The Oil Drum | DrumBeat: September 7, 2006

307 comments on DrumBeat: September 7, 2006

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Robert Rapier on September 7, 2006 - 9:19am

But a successful test in a mammoth field deep beneath the Gulf of Mexico, announced on Sept. 5 by Chevron, Devon Energy, and Norway's Statoil, should help put that scary scenario on hold for decades.

Decades? Someone is in need of a good debunking.

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Consume More on September 7, 2006 - 9:26am

Hmm. Weeks?

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Consume More on September 7, 2006 - 10:06am

It's not difficult.

In rough numbers, today the US imports about 13 mb/d. This increases by approximately 5% per year. Assuming our demand and domestic production decline don't change much, in 2010 we will be importing around 15.8 mb/d. If in 2010 they bring on 400 kb/d, this brings our import requirement down to 15.4 mb/day. Even if they find two more of these and bring on an additional 800 kb/d by 2010 (HA!), our import requirement will still be 14.6 mb/day, or 12% more than we use today.

Energy security in the US? Even this optimistic example says loud and clear, "Sell your Hummer."

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neon9 on September 7, 2006 - 10:41am

Wow, this field might replace almost 3% of our import needs in 2010!
Or hey, we could raise fuel efficiency standards, and have at least as large an impact, but that's no fun.

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mr f on September 7, 2006 - 12:12pm

Jevons. It's tired, but true.

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Pitt the Elder on September 7, 2006 - 1:34pm

Jevons. It's tired, but true.

That's not entirely clear.

This DOE report on the 25th anniversary of the first oil shock notes that since CAFE standards first appeared, fuel efficiency of the US fleet has increased 70%, but per-capita petroleum consumption has decreased by about 15%.

It's important to remember that Jevon's Paradox says increased efficiency can lead to increased use, not that it will, and the most relevant historical example (increased efficiency in the US after an oil shock) suggests that it will not.

In other words, history suggests that efficiency is worth looking at and cannot rationally be dismissed out of hand. (Whether and how much it will help, of course, is open to debate.)

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clifman on September 7, 2006 - 1:56pm

Were it not for JP, a 70% increase in efficiency would translate into a 70% decrease in per capita consumption, n'est-ce pas? So JP ate up the other 55%.

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Pitt the Elder on September 7, 2006 - 2:10pm

Were it not for JP, a 70% increase in efficiency would translate into a 70% decrease in per capita consumption, n'est-ce pas? So JP ate up the other 55%.

Perhaps, but that wasn't the claim. The claim was that any increase in efficiency would be self-defeating, since JP would make that translate into an increase in consumption, and that's simply not true.

While it's certainly the case that per-capita consumption didn't drop as much as per-mile consumption did (15% vs. 40% = 100%-100%/1.70), that's much what you'd expect based on a supply/demand analysis; i.e., more efficiency = lower per-mile cost = more miles = lower decrease in total cost than in cost-per-mile.

Jevon's Paradox is simply noting that sometimes (relatively rarely) the demand for extra miles at the new per-mile price is so much higher than at the old price that the total cost actually increases. That's not really all that surprising in light of modern supply/demand thought, though.

It's also worth noting that Jevon's Paradox is much less likely to apply to a mature market, rather than an emerging one, since the scope for increased consumption is so much lower. If fuel efficiency went up by 100% in the US, it's unlikely that people would increase their miles driven by over 100% in response; most people just don't have that many extra miles they want to drive, so the "mile demand" is largely saturated, regardless of efficiency. (Of course, we'd probably see SUVs come back into vogue to some extent, so we'd see the same kind of smaller-but-positive improvement that we saw from the CAFE standards.)

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mr f on September 8, 2006 - 1:43pm

Pitt the Elder...

Your distinction is academic. The fact remains demand increases for gasoline every year, as does the domestic (and global) demand for crude. Our industrial economies require increased energy inputs for growth, otherwise financial markets wither. If efficiency cannot gain inversely proportionate to global crude oil depletion then there is trouble. IMHO there is simply no way efficiency can make the required advances to replace the most energy dense and useful liquid that we've discovered and consume is massive amounts. We have built our infrastructure around the highly inefficient internal combustion engine.

As of now, until the Dow drops dead or some other climatic event (no pun intended!) in whatever bizarre form--I was just stating that JP must hold true in a world of unequal humans, where billions are in poverty and billions of others in industrialized countries with computers, cars and credit cards. There is a natural tendency for the global system to encompass all humans in the "good" modern life of industrial societies. Energy = affluence. Hence, here in the US waste equals profit. There are masses eager to participate in the consumer cult culture we have created here in the West. If we conserve, that will be displaced by someone else, that is the fact. The Chinese have trade surpluses that they are siphoning off into development of highways and sprawling cities--a rising middle class is now displacing the old status quo of bicycles. In Shanghai, now most major roads don't even allow bikes. Not that I'm any Critical Mass proselytizer for bicycles--I prefer the subway. And as long as oil use and demand are rising--which is a necessity in order to ensure growth, then JP will hold true with a vengeance regardless of those who tout "efficiency" and "alternative energy" as saviors. More will be included in the easy-motoring economy, which will just further propagate demand. The financial system is built around these fundamentals, no-growth is not a viable option under present conditions...and if it rears its ugly head soon (like I and many others here at TOD believe it will) then people must know that "efficiency" and "alternative" fuels alone will not support the same kind of system that we had become accustomed to.

When will people realize there is no viable alternative for crude oil? Especially at the present global population level. We are going to have to make other arrangements, as JHK puts it.

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Pitt the Elder on September 8, 2006 - 2:21pm

If efficiency cannot gain inversely proportionate to global crude oil depletion then there is trouble. IMHO there is simply no way efficiency can make the required advances to replace the most energy dense and useful liquid that we've discovered and consume is massive amounts. We have built our infrastructure around the highly inefficient internal combustion engine.

All potentially true, and all completely unrelated to Jevon's Paradox.

While you're right that it'll be almost impossible for efficiency gains to keep up with exponential demand growth in the face of falling production, that has nothing to do with Jevon's Paradox, and invoking it only obscures the very valid point you're trying to make.

Jevon's Paradox is not a general indictment of energy dependency; it's a very narrow observation, and simply doesn't describe most of the problems we're facing. When it comes to Peak Oil, Jevon's Paradox probably doesn't apply at all.

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roy on September 8, 2006 - 4:37pm

Pitt the Elder,

Thanks for thoughtful treatment of Jevon's Paradox. It helps that I happen to agree with you and think that invoking JP in discussion is often just a substitute for "Tsk, Tsk.."

The fact that I'm converting my travel to mostly a human electric hybrid (tandem bike) makes the rhetorical taming of JP even nicer. I feel good!

Cheers,
Roy in Silicon Valley

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Pitt the Elder on September 8, 2006 - 2:34pm

Oh, yes, one more thing:

Our industrial economies require increased energy inputs for growth, otherwise financial markets wither.

Historical evidence suggests that's not true.

Per-capita energy consumption in the US hasn't changed over the last 25 years (http://www.eia.doe.gov/pub/international/iealf/tablee1c.xls), so the US uses only 60% as much energy per (chained-2000) dollar of GDP as it did in 1980 (http://www.eia.doe.gov/pub/international/iealf/tablee1p.xls).
i.e., the US has seen roughly 65% per-capita GDP growth with zero growth in per-capita energy use.

Even world per-capita energy consumption is only up 10% in the last 25 years (http://www.eia.doe.gov/pub/international/iealf/tablee1c.xls), despite much faster growth in real per-capita GDP, so it's not as if the increased energy efficiency in the US has (primarily) come at the expense of vastly greater energy use elsewhere.

Of course, that's not to say Peak Oil doesn't represent a serious problem; obviously, it does. But the number and scope of problems it does threaten should be identified and examined as clearly as possible, and, fortunately, it is not the case that economic growth requires energy consumption growth.

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mr f on September 10, 2006 - 1:09am

Pitt, you write,

" But the number and scope of problems it does threaten should be identified and examined as clearly as possible, and, fortunately, it is not the case that economic growth requires energy consumption growth." (my stress)

Again, excuse me, but I believe your historical evidence is just another semantic to make a very grim situation look somewhat palatable. I think the evidence is to the contrary, namely, that economic growth, in the modern financial sense, is predicated on increased energy consumption. Everything that enables our economies to "grow" is based on having more available energy.

Also, I cannot concieve of a situation where decreased energy consumption could lead to a growth based economy, in the fashion that we have been accustomed to.

What matters is absolute growth not per capita.

