 90% lower in hydrocarbon
emissions than gasoline. That's documented in reams of studies. In fact
work I did with Gordon Cooper the aerospace engineer and astronaut back
in the 80's on jet engines showed the exhaust leaving the turbine
cleaner than the LA air going into the turbine in all three major emissions.
"What is your experience? Do you have something other than what you have read on the Internet? I am interested in real arguments, not hyperbole and ad homs."
I have had over 25 years experience in ethanol production and have
worked with all sorts of carbohydrates. In my experience the very best,
most detailed, and world wide respected studies on energy balance come
from Macedo in Brazil and they demonstrate the FACT that Brazil gets between 8-9 units out for every unit in going all the way back to the energy to smelt the steel for the tractor.
Ask Mr. Blume if he would like to debate the issue. Claims must be referenced. "It will be in my book" is not a valid reference. Red herrings, such as "gasoline is essentially refinery waste" are not valid arguments.
I mean, half of what he wrote above is irrelevant, and a good bit is plainly false. For example "Using corn as the primary source of ethanol as a fuel is intellectually dishonest since corn is a minority crop in world alcohol production". What? We are talking about fuel in the U.S. That was the topic of my post.
Also, given that he wrote "Although I am not a fan of
corn....", I am not sure how much we have to debate.
By the way, his claim "It (the new Saab) advertised the same mileage whether on gas or alcohol if it is driven the same way" is not what they stated in their recent news release. They reported a 12.5% drop in effiency when using alcohol.
These are the reasons that claims need to be referenced. It is easy to claim something. It is not as easy to reference it in the literature and support it.
RR
Nothing on the Macedo studies.
Nothing on your fallacy about how everyone uses fossil fuels to make ethanol.
What is false about the point that corn is a minority crop in world alcohol production? You may think it is off topic but it isn't untrue.
Why go on? Your claims are always properly referenced and everyone else is a just a shill for the industry.
Our arguments are permaculturally based, focusing on local and regional production of ethanol from a variety of sources, without using fossil fuel inputs (including pesticides, herbicides, etc)
We can do ethanol right or we can screw it up. Let's focus on doing it right. That's our view, that was Barry Commoner's view in the 80s.
http://www.theoildrum.com/comments/2006/5/2/22724/62944/72#72
If he (or you) would like to debate this in an open forum, in which claims will be referenced and verified, let me know. You have also shown yourself to be very selective with the facts, and you have misrepresented my position multiple times, as you have did in your previous response here that I documented here:
http://www.theoildrum.com/comments/2006/5/2/22724/62944/89#89
Now, you have done it again. I won't let that go in a formal debate. Put up or shut up.
RR
http://www.metroactive.com/papers/cruz/06.08.05/rev-0523.html
Blume says:
There has been research that shows a 1:11 energy-balance ratio with ethanol. The USDA, definitely a conservative entity, found net positive output from ethanol of the order of 67 percent. When you compare that to the current numbers on petroleum extraction, which hover around the 1:1 ratio, we should wonder why we all aren't growing sugar beets."
That's all complete crap. 1:11 on sugar beet ethanol? Show me the reference. 1:1 on petroleum extraction? LOL! The USDA study that shows 67 percent? I have addressed it before, but suffice to say that not even one of the co-authors of the study, Wang, uses that number when giving presentations on ethanol.
Blume also writes:
"The choice is over; we hit peak oil production in November 2004. We're currently operating in a functional oil peak, and alcohol is the only fuel to challenge gas."
Again, more crap. We certainly didn't hit peak in November 2004, did we? And alcohol certainly can't rise to the challenge. You can't make enough, and if you try you will deplete all our natural gas supplies. Oh, but I forgot about all those corn-stover boilers you are using for the distillations. Could you show me where one of those is operating?
Blume's problem is that he is shooting from the hip. He is throwing out pseudo-facts, and not backing any of them up.
RR
Like Pimentel, who refused to apply his numbers to organic farming methods, you focus on what is, not what can be. You call yourself an expert? All you do is say, these systems don't work so they're out. How about designing a better system? And you still haven't answered the points about Macedo, etc.
I think the Oil Drum folks need to research who you really are and who your allegiance is really to. Your paycheck, perhaps?
