<The Hydrogen Economy and Peak Platinum The Oil Drum DrumBeat: August 14, 2008>

332 comments on The Path from Petroleum Shortages to Electricity Shortages

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DaveMart on August 14, 2008 - 8:39am Permalink | Subthread | Parent | Comments top

Gail, your essential argument appears to be financial.
When many other of your arguments such as in a previous article of yours the contention that the grid was likely to progressively degrade were answered by several electrical engineers that although there were problems it should be possible to continue to supply power, the position you then took was that the financial system would collapse and so this would not be possible.
Presumably you have a similar outlook to other possibilities, such as moving more freight to rail.
It should be noted in this context that doubling the freight traffic does not entail a doubling of the rail network or anything like it, so the sums are fairly reasonable.

Indeed, the basis of your contention seems rather circular, as the finance system appears likely to collapse in your model largely due to increased energy costs, and nothing can be done about that due to the collapse of the financial system.

In the case of the US at least, the sums needed to alter the energy situation would be comparatively small against the total size of the economy - even coal with more transmission lines and more rail freight would essentially do most of the job.

So even if your basic thesis is correct, and the financial system collapses, why should that paralyse all the needed investment?

To take two examples of bankruptcy, the total collapse in the Weimer Republic did not prevent a vast program of rebuilding and re-armament just a few years later in Germany, nor did the collapse of the Ancien Regime in France prevent the huge outpouring of energy in the aftermath of the French Revolution.

So why should the US suffer the never-get-overs in the event of financial collapse?

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Gail the Actuary on August 14, 2008 - 10:53am Permalink | Subthread | Parent | Comments top

1. The increase in oil availability has fueled growth in the past. As we move toward the downside of the curve, there will be much more of a downward pull, instead of an upward pull.

2. Previous bankruptcies took place in very different environments. One can also find a lot of examples of societies that did not re-emerge after collapse.

3. Who would come to aid the US? How much aid could they really provide?

4. We have very long supply chains, and most all of them depend on electricity. Once they are broken, restarting with major electricity outages will be a problem.

5. This is an Associated Press article I ran across this morning, talking about the US's electricity problems, even apart from peak oil. Fixing these problems will take massive co-ordination among the various entities involved. There doesn't seem to be any way to make this work.

6. Geopolitical issues are likely to play a role also. I expect the US government will decline in influence or be replaced by more local governments.

7. I think that things are happening too fast for the various kinds of investment that you are proposing to be done in sufficient quantity to make a difference. Once the financial collapse comes, debt financing will not be available to either governments or others. Lack of imports will be a major impediment to investment as well.

The US does have resources, such as good farmland and above-average fossil fuel supplies. Long term, the US may be able to redevelop to some extent, but I expect that the redevelopment will look nothing like the current system. It may be that the US will break into smaller political units.

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DaveMart on August 14, 2008 - 11:40am Permalink | Subthread | Parent | Comments top

Point 1. above should surely read that fossil fuels have given rise to growth, rather than just focussing on oil, since a lot of growth took place before it's use.
At least in the US there is no imminent shortage of coal, and also at least immediately no shortage of natural gas.

On point 2 it should be noted that collapse has never happened in a society where so many are so far above subsistence, and so perhaps there are more possibilities to adapt.

On point 3, who would come to the US's aid - the rest of the world, given your basic thesis of energy shortages and perhaps food shortages will want American produce more than ever, so trade will still take place.

On 4 & 5, the same article that you quote says that many of the problems that the grid had in 2003 have been fixed.
A real shortage would focus minds, and I doubt that much NIMBYism would be tolerated, which is the largest factor in excess costs.

On 6 & 7 I don't think anyone is arguing that no disruptions will occur, or that transition to nuclear and renewables will be easy.
In my view however you are overstating the case by assessing it as more-or-less impossible, and particularly when much of the argument appears to be from the general to the particular, so that individual solutions to elements are dismissed because the whole system will allegedly collapse, and the whole system collapses because it's constituents do.

For perspective if we take the sky high estimates for nuclear power of $12bn GW installed, and guesstimate around the same for wind due to intermittency, then you might need around 20GW/year, say £240bn/yr plus money for extra infrastructure etc, so you might come out to around $350bn/yr - say up to 7% of the current GDP.
Of course, GDP would sink, but so would wage costs, and in the event of such a massive recession as you hypothesise so would raw materials costs, as, for instance, the US would hardly be producing 17 million vehicles a year.

I'd be curious to know whether you would have arrived at a more favourable prognosis for Weimar Germany - but after 40 years in spite of massive inflation and defeat in a major war they were still much more prosperous than they had been at that earlier date.

With it's huge mineral resources, massive agriculture and comparatively young population I can't get to the same point as you arrive at, where it is game over for the US.
Many areas in the rest of the world are far more doubtful.

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Gail the Actuary on August 14, 2008 - 6:03pm Permalink | Subthread | Parent | Comments top

I didn't say, "game over for the US". I said

The US does have resources, such as good farmland and above-average fossil fuel supplies. Long term, the US may be able to redevelop to some extent, but I expect that the redevelopment will look nothing like the current system. It may be that the US will break into smaller political units.

There are a lot of other places that aren't going to be doing well--Britain and Japan most likely are two of them. I didn't make a comparison as to who would be doing better/worse.

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DaveMart on August 14, 2008 - 6:43pm Permalink | Subthread | Parent | Comments top

Sorry if I have mis-stated your position.
The reason I used the term 'game over for the US' was that you appear to think that a Tainter-type progressive decline is unstoppable within the US at least, as that is where most of your argument is drawn from.