Of course, you're only talking about the US--the most wasteful society on earth, not that hard for us to cut some of our totally wasteful energy expenditures and recycle that through "efficiency"... Of course, global energy consumption per capita had to be rising over the last 150 years since the discovery of crude oil--and as you cite, over the last 25 years with 10% increase per capita. Maybe you could find statistical anomalies within that graph and point them out.

You also fail to realize that through energy arbitrage, so to speak, our economy's energy consumption has been displaced and "globalized". Now factories in China and the rest of the newly industrialized world use tons of energy that is not officially "counted" by your US DOE data.

Also, during the last 25 years efficiency has rapidly developed, but is starting to hit a wall.

One can only make the internal combustion engine so efficient before it must be replaced with something new (costly,/long-timeline) or with another fuel (unlikely/grain based ethanol is a swindle).

My point about JP is still simply what it initially was... That even with increased efficiency you still need absolute gains annually (with required population growth) in order for financial markets to function properly. The system just doesn't work otherwise, no matter how hard one can close their eyes and imagine that everything is gonna be A-OK in a no energy growth global economy.

We'll see, time will tell.

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Pitt the Elder on September 10, 2006 - 3:50pm

I think the evidence is to the contrary, namely, that economic growth, in the modern financial sense, is predicated on increased energy consumption.

Based on what evidence do you believe that?

Yes, it's surprising (at least to me) and a little counter-intuitive that per-capita GDP has gone up so much despite per-capita energy consumption going up so little (or not at all), but that is the fact of the matter. Accordingly, our theories should be based on what we observe, not on what we believe.

I cannot concieve of a situation where decreased energy consumption could lead to a growth based economy

It happened in the US from 1979 through 1983.

Obviously, that's not saying it will happen, but that does suggest that it can happen, so it might be an option worth looking at.

(Keep in mind also that you're pushing a bit of a false dichotomy; I was just talking about lack of growth, rather than outright decline.)

What matters is absolute growth not per capita.

Absolutely. There are two reasons I've been talking about per-capita consumption:

First, my point was really pretty simple: economic growth without growth in energy consumption is possible - at least theoretically - since historical evidence shows us that a group (e.g., 100M Americans) can have large growth in GDP while having no growth in energy consumption.

Second, demographic trends suggest that this may be achievable in practice. The West - the world's major energy consumer - has a rapidly-falling population growth rate, and will reach no population growth in the medium term. What that means is that the challenge of maintaining no overall growth in energy consumption is relatively modest for the West as a whole - about a 0.5% decrease in per-capita consumption per year - and it will get easier as time progresses, since the growth rate will get lower (all other things being equal, which of course they won't be).

I haven't been arguing that it will happen, should happen, or even necessarily can happen; what I've been arguing is that evidence does not support the claim that it can not happen, so more investigation is needed.

Even world per-capita energy consumption is only up 10% in the last 25 years (http://www.eia.doe.gov/pub/international/iealf/tablee1c.xls), despite much faster growth in real per-capita GDP, so it's not as if the increased energy efficiency in the US has (primarily) come at the expense of vastly greater energy use elsewhere.
You also fail to realize that through energy arbitrage, so to speak, our economy's energy consumption has been displaced and "globalized".

No, I addressed that explicitly, as the above quote shows.

during the last 25 years efficiency has rapidly developed, but is starting to hit a wall.

Interesting. What is your evidence for this?

That it "makes sense" does not mean that it's true.

That even with increased efficiency you still need absolute gains annually (with required population growth) in order for financial markets to function properly. The system just doesn't work otherwise

What is your evidence for this?

The system did work otherwise, from (for example) 1979 to 1983 in the US. Stock markets even kept going up (although the S&P500 had a crash in 1981/82, it was still higher even at the trough).

In some ways, that illustrates my overall point: there are variety of "common wisdom" claims that people assert, and those claims typically make quite a lot of sense, but those claims may well be false.

Without evidence - hard, factual evidence - to support a claim, it's very difficult to tell what's true and what's urban myth.

So I'm trying to provide some historical and quantifiable evidence regarding some of these claims, and - having no personal preference for whether these claims turn out to be true or not - I'm pushing the conclusions that the data support. That is my overall point.

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ET on September 7, 2006 - 4:01pm

My own take on Jevon's Paradox is that it simply notes the observed tendency of exponential growth to overwhelm any increases in efficiency. The US consumes whatever percentage more crude now than in 1970 in spite of any increase in average car mileage or increases in efficiency of other uses. Same applies to electricity. Efficiency of appliances, computers, etc. has increased quite a bit, so has overall consumption..... Jevon's Paradox.

Bottom line: it doesn't make sense to try applying JP to narrow cases, it applies on a society-wide scale.

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fleam on September 7, 2006 - 5:31pm

A good example of Jevon's Paradox is those corn stoves being used in the Midwest. Corn is so cheap, in relation to other fuels it's often economical to burn as fuel! This would have horrifled people 100 years ago, much less those who originally domesticated corn.

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mr f on September 7, 2006 - 11:14pm

Great point... We have begun to go down the road of burning potential food crops for energy. That alone shows you the desperation that no one can face.

This is in a world where 2 people die every second of starvation.

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odograph on September 7, 2006 - 11:20pm

I agree that this is a problem, but it is related to the same old problems and questions we've faced in the past.

For instance, why do we grow wine grapes in so many countries around the world, whem people are starving?

Why do countries with starvnig people grow tobacco?

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Jack on September 8, 2006 - 12:26am

Good reply. The food versus fuel issue is legitimate, but in its most common presentation simplistic and misleading.

Far more potential agricultural land is wasted on sugar, livestock, tobacco, alcoholic beverages (25% of global ethanol production) than fuel. Much current and future biofuels plans look to produce from poor quality land or non-food crops. The poor also suffer disproportionately from fuel shortages.

It is far from clear that producing fuel from farmland is a net negative for the poor.

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Dan Ur on September 8, 2006 - 4:00am

Wine grapes can be grown on poor soils, they are like a tree, grown for years and years in the same spot. On land that would otherwise just be used for pasture, to steep for regular farming.

Grapes are hand picked. In most cases even hand cultivated. Rasins are a by-product of some grape growing, others are eating grapes, also hand picked.

Sugar being a good food source.

Starving people? Why are they starving? Didn't you know the USA grows enough to feed the world? Ruler Y hordes the Food the UN food agency supplies and sits on it, or sells it to others, and the People starve.

Tobacco provides a good cash crop, and if anyone gets to use it, a bit of an appetite supressant, so does the raw leaf of the cocoa (I don't know the latin genus and species) plant of which cocaine is derived. Stravation happens in most cases because someone else is hording the food, The food can't get to them, War is killing the ability to get food to the people, someone wants to get paid more money for the food than the person has, Or the area has had drought and animal die-offs faster than the aid agencies can get food to them.

Currently no one need starve to death or into illness on this planet. Other humans let it happen or cause it to happen. Soon we will have maxxed out our carrying copacity and then you will see real die off, When the Grain in storage is used before the next year's crops are in.

57 days, and then others start to feel the real pinch. Though a lot of nations waste far to much food. The USA is not the only one, we are seen as the worst, but any country can waste food.

I have been trained as a Chef I don't do it as a proffesion, mostly as a hobby and volunteer work. Every resturant, every home I have been in, wastes food. It does not help that the FDA and Local Health codes Require you not to serve day old foods to paying customers. There have been and are drives in some cities to provide food stuffs to homeless shelters and soup kitchens, but that only partially attacks the problem. Food spoilage, food saving and many other issues can be streamlined to prevent so much waste, but they just are not.

Someone asked What I had invented,, (in yesterday's threads) Methods to get more food into long term storage and out of the trashcans of the world. But food will spoil even with these methods, they are just minor stop gaps.

No one need starve!!!! That is still the point. Humans kill humans, by action and by inaction.

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odograph on September 8, 2006 - 10:29am

I sometimes watch that "dirty jobs" show. It kind of fascinates me which ones I could do and which ones I don't have the stomach for (literally).

One that took a strong constitution was the uneaten food sorting job in las vegas, that was part of a hog feeding operation. Apparently there the "extras" from those buffets are recycled.

(in a somewhat tighter economy, someone would have hogs or chickens at home to eat restaurant scraps. in a very tight (pessimistic future) economy, somebody would eat it.)