There you go again with the ad homs. That's what you do when you can't refute arguments with anything other than made up facts and exaggerations. I will repeat my debate challenge to you. If you believe you can supports your arguments with references and verifiable facts, then debate me on our ethanol policy. What I have seen you, Stryker, and now Blume do is throw out a bunch of "facts" that aren't true, make a bunch of blatant exaggerations, and argue via ad hom. At the end of the day, you have to support your argument and rebut mine. Ad homs don't do that. Misrepresenting my position doesn't do that. Making up facts doesn't do that.
I will put the debate challenge up on my blog today or tomorrow. If you know someone who wants to debate the issue, round them up. But remember, these claims are going to come under harsh scrutiny. Exaggerations will be exposed for what they are.
Again, put up or shut up.
RR
First of all, I've read plenty of biofuels comments here. They are not as clearly slanted, and poorly thought out as yours. And I haven't agreed with a lot of them. But I know they aren't oil company shills.
I repeat, you are the one with the made up facts, poor understanding of basics (energy input vs energy output) and you are simply parroting oil company complaints and then covering your butt to disguise it whenever you can. You're an insulting smug wannabe know it all. I think a challenge should only come from someone who is qualified to make it. Engineer Poet comes to mind. He doesn't appear to have allegiances to his employer that cloud his vision, prompting numerous ad hominem attacks against me and Blume and Stryker.
I think frankly instead of saying something like, this beet EROEI is bullshit, you should be saying, oh, really, I'd like to see that study.
But you didn't.
Because it's your nature to be dismissive and not consider anything that doesn't inflame people to capitalize on TOD's tendency to doubt any energy alternative that comes along. You feed that well. It's clear you have no children, no concern for hope, no concern for anything other than your paycheck.
And you spend too much g-d time blogging. You have to be paid for it! End of story.
By the way, the source for the $15 gas is the International Center for Technology Assessment, It's the high end of the estimate, but the study did come out in 1998. Things have changed a bit since then. And yes, I count ships in the Persian Gulf and what taxpayers pay for them as oil subsidies!
Blume would be wasting his time with you.
Engineer Poet comes to mind. He doesn't appear to have allegiances to his employer that cloud his vision, prompting numerous ad hominem attacks against me and Blume and Stryker.
My position is basically identical to that of EP's, and he was the one who inspired me to get involved. Ask him. And funny that you would accuse me of ad homs, after committing a bunch of new ones against me. You question who I am. I have been forthright about that, unlike "fuelaholic". I don't know the first thing about you or your agenda, and yet you have the nerve to suggest I should be investigated? I have also not made any ad homs against you. Maybe you need to look up the term in a dictionary. An ad hom would be something like "maybe the Oil Drum needs to investigate you". I have attacked your arguments. You have attacked me personally.
I think frankly instead of saying something like, this beet EROEI is bullshit, you should be saying, oh, really, I'd like to see that study.
This is precisely the problem I have with you. I did ask for the reference. Here were my exact words: "Show me the reference." This is why I have a hard time taking you seriously. You don't pay attention, and then complain about ME!
And you spend too much g-d time blogging. You have to be paid for it! End of story.
There you go again with the false accusations. Actually, at the moment my wife and kids are the ones "paying for it". I keep telling them it's only temporary. But this is just more par for the course from you. Shooting from the hip, with incorrect facts.
You feed that well. It's clear you have no children, no concern for hope, no concern for anything other than your paycheck.
What a dumbass. I have children, and the only reason I do this is I have a great concern for the path we are going down. It is not the right one. Debate me on it. I will eat you alive. You just make too many "shoot from the hip" claims that are easily falsified. You throw out a bunch of crap, and never support it. This is just more of the same. Ad homs, misrepresentations, and made up facts. Do enough of that, and suddenly ethanol looks like the solution we need. You obviously don't even have a remote grasp of my position.
RR
As RR says, time to put up or shut up.
I assume that you are in favor of eliminating all subsidies and preferential taxation for all energy sources, including ethanol. Of course, the most irrational subsidy going to ethanol is the tariff on imported ethanol.
