A new thread for the weekend

In the midst of the warmer weather . . . .
How much of US/World oil use is for military? We keep hashing out bpd supply to fine points over the next 5-10 years under various scenarios but recently I have been wondering how much 'fixed' oil use is in the system? We will use an increasing amount of the 84mbpd to create/refine the energy (declining EROEI), after that there is military use which certainly will not decrease, after that there is the transportation that represents the globalized economic regime, after that there is food, and then there is luxury/consumer choice/retail/vacation/frivolity etc. I am curious at what minimimum threshold of bpd we would currently need before the system would break down?

The hubbertian charts show that in 2025 we'll be back to the same production as 1985, which we all remember as not being too bad - but there were less people, less wants, and less globalization then. My instinct tells me that even 2-3 million bpd offline (Iran?, Venezuela? Mexico?) causes serious disruptions. My question gets at defining serious as 'economic' e.g. just higher oil prices, or 'structural' e.g. below the minimum needed to fuel the engine as we know it...

Darn data is hard to come by - I assume that on the EIA site, the US military consumption is 'hidden' under the 'industrial' heading but Im not certain. thoughts?

Search old TOD posts. This was fairly well covered a few months ago. I think the TOD Editor was the now translated Ianqui.
OK thanks - lots of info on this site. I guess my main question gets at if we could label all oil use as 'necessary, important, or marginal' how much would fall in the 'necessary' camp. Ill look into some old posts.
This is a misleading thing to look at. Let's take one extreme example, the people making a living selling gasoline at the boat docks at Lake Powell's remote Dangling Rope Marina.

To anyone who doesn't visit there it's pretty "non-essential."

To them it's their livelihood. If they didn't work there, they would need to work somewhere else, or else starve.

Pretty much every use of hydrocarbon fuels is "essential" to someone. It's all shades of grey. When does gray become black? When does grey become white? It's irrelevant.

What we must ask is the rate of onset of the shortage. If it is too abrupt then the economy will have trouble readjusting. If it is gradual, then there may be less pain adjusting.

Here's the post you want, Sasquatch.
"...I am curious at what minimimum threshold of bpd we would currently need before the system would break down?"

If we are within 20 years of PO (how many of us here at TOD really doubt that?) without any measurable action on mitigation a la Hirsch, et al, then the system already is broken down, but the spaghetti just hasn't hit the fan yet.  

Too many variables, LOL. But...

Military spend is less than but close to 5% of global GDP,  marginally higher than 5% US GDP, don't have up to date numbers and it is hard to come by realistic recent ones. US military spend is close to all other countries' military spend added together and has been increasing (in proportion) over the last 5 years.

Global population (current trends, excluding catastrophic adjustments) will be near double 1985 level in 2025, at between 7.5 and 8 billion. Peak oil production per capita was already passed before 1985 (1979 if I remember right).

There is insufficient slack in the current situation to accomodate a 2 to 3 mbpd disruption in supply (without causing a shortfall), present margin seems to be 1 mbpd at most.

Barring major exogenous events affecting supply or demand we will likely reach a supply shortfall within 3 to 6 years. At that point, or should a significant supply disruption occur prior to then, the price of oil will reach a minimum of $100 bbl, quite likely $200 to $500, possibly $1000 or more, dependent on shortfall, associated events, duration.

The economic system will break if those 'quite likely' levels are sustained for any lengthy time. The minimum result will be 1930s in spades, near globally, but could be significantly worse.

How far can we cope relatively comfortably with an extended supply shortfall? Price will be the initial killer, it ends economic growth in the short to medium term. If the shortfall is perceived as permanent then there is virtually no limit to the price of oil. If consequent disruption interrupts electricity supplies for more than a few days then the scenario changes and substantial die-off may occur.

If the transition is more managed, government more in control, population more educated, aware and prepared, then a greater supply shortfall could be absorbed, perhaps 10% to 20% within a year. Under current circumstances I would say a rapid (within a year) supply shortfall of 10% would break the US economic system. I don't know the consequences of that, it hasn't happened before, but a 10% population reduction is plausible before / if stability is briefly resumed.

Your quoted 2 to 3 mbpd shortfall is approx 3%, I would say that is probably manageable but would cause a doubling of oil price and serious US and global economic depression. I don't believe a sudden shortfall of 10% or more for more than 3 months is manageable (without major advance preparation), and I expect such an event within 5 years, probably within 3 years.