(on increasing the food value of those wine grapes, it could be done with dried fruit, fruit leathers, etc ... but the point really is that we don't and that this is a very old choice we have made (in the broadest possible sense of the word "we))

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Nick on September 7, 2006 - 5:42pm

Well, Jevon's paradox is just the narrower idea that increased efficiency allows greater usage. Actual data indicate that for driving, about 30% of greater efficiency is used to drive more miles, which is what you'd expect in a fairly mauture market - most people drive as much as they want to already, and lower costs won't make that much difference. Of course, that only applies with stable prices - in a time of rising prices Jevon's paradox doesn't apply.

Oil prices crashed in the 80's and 90's, and so usage increased. Not especially far sighted, but not surprising. Greater usage wasn't caused by greater efficiency - light vehicle efficiency hasn't increased in the last 20 years.

There's no reason to think that will happen again, at a time of rising prices.

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Pitt the Elder on September 8, 2006 - 2:13pm

My own take on Jevon's Paradox is that it simply notes the observed tendency of exponential growth to overwhelm any increases in efficiency.

While very true, that's not Jevon's Paradox.

Jevon's Paradox is, restated, "a decrease in the per-unit cost may increase the number of units consumed so much that the total cost increases". It's a supply-and-demand effect.

Your point is, restated, "exponential growth is really fast. Think about how fast it is; no, it's faster than that." It's the "yeast doubling" explosive growth effect.

They're both important points to consider, but they're different points.

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Nick on September 7, 2006 - 1:59pm

Yeah, Jevons only applies if the effect of the efficiency isn't offset by rising prices. If the overall cost of driving falls, then of course people will drive a little more (though usually they'll take only about 30% of the savings to drive more, and pocket the rest), but if the price of gas is rising as fast as the efficiency is improving, then driving would be stable.

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sofistek on September 7, 2006 - 3:36pm

Jevons only applies if the effect of the efficiency isn't offset by rising prices

This brings to mind something Zach Goldsmith (editor of The Ecologist) claimed about efficiencies. He said that businesses can benefit from increased efficiency and cited one business that saved billions off its costs (it was a big UK based business but I don't recall the name). I then thought, "yes, but what did they do with the saved billions?" Why do businesses and people want money? To hoard it? I doubt it. I think this is the lie about efficiencies - if money is saved, it will be spent somewhere else and continue the growth economy, which means more consumption of all resources. Not that efficiency is bad; it's not. But I think a more realistic message needs to be given, not that efficiency is profitable - it is, but that doesn't help us in this long emergency.

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Nick on September 7, 2006 - 4:42pm

" if money is saved, it will be spent somewhere else and continue the growth economy, which means more consumption of all resources. "

Well, if you increase efficiency at the same rate as economic growth, then resource use would be constant. And of course at some point the markets for tangible goods mature and level off, and economic growth comes from services, which don't use much in the way of mineral or energy resources (except for a bit of electricity).

It depends, too, on the resources. It's no problem to use more electricity from wind, or solar.

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JoulesBurn on September 7, 2006 - 8:00pm

Well, there is a limit to which efficiency can be improved, due to the 2nd law of thermo, and that is usually well below 100%. Once you arrive at the limit, there is no such thing as economic growth without mineral or energy utilization. Things which use "a bit of electricity" provide just "a bit of growth".

Finally, wind and solar are not infinite resources--there are a finite number of watts available, and making them available takes a lot of up-front energy for construction and fabrication. With apologies to Monty Python fans everywhere:

Every watt is sacred
Every watt is great
etc...

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Nick on September 8, 2006 - 12:52am

"there is a limit to which efficiency can be improved, due to the 2nd law of thermo, and that is usually well below 100%."

The 2nd law doesn't tell you anything about how close you can get to 100%. We're getting a bit abstract. Here's an example: I remember car industry execs who said that 40mpg cars were absolutely impossible. At that time average MPG was about 13. Now it's about 26, and it could easily be doubled again to 52, and Toyota is talking about getting 75 with the next Prius. The next step is EV's, which currently get the equivalent of 115 MPG.

The ratio of energy to GDP gets very, very low for services.

Wind and solar may not be infinite, but the ratio of available solar to our needs is about 25,000 to one. Wind has an E-ROI of about 60, and solar of 10-30 and rising, which is substantially higher than oil at the moment. A high E-ROI really does mean that they solve energy availability problems - that's what E-ROI means. It also means that if energy prices go up, the output of wind and solar just gets proportionately more valuable. Finally, a high E-ROI means on a practical level that energy isn't a big part of the cost, and even if oil prices triple it still won't be.

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JoulesBurn on September 8, 2006 - 3:01am

"The 2nd law doesn't tell you anything about how close you can get to 100%."

False. In heat engines (internal combustion engines, nuclear power plants), the maximum possible conversion efficiency of thermal energy to useful work is a function of the two temperatures involved.

Nobody will defend the quotes of auto execs. Indeed great strides have been made in cars. But some of this has come from redefining what a "car" is. Consider the size of a current model Cadillac vs. its land yacht ancestors. If you made a hybrid Hummer, how much better mileage would it get.

My point is that efficiency improvements face diminishing returns. The cost to get that next 10% keeps getting higher. Real efficiency improvements are also limited by the necessity to replace existing infrastructure. The mileage figures you quoted are for cars currently sold. What is on the road is much worse, and turnover takes years. How are you going to limit economic growth to be less than efficiency gains?

Pacific NW National Labs has estimated the US wind energy could theoretically replace 20% of our current generating capacity. It doesn't matter what the E-ROI is; there is your availability limit.

With solar, your limit is ~300 watts/sq. meter. And please point me to a solar unit where I can get the kind of return (10-30 fold) that you quote. In reality, there are few areas of the country where you can save enough on energy costs (at today's prices) to recoup the photovoltaic fabrication costs (which takes a lot of energy at today's prices). That doesn't sound like a E-ROI of 10 to me. Nanosolar will probably be the best near term. How much is possible from solar? I hope we make it through the next few years to find out.

Services? You mean like the "Information Economy"? Look at this plot:

Note the ramp up in the last few years? And that's despite all those CFL bulbs we've been installing.

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Nick on September 8, 2006 - 12:03pm

"In heat engines (internal combustion engines, nuclear power plants), the maximum possible conversion efficiency of thermal energy to useful work is a function of the two temperatures involved."

Absolutely true: the 2nd law does limit the efficiency of heat engines, but 1) it doesn't tell you how close you can get to 100%: a very high input temperature and very low output can get you any arbitrary % you want, and 2) as a practical matter you don't have to use heat engines. For example, fuel cells are more efficient. Similarly, photoelectric processes can be much more efficient for converting light to electricity than a solar thermal plant using a heat engine, and electric engines are 6 or 7 times as efficient than gasoline ICE's.

In transportation, efficiency is a misnomer: from the point of view of the laws of physics transportation involves "translation" of an object from one location to another. There is no increase in kinetic energy, no work done, just a change in location. This can be done with an arbitrarily low amount of energy if something is accelerated to whatever speed is needed, friction is minimized, and the kinetic energy recaptured at the other end (i.e., regenerative braking). For example, the Prius has, I believe, a coefficient of wind friction of .29, but the GM EV-1 was at .19, and lower is certainly doable.

So, the EV I mentioned with an equivalent MPG of 115 can be doubled to 230 without too much trouble, and can be doubled again with more work.

You're right, cars are somewhat smaller. OTOH, larger SUV's/pickups (light trucks) are more than half the US market, and light vehicles (cars & light trucks) are much more powerful than they were 25 years ago, so on the whole light vehicles are probably at a lower efficiency point design wise, compensated for by more efficient power trains.

There's no question that at some point you run into diminishing returns. OTOH, there's only so far you need to go. For instance, an electric car using 50 whrs per mile could be run from PV on it's own surfaces, or even from a bicycle generator - that's personal transportation!

It's true that improvement is limited by turnover. OTOH, turnover is faster than most of the casual analyses have assumed (including Hirsch's, surprisingly), as newer cars are used substantially more than older ones - you can probably replace 60% of car usage in 5 years.

That 20% figure isn't a hard limit: it's what you can do without much trouble. You could do much more with careful demand management (including use of plugins and EV's for low demand period charging, and V2G), a better national grid, storage, etc. Solar is complementary: it has a different pattern, and follows usage much more closely than any other source, so between solar and wind you could easily get to 70% of electricity demand. The other 30% might come from many sources, especially biomass and nuclear.

What's the source of that limit of 300 w/sq meter? Solar insolation is about 1,000w/sq meter (clear day at a good location). Sunpower cells (the best single layer cells, i.e., less expensive and not used for concentrating systems) are at 200, the best commercial triple junction cells are at 380, and the latest lab methods offer the possibility of 650.

