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The Death of Peak Oil
Posted by Gail the Actuary on April 7, 2013 - 2:27am
This is a guest post by James Hamilton, Professor of Economics at the University of California, San Diego. This post originally appeared on the Econbrowser blog here.
"Peak oil is dead," Rob Wile declared last week. Colin Sullivan says it has "gone the way of the Flat Earth Society", writing
Those behind the theory appear to have been dead wrong, at least in terms of when the peak would hit, having not anticipated the rapid shift in technology that led to exploding oil and natural gas production in new plays and areas long since dismissed as dried up.
These comments inspired me to revisit some of the predictions made in 2005 that received a lot of attention at the time, and take a look at what's actually happened since then.
Here's how Boone Pickens saw the world in a speech given May 3, 2005:
"Let me tell you some facts the way I see it," he began. "Global oil (production) is 84 million barrels (a day). I don't believe you can get it any more than 84 million barrels. I don't care what (Saudi Crown Prince) Abdullah, (Russian Premier Vladimir) Putin or anybody else says about oil reserves or production. I think they are on decline in the biggest oil fields in the world today and I know what's it like once you turn the corner and start declining, it's a tread mill that you just can't keep up with....
"Don't let the day-to-day NYMEX (New York Mercantile Exchange) fool you, because it can turn and go the other direction. I may be wrong. Some of the experts say we'll be down to $35 oil by the end of the year. I think it'll be $60 oil by the end of the year. You're going to see $3 gasoline twelve months from today, or some time during that period."
But others, like Daniel Yergin, chairman of Cambridge Energy Research Associates, were not as concerned. Yergin wrote on July 31, 2005:
Prices around $60 a barrel, driven by high demand growth, are fueling the fear of imminent shortage-- that the world is going to begin running out of oil in five or 10 years. This shortage, it is argued, will be amplified by the substantial and growing demand from two giants: China and India.
Yet this fear is not borne out by the fundamentals of supply. Our new, field-by-field analysis of production capacity, led by my colleagues Peter Jackson and Robert Esser, is quite at odds with the current view and leads to a strikingly different conclusion: There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million barrels a day-- from 85 million barrels per day to 101 million barrels a day-- a 20 percent increase. Such growth over the next few years would relieve the current pressure on supply and demand.
Let's start by taking a look at what happened to global oil production in the years since those two very different views were offered. Total world liquids production as reported by the EIA had reached 85.2 million barrels a day at the time Pickens issued his pronouncement. It briefly passed that level again in June 2006 and June 2008, though mostly was flat or down over 2005-2009 before resuming a modest and erratic climb since then. The most recent number (December 2012) was 89.3 million barrels a day, 4 mb/d higher than where it had been in May 2005, and 12 mb/d below the levels that Yergin had expected we'd be capable of by 2010.
But more than half of that 4 mb/d increase has come in the form of natural gas liquids-- which can't be used to make gasoline for your car-- and biofuels-- which require a significant energy input themselves to produce. If you look at just field production and lease condensate, the increase since May 2005 has only been 1.7 mb/d.
Gasoline in the United States reached $3.00 a gallon in July 2006, just as Pickens had predicted it would. Today we'd consider that cheap.
Crude oil only took two months after Pickens' prediction to reach $60/barrel. Brent is almost twice that today.
Data source: EIA
Knowing all the facts today, of the assessments offered in 2005 by Pickens and Yergin, which one would an objective observer characterize as having been closer to the truth? How could anyone come away with the conclusion that those who saw the world as Pickens did were "dead wrong"?
The rush to judgment seems to be based on the remarkable recent success from using horizontal fracturing to extract oil from tighter rock formations. Here for example is a graph of production from the state of Texas, one of the areas experiencing the most dramatic growth in tight oil production. In 2012, Texas produced almost 2 million barrels each day, up 800,000 barrels a day from 2010.
But Texas production in 2012 was still 1.4 mb/d below the state's peak production in 1970, and I haven't heard anyone suggest that Texas is ever going to get close again to 1970 levels. Production from any individual tight-formation well in Texas has been observed to fall very rapidly over time, as has also been the experience everywhere else.
Total U.S. production-- including Texas, offshore, and every other state-- is up 1 mb/d since 2012. But interestingly, that's almost the magnitude by which Saudi production (which accounted for 13% of the 2012 total in Figure 2 above) has recently declined.
Stuart Staniford speculates that the recent Saudi cutback may have been a deliberate response to U.S. production gains in an effort to prevent oil prices from declining. On the other hand, his graph shows that Saudi effort (as measured by active drilling rigs) has ramped up significantly in the last two years.
Perhaps it's the case that Saudi Arabia isn't willing to maintain its previous production levels, or perhaps it's the case that Saudi Arabia isn't able to maintain its previous production levels. But whatever the explanation, this much I'm sure about: those who assured us that Saudi production was going to continue to increase from its levels in 2005 are the ones who so far have proved to be dead wrong.
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I'd change the way all-liquids is defined just in case the cornucopians get over excited. One change would that liquids should be transport compatible. That is condensates like propane that are unlikely to make into petrol should be excluded. I realise LPG or autogas is a vehicle fuel but it is minor. Secondly I would give each liquid a net energy weighting which I'd define as (e-1)/e where e = EROEI. If tar sands have an EROEI of 5 the weighting is 4/5. In other words knock off 20% from the number of barrels. If grain ethanol has EROEI of 1.25 the weighting would be 1/5. Check it. That combined series will be declining.
I have this idea that certain people have good hunches and Pickens may be one of them. The techno-optimists said the roads would be crammed with EVs by now but Pickens suggests NGVs could become popular. A decade from now we'll know who is right. However if gas for transport is priced the same as petrol/diesel which is about $40 per GJ/mmbtu in Australia (including fuel excise) that price will be far too high for power stations and industrial gas users.
Weighting according to energy content and EROI really make sense.
add to that net energy.
"I would give each liquid a net energy weighting which I'd define as (e-1)/e where e = EROEI."
To be even more accurate we should take it a step further. EROEI only accounts for the direct energy inputs, but there are also capital and labour inputs to getting new oil out of the ground. Those are also going way up, as evidenced in the Canadian oil sands which require huge amounts of industrial infrastructure to be built. So beyond the already very poor 5:1 EROEI for Canadian oil sands, we really ought to reduce it by another factor to account for all the machinery that had to be manufactured somewhere else (that all took energy and resources!) which was then shipped up to Alberta.
Those who don't understand how energy works point to all this techno-wizardry and call it "technological progress", not seeming to realize that if we weren't running out of oil then we wouldn't need it; all we'd have to do is poke a hole in the ground and it would come squirting out by itself. The fact that we have to build all these factories to merely get to the place where we were only a few decades ago seems to escape them.
Furthermore, even worse, these same cornucopians point to all the labour requirements for new oil development as a good thing, since the economy is in such shambles and unemployment is so high. Building and operating these factories provides jobs for people. But this is anything but a good sign, it's actually a sign that we are approaching our Malthusian Collapse when everyone's forced to give up their regular jobs (most of which are dependent on cheap surplus energy) and instead pick up a "shovel" and go out into the fields just to provide enough complex carbon molecules to burn to keep society moving.
Or in the final analysis the benefit to society after thermodynamic inefficiencies. It was the position of the 1930s technocrats that this should be decided by experts in entropy, see http://www.technocracy.org/study-guide
Mostly written by M. King Hubbert who understood that BAU would ultimately lead to anyone left fighting for the last barrel of oil.
Looks to me like we are already on the road to ruin.
You can run the risk of being too cute with EROEI corrections. Strictly speaking, when referring to liquids, one should estimate the correction using the liquids input only. BTU arbitrage is real and we should not make the error of equating a BTU from coal with a BTU from WTI.
Don't misunderstand my point, clearly EROEI determination will eventually converge to a straight BTU basis, but we are a long way from having to worry about it...
As Rockman says, noone gives a damn about EROEI when deciding to drill....
The recent reports of all the empty shelves in Walmart stores are an interesting case study in EROEI feedback and "biteback".
After the 2008 financial crisis, Walmart laid off more than 100,000 workers in order to economize. Some of the shelves of their huge stores, built before 2008 to accommodate a more speedy, immense throughput (more embodied energy, that is) cannot be restocked. It is simply not worth it for Walmart to hire the people back to restock some shelves.
So what happens? People who used to drive to Walmart no longer do, because they burn too much gasoline going there to make the savings on goods worthwhile, since they cannot get all the items on their list anymore. The cycle is a vicious one, with economizing on the part of the customers leading to further restocking issues and more layoffs and reductions in time worked.
This is how we perceive EROEI---it's action on us is indirect---and to be sure, the same feedback mechanisms will claim (I mean stifle) economic activity at the tar sands and the shale plays, it is only a matter of time.
Overcapacity on all kinds of economic fronts is one way to see peak oil in action. And the analysts who deny peak oil are silent on the topic. Economics is not 'their sphere' of expertise, I am sure they would say.
Their ignorance of dependencies and feedback loops is their weakest and most vulnerable point.
I think it is more of a lesson in the bite back of greed. Wal Mart took cost cutting to an absurd level where it is biting back, pissing off both customers and employees.
"BTU arbitrage is real and we should not make the error of equating a BTU from coal with a BTU from WTI."
One of my favorite instances of "BTU arbitrage" can be found in the calculations this fellow did regarding the tar/oil/bitumen sands versus using the up-grade energy directly to charge the Chevy Volt.
http://www.hybridcars.com/the-oil-sands-surprising-new-nemesis-plug-in-v...
If you include the energy efficiency of the power plant used to generate electricity, yes, in many cases electric doesn't compare favorably to a efficient diesel engine. If the electricity is generated by wind or solar, then electricity is a much better source.
The main problems with electric cars still being the availability of large volumes of electric vehicles and the fact that electric vehicle manufacture itself runs off the oil platform. Parts are delivered with vehicles or ships that use oil-based fuels.
That is not a problem at all. Quite the opposite. Nissan now has factories in Japan, the USA, and the UK for manufacturing Leafs. The could crank out 10X as many as they are right now. For now, the problem is finding buyers. People just don't see EVs as a good bargain right now. And it is hard to argue with that view unless you are willing to take a long-term view and you believe peak oil is an issue.
But right now, the Nissan Leaf is a bargain in California. The Leaf S is $28.8K before subsidies. If you claim the $7500 Fed tax-credit and the $2500 from the state of California, the net cost is only $18.8K. At that price it is indeed a bargain when you consider that you'll be saving $1000+/per year in gasoline savings.
But people are afraid, worry about range, etc. But if people want to get off gasoline, you can now do it. And if you are worried about electricity costs then throw PV panels up on your roof. No gasoline, no net electricity cost. Solutions are now available. They cost a bit up-front and have some inconveniences. But they are here.
One of my hopes is that Nissan will realize that we live in 'Murica and that even goin' to the cowboy boot store an' fer some jerky exhausts the measly range on that thing and that they offer a dual-pack option ($10k extra, 140 mile range) or just increase the range a lot. For being a "designed from the beginning to be an EV" car they also made two huge "what were they thinking?" out of it. #1 That hump between the back wheels that kills the cargo space - was the on-board charger really an afterthought? Did they get finished and go "Woops! Forgot the charger! We'll just stick it between the wheels and put some plastic over it!" #2 Manhole sized charging point flap. It looks moronic when charging - perfect for scaring off potential customers with ugly. Pretty ugly mess under the hood too...like they tried to make it look like an ICE on purpose.
I'm thinking about putting together some sort of proposal that can be handed to congress critters/state reps outlining the strategy of electrifying state rest stops to accelerate electric vehicle acceptance. If I do...I'm pulling out all of the stops - national security, American made power (and customers for utilities that have seen a decline), jobs, tossing out pictures of Bob Lutz and VIA motors, Chevy Volt, Cadillac ELR, Ford plug ins, etc (foreigners make electric cars?! - maybe some tiny pictures of those).
