At $100 Oil - What Can the Scientist Say to the Investor?

The following post is my cut and paste review of a new paper by Charles Hall, Robert Powers, and William Schoenberg titled "Peak Oil, Investments, and the Economy in an Uncertain Future". This paper, along with 16 others (including 2 by theoildrum.com contributors), will be part of an upcoming book edited by Professor David Pimentel, "Renewable Energy Systems: Environmental and Energetic Issues". (I'll provide links when published). The paper by Professor Hall et al. is a thoughtful preliminary treatise on the impact that projected lower net energy for petroleum might have on the economy and investments.




The following graphics and grey box quotes are taken, in order, from the paper "Peak Oil, Investments, and the Economy, in an Uncertain Future". The paper is much longer than what is pasted below, but this post should give a general sense of the authors work. The comments between the grey boxes, as well as the conclusion, are my own:

While we are used to thinking about the economy in monetary terms, those of us trained in the natural sciences consider it equally valid to think about the economy and economics from the perspective of the energy required to make it run. When one spends a dollar, we do not think just about the dollar bill leaving our wallet and passing to some one else’s. Rather, we think that to enable that transaction, that is to generate the good or service being purchased, an average of about 8,000 kilojoules of energy (equal to roughly the amount of oil that would fill a coffee cup) must be extracted from the Earth and turned into roughly a half kilogram of carbon dioxide. Take the money out of the economy and it could continue to function through barter, albeit in an extremely awkward, limited and inefficient way. Take the energy out and the economy would immediately contract immensely or stop.

Professor Hall also has recently written a textbook on Biophysical Economics, and the above example illustrates part of the difference between biophysical economics and neo-classical economics. There is no 'substitute' for energy. Conventional economists see economic activity as a function of infinite "money creation", rather than a function of finite stocks and flows. Though we are not taught this way, the economy is 100% dependent on available energy. (Biophysical economics is a step in the right direction, but does not address the demand-side problems with neo-classical economics -e.g. we are not rational utility maximizers, 'utility' itself being a scientifically non-measurable tautology, wants are not needs, neuromarketing CAN influence our decisions, etc.) Without a growing energy surplus, the only way we can have economic growth is by a)borrowing from environment, b)an increasing global GINI coefficient of wealth inequality, c)concomittant increases in efficiency and/or conservation. Otherwise 'increases' in GDP are just accounting tricks. When oil peaks (and probably before, due to net energy), global growth will be over. (I acknowledge several non-zero, but extremely low odds exceptions to this statement)

Cuba found this out in 1991 when the Soviet Union, facing its own oil production and political problems at that time, cut off Cuba’s subsidized oil supply. Both Cuba’s energy use and its GDP declined immediately by about one third, all groceries disappeared from market shelves within a week and the average Cuban lost 20 pounds.

I could use 2-2.5 of these energy crises...;) (There is also a movie "The Power of Community" about the successful response of Cuba to their oil crisis)

While the United States has become more efficient in using energy in recent decades, most of this is due to using higher quality fuels, exporting heavy industry and switching what we call economic activity, and many other countries, including efficiency leader Japan, are becoming substantially less efficient.


The very large use of fossil fuels in the United States means that each of us has the equivalent of 60 to 80 hard working laborers to “hew our wood and haul our water” as well as to grow, transport and cook our food, make, transport and import our consumer goods, provide sophisticated medical and health services, visit our relatives and take vacations in far away or even relatively near by places. Simply to grow our food requires the energy of about a gallon of oil per person per day, and if a North American takes a hot shower in the morning he or she will have already used far more energy than probably two thirds of the Earth’s human population use in an entire day.

A quibble~ this differs from the numbers I've been using. I've seen it several places that 1 barrel of oil has the amount of calories that equates to roughly 25,000 hours of human labor. Of course, me sitting at a computer will use less calories than my friend the jackhammer operator, but consider that as average. Working 50 weeks per year at 40 hours per week, that equates to 12.5 years of labor per barrel - each American uses 25 barrels+ of oil per year, which is 312 'hard working laborers', not 60. If we include gas and coal, the number is over 700 of these 'energy slaves'. (Professor Hall works much harder than I do, so if he meant 60-80 "Charlie Halls", I'll agree...;) I guess I need to track down a source for my 25,000 figure.

.... So our physical capacity to produce oil depends upon our ability to keep finding large oil fields in regions that we can reasonably access, our willingness to invest in exploration and development, and our willingness to not produce too quickly. The usual economic argument is that if supply is reduced relative to demand then the price will increase which will then signal oil companies to drill more, leading to the discovery of more oil and then additional supply. Although that sounds logical, the results from the oil industry might not be in accordance to that logic as the empirical record shows that the rate at which oil and gas is found has little to do with the rate of drilling.



Annual rates of total drilling for and production of oil and gas in the US, 1949-2005 (R2 of the two = 0.005; source: U.S. EIA and N. D. Gagnon). Since drilling and other exploration activities are energy intensive, other things being equal EROI is lower when drilling rates are high.



This surprised me. I would have thought there was some stronger correlation than ZERO. Obviously a much better predictor of this years production, is last years production plus (2 years ago prod. minus last years production). Only around the peak would that have not had high predictive value. But I leave such details to the experts. The graphic is also potentially misleading in that it does not show discoveries of oil but production- some of those wells might have been drilled for different reasons than production (exploration, injection, etc.)

The United States clearly has experienced “peak oil”. In a way this is quite remarkable, because as the price of oil increased by a factor of ten, from 3.50 to 35 dollars a barrel during the 1970s, a huge amount of capital was invested in US oil discovery and production efforts so that the drilling rate increase from 95 million feet per year in 1970 to 250 million feet in 1985. Nevertheless the production of crude oil decreased during the same period from the peak of 3.52 billion barrels a year in 1970 to 3.27 in 1985 and has continued to decline to 1.89 in 2005 even with the addition of Alaskan production.

In 2006, when oil averaged over $60, there was a 20 year record of drilling feet. According to API estimates, 290 million feet were drilled in 2006 with over 74 million in the fourth quarter alone. But annual production declined to 1.86 billion barrels.

Energy return on investment (EROI or EROEI) is simply the energy that one obtains from an activity compared to the energy it took to generate that energy. The procedures are generally straightforward, although rather too dependent upon assumptions made as to the boundaries, and when the numerator and denominator are derived in the same units, as they should, it does not matter if the units are barrels (of oil) per barrel, Kcals per Kcal or MJoules per Mjoule as the results are in a unitless ratio. The running average EROI for the finding and production of US domestic oil has dropped from greater than 100 kilojoule returned per kilojoule invested in the 1930s to about thirty to one in the 1970s to between 11 and 18 to one today. This is a consequence of the decreasing energy returns as oil reservoirs are increasingly depleted and as there are increases in the energy costs as exploration and development are shifted increasingly deeper and offshore. Even that ratio reflects mostly pumping out oil fields that are half a century or more old since we are finding few significant new fields. (In other words we can say that new oil is becoming increasingly more costly, in terms of dollars and energy, to find and extract).

While we do not know whether that extrapolation is accurate, essentially all EROI studies of our principal fossil fuels do indicate that their EROI is declining over time, and that EROI declines especially rapidly with increased exploitation (e.g. drilling) rates. This decline appears to be reflected in economic results. In November of 2004 The New York Times reported that for the previous three years oil exploration companies worldwide had spent more money in exploration than they had recovered in the dollar value of reserves found. Thus even though the EROI of global oil and gas is still about 20:1 as of 2007, this ratio is for all exploration and production activities. It is possible that the energy break even point has been approached or even reached for finding new oil. Whether we have reached this point or not the concept of EROI declining toward 1:1 makes irrelevant the reports of several oil analysts who believe that we may have substantially more oil left in the world, because it does not make sense to extract oil, at least for a fuel, when it requires more energy for the extraction than is found in the oil extracted.

This is a critical (and shocking) observation. So I can enjoy my weekend, I will assume the suggestion of energy break even for new oil is for the United States, and not the world. But I'm not sure hard data exists in either case, a fact Dr. Hall has pointed out and lamented. It is quite possible that energy break even is already occurring globally, at least for replacement costs (e.g. much of the 86 mbpd currently produced is using energy that was 'input' long ago. In this sense, global net energy decline is 'stealth' in nature.

**Of course it could/will make sense to extract oil at energy break even or lower, if the energy we used to extract it was plentiful. But oil and natural gas are the primary fuels used to extract and refine, crude oil, so approaching energy break even would be an extremely fast treadmill for the economic system, as we will see below. It also suggests that the economy 'feels' the high EROI stuff which was found long ago, but that the 'yet-to-be-discovered' may not translate to 'yet-to-be-produced' due to high costs.

How well we weather this coming storm will depend in large part on how we manage our investments now. From the perspective of energy there are three general types of investments that we make in society. The first is investments into getting energy itself, the second is investments for maintenance of, and replacing, existing infrastructure, and the third is discretionary expansion. In other words before we can think about expanding the economy we must first make the investments into getting the energy necessary to operate the existing economy, and into maintaining the infrastructure that we have, at least unless we wish to accept the entropy-driven degradation of what we already have. Investors must accept the fact that the required investments into the second and especially the first category are likely to increasingly limit what is available for the third. In other words the dollar and energy investments needed to get the energy needed to allow the rest of the economy to operate and grow have been very small historically, but this is likely to change dramatically. This is true whether we seek to continue our reliance on ever-scarcer petroleum or whether we attempt to develop some alternative. Technological improvements, if indeed they are possible, are extremely unlikely to bring back the low investments in energy that we have grown accustomed to.

The main problem that we face is a consequence of the “best first” principle. This is, quite simply, the characteristic of humans to use the highest quality resources first, be they timber, fish, soil, copper ore or, of relevance here, fossil fuels.... It is critical for CEOs and government officials to understand that the best oil and gas are simply gone, and there is no easy replacement.

Perhaps that message is starting to be heard and understood by CEOs and government officials. The issue is that when they see a problem, they like to hear a solution. The solutions are difficult, complex and do not conform to the systems that put the CEOs and government officials in the positions they now hold.

We pay for imported oil in energy as well as dollars, for it takes energy to grow, manufacture or harvest what we sell abroad to gain the foreign exchange with which we buy fuel, (or we must in the future if we pay with debt today). In 1970 we gained roughly 30 megajoules for each megajoule used to make the crops, jet airplanes and so on that we exported. But as the price of imported oil increased, the EROI of the imported oil declined. By 1974 that ratio had dropped to nine to one, and by 1980 to three to one. The subsequent decline in the price of oil, aided by the inflation of the export products traded, eventually returned the energy terms of trade to something like it was in 1970, at least until the price of oil started to increase again after 2000. A rough estimate of the quantity and EROI of various major fuels in the U.S., including possible alternatives, is given in Figure 5.5. An obvious aspect of that graph is that qualitatively and quantitatively alternatives to fossil fuel have a very long way to go to fill the shoes of fossil fuels. This is especially true when one considers the additional qualities of oil and gas, including energy density, ease of transport and ease of use.



Figure 5.5. “Balloon graph” representing quality (y graph) and quantity (x graph) of the United States economy for various fuels at various times. Arrows connect fuels from various times (i.e. domestic oil in 1930, 1970, 2005), and the size of the “balloon” represents part of the uncertainty associated with EROI estimates.
(Source: US EIA, Cutler Cleveland and C. Hall’s own EROI work in preparation)Click to Enlarge.

By quality here, on the y-axis, they mean EROI, as opposed to 'energy quality'. So EROI x Scale = Total energy gain. The "USA 2005" balloon should be a different color - as its a 'consumption', not an energy source. But note that it is 20% greater than the total photosynthesis for the entire country!

And this graph suggests an important story. Yes, I've increasingly heard about 10:1+ EROIs on new generation biofuel technologies that are 'pending'. This may or may not be true. But even if it is we have to multiply EROI X Scale. With oil, we are getting the energy content of 86 million barrels a day times 20:1, or whatever the current energy gain average is. Biofuels, even the ones that might attain high EROIs, will be limited in scale. The scale issue is less clear but still relevant for the other alt energy sources of wind, solar and nuclear.

The implications of all this is that if we are to supply into the future the amount of petroleum that the US consumed in the first half of this decade it will require enormous investments in either additional unconventional sources, in import facilities or as payments to foreign suppliers. That will mean a diversion of investment capital and of money more generally from other uses into getting the same amount of energy just to run the existing economy. In other words investments, from a national perspective, will be needed increasingly just to run what we have, not to generate real new growth. If we do not make these investments our energy supplies will falter or we will be tremendously beholden to foreigners, and if we do, the returns may be small to the nation, although of course if the price of energy increases greatly the returns to the individual investor may be large. Another implication is if this issue is as important as we believe it is then we must pay much more attention to the quality of the data we are getting about energy costs of all things we do, including getting energy. Finally the failure of increased drilling to return more fuel calls into question the basic economic assumption that scarcity-generated higher prices will resolve that scarcity by encouraging more production. Indeed scarcity encourages more exploration and development activity, but that activity does not necessarily generate more resources. It will also encourage the development of alternative liquid fuels, but their EROIs are generally very low.

What would be the impacts of a large increase in the energy and dollar cost of getting our petroleum, or of any restriction in its availability? While it is extremely difficult to make any hard predictions, we do have the record of the impacts of the large oil price increases of the 1970s as a possible guide. These “oil shocks” had very serious impacts on our economy which we have examined empirically in past publications (e.g. Hall et al. 1986). Many economists then and now did not think that even large increases in the price of energy would affect the economy dramatically because energy costs were but three to six percent of GDP. But by 1980, following the two “oil price shocks” of the 1970s, energy costs had increased dramatically until they were 14 percent of GDP.

The Cheese Slicer Model

We have attempted to put together a conceptual and computer model to help us understand what might be the most basic implications of changing EROI on the economic activity of the United States. The model was conceptualized when we examined how the U.S. economy responded to the “oil shocks” of the 1970s. The underlying foundation is the reality that the economy as a whole requires energy (and other natural resources derived from nature) to run, and without these most basic components it will cease to function. The other premise of this model is that the economy as a whole is faced with choices in how to allocate its output in order to maintain itself and to do other things. Essentially the economy (and the collective decision makers in that economy) has opportunity costs associated with each decision it makes. Figure 5.6 shows our basic conceptual model parameterized for 1970, before the oil shocks of that decade.



The “Cheese slicer” diagrammatic model, which is a basic representation the fate of the output of the U.S. economy, 1970. The box in the middle represents the U.S. economy, the input arrow from the left represents the energy needed to run the economy, the large arrow on the left of the box represents the output of the model (i.e. GDP) which is then subdivided as represented by the output arrow going to the right. In other words the economic output is “sliced” into different uses according to the requirements and desires of that economy/society.
(Data principally from the U.S. Department of Commerce. Extrapolations via the Millennium Institute’s T-21 model courtesy of Andrea Bassi))
Click to Enlarge.

The large square represents the structure of the economy as a whole, which we put inside a symbol of the Earth biosphere/geosphere to reflect the fact that the economy must operate within the biosphere. In addition, of course, the economy must get energy and raw materials from outside the economy, at least as narrowly perceived, that is from nature (i.e. the biosphere/geosphere). The output of the economy, normally considered GDP, is represented by the large arrow coming out of the right side, where the depth of the arrow represents 100 percent of GDP. For the sake of developing our concept we think of the economy, for the moment, as an enormous dairy industry and cheese as the product coming out of the right hand side, moving towards the right. This output (i.e. the entire arrow) could be represented as either money or embodied energy. We use the former in this analysis (as almost all of the relevant data is recorded in monetary, not energy, units), but it is probably not terribly different from using energy outputs. So, our most important question is “how do we slice the cheese”, that is how do we, and how will we divide up the output of the economy, or said differently, in what way can the output of the economy be divided up with the least objectionable opportunity cost. Most economists might answer “according to what the market decides,” that is according to consumer tastes and buying habits. But we want to think about it a little differently because we think things might be profoundly different in the future.




Figure 5.7. Same as figure 5.6 but for 1981, following large increases in the price of oil. Note change in discretionary investments.
Click to Enlarge.




Figure 5.8. Same as figure 5.6 but for 2007, following large decreases then small increases in the price of oil. Not change in discretionary investments.
Click to Enlarge.




Figure 5.9. Same as figure 5.6 but for 2030, with a projection into the future with the assumption that the EROI declines from 20:1 (on average) to 10:1.
Click to Enlarge.



Figure 5.10. Same as figure 5.6 but for 2050, but a projection into the future with the assumption that the EROI declines to 5:1.
Click to Enlarge.

The results of our simulation suggest that discretionary income, including both discretionary investments and discretionary consumption, will move from the present 50 or so percent in 2005 to about 10 percent by 2050, or whenever (or if) the composite EROI of all of our fuels reaches about 5:1.

As 'new oil' replaces 'found oil', the EROI will drop faster than the global decline rate. In this sense, the authors time estimate (2050) for the contraction of discretionary spending might be (extremely) conservative as there is evidence already of a crowding out of non-energy sectors. Further study combining net energy with global decline rates is urgently needed, especially as the worlds last giant oil fields deplete, we will be replacing them (if we're lucky), with newer, more expensive (in energy and dollar terms) production. Who knows how high of energy gain Ghawar has provided the world - 200:1? 1000:1??? Impossible to tell because we don't have the data. Another insight is the difference between 'fixed' vs. 'marginal' EROI. As oil wells and infrastructure were created in era of cheap fuel, they continue to produce high return oil. What would be the EROI of this oil if it had to be rebuilt now? (Eg. how many stripper wells in GOM remain profitable but if damaged by hurricane aren't repaired because marginal cost is too high?)