Fund research in measured amounts, tax dirty fuels, and let the market find the best (subsidy free) alternatives.
That is exactly my position as well. Put higher taxes on fossil fuels, and then let the alternatives fight it out in the marketplace. But don't allow a powerful lobby to cause a disproportionate amount of funding to favor a specific alternative.
RR
I just got back from a listening to Boone Pickens speak in Dallas. He reiterated his position that we need to increase the gasoline tax up to where gasoline costs $5 per gallon or more, offset by a cut to the Payroll Tax.
In response to a question regarding oil prices, he asked how many in the audience thought that either the US or Israel would attack Iran (about a third of the audience raised their hands). He said that he agreed with everyone who raised their hands. Before the attack on Iran, he said he was expecting to see $80 oil next year. After the attack, he said that we would of course see $100 plus oil in the blink of an eye.
His single biggest investment is in the tar sands play. In response to a question about what energy stocks he would recommend, he responded that he would divide the money between quality coal companies and the tar sand play. He said he likes long life reserves; he doesn't like to deal with depletion. Notice that he did not recommend any conventional oil and gas companies.
He said that we need every single form of alternative energy (he is not very enthusiastic about ethanol from corn). He noted that the ethanol industry must have a lot of political influence to get a 54¢ per gallon subsidy and a 51¢ per gallon tariff on imported ethanol.
As far as Daschle goes, I'll offer a brief anecdote. One of Daschle's close advisors is a neighbor of mine and a very smart fellow. I have discussed peak with him on many occasions and even had a rather challenging evening with him and Julian Darley--around my dinner table-- a few years ago. At my urging, he read the first Deffeyes book and absorbed it fully.
He gets it for the most part--though is still optimistic in some respects that I am not. So it is surprising to me that Daschle is still operating in this sort of a vacuum. My neighbor sent me a speech that Daschle gave recently that sounded like Rep. Bartlett. The general sense that I get from him is that peak is a central issue in Daschle's new think tank.
So go figure.
-Matt, DC
RR
Has anyone heard of stuff like this before? I feel slightly sceptical about stories like this. As few months ago I heard another story from Denmark about hydrogen pill that one could use to power one's car. I seem to remember one took a gallon of water and one little pill, and hey presto, one had fuel for ones car! These stories are fascinating, entertaining and surprising. Are they a sign of the times, that we're really getting desparate? I suppose one could in theory modify anything to produce gasolin couldn't one? But how does one ramp-up something like this from the lab to the real world? He also said that the beauty of these bacteria was that one could retain the same gasoline infrastructure, which wouldl save a lot of time and money. Encouraged by this young man's optimism, I wonder if we could even genetically modify cows to give gasoline instead of milk?
In fact, we've had several PnDs already here on TOD, correct?
Until I can buy it at the gas station or grocery store, I don't believe in it :-)
Obviously evoltionary advantages flow from this (mis)perception.
Best,
Matt
Meanwhile Craig Venter is on the case:
http://www.syntheticgenomics.com/
There's a long way to go with these sort of bugs.. We'll be well down the other side of the curve when they trickle on line. And how much biomass can we harness? All ecosystems enthralled to us?
I prefer the Amazonian diesel tree myself:
http://www.hort.purdue.edu/newcrop/duke_energy/Copaifera_langsdorfii.html
Drill a hole and fill up the tank! :-)
Who makes for better (more ruthless?) oil-warriors: young people trained in chemistry or young people indoctrinated into religious zealotry?
Don't think anybody is planning this out per se, it's just the way societies tend to organize themselves when their energy surplus(es) begin to dry up.
Best,
Matt
The US Department of Energy had an Aquatic Species Program established by the Carter Administration. Initially looking at algae producing hydrogen (of which there are some species) this was changed in the mid 80s to focus on url=Biodiesel from Algae.[/url] Unfortunately this program was cancelled in 1996. There is a url=Research Group at UNH[/url] that believes biodiesel from algae could be the answer to the the US liquid fuel needs. They make a convincing case.
So, I am not totally sceptical about the 'bacteria' thing. Hydrogen pills to add to water on the other hand......!! (unless the hydrogen pill was a lump of sodium or other group I metal, lol)
Not in the next 20 years, and certainly not in sufficient scale to cure the supply - demand gap and increasing and inexorable depletion.