I am sorry, but forget about any energy surplus from wind. It is true that windmill factories claim an positive energy balance of 35, but if you take all energy expenses in account i.e. capital inputs to pay for labour, factories, machinery, maintenance and not only calculations based on EE-values (which the windmill industy does to get that enourmous energy balance of 35) it all looks very different. The output from windmills is so extremely costly, because they can merely pay for energy that once produced them.
I very much agree with:
...... but there are also capital and labour inputs to getting new oil out of the ground. Those are also going way up, as evidenced in the Canadian oil sands which require huge amounts of industrial infrastructure to be built. So beyond the already very poor 5:1 EROEI for Canadian oil sands, we really ought to reduce it by another factor to account for all the machinery that had to be manufactured somewhere else (that all took energy and resources!)
Link, Link, Nudge, Nudge..
Please back up this claim.
http://www.vestas.com/en/about-vestas/sustainability/sustainable-product...
That link provides studies which indicate a 35:1 energy payback, and so does not back up your claim that we should "forget about any energy surplus from wind". As that is quite a bold claim, it is reasonable to expect you to provide evidence to support it.
LCA does not comprehend expenses as wages, buildings, maintenance, machinery to build a machine (windmill) or a building. In short, LCA describes the diffence between the materials in a new machine, building etc. and the amount of materials you can recover from the old machine, building etc. In connection with a windmill this is a relatively modest value - the metals are still in the windmill when you tear it down - which a windmill can pay back 35 times.
Sure, but saying "LCA doesn't capture everything" isn't the same as showing evidence that we should "forget about any energy surplus from wind".
You're claiming, essentially, that the energy required for the buildings/maintenance/machinery/etc. associated with wind turbines is 20x as much as the energy required to manufacture those turbines. That's a strong claim, and it's not at all obvious it's true, so you shouldn't expect people to believe it without providing compelling evidence to back it up.
In particular, there's such a wide gulf between 35:1 payback and 1.X:1 payback that the LCA studies could be wildly wrong and yet your claim is simultaneously even more wildly wrong (e.g., if the energy payback is 9:1). So to be widely believed, you'll need to provide direct evidence for your claim -- good reasons for all additional elements which you say should be included in the analysis, along with credible and sourced estimates for their contribution to energy consumption -- rather than just argue that LCA estimates are incorrect.
Oil sands production is dependent on access to cheap natural gas. At the moment the gas being used is considered "stranded" as there is no pipeline connection south into the North American gas pipeline network. However, what happens when natural gas export terminals such as the ones proposed for Kitimat, BC are setup? The world price for natural gas is much higher than what we are currently paying so once the ability to export gas is in place we can expect the domestic price for natural gas to rise. This has to have an impact on the use of gas for oil sands production and the cost of oil sands production.
No, that's not true. The NG collection pipeline system runs right up into the Northwest Territories and the Yukon. The problem is that there is no market for the gas in more southerly regions of North America because of the US shale gas surplus, so companies can't sell it south. So, they are using it locally in the oil sands area.
Don't get me wrong, I am not justifying current practices. And when we hit the EROEI wall it will really hurt, but we ain't there yet. Economic considerations will continue to rule the roost (as flawed as they are). By the time EROEI really kicks in we will be in the process of irreversible collapse.
My point is that EROEI is over relied upon in the discussion of Net liquid production, e.g. liquids are not used to distill ethanol which is a lion's fraction of the energy required. On the otherhand weighting liquids by BTU content to show the lack of increase in production makes perfect sense...
Much the same way that Hubber Linearization was not all it was cracked up to be, one must be careful not to over interpret the effect of EROEI (at present). And in case you are wondering, I am a very old hand her at TOD and have seen a lot of egg on a lot of peoples faces even if they will be proven to be ultimately correct...
if we not take care, we will kill this planet; new energies is available, but the economic interest can not permit their full usage. that's the true.
It could also be added that an oilsands upgrader in Ft. McMurray was recently cancelled after about $3.0 billion was invested.
The problem the upgrader had was that many refineries worldwide are capable of processing crude bitumen with no upgrading - it's not much different from Mexican Mayan heavy or Venezuelan extra-heavy. They are not willing to pay a premium for expensive synthetic crude oil (syncrude) if they can run cheap crude bitumen straight through to gasoline and diesel fuel. In fact they can get more diesel fuel out of bitumen.
The problem with crude bitumen was the difficulty of pipelining it to the refineries, since it is too viscous to flow. It has to be heated or diluted with a diluent such as natural gas condensate to move it by pipeline. Canada cannot produce enough condensate to move all the bitumen because the Canadian NG production is in decline; and it was assumed that producers would have to upgrade the bitumen to sweet, light syncrude to sell it in the US.
However, the American "shale oil" boom has solved this problem. Much of the "shale oil" produced in places like the Texas Eagle Ford is really condensate, and companies are producing too much condensate for the refineries to handle - it's not as useful as crude oil. However, they are solving the problem by selling the surplus condensate to Canadian oil sands producers, the oil sands producers are blending it with bitumen to create dilbit, and sending it back to US refineries.
This cheap diluent renders the upgrader uneconomic. It is hard to justify a $15 billion upgrader when it produces very little increase in product value. Also, and this is a potential future development, other companies are developing processes for partial upgrading. They just upgrade the bitumen enough to reduce its viscosity and allow it to flow in pipelines. This solves the transportation problem at considerably lower cost than fully upgrading it to sweet light synthetic oil.
Reporting "oil" by volume has become a convenient (deliberate?) way to obscure the net energy content of US oil production. Also, as lease condensate becomes a higher and higher percentage of reported US crude oil (now up to 14%) it's worth remembering it has a slightly lower energy content on average than crude (91%) and cannot be used to make diesel or jet fuel.
Since 2005 (peak year for US consumption of oil products), in terms of volume US consumption of oil products has dropped 10.5%. In terms of BTU's, US consumption of oil products has dropped 12%. In terms of BTU's per capita, US consumption of oil products has dropped 21%. US oil production is presently at the same level as 1984 in volume, but at only 87% of 1984 oil net energy levels when taking into account BTU content and EROEI losses.
"Since 2005 (peak year for US consumption of oil products), in terms of volume US consumption of oil products has dropped 10.5%..." Is this before or after off balance sheet production exported overseas has occurred ? eg does US consumption of oil products include imported finished products eg plastics / fertiliser etc ?
The extend to which EROEI is relevant is largely dependent on the source of the energy input - a boundary issue.
http://connectrandomdots.blogspot.com/2012/07/test-post.html
Rgds
WeekendPeak
Peak oil will happen when an alternate source of reliable safe unlimited energy, much less expensive than fossil fuel, is developed.
Peak oil could have happened anytime in the last 30 years with the development of a simple, inexpensive, ultrasafe, factory mass produced molten salt reactor.
We can get beyond peak oil and have cleaner much cheaper unlimited energy when we get serious about energy and get over our irrational fear of the N word.
Ho Ho - no sorry - peaks in any resource will happen - they are all finite - finite country , finite world , finite universe
it always has been where we are now and where we are going , and how to get there.
the issue of peak oil is that there is no alternative that is as cheap and easy and ( relatively ) safe.
even tritium is a finite resource
we may well have a Nuclear future - just that we ain't going to have a happy ride to it - if we make it at all.
Forbin
PS: I'm not anti nuclear but I dispare at the bodge jobs and corruption that has frankly hamstrung the industry - Nuclear is not happy bunny safe type of technology - it requires a lot of respect to what it is , frankly I think some of the designs and attitudes are bordering on the criminal !
PPS: I am all in favour of reduced consumption , solar, hydro , etc , we need diverse power supply and to stop burning coal and oil - the dammed stuff is far too useful to burn for heat and travel!
Nuclear is not happy bunny safe type of technology - it requires a lot of respect
So long as Humans suffer from the Dunning-Kruger effect, Man's reach will overstretch Man's grasp.
stop burning coal and oil - the dammed stuff is far too useful to burn for heat and travel!
A vision that does not get the play it should in the comments on TOD.
Forbin - click on Bill's name, then on "Comments by Bill Hannahan". He has argued and documented many times here on TOD that there are sufficient nuclear fuels available to power advanced reactors essentially until the Earth is destroyed by the Sun. His arguments are not specious.
It is difficult to wrap one's head around the power density of nuclear fuels. You imply that they will peak in the same manner as fossil fuels that are 6 orders of magnitude less energetic.
The Sun is finite and will peak in output - but it is not finite in a way that is relevant to human civilization. Nuclear fuels are arguable of a similar nature. Check out the discussion of nuclear fuel on the "Do The Math" blog, as well as Bill's comment history.
"You imply that they will peak in the same manner as fossil fuels that are 6 orders of magnitude less energetic."
Does it matter? You still gottsa dig 'em up. We're having real trouble diggin up and refining the oil sands, and, in comparison, they're practically ready to 'put in your tank'. Repeat after me, "we have a liquid transportation fuel problem." If we just had a net energy problem, nuclear, solar, hydro, and wind woulda already made it irrelevant. It would seem the economy needs to physically move things around to keep chuggin'. We ain't running short on 'heat' ;)
Desert
Ho Ho - no sorry - peaks in any resource will happen -
So forbin, if you had been born 100,000 years ago your advice would have been “Ho Ho - no sorry – forget about learning to control fire, you will run out of wood some day!
I am so sorry; I do not know where to start...
Do you use the standard definition of the word "sustainable" or "renewable" sometimes?
Wood = renewable, like "wind power" etc. The opposite being "finite", like "gold" for example (not a resource per se, just an example).
That you posted that comment, slightly ironically, a tad aggresively (?), I interpret as such that you are really not interested in debating,
as you are not even using standard definitions of words, so communicating becomes increasingly difficult. A basic premise for exchange
of ideas must be; similar language, respect, definitions, and a will to investigate different arguments.
I see now, while re-reading your comment, that indeed you might have meant "wood is renewable - and it is still there - so indeed forbin's comment must be wrong". However which way to interpret your comment? Please write more clearly. In this latter case of interpretation, indeed, examples of regions where wood has become scarce exist, Crete as well as britain in the 1700 comes to mind. So even -some- renewable resources can be exhausted ofcourse.
Clearly ALL non-renewable resources can be exhausted.
Cedar trees in Lebanon are another example of places where forest cover was removed. Britain lost a lot of trees, and coal supplies in Britain were over-extended, i.e, Britain imports much more coal than it produces.
Hello Bill,
No I wouldnt have said that - man always has played with fire and will continue to do so
"it always has been where we are now and where we are going , and how to get there."
as Segeltamp has pointed out - you can run out of even supposed renewables
I must point out that the N word is not really the main contention
Exponetial growth and the P word is though. ( population incase you're wondering)
we treat , or at least some others have treated Nuclear as if its everyday "safe" , it requires respect as I said. It can be compared as a pact with the Devil.
Thank you for you web site - I wonder of what seems to me, the flippant way Nuclear power stations are designed and built from an engineering point of view regards safety . the default operation for an nuclear power station should be off
example is cooling rods that are down in the core if all power is lost, passive cooling that does not require pumps , extensive containment vessels , I sure there are other things that greater minds than mine can think of...
Cheers
Forbin
Bill, I hate to burst your bubble but you've caught me at a particularly sour moment this Sunday morning and I really have zero patience with your point of view, as it contradicts the most basic tenets of physics and chemistry, and science in general. Furthermore, even if it were possible to build a civilization based on safe cheap nuclear energy, a proposition that I find highly unlikely, the simple fact that you talk about 'UNLIMITED ENERGY' tells me that you really haven't fully examined what the consequences of such a proposition might be. IMHO, given what I know about Homo sapiens, it would be akin to giving a box of matches to a three year old in a straw hut and then leaving her unsupervised. I'll leave you with an excerpt from Dr Albert Bartlett's talk on Arithmetic, Population and Energy.
"Y’know, I’ve noticed an infestation here. Everywhere I look, in fact. Nothing but undeveloped, unevolved, barely conscious pond scum, totally convinced of their own superiority as they scurry about their short, pointless lives." - Edgar (MIB)
Unlimited is one of those words that should probably not be used in logical discussions. It is like never and always, those words only take one case to disprove.
1000 years of safer nuclear using fast breeders and MSR thorium reactors sounds good to me. Less nuclear waste for a MUCH shorter period of time sounds good as well.