The above sensitivity analysis from 2007 to 2050, were it to be done in 'dollars', would likely not show this decline in discretionary income for society. Deep seated assumptions about technology, capital and efficiency improvements, combined with the unlimited support of central bank fiat currency, would underestimate the shrinkage in discretionary investment, especially if conflated perceptions between the 'actual production' and 'productive capacity' of oil persist. Such an analysis would likely also fall victim to the phenomenon of 'receding horizons', as tar sands, deep water oil, etc. might look slightly profitable at $90+ oil but when oil is at $150, they will STILL only be slightly profitable as the inputs will have also increased in price. This 'running in place' is the real world manifestation of a low energy gain technology, and why biophysical analysis is important.

Individual businesses would be affected by having their fuel costs increase and, for many, a reduction in demand for their products. This simultaneous inflation and recession happened in the 1970s and is projected to happen into the future as EROI for primary fuels declines. The “stagflation” that occurred in the 1970s was not supposed to happen according to an economic theory called the Phillips curve. But an energy-based explanation is easy (e.g. Hall 1992). As more money was diverted to getting the energy necessary to run the rest of the economy disposable income, and hence demand for many non-essential goods and services, declined, leading to economic stagnation. Meanwhile the increased cost for energy led to inflation, as there was no additional production that occurred from this greater expenditure. Although unemployment increased overall during the 1970s it was not as much as demand decreased, as labor at the margin became relatively useful compared to increasingly-expensive energy. Individual sectors might be much more impacted as happened in 2005, for example, with many Louisiana petrochemical companies that were forced to close or move overseas when the price of natural gas increased. On the other hand alternate energy businesses, from forestry operations and woodcutting to solar devices, might do very well.

So what can the scientist say to the investor?

When the price of oil increases it does not seem to be in the national or in corporate interest to invest in more energy-intensive consumption, as Ford Motor Company seems to be finding out with its large emphasis on large SUVs and pickup trucks. We are likely to have over invested already in the number of remote second homes, cruise ships, and Caribbean semi-luxury hotels, so that it may not a particularly good idea to do more of that now. This is due to the “Cancun effect” – that such hotels require the existence of large amounts of disposable income from the US middle class and cheap energy, even though that disposable income that may have to be shifted into the energy sector with less of an opportunity cost to the economy as a whole. Investors who understand the changing rules of the investment game are likely to do much better in the long run.

So what can the scientist say to the investor? The options are not easy. As noted above worldwide investments in seeking oil have had very low monetary returns in recent years. Investments in many alternatives may not fare much better. Ethanol from corn projects are financially profitable to the individual investor because they have been highly subsidized by the government, but they are probably a poor investment for the Nation. It is not clear that this fuel makes much of an energy profit, with an EROI of 1.6 at best, and less than one for one at worst, depending upon the study used for analysis. Biodiesel may have an EROI of about three to one. Is that a good investment? Clearly not relative to remaining petroleum, but some day as petroleum EROI declines it may be. However real fuels must have EROIs of 5 or 10 or more returned on one invested to not be subsidized by petroleum or coal in various ways, such as the construction of the vehicles and roads that use them. Other biomass, such as wood, can have good EROIs when used as solid fuel but face real difficulties when converted to liquid fuels, and the technology is barely developed.

This is the issue of energy quality, which cannot be ignored due to how embedded liquid fuels are in our transport system, hence total economic system. Even though electricity currently is a higher quality fuel than oil, that may change as attempts to turn all sort of disparate BTU sources into transportation fuel may occur (Fischer-Tropsch Coal-to-liquids, biodiesel, ethanol, etc.) So EROI and scale are important, but so is quality, which is determined by what is needed and desired by society.

The scale of the problem can be seen by the fact that we presently use more fossil energy in the US than is fixed by all green plant production, including all of our croplands and all of our forests. Biomass fuels may make more sense in nations where biomass is very plentiful and, more importantly, where present use of petroleum is much less than in the US. Alternatively one might argue that if we could bring the use of liquid fuels in the United States down to, say, 20 percent of the present than liquid fuels from biomass could fill in a substantial portion of that demand. Nevertheless we should remember that historically we in the U.S. have used energy to produce food and fibre, not the converse, because we have valued food and fibre more highly. Is this about to change?

Apparently, yes.

Energy return on investment from coal is presently quite favourable compared to alternatives (ranging from perhaps 50:1 to 100:1), but the environmental costs are probably unacceptable as the case for global warming and other pollutants from coal burning becomes increasingly clear. Injecting carbon dioxide into some underground reservoir seems unfeasible for all the coal plants we might build, but it is being pushed hard by many who promote coal. Nuclear has a debatable moderate energy return on investment (5-15:1, some unpublished studies say more), but newer analyses need to be made. Nuclear has a relatively small impact on the atmosphere, but there are large problems with public acceptance and perhaps safety in our increasingly difficult political world.

Windmills have an EROI of 15-20 return on one invested, but this does not include the energy cost of back up or electricity “storage” for periods when the wind is not blowing. They make sense if they can be associated with nearby hydroelectric dams that can store water when the wind is blowing and release water when it is not, but the intermittent release of water can cause environmental problems. Photovoltaics are expensive in dollars and presumably energy relative to their return, but the technology is improving. One should not be confused by all claims for efficiency improvements because many require very expensive “rare-earth” doping materials, and some may become prohibitively expensive if their use expands greatly. According to one savvy contractor the efficiency in energy returned per square foot of collector has been increasing, but the energy returned per dollar invested has been constant as the price of the high end units has increased. Additionally while photovoltaics have caught the public’s eye the return on dollar investment is about double for hot water installations. Windmills, photovoltaics and some other forms of solar do seem to be a good choice if we are to protect the environment, but the investment costs up front will be enormous compared to fossil fuels.

The authors allude to, but do not explicitly say, that Peak Oil may initiate a "Tragedy of the Investing Commons". Short-term (3-5 years) high returns can be made by entrepreneurs and corporations by using both government subsidies (in the case of ethanol) and societal subsidies (in the case of roads, hospitals, food, etc.) that only exist due to cheap transport fuels. Decisions that may look promising from a corporate boardroom perspective, would not look good from a global declining EROI perspective. So, investments in 'moderate' EROI technologies might pay off for individuals, while simultaneously the global energy gain cushion continues to drop. (But I guess this has been happening for a long time wrt the environment)

CONCLUSION

It seems obvious to us that the U.S. economy is very vulnerable to a decreasing EROI for its principle fuels, whether that comes from an increase in expenditures overseas if and as the price of imported oil increases more rapidly than that of the things that we trade for it, or as domestic oil and gas reserves are exhausted and new reservoirs become increasingly difficult to find, or as we turn to lower EROI alternatives such as biodiesel and or photovoltaics. We do not know exactly what all this means, but our straightforward model suggests that a principal effect will be a decline in disposable income and a greater requirement for getting energy, with all the economic impacts that entails. Since more fuel will be required to run the same amount of economic activity the potential for environmental impacts increasing is very strong. On the other hand protecting the environment, which we support strongly, may mean turning away from some higher EROI fuels to some lower ones. We think all of these issues are very important yet are hardly discussed in our society or even in economic or scientific circles.

Concluding Thoughts

As many in the Peak Oil aware community know, Charlie Hall has been researching and writing about energy for almost 30 years, initially as a graduate student of the late systems ecologist Howard Odum. I posted excerpts from this paper because I believe the implication of declining net energy is the single largest overlooked supply side phenomenon about oil and gas depletion, both on Wall St and on Main St. As 'best first' becomes 'best available now', more energy will be diverted to the energy sector, and as the authors have pointed out, this means less for productive society. This doesn't happen while everything stands still - the primary allocation mechanism for lower net energy is already underway -higher prices - squeezing less developed countries, less profitable businesses, less traveled air routes, etc. A secondary mechanism of declining net energy is negative economic growth resulting in global recession/depression, reducing energy prices and pulling the marginal EROI processes offline, many of them forever.

However, there are many problems with EROI analysis, not the least of which is the difficulty of parsing non-energy limiting inputs, like water, soil, or knowledge, into energy terms. Its just simpler to denominate everything in dollars, and of course that is what has happened gradually, but nearly completely, over the last 3 decades. Net energy analysis also has the problem of correctly adjusting for energy quality, as all kilojoules are not created equal, nor do they stay equal in preferences/needs of a civilization. (did the Yibali tribesman 5 centuries ago in Saudi Arabia care about light sweet Arabian crude? No - they cared about strong Arabian horses). Net energy analysis is not a surgical tool, but more like a blunt instrument. But what EROI lacks in precision, it makes up for in scope. It at least attempts to ground analysis based on first principles - we need energy to procure more energy - to procure more dollars, we just print them (using paper, ink and energy).

The battle between the financial economy and the biophysical economy is seeing its first serious skirmish, as oil flirts with $100, pricing out someone, somewhere. Somehow, more analysis like this one by Hall et al. need to be examined, understood and advanced. Grounding supply side analysis in physical terms is not easy, but it will ultimately be more accurate and a better predictor of the future on a planet with finite stocks and flows. I give great credit to the authors and their academic peers who continue to think about the world in this way. Limited funding, limited data and limited government interest, are prohibiting scientists like Prof. Hall from accomplishing more than just nibble around the edges of this vital topic. Finally, though net energy analysis is an important tool, it is still a part of the larger science that is essentially just a 'documentation' of natural resource depletion and the environmental entropy process. Until we thoroughly address the demand side of our energy consumption, better and more correct energy analyses cannot be optimized.

Literature Cited

Adelman, M. A. & M. C. Lynch. 1997. Fixed View of Resource Limits Creates Undue Pessimism. Oil and Gas Journal. 95:56-60.

Andersson, B. A., C. Azar, J. Holmerg, & S. Karlsson. 1998. Material constraints for thin-film solar cells. Energy 23: 407-411.

Ayres, R.U. 1996. Limits to the growth paradigm. Ecological Economics 19: 117-134.

Boulding, K. E. 1966. The economics of the coming spaceship earth. Pp. 3-14. In H. Jarrett (editor), Environmental quality in a growing economy, Baltimore: Johns Hopkins University Press 1966: 3-14 Maryland, U.S.A.

Bartlett, R Representative U.S. Congress. http://bartlett.house.gov/

Campbell, C. 2005 The 2nd half of the age of oil. Paper presented at the 5th ASPO Conference, Lisbon Portugal

Campbell, C. & J. Laherrere.1998. The end of cheap oil. Scientific American (March): 78-83.

Cleveland C.J., 1991. Natural Resource Scarcity and Economic Growth Revisited: Economic and Biophysical Perspectives. Pp. 289-317. in Costanza R., ed. Ecological Economics: The Science and Management of Sustainability. New York. Columbia University Press.

Cleveland, C. J. 2005. Net Energy from the Extraction of Oil and Gas in the United States. Energy: The International Journal 30(5): 769-782.

Cleveland C.J., & M. Ruth 1997. When where, and by how much do biophysical limits constrain the economic process? A survey of Nicholas Georgescu Roegen's contribution to ecological economics. Ecological Economics 22: 203 223.

Cleveland C.J., Costanza, R., Hall C.A.S. & Kaufmann R.K. 1984. Energy and the US economy: A biophysical perspective. Science 225: 890 897.

Cottrell, F. 1955. Energy and Society. Dutton, N.Y. (reprinted by Greenwood Press)

Daly, H.E. 1977. Steady State Economics. San Francisco: W. H. Freeman.

Deffeyes, K. 2005. Beyond Oil: The View from Hubbert's Peak. Farrar, Straus and Giroux, New York

Denison E.F. 1979. Explanations of declining productivity growth. Survey of Current Business 59, No. 8, Part II:1 24.

______. 1984. Accounting for Slower Economic Growth. Pages 1 45 in Kendrick JW, ed. International Comparisons of Productivity and Causes of the Slowdown. Cambridge: Ballinger.

EIA 2007 (U.S. Energy Information Agency website, accessed June 2007).

Duncan, R. C. 2000. Peak Oil Production and the Road to the Olduvai Gorge. Keynote paper presented at the Pardee Keynote Symposia. Geological Society of America, Summit 2000.

Farrell, A. E., R. J. Plevin, B.T. Turner, A. D. Jones, M. O’Hare & D. M. Kammen. 2006. Ethanol can contribute to energy and environmental goals. Science Jan. 27 xxx

Dung T.H. 1992. Consumption, production and technological progress: A unified entropic approach. Ecological Economics: 195 210.

Energyfiles.com Accessed August 2007. www.energyfiles.com

Hall C.A.S., Cleveland C.J., & Kaufmann R.K. 1986. Energy and Resource Quality: The Ecology of the Economic Process. New York: Wiley Interscience. (Reprinted 1992. Boulder: University Press of Colorado.)

Georgescu Roegen N. 1971. The Entropy Law and the Economic Process. Cambridge (MA): Harvard University Press.

Hall C.A.S. 1991. An idiosyncratic assessment of the role of mathematical models in environmental sciences. Environment International 17: 507 517.

______. 1992. Economic development or developing economics? Pages 101 126 in Wali M, ed. Ecosystem Rehabilitation in Theory and Practice, Vol I. Policy Issues. The Hague, Netherlands: SPB Publishing.

______, ed. 2000. Quantifying Sustainable Development: The Future of Tropical Economies. San Diego: Academic Press.

Hall, C.A.S. and J.Y. Ko. (2006). The myth of efficiency through market economics: A biophysical analysis of tropical economies, especially with respect to energy, forests and water. In LeClerc, G. and C. A. S. Hall. Making world development work: Scientific alternatives to neoclassical economic theory. University of New Mexico Press, Albuquerque

Hall, C. A. S., Volk, T.A. ,Murphy, D.J., G. Ofezu, Powers R., Quaye A., M. Serapiglia & J. Townsend. (in review). Energy return on investment of current and alternative liquid fuel sources and their implications for wildlife. Journal of Wildlife Science

Hallock, J., Tharkan, P. ,Hall, C., Jefferson, M. and Wu, W. (2004). Forcasting
the limits to the availability and diversity of global conventional oil supplies.
Energy 29:1673-1696.

Hannon B. 1981. Analysis of the energy cost of economic activities: 1963 2000. Energy Research Group Doc. No. 316. Urbana: University of Illinois.

Heinberg, R. 2003. The Party's Over: Oil, War and the Fate of Industrial Societies. New Society Publishers. Gabriella Island, B.C. Canada

Hirsch, R., R. Bezdec, and W. Wending. 2005. Peaking of world oil production: impacts, mitigation and risk management. U.S. Department of Energy. National Energy Technology Laboratory. Unpublished Report.

Hubbert, M. K. 1969. Energy Resources. pp 157-242. in Resources and Man. National Academy of Sciences W.H. Freeman San Francisco

Hubbert, M. K., June 4, 1974. Washington, D.C. Testimony before Subcommittee on the Environment of the Committee on Interior and Insular Affairs, House of Representatives, Ninety-Third Congress , Serial no. 93-55 U.S. Government Printing Office, Washington: 1974.

Jorgenson D.W. 1984. The role of energy in productivity growth. The American Economic Review 74 No.2: 26 30.

______. 1988. Productivity and economic growth in Japan and the United States. The American Economic Review 78: 217 222.

Herendeen, R. and C. Bullard. 1975. The energy costs of Goods and Services. 1963 and 1967, Energy policy 3: 268.

IEA 2007 (European Energy Agency, web page, accessed August 2007).

Kaufmann, R. 2004. The Mechanisms for Autonomous Energy Efficiency Increases:
A Cointegration Analysis of the US Energy/GDP Ratio. The Energy Journal: 25:63-86.

Kümmel R. 1982. The impact of energy on industrial growth. Energy The International Journal 7: 189 203.

______. 1989. Energy as a factor of production and entropy as a pollution indicator in macroeconomic modelling. Ecological Economics 1: 161 180.

Lynch, M. C. 1996. The Analysis and Forcasting of Petroleum Supply: Sources of Error and Bias. in D. H. E. Mallakh, editor. Energy Watchers VII. International Research Center for Energy and Economic Development.

Laherrère. J, Future Oil Supplies. Seminar Center of Energy Conversion, Zurich: 2003.

LeClerc, G. and C. A. S. Hall. 2007. Making world development work: Scientific alternatives to neoclassical economic theory. University of New Mexico Press, Albuquerque

Mirowski, M. 1989. More Heat than Light. Cambridge: Cambridge University Press.

Odum, H.T. 1972. Environment, Power and Society. Wiley-Interscience. New York

Quinn, M. 2006. The power of community: How Cuba survived peak oil. Text and film. Published on 25 Feb 2006 by Permaculture Activist. Archived on 25 Feb 2006.

Ricardo, David. 1891. The principles of political economy and taxation. G. Bell and Sons, London. (Reprint of 3d edition, originally pub 1821).

Roberts P.C. 1982. Energy and value. Energy Policy 10: 171-180.

Soddy F. 1926. Wealth, Virtual Wealth and Debt. New York: E.P. Dutton and Co.

Solow R. M. 1974. The economics of resources or the resources of economics. American Economic Review 66: 1-14.

I think either (or both of) Matt Savinar or Roscoe Bartlett used the 25,000 number in Crude Awakening. At least the first place I saw the number was the film.

Always be skeptical of the numbers and try and do the math for yourself as a check ... you don't have to be totally accurate, just get a feel for it ... my approximation is:

a US gallon Gasoline = 115,000 Btu
1000 Btu = 0.293 kWh
therefore a US gallon = 115 x 0.293 kWh = 33 kwh

Assume, at best, in an 8 hour working day you could get 100w continuous useful work from a man, ~0.8 kWh?

As a check, a normal man should consume ~ 2,500 kilocalories per day? (1 kilowatt hour = 859.6 kilocalories, so about a third converted to useful work seems reasonable?)

Therefore a US gallon contains the same amount of useful energy as 33/0.8 = 41 days or ~330 hours of human (slave?) labor!

In a barrel there would be 42 x 330 ~ 13,800 hours of manual labor.

thanks
your calculations indicate that there is no precise answer for this question - but we're in the ballpark.
13,800 hours of manual labor at $20 per hour is $267,600 per barrel.

And I could make the argument (strongly) that the energy quality of oil is higher than human labor...;)

Crude at $97.75 today a bargain!!!!