"please point me to a solar unit where I can get the kind of return (10-30 fold) that you quote."

I think you're thinking of dollar Return on Investment ($-ROI). Yes, currently solar PV has a very long or nonexistent $-ROI in most places, though it's cost-effective in some places, like Japan and parts of California, and would be cost-effective in many more if the costs of fossil fuels included external costs (pollution, occupational health, CO2, security, etc). PV costs are dropping about 8% per year, and that's likely to accelerate with thinfilm like Nanosolar (though prices may not drop as quickly, as supply is currently being rationed by price due to skyrocketing demand), while FF electricity is rising in price.

Energy ROI is very different, and is quite high for both solar and wind. E-ROI doesn't tell you anything comprehensive about total cost or $-ROI, it just reassures you that the energy technology in question is basically feasible.

I'm curious where that electric generating capacity chart came from, as the increase from 2000 to 2003 seems a bit steep. I'd remind you, though, that this is a world chart. The transition to a service economy would be visible only in places like the US, Canada, Europe, etc. That's a tough one to analyze at a macro level, as you'd have to account for manufacturing outsourcing, changes in other sectors, etc, but it's pretty clear that a programmer in front of an LCD monitor uses less energy than a guy with a forklift.

Finally, I agree with you that it's not the long-term that's the problem, it's the transition in the next 10-20 years. I don't have a lot of faith in the Feds, especially with the Current Occupant, but the rest of the world (other countries, as well as local government, private industry, and individuals in the US) is moving. Let's work so that we move faster.

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CScott on September 8, 2006 - 11:17am

As to fuel effiency, the Citroen 2cv got something like 90mpg of course it had a top speed of about 60mph and it also did 0-60 in 32sec. Its all a question of trade offs. When fuel efficency becomes more important than performance we will see highly fuel efficent cars.

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Prodigal Son on September 7, 2006 - 12:12pm

That would be called communism, comrade neon9.

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mr f on September 7, 2006 - 12:15pm

Hahah. Nice one, prodigal son.

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tstreet on September 7, 2006 - 1:37pm

Don't forget Satanism.

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Nick on September 7, 2006 - 2:00pm

and terrorism.

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fleam on September 7, 2006 - 5:32pm

Damn that's a good one! We need to come up with more stuff like this, show we can laugh at ourselves and satirize the cornucopians' view of us, it will only help our cause.

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AlphaMaleProphetOfDoom on September 7, 2006 - 6:02pm

oh god is that funny! Prodigal Son, can you email me privately? I tried to email you but your addy isn't public.

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Dan Ur on September 7, 2006 - 8:30pm

Seeing that, reminds me go check out a story I posted to my Blog. It's all about what congress has been talking about for a few days, what the government can and can't do with you while live your life. Either as an honest citizen or as a commie pinko facist trying to take out a loan to buy a house so you can get a DL so you can drive to Washington D.C. and protest the Stupid laws they are inacting.

Oh and Watchout for car jackings, Your beat up pimp mobile might be needed by NSA to hide their agents in the slums so they can spy on the kids buying 1,000 pre-paid cell phones to sell on the street corners.

Laughs, Okay it was the 370 mile drive that has made me realize its the same ole same ole in congress, no wonder I stopped listening to what they have been talking about.

Check the story out, comment, let me know, send me an E.mail something, Checks can be made out to charles Owens, The blog has my address to send them to.

http://www.dan-ur.blogspot.com/

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tom deplume on September 7, 2006 - 12:58pm

That's right, sell your Hummer to someone else who will use just as much if not more fuel than the current owner uses. Instead retrofit that Hummer with a hybrid drive system. Or just let it sit and rust.

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Consume More on September 7, 2006 - 1:04pm

Or just let it sit and rust.

But that's not in the best interest of Numero Uno!! :)

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Brudaimonia on September 7, 2006 - 3:50pm

Better yet, turn it into a "parts car." Sell the parts individually or use some of them to build something that won't depreciate in value so fast in a post-Peak world (whatever the hell that might be).

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Leanan on September 7, 2006 - 9:28am

Definitely. You would not believe the number of articles along that line today. "Peak oil cancelled! Party time!"

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Glenn on September 7, 2006 - 9:30am

I expect we will hear more and more of this. Instead of "party time", people should think of stuff like this as "Last Call". And boy is the hangover going to be bitch!

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Prof. Goose on September 7, 2006 - 10:49am

at least until after November, oh, say 6th.

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Glenn on September 7, 2006 - 1:12pm

Right, just long enough to secure the "election"

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totoneila on September 7, 2006 - 6:06pm

Hello TODers,

I think this is a good time to consider how TPTB and MSM can utilize Shaw's Paradox to their short-term advantage.

If the topdogs are thinking the price of oil is going too low: a cornucopian message can help sustain FF demand among the unwashed masses. Thus, Yergin spouting Jack off in the MSM is purposely to diminish the never-ending depletion & conservation doomer message from TOD and other influential groups.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

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davidsmi on September 7, 2006 - 9:36am

It is amazing how one decent exploratory well gets turned in to an unending supply of the good stuff. I guess when faced with the prospect of hard times people will glom onto any hope to get back to that "good" feeling. It's really a sad state of affairs, we are are so hooked into this growth thing, we can't even see what its doing to us.

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jim burke on September 7, 2006 - 1:49pm

I might have a fresher perspective, since we live in a homestead on the edge of a small town with two traffic lights. We don't have a TV, and we don't travel much. A couple times a month we go to the "big city" thirty miles away; 60,000 people. Maybe twice a year we go to a "Real" city, Tucson. Wow, THAT's a weird experience. All those people zooming around in their cars, without any perspective that this might be unsustainable. In fact, the very word "unsustainable" has been overused and under appreciated. It falls on deaf ears.

It is pretty clear from the deluge of articles above that this is not just a corporate-media delusion; it expends to the full width and breadth of the global civilization. The richest billion people literally cannot conceive of a different way in which to run their lives; the wall of denial is total.

I dont' think peak oil will be fully acknowledged until production has declined so far, and changes have progressed so deeply, that the conclusion is unavoidable.

If adaptation requires the piercing of "The Iron Wall" of denial, that adaptation will be very slow in coming.

It is not clear how we CAN adapt. For after years of trying to lessen our dependence on the machine, my wife and I are almost as dependent as everyone else. Perhaps other people's margin of error (if things were to collapse) is a few hours or days; our's is a few months, or possibly years. For we cannot weave our own clothes, etc., so in the long run we are also dependent.

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fleam on September 7, 2006 - 5:44pm

In the old hunter-gatherer days, no one had to weave their own clothes. Every animal you ate came with X amount of clothing material, or bedding material, etc.

Low overhead, that's the key. What did the old Sioux have to work to support? The clothes on their back, literally, and a teepee, generally shared between 6-12 people. The orginal affluent society, because of low overhead.

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TrueKaiser on September 7, 2006 - 10:10pm

not to mention they used every little scrap of the buffalo.
the fur traders hunters just took the skin and the tongue leaving the rest to rot.

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mw on September 7, 2006 - 10:27am

Even in Canada... yesterday's Globe and Mail carried a half page spread, "Peak Oil Theorists Don't Know Jack" in the business section front page.

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Pitt the Elder on September 7, 2006 - 1:41pm

Looks like the Globe and Mail put the balancing piece in today:

Jack's just a drop in the bucket

The Jack discovery, along with the almost a dozen other prospects that have been recently drilled, could contain as much as 15 billion barrels of oil. Taking the five-year time horizon to develop the discoveries, and assuming U.S. consumption is in the neighbourhood of 22 million barrels a day by then, the 15 billion would last less than two years.
In other words, nice, but not enough.

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Robert Rapier on September 7, 2006 - 10:39am

I did see one this morning that sounded a note of caution:

EDITORIAL: Big Gulf of Mexico Oil Find Won't Mean U.S. Energy Independence
Source: The Morning Call, Allentown, Pennsylvania
Publication date: 2006-09-07
Optimism must be tempered by some realities. First, the United States consumes about 5.7 billion barrels of oil a year, so, at best, this find represents a little less than a three-year supply. Second, it's the deepest oil well ever drilled -- 5.5 miles below the Gulf's surface -- and it will be expensive and technically challenging to extract. Third, it will take probably until 2010 before it's commercially available.
No one should think it's time to forget about conservation plans or developing other sources of energy. Even if this adds more than 50 percent to the nation's known oil reserves of 29 billion barrels, we'll still be importing most of our oil. And, we'll have to be aware of the tremendous pressure this will create to ease environmental restrictions on drilling in the Gulf off the Florida and Louisiana coasts. It even will affect attitudes toward giving the green light to drilling in the Alaska National Wildlife Refuge, where it's estimated there are another 12 billion barrels of oil.
The nation needs more fuel-efficient vehicles, new sources of energy and sensible national policies to make us less reliant on foreign oil. This find only helps a little.