Are at the 'somebody must DO something!' stage?
Are they talking about GM bacteria or Algae? - Even so, just not enough required volumes in the time spans envisaged.
I do agree however it is not going to solve the supply-demand gap in the next 20 years. Regardless it is still an avenue worth purseing, the more options we have the better...
You are absolutely correct in pointing out the limitations of any biological process designed to make fuel.
All microorganisms must live in an aqueous medium and be supplied with miminum amounts of nutrients in the form of nitrogen, phosphorus, and other elements. Due to metabolic realities, the microorganisms can build the desired byproducts (e.g., ethanol in the case of ethanol from corn) only up to a certain concentration and then the process stops. They basically choke on their own waste. Nor can they live in a too conjested an environment. They need space, and space costs money.
Then one has to separate the desired byproduct from the acqueous growth medium, and that takes energy and money. Then the desired byproduct must be purified and further processed. More energy and money. Then we have the issue of disposing the various wastes from the process. More energy and money. Of course there's a considerable capital investment on top of all that.
Mind you, we are comparing this to poking a hole in the ground, inserting a a straw, and sucking the goodies out. It's hard to compete with something so easy. Unfortunately, we're getting close to the bottom of the milkshake.
So, when you get right down to it, while the bugs might work for 'free', getting the fruits of their labor is by no means free. And that's the rub.
One has to evaluate the technology and economics as a whole, with realistic estimates of inputs and outputs. We are going to see more and more snake oil in the coming years, much of it coming from academia. The chief benefit of such efforts will be to keep graduate assistants busy and to give PhD candidates something to write their theses on. Then these people can go to conferences and seminars in posh places and happily wank each other.
If the can could live off of ocean plankton, perhaps we could rope off 1,000,000 square miles of the pacific to serve our gas needs. I think I'm going to puke. In the long run we're just not going to have much more than wind and solar power available to us. Snake oil is right - as long as even intelligent people don't understand basic thermodynamics, this kind of research will continue to be funded on the basis of what are easily falsifiable claims.
I'll do ya one better:
Take air. Compress and cool to get CO2. Split. Take Water. Split. Recombine loose H C and O into Methonal or whatever.
The 'sealand' process did this in the 1970s.
Both ideas ignore the energy input VS the output, but we can force the creation of a liquid fuel.
Estimate of wind power available world-wide is 72 TERAWATTS. Solar is many times that.
We may not be smart or organized enough to live well off the immediate flows of energy the world provides us, but they're enough to provide an American standard of living to a lot more people than are on Earth today.
Well hopefully it workes out better than the modified Klebsiella planticola which could have killed terrestial plants.
http://www.safe2use.com/ca-ipm/01-02-05-study.htm
(Was the product Butynol perhaps? It is 'close' to gasoline)
I'll try to sum up. His farm is 500 acres of rolling pasture and woodland in the Shenandoah valley of Virginia. He raises beef cattle, chickens, rabbits, turkeys and pigs. His business is selling dirctly to customers in the region.
What is important about Joel's farm is that he has very high productivity, has greatly improved his land over the last 40 years, and has very low external inputs of fossil fuels. He "choreographs" a cyclical interplay between the species on his farm, allowing each animal to improve the land and profit from presence of the other species. The chickens follow the cattle in rotating pastures, cleaning grubs and larvae out of the cow manure and speeding the manure's decomposition into the soil. The pigs vigorously turn the winter manure of the cows at the end of winter. The pigs also help clear land of brush and turn and fertilize soil for the vegetable garden. The cattle are rotated daily to fresh pasture so the grass on the land is never over grazed.
His model gave me a more optimistic vision of a lower energy food model than I have had in years.
Basically his work is the antidote to factory mono-culture animal farming.
He is an inspiring person to meet if you ever get the chance.
Matt in DC
Excellent info! Thxs for posting--has Joel and his neighbors started discussing future postPeak isolational security and habitat enlargement? Are his local customers willing to supply their human labor and defend his farm in exchange for his biosolar surpluses? We need a lot more guys like Joel and be willing to protect them and their surrounding biodiversity. Go Joel!
