February 20, 2011
|A Crucial Talk By Naomi Klein||Energy Environment Future|
Watch this. Take it to heart. It couldn't be more important.
It calls to mind this, one of my favorites.
April 08, 2009
|Causes and Consequences of the Oil Shock of 2007-2008||Economy Energy Peak Oil|
On causes, he calculates that the runup in price was consistent with reasonable assumptions about oil demand and its elasticity. Elasticity is a measure of how strongly demand responds as price changes. For a product like oil, which has no short-term substitute and which is used in ways (like driving to work, heating a home, generating power) that people are highly reluctant to forgo, the elasticity is quite small. Which is to say, it takes one hell of a price increase to get people to consume less, especially in the short term. (In the long term, people may switch to smaller cars, and so on. Hamilton says that kind of long term adjustment may even help explain why prices have fallen as far as they have.) Worldwide GDP growth between 2003 and 2007 was such that at existing prices worldwide demand would have been greater than worldwide production, which had flatlined. Rising prices were the result. They kept rising until enough people were priced out of the market to equalize supply and demand. A speculative bubble in oil futures may have contributed to the price spike, but Hamilton's calculations show that it could have easily just been (mostly) your basic supply-and-demand story.
On consequences, he calculates that the impact of sky-high oil prices on the global economy may have been a significant factor in starting the recession that has now become such a vicious downturn. There was a debt bubble for sure, but it may have been the oil shock that pricked the bubble.
People tend to take cheap energy for granted, so we routinely underestimate the extent of its role in the economic fortunes of the modern world. Now that oil prices have fallen so drastically, exploration and new drilling have ground to a halt. Without new sources of supply, depletion will soon erase whatever supply cushion may exist at the moment. So the world is setting itself up for another big price shock when the economy eventually picks up and demand starts to recover. The world economy may get another big kick in the head just when it is trying to get back onto its feet.
May 29, 2008
|Buy Wind||Energy Peak Oil|
Mesa Power, a company run by well-known energy investor T. Boone Pickens, has ordered nearly 700 wind turbines from GE as part of its plans for a giant wind farm in Texas.
The company placed a $2 billion order for 667 turbines for the Pampa Wind Project, which will ultimately provide more than 4,000 megawatts of electricity, or enough for more than 1 million homes. The project will be completed in four phases.
Mesa will start getting the turbines in 2010 and 2011.
Pickens, who became rich in the fossil fuels game, has been interested in alternative energy for some time, and with oil prices hitting record highs above $125 a barrel, the audience for his message is growing. [...]
Warren Buffett, the head of Berkshire Hathaway and another of the nation's wealthiest investors, has also been investing in wind.
Handwriting on the wall.
February 08, 2008
|With A Fountain Pen||Corporations, Globalization Energy Peak Oil|
Richard Heinberg (via EnergyBulletin) calls attention to an extraordinary clause in the NAFTA agreement:
There is a strange clause in the North American Free Trade Agreement (NAFTA) that applies to only one country — Canada. The clause states that Canada must continue to supply the same proportion of its oil and gas resources to the US in future years as it does now. That's rather a good deal for the US: it formalizes Canada's status as a resource satellite of its imperial hub to the south.
From a Canadian perspective there are some problems with the arrangement, though. First is the fact that Canada's production of natural gas and conventional oil is declining. Second is that Canada uses lots of oil and gas domestically: 70 percent of Canadians heat their homes with gas, and Canadians drive cars more and further than just about anyone else. The problem is likely to come first with natural gas; as production declines, there will come a point when there isn't enough to fill domestic needs and continue to export (roughly 60 percent of Canada's gas now goes to the US).
That point is not decades in the future, it is fairly imminent.
What happens when Canadians can no longer drive their cars or heat their homes because NAFTA forces them to export the oil and gas they need for their own use? Will they say, hey, no problem, we'll just sit here in the dark and cold? Would you?
It's not often discussed, but a key subtext of the push for international trade agreements has been the "developed" nations' desire to lock in access to the rest of the world's natural resources. But sooner or later, push'll come to shove. People in countries that have their own energy resources are going to wonder how their leaders managed to sign away control.
One thinks of the Woody Guthrie song:
Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
In this case, the guys with fountain pens have most of the world's guns, too.
January 22, 2008
|How Many Priuses Does It Take To Cancel Out A Range Rover?||Energy|
We Prius owners tend to view hybrid SUVs like the Chevy Tahoe Hybrid, which gets only about 20 MPG, as some kind of sick joke. But the laugh's on us. If you really want to increase fuel efficiency, the place to concentrate your efforts is at the bottom end. Nerdblog explains.
Consider a hypothetical Range Rover (10 MPG) vs. a Prius (60 MPG). Naively, we think the Prius cancels out the Range Rover, since the average of 10 MPG and 60 MPG is a respectable 35 MPG. But this is just bad math. The thing we want to minimize is gallons used, so we should be averaging not miles per gallon, but gallons per mile.
Suppose, for example, the Range Rover and Prius each drive 60 miles. The Range Rover would use 6 gallons, the Prius one. So we've used 7 gallons to go 120 miles. 120 miles divided by 7 gallons is about 17 MPG. The Prius hasn't come close to cancelling out the Range Rover.
How many Priuses would it take to cancel out the Range Rover (i.e., move the average up to 35 MPG)?
Answer: six. Do the math.
Converting your 60 MPG Prius into a 100 MPG plug-in hybrid makes almost no difference in the fleet average, because your 60 MPG Prius is already using such a relatively small amount of fuel. It would probably do a lot more good to take the time, effort, and money that would have been required to do the conversion and use it to campaign for higher CAFE standards. Increasing the efficiency of the least efficient vehicles is what really matters.
January 02, 2008
|Fillin' 'Er Up With Other People's Food||Development Energy Environment Ethics Future Peak Oil|
$100 oil prices poor folks out of the market for energy. But worse than that, it prices them out of the market for food. It's already happening. IHT:
In an "unforeseen and unprecedented" shift, the world food supply is dwindling rapidly and food prices are soaring to historic levels, the top food and agriculture official of the United Nations warned [December 17].
The changes created "a very serious risk that fewer people will be able to get food," particularly in the developing world, said Jacques Diouf, head of the UN Food and Agriculture Organization.
The agency's food price index rose by more than 40 percent this year, compared with 9 percent the year before - a rate that was already unacceptable, he said. New figures show that the total cost of foodstuffs imported by the neediest countries rose 25 percent, to $107 million, in the last year.
At the same time, reserves of cereals are severely depleted, FAO records show. World wheat stores declined 11 percent this year, to the lowest level since 1980. That corresponds to 12 weeks of the world's total consumption - much less than the average of 18 weeks consumption in storage during the period 2000-2005. There are only 8 weeks of corn left, down from 11 weeks in the earlier period.
Prices of wheat and oilseeds are at record highs, Diouf said Monday. Wheat prices have risen by $130 per ton, or 52 percent, since a year ago. U.S. wheat futures broke $10 a bushel for the first time [December 17], the agricultural equivalent of $100 a barrel oil.
Diouf blamed a confluence of recent supply and demand factors for the crisis, and he predicted that those factors were here to stay. On the supply side, these include the early effects of global warming, which has decreased crop yields in some crucial places, and a shift away from farming for human consumption toward crops for biofuels and cattle feed. Demand for grain is increasing with the world population, and more is diverted to feed cattle as the population of upwardly mobile meat-eaters grows.
"We're concerned that we are facing the perfect storm for the world's hungry," said Josette Sheeran, executive director of the World Food Program, in a telephone interview. She said that her agency's food procurement costs had gone up 50 percent in the past 5 years and that some poor people are being "priced out of the food market."
To make matters worse, high oil prices have doubled shipping costs in the past year, putting enormous stress on poor nations that need to import food as well as the humanitarian agencies that provide it.
"You can debate why this is all happening, but what's most important to us is that it's a long-term trend, reversing decades of decreasing food prices," Sheeran said.
Climate specialists say that the vulnerability will only increase as further effects of climate change are felt. "If there's a significant change in climate in one of our high production areas, if there is a disease that effects a major crop, we are in a very risky situation," said Mark Howden of the Commonwealth Scientific and Industrial Research Organization in Canberra.