One thing I must point out: we often talk about peak oil as if it is a steady and gentle process. It almost certainly won't be. Governments ARE aware of it coming, it can be seen in the ways they are playing their hands already, though mostly they don't really appreciate its implications. It is their misplaying (prior to or about the time of PO) that will cause the greatest problems. That is why one of our most important duties is to inform others - so they can be aware of the context within which their government is acting and exercise control and knowledgeable discussion wherever possible when the time comes.

This article on biodiesel provides a few numbers on military fuel use:

http://www.wired.com/news/technology/0,68969-0.html

For example, "All told, the military will use more than 6 million gallons of biodiesel this year, according to the Defense Energy Support Center, the government agency that supplies the military with fuel. That's still a drop in the bucket compared to the military's overall fuel needs, however. The Navy and Marine Corps burn through nearly 2 billion gallons of diesel a year, says Grassilli."

Chris

I found that old TOD discussion here.

Basically it said the military use is 350,000 bpd but that DOD/DOE have overlap and there is alot of uncertainty surounding domestic/international use,etc.

The thrust of my question is more to perform a bottoms up analysis of the 84 mpbd of usage to see how much is really needed to make the current capitalist system run. If for example Venezuala decided to pal up with China and we lost that production and a few others, how much would we need to replace to keep things running at any price?

Basically, what is the US/Worlds fixed vs marginal oil usage?

I think it's pretty hard to predict what will happen if there's actual scarcity.  Once it's clear that there's an actual shortage, or that the price is only going to get higher, individuals, corporations and governments will start hoarding.  The military certainly will not risk being cut off; they will take more than they need, just to be safe.  

I don't know if the gas stations will go dry overnight as some predict, but it's a possibility.  Remember the chaos after Katrina, where people were filling up coffee cups with gasoline.  If everyone panics and fills up at once, the system gets sucked dry in days, if not hours.

Do we have a number for the global production of biofuels expressed in barrels per day? I have seen regional numbers in gallons, in litres or in tons, but no one has estimation in barrels per day.

If, for example, the global production (and consumption) of biofuels were 500K of barrels of gasoline equivalent per day, that would be a significant development, don’t you think? It would mean that fossil fuels substitution has already begun, but we haven’t noticed it yet.

Unfortunately, I can’t find the numbers, I can’t do the estimations myself and I am pissed.

'that would be a significant development, don't you think? It would mean that fossil fuels substitution has already begun, but we haven't noticed it yet.'

In other words, it would mean that using net primary productivity of the planet, which is used for other purposes (water cycle, nutrients in soil, biodiversity, carbon sequestration, etc) to replace fossil fuels is already begun. Yes it has.

here is a link already posted on TOD to a Monbiot article on the ecological devastation of large scale biofuels.

I believe ethanol production last year was about 11 million gallons. But again, this doesnt mean we're 'replacing' fossil fuels, just combining fossil fuels, sunlight, fertilizer, labor, steam, electricity and marketing into a blender and creating ethanol. We are creating energy, but marginally more than we put in.

I think you meant to say 11 billion gallons instead of 11 million gallons as the 2005 estimated global production of ethanol.  

It sounds like a lot, but 11 billion gallons a year works out to be approximately 0.66 million bbl per day, which is  equivalent to only about 0.8% of the yearly oil production of roughly 84 million bbl per day (and that's without even taking into account the fact that ethanol has a somewhat lower heat content than most refined petroleum products).

But it really much worse than that. Don't forget that even if we use the USDA's probably optimistic EROEI for ethanol-from-corn of 1.34, then that 0.66 million bbl per day of ethanol production is really only replacing about 0.23 million bbl per day of fossil fuel, equivalent to only 0.27% of global oil production.

While ethanol has made a start, I think these numbers illustrate how far we would have to go to make a signficant dent in global energy consumption by increasing the ethanol-from-corn option. I really don't see this as doing anything but nibbling around the margins of the overall energy problem. And that's without even addressing the issues of competition with food crops, strain on water resources, and soil depletion.

Yes thanks for the correction - 11 billion gallons.

Another way to look at it is this:

Assuming 84mm bpd of oil and 660kbd of ethanol, we need (using aggressive USDA assumptions) 492,000 barrels of oil each day to create 660,000 barrels of ethanol. (660/1.34). We've 'created' 168,000 barrels per day.

