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| Peak Oil and Economic Growth: Where Do We Go From Here? | The Oil Drum | Andris Piebalgs : getting a sense of proportion | |
Jim Willie and Mike Whitney, Elaine Supkis and Michael Nystrrom are ahead of the curve.
But the "leading edge" is also the "bleeding edge", so be careful, eh?
The US Gov't and it's Banking System are insolvent and in gridlock.
We need $2 Trillion by MayDay. $8 Trillion by August. In cash.
"Viewed from this perspective, what is the Fed's ultimate goal? As Grant correctly points out, savers are being decimated by the Fed's policy of low interest rates, high inflation and a weak dollar. But a nation's savings forms the necessary capital base for productive future investment. Capital investment is required for healthy, long term economic growth.
Asked in a different way, why is the Fed intent on destroying the US economy? "
http://depression2.tv/d2/node/68
"It’s crucial to understand that the problem with our society’s reliance on petroleum is not simply that petroleum will become scarce in the future, and will have to be replaced by less concentrated or less abundant fuels. It’s that a huge proportion of industrial society’s capital plant – the collection of tools, artifacts, trained personnel, social structures, information resources, and human geography that provide the productive basis for society – was designed and built to use petroleum-derived fuels, and only petroleum-derived fuels. Converting that capital plant to anything else involves much more than just providing another energy source.
Unless that new source can be used just like petroleum, the petroleum-powered machines we use today will have to be replaced by machines using the new energy source. Furthermore, unless the new energy source can be distributed through existing channels – whether that amounts to the pipelines and tanker trucks used to transport petroleum fuels today, or some other established infrastructure, such as the electric power grid – a new distribution infrastructure will have to be built.
http://www.energybulletin.net/42029.html
An addendum to the ELM should factor in the rate exports to the U.S. fall when no one accepts our currency anymore.
There are several adverse effects originating in Import Land that need to be considered.
Also the ELM should factor in the implications of the 'net energy' of energy alternatives produced in the Import Land.
'Plain Vanilla' ELM is bad enough, with the add-ons 'Net Exports' decline rate can be expected to be somewhat worse!
There's likely to be several 'Liebig minimums' we haven't even considered - yet.
Although "they" may not accept our currency, they will likely demand payment in grain.
I would if I was "them". In a heartbeat.
hardhast, you're forgetting that your [USA's] excess grains will be used to produce a trickle of biofuels!
John Michael Greer is the author of your second quote.
I don't think people understand the importance of the built infrastructure. This is what everyone owns today - the factories and semi-trucks businesses own; the airplanes that airlines own; and the cars both businesses and individuals own.
If the fuel made for this equipment to run disappears, and is not replaced by another fuel that is equivalent, then there is a huge write-off. There is a significant chance of default on most of the debt used to buy this equipment. Businesses had expected to amortize the cost of this equipment over many years. They are likely to find that the equipment is essentially worthless much before its useful life is over. This will cause a huge drop in the net worth of companies.
If, through invention, it becomes possible to buy some new technology (like battery operated cars), car owners will find that their current equipment (cars) has only junk value as trade in. Lenders will have been burned recently, by all the defaults with respect to the old equipment. There is a good chance that the only way the new equipment can be financed is with accumulated savings. This is likely to be a very slow process, if the old equipment can no longer be used for its intended purpose, because of lack of fuel.
That quote by Greer is excellent and spot on. Thats the problem with EROI analysis - it doesnt go far enough. Not only to we need high energy gain to continue our current trajectory, but we need this energy gain TO COME IN THE SAME FORM THAT IT HAS BEEN, namely liquid fuels. If global EROI of oil is around 19:1 (so says Charlie Hall), and declining quickly, I would argue we need a 30:1 gain with equivalent scale in order to transition the infrastructure into something that can use renewables. So we need both high EROI technologies AND enough additional energy surplus (over and above what we need to grow) to make the transition. Greer said it better than I, but basically replacing 20:1 oil with 20:1 wind is only sufficient, once the wind/electric infrastructure is in place. I had to buy a new tire for my truck today - on the way to store I saw people with flame machines and petrochemicals repairing the cracks in the county road - a crew of 10 people and 4 trucks - all this stuff has to stay reasonably constant while we transition to new modes of energy. To do that we need more than we initially had.