We may not have unlimited, but it could buy us some time to develop fusion or other sources. One thing seems sure in a finite world, when you run out you are out.
"We may not have unlimited..."
My primary objection is that there is no 'we' for very long when we look at humans. As Stoneleigh often points out, the average half-life of a human civilization is tiny compared to the half-life of some of the lethal substances we produce. I simply refuse to impose that level of disregard for future populations on my psyche.
I have a more fundamental objection. Given our lack of self restraint, we would grind every last morsel of nature to dust if we had unlimited amounts of energy with which to do so. My only problem with peak oil is that the downward slope is taking its own sweet time getting here.
On a more mundane level, some of my neighbors appear to have unlimited amounts of money. Lots and lots of money, not the good sense in how to spend it, and total disregard for their impact on their immediate and planetary environment. But they seem like very nice people.
The Fermi Paradox.
The simplest solution is a short half-life of technological civilization - tapping the energy sources to drive a technologically advanced civilization may sow the seeds of that civilization's destruction every time. Maybe any technological civilization will behave like yeast when given access to a large amount of energy. Why are there no radio signals from alien civilizations - when the universe appears well suited to the creation of life? Well - radio signals would imply that that civilization is on the same course as ours - and in the course of the passage of the past 13.5 billion years, such a civilization will be a flash in the pan - hence the quiet emptiness.
I like that. We always suppose that these aliens are going to have reached a higher level of development than us, and will be looking for somebody to talk to, or invade if you believe the notion that all aliens are evil. I know we believe that all human aliens are basically evil, so I guess the extrapolation is understandable.
But. That they have got to where we are and then consumed their planets before thay have the ability to get away is a very acceptable hypothesis. Well done.
As Stoneleigh often points out, the average half-life of a human civilization is tiny compared to the half-life of some of the lethal substances we produce. I simply refuse to impose that level of disregard for future populations on my psyche.
Ghung, burning 1.2 million pounds of coal will produce a lifetime supply of electricity for an average American. Splitting six ounces of uranium or thorium can do the same thing.
What is the half life of mercury?
Uranium and Thorium are radioactive waste from an old super nova. We are constantly being irradiated by this material because nature did not see fit to place it in a well designed repository. The natural decay of a uranium atom produces about 7 times more radiation than the decay of fission products from one atom, and it results in one atom of toxic lead with a half life of infinity.
Reactors do not make nuclear waste; they transform one type of nuclear waste into another type of nuclear waste that becomes less toxic than uranium ore in about 300 years to three tenths of one thousandth of one billion years.
Because of reactors, earth will be less radioactive for most of its remaining years than it would have been if humans had not evolved.
"earth will be less radioactive for most of its remaining years.. "
But the radioactive materials that it has will have been dredged up and concentrated right at the heart of the biosphere, right with population centers, right on the shores of the hydrologic cycles, and they will be set right to the edges of containability in order to access their embodied energy.
We WON'T make the systems as safe as necessary, we never have, only as safe as we're forced to do, and even then corners will be cut and mistakes will be made, worse ones as the bonus power from the oil age wanes and the cashflow is dearer and dearer.
Meanwhile, any cash strained nation that HAS had a serious accident will see an untenable cash drain that only the public till can be used to service, as is the continuing case with Japan and Ukraine today.
One good blackout around a US Cooling pool and we'll have one, too. Some flooding, a little diesel shortage or a fluke in getting a generator part onsite quick enough and we'll lose ground rapidly on that battle.. and if it's on the East Coast, we'll be losing a lot of very populated and productive ground at that.. so the financial hit would hammer us with lost earnings AND increased spending, of course.
Good point, J. So long as the people doing the power production are in it to make a profit, and there are more than one or two such people, they will be cutting costs, taking chances based on a "risk-reward' paradigm that insists that the interests of others (than owners) do not matter.
Having said that, I am certain that we will need some nuclear power for a period of time, if for no other reason than it is easier than the alternative, and does provide a profit to those we currently entrust to make those decisions.
Best hopes for a perfect energy paradigm
Craig
I don't say it very often, but I basically agree with you. I don't insist on the immediate shutdown of current dirty power sources, as we need to use them to power the transition, and keep our system flowing in order to do so.. but I do believe that with more of the cleaner sources in the mix, the dirtier and more vulnerable (my main objection for Nuclear) ones will have their spots and costs more and more on display for all to see.
I suspect that when Ghawar crashes and the tight shale plays hit terminal decline - probably at about the same time, our aversion to fission power will suddenly end. When it becomes a question of having the lights on or not.
I suspect that by that point, the energy and material cost of building new Nuclear will be so exorbitant that noone will be able to defend it any longer, unless they try to do so by holding their audience at gunpoint. By then, we'll also be immersed in the ballooning costs of dealing with the Uranium wastes and retiring plants which we've already built.. so more communities will realize just what sort of costs they're getting involved with.
I have no doubt that people will both want and insist upon having their power.. but our ability to develop and sustain it through Fission will no longer be possible, and that even today's possibility is only at the beneficence of the public wallet.
Evaded the point, Bill. But if you really think our current civilization will be functional enough, long enough, to manage this waste and decommission these facilities properly and safely, go ahead and make your Faustian bargains. The costs of decommissioning my PV panels safely is zero by comparison. We'll just chalk it up to differing world views; differing predictions of collective human behavior going forward. Not sure what you're basing yours on.
if you really think our current civilization will be functional enough, long enough, to manage this waste and decommission these facilities properly and safely, go ahead and make your Faustian bargains.
Ghung
If modern civilization collapses abruptly and hard all over the world, I would expect over 80% of all people to die within two years. The number of deaths from irradiation by reactor fuel would probably be less than 10,000.
Spent fuel assemblies can passively air cool two weeks after reactor shutdown. Spent fuel pools were designed with low density open racks that could passively air cool if the water drained away. The water was for shielding, to have convenient access.
The political decision not to implement one of the many solutions for spent fuel forced the utilities to re-rack for high density storage, requiring active cooling with a large fuel load.
If I were managing a plant during the collapse, I would remove enough fuel (probably 0-20% depending on the load) to allow natural convection in the spent fuel pool. I would distribute the removed fuel through nearby areas so that it can passively air cool, then drain the pool, lock up the plant as well as possible, post warning signs and leave.
Or I might move friends and family into the plant, as it would likely be the easiest place to secure, and we would be warm and dry in the winter.
If looters break into the plant they will be irradiated, get sick and die. That will be a lesson to others to stay out. Those people who stay out will be fine, at least with respect to radiation.
By the time the buildings begin to decay significantly, the next round of high tech civilization will be well under way. They will collect the spent fuel and bury it or recycle it into their reactors.
Wow, Bill,, just wow... maybe you can sell spent fuel rods as souvenirs or bed warmers :-0
And this is the reasoning that is supposed to instill confidence in what we are doing, and excuse our horrible track record, by leaving it to someone else to clean up like we are doing them some sort of favor?
"Or I might move friends and family into the plant, as it would likely be the easiest place to secure, and we would be warm and dry in the winter.
If looters break into the plant they will be irradiated, get sick and die. That will be a lesson to others to stay out. Those people who stay out will be fine, at least with respect to radiation."
Are these two statement incompatible?
Good question jj.
Spent fuel rods produce very strong radiation fields that can deliver a fatal dose in seconds up close without shielding. However, they do not release radioactive material unless they are damaged, especially melting of ceramic fuel pellets releasing fission product atoms locked in the atomic structure.
High radiation fields would be limited to the spent fuel tank area, a very small portion of the plant footprint. People living there would know to stay away.
These plants are well stocked with spare parts and materials, machine shop, welding, electrical etc. Engineers and technicians can work together to make it a comfortable place to live.
For instance, decay heat could be used to make steam to drive a small steam engine to produce a few KW of continuous power for lighting, cooking, AC, etc. There is enough land inside the fence to grow a lot of food, and enough weapons and ammo to protect it.
Bill, I rarely find myself as utterly speechless and dumbfounded as I am just now after reading your comment.
If you get a chance, find yourself a copy of the documentary film 'Into Eternity' about the Onkalo spent nuclear fuel depository currently being built in Finland.
Note to Ghung: the exclamation 'WOW' has just completely lost it's usefulness... especially, given that I assume Bill to be a typical, reasonably intelligent, educated and productive member of society at large.
I thought I had already grasped and been able to come to terms with the darkness and the depths of the abyss into which we stare. I think I was fractally wrong about that.
I think he's created a perfect setpiece for the next Mad Max movie, though!
'Holed up in a conclave called 'Indian Point Forever!', this hardy clan fends off the great unwashed, who make their usual sorties from the North Bronx to try to prize from them their unusually large carrots and other 'super veg' produce. (See veggie pix from 'Sleeper', perhaps..)
..."this hardy clan fends off the great unwashed"... using locally manufactured armor-piercing depleted uranium rounds,, just in case.
"Spread the joy."
G, we can do better than that. How about a hydrogen powered cannon that fires spent fuel pellets (UO2, density 10.5, heavier than steel) into the marauding terrorists.
When their buddies come to strip their weapons, they get irradiated too.
We should all get together over a few pitchers of margaritas and write the script.
If you get a chance, find yourself a copy of the documentary film 'Into Eternity' about the Onkalo spent nuclear fuel depository currently being built in Finland.
FM, Yea, I agree, severe overkill. My recommendation is deep seabed disposal.
http://www.theatlantic.com/issues/96oct/seabed/seabed.htm
You know, I might have the perfect spot. A place where a large area of deep sea coral reefs has recently been completely wiped out. Hint it's about a mile down, somewhere in the Gulf of Mexico...
I was right there with ya until "deep sea coral reefs". Have I really been off the grid that long?
desertrat, just to be clear that comment was intended to be dripping with sarcasm. And the Deep Water Horizon Spill caused extensive damage to large areas of deep sea coral reefs nearby. So what could go wrong if we just dump some nuclear waste at such a site. Oh, and in case anyone is wondering, one hell of a lot...
Got the s/c, and learned something- I thought coral reefs were all rather light dependent shallow kind of creatures. The depth and breadth of knowledge here really does blow me away sometimes, especially history.
The shallow water corals grow faster because they have light (and they generally only grow in nutrient poor tropical waters). They have symbiotic algae living in their tissues which provide a carbon source. They make limestone skeletons.
The deeper water corals feed off filtering the water for plankton, and the water down deep is richer with nutrients so has more life in it. They generally don't make limestone skeletons and they grow much more slowly. Another of the ecosystems that's being trashed, out of sight out of mind. Fishing dredgers destroy them quite easily but no one has a clue it goes on.
Sad but all too true! During the entire Deep Water Horizon spill, the focus was on making the surface and the beaches pretty again at the expense of the deep sea ecosystem nearby.
The people who were involved in allowing the release of massive quantities of Corexit at depth should be prosecuted to the fullest extent of the law for unnecessarily making this unprecedented ecological clusterf@ck orders of magnitude worse than it already was just from the oil spill alone!
http://www.miami.edu/index.php/news/releases/modeling_helps_clarify_effe...
In short, unlimited energy would make the Faustian bargain look like kid stuff. I fear those who are trying to save us with the unlimited ability to destroy whatever is left of our little planet out here.
Historically, we have been able to avoid stripping the planet bare for agriculture and entering a Malthusian Collapse because we found ways of applying fossil fuel energy to agriculture to vastly increase the per-hectare productivity of food. This has all been facilitated through the framework of GMO's which could utilize those energy / fertilizer inputs. However, even with more and more fertilizer application, productivity % gains are dropping simply because of the law of diminishing returns. There is only so much a plant can produce. So even with "unlimited" energy available there would indeed be limitations to how much the food production of a hectare of farmland could increase, and beyond this, increased overall food production would require cutting down the world's last forests. The one exception to this would be if we used "unlimited" energy to desalinate seawater and irrigate deserts. Ramping this up in time is not feasible, however, and it has lots of implications limiting its overall effectiveness.
