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222 comments on Impact of Credit Crisis on the Energy Industry - Where Are We Now?
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222 comments on Impact of Credit Crisis on the Energy Industry - Where Are We Now?
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GAIA Host Collective
It may be true that Danes consume half as much energy, and it is certainly true that Americans went hog-wild over the past few years. But give the devil his due and acknowledge that Denmark is a postage stamp sized country with a milder overall climate. A fairer comparison might be Manhattan or downtown Chicago. The Americans have cut back enough on energy consumption to drop the price of oil by $100. Notwithstanding Black Friday shopping stampedes that kill Walmart workers, their overall consumer consumption has dropped to the point that foreign manufacturers are suffering. So the Americans are changing.
Canada is often listed as an energy hog, but unlike Denmark we have real winters that kill people, and our country is wider than the Atlantic, so we spend more on transportation. From Calgary it is 250 km to the nearest same-size city (Edmonton) and 600 km to the cities after that (Regina or Vancouver). We have cattle ranches and traplines bigger than Denmark.
The high population density and small size of Europe have made it easier for them to use public transit and compact cities. Yes, we have suburban sprawl, of which Calgary is a shining example, but we also have compact downtown cores. But Europe can't feed itself, and as the North Sea petroleum runs out, won't be able to heat itself.
We'll all go together when we go.
Some areas of Europe like Britain can't feed themselves, but overall Europe can very easily.
There are also huge relatively unexploited areas such as the Ukraine.
Life will be a lot more difficult with oil shortages, of course, but there seems no reason to think that they won't be able to continue to do so, perhaps eating rather less meat.
"But Europe can't feed itself,"
The European Union pays farmers money to *not* grow food on land they own. Europe produces more food than it consumes and the export of its subsidized food actually harms farmers in Africa.
"and as the North Sea petroleum runs out, won't be able to heat itself."
well, the coming shortage of nat gas is a serious problem (mainly a political one as we will be at Putins mercy...), but mostly to electricity generation. Heating can be done with coal, of which we have plenty, while Germany, for instance, moves more and more towards housing insulation standards that require houses to need little to *no energy at all* for heating ("Passivhaus").
"But give the devil his due and acknowledge that Denmark is a postage stamp sized country ."
Europe as a whole isn't really that much smaller than NA. Germany certainly isnt "postage stamp sized", uses no more energy than Denmark and its climate is not milder than the USA. Sweden, whose population density and climate ought to be really similiar to Canada, even plans to use zero oil by 2020. They can do this precisely because of the low pop density! (i.e. enormous forests to turn to use for producing energy biomass for not so many people). Canada could probly do something siniliar. From what I know, however, Canadas apperent energy use is only so high because of all the energy intensive resource production going on (tar sands ...), otherwise it wouldnt be that bad.
While I agree we are all in the same boat in this, there sure are differences of degree as to the severity of the problem and the progess done towards solving it. High gas and energy taxes, heavy public investment in renewables, a well working public transportation system are what makes europeans consume only half as much oil as north americans and certainly will go a long way towards making coming oil shortages less socially disruptive.
I "Up-Arrowed" you, inasmuch as I, generally, agree with your statements. That being said, however, I do think Europe has a problem coming down the pike as regards "Diesel."
As the rest of the world, and especially the U.S., replaces more, and more, of it's gasoline with ethanol Diesel supply is going to get shorter, and more expensive. The price "spread" has widened in my area from 57% to 62% in just the last couple of weeks.
It looks to this Mississippian that you guys really need to start working on the Veg oil/biodiesel thing pretty quick. Jes Sayin. :)
I dont think ethanol is a viable option in substituting oil outside of warm countries like Brazil. This has been discussed a lot here on the Oil Drum.
As for the Biodiesel, you can now buy this here in many gas stations. There is also working pilot plants converting any biomass to synthetic diesel. Look here: http://www.choren.com/en/
http://www.choren.com/en/choren_industries/information_press/press_relea...
I even know a guy who owns block of apartment houses in the city and powers both the heating and the electricty needs of these houses with a rape seed oil fueled generator in the basement.
However, Central Europe can not produce enough Biofuls to replace all motor fuel because of too little land for too many cars and people. The United States and Canada should do better on this, at least if they give up EROI-negative ethanol production and go for second generation biofuels.
The U.S. will blend 10% Ethanol in 2009. per the EPA
The operative phrase, here, is "all motor fuel." The goal probably should be something like 20% bio. It looks to me like the oil companies have managed to tie some European countries up in knots with some "environmental" red herrings as regards imported biodiesel. I think this could end up costing you, greatly. I could be wrong, however; it IS a long drive from Memphis to Madrid. :)
"The U.S. will blend 10% Ethanol in 2009. per the EPA"
Sure, i am not arguing you cant mandate such an amount or even produce it, but given the low EROI of ethanol production in the US, how much oil will you have displaced? According to many analysis here on TOD and elsewhere, probably very little.