I would argue we need a 30:1 gain with equivalent scale in order to transition the infrastructure into something that can use renewables
Ed Tennyson estimated that it would take $250 billion (current $) to electrify and improve speed & reliability of the US rail system enough to displace 67% of current and future US truck traffic.
I estimated $400 billion to displace 85%.
Better (but not TGV) passenger rail would come as a byproduct.
I figured 8,000 miles of "CSX"# type rail (grade separated, 2 tracks regular freight at 60 to 70 mph, one track pax & express freight at 100 to 110 mph). About 24,000 miles of double tracking, better signals, etc. About 65,000 miles electrified of 177,000 miles (80/20 rule).
# CSX has "on the table" a plan to do this from Washington DC to Miami.
Add $20 to $60 billion/year for Urban Rail.
Building new renewables (or nuke) to run this would be trivial.
Best Hopes,
Alan
Hi Alan.
When you target 85% are you referring to inter city trucking? [Makes a lot of sense -- most long haul trucking does not involve truly time critical cargoes and it is difficult to believe that long haul trucking is less labor intensive -- other than the initial investment which is born by the railroad, most long haul trucking seems to make very little sense on any basis -- if the cargoes can be delivered to the customer's location!] Short haul -- probably not ever customer is going to relocate so as to have their own siding.
Also, is there work underway on getting a better inter modal hand off between rail and truck for the final delivery? I have not studied this question to any degree, but I have in recent years watched a massive switching yards more or less stripped of track. If we are going to transfer cargo the old way, it seems to me that the switching yards are going to be very busy places.
Thoughts?
The goal is to make express rail time and reliability competitive with trucks for those shippers that require that. Canadian National type operations are assumed (scheduled trains several times/day).
An 8,000 mile network (mainly Texas, Kansas City, Minneapolis and to the East plus San Francisco to Tuscon) of 100 to 110 mph express freight trains will add speed and reliability. Even if only a portion of s trip can be scheduled on a semi-High Speed rail line, delivery times improve considerably. 60 to 79 mph service could become "normal" on regular mainlines.
Highway congestion in major cities and 62 mph governors lowers the bar a tad in competing with trucks on speed and reliability.
Until (and it will happen !) customers relocate to a rail spur (or build new ones), intermodal will be required. The number of intermodal locations will increase, and many will be quite small operations. (Does Tuscaloosa Alabama get it's own, or does it uses the intermodal center in Birmingham ?).
In the first years, with diesel only $9/gallon, it will be Birmingham. Later, having it's own intermodal center will make sense.
Ed is working on a model for EMUs# carrying passengers and less than truckload freight (like old days of Railroad Express). Charge sky high freight rates (in comparison to unit cars of coal), but "affordable" to get appliances, small packages, fruit, etc. delivered at the railroad depot of smaller town. Say $21 to deliver refrigerator from big city 200 miles away to RR depot. Merchant or individual takes it from there.
Combine one or two EMUs with less than truckload freight with basic passenger service (decent seats & bathroom, but no dining car, sleepers or lounge) in one or two EMUs and one can make money today in his opinion, if done right. Service 2 to 6 times/day "depending on demand".
# EMU = Electric Multiple Units, self propelled electric rail cars that can operate singly or in trains of any length. Passenger seating could be 66 to 88/EMU.
Basic passenger service, several times a day, going to "big cities" on either end (including airports) as well as small twons along the way could be quite attractive for trips of 80 to 300 miles for a good % of the population (perhaps not a majority).
Best Hopes for Non-Oil Transportation,
Alan
Alan:
Now here's a thought - I wonder if intermodal shipping containers could be retrofitted to carry passengers? This could be a way to ramp up passenger capacity quickly, and to integrate freight and passenger traffic.
Not ideal, by any means. But it reminds me a little bit of the Cuban contraptions pulled by a semi - whatever works.
FRA would have a seizure ! *SO* far from current regs, etc.
A few years after TSHTF, who knows ?
Alan
Nate, I think you and Gail and Greer et al have it spot on. Now let us estimate the likelihood of a *short term* turnaround in which such energy supplies become rapidly available. All done estimating ;-)?