Already "unusual weather events," linked to climate change - such as droughts, floods and storms - have decreased production in important exporting countries like Australia and Ukraine, Diouf said. [...]
Sheeran said, that on a recent trip to Mali, she was told that food stocks were at an all time low. [...]
[R]ecent scientific papers concluded that farmers could adjust to 1 degree Celsius (1.8 degrees Fahrenheit) to 3 degrees Celsius (5.4 degrees) of warming by switching to more resilient species, changing planting times, or storing water for irrigation, for example.
But that after that, "all bets are off," said Francesco Tubiello, of Columbia University Earth Institute. "Many people assume that we will never have a problem with food production on a global scale, but there is a strong potential for negative surprises." [...]
Part of the current problem is an outgrowth of prosperity. More people in the world now eat meat, diverting grain from humans to livestock. A more complicated issue is the use of crops to make biofuels, which are often heavily subsidized. A major factor in rising corn prices globally is that many farmers in the United States are now selling their corn to make subsidized ethanol.
The world's food stocks are rapidly shrinking. Could anything be more fundamental? And yet there is almost no awareness of this situation in the world's wealthier nations.
By being energy hogs, we make other people go hungry. It's really that simple. Picture it next time you fill your tank: some of what's going in there is other people's food. Either directly, in the form of ethanol from corn, or indirectly, because our profligate energy use drives prices up and fuels global warming. This is a central moral issue of our time: will we in the world's wealthier nations continue to use our wealth to maintain a way of life that is increasingly deadly to everyone else on the planet? In other words, will we make other people starve so we can drive our SUV to the mall?
December 21, 2007
|Plug-In Hybrids||Energy Peak Oil Science/Technology|
Go here and click for a great little video on plug-in hybrids. The technology works. So Cal Edison has been running an all-electric fleet of big repair trucks and over 200 cars for 10 years or more. Batteries are rapidly getting smaller and more powerful. What's needed now are economies of scale.
What are we waiting for?
November 29, 2007
|US Carbon Emissions Down In 2006; Bush Takes The Credit||Energy Environment Politics|
In a White House press release issued yesterday, President Bush declared:
I was pleased to receive the Energy Information Administration's final report today, which includes U.S. greenhouse gas emissions for 2006. The final report shows that emissions declined 1.5 percent from the 2005 level, while our economy grew 2.9 percent. That means greenhouse gas intensity - how much we emit per unit of economic activity - decreased by 4.2 percent, the largest annual improvement since 1985. This puts us well ahead of the goal I set in 2002 to reduce greenhouse gas intensity by 18 percent by 2012.
My Administration's climate change policy is science-based, encourages research breakthroughs that lead to technology development, encourages global participation, and pursues actions that will help ensure continued economic growth and prosperity for our citizens and for people throughout the world. [...]
Energy security and climate change are two of the important challenges of our time. The United States takes these challenges seriously, and we are effectively confronting climate change through regulations, public-private partnerships, incentives, and strong investment in new technologies. Our guiding principle is clear: we must lead the world to produce fewer greenhouse gas emissions, and we must do it in a way that does not undermine economic growth or prevent nations from delivering greater prosperity for their people.
Breathtaking in its cynicism.
Decide for yourself if you're willing to take the government's figures at face value. But let's suppose we do. As Andrew Leonard points out, here's what the EIA report actually says about causes of the drop:
U.S. carbon dioxide emissions in 2006 were 110.6 million metric tons (MMT) below their 2005 level of 6,045.0 MMT, due to favorable weather conditions; higher energy prices; a decline in the carbon intensity of electric power generation that resulted from increased use of natural gas, the least carbon intensive fossil fuel; and greater reliance on non fossil energy sources.
Call me partisan, but I'm finding it difficult to credit the Bush administration with responsibility for a year that featured both a mild winter and a cool summer. And while one can put some blame on the White House for high energy prices, the administration has actually fought tooth-and-nail against any kind of carbon tax or cap-and-trade system that would ensure stiff energy costs for greenhouse gas generating fossil fuel consumption. I'm also skeptical of the notion that "greater reliance on non fossil energy sources" has yet made any significant impact on emissions. Indeed, the EIA's own data have carbon dioxide emissions attributable to "renewable fuels" rising from 11.6 MMT to 11.9 MMT.
Which leaves us with the switch from coal to natural gas for electricity generation. I don't know the whole story of how that transition is playing out, but one major incentive has been the New Source Review requirement of the Clean Air Act, which was designed to encourage the phasing out of older, high-polluting energy-generating technologies.
Of course, the Bush administration attempted (and failed) to gut New Source Review.
And to that we can add this: natural gas is, in terms of its usefulness, the most valuable fuel we have. Think of a gas stove. Instant on, instant off, no fumes, no smoke, no soot. There is no substitute. Moreover, natural gas can't easily be shipped across oceans. When you use up what's on your own continent, you're pretty much done. Here in North America, natural gas production may already have peaked. So, if we're using more natural gas for electricity generation and building lots of new natural gas-powered generation plants, that's hardly cause for celebration.
November 21, 2007
|We're Doomed||Energy Peak Oil|
...if this is how we think:
November 15, 2007
|Biofuels From Food: A Crime Against Humanity||Energy Peak Oil|
This is just the beginning. As fuel becomes more expensive and scarce, the world's rich will not only price the world's poor out of the fuel market, they'll price them out of the food market as well, as more and more food crops and agricultural land (and fresh water) are used to generate biofuels. George Monbiot summons up the appropriate level of outrage:
It doesn't get madder than this. Swaziland is in the grip of a famine and receiving emergency food aid. Forty per cent of its people are facing acute food shortages. So what has the government decided to export? Biofuel made from one of its staple crops, cassava. The government has allocated several thousand hectares of farmland to ethanol production in the county of Lavumisa, which happens to be the place worst hit by drought. It would surely be quicker and more humane to refine the Swazi people and put them in our tanks. Doubtless a team of development consultants is already doing the [math].
This is one of many examples of a trade described last month by Jean Ziegler, the UN's special rapporteur, as "a crime against humanity". Ziegler took up the call first made by this column for a five-year moratorium on all government targets and incentives for biofuel: the trade should be frozen until second-generation fuels - made from wood or straw or waste - become commercially available. Otherwise the superior purchasing power of drivers in the rich world means that they will snatch food from people's mouths. Run your car on virgin biofuel and other people will starve.
Even the International Monetary Fund, always ready to immolate the poor on the altar of business, now warns that using food to produce biofuels "might further strain already tight supplies of arable land and water all over the world, thereby pushing food prices up even further." This week the UN Food and Agriculture Organisation will announce the lowest global food reserves in 25 years, threatening what it calls "a very serious crisis". Even when the price of food was low, 850 million people went hungry because they could not afford to buy it. With every increment in the price of flour or grain, several million more are pushed below the breadline.
The cost of rice has risen by 20% over the past year, maize by 50%, wheat by 100%. Biofuels aren't entirely to blame - by taking land out of food production they exacerbate the effects of bad harvests and rising demand - but almost all the major agencies are now warning against expansion. And almost all the major governments are ignoring them.
They turn away because biofuels offer a means of avoiding hard political choices. They create the impression that governments can cut carbon emissions and - as Ruth Kelly, the British transport secretary, announced last week - keep expanding the transport networks. New figures show that British drivers puttered past the 500 billion kilometre mark for the first time last year. But it doesn't matter: we just have to change the fuel we use. No one has to be confronted. The demands of the motoring lobby and the business groups clamouring for new infrastructure can be met. The people being pushed off their land remain unheard.
In principle, burning biofuels merely releases the carbon they accumulated when they were growing. Even when you take into account the energy costs of harvesting, refining and transporting the fuel, they produce less net carbon than petroleum products....If you count only the immediate carbon costs of planting and processing biofuels, they appear to reduce greenhouse gases. When you look at the total impacts, you find that they cause more [global] warming than petroleum.
A recent study by the Nobel laureate Paul Crutzen shows that the official estimates have ignored the contribution of nitrogen fertilisers. They generate a greenhouse gas - nitrous oxide - which is 296 times as powerful as CO2. These emissions alone ensure that ethanol from maize causes between 0.9 and 1.5 times as much warming as petrol, while rapeseed oil (the source of over 80% of the world's biodiesel) generates 1-1.7 times the impact of diesel. This is before you account for the changes in land use.