Bob Shaw in Phx,AZ Are humans Smarter than Yeast?
http://www.smithsonianmagazine.com/issues/2000/july/farm.php
I read about Joel's farm in Smithsonian, five years ago, and then I thought I heard it mentioned again two weeks ago on fresh air with the review of 'The Omnivore's Dilemma', which I mentioned on an earlier thread. I've been fascinated with the story for years now, and would love to know if they've had anything more detailed published about their efforts and results in recent times.
As I understood it, however, the process was labor-intensive enough to make the produce prices really mainly marketable to high-end restaurants in DC, and the like. Not that this refutes the value of what Joel and Theresa have done, but that the economic realities were still weighted heavily against this endeavor.
I am a craftsman, and have been stewing over the benefits of an economic system that so often devalues labor. Anything I produce by hand can get undersold by someone who can work faster, use fewer people to build it, cut corners.. etc. I know this rewards both efficiency and proficiency, as well as the economies of scale, but it also rewards (in the short term, and there's the rub) the shortcuts, incomplete design, rushed craftsmanship, or craftless automation. I know some consumers do want to pay well for what they know will be a valuable, lasting product, but it's so rare. I just look at a finished product that had more attention given to it's thoroughness, more hours applied to its proper assembly, or the correct selection and preparation of materials, and I see a product that because of this labor-intensiveness is More Valuable, whereas a business owner would have to see it as less, since the labor cost comes out of his profit on the deal. What do you do? Well, as a craftsman, I guess you just have to bill for your hours, and not sell yourself short.
A motorcycle, don't laugh but "cruiser" style with saddlebags, they're best for carrying loads (tourers are tall, heavier than most cruisers, expensive, and unwieldy) would do at least 90% of what I can with my car and those are cheap and get 50MPG without all the computers n' stuff. So would a little bitty car, one of those Aspires (it aspires to be a car) or something. But I like my Prius, strongly.
I'd say is someone is doing a lot of little mile and sub-mile trips as one of the responders to your piece said they do, they need to consider just walking or learning the fine art of trip combining.
Kind of stupid of them to not start earlier. And isent it dumb to sell fossil fuel cheaply when selling it at a high price brings in more money and makes the wells last longer and stimulates investments and lowers the enviromental load.
However this has not stopped the right-wing warmongers from using this as another excuse to attack Iran, see recent article by Jerome Corsi (of 'Swift Boat' infamy, and who, coincidentally, is a strong supporter of abiotic oil) in WND entitled Iran signs its own death warrant.
Is it feasible that they could offer some sort of discount for Iranian oil bought on the bourse? I'm guessing here, any other ideas how they could lure the traders from the stable markets of NY & London, or is that just not realistic?
Being philosphically a small "l" libertarian I am not a fan of the current imperial posturing of the U.S. Government, but why anyone would actively choose to deal with those Iranian goofballs is an even more profound puzzlement [or maybe an indication that in point of fact almost no one will make that choice!]
But to start demanding euros instead of dollars for your oil is exactly what you described - cessation of acceptance of USD as international currency. The only difference is that it is on a much smaller scale - if of course $7 bln. per year (the iranian oil export) is considered a small scale. The real question is whether or not this can trigger a larger runway from the dollar. My opinion is that it just makes it more likely and makes the US position more vulnerable worldwide. It is the same like having a nuke - your opponent is not restrained by you actually using the nuke; it is enough that you have the potential for using it.
The Iranian oil export should be around $60 bln., not $7 bln.
THE Phone company finally is starting to plan and address the energy problems. Their plan is "co-generation" using natural gas. They feel very confident about natural gas becasue they have a piece of paper saying they will supply them X amount for 10 years. Their racing to install 25 generators to supplment power. In the meeting, estimates of parts of the grid failing for 1 to 2 weeks were discussed as realistic. And we are now buying the company that owns most of the prime hurricain targets. Wow, can't wait! Prehaps when the natural gas contract defaults we can convert to peddal power, and install stationary bikes at all the desks?
There is still no real plan for dealing with how to get nearly 300,000 people back and forth to work with wide spread gasoline shortages. They really have no clue yet who are the most important employees.