Longer term, we can probably gradually ramp things up to an extent, depending on economic factors and what else we decide to do - but the question becomes, if we aren't going to make a rapid transition, what do we do in the meantime - do we put everything we've got to trying to build the new infrastructure and in the meantime screw the majority who aren't going to get personal solar or wind, and are going to be left with cars that don't work, and houses that don't heat, and no health care or educational system that can work without fuels, or do we accept an even longer lead time on any transition, and do what we can with what we have to soften the blow for most people, by keeping up lifespan, quality of life and allowing people to live decently - but at the price of a longer time before we can ever run as a high energy society?
I think those genuinely are the choices, and I know which side I personally stand on. But it is a tough decision - and tough stakes, and the price is high either way.
Sharon
Sharon:
Unfortunately, given our political system here in the US, it is unlikely that any such choice will ever be made. I doubt that we're even capable of making effective major public policy choices any more. Whatever happens will happen by default. Which means that there will be no big, coordinated, well-though-out programs, crash or otherwise. "Business as usual" will continue long past the time when things are no longer "usual". Whatever big government initiatives are eventually undertaken will almost inevitably be wrong. (Corn Ethanol is exhibit A.) Infrastructure and artifacts will deteriorate and eventually be abandonded on a piecemeal basis. Decline will be gradual and inexorable - we will continue to hear "there's light at the end of the tunnel" and "prosperity is just around the corner" until we can't stand it any more, but things will just continue to get worse.
Energy conservation and alternative energy investments will also happen piecemeal, a little bit here, a little bit there. It will never be enough "to allow us to run as a high energy society", but gradually individuals -- and thus society as a whole -- will adapt and adjust to the future reality. That future reality is a society that is much poorer and necessarilly more frugal. As I figure it, if we end up as well off as Costa Rica, we'll have done well - and I see that as probably an overly optimistic hope.
And yes, the majority of people are going to get screwed, big time, along the way. It is not going to be a pleasant or happy time.
The bottom line advice for most people in the US (and this pretty much holds for other parts of the world as well): Get your debts paid off sooner rather than later (while you still can), and own some property free and clear; make investments to the extent that you are able in household energy efficiency and alternative energy; produce as much of your own food as you feasibly can; and in general downsize your lifestyle and live frugally. Don't worry about the fact that the people around you aren't doing the same, yet. They'll be following along soon enough.
There are a number of efficiency improvements that might be implemented through retrofits to existing assets. A highly efficient continuously-variable transmission will improve vehicle fuel economy by about 20%. Regenerative braking, hydro-pneumatic or electric, might yield another 20%. BMW apparently improved the fuel economy of some of their engines by about 15% at least partly by replacing throttles with variable valve lift and timing.
The problem is, there's little interest in incremental improvements. Maybe that will change when shortages become widespread, but individuals would have to spend their own money for efficiency improvements whose greatest benefits would accrue to everyone. Much as with buying a hybrid now, the added cost is borne by the individual, but the majority of the benefit of reduced demand is distributed to everyone, because the price elasiticity of fuel demand is so low. IOW, a small reduction in fuel demand leads to a large reduction in fuel price, which benefits everyone, but the individual who benefits most may be the one who lets others spend money on efficiency but pays less due to the reduced demand that results from the improved efficiency.
I think the point is that none of the infrastructure I own now is improving, incrementally or otherwise. My $1000 pick-up is not developing variable valve timing or a CVT, and I do not plan on replacing it - ever if I can avoid it. To get the benefit of even incremental improvements often means replacing the previous infrastructure, and where does the money for that come from?
That is exactly why I have kept my old car and refuse to buy a new one. In the event fuel gets scarce, I will convert the car's engine to run on natural gas and use it to power a generator, while also using it as a water and space heater.
Ahh, the magic of welding.
I know enough about oxygen sensor loops to at least be able to set the fuel ratios to optimum, and if I set the engine up with a good oil system, it should run several years without a lot of fanfare, as it will no longer need belts or pumps, and its carburetor will be replaced by a microprocessor controlled valve which will inject just the right amount of natural gas to the incoming air.