A paper published in Science three months ago suggests that protecting uncultivated land saves, over 30 years, between two and nine times the carbon emissions you might avoid by ploughing it and planting biofuels. Last year the research group LMC International estimated that if the British and European target of a 5% contribution from biofuels were to be adopted by the rest of the world, the global acreage of cultivated land would expand by 15%. That means the end of most tropical forests. It might also cause runaway climate change. [...]
The only sustainable biofuel is recycled waste oil, but the available volumes are tiny.
At this point the biofuels industry starts shouting "jatropha!" It is not yet a swear word, but it soon will be. Jatropha is a tough weed with oily seeds that grows in the tropics. This summer Bob Geldof, who never misses an opportunity to promote simplistic solutions to complex problems, arrived in Swaziland in the role of "special adviser" to a biofuels firm. Because it can grow on marginal land, jatropha, he claimed, is a "life-changing" plant, which will offer jobs, cash crops and economic power to African smallholders.
Yes, it can grow on poor land and be cultivated by smallholders. But it can also grow on fertile land and be cultivated by largeholders. If there is one blindingly obvious fact about biofuel it's that it is not a smallholder crop. It is an internationally-traded commodity which travels well and can be stored indefinitely, with no premium for local or organic produce. Already the Indian government is planning 14m hectares of jatropha plantations. In August the first riots took place among the peasant farmers being driven off the land to make way for them.
If the governments promoting biofuels do not reverse their policies, the humanitarian impact will be greater than that of the Iraq war. Millions will be displaced, hundreds of millions more could go hungry. This crime against humanity is a complex one, but that neither lessens nor excuses it. If people starve because of biofuels, Ruth Kelly and her peers will have killed them. Like all such crimes it is perpetrated by cowards, attacking the weak to avoid confronting the strong.
It will be a crime of unimaginable proportions, but it is hard to see what will avert it. People who can afford cars won't voluntarily give them up because of unseen side effects a world away. Rationalization will be easier than changing one's way of life. The resulting famine and war in faraway countries will be blamed on other causes — extremism, religious conflict, tribalism, backwardness — if it is even noticed at all. And even the minority of people who make the connections will find it hard not to take the path of least resistance: what good will it do really if I stop driving? I'm just one small drop in a very large bucket. I've got to get to work somehow, and to the mall, and my kids' soccer practice. And so millions will die.
September 11, 2007
|Shell May Use Nuclear To Power Tar Sands Operation||Energy Peak Oil|
Shell is considering using nuclear power to operate its controversial tar sands programme in Canada.
Tar sands extraction – mining oil from a mixture of sand or clay, water and very heavy crude oil – uses a huge amount of energy and water. Environmentalists say it results in more than three times as many emissions of carbon dioxide compared to conventional oil production.
Now Canadian firms AECL and Energy Alberta have proposed building a nuclear reactor near the site of Shell's vast Athabasca tar sands development. The boss of Energy Alberta has said the C$6bn (£2.8bn) reactor has the backing of a large unnamed copany that would take 70 per cent of the reactor's energy.
A spokeswoman for Shell Canada refused to confirm that the company would take electricity from the reactor but said: "We have had a number of power options presented to us. Yes, it includes nuclear.
"If a nuclear facility proceeds, we would look at it based on a wide range of factors such as economics, sustainability and the energy [required]."
She added that the company was also looking at building biomass, renewable or co-generation plants.
Analysts estimate that Canada's huge tar sands give it the world's second-largest oil reserves after Saudi Arabia.
However, Walt Patterson, associate fellow at think-tank Chatham House, said: "Extracting oil from tar scares the pants off me. The whole idea is fundamentally perverse in the context of our present environmental situation. To then power it with nuclear, it seems to be the worst of all worlds."
The Independent on Sunday has also been told that, earlier this year, Shell Canada contacted French nuclear firm Areva to find out how much it would cost to build a reactor for the oil sands project, but did not pursue this option because of the cost. The Shell Canada spokeswoman could not confirm this discussion took place.
Shell and its Athabasca partners currently pump over 155,000 barrels of oil per day from the tar sands but want to increase this by five times over the next 20 years. This would need more than an extra 1,000MW of generating capacity. Most of the project's existing power comes from a gas-fired plant, but gas production in North America is declining.
We're addicted to oil, and this is the way addicts behave. No scheme is too self-destructive, no idea too crazy, if it lets the addict get his fix. What's frightening is not so much the insanity of this particular idea — crazy though it is — but the glimpse it provides of the desperation to come. When world oil production starts to decline in earnest, people are going to get reckless.
Update: Oil closed today at $78.23, an all-time record.
August 24, 2007
|Arctic Ice Melt Shatters Previous Record||Energy Environment|
When the most recent Intergovernmental Panel on Climate Change (IPCC) report came out, there were people who called it alarmist. It now appears that it may have been wildly over-optimistic. The summer melt of Arctic ice this year is proceeding so rapidly that it is on target — this year — to hit a level the IPCC projected wouldn't happen until 2050. The ice sheet has already shrunk to its smallest size on record, with another month of melting to go.
Here's the previous record, September 22, 2005 (source):
Here's what it looks like today — with another month of melting to go:
This is no trivial matter. As the ice melts, the Arctic absorbs more solar radiation, warming further, causing further melting, etc., in a feedback loop that will have significant effects on the climate of the planet. And as we've seen so many times before, it's all happening faster than anyone anticipated. Canada.com:
Scientific institutes in the U.S. and Japan confirmed [August 17] that the Arctic Ocean ice cover has shrunk to the smallest size ever recorded, prompting a startling prediction from one expert that the world could witness a total summer melt within 25 years.
The latest findings support an alarm issued last week by another climate expert at the University of Illinois that all-time records for maximum meltage of the polar ice cap will be "annihilated" by the time Arctic temperatures start turning colder in mid-September.
"Everyone is seeing the same thing," Mark Serreze, a senior researcher with the Boulder, Colo.-based National Snow and Ice Data Center, told CanWest News Service on Friday.
"The sea ice seems to be on this death spiral," he said. "And this is not some nebulous thing like global temperature rises. You can see this with your own eyes." [...]
The Japan Agency for Marine-Earth Science and Technology and the Japan Aerospace Exploration Agency - expressing "fear that global warming will accelerate" as a result of the rapid melting - pegged the current size of the Arctic ice cover at 5.31 million square kilometres, just less than the historic low measured on Sept. 22, 2005.
But what worries researchers most is that there's still a month of melting left to go this summer.
"The absolute minimum is typically the first or second week of September," said Serreze, "but we've already set a record. That is amazing. That is just an eye-opener. We appear to be on the fast track of change."
The disappearance of Arctic sea ice is widely viewed not only as a key early indicator that climate change is well under way, but also as a portent of rapidly escalating global warming.
Reduced ice cover, and thus a darkened polar region, means the planet will absorb even more of the sun's energy and trigger higher temperatures, scientists believe.
"If you had talked to me a few years ago, I would have said total melting of Arctic ice might be possible by 2070 or 2100," said Serreze.
Noting that the rate of shrinkage has surpassed all climate models, he predicts that a complete summer melt could occur as early as 2030.
"For many of us, we might be looking at this within our lifetimes."
The Japanese agencies made similar forecasts, noting that the ice cover this year could shrink to 4.5 million square kilometres — a low that the Intergovernmental Panel on Climate Change didn't expect to be reached until 2050. [Emphasis added]
So, how are governments reacting to this trend? By racing to establish territorial claims to the oil and gas buried under the Arctic seabed. Times of India:
If there were any lingering doubts as to how ill-prepared we are to face up to the reality of climate change, they were laid to rest this month when two Russian mini submarines dove two miles under the Arctic ice to the floor of the ocean, and planted a Russian flag made of titanium on the seabed. This first manned mission to the ocean floor of the Arctic, which was carefully choreographed for a global television audience, was the ultimate geopolitical reality TV.
Russian President Vladimir V Putin congratulated the aquanauts while the Russian government simultaneously announced its claim to nearly half of the floor of the Arctic Ocean. The Putin government claims that the seabed under the pole, known as the Lomonosov Ridge, is an extension of Russia's continental shelf, and therefore Russian territory. Not to be outdone, Canadian Prime Minister Stephen Harper hurriedly arranged a three-day visit to the Arctic to stake his country's claim to the region. Although in some respects the entire event appeared almost comical - a kind of late 19th century caricature of a colonial expedition - the intent was deadly serious. Geologists believe that 25 per cent of the earth's undiscovered oil and gas may be embedded within the rock underneath the Arctic Ocean.
