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DrumBeat: July 22, 2006
Posted by threadbot on July 22, 2006 - 9:45am
Topic: Miscellaneous
[Update by Leanan on 07/22/06 at 9:50 AM EDT]
Private Energy Producers Rising in Russia?
An anonymous Moscow-based blogger writing for Ruminations on Russia is making some interesting claims about a report issued last week by UBS, an international investment bank. According to RoR's Thursday July 13 blog post, foreign investors are seriously underestimating how quickly the Russian economy is growing, and therefore how much gas Russia will soon burn at home instead of having available for export. For those of us hoping that Russia can provide the U.S. and Europe with a major alternative to importing more oil and gas form the Middle East, at first glance this sounds like very bad news.
U.S. Energy Secretary Calls on Iraq To Open Oil Sector
India: Panic buying at oil pumps
As pump-owners stopped procuring petrol and diesel from oil companies from Thursday midnight, several outlets in and around the city witnessed panic buying on Friday.If the buying spree remains unchecked, most filling stations will run dry by Saturday, triggering a major crisis.
Zimbabwe: Power Cuts Could Reduce Wheat Yields
Canada: Buy less gas, begs oil exec
I have been kicking around the idea of writing an essay on the coal-to-liquids (CTL) dream of Montana governor Brian Schweitzer. However, a story just appeared in the Billings Gazette that emphasizes many of the points I would cover in an essay:
Making oil from coal is bad for Montana
The essay argues that we shouldn't do it, mainly due to global warming and pollution concerns. I agree that we shouldn't do it, but I think we will do it as we become more desperate for energy. However, the cost of a CTL plant is double the cost of a conventional refinery. This means that CTL is still not an economic option, even though the process is viable from a technical standpoint.
The article above claims $6 billion to build one 80,000 bbl/day plant. This is consistent with estimates I have seen, which are even higher than estimates for GTL plants. So, before we turn to CTL, I think we will have to further deplete our conventional oil resources, and then start building GTL plants. At some point prices will be high enough to justify building CTL plants. Of course we may be growing bananas in Greenland by then.
Oh, and if you want to see some opinions that will make you shudder, read some of the comments following the article above. Some of those comments reflect an incredible ignorance of the issues we face. One of the posters is confident that God won't allow us to destroy ourselves. Someone else argued that if we cut back on CO2, plants will start to die. We have a real uphill battle trying to get people to face up to the challenges before us.
As Robert knows, what the energy industry is beginning to experience is that the cost of obtaining new liquid transportation fuels (LTF's) from fossil fuels is growing far faster than the price of LTF's is increasing. In other words, you haven't seen anything yet (price wise).
While commuting is the most obvious thing, those fuel prices as we all know will "trickle down" into climbing FOOD prices among other things. Water will sooner or later start to have its price climb becuse of fuel to pump it. Coal in powerplants that feed electric-engine driven pumping stations will get more expensive as coal is diverted toward liquid fuel to commute with.
Commuting is about the most energy-intensive economic activity I can think of, in terms of value of payload (the pilot) compared to energy used. People take notice when a quarter of their take-home pay goes to that gas pump to get a load of fuel in their car. Already I saw one coworker quit due to gas prices, and another take up car pooling. Both cases are cases of long-range commuters. Sooner or later we all will have to disembark from our cars. Time to consider less energy-intensive methods now for that day that'll come for each of us. The writing is on the wall.
This heat can't be good for "the economy", although I went to Trader Joe's for some meat, leaves, and high end beer, and noticed one guy had a cart stuffed with enough stuff to feed an army for a week. Guess I should have walked around and noted if people are "shopping different" but I just wanted to get my stuff and get it home before it parboiled in the bag.
--much hotter than what MSM will admit to
That said, a lot of people can cut back on gas usage a lot just by adopting better driving habits (if they realize that their habits are causing part of their excess fuel use) and getting smaller cars. There's no reason we can't have very fuel efficient small cars that are pretty cheap (don't even need any hybrid technology, look at the gas mileage the Geo/Cheverolet Metro got), so there's hope there too as people start to wake up.
It's certain that lots of drivers can modify their shopping trips to match their commuting missions. But the problem is that this method of conservation is limited. I have always kept this in mind, but most people so far don't. That's becuse I have always walked before driving and doing so as to minimise Calorie use in terms of general purpose instinct. I merely carried it over to car use.
Some time down the road, I will have to use a bus as a "booster" to get closer to work and use a bicycle as the second stage of the mission to work - if the job remains that is. I hate thinking about it, but that day is liable to come.
He expects oil to hit $100 in the near future, by November as i recall.
I especially like the astrophysicist -- it would appear that nothing that people do really makes any difference. Here is a perfect synchrony of religion and science. Just shut up and drive your SUV. God will take care of everything, and science will explain it to you.
And the wierd thing is that Montana hardly has any population, so it puts the lie to the notion that all our problems would be solved by simply reducing the Earth's human population.