Err ... GMOs (genetic manipulation) had nothing to do with it. You are confusing GM with ordinary plant breeding. Fertilizers in a big way got going in America in the 1930s and Britain doubled its NPK applications in WWII. Wheat farming in the US is limited by water / temp and uses lower concentrations of NPK than for example in Europe. Prime 'corn' growing in the US utilizes the maximum applications around 200Kg per hectare. Average yields in favourable areas work out at about half the 'record' yields or just under half the theoretical maximum yield given the interception of sunlight. Wheat crops were bred for maximum NPK in Europe in the 1960s and rice worldwide about the same time. Soya needed new root/fungal associations before it could be adopted for growing in the tropics, such as in Brazil, and that really did not happen till 1970s.
I agree that the law of diminishing returns operates, but bear in mind that in the last decade much of increase in world cereal grains (and thereby most of recent increases in use of NPK) has gone to feed livestock, and additionally that 'upmarket' horticulture and biofuels have taken very significant inputs of fertilizer on very significant acreages.
It was only a sketch and needs updating but my guest post on TOD March 2009 documents some world trends. http://www.theoildrum.com/node/5181 There is a Part II and that contains a quote from a reliable scholarly source: QUOTE
"They applied manure as it was available, rotated legumes when it was convenient. But they had no strategy for the very long term. By the 1930s, Rooks County fields had been planted, cultivated, and harvested sixty times without rest. Soil nitrogen was about half what it had been at sod-breaking and crop yields declined steadily. And now no western frontier remained. From the vantage of 1930s, crop agriculture in Kansas does not appear very sustainable. All the arable land in Rooks County - and in the nation for that matter – had been identified and plowed. Soil nitrogen and organic carbon drifted steadily downward, and with them yields and profits. Faced with this dilemma, farmers implemented a dramatic innovation in soil nutrient management. Rather than adopt one or more of the ancient strategies, farmers (and the industrial nation behind them) created a new option. They appropriated abundant cheap fossil-fuel energy to import enormous amounts of synthetically manufactured nitrogen onto their fields. …” page 219, ‘On the Great Plains: Agriculture and Environment’, Cunfer 2005; preview in googlebooks
It isn't fertilizer that's the problem, if crop yields dropped 2/3 there would still be plenty of food for most people in North America and Europe who eat too much meat for their health anyway. Potatoes are actually one of the most energy dense ways of getting food out of the ground, not grains. There are other ways of getting enriched ground, i.e, legume rotation as somebody mentioned, or even silt/soil dredged from the bottom of lakes.
What is a problem is aquifer depletion, which is made worse by any significant drought.
Without sufficient bio-fixed N (rotation with fodder legumes or very extended 'fallow') yields diminish along with soil fertility to about a quarter of present average. Drought or wet years make it worse. In some places top soil may wash out or blow away, whatever.
True about potatoes, but they are a very 'technical' crop to grow especially with regard to both short and long term pest and disease control. Unlike cereals they can normally only be a small part of crop rotations.
I agree that very different factors apply in different regions and that world food production should be looked at region by region. Worth bearing in mind that most food round the world is still eaten either at the point of production or fairly close by. There are important exceptions. Urban populations 'import' food, and some absolutely rely on importing calories from international sources. Historically UK springs to mind, but countries with larger and more vulnerable populations than UK, like Egypt, are now also in that position.
The spread of the 'Western' eating pattern, among other aspects of globalization, has big downsides: http://circ.ahajournals.org/content/127/14/1493.abstract.html?etoc
Well, you say 1/4 food production without fertilizer and I said 1/3.. I've grown potatoes manually, we had some problems with rot due to a very wet summer and ground that wasn't suitable for them. We were able to get 2 months supply for 3 people from a 10 by 10 meter area. Of course, there are are many potato varieties.
Well ... seriously; well done! I was making general points. Low-fertility growing though is heartbreaking to see. It was a commonplace, I believe, in the early years for settlers in America in the East to exhaust soil fertility and have to move on. The huge depth of soil fertility where it could be cultivated in Kansas however (a 1000 years worth) took about 60 years to get to the point when the soil was too thin (low carbon)and the farm could not produce a sufficient crop to sell. The system would have needed to be abandoned. Even self-sustaining systems need to be able to sell 'something' to be sustainable within a broader economy - they must 'trade' to some extent.
You need to renew potato 'seed' from 'clean' sources and you need to renew the soil fertility pretty much each year, unless you have enough ground to 'fallow' areas for several years, as in the middle ages in Europe. I guess you personally find ways to prevent a serious dip in fertility. But even then you cannot grow the crop on the same ground; you will need to rotate. Where I live in the UK some of our very reasonable arable ground can grow potatoes (including our large garden where we have tried many varieties) but it would never be a majority of the cultivated area. During WWII when Britain desperately needed every source of calories, potatoes could only provide so much.
We used horse manure for fertilizer although I thik the soil was actually too rich in nutrients. Potatoes like somewhat sandy soil which helps keep the plants dry.
I see your point about farms, the soil resources are exported from a farm and need to be replenished. It's clear that when food waste is dumped from cities into garbage bins and taken to the landfill the nutrients (NPK)and leftover organic material isn't recycled back to the farms. Looks like there are some improvements to be made.
Any improvements to improve irrigation, e.g, drip-irrigation and low-flow, etc. will reduce total water use from wells.
Yes - regarding soil type - there are physiological interactions with moisture. The specialist contractor who does potato farming round here came because he could get cheap water on light ground. He did not use it last year (exceptional wet summer) but normally does for control of 'scab', a soil-borne tuber fungal infection that mars product appearance if nothing else. His linking of water with scab control was news to me.
I found it worth looking for where the soil nutrients come from and where they go to, especially if you can put numbers to it. What did the horses eat, for example? Similarly, where does urban sewage go? The book I quoted On the Great Plains does some of these calculations. It is really an exceptionally well-written textbook but for me is of profound wider interest. The story of American farm mechanization is a lot more recent than I realised. And how much work could be got from bio-fuelled horses, if one could spare the ground to feed them is something to think about. Similarly, I found food for thought in the contrast between the 'organic' Great Plains (and the earlier American settlement) with some 18thC / 19thC European ‘modern organic' rotational systems that did appear self-sustaining and capable of feeding a relatively large urban population at a ratio of about 5 urban: 1 farm worker.
Keep up the good work.
Because of some land work I did several years ago where the grass became amazing lush and very dark green I did a little research and stumbled upon this article. The addition of 6" wood chips from our local utility tree trimming, tilled in, I believe was partially responsible.
Worth the time to read-
D
http://www.uvm.edu/vtvegandberry/Pubs/Wood%20Chips%20in%20Vegetable%20Pr...
http://www.dirtdoctor.com/view_org_research.php?id=69
yes.
Worth reading.
Interesting carbon / nitrogen ratios.
Some years ago I mulched quite large garden areas (50m x 15m) of very rough grass containing grass weeds (underground stems)and nettles, with a thick layer of old spoiled straw from very large round bales surplus to the local farm. I was able to work the ground underneath with a '3rd world' heavy hoe for a couple of seasons. The soil 'ate' the straw and the old turf and seemed to improve the sandy topsoil.
Thanks
Phil H
"The soil 'ate' the straw..." It is amazing to watch isn't it?
The chips I still have are mostly hardwood, Digging into the pile you literally get these thick, white, wood chip 'sponges'. The mycelium are so thick, the chips so rotted, it almost has no weight.
You are welcome on the links, I'm glad you liked it, I found it fascinating.
D
unlimited energy would make the Faustian bargain look like kid stuff…. My only problem with peak oil is that the downward slope is taking its own sweet time getting here.
I’ll put that on my top ten list of most inhumane comments on TOD.
But Bill, our access to scads of energy in the last century hasn't done ANYTHING to curtail our inhumane actions, has it? I think that's what he means by a Faustian Bargain, don't you? The deal with the devil to get more power can, and probably must result in that many more brutal outcomes.
The delay in our people being aware and accepting of the fate of Oil has kept us setting up shop for more and more BAU, which in the end seems like it will be far more inhumane than if we'd already gotten a clear signal that the clock is running down, and we have no choice but to dig in and start treating it like a real problem to work out.
Thank you. But I did make the top ten list in something. So there's that. Yes. At some point we will have to make some kind of transition whether we like it or not. Better to start now than later. For humanity's sake as well as the remaining species on the planet that have not yet been rendered extinct in part because of our voracious appetite for fossil fuels and other resources.
There are two ways to interpret the "sweet time" comment:
(1) the speaker hates humanity and is "looking forward" to the end of human civilization and/or our species.
(2) the speaker would like his fellow humans to recognize that infinite growth on a finite planet (population x consumption) is logically impossible and that our persistent efforts to achieve it are literally destroying the very ecosystems that made our very existence possible in the first place.
Which of these do you think is more likely?
'UNLIMITED ENERGY' tells me that you really haven't fully examined what the consequences of such a proposition might be. IMHO, given what I know about Homo sapiens, it would be akin to giving a box of matches to a three year old in a straw hut and then leaving her unsupervised.
FM, creating a sustainable civilization is like a jigsaw puzzle with several pieces. Energy is one of those pieces; it is the subject of this blog, the subject of this essay, the subject of my comment. You are talking about the other pieces. Write an essay on another piece and I will be happy to engage.
Well Bill the other comments say it all really. And I agree with them.
BTW - "irrational fear of the N word"? Try saying that to the good people of Chernobyl. Or Fukushima. Like those terrible school shootings it is only a matter of time before the next one.
Besides agreeing with the other comments as you do, I also agree with your comments about C & F. This may well be mankind's stupidest decision ever; to create something, anything, that toxic. 'Temporary' on site storage until a permanent storage facility can be 'found'?
We are in a period of time where we sorta' get along, what happens when we don't? When it comes down to fighting who is shooting at you now or keeping reactor pools cool what is going to happen? The solution is not more of these, even if we could.
Bill, it is not 'fear' it is giving a damn about our kids and all the other life on this planet. There is no planet 'B'. What a short sighted species we are.
what happens when we don't
Or what happens when the fission plants are targets in asymmetric warfare or when the ocean waters once again smack the coasts?
Aww come on, nuclear plants aren't all that bad. After we've stripped every living plant from the planet for energy after we slide down the back side of Peak Fossil Fuels and people can't even feed themselves, when we've devolved into social chaos and blown up all the remaining reactors and spewed forth their contents, at least all that radioactivity swirling the globe will stimulate a new round of evolution for one last final kick at the can for a few hundred million years before the Sun swallows the Earth.
BTW - "irrational fear of the N word"? Try saying that to the good people of Chernobyl. Or Fukushima. Like those terrible school shootings it is only a matter of time before the next one.
The Chernobyl design was known to be dangerous before it was built and should never have been built, and will not be built again.
At Fukushima no member of the public has been exposed to a radiation dose proven to cause harm.
http://www.cato.org/events/looming-scientific-revolution-environmental-r...
If those reactors were equipped with hydrogen recombiners and containment vent filters, as all reactors should be, very little radioactivity would have been released.
Our primitive steroidal submarine reactors have saved many lives.
http://motherboard.vice.com/blog/researchers-claim-nuclear-power-has-sav...
By the way, I am not convinced that solid fueled fast reactors are absolutely proven safe against high energy criticality accidents. My recommendation is that they be defueled until they are proven to be unable to have a high energy criticality accident, by fundamental physics principles, not reliance on engineered safety systems or non conservative accident assumptions.
The only fast neutron reactor I support is the fast neutron MSR because it normally operates in the most reactive configuration, making a large rapid reactivity insertion impossible.
If you wake up one morning and hear that a fast neutron reactor has had a big accident, it is not an argument to abandon all fission reactor designs.
For crimminies sake! Bill, do you not grasp the concept that people are part of a complex web of life... The fact that no members of the public have YET been directly exposed to harmful levels of radiation completely misses the point, in this case, by many nautical miles! Here's a hint of what I'm talking about. Oh, yeah, I too am one of those ocean ecosystem preservation kinda guys... and I'm more than a little upset at people who keep saying that all is well at Fukushima! Things are definitely NOT WELL!
http://e360.yale.edu/feature/radioactivity_in_the_ocean_diluted_but_far_...