Here is my response:
Daschle and Khosla Ethanol Propaganda
RR
Your blog response re ethanol is very well thought out, technically correct, and well written, but it suffers from most such arguments: it is too long, too technical, and loses the interest of those with a short attention span (perhaps 90% of the US).
In this debate regarding ethanol, what is needed is something more short, hard-hitting, and to the point. The ethanol hucksters use simplistic propaganda, and we should likewise keep it simple yet honest.
Furthermore, I have come to the conclusion that while global warming and energy are intrinsically related, from a purely rhetorical standpoint they should be kept separate, because combining them in the same argument only tends to have them dilute each other. I say either talk about one or the other, but not both at the same time.
I think the simple point to be made about ethanol is that it uses almost as much energy as it 'creates' and therefore on balance doesn't do us a whole hell of a lot of good.
By the way, while the concept of EROEI has become sort of a 'term of art' in the peak oil set, it tends to go over a lay person's head. I know, because I tried explaining it my cousin who is a retired VP of a major corporation and quite a bright guy, but even he didn't quite get it. Therefore, for the purpose of trying to explain some of these issues to the general public I think we need some other term that gets the point across but isn't so esoteric-sounding as EROEI. Perhaps' net energy produced' or 'bottom line energy' or whatever. But the term EROEI is not very user-friendly and just leaves many people yawning.
TODers out there: Any suggestions for a more catchy term than EROEI but which will get the same point across?
It's kind of like the Creation/evolution debate in my mind. It is very easy to throw out a bunch of simplistic claims. It is not always so easy to rebut them in a short, to the point way. For example, if I claim that C14 dating is unreliable, how can you answer that in a concise manner? You really can't. You will spend at least a paragraph answering my 1 claim. So, it's always a balance. I try not to be too technical most of the time, but I do try to cover the bases.
RR
How about: "Net Energy Yield".
It's actually a bit strange to think about energy production requiring energy input. For example, look at the Alberta Tar Sands. I'm no kind of expert, so I don't know the real numbers. But let's say we can produce a trillion barrels of oil from the tar sands, as long as we are willing to put energy into the production process equivalent to 900 billion barrels of oil. So one way to look at that would be to say the tar sands have an EROEI of 1.1 - but another way to think about it would be to say those tar sands have a Net Energy Yield of 100 billion barrels.
Of course the tar sands production requires other inputs too, like water & whatever else. But whatever energy inputs are required by an energy production process, that should be just substracted off the output.
I think that makes energy margin = 1 - (1/EROEI).
Thinking more about the factory analogy. Suppose I spend $100K on some nice fancy machine. It enables me to produce 10K widgets per year. The cost of production for each widget, including electricity and labor etc., is $10, and I can sell my widgets for $11. So I am getting a net income of $10K per year from my widget operation. I.e. my $100K investment is earning me $10K per year. That's really my RoI.
So we usually have that split between capital and expense when we look at a factory. Capital is what we invest in machinery. The raw materials are not investments, they're expenses.
So maybe the EROEI term doesn't really hit the mark. In general one doesn't really make a long term investment in energy - there is potential energy, but if it just sits there, it really isn't doing anything. Energy is valuable when it gets used. It's an expense, not an investment.
He liked other examples, often simplistic, but the reader gets the point after a while. If the ERoEI of the tar sands is 1.1:1, that's REALY bad for the environment. Becuse of tar being used to extract tar, a moped getting 100mpg ends up encouraging pollution equal to a mere 10mpg - barely better than a Hummer. Jay liked to point out the pollution potential of poor ERoEI energy sources. He also likes to point out how overall efficiency declines (as pollution rises) as ERoEI declines.
If the $10 is all raw materials and labor, i.e. expense, then maybe I could say I got $11 return on $10 expense, so that is a 1.1 RoE. But normally I don't think people work with that number.
I like "Energy Profit" as a term. But I think a number that will be easier to understand will be either (EnergyOut - EnergyIn) or (EnergyOut - EnergyIn)/EnergyIn.
BTW I really don't know the tar sands details, my 1.1 was just a sample calculation. I have no factual basis for any such number.