That's like saying that the crowded conditions in Tokyo, Mexico City, NYC, etc. for decades puts the lie to the notion that we can't populate the entire world that densely.
I usually ask them about their background, their education, and what they do for a living. Most of the time I already know, but by having them say that they have an education/work experience in sales/marketing/managment/customer service/interior design/accounting or what ever non-scientific/technical background they basically admit they don't have the ability to argue the information. Then I tell them my background - degree in chemical engineering, work in thermodynamics, worked on the solar race car team, work in computer systems - and they start to understand that I can backup what I am telling them.
They usually try to end the discussion with some wild statement - that somebody/thing will save us - that they will find more oil - that I am just missing something. "It won't really get that bad."
Then I realize that they don't want to know.
I think this is more important than their lack of technical expertise. I'm not an oil geologist or chemical engineer and have a background in the 'soft' social sciences -- but peak oil seem credible to me.
the ultimate of this style of thinking is that pennies are $60/gallon and quarters are $800/gallon. A $10,000 surgery job is 4 barrels of pennies! When thinking about large amounts of money, you can easally imagine a warehouse with drums full of pennies. A million bucks is 400 drums of pennies, 20 to a side in that warehouse. Imagine standing on a mezzanine looking down on the floor with those drums of pennies. There is a website about extreme numbers of pennies. (megapenny.com?)
More so than time, energy is money. What a businessperson calls "time is money" ends up being time * energy = money.
http://www.kokogiak.com/megapenny/default.asp
a very interesting visualisation, well worth a look.
One of the more interesting tragic-comedies I've witnessed is a group of marketing guys working for a large corporation.
They came up with an idea for new product. Common sense said that building it should be a no-brainer. They went off on their own; raised millions ... spent the $$$ mostly on marketing ... got orders ... then found out there was this ... err ... engineering problem that had not been solved by anyone ever before.
They lost their homes ... lost everything.
Technology did not come to the rescue.
A small high-tech firm I worked for was founded (funded) in 1988 on the certainty that we could couple 1.7 Gbps of digital data onto standard coax for a distance of 30 feet or so. After the equity R&D investment was all spent on "R" with no results, we admited that the low signal to noise ratio had killed us, and there would never be any "D".
Interestingly though, the need to recover from that failure led us to develop the world's first 100 Mbps Ethernet-packet LAN on fiber-optics, several years before the early 100 Mbps standards were developed. That, in turn, led to one of the world's first, and possibly the world's very first, pure-hardware Ethernet switch.
Ultimately marketing problems, competition from the industry's big dogs, and a severe case of management recto-cranial inversion sank the company. But the point is that even failed attempts to push the envelope can have subsequent benefits.
The message for those trying everything they can think of to mitigate a post-Peak Oil energy decline without making other problems worse is obvious. Keep trying, civilization depends on us finding as many alternatives as possible.
I think there is a state of mind that is essential for making that last leap. I think you have to be capable of, and comfortable with, drawing dark inferences from the available data. In other words, you need to be a bit of a pessimist at heart. Scientists can be just as prone to unreasonable optimism as anyone :-/
But I have never seen myself as a pessimist. And I have been tracking the path towards both PO & GW for my adult life. And for both I am trying to do "something".
I don't think that I could idlely sit back and just observe, satisified with my greater knowledge of coming doom.
Better to forward some information, write an eMail to some politicans, write a letter to the editor, and all the other "small" measures.
In Australia we have lots of coal and gas but not much Oil. However the investments to turn coal and gas into Oil have not happened because the bankers keep getting told "Oil prices will soon decrease" and so won't fund projects that make a profit at $60 a barrel.
I wonder how long the forecasters will keep up the Oil will get cheap Real Soon Now? They're holding up the investments we need.
I'll admit to a bias against bidness majors, but I would give them more credit than assuming they are all in the GW, no nothing category.
Also, don't lump economists into the same bag, either. There is such a field as environmental economics ala Herman Daily which is much more sensitive to resource constraints, environmental impacts, and externalities than your typical economist.
The key, I think is having the inclination to expand one's knowledge beyond one's chosen specialization.
When I hear that line I say "I've a master's from MIT. I know technology. Technology won't save us." Sometimes it works.
Good luck saving the world, Robert. I hope you don't get an ulcer (or worse) doing it.
Those responses, as well as my experience in L.A., were pretty depressing. You can just see how this is going to play out. It will be denial until the end, and when the panic comes it is going to carry us all along in the wave. If I could figure out a good way to insulate myself from the societal effects, I would be a bit more optimistic. But, if society is not prepared, I don't think I can do much to prepare.
Cheers,
RR
A perusal of the TxRRC site turned up this chart:
, where, as you can see, things are looking up. <grin>
Or maybe it's that UT department — I looked back at the google page and, sure enough, it's this guy:
I'd say this is the kind of guy who'll tell you whatever you want to hear.