BTW Nate, IMO this was an excellent/important post - my understanding of how the world all hangs together and the 'underlying truths' took another leap forward with this. When will the whole book be published?

Thanks. I'm not sure. Certainly this year, but can't say when. Here is draft table of contents:

RENEWABLE ENERGY SYSTEMS:
ENVIRONMENTAL AND ENERGETIC ISSUES

Authors and Titles of Chapters

1) David Pimentel, College of Agriculture, Cornell University, Ithaca, New York: RENEWABLE ENERGY SYSTEMS; BENEFITS AND ENVIRONMENTAL COSTS
2) Tad Patzek, College of Engineering, University of California (Berkeley): CAN THE EARTH DELIVER THE BIOMASS-FOR-FUEL WE DEMAND?
3) David Swenson, Department of Economics, Iowa State University: A REVIEW OF THE ECONOMIC RISKS AND REWARDS OF ETHANOL PRODUCTION
4) Doug Koplow, Earth Track, Inc., Cambridge, MA and Ronald Steenblik, Research Director, Global Subsidies Initiative International Institute for Sustainable Development, Geneva: SUBSIDIES FOR ETHANOL PRODUCTION IN THE UNITED STATES
5) Charles Hall, Department of Environmental and Forest Biology, College of Forestry and Environmental Science, State University of New York, Syracuse, NY: PEAK OIL, EROI, INVESTMENTS AND THE ECONOMY IN AN UNCERTAIN FUTURE
6) Andrew Ferguson, Optimum Population Trust, Manchester, England: WIND POWER: BENEFITS AND LIMITATIONS
7) Robert Rapier, Conoco-Phillips, Aberdeen, Scotland: RENEWABLE DIESEL
8) Mario Giampietro, International Nutrition Institute, Rome, Italy, K. Mayumi, Tokushima University, Japan: COMPLEX SYSTEM THINKING IN RENEWABLE ENERGY SYSTEMS
9) Marcelo E. Dias de Oliveira, The Brazilian Alcohol Programme, Brazil: SUGARCANE AND ETHANOL PRODUCTION AND CARBON DIOXIDE BALANCES
10) Tom Gangwer: BIOMASS FUEL CYCLE BOUNDARIES: CURRENT PRACTICE AND PROPOSED METHODOLOGY
11) Edwin Kessler, Department of Meteorology, University of Oklahoma, Norman: OUR FOOD AND FUEL FUTURE
12) Nathan Hagens, University of Vermont, Burlington, VT, Kenneth Mulder, Green Mountain college: A FRAMEWORK FOR ANALYZING ALTERNATIVE ENERGY: NET ENERGY, LIEBIGS LAW AND MULTICRITERIA ANALYSIS
13) Robert M. Boddey, Embrapa-Agrobiologia, Rio de Janeiro, BR: ETHANOL PRODUCTION IN BRAZIL
14) Roger Samson, Resource Efficient Agricultural Production Canada (REAP-Canada): CELLULOSICS FOR THERMAL ENERGY
15) Maurizio Paoletti, Department of Biology, University of Padova, Italy, Tiziano Gomiero, (please provide affiliation and location): ORGANIC AGRICULTURE AND ENERGY CONSERVATION
16) Sergio Ulgiati, Department of Chemistry, Sienna University, Italy: BIODIESEL PRODUCTION IN ITALY: BENEFITS AND COSTS
17) Kenan Unlu, Pennsylvania State University, University Park, PA: CURRENT RESEARCH ON NUCLEAR ENERGY

And I could make the argument (strongly) that the energy quality of oil is higher than human labor...;)

I think you mean that the thinking of human beings is often of a thicker quality than crude...;)

While interesting as a fun comparison it is just that attitude of looking at energy as a be all and end all that has got us where we are. Trade me one willing worker (for his lifetime) for a D9 cat (and all the diesel it can use in it's lifetime) and look at the different world you and I will produce.

"One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man." -- Elbert Hubbard

Unfortunately we have way too many ordinary men and their machines doing things we do not need and not enough extraordinary people doing without machines what needs doing.

"Ordinary men are made not born." -- anon ;)

Some men are born mediocre and some men have mediocracy foisted upon them.

Some men don't count and some men can't count ... 2 7? 3 4

(Just in jest robert2734, merely to see if this thread of nit wittery will continue:)

I had always heard about 75W output on a fairly continuous basis for a fairly fit person, but wouldn't be surprised if in reality it is more like 50W when average fitness is considered and the work is stretched over 8 hours, day after day, month after month...etc. So the 25,000 hour figure not off the mark either perhaps, though I don't know enough to argue about it.

True, but also I forgot that to get the energy out of the oil you need something like a power station with all it's losses - so, maybe there's only ~17Kwh of useful energy in the oil as well as less useful energy in the man?

Arm output cranking was some 50-80 watts for myself.

Legs 400 watts. (no shoe clips)

Lance Armstrong was known to do 600 watts for 30 mins peddling.

The numbers I have are a gallon of crude is about 138,000 BTU, and a gallon of gasoline is about 125,000 BTU. The standard figure for boe is given as 5.8 million BTU.

Using these numbers, I get about 16,600 hours. 100W is perhaps a little high for sustained effort, usual figure is 0.1 HP, about 75W. This gives nearer 23,000 hours manual labor.

33 kwh is gross chemical potential energy, but given that we are mostly concerned about mechanical uses for oil should we not be doing somthing like this?:

first subtract 10% for energy cost of the oil production i.e. assume that EROEI on oil is about 10:1 right now, that gives us 29.7 kwh / gal

then assume 2/3 will be lost when converting it to mechanical by running an engine connected to a machine, so we then have 9.89 kwh / gal

So a gallon is more like 9.89 / 0.8 * 8 = 98.91 person hours of labor.

X 42 = 4,153 hours of manual labor per bbl (that would be 1 person year at 6 days a week 13 1/4 hours a day, which sounds like a rough number estimate for a third world sweatshop).

Lets assume we can hire manual labor "somewhere" for 20 cents an hour (1/3 of the worlds population earns less than $2 per day according to the UN) then the manual labor substitution cost of the bbl becomes something like $830 per bbl.

Is this the valid measure? This talk of "slave labor equivalents"? Consider: If there is a half-ton rock, I might require ten slaves to move it (figuring each slave capable of lifting 100 lbs.). But I have technology: a long lever, a wheeled cart. Now, instead of ten slaves, I can move the rock myself (given certain assumptions such as a fulcrum for the lever and cart-friendly terrain - but those assumptions aren't unreasonable for a broad range of situations). Nor do I need to eat ten times my normal meals for the day to have energy for the lever and cart.

Since much of our technology is of the lever or cart type, rather than the brute strength type, this whole "slave equivalence" metaphor is severely misleading. It makes for a nice rhetorical flourish, but misrepresents our reality. It treats machines as primarily energy-consumers, whereas they achieve their primary value via design - as levers and carts do - with energy inputs being a real but secondary, and not tightly-correlated part of any equation accurately describing their place in our economy.

Technology is "raw power" harnessed. I don't think for a moment that the energy slaves describe a pointless task of dragging a rock for example.

It might describe the ability to type and click send and the electricity and embodied energy in the internet allows you to instantly send a message without having to find paper, ink, envelope, postage, pony express, ship, plane,rail and other means for physical communication.

Also consider a robotic car manufacturing plant, very high energy consumption, definitely highly technical, precise operations being performed more of our energy slaves 24 hrs 7 days a week.

Computer chip manufacturers and countless other industrial processes that are highly energy intensive currently built around our cheap oil lifestyle.

My contention is that in reality we are in fact via technology using the equivalent of levers, fulcrum and cart friendly terrain all the time this only magnifies our dependence.

Comparing oil to manual labour may provide a sense of scale to the energy in a barrel of oil but it ignores the sheer versatility of oil.

No matter how many human labourers I have, I will never be able to get them to move me along at 60 miles per hour without ever complaining or getting tired.

Human labour can't be converted into lubricants, chemicals, medicines, ashphalt, plastics etc., etc.

What a miracle oil is ? $ 100 a barrel is a bargain.

$ 100 a barrel is a bargain.

So? Doesn't mean much when how people are used to living is with $10 oil.

The transition to higher oil pricing means pain - and animals in pain and who feel cornered are dangerous

From "Food, Energy, and Society" by Pimentel, pg. 13. Gasoline is 20% efficient in converting to work in a mechanical engine, 8.8 kWh. A horse working for ten hours at maximum capacity yields 7.5 kWh. Man can work at 0.1 HP or 0.075 kW per hour. 117 hours of Man work done by 1 gallon.

See http://greatchange.org/bb-answer2.html for a tentative resolution of $146.00 as the value of gasoline per gallon, considering the energy cost of machinery and the need to do more work as value than what simply pays for the fuel.

If we are considering the efficiency of the ICE, do we also need to consider the efficiency of the human?

Is the 75W of the man expended power or effective power? And what efficiency does the human work at?

Nate: This is a fantastic post, great observations, the info and the work are much appreciated! Pk

Terrific post, and 100% dead-on right in the points made and cited.

What Can the Scientist Say to the Investor?

The global system is finite and bounded, live within it.

Any economic theories you have that include the assumption of the infinite are wrong and you can win yourself a Nobel prize by pointing this out. The only infinite thing is human stupidity.

Herman Daly, among others, pointed this out in the 1970s. I think he is first in line for the Nobel for economics, once all this comes to light....

I've had....discussions.... with finance types when I had the temerity to point out that in the end the system was finite and zero sum (ok excepting the solar input). It seems to be a religious tenet that everything is infinite and growth can go on exponentially for ever.

BTW, as far as this simple systems dynamics model is concerned, throw in the effect of the demographic timebomb and see how much worse it gets.

Herman Daly was a Ph.D. student under Nicholas Georgescu-Roegen, the author of "The Entropy Law and the Economic Process". This is the book that preceded "ecological economics" by 35 years and deserves a Nobel (hey, if Al Gore can win one with a Powerpoint presentation...). Most of Daly's ideas can be found in more complete and energetically aware form in Georgescu-Roegen's book--highly recommended as THE starting point for any energy/society discussion.

Another piece of essential reading is Howard T. Odum's "Environment, Power and Society", published in the same year (1971) as Georgescu-Roegen's magnum opus.

Georgescu-Roegen's "Energy and Economic Myths" (1977) is also worth a read.

EROEI for nuclear is at least 30. Maybe 100. EROEI for photovoltaic is 30. I don't know why people assume PV will self destruct in 30 years. Worse case we recycle the silicon.

We've just had a content free discussion of nuclear power a few threads ago.

Nanosolar claims that the energy payback for their CIGS product is less than one month compared to up to three years for first generation wafer based polysicon cells. So, your EROEI may be way understated for Nanosolar's printing based technology.

While I am not a cornucopian, I think we need to recognize these breakthroughs when they occur. For reasons not just related to energy, we should not seek to maintain our current lifestyle, much less what we hope for in the future through continued unlimited growth.

I have read elsewhere that solar cells produced 50 years ago are still cranking albeit at reduced efficiency. A ton of coal put in the hopper this morning will be gone before noon, but the CO2 produced will be around for hundreds of years.

The economists, though not all, tend to believe that there are always alternatives, given a high enough price. If this is believed, why not hasten the arrival of those alternatives now since they will supposedly magically arrive eventually anyway?

Yes, the market can do many things, but we do not have the luxury of waiting for it to do something about oil shortages and the overuse of coal.

Hi tstreet,

Are you referring to my comment the EROEI is at least 30 for PV? Nanosolar's technology is so cloaked in secrecy, I don't know what they have. I'll recognize "breakthroughs" when there is falsifiable evidence one occurred. Solar cells have a "half life" of 130 years. They never die but keep cranking away at reduced efficiencies until we decide to take them down and recycle the silicon. The only thing that happens after 30 years is that the warrantee expires.

robert

Yes, this needs to be verified (falisfied?) but I'm can only just report what Nanosolar says on their web site at this time. Given the process, though, it does seem reasonable that efficiency and payback have improved thereby. It would, of course, be nice if Nanosolar could provide some documentation showing the energy inputs and outputs required. They are, however, quite paranoid, probably justifiably, about protecting their very valuable processes and patents.

I don't know any more or less about nanosolar than you do. I expect continued evolutionary improvement in solar technology. Anybody can write anything on a website.

I've run into this with regard to batteries. People report what someone wrote on a website somewhere as if its a fact. At best it is someone's goals for a research project.

Commenting on Solarhouse below: Most batteries are killed rather than die a natural death. The 800 watts are a maximum at some particular testing condition for some voltage and current output.

Nineteen years ago I bought 800 watts of single crystal solar for my house. I have fairly good metering and the most power I ever saw on a bright clear day the year I installed them was 635 watts. (Overselling the power capability was common then.) On bright clear days I still see over 600 watts. No discernible decrease. These and a 1kw (peak) windmill have kept me, partner, computers, toaster and misc. stuff well supplied.

Aside. There has been considerable talk about lead acid battery life. In the nineteen years my battery experience has been thus. First set 450AH L16 size 12v. Destroyed in 3 years due to my stupidity in not appreciating that they look rugged but in fact are exquisitely delicate chemical plants. Second set 900AH L16 size 12v. Slowly petered out after 7 years. I can learn. Third set 1000AH reconditioned fork lift truck battery. Still going after 10 years but starting to show some cell to cell inequalities. Conclusion: Lead acid batteries are remarkably delicate. The simplest things can damage them. Example: Having two rows of parallel batteries at different heights means they are at slightly different temperatures, which means one set discharges the other. In series it means some cells will not be in equilibrium. Temp gradients within a battery (say sitting on a thermally conducting floor(concrete) will develop internal voltage gradients and slowly destroy themselves.

Thanks for this article.

SolarHouse

"If this is believed, why not hasten the arrival of those alternatives now since they will supposedly magically arrive eventually anyway?"

we know what will magically appear at a certain price. conservation, demand destruction, bikes, solar, wind, hybrids, PHEVs, EVs and so on.

no, that is where you are always wrong - we don't KNOW that at all - you believe it, some suspect it, many here doubt it

if the economy crashes beyond the ability of the nation to feed everyone, we don't KNOW what is going to happen, but we can guess, the 4 horseman; war, famine, conquest and death

if things get bad enough quickly enough, a gradual changeover will be impossible - instead collapse will occur, a world-wide great depression will hardly be the place where advance research and development will occur

if the BANKING crises gets bad enough, where will the $ come from to finance all of your dreams? and that is without peak oil, resource wars, etc. etc.

show me the bright spots in equatorial Africa, how all the investments are occurring as oil gets priced out of people's reach - show me the peaceful transition to another way of life

macduff- your ifs are a lot less possible than my knows. if something like what you said happens we won't need technology because so much demand destruction will occur that 100% resources will go only towards production of food and some other necessities.

I've said this before, if there is a big huge crash oil ain't gonna matter because nobody will be able to afford it(hyperinflation) or nobody will buy it and it will be cheap(massive deflation).

whatever the situation is, my good old low tech of conservation/demand destruction will work.

the 70's was bad and people still bought enough fuel efficient cars that the fleet MPG went up.

It is very hard to know for sure what the EROEI of nuclear power is. Currently in the US it is almost certainly less than one because we are using very poorly stored Soviet hydropower from the sixties and seventies. Enriching uranium to weapons grade then diluting it does not make for an efficient process.

On the solar front, recycling silicon requires one third the energy that initial purification requires so that post recycling you get an EROEI three times higher. I take the current silicon EROEI to be about 12.5 for a 25 year (guaranteed) life and about 33 for and extended 100 year life (20% degredation every 25 years). So, on recycling you get an EROEI of either 37.5 or 99 depending on how you use it. The EROEI also depends on where the silicon is used. At altitude you get more cosmic rays so it will degrade faster. In the desert you get a much higher EROEI because there are more hours of sunlight in a year. The Southeast of the US, which did not want the RPS portion of the energy bill, should see an improved solar resource as a result of global warming because they'll have more drought. Perhaps they are biding their time.

Chris

It was claimed by a recent Sandia labs publication that the energy payback time for polysilicon was 2.8 years. I don't know what sort of assumptions about siting were made, but I can bet that for PV installed in Germany, and Japan the payback period is probably more like ten years. Even using the 2.8 figure, we see that we are using more energy creating PV modules than they are currently producing. This is probably the basis for derisive statements about solar consuming more power than it generates.

Of course this is really investing current energy to create future capacity, and earning 30% energy interest! If I could sell bonds that did so well I would be the next Warren Buffet!

We have several promising developments such as Nanosolar which claim much shorter payback periods. That is probably not yet auditable, but it seems pretty likely that energy payback times of a year or less should become common within a few years.

I think you mean 1000% interest?

Chris

I think you both mean 3.6% a year.

A return of 33 in 100 years is quite low for today standards.

Sorry, the term energy interest is proabably flawed. It is a factor of ten or more return in energy invested. Obviously, the Sun is not a bank.

Chris

Those claims for EROI of PV are like EROI for crude oil at the wellhead. That's not how oil is actually used - nor how PV is used. You need to transport the (large and fragile) panels, install them, replace if damaged (hurricanes? hail?), wire them (priced copper recently?), add charge controller and batteries and/or inverter and grid-tie electronics, suffer energy losses in battery storage or grid, etc etc. If you look at the economics of PV in actual use, the cost of manufacturing the raw unframed panels at the factory is a minority of the total cost. Is it also a minority of the energy cost? I think so, unless I see evidence otherwise.

At least in terms of weight, solar panels put 200 times less stress per unit energy delivered on transportation infrastructure than coal. There is labor involved in installing panels so you might want to count the portion of income that is spent on energy as an input as well.