The oil giants are already scurrying to the front of the line, seeking contracts to exploit the vast potential of oil wealth under the Arctic ice. The oil company BP has recently established a partnership with Rosneft, the Russian state-owned oil company, to explore the region. Aside from Russia and Canada, three other countries - Norway, Denmark (Greenland is a Danish possession that reaches into the Arctic) and the United States - are all claiming the Arctic seabed as an extensionof their continental shelves and, therefore, sovereign territory.
Under the Law of the Sea Treaty, adopted in 1982, signatory nations can claim exclusive economic zones for commercial exploitation, up to 200 miles out from their territorial waters. The US has never signed the treaty, amidst concerns that other provisions of the treaty would undermine US sovereignty and political independence. Now, however, the sudden new interest in Arctic oil and gas has put a fire under US legislators to ratify the treaty, lest it is edged out of the Arctic oil rush.
What makes the whole development so utterly depressing is that the new interest in prospecting the Arctic subsoil and seabed for oil and gas is only now becoming possible because of climate change. For thousands of years, the fossil fuel deposits lay locked up under the ice and inaccessible. Now, global warming is melting away the Arctic ice, making possible, for the first time, the commercial exploitation of the oil and gas deposits. Ironically, the very process of burning fossil fuels releases massive amounts of carbon dioxide and forces an increase in the earth's temperature, which in turn, melts the Arctic ice, making available even more oil and gas for energy. The burning of these potential new oil and gas finds will further increase CO2 emissions in the coming decades, depleting the Arctic ice even more quickly. [Emphasis added]
It's too grotesque for words. We respond to global warming by racing to dig up even more carbon so we can send it into the atmosphere. Talk about a feedback loop. I'm tempted to say that with stupidity like this we deserve whatever we get, except that most of humanity — not to mention all the other species of life on Earth — is not participating in this insanity, but they will all pay the price.
Greed kills, and that includes greed for comfort and convenience.
August 01, 2007
|The Beauty Of Wind||Energy Environment|
A couple of weeks ago, I wrote: "Wind farms are a thing of beauty, a monument to a better, saner future." A commenter took exception, saying, "the idea of wind farms as beautiful is purely subjective."
Well, maybe. But if anything is objectively beautiful, I think windmills have to be on the list. It's not just how they look, it's what they embody, what they portend, what they mean. We're not alone on this Earth.
July 18, 2007
|Mr. Wind Tells His Story||Energy|
As a companion piece to the previous post, here's a wonderful little fantasy from Germany (via Yoga Coffee Outlook):
|Dutch Study: Wind To Outcompete Nuclear||Energy|
A study undertaken on behalf of the Dutch government concludes that wind power will soon replace nuclear as the fossil fuel replacement that makes the most economic sense. Groovy Green:
A report commissioned in the Netherlands and leaked to a Dutch newspaper confirms that wind power will quickly replace nuclear energy as the fossil fuel alternative of choice. The researchers concluded that not only will technological advances in the coming years make wind financially competitive but also security costs tied to nuclear energy will further add to the value. From the article,According to the report by the Energy Research Centre (ECN), the cost price of electricity production – around 6.6 euro-cents per kilowatt hour – is already comparable.
However nuclear power is more expensive if the additional costs of security against terrorist attacks is taken into account. Meanwhile technological advancement will make wind power increasingly cheaper in the coming years.
The report was commissioned by one of the social and economic council (SER), one of the government's most important advisory bodies, which is currently looking into whether the Netherlands should expand its nuclear power production. It currently has just one plant located at Borssele.
Very interesting. Obviously, wind power is dependent on geographic conditions to function properly — but as efficiency and technology increase, the idea of wind farms as safe and reliable alternative to nuclear power will start to make financial and social sense. Will this do anything to squash the debate over nuclear as the energy source of the future? Absolutely not. That industry is still pushing ahead with plans to increase safety, find solutions to waste disposal, and position itself to be a major player in the future energy needs of the world. Efficiency, safety, and especially cost will ultimately decide which industry will lead.
Wind has so much going for it. It's decentralized, it's clean, it's renewable (nuclear fuel is not), and it poses no risk as a terrorism target or source of nuclear weapons material. Wind farms are a thing of beauty, a monument to a better, saner future. Can't wait to see more of them.
June 22, 2007
|The Politics Of Energy||Energy Politics|
A commenter to the previous post points out that when fuel efficiency increases, people just drive more. He/she has a point. This effect is an example of the Jevons Paradox: increasing the efficiency of the use of a resource is effectively the same as cutting its price — so people buy more of it. Total consumption may actually go up as the lower price makes new usage patterns affordable.
If the increases in efficiency are sufficiently great, however, it seems unlikely that usage will keep pace. If people started driving cars with three or four times better mileage than cars today, it seems doubtful that they would drive three or four times as many miles as a result. There are only so many hours in the day. Not that the proposed increase in CAFE standards will get us to those kinds of efficiencies, but you see my point.
The commenter also says (correctly, I think) that a stiff gasoline tax would be more effective than CAFE standards in getting people to conserve. I don't doubt that's true, although it would be an awfully regressive tax. But it's a moot point. A significant gas tax is, at present, a political impossibility.
By the target date of 2020, 35 mpg will seem ridiculously inefficient, so the CAFE increase may be of purely symbolic importance, telling the car companies to do something they were going to do anyway. Which may explain why the Senate was willing to pass it. But it at least acknowledges conservation as an important goal. And I guess that's worth something.
Republicans blocked Democratic efforts to pass a $32 billion package of tax incentives for renewable energy and clean fuels, objecting to increasing taxes on oil companies by $29 billion over 10 years to pay for it.
That's the real story of this energy bill.
June 21, 2007
|Senate Votes To Raise CAFE Standards||Energy|
The Senate has approved raising the fleet-wide fuel economy standard to 35 mpg by 2020, the first significant increase in almost twenty years. SUVs and light trucks are included. SF Chronicle:
The Senate voted Thursday to require average fuel economy of 35 miles per gallon for new cars, pickup trucks and SUVs by 2020, raising efficiency standards that have not changed significantly for nearly two decades.
The fuel economy measure was added to a broad energy bill without a roll call vote even as senators were holding a news conference announcing the compromise.
Republicans earlier blocked Democratic efforts to raise oil taxes by $29 billion and use the money to promote renewable fuels and other clean energy programs.
Democratic leaders hoped to complete the energy bill Thursday night, but senators close to the auto industry began an effort to derail the entire bill.
"We will be continuing to oppose it," said Sen. Carl Levin, D-Mich., "This is not over by any stretch."
The legislation for the first time would establish a single fuel economy standard applicable to not only cars, but also SUVs and pickups which currently have to meet less stringent requirement.
Fuel efficiency requirements would vary for different classes of vehicles based on weight and size. But manufacturers would be required to meet an overall fleetwide average of 35 mpg.
"It closes the SUV loophole," declared Sen. Dianne Feinstein, D-Calif., referring to current requirements that allow much less stringent fuel efficiency standards for SUVs and pickup trucks than for cars. "This is a victory for the American public."
The compromise, approved without floor debate, was crafted over several days behind closed doors with the aim of heading off attempts by senators sympathetic to the auto industry to press a less stringent proposal. [...]
Automakers are currently required to meet an average of 27.5 mpg for cars and 22.2 mpg for SUVs and small trucks. The car standard has not changed since 1989, though the truck requirements have been increased slightly by the Bush administration.
The measure tacked onto the energy bill would require a 35 mpg fleet average — including SUVs and pickup trucks — by 2020, and require that automakers make half of their vehicles capable of running on 85 percent ethanol fuel by 2015. [Emphasis added]
By 2020, 35 mpg is going to seem awfully wimpy. And the last thing we need is half our cars running on 85% ethanol. Still, it's good to see that momentum is building behind the principle of increased efficiency. Efficiency is the low-hanging fruit.
April 28, 2007
|Airborne Wind Farms||Energy Future Science/Technology|
An interesting review of concepts for flying wind farms. Whether or not these particular ideas turn out to be practical and scalable, it's encouraging to be reminded that there's a whole world full of inventors out there, and some of them are definitely thinking outside of the box.