But that was how I found out about ERoEI. I guess Jay Hanson would coin "violence profit" for that other acronym, ERoVI. How many barrels of blood must flow until the oil flows? The current US fatalities of Iraq is equivalent to 90 barrels of blood assuming a gallon and a half per soldier killed.
Rex Tillerson, Exxon Mobil's new chief executive, has a surprising message for everyone who's upset about high gasoline prices: Stop using so much of it.
Okay, now the world's officially upside down. Exxon says don't use gasoline.
In addition, there is a human tendency to think that things will go as before, that the (recent) past predicts the future--there is even a false belief over the last century or so that there is such a thing as "progress". I suppose that you could say that there has been progress and I would just simply say to you that starting about 1850 or so, cheap energy started coming out of the ground in the form of cheap, abundant oil, at that time known as "rock oil". Decades passed, automibiles and airplanes were invented, and then things seemed pretty great for some number of decades. We had ample transportation fuels. But there is something called, as Al Bartlett has taken pains to point out, a thing called an exponential function. So much for progress. History is replete with sudden catastrophic changes. My intuition and knowledge at this point in time are telling me that we are about to reach an inflection (tipping) point in the next few years. A geopolitical event, even a raging hurricane or two, could speed up this process.
But unlike Lowell's Uniformitarianism, the "standard" theory for how things worked in Geological Time until relatively recently, I have become more and more convinced that Castastrophism more accurately describes how things happen in the real world not only in Geological Time but also in more pertinent, modern circumstances. When that big rock (asteroid, comet?) hit the Earth at the K/T boundary 65/mya, my view started to change and I've little reason to revise it since then. Think about the stock market crash of 1929. Or, the beginning of World War I. Or the Anazazi or Mayans.
So, I'll be back online in about 3 weeks or so and I've some stories in the pipeline ready to go. See you all then --
TOD is the best -- Dave
(i think 42" plasma tvs often pull like 450w!)
Same article says
That's so stupid. A high-wattage microwave is on for two minutes to cook something and then doesn't use much power to run it's little clock the rest of the time. I gave away my low-wattage microwave to charity (it was from 1985) and got a high-wattage one.
Meanwhile the biggest savings comes from the stuff that runs constantly not just for two minutes a day. Don't leave things run when you aren't around or awake. Insulate electric hot-water heaters that never stop running all day. Learn how to clean the coils on your older refrigerators that don't sealed coil technology like the newest ones do. Dirt on the coils make the refrigerator work longer since it acts like insulation on the heat exchange parts that the unit uses to pump heat out of it.
The best thing that an organisation like ACORN could do would be to hire a full-time eco-auditor who could go the homes of these people with something like the "Kill-a-watt" to determine where these people are using their energy.
Could you imagine trying to do that in America? Oh wait... This voluntary program allows MGE to shut off participating customers' central air conditioners when we need emergency power. MGE pays participants $2 for every 15-minute increment the air conditioner is shut off.
Yes, we are seeing globally more and more indications of Dr. Duncan's Olduvai Theory: http://dieoff.com/page224.htm
The immense complexity of widespread electrical generation and distribution will be increasing difficult to maintain. As the electrical spiderweb strands start to break it becomes increasing difficult to maintain until the whole web becomes dysfunctional.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
http://news.yahoo.com/s/csm/20060508/ts_csm/ctele
http://www.morganstanley.com/GEFdata/digests/latest-digest.html
If you view this after May 9, you'll have to click on the 'Archive' link on the right side, and then click on May 9, to read the piece.
An excerpt:
"What's new
We have examined the sensitivity of real GDP growth and prices to changes in our oil price assumptions, as an interim measure before revising our official outlook after GDP data for January-March are released on May 19.
Conclusions
Looking only at the income transfer effect under high oil prices, we calculate that raising our price assumptions by approximately 15% for 2006 and 40% for 2007 would depress real GDP growth by about 0.2pp for each year, compared with our current outlook. The impact on the core CPI is +0.1pp for 2006 and zero for 2007. This approach implies a smaller impact than a simple elasticity model, especially for prices, partly because we assume that oil prices will fall in 2007 and that the yen will appreciate."
This is an interesting piece. Doesn't take long to read, either.