 | Hmmmm....What Corporate America Is Reading | The Oil Drum | NYT: Strangers in the Dazzling Night: A Mix of Oil and Misery |  |
An exercise in civil discussion
Posted by Yankee on December 9, 2005 - 12:33am
I was looking around the web today, and I came across a website (which I probably should not even be linking to) that had a small blurb mentioning that Rigzone pulled Corsi's "Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil" off their website. In the comments, people there started to discuss abiotic oil, and one response in particular got me to thinking.
There is one thing that none of the peak oil advocates have ever adequately explained: if oil truly is running out, then why aren't the oil companies and industry in general scrambling to replace it with something better? Do you expect any rational person to believe that an entire civilization would willfully commit suicide in full knowledge of the consequences of its dependency on petrochemicals? The logic just isn't there.
It seems odd to me that this commenter would ask this question if he has done any reading at all about PO (and let's give him the benefit of the doubt). Maybe the oil companies aren't scrambling to come up with anything better because, well, there isn't anything better. At least, there's no one thing that's better, which would mean that oil companies would have to seriously diversify their R&D, and I don't see that they're prepared to do that. Or something like that.
But my bigger point here is this. If someone argued this viewpoint to your face, you wouldn't be able to call him an idiot and stalk away. You would have to systematically explain why the oil companies are not apparently "scrambling to replace [oil] with something better". So in all seriousness, what would you say to a person who asked you this question? How would you, a peak oil adherent, concisely explain to an abiotic oil proponent what the oil companies' current game plan is?
And just to close, here is (part of) the remainder of that comment:
However if you consider that the peak oil scenario provides a perfect cover for global depopulation as desired by the ruling elites of the oil industry (Rockefellers, etc.), then the pieces all start lining up.
Still, I want you to take this seriously.
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
- Biofuels don't scale. They can help in some small way to maintain a technological society but they won't sustain suburban living. But people are researching this.
- Fusion doesn't exist yet, but people are still researching this too, even after 50 years of failures.
- Coal is already owned by companies heavily invested in coal. To buy into coal would require buying those companies (which we may yet see oil companies do).
- Fission is a specialized industry with a very small qualified workforce most of which is already employed by the companies already engaged in fission research and deployment. (Think GE here and other such companies.)
- Solar and wind are being invested in by the oil companies. Look at who makes most of the solar panels already.
The IOCs may feel that their shareholders are better served by letting the energy research situation resolve more clearly before investing more heavily. Remember all the auto makers near the beginning of the 20th century? Most don't exist anymore. So the IOCs could be protecting their existing capital with the hopes of snapping up a small, innovative company that develops something remarkable. In fact, most businessmen simply assume that this will occur since we need it to occur. Now it might and it might not. In the past we've pulled rabbits out of our hat but this is a bigger rabbit than we've ever pulled before. They may not fully realize just how difficult it will be this time though.It's important to remember that peak oil does not lead inevitably back to the Olduvai Gorge. It can but it can also lead elsewhere, especially if we do choose to tackle sustainable energy issues. It's very technically clear that a mix of breeder reactors, coal technologies, solar, wind, and biofuels all taken together can sustain us for a long, long time with a comfortable lifestyle if we get a handle on population growth. So the problem is not and never has been science. The problem is the lack of political will to treat this as a serious risk management problem in the same way we've treated national security or the current risk of global pandemic as something worthy of consideration and action.
There is also the sense that we need 'bridge' fuels - something to tide us over until some long-term yet to be developed transportation infrastructure is developed. Bridge fuels would be things easily adapted to the existing rolling stock. Examples of bridge fuels would be:
In the longer term, there are several possibilities. All of these involve a storage technology which is portable, and drawing energy from the grid (which would have to be augmented - ideally with renewable technology). For personal transportation, possibilities include:
For transport of goods to market - today done mainly by truck, it is likely that there will be a transition to transport of goods by rail as this is far more energy efficient than transporting goods by truck. In the long run rail lines can be electrified, which would again serve to allow the use of rewnewable grid energy to power the locomotives.
It is also possible that there would be a reversal of globalization - a localization if you will in order to help control transportation costs. This might mean for example that in the wintertime it would no longer be possible to get fresh fruit in the grocery stores. While this doesn't involve a new technology, but some of the business practices today are predicated on cheap energy. As energy costs climb, these practices will no longer be economicly viable.
To get an idea of this check out Vestas Wind Systems, the largest supplier of wind turbines in the world.
http://www.cse.dk/kf/kf_aktie_graf?p_stockid=stock.kf.DK0010268606&menu2show=1.1.2.4.
versus Suncor, the most successful oil sand company in Canada.
http://finance.yahoo.com/q/bc?s=SU&t=my
From an investor's standpoint Vestas is a nightmare whereas Suncor has consistently rewarded investors. Suncor is only one example out of about 30 I could name.
Once investors are convinced that they can make good returns on their investments in renewables, then money will start pouring into developing a large infrastructure of renewable energy sources.
This is a misunderstanding of fusion research. None of the research machines built to date were expected to create more fusion energy than was put into them. ITER is the first machine designed with that expectation and there is an excellent chance that it will do so and by a wide margin. The other machines that have been built so far were experimental rigs to allow us to understand plasmas under the conditions required for fusion. Fusion has been produced on a very large scale, in the case of JET 16MW of fusion power at 65% of input power. Many machines have reached, and some like JET have far exceeded all that was hoped of them. Our understanding of plasma physics has grown enormously and experimental results and theoretical predictions are now very close.