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Nate Hagens on September 7, 2006 - 10:53am

Ive seen that number several times in the last few days. According to BP statistical site, US consumed 7.5 billion barrels in 2005, not 5.7 billion.

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Robert Rapier on September 7, 2006 - 11:34am

You are right about that. Looks like someone transposed a number.

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mr f on September 7, 2006 - 12:21pm

Yup. Simply multiply 21 (or 22?)--hard to keep track of all these numbers, by 365... You get somewhere in the range of 7.5 billion as a result.

The funny thing that no one seems to be mentioning... I saw an article somewhere yesterday with a big title something along the lines like "US Reserves may swell 50% on huge oil find"... As if this is a massive find which is a harbinger of good times to come. When, in fact, the exact opposite is true--what this story is indicative of is how small US reserves is.

As usual, the press has got everything backwards.

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mr f on September 7, 2006 - 12:23pm

are*

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Badger Peaknik on September 7, 2006 - 3:12pm

Already happening in the more sane, local press:

http://www.norwichbulletin.com/apps/pbcs.dll/article?AID=/20060907/OPINION01/609070309/1014/OPINION

And here too.
http://lacrossetribune.com/articles/2006/09/07/opinion/00edit07.txt

Published - Thursday, September 07, 2006

New oil discovery does not reduce need for conservation

By La Crosse Tribune editorial staff

The announcement about a large deep-water oil field off the coasts of Louisiana and Texas certainly is good news.

But we shouldn't assume that we can drill our way out of the current oil crisis. The world now includes a rapidly developing China, with its 1 billion residents. When more Chinese residents start consuming oil at the rate of Americans, there's no amount of new oil fields that could make up the difference.

Instead, we're going to have to get smarter -- and pretty quickly -- about how we use energy <snip>

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TN Granny on September 7, 2006 - 10:09pm

Chattanooga newspaper has 'Oil find deep and difficult' on the left side of the editorial page which points out the expense and long time frame for producing this field and the fact that it will do little to diminish our imports of foreign oil. On the right side of the editorial page is 'A Great new US oil discovery' which is a call for drilling in ANWR (and any place else) to recover more domestic oil. (these are not available online)

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old hermit on September 7, 2006 - 7:29pm

Hello RR:

No one should think it's time to forget about conservation plans or developing other sources of energy. Even if this adds more than 50 percent to the nation's known oil reserves of 29 billion barrels,

It's the 50% increase in the national reserves that kills me
me when I'm talking to people about PO. Their comments are
look we just almost doubled our reserves. Trying to convence
them that a 50% increase doesn't mean a damm thing, is next
to impossible.

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westexas on September 7, 2006 - 9:37am

Says Robert W. Esser, a director of CERA: "Peak Oil theory is garbage as far as we're concerned."

The actual estimated reserves for the "Jack" discovery, about 300 million BOE, would meet total world liquids demand for less than four days. From nuclear + fossil fuel sources, the world uses the energy equivalent of the estimated "Jack" reserves about every 36 hours.

Look at the chain of events here. A group oil companies makes an announcemnt of a "major" discovery, at a politically convenient time. The energy analyst guys, CERA, jump on the bandwagon and use it as an example of why Peak Oil is "garbage." All of this is reported by the media group, at Businessweek.

Look at the level of coverage regarding this ultra deep discovery, versus the (extrememly limited) coverage of the ongoing crash in production at Cantarell, the ongoing production deccline in Saudi Arabia and the overall decline in production by the top 10 net oil exporters.

What we are seeing is the "Iron Triangle" in full force--fighting back against those who would advise Americans to "Economize; Localize and Produce."

The underlying message of the Businessweek column is to go ahead and buy and finance the large SUV and large suburban home, because you have nothing to worry about. . .

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optimist on September 7, 2006 - 9:40am

Hey Westexas, did you see the link I posted on yesterday's thread to a list of all the U.S. localities that have implemented some form of their own local currency? ELP and they don't even realize it!

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roel on September 7, 2006 - 10:11am

I find the surprise expressed at The Oil Drum more surprising than the entire spin itself. Deliberations in the War Room have been finalized. Now the full weight is thrown behind getting the media to paint the desired picture. And the spin machine is powered by a giant engine that controls much of the press and throws a lot of weight. This they can do. But we knew that.

We saw it coming from far, as in 7000 feet of deep water, away.
Bush "admits" to the secret CIA prisons, and while some EU allies express their shock, for what that's worth (he lied!!), it will hardly raise a brow this side of the pond. Result: it can't be used against him anymore in November.

Meanwhile, NATO grabs the opportunity, away from the full press glare, to demand more troops for Afghanistan. They're losing bigtime over there. But they're not losing US bodies, so who cares?

It has been decided that 2 full months of powerspin are needed to get the election outcomes desired. Well, we're off, the gentlemen have started their engines.

Oh, and there's the little matter of a Senate vote on offshore drilling. What better persuasion than a discovery "at home" that carries the promise of lower prices at the pump? Who in Washington now wants to be seen as the party pooper?

Jack's main purpose may well be holding out the option of more Jacks. If only they let us drill.

It's a clever ploy. Telling people what they like to be told is infinitely easier that the opposite. See anyone capable of breaking that fold? I don't think Peak Oil awareness is perceived as a serious problem yet, but just in case, Jack squashed it out of existence for the foreseeable future. Job well done.

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paperhead on September 7, 2006 - 10:28am

It is amazing how fast the price of gas is coming down this time. Oil is down less than 15%, and gas is down about the same, even though the price oil is only about 1/2 of the cost of gas. Usually, it takes months for gas to follow oil down. The spin is in full force now!

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fleam on September 7, 2006 - 5:41pm

I don't even think the average 'merkan cares about secret prisons. The "liberal" press (good on 'em but this has played into corpgov's hands here) has been telling those who are interested there are secret prisons, so there's no real shock over it now when the neocons let it out that they exist now. And the average 'merkan is convinced all them ay-rabs in Dearborn Mich. or someplace can hardly wait to rape their sister (who looks like Drew Carey in a dress) anyhow. We've all been weaned on movies about WWII where The Good Guys beat up The Bad Guys for a confession and were raised to believe the Nuremburg trials* were run on the up-and-up so basically we as a country have no real problem with secret prisons by now.

*The Nuremburg Trials did convict and hang a lot of baddies, but they were a kangaroo court at best. The big baddies were offed and that's good, but a lot of smaller supposed baddies, maybe baddies and maybe not, were hanged on hearsay. The result is that some of these minor players are considered martyrs now,, although you'll never hear about it from inside the US.

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Nick on September 7, 2006 - 5:55pm

"We've all been weaned on movies about WWII where The Good Guys beat up The Bad Guys for a confession "

Not to mention "24", where someone is tortured for information about every 3rd episode. The victim is always guilty (at least when Jack Bauer does it), they always cough up the info, the info is accurate and the day is saved.

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oldhippie on September 7, 2006 - 6:21pm

Have you really watched 3 episodes? You must have a strong stomach.
I have friends who rent and/or buy the full season DVDs and can't even understand that what they are paying for is propaganda. At such moments I feel like joining the doomers.

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Nick on September 7, 2006 - 8:38pm

Oddly enough, I can notice the strong propaganda elements, put them aside, and enjoy the show.

It certainly promotes bad things, like fear of "terrorists", faith in torture, secrecy and general disdain for civil liberties.

OTOH, it's a fairly complex mix of ideas. The authorities, including presidents and presidential advisors, are usually incompetent, corrupt or power hungry. Three of the first 5 seasons have featured plots to gain control of oil supplies, twice by corrupt presidential advisors.

Finally, it's pretty good entertainment. I wouldn't recommend it for anyone under 25 not accompanied by someone who can explain all this...

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oldhippie on September 7, 2006 - 10:35pm

Lynchings are good entertainment too.

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Nick on September 7, 2006 - 10:50pm

Yikes!

This is fiction, you know...

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AlphaMaleProphetOfDoom on September 8, 2006 - 4:24pm

come to the dark side my child

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oldhippie on September 8, 2006 - 7:21pm

Sorry, Alpha. I'm holding out for the Alpha Female Prophet.