April 25, 2007
|Tesla Motors||Energy Science/Technology|
Vanity Fair has a long feature article on Tesla Motors, maker of the world's coolest electric car:
There is no engine noise, because it is a 100 percent electric car—only an eerie whine of gears as the car accelerates. We turn onto an entrance ramp for Route 101 South. And then comes the money moment. Luk floors the accelerator, and the Roadster jumps forward so fast—as instantaneously as its inverter can send electricity to the motor that turns its wheels—that I'm pinned against that hard-shell seat. Zero to 60 in four seconds is Tesla's claim—faster than all but a few high-performance, gas-powered racecars—with a top speed of 135 miles per hour and a range of 250 miles. It's pretty cool.
March 31, 2007
|The Post-Peak Path Of Least Resistance||Energy Environment Peak Oil|
I don't think the end of cheap oil will mean that things completely grind to a halt à la James Kunstler. But what seems like good news may actually be bad news. Very bad news. Why?
Humans, like other organisms, generally take the path of least (short-term) resistance. It's our nature. In the Peak Oil context, the path of least resistance won't be to change how we organize cities and suburbs; or to switch to public transportation; or even to drive significantly smaller, more efficient vehicles. Nor will it be most of the other alternatives that could meaningfully reduce the demand for liquid fuels.
Instead, the path of least resistance will be to substitute other liquid fuels for gasoline and diesel, those other fuels probably being ethanol made from plant matter and, most alarmingly, synthetic fuel made from coal. There is an enormous amount of coal remaining, and if we put all of that carbon in the atmosphere the results will be deadly.
As people flail about for ways to cope with increasing shortfalls in oil production, they will act hurriedly, thoughtlessly, and they will almost certainly exacerbate global warming, perhaps catastrophically. That will be the path of least resistance.
In a BBC op-ed, author David Strahan makes a similar point. Excerpts:
[I]t is quite possible to run out of oil and pollute the planet to destruction simultaneously.
In fact peak oil could even make emissions worse if it drives us to exploit the wrong kinds of fuel.
Burning rainforest and peatlands to create palm oil plantations for biofuels releases vast amounts of CO2, and has already made Indonesia, according to some ways of calculating it, the world's third biggest emitter after the US and China.
Synthetic transport fuels made from natural gas using the Fischer-Tropsch process emit even more carbon on a well-to-wheels basis than conventional crude; and when the feedstock is coal, the emissions double.
None of these alternatives are likely to fill the gap left by conventional crude — at least, not in time.
But because they are so much more carbon intensive, it is quite easy to conjure scenarios in which we still suffer fuel shortages while emitting even more CO2 than in the current business-as-usual forecast — the worst of all possible worlds.
Although these fuels are likely to prove inadequate, we may be driven to use them because cleaner alternatives are even more inadequate, for a variety of reasons.
Biofuels can be produced sustainably and with real CO2 reductions, but in the industrialised world there simply isn't the land.
In the developing world, however, there are vast swathes of land which could be put to sugar cane in a sustainable fashion; but the scale of the task of replacing crude oil would still be monumental.
I calculate that to substitute the fuel lost through a post-peak oil production annual decline of 3% would mean planting about 200,000 sq km — equivalent to the land area of Cuba, Sri Lanka and Papua New Guinea — every year.
Alternatively, if we decided to run Britain's road transport system, say, on cleanly produced hydrogen — electrolysing water using non-CO2-emitting forms of generation — our options would be:
67 Sizewell B nuclear power stations
a solar array covering every inch of Norfolk and Derbyshire combined
or a wind farm bigger than the entire southwest region of England.
When oil production starts to fall, the economic impacts could well be devastating.
Soaring crude prices could tip the world into a depression deeper than that of the 1930s, and collapsing stock markets cripple our ability to finance the expensive clean energy infrastructure we need.
As the unemployment lines grow, the political will to tackle climate change may be sapped by the need to keep the lights burning as cheaply as possible.
Many environmentalists seem to dismiss or ignore peak oil because they simply cannot see it as significant when compared to climate change.
But this is to miss the point.
Oil depletion is deadly serious in its own right, but it also has the capacity both to worsen emissions and destroy the wealth needed to fight global warming.
For this reason - among others - it too has the power to destroy our civilisation. [Emphasis added]
Desperate people do desperate things. Fuel shortages will be an immediate, concrete problem staring people in the face. Global warming will seem, by comparison, an abstraction somewhere off in the future. And it will be easy for people to rationalize that their little contribution to global warming is an insignificant drop in a very big bucket; meanwhile, they need a way to get to work, to shop, to heat their homes. They are going to want fuel; they're not going to care much where it comes from.
Of course, there are significant wild cards in any attempts to project the future. Biotechnology and nanotechnology, especially, have the potential to radically transform the equation. (And also to create their own brand of havoc.) But the next couple of decades are pivotal, and the sheer scale of the problem means that new technologies may arrive too late. Enormous damage is already being done, right now, in the race to produce biofuels. The colossal scale of the world's thirst for fuel pretty much guarantees that in the race for profits all sorts of bad ideas will be pushed into large-scale use without due regard for the consequences. We suffer from a kind of technological monoculture and a monoculture of the mind that causes us to risk way too much on a few throws of the dice.
If we act without thinking, we're guaranteed to follow the path of least (short-term) resistance. But it's the wrong path. It remains to be seen if humans are smart enough to forego short-term convenience to gain long-term survival. Are we?
March 29, 2007
|Today's Biofuels Are A Disaster||Energy Environment|
If you run your car on recycled fry oil or biofuel generated from waste, awesome. But growing food crops to turn them into fuel (and ripping up rainforests to do it) is out and out lunacy. Nothing shows our addiction to fossil fuels more starkly than our willingness to bid up the price of food crops — so we can price the world's poor out of the market, take food out of their mouths, and set fire to it.
It's simple really. There's a finite amount of corn and other crops in the world. They go to the highest bidder. There isn't enough to feed the world as it is. But now we in the First World want to take a big piece of that pie and pour it into our gas tanks. Every bushel that goes for fuel is a bushel that cannot go for food. People must go hungry so we can drive our SUVs to Wal-Mart.
But it's actually worse than even that. Many of today's biofuels are an environmental disaster, too, worse for the planet than petroleum. George Monbiot explains:
It used to be a matter of good intentions gone awry. Now it is plain fraud. The governments using biofuel to tackle global warming know that it causes more harm than good. But they plough on regardless.
In theory, fuels made from plants can reduce the amount of carbon dioxide emitted by cars and trucks. Plants absorb carbon as they grow – it is released again when the fuel is burnt. By encouraging oil companies to switch from fossil plants to living ones, governments on both sides of the Atlantic claim to be "decarbonising" our transport networks.
In the budget last week, Gordon Brown announced that he would extend the tax rebate for biofuels until 2010. From next year all suppliers in the UK will have to ensure that 2.5% of the fuel they sell is made from plants — if not, they must pay a penalty of 15p a litre. The obligation rises to 5% in 2010. By 2050, the government hopes that 33% of our fuel will come from crops. Last month George Bush announced that he would quintuple the US target for biofuels: by 2017 they should be supplying 24% of the nation's transport fuel.
So what's wrong with these programmes? Only that they are a formula for environmental and humanitarian disaster. In 2004 this column warned that biofuels would set up a competition for food between cars and people. The people would necessarily lose: those who can afford to drive are, by definition, richer than those who are in danger of starvation. It would also lead to the destruction of rainforests and other important habitats....Well in one respect I was wrong. I thought these effects wouldn’t materialise for many years. They are happening already.
Since the beginning of last year, the price of maize has doubled. The price of wheat has also reached a 10-year high, while global stockpiles of both grains have reached 25-year lows. Already there have been food riots in Mexico and reports that the poor are feeling the strain all over the world....According to the UN Food and Agriculture Organisation, the main reason is the demand for ethanol: the alcohol used for motor fuel, which can be made from both maize and wheat.
Farmers will respond to better prices by planting more, but it is not clear that they can overtake the booming demand for biofuel. Even if they do, they will catch up only by ploughing virgin habitat.