It has most assuredly not been 50 years of failure but 50 years of excruciatingly slow success.
However it is very unlikely that fusion will provide significant power on a global scale for another 50 years
but it about the only source of energy that has the ability of providing the concentrated power on a large scale for centuries sufficient to enable a global population near the present size to live in reasonable comfort without destroying the environment.
Since 50 years exceeds all but the most optimistic estimates of peak oil, the problem is how do we get from here to there.
In the sense of providing a failover for the end of oil, fusion is a failure because it is not yet here even as oil is headed down.
When I last checked they expected to commission a viable plant with a positive EROEI in about 10 years, 50 years is what they predict for practical commercial use. But circumstances change and when the desparate need becomes more obvious resources would be found to shorten that, I hope.
So, let's be optimistic and suggest commercial use becomes possible by, say, 2035. Then perhaps the key objective is to retain and develop our technology level, and avoid falling into chaos, until that time. It's going to be difficult (probably more difficult than most people realise) but it must be possible. It will be a hard 30 years, I promise you.
The FS reactor can burn the uranium and plutonium from the spent fuel of our first generation reactors. There is enough of this around that even with a power grid based entirely on FS reactors, we would not need to mine any uranium for over a century.
Here is a link to the Integral Fast Reactor (IFR), maybe the best example of a fast spectrum reactor.
http://www.nuc.berkeley.edu/designs/ifr/anlw.html
Certainly promising but why is it there is so little discussion of implementing this technology? I would have thought it could be done commercially now, and with the price of U235 going through the roof and its apparently failsafe operation it should be very economically viable. China is building lots of nuclear powerstations but, as far as I know, the most advanced are planned to use a pebble bed version of standard technology.
If gold were running out,
and you owned a gold mine,
Wouldn't YOU start looking for something "better"?
Give up the gold laden bank,
and start mining for silver?
but not so for oil. there is no one thing that replaces oil. i've had this debate numerous times with my stupid friends. stupid because they can never get past the one stone-cold fact - there is no replacement for oil and because our world is so dependent on it, we're oh so screwed.
so if a abiotic oil person dares to step to me about peak oil, i'll bust out the - what is wrong with you! humanity has yet to figure out how to replace oil, therefore, the oil companies are just gonna ride it out with fingers crossed.
The point is that if YOU are in that lucky, catbird's position, you mostly sit back and watch your gold mine become more and more valuable over time.
Then, when you are good and ready, and the price of gold is high enough for your liking, you start selling some in exchange for other stuff you may want.
So same answer if you are sitting on an oil well and do not have a need to immediately pump out everything in it. Your only threat is if someone comes along and claims they have a cheap alternative to gold (or oil). If they do, they are a threat to your "wealth". To preserve your wealth, you need to debunk them or otherwise put them out of their misery.
This is simply the "Invisible Hand" weaving its magic solution for the good of all of us. Got it?
The reason I bring this up is because I blogged about it awhile ago and never resolved this completely in my mind.
Most of the real innovation occurs in universities, gov labs, or much smaller dynamic start-ups, which is why government R&D spending, progressive small business R&D tax treatment and especially availability of private venture capital are far more important to solving our energy supply problems than big oil R&D expenditures.
This is virtually identical to what happens in the life sciences, like plant and animal research.
The really basic research is done at universities not business. Business has leveraged decades of basic research into products but is now running out of areas to capitalize on. No one really wants to do basic R&D because of cost and timelines. My impression is that policy makers think that giving tax breaks to big multinationals and drug companies will spur the R in R&D. My experience is that it only cranks up the D side and fosters lots of mergers to leverage other peoples intellectual property that took decades to build.
We need dollars going to people to just do Research without any expected product in 2 years or less. That knowledge often leads to new products, but only after 15-20 years of other complimentary work getting done. Then the area is mature and a flurry of products can be made. It appears no one is patient enough for research to pay off anymore.
Read Paul Krugman's "The Great Unraveling" about what's being done to the U.S. economy and it all starts to make sense.
It's very odd.
As far as the Rockefeller comments try reading up on Strausz-Hupé. This man in 1945 wrote policy foreshadowing events that happened that shaped the current world we live in and the direction it is going. The US military is being used to implement goals that extremely powerful silent men have been dreaming about for generations, a global federation. Depopulation is not the "main goal" but it will be a necessary result. Denial will not make it any less real...
==AC
"Will the coming world order be the American universal empire? It must be that.... The coming world order will mark the last phase in a historical transition and cap the revolutionary epoch of this century. The mission of the American people is to bury the nation states, lead their bereaved peoples into larger unions, and overawe with its might the would-be saboteurs of the new order who have nothing to offer mankind but a putrefying ideology and brute force. It is likely that the accomplishment of this mission will exhaust the energies of America and that, then, the historical center of gravity will shift to another people. But this will matter little, for the opening of new horizons which we now faintly glimpse will usher in a new stage in human history.... For the next 50 years or so the future belongs to America. The American empire and mankind will not be opposites, but merely two names for the universal order under peace and happiness. Novus orbis terrarum."
~Strausz-Hupé, 1955 "The Balance of Tomorrow,"
"He later wrote in his autobiography: "I was raised in the Protestant faith. Of its theological teachings I kept little."[15] And yet he described, in language similar to Whittaker Chambers', the demoralization that afflicted Western culture coincident with the rise of scientific-industrial-bureaucratic "mass society." Cut off from the roots of their own notions of the purpose of life, Europeans and Americans were prey to materialism, to the patrons of race and class warfare who tear men apart, and to the "zone of indifference" inhabited by the postwar existentialists.