Chris

Good job! As a recent convert to the peak-oil issue and all matters related, I remain truly perplexed at what seems to me to be the continuing yawning gap between the "in-the-knows" and the ignorant when it comes to relating this type of academic analysis to the real world. I've recently read any number of great and good analyses of what 2008 and beyond holds for mankind and I'm astonished at how few commentators - including the supposedly smart ones - who simply can't or don't see the peak oil writing on the wall. When and how does this huge issue - much bigger than climate change (or dare I say religous terrorism) - hit the consciousness of the world's movers and shakers? The longer we sleepwalk on this matter, the further we're going to fall and the harder we'll hit the deck when the day of reckoning arrives. Keep up the good work guys.

Mark*,

I think it's just an example of purely Kuhnian paradigmatic thinking. When you're inside a paradigm, you don't see outside--instead you continue refining the knowledge pile inside your own paradigm with "normal science."

The problems (and I would bore you with a discussion of Lakatos, etc.) are that the protective assumptions of that paradigm are failing...therefore, perspectives will be resistant to change until the paradigm shift occurs...and after that, who really knows? Paradigm shifts lead to macrosocial changes of the highest order, that's about all I would be willing to forecast at this point. :)

I make the forecast that Darwin did concerning evolution. Those with the ability to adapt to the shifting paradigm will survive. Those that don't, won't.

I'm coming into TOD from multiple
site hotlinks.

Formerly dis associated from each other-war, peace,
ecology, finance, are all posting TOD
as the GOTO site for Energy/oil info.

For what it's worth.

“So why is "homeland security," not green energy, the hot new sector? Perhaps because there are two distinct business models that can respond to our climate and energy crisis. We can develop policies and technologies to get us off this disastrous course. Or we can develop policies and technologies to protect us from those we have enraged through resource wars and displaced through climate change, while simultaneously shielding ourselves from the worst of both war and weather. (The ultimate expression of this second option is Hummer's new TV ads: the gas-guzzler is seen carrying its cargo to safety in various disaster zones, followed by the slogan "HOPE: Hummer Owners Prepared for Emergencies." It's a bit like the Marlboro man doing grief counseling in a cancer ward.) In short, we can choose to fix, or we can choose to fortress. Environmental activists and scientists have been yelling for the fix. The homeland security sector, on the other hand, believes the future lies in fortresses.”

Guns Beat Green: The Market Has Spoken
http://www.naomiklein.org/articles/2007/11/guns-beat-green-market-has-sp...

Actually, installations of solar power grew 83% in the US in 2007. I think a portion of this growth was motivated by national security concerns. It was only 259 MW but at that kind of growth rate we might see 100 GW installed in 2017, well above the 4 GW of wind installed in the US in 2007. However, world growth in solar cell production would have to increase above the current rate of 50% annually or the US would be taking half of the total production in 2017. At its present growth rate of 60% annually, wind should still be ahead of solar in 2017, installing about 530 GW. I'm not sure we'll need that much new generation but we sure could stand to retire some coal and nuclear plants. We currently use about 1.2 TW in the whole economy. Silicon prices should be heading down in 2009 so that growth in solar should be sustained because thin film, which is reaching a production cost below $1/watt will see competitive pressure from silicon at that time so that they will have to lower prices. We should be sure that it is investors in coal and nuclear power that take the hit when they are driven out of business rather than tax payers. By 2017, wind should reach a terminal $1/Watt cost and some solar manufacturers should be reaching below $0.50/Watt and further cost reductions will be found more in installation methods (as with wind now) than in reduced cost of fabrication. All of these costs are competitive with coal so that coal mining and transportation would have to find cost savings to remain in the market. This is contrary to current trends where deeper mines at greater distances from power plants are being used. A reduced cost for electric power should spur conversion to plug in hybrid and all electric vehicles and we ought to see energy independence from both imports and fossil fuels by 2025 at the outside. I would guess that the price of oil at that time would be a factor of ten lower than presently and most biofuels would be non-competitive.

Chris

we're not using so much power at night, it only makes sense to use that we use some of that for vehicles. why wast it by using oil that has to be shipped all the way from saudi arabia and trucked here.

Alternative energy is growing yet Security technology investment is ballooning faster.

"According to Venture Business Research, in 2006 North American and European companies developing green technology and those focused on "homeland security" and weaponry were neck and neck in the contest for new investment: green tech received $3.5 billion, and so did the guns and garrisons sector. But this year garrisons have suddenly leapt ahead. The greens have received $4.2 billion, while the garrisons have nearly doubled their money, collecting $6 billion in new investment funds."

Same link

Well, I think in the case of solar we are seeing quite a lot of reinvestment because the main issue is market share. There may be room for a startup and some more venture capital but that room is getting smaller because self-financing of growth is getting to be the trend now.

Weapons become obsolete as the other guy gets better weapons or methods so we might be seeing something of that. Also, in the security business you start out with connections to the military so that your profits are guaranteed unless the IG really gets on your case and the IG is probably too busy with so much war going on.

Chris

Hang on. You really believe that in less than 20 yrs we'll be free of ff and energy independent? And oil will be $10 a barrel? Does anyone else? Is a poll in order?

Yes, I think the prime mover will be the rapidly falling production cost of solar power. It looks like breakthroughs in battery technology have already occured so that transportation will transition pretty rapidly to electricity and electricity will become (slowly) cheaper enforcing the transition. Aleady, it is cheaper to heat a home with space heaters than with oil and much cheaper to use a heat pump for the same performance. Space heaters save when you don't heat the whole home. A large reduction in demand for oil will reduce the price to close to the lowest cost of production which is getting to be about $10/bbl. Projected decline rates for the overall availability of oil at maximum production are likely not sufficient to maintain scarcity in the face of rapidly falling demand. I would expect that our use of oil will be mainly confined to small ICEs that get infrequent use such as lawnmowers and so are not worth converting rapidly to electricity though new equipment will likely be battery powered.

Chris

People tend to only see the gas oil and electricity as options, so I'll add my comment here.

Energy for homes does not have to be only be expensive oil or electricity space heaters, but can also be direct 'input' from the surrounding planet which the solar panel is taking advantage from. The panel is only a portion of this input effect, put towards generating electricity. But it's really our total urban design being half the problem, with a mindset of techno-answer for everything. With the cheap energy going we will have to consider how we design how we live.

For example, the amazing technology of the 'awning' in summer that blocks heat from entering is just at the right height to allow the lower winter sunlight in. I know it's just a sheet of cloth, but it turned out to have a purpose. We'll rediscover all sorts of 'new' technologies hopefully before the memory of their use disappears.

I'm enjoying the discussion on solar panels but if it's just to heat a living space, passive solar does not require silicon, just some wood, black paint and glass. There is also the usability of geothermal underneath us that also goes unused or exploited for it's natural tendency to be cooler (or warmer in winter depending) than the surface air. Combine the two and you have helper technologies that can dramatically effect the energy used via urban design.

If we ever again pay attention to the sunrise and sunset orientation of our buildings to take advantage of the best heating times as well as use of ever increasing PV technologies as discussed here, it will improve the efficiencies without adding overly expensive and time consuming inputs. In this case taking input effects directly from the sun and earth.

Given the discussion and the above 'earth friendly house' example however, this is only likely to be practical in a low density environment with direct sun access. Cities with apartments without this access cannot ever really use PV. Therefore I expect this to create an urban planning reassessment as we seek ways to improve PV usage.

Walter

oh yeah, about that battery powered lawn mower... I think the battery will be put to better use elsewhere. I remember as a kid being the only one with a manual mower. When we moved in it came with the house otherwise I had never seen one before. I was happy the lawn wasn't that big! If we're to zero in on wasted inputs again, lawns are going to go too. They're the SUV's of the gardening world as they soak up another priceless commodity...water.

More likely if you have a lawn in 2015 it will be mowed manually and mostly replaced by fruit trees, planter groves and edible herbs etc.

It'll be nice, promise ;)

Walter

I live in an "earth friendly house". We burn 2 cords of wood, no backup, 2400 sq ft. Very toasty.

The problem is, no one is going to tear down their house to redo it right, & we've got a huge overhang of new, poorly built homes. People who can afford to do it, don't care. Most of the rest can't afford it. That's why mdsolar is wrong. Joe Shmoe isn't going to by solar panels. It would make him realize what a moron he was to buy/build a house that has a garage blocking his southern exposure!

I agree that both improved building codes for new construction and retrofitting for existing structures is a big part of the energy transition. I think that once energy generation becomes an architectual element, there will be a pretty natural shift to considering the energy flow of the whole building even without better building codes.

Chris

Regarding the amount of energy associated with the expenditure of each dollar. This is an average, of course, and depends upon the nature of the expenditure. If I buy most of my goods used, then the actual energy costs of production could be completely negated since it would just be counted against original production. This would not be counted against GDP, but would clearly contribute to my welfare and the overall welfare.

What if we cut our consumption of "new" products by 50%. What impact would this have on our economy and what impact would it have on our overall energy consumption? From a GDP perspective , the economy would appear to suffer although individuals would be benefiting from the necessary financial transactions, not to mention the barter possibilities that can and do occur. This is why we need a different proxy for measuring well being. While GDP doesn't purport to really measure well being, we treat it as such, much to our and the planet's peril.

The supposed health of our economy is based upon the premise of infinite growth, maximum consumption of new items, and maximum debt. No politician really wants any of us to save. While saving might be a prudent exercise for the individual, a massive increase in overall savings would be a nominal disaster to the economy, at least the way we measure it.

On a personal level, my sense of personal well being and security is enhanced by saving and investing, not consuming up to and beyond my income level. For this attitude, I would not be considered a patriotic American. After all, right after 9/11, we were told to shop and travel, both massive consumers of energy. The irony, of course, escaped almost everyone.

What if we cut our consumption of "new" products by 50%

I watched thisenvironmental video the other day "The Story of Stuff", which claimed that 99% of the stuff we buy is junked within 6 months. I have to assume a big part of that is food and the packaging that comes with food, but maybe not. In any case, if that figure is correct, cutting down 50% of 'new' products would essentially be 49% of all products....

What if we cut our consumption of "new" products by 50%

Well, in a population size of say 300 million, it means unemployment for about 100 million or so.

It would make the soup lines of the 1930's look like a picnic.

Back then they had soup and a line that served it.

This is the answer that I would expect because we cannot imagine a viable economy that is not constantly producing and/or consuming vast quantities of goods and,therefore, energy and natural resources. Given the current structure of our economy, what you say may basically be true although perhaps a bit overstated since we really don't produce much of what we consume in the U.S. In any event, a reduced nominal income leads to a proportionate increase in unemployment because we don't have a society where we can readily reduce employment hours per employee and share the wealth or share the reduced wealth equally. While this may work to perpetuate an economy that is based on the classical capitalist model, it is unsustainable on a U.S. and global level.

We have to find a better way. If we cannot find a way to have an economy and cut consumption then we are condemned to see production really radically reduced once the climate and natural resource base becomes completely degraded because of climate change and resource exhaustion.

We need to start by restructuring the economy so that it is not either/or. Either you have a job or you don't. We need a proliferation of job sharing and more flexible numbers of hours for those who don't need to continue their ride on the treadmill so that they can maximize their consumption.

Adam Smith believed that because of increasing economic efficiency so that there would be a reduced demand for labor in the future and, therefore, we would have increased leisure. Instead we ended up working even more because of our apparently insatiable demand for more goods instead of more leisure.

In short, we need to find a way to have less employment without more unemployment. Many of the French complain that this has led to less productivity but that is the point, or should be.

This is one of the reasons I have a big problem with the "cheese slicer" chart, which makes it appear as all inputs become useful outputs, and ignores the dominance of waste (including material and pollution) in these flows. Compare this with a material flow chart of China in 2002 (from Xu and Zhang, "Material Flows and Economic Growth in Developing China", Journal of Industrial Ecology, Vol. 11, No. 1, 2007:

ya - obv waste needs to be included...

I like the chart. It seems so boring academic obvious that I wonder why it is not in ECON 101 in high school and college. I suppose in ten years it will be de rigeur like plate tectonics and Darwin whic were themselves controversial. This is the paradigm switch we are now experiencing. It goes from fighting the uphill battle to boring academic school knowledge. Only problem is the older guys controlling the economy never learned it in school. They believe in infinite energy and growth due to the coal and oil revolutions and the american dream of manifest destiny and the endless Eurpean colonial epxansion which gave unending grwoth and all based on renaissance humanistic concepts of logic, etc.

Theoretically I believe in infiinite growth also but only at a spiritual level as I am religious and believe in reincarnation, and other sources of energy but transifoming that into hard physical matter is quite another matter. Sublimating spiritual energy alchemically to transform the self is of course the best way. Chemistry and modern science are just bastard approaches to this and dreadful mistakes which have brought us to a logical dead end in our modern world. However, children must learn by making mistakes and adults and civilizations too. Some day we might grow up. I hope we get the chance.

Poking Google informs that 1 Barrel of oil is about 6.1 gigajoules, and that a healthy human can sustain about 0.1 horsepower for (conservatively) an 8 hour day. (These values match my memories from an old Engineering Measurement lab.) Google calculator says 6.1 gigajoules divided by 0.8 horsepower-hours is about 2840, which suggests there's an extra zero stuck on the "25000" figure.

Ahem, you have calculated labourer-days, not labourer-hours! 2840*8 ~ 23,000.

Wikipedia informs me that 1 joule = 0.238845896628 calories, so 6.1 billion J would be 1,456,959,970 cal (roughly 1,456,960 kilocalories). Taking that an average manual laborer might burn through 2,000 kilocalories doing a day's work, and assuming that, over the long term, energy output would have to match energy input, that comes to a little over 728 days, or about 5,828 hours for an 8-hour day..

I basically pulled the 2,000 Cal out of thin air. I know that I burn a lot less than that doing my desk job. But I also know that lumberjacks and other people doing heavy manual labor burn more. I figured it was a nice, round number in the middle. In any case, if we're talking about how many slaves it would take to replace a barrel of oil, we're not talking about slacker desk jockies like myself, but rather strapping young lads wielding axes and tossing cabers and such.

Ok then - that seals the debate.. If I, in the future refer to the 25,000 hours figure, I will change it to 'in the neighborhood of 25,000 hours worth of work by strapping young lads wielding axes and tossing cabers'...;)

The scientist could say that our money maggot wasteful ways are destroying the planet. We waste half the energy used in this country. The waste will continue long after people begin to go hungry. Oh well.

Thanks for posting this. Energy from hydrocarbons is really unique as shown by the conversion to human power. Too valuable to burn in automobiles and waste. Many predictions of increased production during 2008 in response to the higher cost. This is the acid test for Peak Oil.

Humanity has been hitting the "Easy" button for a long time.

Charles Hall's work is incredibly important. My own work involves modeling energy production sustainability. Actually I am developing a new modeling language to facilitate this effort and those of folks like Hall, et al.

Readers of this thread may be interested in a project I am trying to get off the ground at the University of Washington Tacoma, Institute of Technology. I am proposing a Master's of Energy Systems Engineering degree which will focus primarily on alternative energy production but from a systems point of view. We are already developing a Systems Science BS degree and think this master's degree will be a good complement.

I am currently soliciting comments from qualified (meaning you work in the energy field in some responsible capacity) people regarding the need for engineers in this field and potential growth of the field over the next several decades.

If you are interested in taking a look at this proposal please send me an e-mail at: gmobus@u.washington.edu, subject: ESE Proposal Inquiry and I will send you the URL.

George Mobus
Assoc. Prof. U. of Washington Tacoma
http://faculty.washington.edu/gmobus/

The series of diagrams e.g.

appears to keep The Economy/GDP Output fixed while varying how output is spent (more for energy acquisition, less available for consumption) over time. OK, that much is obvious. But Nate observes--

Finally, though net energy analysis is an important tool, it is still a part of the larger science that is essentially just a 'documentation' of natural resource depletion and the environmental entropy process. Until we thoroughly address the demand side of our energy consumption, better and more correct energy analyses cannot be optimized.

Right! Addressing the demand side is just what many energy analysts fail to do. When I started writing about these issues, I made that mistake all the time. Now I spend much of my time talking about potential price movements and the effects on demand in a context of flat or declining oil supplies.

Oil prices have tripled since 2003. I see no reason why they shouldn't double again by 2012 (= $200/barrel). I would contend that the general American economy's pain threshold (the "tipping point") will be surpassed before then, resulting in a prolonged contraction that stabilizes at a lower level of GDP output with concomitantly lower oil demand.

If that scenario is correct, all the arrows & boxes in the Hall, et. al. diagram change. Unfortunately, this is only one of many scenarios to consider in the medium-term out to 2012. My main point is that focusing on nearer-term scenarios allows us to development responses now (policies) that might be implemented. (I did not say will be implemented.) As far as the long view goes (2030 or beyond), that seems to be too far down the road to think about clearly, although I do also assume that the farther ahead one looks, the worse things get in terms of energy available for human activity.

Net energy analysis is not a surgical tool, but more like a blunt instrument. But what EROI lacks in precision, it makes up for in scope.

Right. But as I argue, focusing on defining nearer-term scenarios & policies that might empower us now is better than talking about our helplessness in 2030 or 2050. Well, at least that's the conclusion I've arrived at.

Dave

Policy should focus on efficiency--that's our best hope for the least terrible outcome.

FWIW, my models don't show prices going down due to demand destruction. (There will be reduced use of oil because there will be less available to use, but that isn't the same as the kind of demand destruction that leads to price declines.) Use of fossil fuels creates wealth, and prices will continue to get bid up until the point is reached where that's no longer true. And that's a long way from the current price.

My main point is that focusing on nearer-term scenarios allows us to develop responses now (policies) that might be implemented... As far as the long view goes (2030 or beyond), that seems to be too far down the road to think about ....

The shift from discretionary to investive use of energy (to build up genuinely renewable energy systems) shown for 2050 will already have to happen up to 2020. This is because global warming is non linear and nature may force us to abandon coal and go for renewables much earlier than previously thought. The turning point may well be the disappearance of the Arctic summer sea ice in the next years.