At least in the resource rich US this seems to me relatively unlikely, and to rely on the assumption that bad choices are fairly universally applied.
Of course this may be the case, but it seems to me far from certain.

To look at another area on which it may serve to demonstrate that rolling collapse may not be inevitable, by 2020 China plans to have production lines capable of producing 20 conventional nuclear power stations a year, aside from pebble bed reactors and coal, wind and solar.
If continued then these 20 a year are around the number China would need to provide all it's power, other contributions aside.
Although shortage of oil might be a great obstacle in doing this, it is difficult to see why it would not be possible - already much personal transport is by very energy efficient rail and EV bikes, and residual needs for oil where vital could surely be produced from coal.

With perhaps more political delay there seems no reason why something similar, perhaps with more wind power, would not be possible in the US.

Since most of the difficulty and cost in building power and transmission lines in the States lies in regulatory approval, raising times for instance from around 4 years for a nuclear build to around 10 and putting up costs hugely, it is perhaps improbable that nothing at all will be done when times get tough to reduce this.

If resources are available, even financial disaster may be engineered around - the re-financing in the early days of the Reich being the most prominent example.

In short, the gravity of the crisis in itself would seem likely to preclude business as usual, and to blow away many of the roadblocks to progress.

Although the new cost level of renewables and nuclear will likely be higher than fossil fuels, they are likely to drop over time, as are batteries etc, and so it would perhaps be just as reasonable to hypothesise a progressive recovery from a much lower level than present US standards as an on-going, ever-worsening deterioration.

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Gail the Actuary on August 15, 2008 - 10:32am Permalink | Subthread | Parent | Comments top

Some of what you say may be right.

One reason I think that outcomes will generally not be very good is that there will be a lot of things besides peak oil going on at the same time. It seems like peak minerals (or at least peak extractable minerals, with the resources we have on hand) will be taking place, making a drop in the cost of batteries or anything else made from metals unlikely. There will also be climate change, of some form or other. Water levels are already a problem, and are likely to get worse. These will be a problem in some parts of the world.

Time will tell what really happens.

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DaveMart on August 16, 2008 - 8:10pm Permalink | Subthread | Parent | Comments top

If we have enough energy most minerals can be got in sufficient quantity - problems only really start if you are very short of energy.
So although I quite agree severe financial and liquid fuel constraints will hit, it seems to me that the spread of outcomes will be much wider than might be inferred from a position which seems to perhaps rather discount those possible solutions on the grounds that systemic collapse will not allow them.

Should some areas come through in relatively good shape, then their influence seems likely to spread.

To move from a general argument to a particular one, perhaps it is worth looking at the position of an individual country, France.
If one assumes that some sort of relatively effective response happens there to the financial challenges,and that ethnic conflict is contained relatively successfully, then it is rather difficult to see why a technological civilisation should not maintain itself there, with high standards of living.

They can probably do this using about the same number of reactors as at present, with gradual capacity increases as they come to be replaced with new reactors.
They burn a lot of gas, but then again it has been cheap, and dearer gas would simply mean that they would need to accelerate their program of installing air source heat pumps - they are putting in around 50,000 a year at the moment.

More freight would need shifting to rail, and the existing program of installing electric car charging points in cities would likely be expanded, but the model that Nissan/Renault have of building electric cars and selling them whilst leasing the batteries seems robust.

Biofuels sufficient to provide for agricultural machinery and other essential uses would be well within the capabilities of French agriculture.

Concerns about uranium shortage would seem to be misplaced, as solutions ranging from thorium burning reactors to building breeder reactors or obtaining uranium from seawater are numerous.

If France then is relatively well placed to overcome the difficulties ahead, that provides a core around which Europe can be re-powered.

This is not to dismiss well founded concerns, many of which I share with you.
In this context it is interesting to note the severe longer-term problems of Europe, due to it's unfavourable demography,
as is extensively detailed in articles on this site:
http://demographymatters.blogspot.com/

The same demographic issues perhaps put the present more aggressive stance of Russia into perspective, as over the next 20 years it seems from the ELM that the present leverage provided by oil will evaporate, and the bind that demography will have got them in by this time seem to point to a much weaker Russia.

The outcome you hypothesise seems likely in some places, but my own feeling is that outcomes will be patchy, with relatively successful outcomes in some areas.

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Gail the Actuary on August 17, 2008 - 3:05pm Permalink | Subthread | Parent | Comments top

It seems like more local almost equates to patchy.

We have gotten used to having inputs from around the world. Once these are cut way back, I am wondering whether this will put an upper limit on how developed even the better-developed areas can be. This week we read about platinum possibly being in short supply. With electricity shortages, I expect the supply of a lot of metals to be cut back greatly--copper and aluminum are two in particular.

A lot of things will change. It is hard to understand the interdependencies.

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DaveMart on August 17, 2008 - 4:27pm Permalink | Subthread | Parent | Comments top

You've put your finger on what I find difficult or unproductive in some of the analysis here.
Of course, systemic failure may doom any response - I don't know.

However, if that is the working assumption then for a start the analysis tends to jump around from point to point of difficulty, by-passing often fairly simple remedies to particular issues.

I am also not a big fan of power down solutions - systemic collapse would certainly seem probable together with mass deaths under those scenarios in my view.

Considering that heating and air conditioning could be done with a fraction of today's energy inputs, and so could goods transportation and personal mobility, together with feeding the population with a much healthier diet with less, better quality meat, then the obstacles seem primarily institutional.

Focussing largely on the interdependencies rather than biting off bits that are chewable may make life too hard! :-)

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332 comments on The Path from Petroleum Shortages to Electricity Shortages

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