"If those reactors were equipped with hydrogen recombiners and containment vent filters, as all reactors should be, very little radioactivity would have been released."
"Woulda, coulda, shoulda". Adage from my old Navy days, usually spoken after something goes amiss (ie. "charlie foxtrot").
Aldo
Ah, as in Kunstler's "Charlie Foxtrot Nation". Had to google that one...
Using such an extremely complex and dangerous technology to move some hot water sounds like the very epitome of rationality.
Bill Hannahan: “Peak oil will happen when an alternate source of reliable safe unlimited energy, much less expensive than fossil fuel, is developed.” This statement is true depending on what you believe. Whale oil peaked when crude oil came along because it was replaced by a more convenient, reliable, and plentiful fuel. Cornucopian view: "We never run out of oil".
Somewhat unlimited energy could be achieved if we ever get fusion reactors working where a reactor trip is physically impossible, radiation is low, and the waste product is water.
In crisis times where the survival of states is threatened there will be upheaval on a grand scale. As demonstrated daily, Homo sapiens care little about the planet. So, after burning what can be burned, the last resort, in my opinion, is to use nuclear energy on a grand scale. In a peaceful time and better reactor design that would not be so bad. But after leaving the hydrocarbon bubble even the safest reactor may be a liability when threatened by bellicose state actors.
Somewhat unlimited energy could be achieved if we ever get fusion reactors working
We can have abundant inexpensive fusion power anytime we are willing to put aside our shallow political correctness.
http://www.yottawatts.net/
A fascinating, albeit frightening proposal. It is inconceivable to me that any government would ever allow its construction. It would work though.
Quite similar to the proposed cheapest way to launch massive tonnage into orbit.
We already have a fusion reactor, the sun. It works mostly OK, like daily, with the occasional coronal mass discharge and Carrington effect. Which I'm sure will be better if human are in charge of everything. Not only that it takes care of its own waste, which we don't
Well, we don't have fusion reactors, political correctness or not(?). Which I'm really surprised making the world less radioactive couldn't be marketed as 'green' technology the way you have presented it.
Behold! A device capable of harnessing fusion generated energy and converting it into electricity! Safe to handle and no lethal radiation! The ability to work at all scale, from pocket calculator to entire countries! Cheaper than oil and less polluting than coal!
What could it be?!
http://en.wikipedia.org/wiki/Photovoltaics
You beat me to it >;-)
Yep! For once I actually agree with something you say. We could invest heavily in all forms of solar energy capture and start using our already available fusion power today! And we know the sun has been shinning for about 5 billion year and will be around for at least another 5 billion...
Does it ever seem strange to you, Fred, that we casually speak of what will be here in hundreds of millions to billions of years when the human race, per se, has only been around for about 100 thousand? As if we will not evolve, and as if we know in what direction.
Who knows, maybe the Chimps* will evolve into a super species and we will evolve into toadstools?
Craig
*Or cockroaches, more likely!
Dear Bill..
Im sure you know the history of fusion power? That is: The endless postponements and excuses.
I think the U.S.A sends a clear signal when you look at what has happened to N.I.F. last year. Mind you, this happens at a time where the N.I.F. has said that they are very close to success. But there has been no clear information saying that this was not the case. So was it true? Either there should be a scandal and some head chopping or it should be obvious that the funding should continue?
They stopped their research into fusion and started concentrating on nuclear weapons. I believe old drumbeats has the links necessary to review this happening.
At roughly the same time the europeans started talking about making their own fusion experiments.
From my point of view the signal is as follows:
We give up on trying to make energy - since it wont solve our (current?) problems. Now we want to solve our problems with better weapons.
And:
We discard our 60 years of research quietly (by inactivating those with the best knowledge and using the experience in the organisation for something different) and at the same time we make a brand new project with unexperienced people in europe to give people a false hope.
The long term results of such actions should be fairly clear?
The "waste product" of fusion is NOT water. Fusion means the atoms combine to form a new element. 2 H fuse to form 1 He.
Most researchers are working with He3 as the preferred fusion fuel because of the corrosive nature of Hydrogen (it eats up the containment vessel) and the difficulty in storing it. Of course, He3 is very rare here on Earth. You need to go to the Moon to get it.
After saying that, the conventional wisdom is that fusion power is 50 years away. Of course, that was also the CW 50 years ago, so, Hey!
Robert Heinlein wrote a short story about fusion power. In the story the reactor ended up in orbit, and the power was transmitted to Earth. I think the title was,"Blow Ups Happen." I read it in an anthology published in 1946, revising the original story from 1940 as published in Astounding Science Fiction. This is not a new idea.
Craig
...and then there's those 14MeV neutrons converting the vessel, whatever vessel, into un-useable-ium.
US oil production will be determined by how much the capacity of the shale plays are able to produce. Reserves means little. With the right investments, a lot is possible. But as I understand, its becoming less and less available areas for shale production as most of the places have already been taken. Unless the Grand Canyon is declared as an oil producing area, and ripped open.
Short term
Long term (destroying the canyon)
he he - to infinity and beyond!
I do really love some graphs - nice steady declines that have no resemblance to reality
not kickin the poster here btw
the green river "shale" graph is marked wrong - that not green river but the output of PV as we switch over ....
Forbin
Phew! Thank goodness! Now that the IEA has forecast a new peak in US production around 2020 or so, I can rest easy. To think I've just wasted all this money buying PV panels, charge controllers, inverter chargers and some grid tied micro-inverters, with a view to getting into the business of installing PV systems.
There's this guy driving a nice white Hummer around town. Maybe I should make him an offer, since from the look of it, crude oil should soon be back down under $50 a barrel! If I had only known that Peak Oil was a hoax! /sarc
Alan from the islands
Yes. This is ridiculous. The laws of thermodynamics really do matter.
Speaking of a graph in severe need of EROEI correction...
That graph doesn't include loss of GOM offshore at about 2 mb/d.
what does it actually mean "without us governement interference"?
is this also iea graph?
That means all environmental restrictions are lifted. Drill at will using any toxic means necessary.
Yeah, right. 3 million bpd of Alaska offshore by 2018.
Look at the tail of that chart- wow! I have been away for a while and have noticed an increase in this type of post. Who is sponsoring all the 'hopium' propaganda? Professors looking for research grants? There is money behind this as a motivation - imho.
Looks like the source for the 'green river shale forever!' chart is here:
http://debunkhouse.wordpress.com/2011/05/11/common-sense-from-a-democrat...
"If I take 80 billion bbl of the undiscovered resources on the map above and assume that they were developed at the time they were placed off limits and add in 120 billion barrels of oil shale recovered from 2022 to 2100, this is what US oil production would look like…"
Why is Green River Shale even on that chart, except to confuse people and manipulate their opinion? The only way it could get produced is with a tremendous amount of government interference ie confiscation of water that is already spoken for and a huge subsidy in energy and money to convert the Green River Formation's kerogen to a usable product. It is not a fuel source capablen of benefiting civilization - insufficient surplus of energy to drive the process and yield a useful product. Consequences terrible to contemplate if it was tried on a large scale so it is just as well.
Holy smokes. That Green River shale graph is a joke. I just don't see that happening unless someone figures out some miracle extractraction system in the next 30 years.
I just don't think that is going to work. And besides, other things are probably cheaper. I think the combo of PV panels for power EVs is much cheaper and more practical. Even with no subsidies you can today buy a PV system for $20K (which includes installation) and an EV for $30K (Nissan Leaf) such that for $50K you can buy a vehicle and a means for fueling it for 30 years (though the car won't last 30 years!). But other things like coal to liquids or natural gas to liquids are also probably cheaper than extracting oil from that oil shale.
Nothing to figure out. Just an incredible amount of work and resources to extract a billion barrels a year... but who's actually going to do that ?
No one is going to do it if there are other means to extract useful energy at cheaper prices. With natural gas, solar, wind, nuclear, coal . . . I just don't see those shales being extracted unless someone finds a better way. I think the well-known coal-to-liquid techniques are cheaper than the oil-shale to liquid.
I agree. And "an incredible amount of work and resources" requires energy. If those energy inputs exceed the outputs then it's literally never going to happen no matter how bad we want it.
Well, I don't see anything happening now. http://www.youtube.com/watch?v=TC-pbsRfXz0
Spec, it is not a matter of cheap. The limits to coal production are known, and close. Using coal to oil would be a very short term solution. OTOH, the kerogen to oil process is environmentally destructive, requires huge quantities of water that simply are not there, and has low EROEI, resulting in extremely high cost for recovery. In a word, it is not, and does not look ever to be, sustainable as a long term energy solution.
PV, hydro and wind, with PV the main source is where we must go. And we need to get a move-on!
Craig
The good thing about PV is that, unlike any other energy source, the EROEI generally goes up the more we tap it. It isn't limited by available energy (well, ultimately it is, but that's a long ways off), it is limited by how fast we can crank out the panels, and how efficient the panels are. That's why I think we should devote our efforts on PV more than anywhere else. Wind is nice, but it doesn't have the capacity of PV, and it requires transmission lines all over the place.
Some pictures of post cheap oil in a northern european country. Gasoline is 6,12 euro/gallon.
A tire-change place with dilapidated signs and rusting and damaged barbed wire fencing around it.
http://i1294.photobucket.com/albums/b615/e4obf1/Kuva0084_zps9cb60516.jpg
Dilapidated truck off-loading area.
http://i1294.photobucket.com/albums/b615/e4obf1/Kuva0083_zpscd55c68e.jpg
http://i1294.photobucket.com/albums/b615/e4obf1/Kuva0082_zpsb05587a9.jpg
http://i1294.photobucket.com/albums/b615/e4obf1/Kuva0081_zps54409abb.jpg
Damaged vehicles in empty parking lot of closed big-box store, on the left is another almost empty large building..
http://i1294.photobucket.com/albums/b615/e4obf1/Kuva0079_zpsb72f004a.jpg
http://i1294.photobucket.com/albums/b615/e4obf1/Kuva0080_zpsd190ef53.jpg
I posted several comments on the Econbrowser website--mostly the usual stuff. Generally, I try to answer qualitative assertions about near infinite fossil fuel resources with quantitative responses, and following is an example.
Jeffrey J. Brown
Posted by: Stefan Stackhouse at April 4, 2013 08:18 AM:
My response:
Link to long paper on net exports:
http://aspousa.org/2013/02/commentary-the-export-capacity-index/
*And here's the problem. Our supply base consists of discrete sources of oil like Alaska's North Slope production:
What surprises me about the almost daily “Peak Oil Is Dead” stories is the implication that production will increase virtually forever.
If the rate of increase in oil production from the North Slope did not increase forever, why would the rate of increase in production from the finite sum of discrete producing regions like the North Slope increase forever?
I think this chart originally came from ASPO-Italy (Ugo Bardi?)
http://peakgeneration.blogspot.com/p/what-is-peak-oil.html
(Mathew Wild's blog)
...though, with a doubling of crude prices enabling more EOR, I suggest the curve gets a bit warped; will look more like this:
Elementary my dear Watson... Just keep denying reality and do the public relations hokey pokey instead...
What is the purpose for oil companies to try to keep denying that there is an issue? (BTW, they do not all deny it. Total and Chevron seem to have admitted the issue.)
Potential reasons for cornucopia talk:
1)Keep investors from fleeing the stock
2)Keep consumers addicted to oil (Every new gas/diesel vehicle sold is a guaranteed customer for the next 15 or so years.)
3)Discourage investment in competing alternatives such as natural gas, EVs, etc.
4)Keep themselves self-deluded and motivated
1 & 2 seem the most likely
I think cities like Philadelphia and Detroit in the U.S are already an example that the remains of some cities are running on almost fumes.
what were consumption estimates in the mid 2000's? Not that US would decline from 21+
to 18-19 or that Europe would be using 2mmbpd less fuel. What would prices be if that
4-5 mmbpd suddenly disappeared? It's a bigger factor in this illusion of abundancy
than new production.
What were economy estimates in the mid 2000's?
I would like to highlight the forecasts made by Khebab, latest in 2010, which were a summary of 20 odd estimates and forecasts of crude and condensates by , it seems, most of the prognosticators on TOD. He gave a 90% confidence and 95% confidence interval etc. etc.