Actually, quite lot, Old One. It takes about 8 gallons of diesel to produce 154 bushels of corn (462 gallons of ethanol.)
The ethanol coming from an "average" newer refinery has about 30,000 btus of nat gas, from fertilizer, drying, and refining, embedded in it; but, by using This technology that can be lowered to about 2, or 3,000 btus (for a gal of ethanol that can replace 116,000 btus of gasoline in the proper blend/engine.
Of course, you could add in THIS Technology and be down to NO nat gas, diesel, and electricity embedded in the ethanol. The DDGS, at 8400 btus/lb (17.5 lbs/bu) would more than cover all energy used.
Personally, it seems to me that "cost of production" is a much better metric than trying to ascertain eroei. Although you, or I, might miss an energy input the guy that supplies the inputs Won't. :)
http://www.neatorama.com/2008/01/01/energy-independence-how-denmark-kick...
Comment number 22 and 28 are quite interesting on that site. I reckon we need to really investigate whether Europe really uses less energy and is scandanavia in particular really so independent? I'd say it's hogwash to say they are, they have not found some secret way to beat the laws of thermodynamics. Again if Scandanavia is so great than how come more people don't live there? And why hasn't their model been copied? There's more here than meets the eye.
What about the concept of virtual oil, a LOT of Chinese oil imports are most likely converted into exports for Western Europe, Japan and America. Hence because a lot of manufacturing has been outsourced, a lot of the energy use in America and Europe has been reduced due to this.
Also America basically maintains global security, i'd like to see how long Europe and Canada and all could maintain their low energy use relatively and their welfare states without the presence of the American Military, as they would have to set up their own forces.
"Again if Scandanavia is so great than how come more people don't live there?"
In short: Its cold, dark in winter, and it rains alot. Otherwise its a truly nice place to live.
Central europeans might got to work to Scandinavia, but they'd rather emigrate to the warm mediterranien shores :)
Sweden isnt actually energy indepent right now, they just adopted that plan like two years ago. At the moment they mostly run their volvos on gasoline just like the rest of us.
In the comments you mention they seem to talk a lot about how wind energy is not cost competitive and subsidized. That is true, but I consider these subsidies (in Germany paid by the end user) a very smart investment for a future with a much more insecure energy supply. I rather have people spend money on renewable energy and small cars, and states invest in the development of the same instead of huge military spendings to occupy oil producing countries.
"Virtual Oil" is an important aspect, however Germany has a large export surplus (we still export a little more than China) whereas the USA import twice(!) as much as they export.
I think the difference is really in things like car size and efficiency, car sharing, riding buses and trains etc. Exchanging a Hummer for a VW Golf yields a manifold increase in fuel efficiency and wouldnt cost anything.
If you contend that Denmark and other Scandinavian countries do not use less energy (all types) Per Capita than the USA then you are wrong.
2005 IEA Energy Trends - Kilograms of oil equivalent (kgoe) per person:
USA - 7,885.9
Denmark - 3,634.3
Finland - 6,555.0
Sweden - 5,780.3
Norway - 7,153.2
Regarding America providing global security, well, I think that
A. nationalistic posturing (USA! USA!)in the face of global crises is counterproductive and
B. if you mean that by guarding the oil in Iraq the USA is really just being Mr. Nice Guy, practicing high altruism sacrificing our young for the rest of the world's benefit, you are again mistaken and
C. if you think that choices made by the people in democratic nations in Europe regarding health care and other social benefits are only possible because of US military presence then you suffer from a great and misguided arrogance.
Drop the price of oil by $100? $147 was the highest future price and as I recall those contracts settled at approximately $120. At the same time probably most of the oil actually changing hands was going at less than that. At the moment there are lots of supply contracts hedged at more than the current future bet of $55. The actual average settled and delivered prices never moved nearly as much, as far as I know. The only consumers of crude are refiners, but there's lots of froth along the way. It would be interesting to know the average high and low numbers actually paid and I bet there's a lot less than $100 between them. Or there's something going on that I don't realize - ever a possibility.
The high price paid by refiners in the U.S. was roughly $127--my best info as of right now. (You're right, it was never $147.) Not sure yet of the low.
Re Danish climate, Danish Happiness, Danish self supply and Danish energy use.
Climate
The present Danish average is 3400 HDD oC, base 18oC = 5800 HDD oF.