The ethanol numbers show up in the 84 mbpd figures so the alternate equations are:

a) no ethanol => meaning we have 83,834,000 bpd of oil

OR

b)create ethanol => 660,000 bpd ethanol, which becomes part of 84,000,000 bpd oil equivalents + ecological externalities and some loss of food.

In this way, it can be seen that alternative energies, in an EROI circular fashion are adding to our energy supply by grossing up both sides of the energy balance sheet and adding other issues to the system that are not easily compared as apples to apples.

I suppose ethanol from sugar cane has much better EROEI otherwise it would have been a financial loser for Brazil for example. I also suspect that a great deal from the energy inputs ultimately comes from coal which is still quite abundant. If this is the case, one could argue that CTL would be a much more effective choice, which at least does not put a pressure on the food production.
This is almost evil but a lot of rural europe would welcome pressure on the food production. Selling biomass for fuel production gives a better farmer life then living on subsidies. But this only works out well for the farmers if EROEI is high enough.
CTL takes carbon from the ground and puts it into the atmosphere, exacerbating GW. One day even coal will run out. In an all-biofuels economy the carbon would be recycled indefinitely. Preferably the plant material would be leftovers from food production. Conservative estimates say to get both food and fuel we need at least 20 acres or 8 hectares of productive land per person. In the absence of new clean energy sources this probably requires a 50% reduction in the population.
If I can recall correctly over the half of the energy needed to produce ethanol goes into the destillation process which by itself uses electricity. If the additional electricity comes from coal (the obviuos choice if you don't want nuclear) then with a 40% efficient power plant and EROEI of 1.34 we are going to need 0.5/0.4 = 1.25 Btu of coal energy to produce 1.34 Btu of ethanol energy; That is coal to ethanol EROEI is less than 1.1
On the other hand a Fischer-Trops conversion has an efficiency in the range of 70% so the coal to diesel EROEI is 0.7 which is not that far - again for ethanol I omitted the other energy inputs for fertilizers etc.

The CO2 arithmetics is even worse for ethanol because the ethanol itself is releasing CO2 in the atmosphere. If instead we yielded the farmland to forests the net result would be a reduction of C02 so I can not not agree that ethanol is costless on this point - there is an alternative cost here. My fear is that if we allow this idea to go to a really large scale, there may come a day when we will have all our forests replaced by energy crops just like it seems to be already happening in Brazil. No need to comment on the CO2 emissions effects from that prospect.

I have no idea what the four branches of the military use. But consider this: There are still hundreds of bases, large and small, both in the CONUS and overseas. Don't even think Iraq at the moment. Even at the average company-sized (as opposed to brigade or battalion or some other unit level) Army National Guard armory there are dozens of vehicles, most if not all could charitably be described as hoggish on fuel.
Then consider jet fuel (JP-4 principally). There are 11 active (I think) Navy aircraft carriers presently afloat. Each carries 70 some aircraft. The average Air Force/Air National Guard/Air Force Reserve fighter wing has 18 or more aircraft. The average bombardment wing (B-1B, B-52H, B-2) has dozens of multi-engine aircraft. Don't forget the military airlift wings (C-130s, C-5B, C-17). And the tankers (KC-10 and KC-135).
Put this all together and you have an aircraft fleet far beyond the dreams of even the biggest (bankrupt) civilian airline.
The waste is prodigous. I remember sitting inside a KC-135 on the taxiway at a now closed Strategic Air Command base in the late 80's and waiting waiting waiting for the aircraft to take off. There was an Air Traffic Control hold. We sat there, with engines running, for more than one hour. As I said the waste is prodigous, probably beyond the ability of even the most astute accountant familiar with the system to calculate.
Hello all,

First post. I've been convorting with my other lemmings over at http://www.peakoildebunked.com

I felt it's time for me to enlighten you all with my insights here. I've come to show you the silliness of your ways and to teach you about the Great mMarket, who provides for our everlasting needs so long as you have faith int rational utility, supply, and demand.

TML

Welcome, and thanks for your insights in advance. Rational utility equates to brain chemicals that met with evolutionary success in my opinion. No neo-classical argument will convince me otherwise.
Going to be a tough task.
We bunk and debunk Peak Oil here already.
Chances are we have already heard it.
When you say the "Great Market", you mean        speculation, this has already caused a serious blunder that goes by the name Calpine.
20 billion down the drain.
Just relax. The Great Market will provide. It always has, it always will.