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Substrate on September 8, 2006 - 10:55pm

Holding out for Leannan, eh? ;)

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TrueKaiser on September 7, 2006 - 10:20pm

They're losing bigtime over there. But they're not losing US bodies, so who cares?

Thats a understatement. about half the country is back under tali-ban control.

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tate423 on September 8, 2006 - 10:18am

Must be the half that aren't grwing the poppies for heroin.

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mikeB on September 7, 2006 - 10:12am

Right on, Jeffrey.

And that's why I am a hard-core, despairing, not-nearly-enough- prepared DOOMER.

Not because of Peak Oil.

Because of human OBLIVION to the facts.

What good does it do me to prepare when the people around me aren't preparing?

No, they're doing the opposite.

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Todd on September 7, 2006 - 11:39am

Let's call ourselves Realists - not Doomers

Mike,

Like you, I've called myself a doomer for more years than I care to remember. However, I've come to the conclusion that we need to rename our position. "Doomer" connotes some sort of emotionally arrived at or, perhaps, irrational belief. In my case, and I'm sure most others, I arrived at my beliefs from a rational perspective. Further, the actions I have taken have only been taken after a rational consideration of the future.

Todd; A Realist

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toilforoil on September 7, 2006 - 1:12pm

Relax, Doomsters, this is just a big jack-off. In a few months, if not weeks, the present circle-jerk will have been forgotten, real trends will reassert themselves and the climb in peak oil/energy awareness will continue.

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Samsara on September 7, 2006 - 1:18pm

The Optimist Believes That This is the Best of All Possible Worlds.

The Pessimist is Afraid That He is Right.

----------------

There is so much good in the worst of us
and so much bad in the best of us
It's hard to tell which of us
should reform the rest of us

john

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biologist on September 7, 2006 - 2:04pm

Congratulations, THEOILDRUM! The spinmeisters have finally established a base camp at this venerable place. "Doomers" sounds too bad, we have to call it something else....

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Todd on September 7, 2006 - 3:48pm

Biologist,

Thanks for the compliment, you are exactly right. Whether we like it or not, words define people's thoughts (not much of an insight there, though). Who would choose doom over cornucopia?

The truth is that I want to live/survive far more than most other people. To me, they are the doomers. I have been willing to put my time and money on the line in order to have better odds at a satisfying life.

As a Realist, I see nothing that leads me to believe population will be dealth with; that a non-growth economic system will be developed; that all energy will come from sustainable sources; that agriculture will be able to function without FF inputs and so on and so on.

It's really the difference between the people in Galt's Gulch in Atlas Shrugged and people outside. The people in the valley were not doomers even though they understood where society was going. They were highly optimistic.

Todd; the Realist

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Seadragon on September 7, 2006 - 5:24pm

BTW, Todd, thanks for the recommendation of Lights Out the other day. I'm still reading it and learning a lot.

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Todd on September 7, 2006 - 6:30pm

Seadragon,

Thanks. It's such a good read and contains so much useful information. I've considered printing it out but I can't get myself to spend the ink and paper.

For those who missed the link, it is:

http://www.giltweasel.com/stuff/LightsOut-Current.pdf

Be forewarned it's 611 pages - but worth it.

Some other good reads with good information are:

http://www.timebomb2000.com/vb/printhtread.php?t=136417

This story is called Dark Winter by Tom Sherry. It starts with an eruption in the Seattle area.

This was follwed up with:

http://www.timebomb2000.com/vb/printthread.php?t=169761

This is the continuing story and still (albeit slowly) ongoing.

Todd; a Realist

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odograph on September 7, 2006 - 9:47pm

Just don't try "moderate," it's taken.

FWIW, I think "pessimist" is a good word, which accurately describes those who think peak oil will lead to very bad outcomes.

(we moderates worry about somewhat bad outcomes, and the optimists don't worry at all)

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odograph on September 7, 2006 - 10:08pm

Well, if doomers become realists, I'm going to rename moderates to be "people with a balanced brain chemistry."

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odograph on September 7, 2006 - 9:51pm

What good does it do me to prepare when the people around me aren't preparing?

I bet you could actually find me some local, state, federal, and international programs to reduce energy and/or oil consumption.

Down the thread someone wants to say that "pessimism" isn't emotional .. but what the heck is it when we just pretend nothing is happening?

(The key is that it isn't happening fast enough for you, and me actually. But not fast is not the same as not at all.)

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mr f on September 7, 2006 - 10:17am

Aha, but you are wrong!

See, the the price of oil has PLUNGED down to 67-68 dollars or so... Just look at the little graph on the righthand column there. I mean, if that isn't evidence for peak oil "theory" being garbage then I don't know what is.

Anyway, didn't Vincente Fox announce a 10 billion barrel find earlier in the year? I mean come on, we've now discovered 25 billion barrels in ONE year. You guys just want the futures price to go up. Jesus you people are so pessimistic--why can't you just go with the flow? I mean yeah, Saudi supposedly has 250 billion barrels left--so what! We have 21 million (plus the new finds) which will last us, eh, hrmm, carry the 1... shit, nevermind.

Just let the oil fiesta continue!

Roll up in your SUVs and holla if you hear me

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mr f on September 7, 2006 - 10:19am

21 billion! Alas, three years worth of consumption is close to negligible.

If only we could drill anwr, and get another couple of years worth of hydrocarb smack. Shoot 'er up!

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Seadragon on September 7, 2006 - 10:35am

Great job the MSM is doing talking down the price of oil, and so close to the elections too. If I didn't know better, I'd think it was there was some kind of conspiracy or something, but that's just absurd...

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Calorie on September 7, 2006 - 10:54am

westexas,

Don't forget the April 5, 2004 BusinessWeek cover story on Saudi Arabia. In fact, that story is how I found out about Matt Simmons and his book.

I would not be surprised if we see some more sober MSM articles about this find (i.e. Jack, lower tertiary) in the near future. These will remind us about the high cost, long lead time, location in the hurricane-prone Gulf of Mexico, importance of production rate as opposed to reserves, and the ongoing depletion of existing fields in production. I'm betting on a front-page story in the Wall Street Journal in the next few weeks.

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mr f on September 7, 2006 - 12:33pm

Already happening in the more sane, local press:

http://www.norwichbulletin.com/apps/pbcs.dll/article?AID=/20060907/OPINION01/609070309/1014/OPINION

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jkissing on September 7, 2006 - 1:27pm

What's proved is 300mm. Chevron statement is 'maybe 3-15 billion'. What is qouted is 15 billion, or 50x the proved.

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mr f on September 7, 2006 - 2:24pm

I thought all that was was proved is 6k bpd outta something called Jack 2--that is something like almost 30,000 feet down--supposedly below the normal oil barrier and more in the territory of gas? I dunno.

http://www.theoildrum.com/story/2006/7/10/145048/052

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elwoodelmore on September 10, 2006 - 3:10pm

where did the 300 million (proved) figure come from chevron didnt to my knowledge comment on reserves only that the lower tertiary (80 x 240 miles) could contain 3 to 15 billion

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Wolfric on September 7, 2006 - 11:09am

Hi Westexas,

As I told before, the way the MSM are acting now is not as good as it would be if it was actually convincing people to ELP but at least, they are a notch above their previous stance: dont even argue against!

When you want to keep something off the public debate, the first thing to do is not to talk about it. If it's not talked about, it does'nt exist. Right now they are talking against and they have two reasons to do it.

Geopolitics are kind of smooth theses days and even the Iranian situation is less hot than in the summer or last spring. Worries are also on the low side for the huricane season.
This discovery was spinned in the usual low consumption period, we have not started heating, AC is down in northem part of the US, vacation driving is down because of back to work period, change between the summer and winter fuel formulae and lowering of fuel prices to empty the tanks.

People are less dumb than they appear (sometimes) and they know that this kind of lowering of prices is just a step to increase the price even higher than before. They've seen the patern in the last 3 years.

I do think then that the PO message will kind of get some more people on this.

Time and developpement in actual extraction of the ressource world wide will confirm the decline in Cantarell and KSA. I wonder at which point does the current shiping to the refineries in Texas and Louisianna will get low enough to limit the switch to other producers.

I do think it's better, in a chain of event perspective, that the decline of production comes from a geological limitation. Other effects caused by war, technical maintenance, unrest or commercial sanctions would just get the people to discard PO as the underlying phenomenon.

If indeed Chris Skrebowsky, Collins and others are right and increase in production is possible trough 2010 it will just help us convince more people and prepare better.