Causes of Changes in Arctic Sea Ice; by Wieslaw Maslowski (Naval Postgraduate School)
http://www.ametsoc.org/atmospolicy/documents/May032006_Dr.WieslawMaslows...

We have no idea how that will impact on the climate of the Northern hemisphere, but definitely a warming Arctic ocean will highlight the problem of ice sheet disintegration in Greenland and associated sea level rises.

After a recent AGU conference

Session Information AGU 2007 Fall Meeting Cryosphere
http://www.agu.org/cgi-bin/sessions5?meeting=fm07&sec=C

NASA climatologist James Hansen moved the goal post from 450 ppm CO2 to 350 ppm CO2 concentration

Remember This: 350 Parts Per Million
By Bill McKibben
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/27/AR200712...

Since we are already at 383 ppm, this means we would not only have to reduce emissions immediately but also extract CO2 from the atmosphere which of course will cost energy.

The EROEI problem means that if we continue BAU with fossil fuels we'll not only wreck our climate for good but also fall down the energy ladder.

Unless this is all calculated in a model and then immediately implemented without big debate we won't make it.

I think it is not a problem of big debate but rather long debate. We have seen too many delaying tactics. It gives me sympathy with those who say forget the fundemental issue, we ought to be controlling polution in anycase. But, I think we do need to have the debate. And, I think it is shifting. A couple of years ago now we called for an 80% cut in emissions from the US within a decade. Now I think Lester Brown is beginning to support a similar goal of 80% by 2020. And, with your link to McKibben's article, I think we will be seeing a shift in the Step It Up goals as well. Perhaps the urgency of these calls will help to make the debate big rather than long. In the meantime, we can all do some things that help on our own before we settle on unified national action.

Chris

Frankly when I see a statement like "the average Cuban lost twenty pounds during the first week", which is patently absurd -it would take ten times as long fasting, I become suspicious of the author. While his general ideas are important -and intuitively correct, sloppy or exagerated numbers detract from his argument. We need to be careful to check our figures, and our logic prior to publication. We've seen how the denialists make hay with even tiny corrections regarding climate science. We need to be very careful that our important ideas can't be easily dismissed because of a few careless calculations.

the author said no such thing, other than perhaps the confusion of a poor sentence.

"Both Cuba’s energy use and its GDP declined immediately by about one third, all groceries disappeared from market shelves within a week and the average Cuban lost 20 pounds"

When you put things in quotation marks, as you did, that means they were cut and pasted from someone else, but you changed the order and the meaning of the words in your comment==> "the average Cuban lost twenty pounds during the first week". Clearly the author did not say this. He said the grocery shelves were empty in a week -(and the recent diesel shortage in italy shows we are speeding up - there they were empty in 2-3 days). He never gave a timeline on the weight-loss.

I think the 'reasonable person' is aware that people don't en masse lose 20 lbs in a week and that this is not what was said.

It looks to me like they were saying that "all groceries disappeared from market shelves within a week" AND "the average Cuban lost twenty pounds" with no time given on the weight loss.

It is a rather poorly structured sentence, I think.

The actual statement was:

Both Cuba’s energy use and its GDP declined immediately by about one third, all groceries disappeared from market shelves within a week and the average Cuban lost 20 pounds.

I don't interpret the sentence as meaning that they lost the weight over the 1 week period - to me the time interval for the weight loss is unspecified. My reading of it is that it was the exhaustion of the supply of groceries that occurred over the 1-week time period.

An energetic analysis is much more sobering than a monetary outlook that invokes the magic of the market. However I wonder if even this analysis is optimistic. Assuming political stability I think the decline in discretionary consumption will tend to reduce the feedback loop for energy acquisition. Something like 'let's take our communal electric cars on vacations instead of using the electricity at the silicon plant'. Or maybe foreign wars will still drain any surplus.

The chart for 2050 suggests that when today's children are middle aged they may regard present day Cubans as affluent.

Filed under "Economics and the Economy" (opens new window).
http://www.inspiringgreenleadership.com/blog/aangel/oil-drum-best-index

Tips for serious research on The Oil Drum
All techniques are for Google unless otherwise stated; click to try them.

All this stuff about payback times and ER whatever's is very interesting for those so inclined to ruminate over such topics..

However - I once tried to explain about hydrogen as a transport fuel to someone who was moaning that using it in a car would be more expensive than petrol and they'd get less mpg so had to fill up more often. All I said was "who the heck cares if you can't buy petrol or diesel anymore"... That shut them up... :-)

have we really used up half the world's oil? if everything we use is touched by oil and we still have things around us, we haven't exactly used 50% of the oil. the oil is just stored in whatever is around us. an old home is still using the oil used to produce it. how many homes are there? how many cars are there? cars are also are highly recyclable. we just have to find ways that cars and homes don't use as much FF energy because that's where the real consumption of energy is.

on the other side we need to make good products that last. the excess consumption and throwaway economy will have to shift. I have some of my grandfather's tools that are over 50 years old and they were built to last. that's where we are going. we are also going to have to reuse(like those websites do) and recycle. goods that are recycled will be used more efficiently.

Its frightening isn't it?
learning where you stand, relative to where you thought you were.

Another 'store' of oil is of course ourselves - raised in wealthy economies with plentiful food and comfortable shelter. In that respect, I heartily recommend sterilization, and the childfree lifestyle for those not yet parents. It is the sensible option for potentially limitless personal carbon footprint reduction over the long term (since as well as childen, grandchildren/great grandchildren and so on are avoided).

Enjoy the rest of the party!

Interesting idea, and yes, if you don't reproduce you are stopping an incredible amount of future energy use.

This line of thinking brings up some interesting ideas. An eco-totalitarian government could bring in restrictions - if you can live within a sustainable limit, you can reproduce. I guess you could be awarded sustainableResourceUse / personalResourceUse reproduction credits to share with your SO (if you're sustainable, you can have replacement level children. If you use twice as much, 1 child. 2/3 each? 3 children.)

the oil is just stored in whatever is around us. an old home is still using the oil used to produce it. how many homes are there? how many cars are there?

But many things we have built have implicit oil use in them - cars need oil to obtain most of their value. Many modern houses are located at places that require oil to be viable, for commuting and shopping and also inefficiently designed and require expensive for heating/cooling.

I have some of my grandfather's tools that are over 50 years old and they were built to last.

I have granddad's hand tools too. Today I used them (hand drill/borer, saw) to start building a MAME cabinet. I've used powertools, and tractors/cultivators/power tools (I use pitchforks for my suburban garden) and they're a heck of a lot easier and faster. You don't really appreciate how much time you save with powered tools till you've used both hand and power.

I ride a hundred k's a week to work, and every few weeks when I get into a car, I'm blown away by how easy such an incredible amount of power is available to any person who sits in the seat. I'm very thankful and in awe of oil energy. Most people just take it for granted and waste it.

My attention these days is mostly focused on food production.

What should scientists say to the modern day retards of Policy making?

The basic of message goes: No food, No economy.

Energy really is the underlying basis of money (and food).

Fiat 'money' has 'good intentions' backing it up. Wow, sink a fork into that.

We will see how the 'good faith' of subprime borrowers pays back 'money'.

The EROI of alot of farming in the US a 100 years ago revolved around a pair of good draft horses. Pulling a plow with people sucks, try it sometime with a large group of your friends. (They won't ever return your calls after that)

You had to feed your horses something in return for all that magnificent energy they expended on your behalf.

The horses did not take Dollars or Credit Cards or bank notes or AAA Rated Bonds.

They accept food, oats were a favorite.

An average amount of land a typcial farmer had to set aside to provide payment (food) to his horses was roughly 25% of his acreage. That was quite a bit, but what was the alternative.

Even back a hundred years ago, farmers knew that you didn't get something (food) for nothing (zero energy input). It wasn't about money or economic theory, it was always about the physics of energy.

When the first tractors came out, they ran on alcohol (Not gasoline). Almost every farm with a tractor had a still to produce fuel (food) for the tractor in lieu of oates for the horses.

Farmers had to set aside a certain amount of land to grow a crop that produced enough alcohol for the yearly consumption of their tractor and farm machinery. It made no sense even back then to import alcohol fuel from too far from their farm, most were in the middle of Nowhere and the EROI of trucking alcohol any great distance was obvious to most farmers. The thought of bring in oil distillates from hundreds of miles away would have struck most as insane.

For a relatively short time frame in our history, US farmers substituted setting aside part of their land to grow fuel (mostly oates and hay) for their draft horses to setting aside part of their land to 'grow' alcohol producing plants as fuel for their tractors.

It was all done the a minimum of EROI fuel transport costs. The fuel was produced where it was needed, unlike today with gasoline and diesel, coming from half way around the planet.

The 12 years of the Volstead Act conveniently ended the use alcohol on US farms for tractors and farm machinery.

It became illegal for US farmers to grow their own fuel (alcohol) for use on their own farms. They eventually gave up and switched to gasoline, trucked in from a great distance.

Wow, 'progress' at last.

The 12 years of the Volstead Act conveniently ended the use alcohol on US farms for tractors and farm machinery.

It became illegal for US farmers to grow their own fuel (alcohol) for use on their own farms. They eventually gave up and switched to gasoline, trucked in from a great distance.

Wow, 'progress' at last.

the question is did the farmers not mind because they could farm that other 25% of their land now? was it cheaper to purchase oil than to grow it? was it too much of a hassle to grow your own and worth it to just buy fuel even if it cost more?

I see solar tractors in our future. use land that would never be used to grow anything. maybe even a plug-in hybrid tractor?

"maybe even a plug-in hybrid tractor?"

I don't see any reason for them. Tractors don't travel long distances (at least, they shouldn't), it shouldn't be that annoying to go home and recharge.

Nate / Charlie, this is a long and complex post dealing with a complex subject where I suspect we mortals are still grappling with the basic concepts - which some implicitly understand but struggle to convey the essence to the masses that rule us. I'll just focus on two points:

Thus even though the EROI of global oil and gas is still about 20:1 as of 2007, this ratio is for all exploration and production activities. It is possible that the energy break even point has been approached or even reached for finding new oil.

I'm a bit concerned about this statement that is presented in the context of exploration economics. During the 1980s, the oil industry got weaned off indiscriminant wild catting towards risked exploration drilling based on 3D seismic data and basin modeling. Rather than spending a fortune drilling everywhere they focussed much more on drililng where the prospects were really good. The bottom line is that most really good prospects in known basins have now been drilled and companies are struggling to generate new drilling prospects. This is set against a backdrop of hyper inflation in the service / drilling industry - so the exploration risk is increasing at a time of increasing costs. I will bet a $ that the EROI of exploration drilling world wide is still very high (over 20?). This will only collapse when desperation sets in and companies start to drill poor prospects and the exploration success rate collapses.

How well we weather this coming storm will depend in large part on how we manage our investments now.

I think this statement is key to what TOD is all about. Will we build carbon capture coal plants or direct solar and nukes? To make these investment decisions it is vitally important that we do know exactly what the EROI is of oil and gas wells being drilled today and of all alternative means of gathering energy - we need loads of money to work on this.

And finally linked to this comment, and intentionally provacative:

On the other hand protecting the environment, which we support strongly, may mean turning away from some higher EROI fuels to some lower ones.

The Earth is whirring round in space largely oblivious to our activities - so why do we care about the environment? Is it that we want to live in safety from climatic disaster? Or do we want to protect Polar Bears for their cuddly qualities. My feeling is the bio fuels, carbon capture direction is leading us towards a human catastrophe - so you need to ask who the environment is being protected for.

I will bet a $ that the EROI of exploration drilling world wide is still very high (over 20?). This will only collapse when desperation sets in and companies start to drill poor prospects and the exploration success rate collapses.

Euan, I understand what you are saying. However, even if the EROI of exporation is as high as you say, (which I doubt), there are large non-energy costs that have to be considered as well. Therefore exploration may become uneconomic well BEFORE energy break-even (though I expect we will through good oil after bad for some time). This graphic will soon be updated:

Finding and Development Costs per Barrel Oil Equivalent - Source - John S. Herold, Inc
Click to Enlarge

As can be seen, exploration and development costs increased from 2004 to 2005 (not shown) and increased dramatically from 2005 to 2006. In 2006 oil prices were around $60, with FD costs at over half of that....Keep in mind that this is for public companies, and leaves out major players like Saudi Arabia, Russia, etc. I think its safe to say though that the USA is much closer to energy break even on exploration than the rest of world. Also - I obviously left quite a bit out of this already 5000 word long post. For example, Charlie writes:

In November of 2004 The New York Times reported that for the previous three years oil exploration companies worldwide had spent more money in exploration than they had recovered in the dollar value of reserves found.

In sum, I will take your bet, but expect neither of us will collect for lack of data.

Nate, this is a truly fascinating chart if it is accurate. Why should the finding and development costs have near trebled in the USA whilst only rising about 30% in the rest of the world? Some of this 30% I imagine may be due to $ depreciation?

I'd guess the US situation may be heavily influenced by nat gas but someone at TOD really needs to look into these data to find out what is going on. We've all seen the evidence for frantic drilling of gas wells in the US - how much gas are these new wells producing over their life time and much energy is used to drill the wells?

Its possible that the US is reaching some energy threshold for exploration and development drilling but the figures presented above are still in $ and cents.

Nate, this is a truly fascinating chart if it is accurate.

Herold is respected source - Im pretty sure its accurate, as far as public company universe goes - I have email Herold and Co for last years data, but they were recently sold to IHS Energy, so I may now not receive a response??? Someone can easily help us with this data though. (p.s. obviously you havent read all my posts....;)

Why should the finding and development costs have near trebled in the USA whilst only rising about 30% in the rest of the world?

Euan, for a geologist, I'm surprised you are asking this question. US Peaked in oil production 38 years ago. Some countries have not yet peaked. By definition, we are closer to energy break even than ROW. Would you think it takes more energy to pull out crude from Jack II or Haradh or Ghawar? If we were getting such high return on investment, with oil at $100, why wouldnt US oil companies be more than doubling or quintupling since move from $60 oil? Because their costs are rising almost as fast as their revenues - this is definition of lower EROEI. Its the small fries that still get the Beverly Hillbilly sans-jet-pump oil that can still leverage their returns.

Some of this 30% I imagine may be due to $ depreciation?

No. In 2004-2006 - the dollar was relatively stable. 2007-8 has been the majority of the selloff.

for a geologist, I'm surprised you are asking this question.

Nate I like asking questions - sometimes cus I don't know the answer, other times to see what others think.

I also asked how much gas the 2006 vintage oil and gas wells will produce and how much energy did they cost to drill? I don't know the answer here.

I'm pretty sure that Jack trend wells will produce at high net energy - and I think one needs to take care to not confuse high drilling cost with high energy expenditure. These deep water, deep reservoir wells are expensive because of the very high rates for the specialised drill ships and time taken when drilling to overcome technical barriers - marine currents acting on the very long drill string and the like.

I'm pretty sure that Jack trend wells will produce at high net energy

Maybe so, but I doubt it. Plus one has to include all the dry holes and investments written off in the true EROI figure. And battling marine currents and overcoming technical barriers also takes more energy and more money...Those specialized drill ships take alot of money and energy as well

perhaps we are agreeing in concept but disagreeing in semantics? are we conflating 'fixed vs marginal EROEI'? once/if Jack is producing, its daily EROI of production might be quite high, but after enormous embodied energy has been used prior...

Being a part-time skeptic, I will accept that the Jack wells will produce when I see the reports of their production. The metallurgy, pressure and logistical/distance problems all contribute to my skepticism. Maybe I am ill-informed, but my experience is that drilling a successful well is only rewarded when it produces. A well completed in 2004 (with tests) and retested in 2006 (still with problems) does not appear as successful in 2008 as it did even in 2006. A lot of dates, representing a lot of time. Any guesses as to date of first production? How much of a shut-in clause do they have?

And, as a reasonably concerned citizen of Earth, how secure can I feel in production with all of the inherent risks of high pressure at great depths and conditions which are as inhospitable as the depths of the Gulf?

Solving these problems will make the terminology using "rocket scientist" as the ultimate in applied wisdom obsolete.

Always great info on the tech front from some very intelligent people here on TOD.

But what I hear, from so, so many, is almost exactly the comments and justifications a person with terminal Cancer makes. The "Doc's say so and so levels are such and such, and if we use this treatment, I may have another year".......

We, as a Civilization, have Terminal Cancer....accept it and get on with the time you have left to prep for your family, and yourself.

The world turns, with or without U.S.

BZ

Indeed, this is a great post! I might almost wish it wasn't titled to be about "investments" since it's a lot more basic than that.

Of course, this again brings up a pet peeve of mine, I think that the term EROI unnecessarily confuses things; should be EROEI. There is an established default meaning for the term "investment" in common parlance, and it refers to financial investment. Sticking with an unnecessarily ambiguous acronym while trying to popularize a non-intuitive new paradigm is little short of masochistic. Honestly, how bad would the original term have to be for us not to abandon it in favor of a more logical one? TOEJAM? ERRRRR? Entropoop?

One reason this is a shame is that financial ROI is at this point considered by even extractive entities like Exxon to be a more basic pursuit than EROEI, so they buy up smaller firms with proven reserves because that activity has a better EROI for the firm than does exploratory drilling. Financial EROI is thus considered more important than EROEI even by energy firms. Indeed, financial ROI (alternate investments) competes with EROI (money invested in getting energy) which helps obscure the real limits imposed by EROEI. And if this paragraph seems confusing to anyone, it is precisely because the term EROI is dopily ambiguous. It's ER/EI, or should be. This is the kind of conceptually basic blunder which may have convinced the rank and file of Easter islanders that giant stone heads and trees were in some sense fungible.

And yes, I'll continue to bring this up until it's changed. Resistance is futile.

However, the thing I was going to comment on - and see that Euan has - is the stunner of this piece:

Thus even though the EROI of global oil and gas is still about 20:1 as of 2007, this ratio is for all exploration and production activities. It is possible that the energy break even point has been approached or even reached for finding new oil.