[Do you think these predictions were lucky guesses?? ==AC]
Did Americans care enough to save and lead the world, or would they succumb to a selfishness that could not, in the end, save even themselves? It was at that point that Strausz-Hupé sketched the blueprint later to appear in Orbis. First, Western Europe must unite. But that required that the United States deter the Soviet Union until the Europeans recovered from the war and learned "new, supranational loyalties." Once this was achieved, the Soviet bloc would be exposed in bold relief as "a clumsy and backward despotism" and the Eastern Europeans would feel an "irresistible pull." In the fullness of time the USSR would have to accept a negotiated settlement, pull back its armies, and permit the reunification of Germany.[16] The reunified West would then offer a framework which the rest of the world would beg to join. Thus would the Cold War become "a federative enterprise [that] confers justice and nobility upon the uses of power."[17] In the decades after those words were written, NATO survived many crises, each labelled terminal at the time. The European Community was born, then deepened and broadened to the point of monetary and political union. East Europeans persevered through numerous heartbreaks, finally broke free of Moscow, and petitioned for membership in the EU and NATO. Germany reunified within the European and Atlantic communities. And the Soviet Union liberalized, de- Communized, shrugged off a neo-Stalinist coup, and peacefully disassembled. Strausz-Hupé even predicted that the Chinese would remain stubborn for a time, the last great power to get with the program."
http://tinyurl.com/77p68
Do you have any more links or recommended reading by and about him?
The guy is just uninformed. Of course, they aren't investing as much in this as some might like, but hey, they're big bureaucracies with entrenched cultures.Also, for the record, since motivations of peak oilers are questioned over at Free Market News, I have never received any money from anyone to work on peak oil stuff or write for TOD. Someday I may figure out a way to get compensated for doing this stuff, but right now it's all pro-bono - done out of passion for the subject. No oil companies have called me offering to help either ;-)
Average cost is 5 centsKWH through a 20 year lifespan. Or in other words the cheapest source of electricity.
I am getting 5 cents /5 kWH only if:
- Get a 27% yield. Pretty optimistic for a wind turbine. 20-25% at max is much more real.
- No maintainance cost?
- No interest - the cash flows are not discounted... If I invest 100 mln. in a wind turbine I'd expect some rate of return through the years. Otherwise I'd better put them in the bank where I'd receive better return.
With all of this I'd put 10c/kWH as much more realistic cost, maybe even 15c if I expect some decent rate of return.Personally I like wind power, but with about 6000$ per effective kW plus the always-to-be-hidden cost of unreliability, there is a long way to go before it becomes attractive.
On the other hand nuclear costs 2-3000$ per kW (plus some 1c per kwH for fuel, etc) is reliable and will not require additional yet-to-be-invented-and built storage devices. Not to mention the potential of scaling it up and deminishing the costs and the construction times if it goes to the mainstream. So what is the better?
The yield required would be 15% and I guess the difference to 20% is enough to cover maintainance. But yet the rest of the drawbacks remain.
I did a quick back-of-the-envelope calculation. I assumed an 8% return on investment, and a 20% yield. I came up with a cost of 6 cents/KWh.
They mentioned 20 employees after construction was complete - I made some estimates there, and worked that into the equation, and came up with 7 cents/KWh.
Still no maintenance costs in this model - I don't even know how to estimate those costs as I haven't seen any estimates. In theory the footer and the tower proper shouldn't need any. The generator and electrics might need something from time to time. In theory you might lose a blade, but I haven't heard of many cases of that happening.
Those things all sound kind of reasonable. I am assuming a 20 year lifetime, so you may be in a situation where the electrics are good for the lifetime of the thing.
What may happen though is that after 20 years they may decide to extend the lifetime another 10 years - since they have already paid off the initial investment, they could do a major refit and get fairly cheap electricity for a period.
Anyways, If I factor in a 2% cost for maintenance (over and above the manpower costs of having 20 people on-site (figure ~4 shifts, so ~5 onsite at any one time), the price goes to about 9 cents/KWh.
On my electric bill, I am currently paying 5.9 cents/KWh, which I gather is relatively cheap by national standards.
Oh, I know. Even the cost of coal is increasing.
The other thing that comes to mind is that I may have double-counted part of the maintenance costs with the labor costs. I suspect that the daily maintenance (inspection, lubrication of bearings, etc) would be done by the on-site staff. When you think about it, what else is there for them to do, really?
Big ticket things, like replacing a set of bearings, or rewinding a generator would most likely involve getting a crane. Now that I think about it, my alma mater installed a 1.5MW turbine in a cornfield, and I thought I heard them mention that it had a bad bearing and that they were able to replace it without taking the thing completely apart. They may have a way to replace a bearing in-situ by using a hoist that is built into the nacelle.
The only way we can fix it as a society is to tax the usage of non-renewable resources based on the simple fact that they are non-renewable and they will run out some day. If we also add the cost of carbon emissions IMO we will be able to get off the fossil fuels cart relativaly smoothly. But unluckily I don't envision this happening and it is becoming more and more improbable as time goes by.
I'm for nuclear, we need the energy. I would be rabidly for nuclear if the company CEOs and top management were required to live next to the power stations.
What they are realising is that there isn't anything else they can invest in that gives as good returns as oil.
As much as it's going to cost the oil companies to get the oil, you can bet that until there is a replacement consumers will pay more. Well, barring extreme disturbances in society.
"Yes, you are perfectly right. If you knew that oil is running out, you would as an oil company invest in alternatives. Alas, as there are no alternatives, they have nothing to invest in."