I don't know that I would assume a large supply of cheap natural gas in your future planning.
Hello Hardhat ~ a friend was telling me about something called "hydrogen assist" (aka Hydrostar) for gasoline engines. Do you know anything about it?
No, I do not know anything about Hydrostar, but anything gaseous and combustible injected into the airstream will richen the mixture and cause the car's computer to correspondingly lean out the fuel to compensate.
My guestimate on likely result of slipping hydrogen into the intake air...
If you add too much, it will likely trip the MIL (Malfunction Indicator Lamp, or "check engine" ). The correction will be reflected in the fuel trim. Likely, the computer will just "think" the injectors are a wee bit out of calibration, make the compensation, log it as a fuel trim adjustment, and not say much more about it.
I would be careful to only inject hydrogen if the car was running. Loose hydrogen under the hood would be bad news and would likely result in an explosion in an unintended space, likely resulting in a lot of embarassing questions and a need to replace the hood. I would also ensure I had a smooth injection during engine run so as not to confuse the car's computer with erratic corrections.
Anyway, thats just my WAG (Wild Ass Guess) on how a car engine would handle it. I would not think any harm would come of simple injection of additional combustibles, just as I do not see where I could run into anything to damage the engine by feeding natural gas to it, as long as I monitored the exhaust stream and metered the gas appropriately.
Maybe you might want to tinker feeding barbeque gas to a car while watching the fuel trims on a monitor hooked to the car's OBD-II (On Board Diagnostics) port to get a feel for how the engine responds to combustibles in the intake air.
If you are using the car's electrical system to power an electrolysis system to get your hydrogen, I guess you already know you will spend more power splitting the water than you will recover in the engine reuniting it.
Its nice as an academic experiment, as was my experiments using a motor connected to a generator to tinker with the fine points of locking a generator to the grid. At no time did I actually put any net power onto the grid using such an arrangement, as the motor pulled more power than the generator put out.
Steve
That is precisely what he was talking about, and what I needed to know.
Thank you very much.
I say try building a D9 Cat Bulldozer with a factory powered by PV electric.
Not even addressing the sunk costs that will need to be written off like you say Gail.
Soveriegn Default is where we are going. (and you know it Gail).
Our collective debt cannot fiscally/physically be repaid.
Never. Ever.
That is what Peak Energy boils down to.
Our collective Pensions/401's will be revealed to be worthless.
THat is our future. Plenty of "Stuff" of little value.
(Consumer goods at flea markets will be very cheap)
Why not? Except for gas powered ovens I think most of the machines in factories these days run on electricity. Concentrating Solar Power (CSP) plants are being built that produce on the order of 500MW. We can quibble about how soon they'll be built and how many and such, but in principle you could power a large factory with electricity generated by solar power.
What softens the blow a bit is that the infrastructure doesn't have to be rebuilt overnight. To the extent that X% per year of the infrastructure gets rebuilt using an equivalent that reduces demand for fossil fuels by X%. The value of X being set by the depletion rate I'd imagine. Any idea what percent gets rebuilt each year due to attrition?
mcgowanmc - I really appreciated the illustration in the blog showing the rusting autos in a junkyard as the assets that the Fed is propping up.
I'm pretty thick but I get it now.
Pics worth a thousand words, indeed. 8D
H/T to Elaine Supkis, Money Matters
and yet... the financial market outcomes following the bailout of Bear Sterns have been lower commodity prices and a slightly higher $ (USDX)! WTF! too early for the train wreck? too many hedge funds deleveraging? will u.s. treasuries ever fall? the whole stinking financial system is broken.
Welcome, Fred. Good to have you here.
Overbought retracements.
Bearish triangle forming possible.
It's ferd.
Fred Mertz died in 1966.
And I suspect deleveraging /unwinding as the assets of broken investment houses are taken apart.
"Fred Mertz died in 1966."
Bummer! Here's to second fiddles Fred Mertz, Norton, Barney Rubble, and the Skipper.
Commodities did go down, but are still at elevated levels. The USD went up, but it is back down again, and is almost back at its low.