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solar1 on September 7, 2006 - 9:28pm

Westexas, It is amazing to see the differences in MSM reporting on oil crashes vs oil discoveries. This smells just like the Mexican oil discovery that was as big as Cantarell and rapidly sank to zero. We will be fortunate if this find is at the low end of their range. I don't know how they could be so certain given the limited exploration and great depth of their find. In this case it looks like absence of proof is proof enough of a "huge" find. Reminds me of gold rush fever.

Soon all we will have will be solar and efficiency improvements. We'd better get used to it.

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optimist on September 7, 2006 - 9:38am

It's all part of PR control. We can't have the people finding out the truth -why that would cause a panic!

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Nate Hagens on September 7, 2006 - 10:04am

Peak Oil of course is not a theory but a fact, as the world is subject to natural laws and oil is finite.

What that article, and others like it, might have suggested is that Peak Oil, according to Hubbert Linearization, could have some slight adjustments down the road.

Im not an HL expert, so will throw this out to the crowd, but how much of a 'region', according to HL, goes out to the deeper water (35,000 feet)? Can we do a Hubbert analysis of Nigeria and other African countries that have never drilled in deep water and assume that future finds will fit in their general geographic 'country' boundaries? Or are deep water Nigeria and deep water GOM 'different' regions and should be linearized separately from the countries they are next to?

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mr f on September 7, 2006 - 10:30am

That fatuous Business Week article suggests that the Lynchites over at CERA consider near term peak to be unlikely to impossible (before 2020).

Now I'm very curious--why doesn't Michael Lynch work for CERA?

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copelch on September 7, 2006 - 4:08pm

Nate Hagens writes:

What that article, and others like it, might have suggested is that Peak Oil, according to Hubbert Linearization, could have some slight adjustments down the road.

Precisely. It is absolutely vital for peak oil theorists to factor in a generous yet-to-find fraction in their calculations -- otherwise every future discovery (be it baby elephant, hippopotamus, water buffalo or koala bear) is going to give the cornucopians yet another opportunity to dump buckets of derision on the 'doomsters'.

And the peak oil activists will begin again to hum and haw (for example) about pre-election 'conspiracies' or play with words by making artefactual distinctions between 'conventional' and 'non-conventional' categories of oil.

Why not just acknowledge the reality: nowhere is it carved in stone that a straight line has to stay straight for ever. Why not consider the possibility that the final decades of the petroleum era may have a somewhat different pattern than the one that characterised the now vanishing halcyon days? After all, the Hubbert curve only 'settled down' about 25 years ago. Who can guarantee that it won't get unsettled again?

And just in case there are any misunderstandings: I am a dyed-in-the-wool Georgescu-Roegenist, Cattonist, Hardinite, Dalyist and Anti-Yerginist. I have a copy of 'The Entropy Law and the Economic Process' under my pillow. I have attended the last two ASPO annual conferences.

... and I even brushed up my old school math for HL's sake.

Now I know that the x-axis is the horizontal and not the vertical one.

After all these years ....

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Halfin on September 7, 2006 - 5:48pm

That's in fact what economic theory would tend to predict. As world oil supplies decrease, price will rise. More importantly, price will be known and anticipated to continue to rise for the foreseeable future. This will lead to very different results than when individual fields or even countries have run out of oil in the past. Incentives to improve production will be far greater as the world goes over the top of Hubbert's Peak than anything we have seen before. No longer will it be an option to just go elsewhere where oil is still cheap and easy to get. There will be no more "elsewhere" to go.

Expecting worldwide peak oil to be the same as region-wide is setting yourself up for surprise and disappointment.

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Patently oil on September 7, 2006 - 6:40pm

Halfin,

I get your point that economic incentives will push up production but I think you gloss over the strongest arguments too easily.

If I understand your argument, your position is that if we show up with more money then we will figure out more ways to get more oil. This is the argument posed by CERA and Lynch. They say Hubbert theory fails because it doesn't take into consideration that the area under the curve grows in response to technology and more money. I believe that is what your opinion is.

In my opinion, the strongest argument for a worldwide peak to be the same as a region peak is the United States or other wealthy country that is in decline.

The United States has peaked and has been steadily declining for over 30 years. The price of oil has increased from $18 to averaging around $70 since 1998 and we've pretty much done nothing to stop the decline trend. As the world's largest importer we are transferring huge amounts of wealth oversees to pay for our imports. Not to mention the price rise is making many of our enemies more wealthy and more powerful.

Can you honestly hold the position that if this is simply a matter of price and economics---why haven't we been able to signifcantly change the shape of the curve for 30 years? Wouldn't it be in our best interests to increase our own production as much as possible? Yet we haven't. The best we have done since 1998 is maybe find some gas or oil that will possibly offset the Gulf of Mexico decline.

Furthermore, peak oil is all about economics anyway. If we have to spend $200 for a barrel of oil just to change the shape of the decline rate from 4% to 3% where does that really help us? Wouldn't oil at that price pretty much revolutionize the United States way of living anyway?

I like your skepticism against all the doom talk around here. Need different viewpoints. But I don't think this argument flies--I can't see how the world will be significantly different than the aggregate sum.

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Halfin on September 7, 2006 - 7:24pm

The point is that logically, there is no reason to expect local peaks in production of an irreplaceable commodity to have similar effects as a global peak in production, for the reasons I gave. Local peaks mean you go elsewhere; a global peak means you have no choice but to work harder than you ever have before, or else you die (or whatever). So logically, you would not expect this to be the case.

Now, maybe in fact it does turn out to be the case, even though logically there's no reason to expect it. Maybe in fact regional peaks will turn out to have the same properties as a global peak.

But if that were true, what would this site be about? Isn't the whole point of the PO movement that worldwide peak oil will present us an unprecedented challenge? Otherwise people could just say, oh, we ran out of oil in lots of places before and nothing bad happened, so running out of oil in the whole world will be no different.

Of course, that's absurd. Running out of oil in the whole world is very different from running out of oil in one field or country. And that's really all I'm saying. Just as we would expect other effects of a worldwide oil peak to be different from past regional peaks, we should expect the details of production rates to be different as well. Desperate people behave differently than complacent ones, and that is going to make a huge difference in the response to a worldwide peak.

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Patently oil on September 7, 2006 - 8:05pm

Halfin,

I get your point very much. I do think things will look different on the backslope but will have to do much more with demand than ability to get supply. But I don't see a big change for supply.

Concerning desperation, lets take a real world example. Shell Oil is in the oil business and if they can't replace their oil reserves they will die so to speak. They are a good model for desperation as they have been struggling a bunch with replacing reserves.

Shell is spending 19 billion dollars this year mainly on synfuels. Shell is making the decision that milking oil from dirt is more cost effective then searching for more. Shell is also contemplating opening up some new projects in the new Jack area find.

Think about this. Shell, a desperate company, has decided that its better to spend their time and cheaper to drill down 5 miles for oil or gas and convert dirt to oil than to upgrade existing production flows. Accordingly, increasing the amount of recoverable oil from the oil in place seems to be quite difficult. Otherwise, it would seem to be much easier to simply put this money to doing that as such a small increase in recovery factor would be huge for a company with this big of reserves. A desperate company will years of oil experience isn't counting on changing the production curve.

Summing up, in my opinion, the production curve will be similar on the backside even if we are desperate. In my opinion, any extra financial and survival motivation will be tempered by the difficultly of extracting the newly found oil from 5 miles down, burning dirt, etc. Unconventional might cause the decline rate to be a little slower, which is good news (from a PO perspective only), but a totally different shape seems unlikely to me.

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gTrout on September 7, 2006 - 7:17pm

"It is absolutely vital for peak oil theorists to factor in a generous yet-to-find fraction in their calculations"

Ah, you don't understand the point behind the curve fitting, and that is why you are bashing the technique. I think I can help, and perhaps help a few others understand at the same time.

We cannot measure future oil discoveries and production directly. They happen in the future and we are not there yet. So the point of fitting the curve is to use past data to create a mathematical model. Then we use the mathematical model to predict the future.

The mathematical model for discoveries predicts that there are at least 100 billion barrels of oil yet to be discovered. If those discoveries are not found, then the model was too generous and the decline curve will be steeper. If 200 billion barrels of oil are found (about another Saudi Arabia's worth) we can start to worry the model was too conservative.

No one is factoring in a generous yet-to-find fraction. What they are doing is reporting the predictions of the model. (that is why we did the whole model in the first place)

Also notice that an extra 200 billion barrels is still less than 10% of the planets total endowment of oil. Adding it or not will not change the peak date by much, or lower the decline rates by a large amount.

"Why not just acknowledge the reality: nowhere is it carved in stone that a straight line has to stay straight for ever."

