The Oil Drum

Well, in all liklihood for GM... the shareholders get screwed, the PBGC takes over the pensions with substantially reduced payouts, and the retirees lose their health insurance and (for the most part) depend on Medicare/Medicaid. GM continues to operate, and sheds the $1200 or so per vehicle cost that the retiree expenses currently impose. The biggest result will be that Ford and Daimler-Chrysler will have to make the same trip through bankruptcy in order to remain competitive.

Many people ask the question, "Where will we find the workers to fill the jobs when the Baby Boomers retire?" They should be asking, "Where are the jobs that the Boomers will need when they find that they can't afford to retire?"

"They" have let Hubristic Huber out of the Liberal Arts Loonie Lockup again.

Did $35/barrel-soon Steve Forbes give a stamp of approval this new Clucker of Thermodynamic Defiance?

(Definition: Clucker of Thermo-Defiance: One who thinks that Adam Smith's Deuce of Dumbness trumps Mother Nature's Ace of Universal Laws.)

In Steve's defense, the Huber-ubber ill-piece is listed as having been published on Halloween --a.k.a. All Saints & Sicko's Eve. So maybe it's just a joke?

Peter Huber is a senior fellow at the Manhattan Institute's Center for Legal Policy, writing on the issues of science, technology, and the law.

His latest book, The Bottomless Well, co-authored with Mark Mills, examines energy technology and policy. Hard Green: Saving the Environment from the Environmentalists (Basic Books, 2000), called "the richest contribution ever made to the greening of the political mind" by William F. Buckley, Jr., sets out a new conservative manifesto on the environment which advocates a return to conservation and environmental policy based on sound science and market economics.

In these dire times, we definitely need more pirates!

http://venganza.org/

;^}

But nuclear reactors extract only a minuscule fraction of the energy locked up in the nuclei of uranium atoms; all the rest gets discarded as "waste." On Eroei logic, uranium would never be used to generate either electricity or heat. But per unit of raw stored energy, uranium is a thousand times cheaper than oil.

I guess, based on his "logic" then the amount of energy we get out of oil is infinitesimal too since the total energy in oil is defined by e=mc squared.

Huber is a free-market economist which, given where his writing appears, should come as no surprise. My understanding of EROEI is the total amount of FUNGIBLE energy input to produce a unit of FUNGIBLE energy output. The fact that the nuclear reactor doesn't use all the potential energy is irrelevant. What is relevant is the energy cost of mining and refining the nuclear fuel, amortizing the cost of the reactor, eventual decommissioning, etc. Those are the real energy inputs.

As it happens, the people extracting oil out of tar sands today use gas from the fields themselves to power their refineries. There's gas, too, under what has been called Alberta's "trillion- barrel tar pit," but it's cheap because there's no pipeline to deliver it to where it would be worth more.

Presumably the NG beneath the tar sand deposits could be piped to market if it exists in sufficient quantities.  It also can be liquified and trucked to market.  I'm not prepared to do a cost analysis here but it seems to me that the NG being used to crack the tar sands cannot be considered free or even "cheap" just because it is proximal.  If there are sufficient quantities of NG to allow a significant portion of the tar sand to be processed into distillates then there certainly ought to be enough NG to make a pipeline financially rewarding.  Perhaps a calculation will reveal that the value of NG at the site is only 75% of the value at Henry Hub due to transportation costs.  It's still not free by any means. Two pipelines running side by side can be built for not much more than the cost of one.  Given that the product of the tar sands is a liquid then we should expect that building a pipeline to transport it makes good sense.  Building the second pipeline to transport NG would just be a free ride.  NG is pressurized and requires no pumping stations.  Hence it requires a very simple infrastructure to move it long distances.

Naturally the Hubers of the world aren't going to point this out because suddenly their "cheap energy" source would suddenly command a much higher price because it's no longer locked in.

Remember that NG would be used in a dual capacity for processing tar sands - it must supply heat for the cracking process as well as supporting hydrogenation.  We're talking significant quantities here.

As an alternative to gas, Total S.A., the French oil giant, is thinking about building a nuclear power plant to supply heat to melt and crack the tar.

In the same article he's blathers on about using "cheap energy inputs" to produce "expensive energy outputs."  Mr Huber, apparently, has never asked for a quote on a nuclear reactor.  Nor has he troubled himself pricing out the cost of running a water pipeline for hundreds of miles to supply the required hydrogen. I'm not saying the idea of building a nuclear reactor close to the tar sands is a bad idea.  It probably is a good idea.  But the way to find that out is by classic EROEI calculations taking into account current market prices.

As a first approximation I think it makes good sense to ask how many joules of energy are returned for each marginal joule spent. If some adjustment needs to be made because some of those joules are less useful to the current market than others, fine.  Don't discard the method.  Refine it.

Notice how completely unhelpful Huber is in this regard.  Note that his solution is to let the "free market" do its magic and just keep out of the way.  I'm sure Steve Forbes finds this advice particularly comforting.

Huber is obviously sponsored by corporate clients and charged with the task of pooh poohing people who are raising concerns about the medium and long term sustainability of our life style in the face of escalating energy costs. He creates a veneer of flawed logic atop an agenda of corporatism that collapses into a grim foretaste of the future.  He may be serving tripe but that tripe is currency to modern economic thinking. Never underestimate the power of malinvestment to separate fools from their dollars and lay waste to our world in the process. I'm sure there were compelling reasons the Easter Islanders cut down all their timber to the point where they couldn't build a boat for fishing. They must have said to themselves in the latter days, "I wonder if we really need those totems to the gods more than fish from the sea."

But by then it was too late and then they starved to death.

I would simply venture the opinion that what we are faced with today is a very serious problem that will require many delicately nuanced judgement calls. Huber IS right about EROEI being inadequate as the sole means of deciding our energy future. But it's part of the toolkit. Necessary but not sufficient, as they say.