TML

Sorry to break it to ya, but the "market" is controlled by the government.  He who gets the most tax breaks and subsidies wins.  And the fossil fuel business is winning.  Nothing like putting all your eggs in one industry.
Maybe next time we can go to war for windmills and the latest in wave energy technology....Spain and Portugal are next!
He's already on your side. The "Lemming" post appears to be typical of fraud posting that pretends to state the opposition viewpoint but do in in a way that makes it look wrong. It has cheapened the dialogue at many sites (ie. Washington Monthly). Let's hope it doesn't here. There are plenty of people submitting good opinions on all sides of the arguement. Let keep the discussion legitimate.
I have no idea what you just wrote, but anyhow,  this is just a "discussion".  I have libertarian views, I want free markets or something close to it; our current system in nowhere near.
The markets will fail because there is too much control over the system.
There is no competition anymore, subsidies and tax breaks create a very uneven playing field and as they are set up now, lobbyists (corpo money)seem to have more
control over the markets than any other force.
This is dangerous.
It seems the Lemming likes the current system and is probably making some serious money off of it at tax payers expense.
I am not a fan of the current "markets".
Appears to be a "legitimate discussion"....no?
It could all be snark, but I doubt someone would get snarky their first post.
I think it is snark, as you call it. Read this:

"I felt it's time for me to enlighten you all with my insights here. I've come to show you the silliness of your ways and to teach you about the Great mMarket, who provides for our everlasting needs so long as you have faith int rational utility, supply, and demand."

I don't think the Lemming likes the current system, or is engaging in legitimate discussion. My impression is this is a fake post intended to make the pro-market argument look foolish.

If it is indeed snark or sarcasm, I think it should be labeled as such - particularly in a first post. If I am wrong I apologize.

By the way I agree with a lot of the views you stated and do regard all of these topics as good ones to discuss. I just think that we should be honest in how we represent our positions. As I noted above, other comments sections in some other blogs are virtually ruined because a lot of the posters pretend to represent a position they oppose, but do it in a way that makes it look foolish. The quote above seems like a good example of this.

I should not have said "on your side", since I didn't know what side you are on or even if you are on one.

There are certain areas in which free markets work well and with great efficiencies and others where the free market system is a total failure.

  1. An example of success: the computer industry
  2. First example of failure: ocean fishing where the tragedy of the commons has wiped out many a species. Before you get glad on this being an "exception", remember that the air we breath is our commons and all industrialization is polluting it while claiming to be providing "growth" and "progress". Run-away global warming is not exactly something the free markets should be crowing about as a success story. It may be the end of our species.
  3. Medicine. It is impossible to "negotiate" the cost of your own life and those of loved ones. Health care is an area that does not fit into the supply /demand theory of free markets.
An example of success: the computer industry

Not so fast. Yes, the computer industry has produced a great deal of value; but it could have produced much more at much lower cost under a free software model, ideally with a small tax on every computer (smaller than the "Microsoft tax" [monopoly rent] that most everyone has been paying all along) used to reward developers and especially innovators.

As a sidebar, IBM's decision to base PCs on the Intel 8086 chip was a tragic blunder, when the 68000 with its flat 32-bit address space was already available. An enormous number of programmer-hours has been wasted catering for the various ugly Intel architectures (and Intel has had to waste chip space staying compatible with their previous bits of ugliness).

And don't even get me started on software patents.

And don't even get me started on software patents.

Aha. A card-carrying member of the League for Programming Freedom (LPF).

(I understand where you people are coming from, but I work for the other side.)

Anyway, software patents are way off topic here.

You don't have to be an LPF member to dislike software patents. You just have to be a programmer.

The industry did fine without software patents for quite a few decades. It was productive, profitable, and innovative. Fortunately, we had time to invent quite a lot before software was declared patentable--though quite a few patents were granted and enforced for stuff that was already in the public domain.

Relevance to Peak Oil? Patents can be used to stifle innovation in alternative energy. Already have been. Probably will be, right up to the point that oil companies go bankrupt. Oh wait, oil companies won't go bankrupt until long after peak oil--they'll just charge more for less. Oops.

I'm not anti-patent. I am anti-software-patent. And I am to a large extent anti-patent-system. If patents were really about encouraging innovation, it wouldn't cost a million dollars to fight a bad patent or defend a good one.

Chris

Relevance to Peak Oil? Patents can be used to stifle innovation in alternative energy.