To which Euan says:

During the 1980s, the oil industry got weaned off indiscriminant wild catting towards risked exploration drilling based on 3D seismic data and basin modeling. Rather than spending a fortune drilling everywhere they focussed much more on drililng where the prospects were really good.

My own thoughts when reading the 'stunner' is that it was perhaps true - at the level of complexity employed by the large exploration firms. A gigantic entity like an Exxon is going to have a sunk cost of complexy (in Tainteresque terms) which is sort of the inverse of EROEI. We humans don't have a clear sense of the costs of complexity, but they're real. There are obviously - for instance - many small projects which Exxon cannot afford to pursue, but which might be pursued profitably by less-complex smaller firms. There are also projects which would require the complexity and size of something like an Exxon for threshold reasons, such as remote deep fields. My contention here is just as there are absolute physical limits imposed by EROEI, there are more stringent limits imposed by the level of complexity necessary VS. the level of complexity sustainable by a given EROEI, VS. the minimum threshold of energy-complexity to access each physical manifestation of energy concentration. (ie, if you only have ten guys with shovels, it matters little what's 1000 feet underneath them). Ultimately, this will be where the rubber meets the road in terms of energy and mined resources for the human race.

The 'best first' principle seems so simple it's underestimated and not often mentioned. Coupled with complexity investment, it explains most of Receding Horizons I think. It provides a mechanism whereby a given level of human industrial complexity will require a constantly increasing EROEI just to exist, because the ores, etc it uses to physically express its complexity will always get progressively energetically remote (in terms of physical barriers of sequestration and lesser concentration).

So not only is there probably a minimum EROEI to maintain any given level of industrial civilization, but this minimum is constantly increasing at the same time the best EROEI is falling. These are absolute energy walls closing in on industrial civilization from two sides like a hydraulic press.

It's quite credible to me that there could be oilfields with theoretical EROEI of 20:1 or much higher which will never be exploited due to "minimum Energy investment" thresholds and complexity investment thresholds, and they fall into a large catagory. These include the resources on other planets, probably the fusion energy available in deuterium in our seas, and certainly many underground sources of energy. Indeed, if the two converging limits were understood systematically, most of what's debated on theoildrum wouldn't need to be.

finally, in a different vein since I chose to stick this here in reply to Euan's post:

The Earth is whirring round in space largely oblivious to our activities - so why do we care about the environment? Is it that we want to live in safety from climatic disaster? Or do we want to protect Polar Bears for their cuddly qualities. My feeling is the bio fuels, carbon capture direction is leading us towards a human catastrophe - so you need to ask who the environment is being protected for.

So the burden of proof is on the only known living planet in the universe to somehow justify to the firemonkeys its continued existence for another billion years or so VS. pushing back an inevitable human dieoff for maybe 50-100 years? I'd say you really DON'T need to ask, or shouldn't unless it's to be provocative for mischief's sake. But if anyone ran the numbers on a dieoff sooner with less of the world destroyed VS. a dieoff at the latest possible time with more of it destroyed, my guess is that the total number of humans to eventually live, and their average life quality, in the coming million years would be hugely increased in the latter case (and I'd like to see someone actually DO it for a post). That the very concept of humans living on earth for millions of years sounds somehow farfetched shows just how fucked-up our collective 'discount rates' really are.

cheers.

Greenish - one gripe I have at present is with do-gooding environmentalists who seem to have captured the imagination of the global media and politics the result of which has given us bio - fuels and is about to give us carbon capture and storage. I believe this is an utterly futile attempt to arrest climate change. One point I've made before is that the day our climate stops changing we are well and truly f*d - to use your vernacular.

If it is the intention of the environmentalists to kill of millions in order to save the planet then fair enough - but they should at least have the courtesy and honesty to say this is their aim. Many environmentalists are of course anti-everything and have no concept of the level of human endeavor and creativity required to support 6.5 billion souls.

I think we Firemonkeys do have an amazing future that will stretch many thousands of years into the future, but we are at a critical juncture. Do we allow a bunch of ill informed green heads channel all our surplus capacity, energy and effort into futile attempts to bury CO2 and convert all our food into liquid fuel or do we channel that same energy into "new" smart ways of using and gathering energy and learn now how to live sustainably on the Blue Planet?

More like 1 billion or less people long term and the politics for a stable transition to that are very bad at that. If the silly nonsense that brought us the current credit crisis and Iraq war say anything about the current state of humanity then chimps fighting over a ball in the zoo sums it up. Only a serious global crisis will get the ball rolling. Unfortunately even with that it could go like in 2001. When something goes wrong it will be used as an excuse to take the worst action(attack outsiders for profit and control of limited resources) and not the most enlightened path of longterm adjustment to a sustainable future(windmills, insulation, solar, TOD, permaculture, gardening, bicycles, etc.) If the past is any guide then we are looking at more of the same. Fight over what little is left to maintain status quo high energy lifestyle. Like men in a boat fighting over last fish on board instead of learning to fish.

Things look bad and the average inorant joe public who relies on Iron Triangle corporate created opinion entertainment complex is to blame or that iron triangle as some sort of satan determined to kill us all for their short term profits.

Euan,

"Many environmentalists are of course anti-everything and have no concept of the level of human endeavor and creativity required to support 6.5 billion souls."

Ok, maybe some who call themselves environmentalists are just as naive and ignorant as the next guy and probably shouldn't be in a position to dictate public policy any more than the nice folks currently in charge of our government and corporations.

On the other hand who exactly are these environmentalists that you are referring to? Do you have names, organizations, can you provide specific mission statements from them?

You're sounding a lot like a right wing religious fundamentalist who is claiming that all the ills of society are caused by those horrible amoral atheists. Though they themselves have never taken the trouble to meet a real person who is an atheist.

I think the term Do-gooding environmentalist is nothing more than a strawman for you to attack and it allows you to avoid the reality that we can't continue the current status quo and that even people like you might eventually have to change their ways. Change is not pleasant for most people they don't want to deal with with it. It can be scary and frightening.

I might be wrong and I don't want to pretend to speak for anyone but I would venture to guess that the very author of this post might fall into the category of "Do-gooding environmentalist".

I very much doubt that people like him are intent on killing millions of people in order to save the planet. BTW it is very clear that if we continue on our current path possibly billions of people are going to die before their time anyway.

To put it another way as much as I might like polar bears, whether they survive as a species isn't the point at all. However if they go extinct because the global ecosystems have passed a tipping point and can no longer sustain them then chances are pretty good that those same ecosystems will also be unable to sustain us.

So at the end of the day it may very well be that at least some of those do-gooding environmentalist are actually aware of the level of human endeavor and creativity required to support 6.5 billion souls.

Hi FMagyar,

re: "...if they go extinct because the global ecosystems have passed a tipping point and can no longer sustain them then chances are pretty good that those same ecosystems will also be unable to sustain us."

Critical point, well said - often overlooked.

Euan, the real reason why there will probably be an increasing diversion of agricultural feedstock into biofuels production is not environmental concern about climate change. That's just a good-sounding red herring. Rather, the real reason is just selfishness, specifically trying to keep the happy motoring way of life in as much and for as long as possible.

At the risk of being repetitive, I'll expand my view using some material from previous posts.

Turning soybean (or sunflower, or rapeseed) oil into biodiesel is a proven, cheap, scalable technology with EROEI > 1. When high enough oil prices make it viable, a huge share of today's agricultural production from Brazil, Argentina, Paraguay, etc. will very probably be diverted into biodiesel production. Land arbitraging based on profits per acre will then divert land from wheat and corn into soybeans. Food exports will drop, and poor people will be priced out of food. (1)

And the fact that using the entire Earth's arable land for biodiesel would not even approach today's GLOBAL oil consumption is meaningless. Those countries have much lower per capita oil consumption than OECD countries, so maximizing their biodiesel production for THEIR own use will allow them to run the critical part of THEIR economies for ever.

I'm not saying that's the way things should be. I'm saying that's the way things will most probably be. So, just as oil importing countries should not count on increasing oil imports (actually they should count on decreasing oil imports), so should food importing countries.

To be clear, I'm saying it is very likely that there will be less and less food and consequent massive starvation in the next decades, that in effect the world is at peak food now, that the third horseman is coming driving a biodiesel-powered SUV.

All this doesn't sound good, but I suggest the following mental exercise. Assume you are in England in 1938 and have the opportunity to broadcast a radio message to all Jews in Germany. What will you tell them?
a. "The German government must respect your human, civil and political rights."
or
b. "In a very short time, the German government will start enslaving and killing you."?

And in contrast to the Holocaust, the coming starvation will not come out of the evil madness of a few. It will be the result of the foreseeable majoritarian consensus of whole societies, driven by selfishness. Will you say to Argentines "Don't produce biodiesel, learn to live without fuels, go back to horses and oxen, and keep exporting wheat to the hungry of the world"? Won't they reply "Since when do we have the duty of feeding the world?"

Moreover, the Natural Gas depletion issue will actually PUSH the process, because:
a. soybean has less fertilizer requirements than grain crops (2), and
b. many of the electric power plants in South America are NG-fired but can also burn diesel oil. Therefore biodiesel will in effect free NG for home, fertilizer, and other uses.

(1) That's beginning to happen right now, as per the December 17 FAO communique at
http://www.fao.org/newsroom/en/news/2007/1000733/index.html

(2) From the National Academy of Sciences recent report titled "Water Implications of Biofuel Production in the United States" at http://www.nap.edu/catalog.php?record_id=12039

"Nitrogen application rates are much lower for soybeans than for corn because soybeans, which are legumes, fix their own nitrogen from the atmosphere. Pesticide application rates for soybean are about half those for corn."
...
(The key) "index is inputs of fertilizers and pesticides per unit of the net energy gain captured in a biofuel. To estimate this first requires calculation of a biofuel’s net energy balance (NEB), that is, the energy content of the biofuel divided by the total fossil energy used throughout the full lifecycle of the production of the feedstock, its conversion to biofuel, and transport. U.S. corn ethanol is most commonly estimated to have a NEB of 1.25 to 1.3, that is, to return about 25-30 percent more energy, as ethanol, than the total fossil energy used throughout its production lifecycle. The NEB estimated for U.S. soybean biodiesel is about 1.8 to 2.0, or about a 100 percent net energy gain."
...
"Per unit of energy gained, corn ethanol and soybean biodiesel have dramatically different impacts on water quality. When fertilizer and pesticide application rates are scaled relative to the NEB values of these two biofuels, they are seen to differ dramatically. Per unit of energy gained, biodiesel requires just 2 percent of the N and 8 percent of the P needed for corn ethanol. Pesticide use per NEB differs similarly."

Euan,

I can say that the Green Party of the US is not suporting corn ethanol or carbon capture and sequestration but it is trying to work out ways that all of us can live on the planet. Ending the use of fossil fuels is part of our goals but we support alternatives to fossil fuel use that are feasible such as wind and solar power. I think perhaps you are taking greenwashing for actual green thought and are thus confused about what greens really want.

Chris

Euan,

Thanks for your reply, and let me apologize (to all) for my vernacular... I should watch my language, particularly on posts that may be read by others as a resource. I won't drop the F-bomb again, I wrote that post in a bit of a hurry and am just now back from being away for a day+.

The user name 'greenish' is probably lame, it was done with no forethought the first time I wanted to post a reply to something, but there may be significance to it... I'd be identified as deeply 'green' in my thinking, but most 'greens' would be horrified at how out-of-the-mainstream I actually am. I've been doing it since before it was popular, and I assure you that I have a bigger bone to pick with "airhead" greenies than most do. And they do exist, in their multitudes. Every rational position must ultimately be buttressed by irrational support to creep into the mainstream. Thus, if 'greens' or 'gw deniers' or 'economists' etc act as though their beliefs are religion, it's because that is actually the case more often than not, IMO.

If it is the intention of the environmentalists to kill of millions in order to save the planet then fair enough - but they should at least have the courtesy and honesty to say this is their aim.

Personally, I think if there were just a 1% chance of runaway methane heating creating an anoxic-oceans scenario, that would be sufficient cause to make large changes even if they impacted the lifestyle of billions and in fact reduced the global human population by billions. No one seriously thinks that 6 billion plus humans can continue to exist on earth indefinitely anyhow. Moreover, even if you discount the loss of other species, which I do not, I consider future generations of humans 'real' in fully the same sense as those alive now. I have basically zero 'discount rate' which makes me admittedly odd, but I don't think it makes me wrong. What can be done to maintain the optimum healthy populations of humans and other species? If that is honestly answered, then the situation of the current population is almost literally irrelevant compared with the trillions of people we are potentially depriving of life. The only reason it ISN'T dealt with that way, is the ones alive now are the only ones who get to vote. I admit my decision not to have kids makes it emotionally easier for me to hold this position, but that's no coincidence. So, is it your intention to kill trillions of people who might live in the future, to save billion you can see? Of course not, so your phraseology above is inappropriate except as provocation. I assume you're not one of those 'every sperm is sacred' folks...? ("not that there's anything wrong with it...")

I think we Firemonkeys do have an amazing future that will stretch many thousands of years into the future, but we are at a critical juncture. Do we allow a bunch of ill informed green heads channel all our surplus capacity, energy and effort into futile attempts to bury CO2 and convert all our food into liquid fuel or do we channel that same energy into "new" smart ways of using and gathering energy and learn now how to live sustainably on the Blue Planet?

Why not millions of years? Shooting for thousands as a goal is arguably aiming far to low. I nitpick this point since I think it is an unconscious bias to fail to think in terms of real people alive in a million years, as real as we are this moment and with the same needs.

The ill-informed of various stripe will almost certainly make our decisions. Personally, I think carbon sequestration is (in effect) a bait-and-switch and oppose it; there's no way sequestration will be continued once energy is tighter, it's just a way to get coal plants permitted, a way around cognitive dissonance in the near term. (There are obviously some less cynical intelligent folks who sincerely think it's a good idea; they have more confidence in human rationality than I do). I'd favor an international ban on coal use, but that isn't practical due to its ubiquity. Yes, that would have population impact. The current population, if seen by intelligent aliens, would probably seem about like a morbidly obese person who doesn't want to diet "for the sake of the fat cells". The fact that we can relate to humans - and I do, too - doesn't make the metaphor incorrect.

I think biofuels, particularly ethanol, are pretty boneheaded for the reasons detailed so well on this site, though in niches they will make sense. Getting drunk, for instance, or for chainsaws. And I've been involved in promoting fusion research, as well as being a rather techy inventor-type who hangs out with the astronaut crowd, despite also being a founder of some large 'green' organizations. So there are the stereotypical idiots who can be found for any school of thought, and there are actually intelligent people who come to different conclusions with the same data. Those latter seem to often hang out at theoildrum, which is what makes it such a good site to visit even on days one doesn't give a fig about what oil's doing. So kudos to you for your many excellent posts, and to the goal of finding smart ways of using and gathering energy...

best.

Greenish (and Galicticsurfer, FMagyar, Beach Boy and mdsolar)

A great set of comments. I am not as well read and informed about the activities of the different factions of the environmental movement as I should be and so apologise for lumping you all together.

I grew up in a country town and set a high value on my environment and environmental issues. Hill walking, cross country skiing and fly fishing for wild trout (seatrout and salmon) are my main hobbies.

Much of my current impression of the environmental movement is moulded by the press and politics and by George Monbiot's book, Heat, which I read last summer and actually wrote a review for TOD which I never finished.

An interesting book of 2 halves that are interwoven. Half of it is good well informed stuff and the other half is junk. Unfortunately it is the junk half that by chance is guiding political and industrial strategy today.

George discussed peak oil - and acknowledged its pending impact - but in the same breath completely dismissed any notion of peak gas and did not even consider the finite nature of coal. This provided George with an "infinite" supply of FF to pursue the energy intensive strategy for C capture and storage. This part was dross and I am somewhat bemused by the fact that the UK, EU and other governments will pour billions of £$ into this totally futile exercise. Its seems that all those involved in this thread are in agreement here so I won't elaborate just now on reasons for considering this futile - but imagine a post on this subject is overdue.

Stuart will have a post on bio fuels soon - maybe tomorrow - and I gather the message there will be converting food to liquid transportation fuel is not that smart for Homo Sapiens.

In order to avoid a long rant I will summarise my current position (that is subject to continuous revision)

1. Pro nuclear - since James Lovelock volunteered to store all the waste in his garden.
2. Pro wind and solar, esp direct solar.
3. Pro FF - because I don't think there are enough to cause runaway GW.
4. Anti IPCC - whose climate models seem to be crap - actual warming seems to be more advanced than their models forecast - and they neglected to examine the inventory of FF on Planet Earth.
5. Anti Nobel committee who seem to have been carried by the rock star Gore
6. Pro markets - the systems we are dealing with (energy and climate) are so complex that any attempt at central management will fail.
7. Pro regulation of markets - that is, informed unbiased regulation that sets standards, targets and goals - and which has teeth to punish non-compliance.

One significant corporate event in the UK this week was the acquisition of Airtricity by Scottish and Southern energy - the owner of all our Hydro dams just bought the biggest owner of wind generation. I will be contacting them to discuss their plans - wind - pumped hydro is one of the smartest solutions out their IMO - so I'm kind of interested to see what their plans actually are. Will any of the fiction discussed on TOD turn to fact?

On EROI - I agree entirely that EROEI is much better - that's what I normally use - but Prof Hall used EROI and so I used the same notation.

On kids and discount rates - I have 2 boys aged 15 and 17 - and I often reflect on the fact that my generation is one of the first in many to never be asked to go and fight. Many thousands of years are millions of years. I was educated in a uniforomitarian geological world only to learn that in practice many geological events are in fact catastrophic.

To conclude, aiming for 3 Gs (giga souls) in 2200 I think is achievable and sustainable - but that is a geologist's extended gut feel - and a lot more work needs to be done to quantify this. One interesting thing about the Scandinavian countries is that their demographic structure results in vast amounts of wealth being focussed down through the inverted population pyramid. Has anyone ever written on this attribute of population decline before?