Yes, Shell and BP do invest in solar and wind, which just goes to show the point you're trying to make.
Besides oil won't run out over a night, it will first become really, really oh-gosh-how-can-I-afford-this-expensive, and the companies will make money for quite some time.
Without a viable replacement for oil than scarce oil will just become ever more valuable, like gold. Those involved with oil can get no better return on investment than in oil.
This is a different question than what is best for civilization if oil becomes scarce. Without a viable (energy density) alternative to oil no one has a good business case for investing in alternatives. Capital wants to invest in areas with the best return. Until something with greater energy density than oil is found why would capital markets invest in alternatives in a big way, knowing there is a calculated lower return on investment?
- It meant that there might be a lot more out there that we have not found because we're making the wrong assumptions about where it is likely to be - I doubt this because a lot of the tools that prople use to figure out where to look are based on empirical observations about geologic formations, etc.
- It meant that oil formed more quickly than we thought.
Since I see no evidence that either of these is true, then who cares? What does it have to do with the depletion of oil?There are a number of possible answers to this:
Of course not. On the other hand, societies have died because they didn't believe their actions were going to hurt them. Look around, there's plenty of denial.
Part of the issue is that no one company provides the entire product. The purpose of gasoline isn't to burn hydrocarbons for heat, it's to get people from A to B (possibly with as much comfort, style or noise and fun as possible). One company provides the energy supply, another provides the machine which uses it; a large shift requires both to change in sync, which is kind of like two elephants trying to dance Swan Lake.
The fact that most oil companies don't have any great expertise in wind, photovoltaics, engineered algae or photolytic systems puts them at a disavantage in the up-and-coming fields. Their own short-term interests and profits lie in getting the best possible price for what they make, not making energy in general. They may have the political power to stymie the emergence of alternatives, perhaps at the cost of serious damage.
Maybe they don't, but they'll be a very small part of what follows because they don't know how to build it. A read of The Innovator's Dilemma shows several examples of industrial leaders which became insignificant or vanished as upstart competitors with new technologies changed the landscape beneath them.
Isn't it obvious that if oil production levels fell by 10% that the price would go up by more than 10%? This means that the oil companies will actually be more profitable once we reach that point on the Peak Oil curve than they are today.
In short, even if the more pessimistic Peak Oil scenarios come true, the oil companies are looking at a successful business at least through 2040 or so. That is well beyond the planning horizon of almost any company. The world will probably be very different by then and companies will have many opportunities to adapt to changing circumstances between now and then.
A better question to ask is, if oil companies "know" that oil will be much more valuable in a few years than it is today, why aren't they conspiring to keep oil off the market? Why are they pushing for drilling ANWR and other places, when they (should) know that in 2010 or 2015 that ANWR oil will be worth 5 times what it is worth today? Why aren't they in fact trumpeting Peak Oil warnings in order to scare people and drive up the price of oil as much as possible today, and thereby make even more money?
I don't have good answers to these questions.
As for why not trumpet it and cause hysteria, maybe they fear either a push to nationalize oil production or a serious shift of investment capital away from their enterprises and into other energy production.
I think whenever anybody looks at oilfield corporations, they need to always remember the median age of the people working in this business (50-60 or more).
My outlook at 52 is very different than my outlook was when I was merely 35. I can see the end of my business career via oil depletion just about the time I might be forced to retire in another line of work. And I promise you I am not the only guy thinking this way in the exploration business. We are all taught to have our own "exit strategy".
The People who run the Magic Kingdom, as I recall, have a very unique "exit strategy" to recommend for visitors to their Haunted House. Something involving a rope, an elevator, and the idea of trying to pull yourself up or down by your own bootstraps.
- You can (will) lose government protection and reputation and will possibly be investigated.
- Others will take your market share. There is still quite a lot of oil around and nobody is that big to command the market easily. OPEC is another case - they are big but they are also afraid of price going too high.
- If you help cause significant price shock you can easily start a recession and such a subsequent price drop that can kill your own company (given that you have rising production costs)
It is a hundred times more important for any company to maintain a secure and decent cash flow (with good perspectives for growth) than to risk its entire business for near term superprofits.Answer:
"What am I, a psychoanalyst? You'll have to ask the oil companies that question."
Oil is not running out...!
It won't flow any more quickly and will become much more valuable as a consequence... Why would they want to replce it with anything else, that would only serve to lessen its value. They may have already worked out that it is unlikely that a better fuel source will be found in any reasonable time frame and that if it was discovered they could buy it in before it got off the ground with the riches generated from the preceding energy crunch...
One of the main difficulties with oil is that, once the capital investment is made, the cost of extraction is fairly low. If I have spent a few billions developing a well and refining capacity, I have to pay that investment back with interest. If the price of energy drops because of a recession I will continue to sell product at lower prices because I have no real choice - the bank is at my door asking for repayment of debt. OPEC is in the same boat except it is population growth and the consequent need for money to support them is the equivalent of the bank for the oil companies. The Saudi princes are quite aware that they need to feed their population if they want to stay in power. The people they pay off are quite handy at beheadings.
The end result is instability because producers will continue to sell lots of oil even when demand falls due to a recession. The good news is that the recession will quickly end because cheap energy allows the economy to recover. The bad news is that these oscillations occur on a background of slowly rising energy prices. The oscillations hide this slow rise from the public and reinforce the notion that it's all the work of the nasty oil cabal.