Chris,
I strongly disagree. I just got a patent awarded to me a few months back involving alternative energy.

Without the patent I would have zero. Less than zero.

Even with a patent, the world does NOT beat a path to your door step (the old mousetrap BS). Instead, it is a hard uphill battle even with a patent in hand. You got to prove to those who got the money that they will make tons more money if they back you up. But first you got to make them even listen to you. That alone is far from easy. If we did not have a patent system, small time inventors would be screwed.

BTW, forces are now at work in Washington D.C. trying to do exactly that, screw the small time inventors by "Deforming" the US Patent system. They call it "reform". You know you can always trust those "They" people. They never lie to you.

Getting back to Peak Oil and Software Patents,
Suppose I had invented a clever software algorithm for controlling a car's engine so that it burns much less gasoline per mile.

Under your definition I am not entitled to a patent?

The practical problem with software patents is that scores of very simple things have been patented and are being patented in the US.  This minefield of trivial patents makes it impossible for small time inventors to write a program that does not happen to use some trivial method or obvious idea that is patented. Getting a handle on those patents and working around them would be an immense task.

And there are lots of people who are perfectly happy with sharing their work withouth the patent system protection so software innovation will not stop with no patent system or no trivial patents. But they do benefit from copyright, copyright gives people a way to negotiate the rules in the sharing. And copyright have a low costs for legal overhead, manny programmers has no chance of financing large legal costs.

Your patent system has partly been overused into uselessness. Some kind of reform is probably needed, otherwise it will crash due to massive disobediance and legal preying on companies who make money while using software. This would also screw you as an inventor who can use patents as a tool to secure investments.

The peak oil lesson is that it is very bad to let legal systems become inefficient and misused. It is a waste that will not be affordable in depression times since it is in the way of new economic progress adapted to the new physical realities.

As I said, I'm not against all patents.

Not being a patent lawyer, I can't tell you for sure whether you would have gotten a patent on your engine-control software algorithm prior to the imposition of software patents. My impression is that you could still have gotten a patent on the physical component--the engine using the algorithm.

Remember that absence of software patents is not my "definition." It's the way things were until a few years ago. The old maxim "If it ain't broke, don't fix it" should have been applied in this case.

I have heard it said by people who study patents that unless you think you can make a million bucks on your idea, don't bother getting a patent--it will cost you more than it will save. This tells me that the system is very much broken and does not help small inventors. How to fix it is not an easy question to answer, but that it is broken is obvious. That bad patents are granted is a fact. That "category killer" patents are granted is a fact. That patents can be used to hurt innovation is a fact.

A few years ago, I happened to meet someone who had worked on an innovative alternative-energy plant, I think in the Northwest US. They got it built, at the cost of millions of dollars. They were about to start operation, and then an oil company (I forget which one) said, "We have a patent on this. You have to sell it to us for pennies on the dollar, or take a total loss, because we'll never let you run it." The oil company didn't run it either. Unfortunately, I don't remember any more details, but the person I spoke with had actually worked there--it's not a friend-of-a-friend story.

And again, I am not against all patents, so stop your knee from jerking.

Chris

my nano-positioned knee stands still and stable, thanks. :-)
The Market will provide. Always has, always will.

Aha.

I sense a disciple out there, ... spreading the viral message.

Keep clawing away brother.

The Wealth of Tunnel Visions will soon reveal itself onto us
as foretold by our prophet, Adlemm Smith.

The Rapture of the Invisible Hand is at hand.

Burrow like there's no tomorrow.
Our prosperity is inevitable,
....and non-negotiable.

Hey TML:  I've  been checking in on the POD each day for a few laughs. For a little relaxation it's much better than the comedy channel.  Facts are few and far between. BTW Boeing is doing so well because of the A380.  Airbus is going in the tank in a few years. The little Brazilian jets will soon only be flying the old SST folks around the world. More later, I've a pain in my side.  Also do you know how much oil Halliburton produces and what their reserves are.
Halliburton is actually a service provider to the industry, rather than one of the companies that produces and markets the oil.  It does a lot of the hydrofracking of wells and things of that nature to improve oilfield production.
Thank you HO: I did work in the oil service industry for 40 years, How ever no one ever seems to state Halliburton's primary roll of oil field services and construction. BTW I was never an orange man.
This guy is a merry prankster...he is using irony. Relax TOD contributors.