To be continued...

Euan

Euan,

George Monbiot is liberal/progressive not green. Greens start from ecology and try to fit humans back into it because it is fundemental. The others start with, for example, wealth equality or some other thing that grew out of 19th century politics, and try to make their system fit within the global warming issue. Greens would be pushing for harmony with the ecosystem with or without global warming and that means ending fossil fuels use and nuclear power. I pay attention to Lovelock's work because it provides a path to understanding how the biosphere can self-regulate without "intending" to do so. But, I do not think he is well informed about nuclear power and I think that nuclear power does poorly in a changing climate.

I like your term Gs but I would put it to you that 2200 is not our immediate concern. We need to make it possible for 11 Gs to live soulfully in 2050 so that they may discern how things might go in 2100. We have a duty to the seventh generation but it is conveyed through each of the generations in between. Transforming ourselves and our children into a people they would be proud to acknowledge as ancestors is our main task right now.

Chris

Chris - 2200 was a typo - I meant 2100. I just don't see 11 Gs by 2050. I do see a peak / plateau in FF production by 2020 and what happens to global population at that juncture is anyones guess. I suspect a Global famine will be well underway by then.

Greenish et al, I slept badly mulling your comments and my rather feeble attempt to respond. I have to admit you have caught me completely off balance. You've clearly thought about some issues here very deeply and for a long time. Some of the issues you raise are vitally important - to discuss.

I have basically zero 'discount rate' which makes me admittedly odd, but I don't think it makes me wrong.....and

I admit my decision not to have kids makes it emotionally easier for me to hold this position, but that's no coincidence.

and

But if anyone ran the numbers on a dieoff sooner with less of the world destroyed VS. a dieoff at the latest possible time with more of it destroyed, my guess is that the total number of humans to eventually live, and their average life quality, in the coming million years would be hugely increased in the latter case (and I'd like to see someone actually DO it for a post).

I understand now where you are coming from. To be sure, not having kids will enable freedom of thought on this matter. I have to admit that my thinking about energy decline is driven by traditional selfishness and the optimum survival of myself and family. In essence, sensible allocation of investments today with the aim of sustainable global population 100 years from now - with minimum pain inbetween.

The question you pose about the total number of humans to live a quality life in the coming millenia is a deeply philosophical one - not one I can engage in here, but I'll pass your suggestion for a post on this on to Nate and Kyle.

Having slept (badly) on this issue the simple conclusion I reach is that the only way to tackle the twin problems of habitat destruction and energy decline is a drastic near term reduction in human population. I think we can just about ignore everything else and focus on that one issue. This reduction can either be managed or allowed to happen of its own accord. The issues surrounding religion, our desire for longevity, to reproduce, attitudes to health care, "moral" issues and our high discount rates makes it near impossible to negotiate a managed decline, and so unmanaged decline is the most likely route IMO.

The environmental consequences of this are difficult to predict. Here, I am able to consider a time scale of millions of years more easily. The only man made event I would consider likely to drastically and unnaturally alter the future course of the global ecosystem is a nuclear holocaust - man unleashing the power of the supernova upon the Earth may change the future evolutionary course.

You mention runaway GW arising from methane release. I'm unsure that man can bring this about. Melting of clathrates in permafrost will certainly provide a positive feedback to GW - but as far as I can see there is little evidence for this happening from the Keeling data - maybe you can elaborate here. One thing I'm interested to know is whether permafrost methane is of biogenic, thermogenic or mixed origin - is it rotting plants or gas leaked from deep reservoirs. This is an important question regarding the overall CO2 budget of the planet.

Methane release from gas hydrates on the ocean floor has happened in the past - most likely due to geological or astronomical events. I'm not sure this is likely to happen as a result of the current warming cycle. Ocean bottom water is always going to be about 4 C - regardless of the temperature of the surface layers and rising sea levels will increase bottom pressures - so I don't see gas hydrates being destabalised. But may stand to be corrected.

Your comments about complexity and the EROEI for industrial civilisation also merit a post in their own right - do you have any text on this? There is no short response.

Euan

Euan,

Well, such posts tend to get too long, and it's possible I should post this offlist, but I'll keep this on. Probably not that much traffic on the post at this point anyhow.

Thanks for your thoughtful and respectful posts.... to me (et al). A few thoughts in response and answer:

I am not as well read and informed about the activities of the different factions of the environmental movement as I should be and so apologise for lumping you all together.

Heh. For what it's worth, I now ignore the 'environmental movement' per se. At this point it's a meme free-for-all and some of the players are outright wankers. I much prefer to be in the company of people who are simply relatively-non-delusional about the world and able to entertain new thoughts. By way of partial disclaimer, I am both a former oil geologist (long ago) and a founder of Greenpeace, if the definition of 'founder' is kept reasonably loose, and I've worn many other hats. I suspect we'd find that we don't actually have many real philosophical differences. Trout and salmon fishing are a sacrament to me, one I've been away from too long. Even there, I've arranged to save a lot more of them than I've eaten, though; an obligation of simple self-consistency I placed on myself long ago.

I understand now where you are coming from. To be sure, not having kids will enable freedom of thought on this matter. I have to admit that my thinking about energy decline is driven by traditional selfishness and the optimum survival of myself and family. In essence, sensible allocation of investments today with the aim of sustainable global population 100 years from now - with minimum pain inbetween.

Not having kids was a damned difficult decision to carry through, my wife and I were able, and I treasure family. But my personal standard of self-consistency came in there as well. I could see the broad-brush collapse coming even in the early '70's, which is why I quit oil exploration to be a low-paid career treehugger. The earth's needs, humanity's needs, and other species' needs simply were more important than my desires. If that seems some kind of elitist do-gooder position, it is not. I'm an atheist and would not respect myself if I didn't even live a self-consistent life. I also made the arbitrary logical leap and conscious decision to behave as though biodiverse life systems have absolute value. Out of those two simple premises, self-consistency and "a living earth is good", my own decisions have been clear, if not easy. I'd have to say that being a geologist helps one think in terms of billions and billions of years; learning to read the rocks imparts an interesting perspective on time.

The question you pose about the total number of humans to live a quality life in the coming millenia is a deeply philosophical one - not one I can engage in here, but I'll pass your suggestion for a post on this on to Nate and Kyle.

I'd say it's more practical than philosophical, at least that's how I meant it. Who dies and when? That's pretty practical.

I don't have the time to write or moderate key posts just now, but would be fine with working with someone else doing the heavy lifting. It's one of those 'elephant in the room' deals which might be awkward, though, for if scenarios were compared, it's almost certain that something like super-bird-flu knocking the global population back to a third of its number in the coming decade would be far better in the long term than the status quo in all ways to optimize human populations as well as other species. So what would TOD do with a posted study that showed an immediate abrupt population reduction as the most rational policy? That would be dancing perilously close to what people could look at without their heads exploding. If a lottery were conducted to implement such a reduction, and it was credible, I would cheerily open a vein and expire without complaint if my number were pulled; but I don't imagine it'd catch on. Thus, I find non-suicidal ways to be useful.

Having slept (badly) on this issue the simple conclusion I reach is that the only way to tackle the twin problems of habitat destruction and energy decline is a drastic near term reduction in human population. I think we can just about ignore everything else and focus on that one issue. This reduction can either be managed or allowed to happen of its own accord. The issues surrounding religion, our desire for longevity, to reproduce, attitudes to health care, "moral" issues and our high discount rates makes it near impossible to negotiate a managed decline, and so unmanaged decline is the most likely route IMO.

Bingo. I don't care for the conclusion either, but there it is staring at us.

The environmental consequences of this are difficult to predict. Here, I am able to consider a time scale of millions of years more easily. The only man made event I would consider likely to drastically and unnaturally alter the future course of the global ecosystem is a nuclear holocaust - man unleashing the power of the supernova upon the Earth may change the future evolutionary course.

I find the prospect of that as disconcerting as you do.... though as I've commented, the likelihood is probably a lot higher than most people are willing to think. Looking at it in the abstract, biowar would screw up the planet less, if one had a choice of apocalyse. I've also commented on the likelihood of this.

You mention runaway GW arising from methane release. I'm unsure that man can bring this about. Melting of clathrates in permafrost will certainly provide a positive feedback to GW - but as far as I can see there is little evidence for this happening from the Keeling data - maybe you can elaborate here. One thing I'm interested to know is whether permafrost methane is of biogenic, thermogenic or mixed origin - is it rotting plants or gas leaked from deep reservoirs. This is an important question regarding the overall CO2 budget of the planet.

Methane release from gas hydrates on the ocean floor has happened in the past - most likely due to geological or astronomical events. I'm not sure this is likely to happen as a result of the current warming cycle. Ocean bottom water is always going to be about 4 C - regardless of the temperature of the surface layers and rising sea levels will increase bottom pressures - so I don't see gas hydrates being destabalised. But may stand to be corrected.

I used the methane release as one possible example of a calamity. I'm no expert on it, though I'll confess the prospect scares me like little else precisely because it IS an unknown. In other words, I'm unsure too but I react perhaps differently to being unsure. Even if the odds are low for an anoxic-oceans-level event, it would end so many evolutionary lines that to me it would merit crash remediation as a precautionary measure. Since we do NOT know it won't happen, we should be damn careful. Looks to me from light research that the amount which could outgass from Siberia peat bogs alone might warm things up enough to cause some of the subsea stuff to be released, (by altering currents and throwing large amounts of freshwater into the system, maybe) I hope that's wrong. However, the periods during which oceans were mostly anoxic clearly can happen on earth, and that's a really really bad thing. Geology was a real science when I got my degree, but mine was the first class graduated which was actually taught plate tectonics. When I was a sophomore, that was considered fringe science. We know very little about the methane hydrates, and that is very worrying. Their formation may in their own way be subject to self-organized criticalities as well, evolving toward ever-smaller triggering perturbations.

Your comments about complexity and the EROEI for industrial civilisation also merit a post in their own right - do you have any text on this? There is no short response.

I agree, but no, I haven't written anything. I'm actually impressed that other humans are thinking about this stuff now; the few times I discussed this stuff with 'science experts' in the '70's, '80's, and 90's I was considered a crank. (May have sounded like one, since my formulation of the concepts was in my own terminology). Now there is a rich vein of literature out there which I'm slowly getting around to reading.... some of which had been around for years without me knowing about it.

I think there is realistic hope for optimizing the situation of the world, for steering it into an optimal managed decline; and as a successful activist in large-scale change I don't think I'm deluding myself. But it'll be like doing a dead-stick night landing of a damaged 747 on an aircraft carrier: unprecidented, unenviable in execution, and white-knuckle all the way. Yet when one is on such a plane and the only other option is crashing into the sea, ya give it a shot....

cheers

Hello again, Greenish,

Very interesting discussion. I wish I was on time for it. I hope if this thread is "dead" that we can pick it up somewhere more current.

re: "If that is honestly answered, then the situation of the current population is almost literally irrelevant compared with the trillions of people we are potentially depriving of life."

Greenish, this is a wonderfully broad thought.

There's something perhaps equally heretical (in a sense) I've come to. It may, perhaps, be a counter-argument to what you are talking about.

To quote Fr. Greg Boyle: http://www.homeboy-industries.org/father_gregg.php, "There are worse things than being dead."

Now, when I heard him say this, I didn't like the context in which he was expressing the thought, as I felt he missed what the questioner - (this was an answer to a question at a public lecture)- was saying. At the same time, I took it for a shorthand version of the following:

Part of what makes humans special are some of our special attributes. If not "unique" among species, at least we do feel them keenly. Among these I count self-consciousness, self-awareness, and many, many kinds of potentials.

Along with this comes a tremendous ability to experience suffering. Even the experience of being deprived of opportunity, for eg., can be devastating.

It's a kind of hell (IMVHO), to be born a human being, and for example, to suffer early childhood abandonment, just to cite one example. Why? Because the effects of an altered development are so incredibly painful to the child/human/adult upon whom such a fate was imposed.

A human being can actually live under these early developmental conditions (not thrive, but survive), whereas, I will argue, most other mammals cannot. In other words, the range of abuses humans can experience is so incredibly huge.

There are many kinds of "living hell".

So, my argument is: the quality of experience matters a great deal to humans. It matters in a way that is perhaps not accessible nor potentially experienced (even in theory) by animals. I don't want to argue this point (other v. human species), I'm just using to help explain my main point.

My main point is: It matters what *kind* of life one wishes on one's (our collective) descendants.

To make an argument for their mere existence is to overlook a crucial feature of human experience.

It's an easy one to overlook, I will say that. Easy, because it's very difficult to understand what I refer to in the strongest possible negative terms. Difficult for those who have not experienced at least a glimpse of it. And my argument is - those (most often) who experience more than a glimpse are rendered incapable of explaining or sharing it. Voiceless.

First, I do not call myself an environmentalist because the mainstream of environmentalist thinking veered off from where I used to agree with them. So let me just say what I believe:

1) We need to reduce the rate of human reproduction for the sake of the environment. Those countries that have 5, 6, even 7+ kids per woman cry out for some serious intervention.

2) There's some overlap between what is good for other critters and what is good for the human species. Though there are differences in interests as well.

3) I want to save habitats for the sake of the critters because I personally like having the critters around. Reduced population would help us do that.

4) I also want to save habitats for our survival. A world where most of the wilds have been brought under cultivation and construction is a world where we are at greater risk for our survival.

5) The environmentalists of the 1970s understood human population growth was a problem. The ones today refuse to admit it.

6) Biofuels don't just put human food and energy sources in direct competition. They also put animal food sources more directly into competition with human food and energy usage.

man - i agree with pretty much all of this. well said.

me too

me too.

well, now that we agree, what shall we do about it?

That's the question.

Whatever it is, we need to do it boldly, intelligently, and damn soon. Let us not be lacking in determination, imagination or audacity; and if humanity and life on earth falls it will not have fallen because we failed to try. This is near the crucial moment in time, of maximum leverage, maximum complexity, and maximum chaos as we careen toward what could be a world-ending crisis on the only living world which may exist. The stakes could be no higher.

So saying, I don't exactly know WTF to do. I have a few notions. Let us reason together.

I see direct efforts on population as both ineffective and a cop out. They are demonstrably ineffective where they have been used. The coersive program in China has destroyed much mutuality that made Chinese society work and we now see individualistic growth without the rule of law that moderates this in the west. The effect of this on the environment is devastating. They are a cop out because our difficulties are immediate, not some time off in the future. The way the current population lives on Earth is not working and so the manner of life is what has to change, not the population level. With sufficient adaptation, a larger population is possible but with no adaptation the current population is not.

That said, there is one indirect method to reduce population growth that is effective and which needs to be pursued in any case and that is the spread of feminism. Establishing universal education through the 12th grade for both sexes throughout the World will stabilize population growth.

In the West, where the rule of law is effective, we need to be making a conscious transition to a sustainable way of living. This means using the law to change building codes, label foods and other products as environmentally beneficial, benign or harmful, and transforming our infrastructure, especially our energy infrastructure, to a beneficial state. We need to be able to remove carbon dioxide from the atmosphere, unmaking our waste.

Elsewhere, we need to understand how corruption can be circumvented. This may include trade restrictions on products that continue to use fossil fuels in their manufacture, establishing ties with NGOs that can do some of the policing that governments are not capable of doing and use of popular media to spread understanding of the ecological crisis directly. These efforts won't be successful though if we don't really get our own act together first. We have our own issues with corruption owing to our willingness to give corporations much more power than people. Resizing these organizations to limited duration entities would seem like a good first step.

Chris

If externalized costs enable the destruction of our future they must be internalized quickly.

Now there's just the entire enumerated economic structure of the planet to change ...

Will the shower accept tokens?

Dear Greenish, et al,

Away from "The Oil Drum" - (how do people actually maintain participation and get anything else at all done?) - and see what I miss.

re: "if anyone ran the numbers on a dieoff sooner with less of the world destroyed VS. a dieoff at the latest possible time with more of it destroyed, my guess is that the total number of humans to eventually live, and their average life quality, in the coming million years would be hugely increased in the latter case (and I'd like to see someone actually DO it for a post)."

A couple of points to this:

1) I believe one could make the case that the interconnection and complexity of the world as it is - or rather, was - for the advent and (arguably "over-") population of the human species means the following: With "much of the world destroyed", this (our very own) species would most likely not be able to survive.

A great many factors from and in "the natural world" that contribute to our survival are probably still uncatalogued. We don't know which ones we could live without. "More of the world destroyed" is taking a chance for calculating risk we simply have no means to analyze.

2) In fact, my guess is: what we do know, is that the conditions were "right" for a human population explosion in the past. We know those conditions/environment (taken as a whole) *can* support human life. This is one premise underlying the notion of "sustainable", is it not?

3) But then again, I'm not sure exactly what you mean by "the world". I was assuming you meant the "natural world". In any case, destroy more of the man-made world and inevitable the non-man-made would be affected, perhaps quite drastically.

re: "This is the kind of conceptually basic blunder which may have convinced the rank and file of Easter islanders that giant stone heads and trees were in some sense fungible."

Green, this is exactly the article I'd like to see. I'd like to see your version of EROEI - what it means, why it's important.

can anyone tell me how quick our drilling infrastructure can switch to something else? can they easily drill for geothermal? can we convert old oil wells to geothermal? can we use wind, solar or a combination to pump oil and explore for oil if the amount of energy it takes to produce a barrel is closer to 1:1?

california is a geothermal hotbed, would dry oil wells eventually be switched to geothermal to produce power(when the oil is done)?

This ties in the EM post above about drilling costs. With nonvolcanic geothermal such as 4km deep dry granite capped by sandstone the temperatures are good eg 250C but a lot of wells need to be connected at depth by fractures from explosives. I'd guess a lot of fractures don't connect drill holes. This means a lot of drilling. After a year or two the granite cools and new wells have to be drilled within piping distance of the generation plant. It could be described as 'heat reservoir mining'.