Looks a bit conspiracy theorist doesn't it? The problem is that there are peak oil sites out there who are quite clear that we need to enforce strict population control measures, lay off old religious prejudices against abortion and infanticide, amongst other things. Fascist peak oilers exist. (I think I even saw a british nationalist site speaking with stars in their eyes about the new National states with the proper strong leadership a post-oil world would need).
While it's not a conspiracy, there are a lot of people who go around with a little fascist inside them, and visions of impending disaster has a knack for getting it out. Actually, I'm kind of relieved that peak oil isn't in the public's imagination just yet. I think we're going to see a lot of different crazy ideas for "drastic action".
in the abstract, anyway. "If only I were
King!" In reality, most of us would find
it challenging to lead a Scout troop.
New song: "We're on the Downward Trail"
Original song: "We're on the Upward Trail"
http://www.nytimes.com/2005/12/09/international/africa/09flames.html?hp=&pagewanted=print
The rise of "Civilization"
We are animals....
We have always been animals....
We will always be animals......
Maybe be our great great grand children will know compassion...
And you are an animal.
Why would you have any reason to suspect that your great, great grandchildren will be anything but animals?
Read "Childhood's End" by Arthur C. Clarke
Once upon a time a monkey overcame its fear of fire ;)
Childhood's End was about the evolution of the human race beyond this planet and these bodies.
Anyway, do you really mean a work of speculative fiction to dissaude me from the "eternal monkey" hypothesis? Yes, some hooting chimp overcame its fear of fire, but it then probably went on to use said fire to intimidate its social opponents and intensify its own consumption of resources. It seems to me that by and large our advances only serve to forward our monkey instincts, not change them.
Seriously, I noticed someone else down the page mention Cannibals and Kings. Great book, great premise, great reasons to think that things won't change on any timescale that matters to a human intellect. I suppose we could all become godlike cyborgs, but will this really eliminate our biological urges?
but we also have the capacity to feel and express compassion.
Unfortunately compassion is not one of our social priorities.
I doubt it.
This is foolish.
One must conserve their compassion.
One must be a compassion conservative. :-)
I think we all have a degree of natural compassion. Empathy w/compassion is more of an acquired skill.
I see it as a question of balance and degree.
Compassion coupled with empathy are vital tools to solving problems collectively. Understanding someone elses POV and how they got to were they are is a valuable means of transcending bias and prejudice. Which in turn facilitates cooperation. It is an ideal, but one worth contemplating, and working toward.
If I were an oil company CEO, I would be investing in a certain amount of R&D, if only to learn about a subject; but also waiting to see what the best place is to invest an accumulating hoard. It is less useful to invest early than to invest in the right places. (By "invest" I mean wait as long as possible so your investment decisions are as good as possible, then buy up all the little companies that now are doing the research, for free.) Why scramble when you can just sit back and have a smoke? In IBM years ago, older colleagues described the CEO's job: look down at the minestrone soup of ideas being generated within (and outside of) IBM, stir occasionally to keep the pieces circulating around, and when something good comes up grab it (develop it).
Because oil companies are in the business of drilling for oil...end of story.
Are you asking the trucking industry (in addition to every other industry/profession) why they are not coming up with renewable energy?
Rick DeZeeuw
Remember back in the '80's there was Exxon Office Products and Mobil bought Montgomery Wards Department Store. Sohio (later BP) bought Kennecott Copper (I think?), and Arco bought Anaconda (another metal mining company). Shell has invested in supercomputing and owned commercial farming enterprises in California.
They have consistently found, however, that they make much more money investing in oil and gas ventures. Since their primary obligation is to return money to their owners (shareholders) then they continue to put most of their investment there.
We should no more depend on Oil companies to find new types of energy than for whaling fleets to find new oil when whales became scarce, but oh so profitable!
Don't blame the oil companies if they are not investing in alternative energy. But somebody should be looking at alternatives. And our government should be providing the correct environment where investing R&D in alternatives is attractive not stiffled or blocked by vested interests.
Why should the current generation of oilmen have a different opinion than Texas oilmen did in 1972? The same thing can be said of Saudi oilmen and oil producers around the world in general.
I was at a Texas oil industry gathering a few months ago, and the Texas State Geologist--in a response to a question from me--said that we may not be able to bring Texas oil production back to its peak level, but we can, with better technology, significantly increase production.
Of course, Texas oil production has fallen continuously for 33 years. My favorite comeback to the "technology will save us" assertion is to ask how technology restore oil production in the East Texas Field, which is now producing 1.2 million barrels of water per day, with a 1% oil cut. In other words, what can technology do to restore an oil field that has watered out?
East Texas is to Texas as Ghawar is to Saudi Arabia.
Texas (peaked at 54% of Qt) is to the Lower 48 (peaked at 48% of Qt) as Saudi Arabia (at 55% of Qt) is to the world (at 50% of Qt).
What are electronic packages that operate to 30,000 PSI in a 400 degree F environment, with sensors attached that perform sonic, Induction, and many different electromagnetic measurements, also Neutron and Gamma ray sensors with electronics attached. How about Magnetic Resonance Imaging in the borehole at 300 degrees F.
Then you supply the world demand for these tool in quantities of hundreds, not like the 100's of millions of PC's, TV's, VCR's and etc supplied to the world. Then you also have the fields of metallurgy, materials, and chemical research. Perhaps the NASA contractor should have hired an oilfield engineer to help them out with their "O" ring design. I am sure an outsider could just walk into a research lab. How about, no vendors, no salesmen, and especially no consultants with out a complete formal background check in any research lab. As far as abiotic oil goes, if some one asks me I simply tell them: There have been thousands of independent wild eyed wildcatters in this country. One of them would have surly found it by now. If abiotic oil were a fact, we would not be producing 5 million barrels/day, we would be producing more than 11 million as we did in 1970. Conspiracy theories are for authors that write mysteries. 3 people can not keep a secret unless 2 of them are dead.