The Fed thinks it can manipulate markets. When the problem is out of control computer trading, as in the 1987 crash, then an intervention is capable of turning things around. But they are only going to be able to override fundamentals for so long, especially in commodities. And the fundamentals for the US economy are very bad. Really all they're doing, whether it is intentional or not, is allowing the big players to unload their holdings on the "dumb money" that is being suckered in to "buy on the dips" by TV's smiley faces and Fed interventions.
Markets have their own separate internal logic. It involves such things as support and resistance. Also various chart formations, trends, bases and breakouts are important to the market. News events and fundamentals are incidental to market logic and not central to it.
yeah, fortunately, i read jsmineset.com, so i am not easily deterred by the short term idiocy of markets. nonetheless, i am considering a local gold and silver berserker cult to aid AU in its journey to $1650.
"It’s that a huge proportion of industrial society’s capital plant – the collection of tools, artifacts, trained personnel, social structures, information resources, and human geography that provide the productive basis for society – was designed and built to use petroleum-derived fuels, and only petroleum-derived fuels...
Yes--it's a doubly whammy. We've got the massive devaluation of suburbia (JHK) AND the massive devaluation our capital stock.
But, and here's where the debate comes in and what makes it a triple whammy: can anything replace oil (and NG)? I think not, not on the scale we use it. Problem is, we are now starting to eat the bark off the trees (biofuels) and burn the beams in the basement (coal).
The massive devaluation of the capital stock is yet another reason why the nuclear option is a non-starter -- nuclear is heavily dependent on this very capital stock and our current infrastructure. It's as good an idea as building a nuclear power station in Basra.
Anything but a planned, cooperative and collective, orderly retrenchment to sustainability.
Dave - "Anything but a planned, cooperative and collective, orderly retrenchment to sustainability."
I have been considering the notion of sustainability. When you consider industrial societies and modern urban cities sustainability is a fiction. Take my older sister for instance: She recycles and goes to the supermarket with re-usable bags. She feels good about it. But it is a fiction. We're in a crises of epic proportions and
"...one path leads to despair and utter hopelessness.
The other to complete extinction.
Let us pray that we have the wisdom to choose correctly"
Woody Allen
Face it, we can ramp up conservation, electric cars, solar hot water heaters but none of it will ever be enough to avoid the consequenceses of overshoot.
Daily luxury cruise ships depart American port of calls full of over-fed complacent Americans who gorge on cheap food prepared by minions of low paid slaves (the luccky ones) from foreign nations.
It would be laughable but it's not...
I don't disagree with you. The road to sustainability involves retrenchment on many fronts: population, industrialization, etc. But where I become, if not an optimist, at least a possibilist, is in believing that after the smoke clears we can find a level at which humanity is able to live more or less in harmony with nature. I don't see some fundamental reason we can't survive as species, at least until a major natural catastrophe ends our story. I still believe brains will turn out to be of some value when we learn how to use them cooperatively.
RE Greer quote:
We are in a position analagous to someone who has been recently laid off (this after a series of pay cuts over the years). This person also has a $200,000 mortgage, $50,000 credit card bill, $3,000 per month expenses such as insurance, car payments etc. etc.
This poor bloke is now being told that he needs to buy a new electric vehicle (or whatever the 'next' technology will be) to save on fuel expenses, buy all new energy saving appliances, super-insulate his house, possibly buy a PV rooftop grid-tied system to save on the electric bill, pay either a tax subsidy for new nuke plants and electrified rail, etc. etc. etc.
Gives new meaning to 'between a rock and a hard place.'
ET:
You are entirely correct, it is not possible for an individual with no assets to tackle a problem of this magnitude. Which is why the only way out of this, if there is one, is by a group effort. For example, cities setting up trains and buses that transport your "poor bloke" to work and shopping so that he needn't purchase a car. Perhaps the local utility company would place the PV array on his roof and sell him the electricity it generates. And maybe he'll pay for the electricity and train fare and food with a salary from his new maintenance job at the solar plant on the outskirts of town.
It is not that different from now. No one starts with an empty lot and builds a home entirely by hand. We all rely on a vast number of architects, engineers, craftsmen, chemists, physicists, EEs, bankers, lawyers, clerks and more to come up with the designs and materials and financing for our homes and goods. The problem, as I see it, is that we (as a society) haven't yet made it a priority.