Now 250C is not that hot by thermal standards so the granite people are experimenting with a water-ammonia mixture for the surface boilers. I'm not confident they will get it right, particularly with all this drilling and redrilling. The double whammy is
1) lower thermal efficiency
2) energy costs of repeat drilling.
This leads me to think that old oil wells that are a lot cooler (I presume) and more leaky are unlikely to suit geothermal.

Recently a new type of hard rock/soft drill rig was used nearby to get to shale beneath dolerite dykes, kind of the reverse of granite below sandstone. Not cheap I'd guess. Others may have inside info I don't.

I couldn't help but think of the cheese models showing not only energy, but natural resources as well. More generally, low entropy sources. As it takes more of the resource pie to keep the economy running, GDP measured in dollars will appear to grow enormously even as what people have for their own use will shrink rapidly. Not only energy resources, but clean water, food and so forth. Even the order of society will drop. I wonder how effective RFID chips will be when the system hierarchy has to shift to a lower level.

It also strikes me that this game has been in progress for quite some time and is not only a function of peak oil, but declining EROI. That would be Tainter's diminishing marginal returns - that the critical time for investors is when the rate of marginal return starts to go down. That would be roughly the 70s and the moon landing. It was Carter vs Reagan - Morning in America - when the investor class shifted from open horizons to piranha mode.

I wonder if in the big picture since stone age EROI across all energy sources has been going up until right around Peak Oil in US. Then our economy shifted into the scarcity/pricing model [The Chicago Boys *couldn't* have made it 100 years ago when world was "unlimited".] Even the whole shift of culture into "greed is good" and me first seems to correspond with increasing scarcity and diminishing EROI. We've already been hamstrung with the political and cultural consequences of diminishing marginal returns. Hmmm, Peak Oil would more or less correspond with diminishing absolute returns - where we work harder to get absolutely less.

Its just simpler to denominate everything in dollars, and of course that is what has happened gradually, but nearly completely, over the last 3 decades.

I don't think that works; it masks the consumption of physical resources. What we need is a balance sheet showing assets and liabilities OTHER THAN money. As far as the planet is concerned, we don't care how much money we have. [Money suffers from fallacy of composition.] What matters is how many fisheries, how much ore and how many toxic sites and CO2. They can't be valued in money because of the whole scarcity/pricing issue. What it would
address is the depletion of resources, not their price.

BTW, is the actual essay available? I only found various powerpoints at Hall's site.

cfm in Gray, ME

regarding my quote - that is what I meant - I lamented the fact that we have come to denominate everything in dollars.
regarding the manuscript - it has not been published yet, so I'm not sure the protocol on making it openly available.

Nigeria's main militant group promised a "bloody fight" in the new year, according to an e-mail message.

The Movement for the Emancipation of the Niger Delta, or MEND, said in the statement sent by e-mail late Thursday that its "goal remains to paralyze 100 percent of Nigeria's oil export in one swipe."

http://money.cnn.com/2008/01/04/news/international/nigeria_oil.ap/index....

While some quick expansion of uranium mining might be accomplished by in-situ uranium miners, those developing adit/shaft and open pits require more lead time. Cameco indicated it took 10 years from initial plan to permit to production to open a mine in Canada. The uranium market is getting help from sales of decommisioned Russian nucs until about 2013 and on dwindling stockpiles was the rumor that was circulated. Some of the stuff I have read indicates there will be a uranium deficit and very high uranium prices coming. I do not have any information to refute the rumor of a coming crisis.

If a U price spike causes reactor operators to start experimenting with using Thorium, that should be a good thing.
Supposedly Thorium rods (at least in small quantities) can be used instead of Uranium ones, and left in several times longer. If this happens input and waste steams would be greatly reduced.

The EROEI for nuclear is listed as 5-15:1. What is this based on? What generation of reactor? 1, 2 or 3? Any new reactors built will not be based on designs and efficiencies over 50 years but 3rd and soon 4th generation designs that are far more efficient.

A recent study I read from Melbourne University quantified the EROEI from the Forsmark Plant in France as 93:1.

Souce: http://nuclearinfo.net/Nuclearpower/TheBenefitsOfNuclearPower

How can there be such a discrepancy? This discrepancy on the EROEI figure for nuclear has to be clarified as one of the most urgent energy issue.

There is a large discrepency because the report you read is intentionally deceptive. Their goal is to hide carbon emissions associated with nuclear power so when they calculate the EROEI they hide the energy neeeded to enrich the uranium. This is currently the largest energy input. France devotes the entire output of three reactors to enrichment so the EROEI of their program should be around 7 or less. In order to properly estimate the carbon dioxide emissions associated with nuclear power, one needs to look at the generation mix in the region. Since France is on a European grid, the mix in Europe needs to be used. This is why your link has hidden the energy input related to enrichment. But, the unphysical EROEI gives them away.

Chris

So the energy cost of enriching the uranium for this plant reduces the net energy by 85?

You are effectively saying the vast majority of the cost of nuclear is associated with enriching the uranium?

Remember that the EROEI is a ratio, so we should discuss factors. It is probably off by a factor of ten or so. You could attempt to back out the numbers from the base data but once this kind of deception appears it becomes difficult to trust anything in the report. So, I just give an alternative estimate for a country that is trying to do mostly energy and is not hooked into the current conversion of weapons grade unranium to fuel which complicates things quite a bit.

I would say that the greatest cost associated with nuclear power is accidents which place land in an unusable state for very long periods. Obviously, we have not had all of our accidents yet so it is difficult to know the total cost. Indian Point, for example, is quite poorly run and a major accident there could push the US government into insolvency owing to its liability under Price Anderson. An accident elsewhere might not cost as much. The next major cost is waste disposal. Enriching uranium takes quite a lot of energy and has been based mainly on gaseous diffusion in the past. Centrifuges require less energy and are beginning to dominate enrichment. France still uses diffusion.

Chris

When Wes Jackson started doing research on perennial grain crops, I thought he was on the wrong track. As a native grass seed producer I knew that perenniality and seed production have an inverse relationship. There is only so much energy a plant can invest. Perennials prefer to sequester it underground, and annuals put it into their seedheads.

My thought was that we should all become grazers. That is, extract the carbohydrates and nutrients from the vegetative part of the plant, the way herbivores do. Grasses are wonderful producers of foliage at low fertility levels.

The research into enzymes to break down the cellulose molecule into its component glucose molecules for feedstock for biofuel production also opens up the possibility of directly accessing that glucose as the carbohydrate fraction of human and animal feed.

University of Illinois' perennial biomass research in the heart of the corn belt shows that perennial grasses have the ability to ouproduce grain corn by about a four to one ratio. These grasses can produce this much biomass with fertilizer and fuel input levels only a tiny fraction of what corn requires.

Since grass biomass is 25% lignin, itself a fuel, we are left with a three to one ratio to corn. Take one part and use it for feed, and the other two parts go into fuel. This is a paradigm shift. It leaps past incremental yield improvements. The same land now produces much more, while using less, and also sees an improvement in soil A-horizon quality and quantity, reduced soil and chemical flush into waterways, provides wildlife benefits and carbon sequestration.

The same concept can be applied to perennial legumes to provide protein. That's what cows do. There's no reason we can't do it also. Biomass can also be used as heating fuel in pellet stoves that now have reached 95% efficiency. REAP-Canada's EROI on switchgrass pellets is 14.6.

Now that we would have feedstock for liquid fuels that don't compete with food production, we can look at the use side of the equation. There are three recent vehicles that point the way to the future: Mitsubishi iCar, Volkswagen Up! concept and the soon to be released Tata one lakh car. For simplicity sake, I call these vehicles RENOs, for Rear Engine No Overhangs. These three manufacturers have recognized the primary importance of morphology, that is, shape, in vehicle design.

It is too late for incremental fuel economy measures. The vehicle replacement rate is too slow. We need legislation to send our present vehicle fleet to the crushers. I call this the Auto Industry Recover Act. Ninety percent of the time we travel alone. On average, we use 4,000 pounds to move a 200 pound payload. The RENOs are all that's required for most of our transportation needs. The Tata gives us a low-cost model that shows this fleet replacement is doable and would triple our fleet fuel economy with existing low-tech technology.

Why don't I mention battery powered vehicles? Because a conversion to electric power for personal transport will mean an explosion in the burning of coal. Petroleum is bad, but it's coal that will kill us. If we don't stop burning coal, there is no hope for the future.

Commercial transport is a huge energy user. All linear traffic -- rail, trolley, buses -- should switch to mains electric power. Railroads are already electric, they just carry their fuel and generators with them. More freight needs to be handled by rail. We need to rebuild trackage that has been abandoned.

Trucks need a leap in efficiency, and that requires morphological change. Drivetrain should go to diesel-electric, like trains, with hub motors in each wheel. Every axle becomes a driver. If the shipping container is the standard module for freight, then the shipping container, itself a structural member capable of carrying all its loads off its four corners, becomes the trailer. A dolly is attached at the back end of container, not underneath it, while the tractor has a grapple to attach the front to the fifth wheel. This would allow the whole unit to lose at least three feet of height. A doubling of fuel economy should be possible.

Ships can benefit from three technologies: sail and kite supplemental wind propulsion; hull air injection to reduce skin friction; and flapping foil propulsion replacing propellers. These technologies should cut fuel use in half.

All buildings, commercial and private, should receive a complete energy audit. The coming baby boom retirees can provide the labor force to do these audits and help with retrofits. All motors should run on three-phase if that power is available. Tax credits and grants should be made available to accomplish rapid energy conservation improvements. Existing structures will need to be rehabilitated. We don't have time for building replacement. If we can afford to spend over $200 billion per year on a war, we can afford to do this work.

For North America, windpower has the ability to service the lion's share of electrical demand. But it needs to be developed systematically, not the hit and miss way it is being done now. Windpower is baseload power. It serves exactly the same function as coal-fired powerplants.

Let's forget about putting windmills on top of mountains, heavily populated regions, or aesthetic sites. Put the windpower where it should be, on the Great Plains and the Hudson Bay Region Tundra, in two geographically separate regions.

In the north, an area to be called SASKIMONDAKWY: Saskatchewan, Iowa, Manitoba, Minnesota, Montana, Ontario, North Dakota, South Dakota, and Wyoming. These areas are dominated by the transpolar northerlies. The southern region would be TEXOKAN: Texas, Oklahoma, Colorado, Kansas, Nebraska. The two regions will experience differential wind flows. Tie the two regions to each other and then to the national grid, preferably through super-conducting cable when that becomes available.

These regions need to have independent governmental authority similar to a Port Authority. They will have a managing board, elected by the voters of the regions. The board will distribute revenue to political subdivisions, power developers, land owners, residents and provide mitigation relief for negatively impacted residents and businesses. A planning and zoning agency will pre-site all future wind towers, ignoring private property lines, which are too close together for efficient siting of windpower, but taking into account natural regions and transportation patterns. Development of windpower can be done, as at present, by government agencies, cooperatives or private investment.

A large wind capture area is the best antidote to wind variability. Trying to store wind energy is inefficient. It would be better, and cheaper in the long run, to overbuild, having more wind towers than base demand requires, and feathering unneeded capacity. As demand increases, wind towers get turned on. Because revenue would be distributed region-wide, there would be no loss to land and windpower owners if their towers are idle. Power production increase would be nearly instantaneous, with no thermal lag. Windpower then could act as peaking power with characteristics very similar to hydroelectric power. (In fact, hydro should really be used as peaking power rather than baseload.)

These are a few paradigm shift ideas that bypass incremental improvements. They are technologically feasible and doable over a short time frame (years and decades, not centuries).

The wind program you propose at the close of your post is very good.

I would go one step further, and incorporate CSP (Concentrating Solar Power_ mirrors, using such proporty as the desert southwest, and military bases which have many miles of unused property.

Now, we would have a grid which could delivery massive power in a renewable way. Natural gas consumption could be freed up. We could make transportion much more grid based.

What we would lack is the predictability of "fossil fuel" type plants with their "instant on" ability. Of course, we would still have oil and gas, but we are making the assumption we want to continue to reduce their input as a percent of GDP.

Where to get transport fuel and liquid fuel that would be dense in BTU terms? First we are assuming we would need far less of it in a grid based system (electrified rail and PHEV vehicles much more the norm) and also that through planning for a future that meant much more local production ( the ELP model often mentioned here on TOD), we would reduce transport needs considerably. This will happen. It requires no new technology, just correct application of what we already have.

The other way to reduce transportation consumption of liquid fuel is by substituting communication. Broadband internet has been a great disappointment to date, not available to many, and very expensive to many others. This must be improved soon.

It is hard to imagine how primitive our current system is! I buy a book online from Amazon, and then send the payment electronically to pay for it....but an airplane and a truck are used to deliver it to me, when it could be downloaded the instant I purchase it online in a truly modern world. VERY few books, movies, and musical events are downloaded in this way as a percent consumed, due to legalistic glitches and primitive technology. The amount of transportion fuel consumed could be reduced in great volume, while the convenience to the customer would improve! This will happen. It requires no new technology, just correct application of what we already have.

To assist in reducing the consumption of very valuable natural gas, methane recapture must become almost mandatory anywhere it can be done. Sewer systems, landfills, wood byproduct, agricultural waste and manures, and coalbed methane MUST be recaptured. It is an insane crime to allow methane to drift off into the atmosphere unused, completely wasting what is the closest thing to free hydrogen we know. This will happen. It requires no new technology, just correct application of what we already have.

What we are looking at is a massive reduction of fossil fuel consumption WITHOUT horrendous suffering or loss of freedom of mobility, safety, security and satisfaction. Very few people burn fuel just to be burning it. It has to be delivering something of value....freedom, security and or status.

It is the job of a sensible system to deliver the above mentioned freedom, safety, security and or satisfaction without destroying the base of production (the Earth). Can it be done?

Never mind what the scientist should say to the investor, what should we as a humane and cultured people say to the "scientist"?

There are no guarentees, there is no fixed outcome. Technology, and economics are judged by their results. It is easy to say, "I am a scientist, and I have the solution....most of you must first give up everything, then you must suffer horribly, then many of you must die a premature death. Thank you for the kudos for my great scientific solution."

That is not science, that is not culture, that is not economics, that is MADNESS. Is the solution above that we pay tax dollars and university tuitions to procure at great cost? MADNESS.

If a "scientist" brings us such a solution, we should be honest, and very directly tell the truth..."you doctor, are a failure and a menace."
"As a scientist, you are a fraud."

RC

RC - On the other hand, had I titled the post, "The Impact of Declining EROEI of Petroleum on Society", it would have grabbed fewer viewers.
The scientist/investor dichotomy is not what you perceive -at its core its the dichotomy between limits/no limits and biophysical/neoclassical, just said in the vernacular.

I've independently reached similar conclusions about native perennial pastures. Basically they want to grow and repel invaders without coaxing, having pre-adapted to local conditions. I think the thermochemical and charcoal route is better than enzymes and distillation, but that still leaves many untested pathways. It also turns out some perennial grasses could have 6 tonnes of carbon in biomass per hectare (2.4t/ac) on or below ground level. In 2008 I'll experiment with native grass/food crop permaculture.

University of Illinois miscanthus trials were coming up with 4 tons/acre/year carbon sequestration at their Urbana-Champaign field trials. Most of prairie grass biomass is underground, anywhere from 50% to 80%. That's what created the chernozem (black) soils of the steppes and prairies. The American corn belt should really be called the switchgrass/big bluestem (panicum/andropogon) belt, since those were the dominant plants prior to European settlement. We know an awful lot about annual cereals, but what we know about perennial grasses and their complex underground hormone regimen fits on a thumbnail. Perennials are not charismatic and don't get their proper share of research funding. (As of two years ago, all requests by USDA northern plains region Soil and Water Conservation Service requests for perennial grass biomass breeding funding were rejected -- as told to me by Dwight Tober, Northern Plains Plant Specialist.)

Solar power collection in desert areas with high insolation levels in low latitudes should definitely be a part of the mix. Mechanical collector vapor pressure turbine systems I think are preferable. They're higher efficiency, they create more local jobs, in construction, maintenance and operation, and they have thermal mass, and thus a mechanism for storing energy for night operation. I think the Sunni area of Iraq is a tremendous area for solar development, and would provide the population with an income source that would be sustainable. Wars are always about control of resources. Sometimes, we just focus on the wrong resources. Four other high quality solar areas are the Sahara, southcentral Iran, China's Taklamakan desert and Chile's Atacama desert. Superconducting cable would really help, since production areas could be out of phase with consuming areas to provide power after dark.

When Burt Rutan, the innovative airplane design guru, was asked what his ideas for aircraft design of the future were, he responded that it wasn't an airplane. He thought that video conferencing was a more appropriate solution. That's the kind of thinking we need more of. Somebody needs to hire that man to do more than design planes. (This is a hint to Richard Branson.)

We should be able to go to paperless printing, freeing up pressure on forests for pulp production and reducing transportation needs, but all the digital readers so far have been clunky, including Amazon's effort. The book as we know it, its morphology, was standardized in the 12th century by the Paris Student's Bible. This was pre-printing and was hand copied, but in huge numbers, and developed all the important innovations that make books so functional today. One simple change I would make to digital readers is to make them two-paged, so they're comfortable to hold in the hands, and they need to be able to display Garamond clearly at 7 point type. They need a thumb sensor to mimic flipping through pages. Books are wonderful random data access devices. If it doesn't feel right, it won't be used and won't sell.

Thanks for these posts. Informative and insightful.

Sort of sounds like the iPod touch I've got in my hand. It's cut my computer (power consumption) massively. I just need the modem on, and a light.

Hi Fred,

I'd like to see you write up your plan for a TOD article - would this be possible? - so we can look at it again (I'm late), and perhaps gather more comments for a plan.

One the best posts ever at TOD from my POV

"bookmarked"

hope exposure here as a form of peer review has positive uses.

Boris
London