More disturbing is that we are beginning to see more accusations that believing in peak oil is synonymous with a belief in population destruction and the return to an idyllic pre-industrial society. "Peak oilers' (note: we already have a permanent label) are being painted as a bunch of anti-technology luddites, enviro-fascists, apocalytic whackos, or pessimistic party-poopers. Take your pick.
As the argument heats up, it's only going to get worse. I think it is therefore vitally impotant that the people making public statements re peak oil be extremely careful about appearing reasonable and in maintaining their credibility. The more the argument can be confined to technical and economic issues, the more credible will be the peak oil position. Aattacking industrialized society, overpopulation, or the 'American Way of Life' (even though all three are valid issues) only gives these people more ammunition and the opporunity to attack peak oil on ideologic/religious grounds.
Well, I think I have encountered people who fit each of those labels. I guess I look at it this way - I cannot control what other people say or do.
When I was listening to the House hearings earlier this week, I didn't hear any wild predictions at all.
If someone were to ask me to name a good starter book on the subject - I would pick Simmon's book. He sticks to the stuff he really knows, and leaves the wild predictions to others.
Caution in talking about the population issue is justified, but it is absolutely valid and necessary, at a minimum, to point out that one of the uses humankind has made of the oil bonanza is to increase its population fourfold (or so). Very few people know that guano was getting scarce along about the time that the Haber process was discovered (and of course this is only one of the ways fossil fuels have been used to increase food production).
I don't get it.
What are the alternatives to believing in PO?
Beliving in forever oils?
- It takes a lot of capital to start a new venture outside your area of expertise, and with most of these companies doing stock buy backs and paying large dividends, they are simply not looking elsewhere yet. A well structured tax with an alternative energy abatement would move them into these new business more quickly.
- You have to sell fellow board members on it, and then the entire wad of your majority shareholders
- It has to be the right timing to use the venture as an offset to higher profits (tax offset), even with the right tax and abatement (stick and carrot) setup.
- It takes a very forward looking, well informed and bold CEO AND BOD to move any corporation to an area outside its core business, or else they must have a huge pile of cash they need to do something with to avoid being taxed into oblivion.
- Many of the smaller companies will wait for oil prices to rise to a level where their sales value is such that everybody can cash out happily
- Mom and Pop oil companies cannot afford to do anything that isn't well established and cheap.
Perhaps the best fit for oil exploration companies is geothermal. Their drilling expertise, formation evaluation and reservoir experience can be easily applied to fracturing HDR and generating power with a binary plant. There are several road blocks in their path right now:- Oil and coal are still too cheap to make drilling geothermal wells attractive across most sedimentary basins (high of 5 cents kwh for coal vs low of 9 cents kwh for HDR depths, per Santos in Australia)
- Shallow geothermal resources are basically restricted to volcanic regions where drilling costs are extremely high, and plants are already in place (the Geysers plant, etc.)
- There is another entirely different set of permits and leases to be negotiated for geothermal, irrespective of your petroleum mining rights
- The HDR resources here in the states are basically at a depth of 3-5 miles, making even fluid circulation an issue with respect to frictional losses. The exactly correct rock needs to be chosen for fracturing, thermal conductivity, and fluid containment. It is not as simple as drilling down to a hot zone and watching hot steam come pouring out. New Mexico may be the exception, as they have some hotter zones at shallower depths.
- Most of these companies have no experience in power generation, and no experience in how to run an electric generating business.
6)We're too early on in the "undulating plateau" of our dilemma - government hasn't accepted and acted on it, so it isn't anything your typical American CEO will go for. Chevron is run out of California, and I can tell you it is very different for that reason alone. Shell is run out of The Hague, and BP out of the UK. Those 3 are the only ones moving to diversify at this time, and what they have in common is that they are all in relatively "green thinking" areas or countries. Most everyone else is hard core oilfield, and simply not interested or too small to worry about their "green factor" with the public.Santos in Australia has a working HDR setup at their Moomba gas facility, and they are actively pursuing this tech across their country. Movement is in progress here as well, with SMU, Texas A&M, LANL and others beginning to push at the research level. Right now they are mapping the Trans-Pecos for deep temperature analysis, and intend to use old gas wells as candidates for power sites.
We will all have to do something else in the next 10-20 years, but REMEMBER - we oilfield guys are between 50 and 60 for the most part. Do the math for retirement, and you can see why it will take an unusual company to move forward rather than sit and watch their stock grow in value.
Just a few thoughts...
"Electric cars. Technically electric vehicles are available now, however they are slow and have limited range. In the past battery technology has been frequently cited as a limiting factor, but advances are being made which may improve this."
I see George Clooney recently bought one of the new speedy Tangos:
http://www.commutercars.com/
0-60 in 4 seconds, 120mph top speed, fits in half a parking space, and internal welded race certified roll cage to protect you when you get creamed by a 2.5 ton SUV.
So much for slow. Unfortunately, the range problem remains, with a paltry 60-80km range.
Batteries evolution has not even remotely kept pace with advances in electronics and other technologies, and may increasingly be a limiting factor on technological innovation in the future.