A good point and worth addressing. I think you will see why that line is unlikely to change direction.

When a polling company predicts an election, they cannot ask every single person how they will vote. So instead they ask a few thousand people and fit that data to a mathematical model and use that model to predict how everyone will vote. It is a valid question to ask how certain are the poll results (and they usually state +-3% or so).

In a poll they might ask a few thousand people out of 100 million voters.

But consider our case with oil production. HL analysis is predicting that we are almost at 50% of total production. We have "polled" half of those 100 million voters. If you examine the discovery data, it is even more certain, we have "polled" 94% of those 100 million voters. That isn't polling anymore, that is the final vote count.

Is it possible the line shifts direction? Yes. The last 6% of discoveries might turn out to be 4% or 8%. Will that matter overall? No.

I still strongly recommend Deffeyes's chapter on Hubbert Analysis in "Beyond Oil". It is very clear and there is no point in retyping everything he writes.

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copelch on September 8, 2006 - 11:39am

Gtrout,
Thank you for your very interesting reply. I hope to address the points you have raised in a future posting -- but I don't have time at the moment due to 'pressure of leisure' -- have to go off cycling with Madame C. as promised.

Actually I have read carefully the Deffeyes HL chapter -- in fact, I think it's almost worth a sentence by sentence analysis, since it encapsulates all the strengths and weaknesses of the top-down approach to peak oil.

Coming soon ...

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GreyZone on September 7, 2006 - 10:18am

Why are you people surprised? What here really is unexpected? Are you all so foolish as to believe that people will respond to raw facts alone always? Especially when there are powerful vested interests (westexas' "Iron Triangle") that have much to gain by debunking those facts in any way possible?

Peak oil is not a problem about science or even technology. Peak oil is a social, psychological, and political problem and we are losing that fight. Further, I will boldly predict that we will continue to lose that fight, until it is too late to do anything about it. Heck it may already be too late as a prior generation tried to warn the world in the 1970s, including M. King Hubbert himself before Congress.

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mikeB on September 7, 2006 - 10:27am

Craig Bond Hatfield, a retired geology professor in Toledo, began sounding the alarm in the early 80s about peak oil, though not using that term. He retired in 1999. I went to see him last month at his home, after not seeing him in 27 years. I asked him what he's been writing lately about oil.

"I quit writing about oil after I retired because I realized it's too late. I'm retired. Time to have a little fun."

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mr f on September 7, 2006 - 10:57am

I see this string of crying wolf scenerios as seriously tragic. We had an open window in the 70s to try to reform ourselves as a society and superpower. Before that it was purely speculation. After Hubbert was vindicated it was immediately clear that the US had to make a decision, that decision was the Carter Doctrine as we all know which has now morphed into some twisted version of Rationality Gone Mad in the Form of NeoCons From Hell. Once Katherine Harris has won her Senatorial campaign in Florida (please god no) I think you can very well give up all hope and call in the apocalypse.

There is nothing that frustrates me more than the retarded inveighs against peak oil scenerios ("peak oil" is not a theory but an observation, as JHK has repeatedly stated!) The idea that somehow we can't hit limits to growth is this Randian idea of the intrepid capitalist out to go find the "next thing".

I'm not sure Rand knew so much about thermodynamics.

Anyway... It is a shame that everyone says (CERA's Daniel Terdgin included) that there has been many times before where people warned of oil running out--since it's discovery a little after the mid 19th-century, and this time is the same thing. Everyone fails to mention that the warnings in the 70s were an opportunity to prepare ahead (ala Hirsch Report pre-requisite 3 decade rule.) We had been "tested". And we failed. We were tested again with Enron and the East coast black out. We have been making the same decisions for more than thirty years, and we aren't going to stop now. We will run into we hit a wall, whatever its form may appear as before us. We chose to go the way of "globalization" and the road led here--to the status quo.

Short the market. =]

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geewiz on September 7, 2006 - 10:56pm

i feel the same way, as if we are headed straight for a wall, at full throttle!
The politicians will talk it up as if everything is OK, but as some one recently indicated, the GOV will deny everything despite anything contrary, and then blame someone when the CRAP hits the fan! followed up with promises to fix it all up, and raise our taxes............
AARRGG!

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Jack Greene on September 7, 2006 - 11:13pm

Mr F,

Not a chance that Harris will win.

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mr f on September 8, 2006 - 2:55am

Yeah, I realize that--it's just that I ordered my rampant horse of the apocalypse and he's already in the stable and ready to go. He's just waiting for Katherine to fire the starting gun.

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Valisade on September 8, 2006 - 4:39pm

A lot of us down here in Florida love the fact that she won the primary. She doesn't stand a chance of beating Nelson, but she's loads of laughs in the meantime. :)

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Magnus Redin on September 7, 2006 - 5:36pm

Peak oil is not a problem about science or even technology. Peak oil is a social, psychological, and political problem and we are losing that fight. Further, I will boldly predict that we will continue to lose that fight, until it is too late to do anything about it. Heck it may already be too late as a prior generation tried to warn the world in the 1970s, including M. King Hubbert himself before Congress.

Over here in Sweden we did not forget to use our technology after the 70:s oil crisis had passed and I think we still are in the fight. We need to do lots more but a fair ammount of what needs to be done is at least on the drawing board and in the agendas of all the large political parties. There are very nice synergies in lessening the dependancy on oil, emitting less CO2 and making society less voulnerable to major disturbances and all of those goals are being worked at, slowly but still going forward.

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tstreet on September 7, 2006 - 10:21am

I have never found the scenario of peak oil to be "scary". What I find scary are stories now coming out that the permafrost is melting at a much faster rate than previously. What I find "scary" is when I see before and after pictures of glaciers and other ice packs. What I find "scary" is when I see species pushed higher and higher and further north because of rising temperatures. What I find "scary" is the continuing drowth in the southwest.

And, finally, what I find "scary" is that such a stupid article could be found in Business Week. What is "scary" is the amount of fossil fuels we are consuming. Whether we are running out of oil should be irrelevant in a world that is determined to do something about global warming. Unfortunately, because our so called leaders won't do anything unless is relates to fear and greed, the existance of peak oil, at least, was a way to get people to do something about alternatives and conservation even if they didn't give a damn about global warming.

But never mind. Most of the country is more concerned about Tom Cruise's baby and Katie's possible botox treatments than they are about peak oil or global warming.

On a related note, there was a guy on Scarborough last night criticizing the CBS news for saying that this new discovery in the GOM would probably not have any efffect on short term gas prices. This was his evidence that CBS is still dominated by liberals. Yeh. Whenever anyone just points out basic, obvious facts, it is a liberal conspiracy.

Yeh, Peak Oil is so last week. We can all relax now and recommence happy motoring as usual.

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roy on September 7, 2006 - 12:34pm

tstreet,

Agreed about climate change being the biggest danger. A tiny bit of good local news: today I get my hybrid operable: Bike pedal/electric.

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jim burke on September 7, 2006 - 1:57pm

We recently got an eGo electric scooter, which we run on PV. Great running little machine; will go up to 20 miles on a charge (530 watt hours to charge up again), and it will hold a front basket, panniers, and pull a trailer rated at 100 lbs. (took three months to get the scooter, and will take another 2 plus months to get the trailer; demand is heavy.)

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TrueKaiser on September 7, 2006 - 10:55pm

i would rather get a normal bike. less parts to break.

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Donal on September 8, 2006 - 12:00am

Well, bikes break down, too. As I see it, the weakness of the Ego, or any scooter, is that you can't pedal to extend the range.

I'm thinking of someday tricking out my old Trek with an electric drive - Wilderness, Bionx, Lashout or something. That way if I run out of juice, I can still pedal my way home.

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Substrate on September 8, 2006 - 11:11pm

A link for you: http://www.waw-bionx.blogspot.com/

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tom deplume on September 7, 2006 - 1:27pm

Considering how often the conservatives have been wrong regarding anything scientific then anyone presenting "facts" must be a liberal.

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josephdietrich on September 7, 2006 - 4:59pm

Reality has a well-known liberal bias.

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Zanth on September 7, 2006 - 11:36pm

wait, Katie's getting botox treatments? I KNEW IT!!!!

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Seadragon on September 7, 2006 - 10:33am

No one more qualified than you to do it, although I suggest you title it "You Don't Know Jack...About Jack."

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307 comments on DrumBeat: September 7, 2006

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“So one may almost say that the theory of universal suffrage assumes that the Average Citizen is an active, instructed, intelligent ruler of his country. The facts contradict this assumption.”

—James Bryce (1909, 35)