Could we please have an update to those forecasts, given all current knowledge and expectations. Not to point fingers or throw stones, but to get a better feel for where things are, and where they may be going.
This is just like global warming. Its a huge complex problem with many interdependent variables. No one has complete knowledge. Maybe we can get closer to a better understanding.
thanks
Bill
www.worldoil.com/August-2007-Systematic-bias-in-EIA-oil-price-forecasts-...
EIA Oil price projection in 2004:
"..Crude oil prices are determined largely in an international marketplace by the balance between production in OPEC and non-OPEC nations and demand. In the reference case, the average lower 48 crude oil price is projected to be $23.61 per barrel in 2010 and $26.72 per barrel in 2025 (Figure 93). In the high world oil price case, the lower 48 crude oil price increases to $32.80 per barrel in 2010 and $34.90 per barrel in 2025. In the low world oil price case, the lower 48 price generally declines to $16.36 per barrel in 2010, then rises to $16.49 per barrel in 2025..."
As many people believed this then as they do now using the EIA chart above to determine business investments.
Gas price hints shale revolution fading:
http://www.ft.com/intl/cms/s/0/e03293c2-9e0f-11e2-bea1-00144feabdc0.html...
As Art Berman has noted for some time, one could build a pretty good case for potentially severe Natural Gas (NG) delivery problems ahead.
First, the underlying decline rate from existing wells is much higher now than at the start of the shale gas boom, so it stands to reason that the industry would have to add more new production to maintain a dry US NG production rate of 24 TCF/year than they had to add from 2005 to 2012, in order to show a net increase of 6 TCF (from 18 TCF/year in 2005 to 24 TCF/year in 2012).
Second, as noted above, based on the decline rates, the industry would need to drill more wells than they did from 2005 to 2012, but there is no chance for that, given the demand for rigs in oil plays.
Lol... just you wait. I was in a meeting last week where we were planning the demise of Indian Point (2GW of nuke power that counts as "in-city" generation for NYC, despite being 40 mi away.) We're doing this because gas is cheap. If they manage to not re-license - part of Cuomo's agenda along with fracking for NY State - then we'll be committed to gas fired turbines to replace it (in place, because that's where the power lines are.) Across the river, Danskammer - coal and oil - was just shut down, again because of competition with cheap, clean natural gas. Likewise here, once you shut a coal plant, clean air regs make it impossible to restart without a very major investment. We are in the "lock-in" phase for natural gas... we are also creating huge new demand. This is the NY state grid, but the same issues are playing out throughout the NPCC (northeast power group.)
When this turns around, it's going to be ugly for the rate payers. Should quickly push the development of solar, though.
I just hope all these new natural gas plants have the ability to increase & decrease to follow load. That way, lots of renewables can then be added to reduce dependence on the natural gas but still have the natural gas as needed when not enough power is being generated by the renewables.
Does tars sands product count in "total liquids"?
thanks
Yes, in Figure 1 up top all liquids are used from EIA
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=57&aid=1&...
in that link the crude oil is chosen,
you need to choose Product "Total Oil Supply" to get the 89.3 mbpd. This includes also refinery gains etc. The lot.
For Canada this means (2012) 4 mbpd total, and some 3 mbpd of "crude oil and lease condensate".
I would say that chart # 7 shows us a lot. Saudi Production from 1995 to 2005 for the most part stayed under 9 MB/d with less than 20 rigs operating. After 2005 it was necessary to increase the number of rigs to 60 to get the production up to just a bit over 9 MB/d. With this action I would say that the Saudi "Oil Lakes" will be drained much faster. In other words the Peak is not noticed because of the increased ability to pump from more wells but when the lakes are near empty the production decline will be huge! The longer the plateau is extended by increasing the rig count and number of pumps the faster the decline will be at the end. On the other hand if we could cut this peak plateau, due to conservation, to a lower elevation plateau (let's say 60MB/d world wide) through continued conservation we can extended this lower elevation plateau out many years. This conservation coupled with a “Manhattan type of project” to implement “renewable or substitute energy sources” is as I see it, necessary to happen now!!
I believe that one could say the TOD view is that the Manhattan type of project was needed 10 years ago m/l. Today we need more than that. What we need is a bloody miracle.
Craig
"After 2005 it was necessary to increase the number of rigs to 60 to get the production up to just a bit over 9 MB/d".
Clearest answer I've yet seen to the perennial question of wether KSA is curtailing production to keep prices up, or, as Ron often alludes, wether they are producing flat-out. Who you gonna believe, the rig count/production ratio, or your lyin' eyes?
Desert
http://www.fool.com/investing/general/2013/04/07/why-global-oil-demand-c...
Hey folks what if peak oil production is remedied by peak demand as stated in this article that I linked to? I agree with the the studies that have produced peak oil, but we can't envision every scenario. I believe that many peak oil people were totally caught off guard by the housing crisis in 2008 and the next crisis will be no different. As we go through the next economic bubbles and collapses we will use less fuel in the west and eventually the far east too. Suburbia will continue to change it's habits and not by choice. High energy prices, due to peak oil and inflation will force people to change in a way that people like Kunstler envision.
What I'm saying is that we may never hit the real achievable peak in production, but it won't matter, because the outcome will be the same.
lets get this straight - there cannot be peak demand for oil because of what you can do with oil ......BUT I claim that oil usage will fail because the dammed stuff becomes too expensive to be used
chalk that up to peak demand if you wish but really this is just trash talk - the demand is being killed by high prices
the very same high prices that allows the shale oils in the USA to be extracted - at a price
the same high prices that hove NOT lead to increased WORLD supply beyond a mere uptick - welcome but not a game changer
at this time the an alternate energy source has NOT been developed and I see no signs of investment or other wise that you could point to to say that another source of high density fuel is going to be around SOON - ( thorium comes to mind )
and for get about all the politico double speak about peak oil - peak oil is just a mathematical FACT - what ever the reasons given geology prevails - nature always wins , beat it back and nature shrug our puny attempts off and comes back again .....
never mind - sit back and watch the show - when the oil shales peter out and the economy steps down another notch then the SHTF
Forbin
Hey folks what if peak oil production is remedied by peak demand ... What I'm saying is that we may never hit the real achievable peak in production, but it won't matter, because the outcome will be the same."
It's the same thing. Since the oil market is so tight, on a global scale, production = demand.
Peak oil is an interplay of geologic and economic forces. As I say, "What’s actually happening is that, as a result of high oil prices, these alternative processes that have been known about for a long time are just now becoming economically viable. And they do indeed unlock fairly large amounts of “new” fossil fuel reserves. But there’s a catch of course — they are slow processes and they require high oil prices, and this is the critical dynamic behind the Peak Oil problem — that at some point oil production hits the maximum rate that can be sustained by the interplay of these slow and expensive alternative oil production methods, versus the ability of the greater economy to tolerate high oil prices before high oil prices kill demand."
I believe that Kunstler is correct that the US Auto Addicted suburbs will be forced and ARE being forced to change as airlines find it more difficult to afford jet fuel, drivers cannot afford to drive, Walmart apparently besides suffering from having almost exclusively only auto accessible stores, also cannot afford to pay the labor to stock their shelves.
However as the Rail experts in my choo-choo group constantly point out to my visions of
Green Transit expansion, even seemingly simple Rail projects get more complicated and require time and investment in particular by cash-strapped public transit agencies.
For example, one of our Rail lines which provided service to Wall Street and investment bankers going back 100 years currently has a 3 1/2 hour gap in New York bound train service.
The problem is it is a single-tracked line even though the room was made for another track.
When will the investment be made for another track and who will pay for it?
In the past the Berkeley Heights station had a siding which could provide this service with manual operated switching and train changes. But even updating that to modern automated switching and signalling requires some investment.
Unfortunately what is tragically happening is that mobility choices are decreasing as people who cannot afford cars are riding unsafe rickety bicycles with little or no shoulders, rail and bus riders are crammed Standing Room only into the infrequent service left, and also constrained to 30-60 minutes waits for transfers and transit they need or taking trains at 5 AM for example.
Not to mention Air travel which is becoming more ugly, dicey and untenable by the day as medium sized airports are losing service or being shutdown, now their Air traffic controllers are being sequestered, people are forced to fly hours of their way to Hubs to get anywhere and get the enjoyment of being scanned and goosed at airports. not to mention increasing outright cancellation of flights which are not totally full.
So this forced transition becomes incredibly painful for no good reason except protection of BAU by politicians in the pockets of pavers and the Auto Addiction lobby.
"Walmart apparently besides suffering from having almost exclusively only auto accessible stores, also cannot afford to pay the labor to stock their shelves."
Sorry, but it's only Walmart's insatiable greed that's the problem. They made about $15,000,000,000 NET profit ($15 billion - zeros for dramatic effect) last year alone. A study done showed that paying a living wage to all of its employees would only cost about $400 million. With $15 billion hanging around they could pay a living wage and hire a few (hundred thousand) people and still have some change left over.
http://en.wikipedia.org/wiki/Walton_family
Note that the figure there makes them worth more than the bottom 40% of Americans.
http://www.walmartsubsidywatch.org/
Can't yet blame this one on Peak Oil - just on a government run by corporations and for corporate profit.
I was trying to follow a link to a story about a large Dutch bank that was apparently refusing to
give their customers their gold which was in storage....instead saying they would pay the spot price
in place of physical delivery. The link did not work. Has anyone read the story and have more info?
Wow, I'm going to google that right now. Peak Gold anyone?
Most of what I read that is called "news or analysis" is agenda driven. From articles and comments that I read at TOD, the idea that the US is going to be energy independent, oil exporter, etc. is nonsense. What are the agenda driving the "death of peak oil", energy independence in the future, etc? Is it willful ignorance, stupidity, investment scam, etc.?
Steve
Sure!
Wanna bet a heck of a lot of people hold pieces of paper that they should, theoretically at least, be able to redeem for actual gold bullion, but if all that paper were totaled, it would add up to quite a bit more than those measly 10 trillion or so dollars.
Wonder why the Germans have asked for their 50% of their gold bars back from the Fed?
http://www.globalresearch.ca/u-s-dollar-collapse-where-is-germanys-gold/...
You know that three cup shell game that is played on street corners you have to bet on which cup the coin is hidden under... Well, your going to lose that bet and all your money at the end of the game. In much the same way the global financial system has become one big shell game.
Cheers!
This may be getting a bit off topic from Peak Oil, but it's all related because the main reason the financial system is going to collapse is because the real economy can't grow anymore, which is largely due to Peak Oil and its impacts. So it's all tied together under the broad discipline of ecology.
Jim Sinclair says that we may be getting close to the point where the Fed says enough is enough and calls an end to the ponzi scheme, to prevent America from being completely drained of physical gold. I'm pretty sure the Fed still has some gold left in the vaults (i.e. other countries' gold held there for "safekeeping" -- and I thought America's gold belonged to the American citizens? How come a cartel of private banks is in control of what used to be owned by the commons?)
Anyways, the issue as I see it becomes: when gold gets revalued (i.e. dollars get devalued) and we move onto a new gold standard, then those countries are going to demand their gold back, so even if there is still some left on American soil, how is America going to manage to keep any gold for itself to back the new currency?
Null, I don't think your off topic at all because it's all connected. We can have a chicken or egg debate but we have severe economic problems that we can't avoid forever. One thing I've been hammered on here is my concern for the millions of people who are locked into the welfare state in western countries. What happens to them? I think they will be and in some countries currently already are being hurt by this revolving banking collapse and inflation. Next in line will be the working class poor folks and lower middle class in suburbia, most who think that food comes from the grocery store.
I don't think we absolutley have to forgo a civil society just because of a currency collapse or because of energy shocks, but people have to be informed in order to not freak out! That information is just not getting out fast enough.
I believe that information is being deliberately kept from the average person. Nothing to see here, everything is just fine so move along folks. Just go on back to your TV sets and watch the evening news to see that the economy is improving, were adding more jobs every month and house prices are rising again, yipee!