See the excellent October 2004 Popular Science article "Your Battery Is Dead", or a host of others available online.
http://blogs.msdn.com/brada/archive/2004/09/30/236193.aspx
http://www.engadget.com/entry/1234000893028137/
There is no Moore's Law for battery technology.
Jared Diamond's "Collapse" adequately answers the question.
The problem there is that people are scrounging for firewood to be used to cook their meals, and as a result the forests are nearly gone. There have been programs over the years to reforest Haiti, but as long as people are using wood for cooking, these efforts are doomed to failure.
http://www.ipsnews.net/news.asp?idnews=31057
Overpopulation (464 people per square kilometer in rural areas, one of the highest population densities in the Western Hemisphere!)
=> forest depletion
=> soil erosion (annual soil loss of 36 million of tons)
=> declining crop yield
=> sediment induced destruction of the coastal marine ressources
=> devastating reductions in fish stock
The same fate is awaiting Grenada and the Dominican Republic.
http://svs.gsfc.nasa.gov/vis/a000000/a002600/a002640/
Shades of Easter Island, I would hazard to say.....
I am not familiar with corn-burning stoves, but they appear to be very similar to these stoves that burn wood pellets. However, I fail to see how this is a good idea. In fact, it appears to be a very bad idea.
First, it is only economically viable in times of high corn surpluses and low corn prices. (I suspect that farm subsidies has greatly distorted the true economics.)
Second, it competes with much higher-value uses of corn, such as food products for humans, livestock feed, or even ethanol. Maybe I've got a mental block, but the very concept of burning food seems inherently flawed regardless of the short-term economics. Eventually, it could set us up for the very unpleasant choice of eating or staying warm.
Third, and perhaps the most important, is the fact that corn has a very high fossil fuel input, mainly in the form of natural gas to produce the large amounts of fertilizer required. Then of course we have the issue of soil depletion and the strain on water resources, etc. Farmland should not be used recklessly.
To me this is but another example of the poorly thought out measures people resort to when things get desparate. Or do we have so much corn that it really doesn't matter?
By the way, does anyone know off hand what the fossil fuel input is for corn, in terms of BTU/lb input vs BTU/lb output ('output' being the heat content of the dry raw product, rather than as ethanol)?
Yes, they burn the dried kernels.
Don't know about the cobs - in the days before toilet paper those had different uses. These days you could burn them I suppose.
A bushel of corn can be made into ~220,000 BTU of ethanol, or it can be burned for 390,000 BTU of heat. There is no energy expenditure on distillation for corn stoves. At $2.00/bushel (considerably more than what the farmer gets), corn is a bit over 50¢/therm compared to natural gas at $1.50 on the spot market today.
fallout was asking about burning the petroleum inputs used to make the corn, not about burning the ethanol the corn could have been distilled to make.
http://www.fromthewilderness.com/free/ww3/100303_eating_oil.html
That's a 1:10 EROEI ratio absolutely attrocious.
Growing corn to make ethanol out of is a net energy losing approach.
http://www.news.cornell.edu/stories/July05/ethanol.toocostly.ssl.html
The limited success of charlatans spreading abiotic oil myths and peak oil conspiracy theories (that peak oilers are propping up prices for the oil companies) tells me that peak oil argument has been spread far enough to cause real fear and dread in the general populous. I take this as a measure of success; we weren't this far 6 months ago. Please everyone, keep on pressing the issue with those around you. We have to get through this stage of mass denial before we can collectively act. I think this thread (about the real hard options we should be looking at) is one of the most important we've had in a while.
But it's kinda funny to expect all "oil comapnies" to become "energy companies." Some might, but others might take PO as a license to print money. Concentrating on the (rarer) oil they own maximizes their ROI.
The bottom line for me is that we are still in the early part of "societal response" and that while we see some people acting (scrambling), others are concentrating on short term problems ... like how to afford a Porsche rather than how to fuel it.
I lived the first 18 years of my life in Penarth, 5 miles south west of Cardiff, but currently live about 25 miles from London :-(
When I move, which will be when the patterns of what will happen become clearer - probably in a couple of years, it may be to near Lampeter. If events begin to go the way I feel possible I would wish to minimise the risk from bands of marauding humans.
For the next few decades the climate should stay quite equitable there even if the gulf stream turns off.
Later it could get cooler still, perhaps by up to a further 5 C, if significant glaciers formed over parts of Scotland and spread out, but that would take a century or two. That would become troublesome. There's a fair chance that the US plains would have become a dust bowl by then - depending on how climate change pans out.
I did a Zogby poll a few months back, and one of the questions was "If you could vote one state out of the Union (like in Survivor), which state would it be?".
Texas. Hands down.
I suppose the whole state shouldn't me made to suffer for having produced one colossal idiot (and you can argue that he was actually produced elsewhere), but it was the first thing that popped into my head.
Anyway, I haven't read that book, but I've read "The Blank Slate" and "Collapse" and they tell me that we didn't need to change much from prehistory. We STARTED with a tendancy to worry about today, and let tomorrow take care of itself.
Peak Oil is just a "current event" in a long and grand tradtion.
And the fact is, peak oil doesn't change that. Did you notice how all the oil company profits skyrocketed after this summer's hurricanes? When prices go up, their profits go up, whether supply meets demand or not. For several decades, there will be massive supplies of oil to pump out of the ground -- the catch is, demand will be greater than supply. From the POV of a producer, having demand outpace supply is a good thing.
Better yet, put water down there and bring it up as steam. I don't know if 3-400F is enough for the average steam turbine that they use in a power plant though - I thought they ran hotter than that to get more pressure.