Already we know that biofuel is worse for the planet than petroleum. The UN has just published a report suggesting that 98% of the natural rainforest in Indonesia will be degraded or gone by 2022. Just five years ago, the same agencies predicted that this wouldn't happen until 2032. But they reckoned without the planting of palm oil to turn into biodiesel for the European market. This is now the main cause of deforestation there and it is likely soon to become responsible for the extinction of the orang utan in the wild. But it gets worse. As the forests are burnt, both the trees and the peat they sit on are turned into carbon dioxide. A report by the Dutch consultancy Delft Hydraulics shows that every tonne of palm oil results in 33 tonnes of carbon dioxide emissions, or ten times as much as petroleum produces. I feel I need to say that again. Biodiesel from palm oil causes TEN TIMES as much climate change as ordinary diesel. [...]
The reason governments are so enthusiastic about biofuels is that they don't upset drivers. They appear to reduce the amount of carbon from our cars, without requiring new taxes. It's an illusion sustained by the fact that only the emissions produced at home count towards our national total. The forest clearance in Malaysia doesn't increase our official impact by a gram.
In February the European Commission was faced with a straight choice between fuel efficiency and biofuels. It had intended to tell car companies that the average carbon emission from new cars in 2012 would be 120 grams per kilometre. After heavy lobbying by Angela Merkel on behalf of her car manufacturers, it caved in and raised the limit to 130 grams. It announced that it would make up the shortfall by increasing the contribution from biofuel.
The British government says it "will require transport fuel suppliers to report on the carbon saving and sustainability of the biofuels they supply." But it will not require them to do anything. It can't: its consultants have already shown that if it tries to impose wider environmental standards on biofuels, it will fall foul of world trade rules. And even "sustainable" biofuels merely occupy the space that other crops now fill, displacing them into new habitats. It promises that one day there will be a "second generation" of biofuels, made from straw or grass or wood. But there are still major technical obstacles. By the time the new fuels are ready, the damage will have been done.
We need a moratorium on all targets and incentives for biofuels, until a second generation of fuels can be produced for less than it costs to make fuel from palm oil or sugarcane. Even then, the targets should be set low and increased only cautiously. I suggest a five-year freeze. [...]
You can join the campaign at www.biofuelwatch.org.uk. [Emphasis added]
Like addicts everywhere, we pretend not to see the damage our addiction does. And biofuels make denial easy. They seem so green. And who really knows what's going on in Indonesia or the Amazon, anyway? Out of sight, out of mind. Out of our minds is more like it.
We do what we do because we are too lazy and too greedy to increase fuel efficiency, drive smaller vehicles, use public transportation. It's too much trouble. We'd rather starve the world's poor, strip off the last remaining rainforests, use the atmosphere for our sewer.
Not always intentionally, perhaps. Many people want to do the right thing (at least if it's not too inconvenient), and fuel from plants sounds like it ought to be the right thing. But just because something sounds green doesn't mean it is. Good intentions alone are worth nothing. We are responsible for the consequences of our actions. We have to realistically assess (take a fearless inventory of) the net effect of whatever steps we take from here on out. We have to determine if they do more harm than good. We have to stop kidding ourselves. We no longer have a lot of room for error.
January 25, 2007
If you'd like to get solar PV panels for your house, but you're daunted by the upfront cost, how about renting them, with a monthly bill like your electric bill. Check it out.
January 08, 2007
Via Big Gav, a fascinating and entertaining Mother Jones article about "hypermilers," guys who compete to see who can get the highest gas mileage using an amazing array of techniques. 59 mpg in a Honda Accord, over 100 in a Prius, 180 in an Insight. Read how they do it.
January 07, 2007
|Mission Accomplished||Energy Iraq Peak Oil|
"Respectable" opinion has it that only naive ex-hippies are so simple-minded as to believe that the US attacked Iraq for its oil. Whatever. But read this. The Independent:
Iraq's massive oil reserves, the third-largest in the world, are about to be thrown open for large-scale exploitation by Western oil companies under a controversial law which is expected to come before the Iraqi parliament within days.
The US government has been involved in drawing up the law, a draft of which has been seen by The Independent on Sunday. It would give big [US and British] oil companies such as BP, Shell and Exxon 30-year contracts to extract Iraqi crude and allow the first large-scale operation of foreign oil interests in the country since the industry was nationalised in 1972.
The huge potential prizes for Western firms will give ammunition to critics who say the Iraq war was fought for oil. They point to statements such as one from Vice-President Dick Cheney, who said in 1999, while he was still chief executive of the oil services company Halliburton, that the world would need an additional 50 million barrels of oil a day by 2010. "So where is the oil going to come from?... The Middle East, with two-thirds of the world's oil and the lowest cost, is still where the prize ultimately lies," he said.
Oil industry executives and analysts say the law, which would permit Western companies to pocket up to three-quarters of profits in the early years, is the only way to get Iraq's oil industry back on its feet after years of sanctions, war and loss of expertise. But it will operate through "production-sharing agreements" (or PSAs) which are highly unusual in the Middle East, where the oil industry in Saudi Arabia and Iran, the world's two largest producers, is state controlled.
Opponents say Iraq, where oil accounts for 95 per cent of the economy, is being forced to surrender an unacceptable degree of sovereignty.
Proposing the parliamentary motion for war in 2003, Tony Blair denied the "false claim" that "we want to seize" Iraq's oil revenues. He said the money should be put into a trust fund, run by the UN, for the Iraqis, but the idea came to nothing. The same year Colin Powell, then Secretary of State, said: "It cost a great deal of money to prosecute this war. But the oil of the Iraqi people belongs to the Iraqi people; it is their wealth, it will be used for their benefit. So we did not do it for oil."
Supporters say the provision allowing oil companies to take up to 75 per cent of the profits will last until they have recouped initial drilling costs. After that, they would collect about 20 per cent of all profits, according to industry sources in Iraq. But that is twice the industry average for such deals.
Greg Muttitt, a researcher for Platform, a human rights and environmental group which monitors the oil industry, said Iraq was being asked to pay an enormous price over the next 30 years for its present instability. "They would lose out massively," he said, "because they don't have the capacity at the moment to strike a good deal."
Iraq's Deputy Prime Minister, Barham Salih, who chairs the country's oil committee, is expected to unveil the legislation as early as today...The Iraqi government hopes to have the law on the books by March.
Several major oil companies are said to have sent teams into the country in recent months to lobby for deals ahead of the law, though the big names are considered unlikely to invest until the violence in Iraq abates.
James Paul, executive director at the Global Policy Forum, the international government watchdog, said: "It is not an exaggeration to say that the overwhelming majority of the population would be opposed to this. To do it anyway, with minimal discussion within the [Iraqi] parliament is really just pouring more oil on the fire." [Emphasis added]
Iraq's reserves are one of the last great untapped sources of inexpensive conventional oil left on Earth. The profits involved will be almost unimaginable, especially as world oil production peaks, driving prices skyward.
Pop quiz. Now that US and British oil majors are getting a 30-year lock on those profits, what are the chances that the US and Britain will walk away and leave all that money lying on the table? Or will they, as Big Gav put it, "fight on in Iraq until the end of the oil age"? It doesn't take a naive ex-hippie to know the answer to that one.
December 11, 2006
As an addendum to the previous post, here's a little chart from PolicyPete.
|It's Still About The Oil||Energy Iraq|
You'd never know it by the media coverage, but the Iraq Study Group report has a lot to say about the disposition of Iraq's oil. Antonia Juhasz, author of The Bush Agenda: Invading the World, One Economy at a Time, noticed. LAT:
While the Bush administration, the media and nearly all the Democrats still refuse to explain the war in Iraq in terms of oil, the ever-pragmatic members of the Iraq Study Group share no such reticence.
Page 1, Chapter 1 of the Iraq Study Group report lays out Iraq's importance to its region, the U.S. and the world with this reminder: "It has the world's second-largest known oil reserves." The group then proceeds to give very specific and radical recommendations as to what the United States should do to secure those reserves. If the proposals are followed, Iraq's national oil industry will be commercialized and opened to foreign firms.
The report makes visible to everyone the elephant in the room: that we [sic] are fighting, killing and dying in a war for oil. It states in plain language that the U.S. government should use every tool at its disposal to ensure that American oil interests and those of its corporations are met.