But having said that I also think that it is possible to maintain a civil society despite a currency collapse. We will find other ways to exchange goods and services.
That's right. And it will be based on what people need, and the hours needed to produce it. Human hours, workers' hours, not computers, robots, or corporations.
Craig
Geez. I just don't get the gold bugs' obsession with that particular commodity as something to "back the new currency."
Gold, understand, is rare. However, you can value currency with whatever you want. Underlying it all is that value is created by labor, and labor is the only value for currency. That is why inflation only happens when workers are involved in it. Today the workers are being left out, and there is deflation if anything, despite the Fed's Herculian efforts to inflate.
Gold is valuable as a conductor especially in communications and the like. It is pretty, and malleable (can be hammered down to almost one molecule thickness), and makes nice jewelery. It is not available in sufficient quantitity to use as currency, because with inflation as you describe, it would take less than a sand-speck of gold to pay one hour of work. Historically, one ounce of gold was the value of one week of work by the average worker. Figure the math.
Gold as backing for currency? Forgetaboutit.
Craig
Gold as backing for currency? It's been the norm for most of history. Only since 1971 have we deviated from gold backing, and it's the longest lasting fiat experiment in history that will soon end.
And you don't have to use gold for transactions -- that's why you back the currency with it and then the paper attached to that gold can be divided into dollars.
Sure, we can value a currency with whatever we want -- but the international bankers aren't going to use anything except gold and silver.
Value is not created by labour -- this is the Marx view of the world which led to such wonderful things as Soviet communism. Value is actually created by extracting and transforming natural resources, and labour is just one input to that process -- and a diminishing one as robots displace labour.
I'm not sure how you can argue against this very basic fact. The capitalist mode of production is based on commodities which are acquired by money, and to obtain money one needs to, y'know, work - this is why said robots are a problem. Economic crises have been about overproduction just as much, or more, as about underproduction.
Are you in agreement with me Henriksson? Not sure how to read your first statement. You mean it's hard to argue against my argument, or the argument I was arguing against?
Yes, this is the classic problem with asset bubbles, especially the Great Depression. The low interest rates preceding this led to a boom in money which people used to buy things and pump up prices. But this just stimulated overproduction and when the bubble burst there was essentially too much stuff for people to buy and unemployment went up, prices dropped, as economic activity stagnated. That wasn't fixed until labour and the economy was re-organized to accommodate growth again (and the consumption to drive it all), which sucked up all the unemployment we'd otherwise get if we didn't have to continually build build build.
I wonder if today's low interest rates are producing a somewhat different effect since the world is now out of resources and the commodities aren't being overproduced. The financial system's merely extending the consumption mode of society till the bitter end until there's nothing left to consume. This is why I don't think we will get a deflationary Great Depression-like recession, it will be hyperinflationary instead.
The problem with Capitalist reality is that it does not recognize that the thing that imparts value to commodities is NOT the resources or machinery; it is the work that it takes to change resources into commodities. Machinery simply increases productivity. The reality is that the "owners" extort the increased value and provide little or none of it to the workers. If all corporations were owned by their workers, that would not be the case.
Most people, including CEO's and other officers of corporations are either lucky or not. Those who are lucky, others think are valuable. Like Ron Reagan and Margaret Thatcher. They were otherwise low level individuals, lucky enough to be head of state at a time when the economy went viral. Their policies had little or nothing to do with that fact.
George H.W. Bush did more to provide empitus to the economy that benefited another lucky individual, William Clinton, than Ron Reagan did when he recognized that a tax increase was needed, and provided it. His son was a disgrace to GHWB when he cut taxes and increased spending!
You cannot have inflation when the masses are not getting paid in accordance with the money supply increase. Just as you see today, there can be minor increases in food and fuel prices, but that cuts into other spending and crashes the economy. All that we are seeing now is banks and wealthy folks drinking in the new money as they pernisiously hoard it to themselves and withhold it from the true creators of wealth.
Yes, the Fed is wrong in their actions today. The value of gold, like other commodities, will be determined by what it costs to extract, and what is can be used for. All you are doing is comparing gold with dollars... you could compare anything to dollars, or for that matter you could coin money from any metal you want (or carve it from wood, ivory, teeth, or bone), and it would be valued based on how many units of that money the average worker was paid in a week, month, or hour. The standard value of gold used to be a week of work. Looks like about 1/4 that or less today, so there has been some inflation. Gold coin will not change that. It would only hurt.
Craig
There are other ways to get inflation besides 70's style cost - push. Be patient, the money supply is increasing, eventually it will bleed out into the economy. In the mean time, enjoy the mini housing bubble, stock bubble, bond bubble, higher taxes, higher tuition, higher insurance costs, etc.
In the current environment even 2% is rather inflationary as far as living standards are concerned since savings is generating a negative real return and household income is falling.
Gold was chosen because it was only useful, at the time, as jewelry and money. Like silver. In fact, Wm. Jennings Bryan in his Cross of Gold speech was in favor of bi-metalism as opposed to a gold standard.
Still, for all that, his speech was, to me, far more memorable for the following than for the "Cross of Gold" part:
He could have been speaking today!
Craig
"He could have been speaking today!"
He'd 'a been branded a socialitst in about 30 seconds and we'd all subconciously agree to ignore him, even if we subconciously agreed with him...
Currency backed by gold is sillyness and just about every serious economist laughs at the idea.
If you limit your currency to the the amount of an arbitrary commodity then you have a natural limit to how your economy grows (the rate at which we can mine gold). If the economy tries to grow faster then you will have deflation since more goods & services can be created faster than the money supply can grow. More goods & services are chasing smaller amounts of currency. Deflation is an economist's nightmare. People will just hold onto the currency knowing that next month they could buy the good/service even cheaper. Thus the economy grinds to a halt.
Thus, only a tiny percent of economists call for a gold standard and even they call themselves the "wingnut" view.
NPR's planet money did a great set of segments on the the gold standard:
http://www.npr.org/templates/archives/archive.php?thingId=133252308
I would agree that in a growing economy, you need to be able to grow the money supply in a way that you could not if it was backed by gold. However, we're entering an era of low/zero growth so the idea of currency backed by gold isn't as outlandish as it appears to be. We're seeing governments greatly inflating the money supply in a desparate attempt to stimulate the economy and that isn't likely to end well. We'd be better off with gold backed currency that cannot be debased by the central bank.
I often hear it said there is not enough gold to back the currency - why on Earth not? It seems to me that the gold price would adjust regardless of the actual amount of gold in existence - in fact a restricted quantity is more a requirement than not.
If there are sufficient gold reserves at $33/oz to back eg $10 billion, then $3300/oz ought to be sufficient to back $1 trillion right?
Something about the argument that we can't go back to a gold standard because there isn't enough gold in the world just doesn't sit well with me - I have no doubt there are reasons not to return to to a gold standard, but quantity of gold in the world is not the reason it has not happened - it is just an argument of convenience, when some would rather the real reasons not be discussed in public.
Yes . . . the price would adjust and that is exactly the problem! You would have deflation because there are always more people and more goods & services being created in the economy than gold being mined. And Deflation is an economists nightmare because with falling prices, people put off buying things because the prices will drop. Thus the economy grinds to a halt. People complain about inflation but small amounts of inflation is actually desired to make an economy run properly. It keeps the economy moving because people buy things and keeps people working because otherwise what they own will just lose value to inflation.
If the price of gold is allowed to change, you are by definition not on the gold standard.
Other than economists of the 'Biophysical' school I have yet to meet an economist who has even the most basic grasp of natural limits or their relationship to 'Growth'... laugh away!
Touche....
\hattip
Saw the word growth in actual or metaphysical words in a lot of those gold posts myself. If the argument for gold doesn't apply to steady-state or declining real production, the argument no longer applies to reality...no one is thinking about, because we have no recent examples of, an economy that doesn't grow. Looks like that will change...
Other than housing, where else is there deflation in the US economy? Hell, even rents haven't deflated.
You are correct about wages, there is deflation there, but it is possible to have inflation without wage increases. Watch Japan to see how it is done. Wages are stagnant while the cost of necessities will go through the roof. The result is reduced living standards.
Be patient, the Fed will be successful in creating inflation and your living conditions will suffer because of it.
"but it is possible to have inflation without wage increases."
Called stagflation. It was the dominant theme of the 1970's, which is why Volcker jacked interest rates up to 20% in 1981 to put a halt to it. There is no way interest rates could be raised that high now. They couldn't even be increased 1%.
The deflationists seem to have a narrow view in my mind. They can only see a lack of demand as causing prices to crash. They don't consider that the monetary system is a fabrication and dollars have no intrinsic worth anymore. We may get an episode of deflation, sure (all hyperinflations start with a little deflationary dip) but it won't last long when SHTF.
I think that hyperinflation and deflation share a common ingredient - panic. If prices start ramping up, persons who have money panic and start buying. Today this is unlikely since no one seems to have money, so if prices rise they start triage on their spending.
A shortage of goods could create some sort of supply based inflation. Even then if no one has money, who is going to fuel to panic?
OTOH, when prices start to drop, people with stuff to sell panic and see at lower prices. The real estate bubble was fueled by loans to people whe were known to be unable to repay. How long could that ever last?
I think that if the government started really printing money, and using it to pay people to work, it might create some inflation. It would last only until the government stopped, and then only if supply of goods remained static.
Real hyperinflation takes place globally when there is widespread currency arbitrage. That is what would doom any specie. And, today, comparing Yen, Dollars and Euros is an exercise in futility. They are in a race to the bottom, and that is preventing any one of the from inflating. That and the fact that they are creating money for the banks and for the wealthy, but not for workers.
In short, currency valuation is irrational, like the markets. Which is why the invisible hand is held palm-up in pathetic supplication.
Craig
I posted this a few weeks back, I thought it was pretty significant. Didn't elicit much response at the time though.
http://www.zerohedge.com/news/2013-03-24/another-gold-shortage-abn-halt-...
I've been hearing stories we're on the verge of a default for years now, and that it's all about to come crashing down. I'll believe it when I see it. It will come of course. Who knows when. Next week? Year?
I believe we live in a financial and social world ruled by cartoon physics now. Reality has been suspended until further notice.
I think it's been a slow grind, but it's happening as we speak. Just because we don't get the crash doesn't mean we aren't having serious consequences to a misallocation of everything. One thing is how we have changed the way we count unemployment and inflation. If you change the rules of the game the scores come out differently sometimes.
When the default happens, we will recover and ask, "So what?" Just my view of it. Certainly, there will be major dislocations, especially on the part of those who hold huge quantities of debt instruments.
Of course, US Social Security holds a ton; but the Government will just print paper to cover the bills for entitlements like that. And everyone will be more than happy to accept those greenbacks since the rest of the world will be in the same condition!
The only time there are severe problems is when one nation is not impacted - something that our financial powers that be are desparate to continue. And yet, they cannot agree on which one to support, and as you see daily the currency trading is more or less uniform. No one is going up or down violently vis-a-vis the others.
Right now there is a concentration by the PTB on Japan, driving down value of the Yen. I predict it won't last - the next Eurozone crisis or US financial debacle will restore balance there, and even though Japan wants to inflate they will be unable to.
Unless their workers are participating. Which they are decreasingly, just as ours are decreasingly doing.
Craig
When the current system ends then the US will lose its ability to run a perpetual trade deficit. Any imports will have to be offset by exports (mostly food). This means the oil imports will basically end (then oil consumption drops by half). And since the US has lost most of its manufacturing base, the cost of imported high tech will go through the roof.
Those depending on social security will get hit hard as those obligations are printed away and they are left with nothing - few job prospects and no way of feeding themselves.
The only benefit will be that more manual labour jobs will be created.
Imports having to meet exports could be met another way. Companies like Apple could manufacture in the United States.
Here are some links I found, these are the most straightforward, others are from places trying to sell you something.
http://www.zerohedge.com/news/2013-03-24/another-gold-shortage-abn-halt-...
http://www.zerohedge.com/contributed/2013-04-05/global-deposit-confiscat...
http://socioecohistory.wordpress.com/2013/03/26/gold-bank-run-begins-dut...