This is close to the European average, similar to 1970 Vancouver Island- and 80% of Toronto – Ottawa. http://atlas.nrcan.gc.ca/site/english/maps/archives/5thedition/environme...
In Europe, the HDD range from Malta/ Gibraltar (500 HDD) to north of Sweden 6500 HCC (oC) = 11700 HDD base oF.
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-76-06-604/EN/KS-76-...
http://met.no/Forskning/Publikasjoner/metno_report/2008/filestore/metno_...
http://www.energy.rochester.edu/units/Heating_Degree_Day_Conversions.pdf
Happiness.
Numerous investigations during the last two decades have found people in Scandinavia (Norway, Sweden, Finland, Denmark, Island) being very content with life. Same investigations have found that happiness is not synonymous with energy consumption. I will not volunteer an explanation, but that’s it.
Some examples.http://www.eurekalert.org/pub_releases/2006-07/uol-uol072706.php
http://www-stat.stanford.edu/~susan/courses/s30/web1/mn_happychart.jpg
http://www-stat.stanford.edu/~susan/courses/s30/web1/happy.html
Food and self supply.
Denmark is one of the world top exporters of food. We have been living of export since the stone age 4000 BC starting with flint and amber, in the middle ages fish, butter and presently we produce food for 5 for times the Danish population and have some of the largest agro industries in the world. Presently half the land area is farm land of fine quality- almost without the need of artificial watering. 25 % of Danish export is food. We have been sailing goods all over Europe for at least 3000 years.
Energy
As other nations, Denmark wastes a lot of energy. But we are ideally placed for transition to a sustainable “post carbon situation”, because we have “trained” in the necessary “skills” for years. Both on energy supply and energy use we have solutions to most of the tasks in a future sustainable society.
The Danish energy “knowledge” export is expected to be the largest export business in a few years.
Novo enzymes, Vestas, Danfoss, Rockwool, Grundfoss, Velux, to mention a few.
1) We can produce a lot of renewable energy. Relatively more than most other nations. We have wind and water.In any future energy scenario, Denmark will do fine. If we utilize the full Danish potential for renewables, we can produce 35-40 % of the present energy use forever.
2) We know most of the general techniques necessary to change society to a sustainable- low- or zero carbon society, what each technique will yield, and have an idea of what costs are involved. One example: The Danish Engineer association has recently taken the initiative to describe the “beginning of transition”. http://ida.dk/News/Documents/Energiplan%202030-Sammenfatning.pdf
What is needed for transition is political will. We got the means and the skills.
Regards/And1
This comment is an almost perfect example of what I mean about discreet 'nationalism' Scandinavian style and the selective use of statistics and 'history' to paint a very subjective picture for domestic and foreign consumption.
Danes may well be the 'happiest' people in the world, but one can also make an argument that they are also the most 'nationalistic' people in the world as well. Minority elements, especially Muslims, are not spectacularly 'happy' with there position in society. In many respects they are similar to the way people of colour were regarded decades ago in the United States, or the Jews in Europe. So 'hapiness' is a relative concept. I think Danes are mostly happy because of their functioning welfare state, full employment, high standard of living and something that resembles a 'tribal' culture.
As to their use of energy, this is a complex subject. True, Denmark uses less energy than the United States, but who doesn't. America's use of energy is profligate in the extreme. Denmark's a small country so transport is easy. Good roads, good railways ect. Denmark produces about 20% of it's electricity from windmills, which is good. But overall energy consumption has been rising steadily in Denmark because of Denmark's long economic boom.
Denmark likes to brag, in discreet way of course, about how it's economy has grown substantially over the last fifteen years, yet it's energy consumption has remained stable, and other countries can learn a lot from this. Up to a point this is true, however, it not that simple. Denmark has a massive merchant marine which has grown substantially in the last fifteen years. The fleet of huge bulk carriers and tankers uses a great deal of oil, some of the biggest ones use as much oil as small Danish town. But because these ships are not classified as part of Denmark's national energy consumption, Denmark's overall energy consumption appears far lower than it really is. Factor in Denmark's huge fleet and the flattering picture relating to Denmark's energy total energy consumption changes radically, and one sees that economic growth and energy consumption are very closely linked indeed.
Thanks for your comments Writerman, all that glitters is not gold. The last statement you make is very interesting. Also even if Denmark is not hit as hard by peak oil, the fact remains that the rest of its trading countries will be affected. The value of their exports and imports will be affected. No country is an island i.e. unaffected by what is going to happen.
Don't you just love the folks who have all the answers and insist on dictating how everyone else should live.
Their attitude is, "If you'd just be like me, think like I think, do what I tell you to do, then the world would be absolutely perfect."
Methinks they play god.