It's spelled out in Recommendation No. 63, which calls on the U.S. to "assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise" and to "encourage investment in Iraq's oil sector by the international community and by international energy companies." This recommendation would turn Iraq's nationalized oil industry into a commercial entity that could be partly or fully privatized by foreign firms.
This is an echo of calls made before and immediately after the invasion of Iraq.
The U.S. State Department's Oil and Energy Working Group, meeting between December 2002 and April 2003, also said that Iraq "should be opened to international oil companies as quickly as possible after the war." Its preferred method of privatization was a form of oil contract called a production-sharing agreement. These agreements are preferred by the oil industry but rejected by all the top oil producers in the Middle East because they grant greater control and more profits to the companies than the governments. The Heritage Foundation also released a report in March 2003 calling for the full privatization of Iraq's oil sector. One representative of the foundation, Edwin Meese III, is a member of the Iraq Study Group. Another, James J. Carafano, assisted in the study group's work.
For any degree of oil privatization to take place, and for it to apply to all the country's oil fields, Iraq has to amend its constitution and pass a new national oil law. The constitution is ambiguous as to whether control over future revenues from as-yet-undeveloped oil fields should be shared among its provinces or held and distributed by the central government.
This is a crucial issue, with trillions of dollars at stake, because only 17 of Iraq's 80 known oil fields have been developed. Recommendation No. 26 of the Iraq Study Group calls for a review of the constitution to be "pursued on an urgent basis." Recommendation No. 28 calls for putting control of Iraq's oil revenues in the hands of the central government. Recommendation No. 63 also calls on the U.S. government to "provide technical assistance to the Iraqi government to prepare a draft oil law."
This last step is already underway. The Bush administration hired the consultancy firm BearingPoint more than a year ago to advise the Iraqi Oil Ministry on drafting and passing a new national oil law.
Plans for this new law were first made public at a news conference in late 2004 in Washington. Flanked by State Department officials, Iraqi Finance Minister Adel Abdul Mahdi (who is now vice president) explained how this law would open Iraq's oil industry to private foreign investment. This, in turn, would be "very promising to the American investors and to American enterprise, certainly to oil companies." The law would implement production-sharing agreements. [...]
In July, U.S. Energy Secretary Samuel Bodman announced in Baghdad that oil executives told him that their companies would not enter Iraq without passage of the new oil law. Petroleum Economist magazine later reported that U.S. oil companies considered passage of the new oil law more important than increased security when deciding whether to go into business in Iraq. [...]
All told, the Iraq Study Group has simply made the case for extending the war until foreign oil companies — presumably American ones — have guaranteed legal access to all of Iraq's oil fields and until they are assured the best legal and financial terms possible.
We can thank the Iraq Study Group for making its case publicly. It is now our turn to decide if we [sic] wish to spill more blood for oil. [Emphasis added]
There's a kind of collective mental illness at work when people can get away with suggesting that the Iraq war is not about oil. As if the US would have even noticed (let alone invaded) Iraq were it located in a part of the world where the principal export was, say, bean sprouts.
December 06, 2006
|Study: Exxon Mobil Source Of 5% Of All CO2 Emissions||Corporations, Globalization Energy Environment|
Exxon Mobil Corp. has historically been responsible for about 5 percent of the world's carbon emissions, a finding that could prod more shareholder resolutions on climate change, environmental groups said on Wednesday.
From 1882 to 2002, emissions of carbon dioxide from Exxon and its predecessor companies, through its operations and the burning of its products, totaled an estimated 20.3 billion metric tons, according to Washington, D.C.-based Friends of the Earth.
That represents 4.7 percent to 5.3 percent of global carbon dioxide emissions during that time, the group said in a report.
The 120-year period in question starts in 1882, the year Exxon Mobil's ultimate predecessor, the Standard Oil Trust, was formed.
Single-handedly responsible for 5% of the world's CO2 emissions over the past 120 years. Think maybe they have a vested interest in confusing the global warming issue?
December 05, 2006
|The Obfuscation Agenda||Energy Environment|
Senators John D. Rockefeller IV and Olympia Snowe write to Rex Tillerson, Chair and CEO of ExxonMobil, to ask ExxonMobil to stop providing financial backing to groups seeking to obfuscate the issue of global warming (WSJ):
Dear Mr. Tillerson:
Allow us to take this opportunity to congratulate you on your first year as Chairman and Chief Executive Officer of the ExxonMobil Corporation. You will become the public face of an undisputed leader in the world energy industry, and a company that plays a vital role in our national economy. As that public face, you will have the ability and responsibility to lead ExxonMobil toward its rightful place as a good corporate and global citizen.
We are writing to appeal to your sense of stewardship of that corporate citizenship as U.S. Senators concerned about the credibility of the United States in the international community, and as Americans concerned that one of our most prestigious corporations has done much in the past to adversely affect that credibility. We are convinced that ExxonMobil's longstanding support of a small cadre of global climate change skeptics, and those skeptics' access to and influence on government policymakers, have made it increasingly difficult for the United States to demonstrate the moral clarity it needs across all facets of its diplomacy.
Obviously, other factors complicate our foreign policy. However, we are persuaded that the climate change denial strategy carried out by and for ExxonMobil has helped foster the perception that the United States is insensitive to a matter of great urgency for all of mankind [sic], and has thus damaged the stature of our nation internationally. It is our hope that under your leadership, ExxonMobil would end its dangerous support of the "deniers." Likewise, we look to you to guide ExxonMobil to capitalize on its significant resources and prominent industry position to assist this country in taking its appropriate leadership role in promoting the technological innovation necessary to address climate change and in fashioning a truly global solution to what is undeniably a global problem.
While ExxonMobil's activity in this area is well-documented, we are somewhat encouraged by developments that have come to light during your brief tenure. We fervently hope that reports that ExxonMobil intends to end its funding of the climate change denial campaign of the Competitive Enterprise Institute (CEI) are true. Similarly, we have seen press reports that your British subsidiary has told the Royal Society, Great Britain's foremost scientific academy, that ExxonMobil will stop funding other organizations with similar purposes. However, a casual review of available literature, as performed by personnel for the Royal Society reveals that ExxonMobil is or has been the primary funding source for the "skepticism" of not only CEI, but for dozens of other overlapping and interlocking front groups sharing the same obfuscation agenda. For this reason, we share the goal of the Royal Society that ExxonMobil "come clean" about its past denial activities, and that the corporation take positive steps by a date certain toward a new and more responsible corporate citizenship.
ExxonMobil is not alone in jeopardizing the credibility and stature of the United States. Large corporations in related industries have joined ExxonMobil to provide significant and consistent financial support of this pseudo-scientific, non-peer reviewed echo chamber. The goal has not been to prevail in the scientific debate, but to obscure it. This climate change denial confederacy has exerted an influence out of all proportion to its size or relative scientific credibility. Through relentless pressure on the media to present the issue "objectively," and by challenging the consensus on climate change science by misstating both the nature of what "consensus" means and what this particular consensus is, ExxonMobil and its allies have confused the public and given cover to a few senior elected and appointed government officials whose positions and opinions enable them to damage U.S. credibility abroad.
Climate change denial has been so effective because the "denial community" has mischaracterized the necessarily guarded language of serious scientific dialogue as vagueness and uncertainty. Mainstream media outlets, attacked for being biased, help lend credence to skeptics' views, regardless of their scientific integrity, by giving them relatively equal standing with legitimate scientists. ExxonMobil is responsible for much of this bogus scientific "debate" and the demand for what the deniers cynically refer to as "sound science." [...]
In light of the adverse impacts still resulting from your corporations activities, we must request that ExxonMobil end any further financial assistance or other support to groups or individuals whose public advocacy has contributed to the small, but unfortunately effective, climate change denial myth. Further, we believe ExxonMobil should take additional steps to improve the public debate, and consequently the reputation of the United States. We would recommend that ExxonMobil publicly acknowledge both the reality of climate change and the role of humans in causing or exacerbating it. Second, ExxonMobil should repudiate its climate change denial campaign and make public its funding history. Finally, we believe that there would be a benefit to the United States if one of the world's largest carbon emitters headquartered here devoted at least some of the money it has invested in climate change denial pseudo-science to global remediation efforts. We believe this would be especially important in the developing world, where the disastrous effects of global climate change are likely to have their most immediate and calamitous impacts. [Emphasis added]
Ok, as Jerome a Paris notes, there is a certain irony in John D. Rockefeller IV taking issue with ExxonMobil, the principal remnant of his great-grandfather's Standard Oil empire.