It is ABN Amro.
http://www.zerohedge.com/news/2013-03-24/another-gold-shortage-abn-halt-...
ABN AMRO bank
http://www.zerohedge.com/news/2013-03-24/another-gold-shortage-abn-halt-...
Given the rapidly changing mix of total liquid fuels produced (oil,NGLs,biofuels, etc.),to really understand how much ENERGY is being produced one should prepare a graph in ENERGY UNITS (Joules or BUTs) and not simply in volumetric units.
In addition, considering that the EROEIs of extracted oil, of NGLs and of produced biofuels are considerably different, it is also critical that at some point someone on The Oil Drum attempts to take that into acccount and prepare a graph illustrating how much NET energy is being delivered by the mix of liquid fuels produced.
If that was done, we might clearly find that - despite growing volumes of produced liquid fuels - the energy content of the produced liquid fuel mix is flat or going down.
In addition, we might discovert that in terms of NET energy produced, we are actually sliding down the net energy curve.
JB
The signs of peak oil are everywhere for astute observers.
The high yet volatile price of oil is the most important...it signifies both upper (what producers need) and lower (what consumers can afford) limits that define the boundaries at which the economy can operate. This is the prime signal that there is no cornucopia. If there was cornucopia, we would have low prices and abundant oil.
The other big one is the dysfunction and inequality being produced in the world. Increasingly what one finds is a very small elite at the top who have scooped up the financial wealth, and billions of people who are in some way or another dependent on subsidy (fuel/food aid, government welfare/healthcare etc.) This is destroying government budgets and breaking the back of the working classes.
Surely these are signs of peak oil.
I see them as signs of the relativelyslow inexorable collapse of our complex civilization due to it having overshot its resource base and surpassed the capacity of our supporting ecosystems to absorb and recycle our waste streams. Peak Oil, IMHO, is just one facet of our predicament.
Knowing all the facts today, of the assessments offered in 2005 by Pickens and Yergin, which one would an objective observer characterize as having been closer to the truth? - Hamilton.
Visualizing this point ...
There is extra oil out there. Nigeria, Iran, Iraq, more Canadian shell, California shale, large land holdings by the US government etc. But, as said over and over. It might take a higher price to get it tapped and flowing. This potential is more political but nothing like a higher price to prime the pump of politics. Will this released energy be the peak depending when it happens?
For the African whose village got their first 2 lights from a couple of panels and a battery, they don't care. It won't change their oil use much. Is there a study or charts that shows all energy use as compared to population growth. That peak would be more interesting. How many people can the earth hold. As mentioned, populations can adapt to different sources of energy over time. Or is the discussion more about peak comfort including computers that much of the world will never see. Unless a successful village now has 3 panels and together just bought a smartphone.
"Or is the discussion more about peak comfort including computers that much of the world will never see. Unless a successful village now has 3 panels and together just bought a smartphone."
http://one.laptop.org/about/mission
It's kind of amazing, but a number of years ago an organization called OLPC "One Laptop Per Child" started to put together a plan to supply poor villages with ruggedized laptops so that children in poor countries could have access to the knowledge available on the internet. Each one was set up to work as a wifi repeater to carry any signal it could get as far as possible. The original cost estimates were pretty high and it was looking grim, but then prices plummeted when smartphones went bonkers. It was mostly the solid state memory that was at issue - the primary failure point and biggest energy hog was the spinning disk hard drive and solid state, the only thing rugged enough, was a fortune back when they started.
You won't be playing Crysis on it and the graphics won't melt your face - but if you're a poor villager looking to access the US Library of Congress or learn about science...it'll do the trick.
See here six Uruguayan elementary school boys, and girls, riding on their horses to school, and holding up their laptops "ceibalitas" given to them by the government.
http://www.armandobronca.com/como-hacer-mas-inteligentes-a-los-ninos-lat...
For the peasant boys, not necessarily poor -a horse costs a lot of money, to buy and to keep- but cut off from the modern world by distance and time, this program has been a godsend.
That's not really true any more. The nomadic yak herders high in the Himalayas have smartphones so they can check the price of yak cheese in Kathmandu before they start carrying it to market. They also have solar panels and satellite TV receivers up on their stone huts and yurts. They actually have better access to information than the average Joe 6-pack in the US, because they can get BBC World Service, Al-Jazeera, and Russian TV on their Sat TV, and J6P can't.
If you break your leg on the trek to Everest, just have your buddies carry you into the nearest tea house. The owner will pull out a sat phone and say, "I can have you in a first class hospital in either India or China in less than an hour. $3000 for the helicopter. Visa or Mastercard accepted, no American Express, sorry".
Been there, seen that, it's a whole interconnected world nowadays. The transportation systems up there are mostly human and yak powered, though. Rockslides keep wiping out the vehicle roads, but the porters and yaks can always get through.
http://www.boston.com/bigpicture/2012/12/mongolias_nomads.html
Great graphic! Although Yergin left himself an out. He can claim whatever he wants to with regard to capacity. But he would need to give a price point at which this extra capacity will come on line, since $100 a barrel has not triggered it.
Seems like they are now calling it the Peak Oil Theory. They either say it has been disproven or "mostly disproven". Which always confuses me. Because if one theory is wrong, there has to be another theory that is correct. What is the correct theory if the Peak Oil Theory is incorrect? They don't say.
If they don't like Peak OilT heory, maybe they go for
Doubling Oil Production Eternally.
Peak oil is dead. Shale fracking killed it.
Look - shale energy is gassy. Some shales are wetter than others, but collectively they deliver a ton of natural gas.
The peak oil people didn't stake their claim exclusively on oil. They made puhhhlenty of doomer predictions regarding gas. Those predictions have been proven to be spectacularly wrong, much more wrong than anything Yergin said re: global oil production **capacity**.
I suppose if the Malthusians hadn't humiliated themselves so thoroughly with re: to N. American natural gas then they wouldn't be so thoroughly discredited and marginalized today.
But they did .... and so they are.
Have you even read the comments here or are you just trolling?
Being wrong on gas doesn't mean they were wrong on oil. Fracturing shale for gas has had a huge impact on the price of natural gas and dramatically lowered it. Yes, it has been a game changer. Fracturing shale for oil has had almost no impact on oil prices. Now perhaps you can say that we would be in a REALLY TERRIBLE situation instead of just a difficult situation w/o fracked oil. But that is merely admitting that peak oil is hitting us and we've just temporarily dodged the problem with fracked oil. If oil is pushed down to $30/barrel without a financial collapse, then you have point. But until then, peak oil has the better argument.
"...but collectively they deliver a ton of natural gas"
2,000 pounds isn't very much.
As I like to point out, Malthus may not have predicted scientific agriculture or fossil fuels, but there are more malnuourished people on this planet today than there were people on this planet, malnourished or otherwise, when Malthus made his predition.
TOD didn't accuately predict shale gas, but shale gas is a classic resource bubble which has already popped. It is also a North American effect. Global demand for gas has continued to outstrip supply worldwide for the other 95% of the global population.
We are paying $0.045/KWh wholesale in the UK today.
@FMagyar: I'm curious. What do you think a "sustainable" civilization would look like? How would life be like in it?
I've never claimed to have a crystal ball so to say I know what a sustainable civilization looks like would be a stretch. of course if I saw one I'd certainly recognize it. However I can tell you without a shadow of a doubt it doesn't look like anything like the one we currently have.
I will say this much, it has to have many orders of magnitude fewer people and those people have to understand resources limits and model their civilization's energy flows, consumption patterns and waste sinks on what a stable mature ecosystems looks like.
Cheers!
Fred
One thing I try to do is jump away from the (necessary) criticism of the current system, and look for the parts I think we're doing right.
What parts would we keep, or readjust a little, but that are essentially successes, or forces for good?
'What's Right with this picture?'
A trick with doing that is not instantly jumping on each one and going 'yah, but' to it all. I realize, as do we all, that anything we can come up with will have blemishes and downsides.. but I do think it's critical to also hold up the goals and the achievements. This being a largely baby boom range crowd, there is a strong strain of Antiestablishmentarianism to our themes.. which has the downside of sometimes instinctively tearing apart anything that gets established at all, including what WE are working to establish ourselves.
- I would say that a forum like TOD is one example of 'what's right..' , and the fact that it isn't illegal or declared a national heresy are a couple others, for instance.. just to point towards areas of technology, of free speech rights and freedom of religion rights that are positives in my great checklist.
- I'm also pretty fond of Stainless Steel and Solid Brass, as far as materialistic concerns are concerned..
Ultimately, Revolutionary Spirit or no, I think we have to find what works in order to have footholds from which to rebuild that which doesn't..
I agree, Bob! And I really like stainless steel and solid brass as well. Just yesterday I had a meeting with the owner of www dot bamboocarbonozero dot com dot br, a small business headquartered in Sao Paulo and I was able to examine a hybrid stainless steel and bamboo structure that he had designed. I sat in a beautiful garden surrounded by a bamboo thicket and tropical plants next to a pool with a fountain, the pool filled with brightly colored Koi, as we talked about sustainability... Yet all the while I could see the tops of the buildings of the concrete jungle, towering over the bamboos and I could still hear the muffled roar of the incessant traffic just a short distance away...
To be clear Sao Paulo is the epitome of unsustainability, yet it is also a vibrant center of culture and commerce, question is, until when? The next question, is it even possible to make a place like Sao Paulo sustainable?!
Cheers!
Fred
Isten hozta a Sao Pauloba?
Craig
Yeah, sorta... More like Ördög than Isten but hey, the local Magyar Ház is just down the street >;-)
At times I can't quite keep my cultures straight.
Cheers!
Fred
"This being a largely baby boom range crowd, there is a strong strain of Antiestablishmentarianism to our themes".
Wait, those of us who didn't live through the 60's aren't allowed to be authentically unimpressed with BAU? I think Henkrikson (US sp, sorry) & company, as well as all the others who frequently mention they don't expect the see the next decade might disagree. You can keep the antiesablishment crown when you pry it from my cold, dead fingers, lol. Last I checked, it got popular on a large scale at least by the '30's, and wasn't that a bit before the great war? Don't know why that tweaked me so...
You have every right to be tweaked. Pardon my limiting scope on that statement.. in fact, there can be little doubt that the sixties would have burned so hot, or at all - if it had not been for the thirties, and much more severe lessons about power, the excesses and the losses it can go through..
In either case, have you seen that effect that I've mentioned, of revolutionaries who often want tear down what even THEY have built, because their intentions developed so that they reacted that way to almost any and all structures?
It's not universal by any means, but it's a bit of the 'To a hammer, every problem can look like a nail' syndrome..
America's oil energy use decline has been impressive. I suspect the leading cause is the decline in living standards for millions, which is ultimately being caused by increased oil prices. Sure efficiency plays a part. Those still not poor will pat themselves on the back for their more fuel efficient new vehicle and the number of poor, who can be defined by their modest energy use, will increase
This dance could play out for quite some time while 'peak oil arguments percolate happily. As long as the financial realm holds together anyway. If not then demand will really fall and peak oil will be a topic only for the obsessed and historians.
Technically peak oil is plateaued oil because of non conventional supply made possible only by high prices. I wouldn't want to discount the accuracy of the peak oil case on such a technicality. We know it takes far more oil to frack a barrel or brew tar sludge than to sit on a pressurized supply. If we are burning 100% more oil to get each barrel over 85 million a day are we really gaining. Stupid question, sorry. Of course not.
The biggest threat to oil energy production stasis is lower prices. A very odd thing. There is no threat to the trend of increased poverty however. I suggest the oil triumphalist be still.
Gail:
Excellent work, as have come to expect. However, the comment that natgas is not used to produce petrol is not wholly correct. Natgas is currently being steam reformed to produce feedstock hydrogen. This is in turn being used to hydrogenate the barely liquid bitumen they call petroleum that is the product of the tar sands. This use of natgas is increasing, and will have an impact on the price of petrol at the pump
and the price of natgas. My meager resources indicate this use of natgas is on the increase. I will appreciate your expanding on this use of natgas as it has the potential to affect both the price of petrol and natgas.
Thank you, eldonlaser.