I just read all the comments on this thread and still do not know why the fossil fuel theory has better technical merits than the abiotic theory.
The closet thing I could find was riptalon's comment about oceans of crude. Could anyone provide serious commentary about why aboitic oil fails against the fossil fuel theory.
(I don't want to know about what are the best alternitives to oil once it peaks or about living conditions post-peak.)
I really am curious and would like to be enlightened.
Is Peak Oil a threat regardless of which theory is more ocrrect?
You've come to the wrong place and time. We are rather tired of the issue. The technical merits of the principle are not as important to us as the political context.
See:
www.theoildrum.com/story/2005/11/4/15537/8056
www.theoildrum.com/story/2005/11/15/32834/429
www.theoildrum.com/story/2005/11/18/12431/292
www.theoildrum.com/story/2005/12/2/01046/8384
I have been reading The Oil Drum for several months now and recently started reading about abiotic oil as a "Devil's Advocate" exercise.
My current reference point of knowldege about abiotic oil is http://en.wikipedia.org/wiki/Abiotic_oil .
Some of the interesting points it raises are:
- n-alkanes (petrol. components) shouldn't form in the pressures found in sedimentary basins
- synthesis of hydrocarbons by mimicing conditions found in the mantle
So, I was wondering if anyone had any insight as to what are the reasons why abiotic theory fails against fossil fuel theory and if Peak Oil is an issue regardless of which theory is more correct.So to flog the not so lively horse a bit further:
The most important sentence in the wikipedia article is "The orthodox and widely accepted position now is that while abiogenic hydrocarbons exist (in inverse proportion to hydrocarbon chain complexity), they are not produced in commercially significant quantities." The origin of oil is not as relevant as it's abundance and our ability to extract it with EROEI > 1. The practical failing of the theory of abiotic origin of oil is it's inability to point to any new useful places to look for new commercially viable reserves.
Some current abiotic oil proponents are not interested in furthering the science of the origin of oil but are using the possibility of abiotic oil to argue that oil is really far more abundant than over a century of exploration experience suggests and therefore we have no reason to take action to mitigate against a peak in oil production. In my opinion hoisting abiotic oil up the flagpole in this manner is an attempt to propagate a tired and dangerous oil abundance myth with the intent to preserve the status quo but with the effect of worsening the human suffering that the imminent peaking of oil production is likely to bring about. I apologize for assuming you were new to the group and for not being patient enough to debate n-alkane formation or the merits of drilling to the mantle in search of a few molecules of hydrocarbons that highly contrived lab experiments suggest might be there.
It's not scientifically correct to take the 0.5% of the available body of empirical evidence that has not been adequately explained by one particular theory in order to contest its validity. Some observations are no properly explained by the Big Bang or the Evolution theory but it does not mean they are false! it simply means they are incomplete.
Good question New Comer !!!
You are just starting to meditate about oil.
Much of the interior of our planet is filled with super hot, molten iron (Fe). No oil there.
So if there is such a thing as "abiotic oil production" which is shorthand for a theory that says Mother Earth takes good care of us by constantly and forever working her bossom to make new oil for us special special critters, then considering all the Billions of years that Mother Earth has been here, we would be awash in oil !!!
But we kind of know that Mother Earth is not so nice to her critters:
Huge numbers of them died and disappeared. What happened to the carbohydrates in their bodies? Layers of sediment built over them and crushed the carbonaceous material underneath. It wasn't just dinosaurs. More so it was plant and microbes. But who cares. Carbon is carbon. Each of the crushed lifeforms had spent is life gathering up the energy of sunlight over the millenium.
Where did you think the Energy came from? In thermodynamics, there is concept called "conservation of energy". There is no magic factory at the center of our Earth that generated all that intensified energy.
It all came from former lives spent concentrating their energies into the magical oil we burn so freely.
Think I should write a children's picture book?
(click on picture & scroll to bottom for site map)
Wait till winter in Montana and mention the France idea to some drillers. If you pay the bill, they'll run the drill.
And what's a billion dollars for 1,000 cheap wells to test the theory? It's costing us that much a week in Iraq!
1) Oil is a non-renewable energy source that at some time will run out.
2)Demand for oil is increasing
3)Our current way of life is dependant on oil.
The global econimics and the US economy in particular is dependant on oil. Oil is priced in dollars "petrodollars" by most of the worlds oil producers. This is the major motivating factor of how the dollar can remain "strong" (other countries are forced to purchase dollars to buy oil and use it as a reserve currency for their central banks). This has allowed the US to run a trade deficit as well as a budget defecit. We simply print more greenbacks. Iraq sealed thier fate when they switched from a petrodollar to a petroeuro.
The problem with running out of the black gold is when it runs out we will no longer have the means to construct many alternative sources. Plastic, insecticides, fertilizers, microprocessors, cars, countless products need oil for their manufacture. The main goal should be in the production of alternatives sources. Solar and Wind are preferable till fusion can be harnessed. A complete change from combustable tools and machines to electric based motors. Parking meters that you can plug into while you park your electric car at the store, put money in for x amount of power. It is going to require a complete restructuring of our econemy and a vast infrastructure to continue with a tech based society once fossil fuels have been depleted. We (US) as a nation need to get back to being a manufacturing giant, and a net exporter instead of an importer of goods. This could be accomplished with large scale manufacturing of Solar,Wind, and other alternative sources. The alternative is either that or waite until the Iranians, Saudies, and Russians get together and start trading their oil in Euro's. The resulting depresion would only be the tip of the iceburg if nothing is done to conserve the remaining resources and start using them to produce alternative sources now.