Meanwhile, the editors of the Wall St. Journal read the Senators' letter and flipped out:
Washington has no shortage of bullies, but even we can't quite believe an October 27 letter that Senators Jay Rockefeller and Olympia Snowe sent to ExxonMobil CEO Rex Tillerson. Its message: Start toeing the Senators' line on climate change, or else. [...]
This is amazing stuff. On the one hand, the Senators say that everyone agrees on the facts and consequences of climate change. But at the same time they are so afraid of debate that they want Exxon to stop financing a doughty band of dissenters who can barely get their name in the paper. We respect the folks at the Competitive Enterprise Institute, but we didn't know until reading the Rockefeller-Snowe letter that they ran U.S. climate policy and led the mainstream media around by the nose, too. Congratulations.
Let's compare the balance of forces: on one side, CEI; on the other, the Pew Charitable Trusts, the Sierra Club, Environmental Defense, the U.N. and EU, Hollywood, Al Gore, and every politically correct journalist in the country. We'll grant that's a fair intellectual fight. But if the Senators are so afraid that a handful of policy wonks at a single small think-tank are in danger of winning this debate, they must not have much confidence in the merits of their own case. [Emphasis added]
There's a special place in hell reserved for these people.
December 03, 2006
|Conserving Energy At Home||Energy|
Home energy conservation is low-hanging fruit. CSM:
When high school science teacher Ray Janke bought a home in Chicopee, Mass., he decided to see how much he could save on his electric bill.
He exchanged incandescent bulbs for compact fluorescents, put switches and surge protectors on his electronic equipment to reduce the "phantom load" — the trickle consumption even when electronic equipment is off — and bought energy-efficient appliances.
Two things happened: He saw a two-thirds reduction in his electric bill, and he found himself under audit by Mass Electric. The company thought he'd tampered with his meter. "They couldn't believe I was using so little," he says.
Mr. Janke had hit on what experts say is perhaps the easiest and most cost-effective place to reduce one's energy consumption: home.
Moving closer to public transportation or riding a bike instead of driving is not an option for many, but changing incandescent bulbs for fluorescent and buying more efficient appliances is not only possible, it quickly pays for itself with savings.
In the end, not-very-glamorous changes like these as well as obsessively sealing and insulating your home will save more than, in the words of one expert, "greenie weenie" additions like green roofs and solar panels. Twenty-two percent of all energy in the United States is used for residential purposes. (Transportation accounts for 28 percent.) And although residences consume only about two-fifths of this as electricity, because electrical generation is inherently inefficient, it accounts for 71 percent of household emissions. A home's electrical use may be responsible for more CO2 emissions than the two cars in the driveway. Ultimately, changes made at home may be the quickest, cheapest, and easiest way to reduce one's carbon footprint. [...]
"If you love your children, replace your lights," says Joseph Lstiburek, principal engineer of Building Science, a Boston-based consulting company that specializes in building technology. [Emphasis added]
He cut his electricity use by two-thirds. Savings like that are well worth the effort. What are we waiting for?
October 14, 2006
|Goldman Sachs And The Price Of Gasoline||Economy Energy Politics|
As we've noted in the past, presidential approval ratings historically closely track the price of gasoline. The higher the price of gas, the lower the approval rating (see the graph here). That makes the recent plunge in gas prices good news for the White House, and for Republican candidates generally, going into the November elections.
Why have gas prices dropped so precipitously? Why now?
One significant factor that has gone largely unnoticed is a decision by investment bank Goldman Sachs to restructure its Goldman Sachs Commodity Index (GSCI) in a way that prompted the sudden selling of some $6 billion in gasoline futures. NYT:
Politics and worries about oil supplies may have caused gasoline prices to go up at the pump earlier this year, but one big investment bank quietly helped their rapid drop in recent weeks, according to some economists, traders and analysts.
Goldman Sachs, which runs the largest commodity index, the G.S.C.I., said in early August that it was reducing the index's weighting in gasoline futures significantly. The announcement did not make big headlines, but it has reverberated through the markets in the weeks since and some other investors who had been betting that gasoline would rise followed suit on their weightings.
"They started unwinding their positions, and those other longs also rushed to the door at the same time," said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation.
Wholesale prices for New York Harbor unleaded gasoline, the major gasoline contract traded on the New York Mercantile Exchange, dropped 18 cents a gallon on Aug. 10, to $1.9889 a gallon, a decline of more than 8 percent, and they have dropped further since then. In New York on Friday, gasoline futures for October delivery rose 4.81 cents, or 3.2 percent, to $1.5492 a gallon. Prices have fallen 9.4 percent this year.
The August announcement by Goldman Sachs caught some traders by surprise. [...]
Unleaded gasoline made up 8.72 percent of Goldman's commodity index as of June 30, but it is just 2.3 percent now, representing a sell-off of more than $6 billion in futures contract weighting.
Like many market indexes, trading in the Goldman Sachs Commodity Index is publicly available, allowing individual investors and third-party asset managers to participate in that market. The $100 billion invested comes from brokers, fund managers and individuals, probably including some of the same people who were hurt by high gasoline prices earlier in the year.
Goldman's announcement on Aug. 9 was not the only downward pressure on prices that week, market participants stress. And while it may have played a part in sending prices down, the market would never have continued its downward trend unless supplies had loosened up, they say.
Also during that week, climatologists revised their hurricane forecasts, easing fears that oil supplies could be disrupted. And BP said it would still produce some oil from its field in Prudhoe Bay, Alaska, where leaks were being repaired. Meanwhile, the peak gasoline season was ending, and new supplies of ethanol were coming online. [...]
"We saw gasoline fall 82 cents in the wholesale market over a four-week period, which is unprecedented," he said. Mr. Goldstein said that the decline in gasoline prices helped send prices of the whole group of energy-related products down.
Now, rather than highs, these products are hitting lows — natural gas, for example, traded on Wednesday at its lowest price in four years. [Emphasis added]
There's an element of crowd psychology in commodities futures trading, as there is in the trading of stocks, real estate, etc. A number of factors contributed to the crowd's psychology changing course with respect to gasoline futures. But the fact that Goldman's announcement came on August 9 and gasoline futures plunged more than 8% the following day is hardly coincidence.
It is impossible to know if Goldman's motives were in part political, but one could be forgiven for concluding that Bush administration economic policy is a wholly-owned subsidiary of Goldman Sachs. Henry Paulson, current Secretary of the Treasury, was CEO and Chairman of GS, as was Stephen Friedman, formerly the chair of Bush's National Economic Council and currently the chair of his Foreign Intelligence Advisory Board. Bush Chief of Staff (and former director of the Office of Management and Budget) Josh Bolten is a GS alumnus, as is Reuben Jeffery, chair of the Commodity Futures Trading Commission. It would be the responsibility of the latter to investigate any questions about manipulations of the futures markets. Not for nothing did Tom Wolfe call them "Masters of the Universe".
October 08, 2006
|Micro-Generation Isn't The Answer||Energy Environment|
According to Britain's George Monbiot, author of Heat: How to Stop the Planet From Burning, micro-generation of electricity via small-scale wind turbines and solar panels is an over-hyped non-solution to global warming. Large-scale wind turbines, however, are a practical solution, especially for an island nation like the UK. Excerpt:
In seeking to work out how a 90% cut in carbon emissions could be achieved in the rich nations by 2030, I have made many surprising findings. But none has shocked me as much as the discovery that renewable micro generation has been grossly overhyped. Those who maintain that our own homes can produce all the renewable electricity and heat they need have harmed the campaign to stop climate chaos, by sowing complacency and misdirecting our efforts.
Last year, the environmental architect Bill Dunster, who designed the famous BedZed zero-carbon development outside London, published a brochure claiming that "up to half of your annual electric needs can be met by a near silent micro wind turbine". The turbine he specified has a diameter of 1.75 metres. A few months later Building for a Future magazine, which supports renewable energy, published an analysis of micro wind machines. At 4 metres per second — a high average wind speed for most parts of the UK — a 1.75 metre turbine produces about 5% of a household’s annual electricity. To provide the 50% Bill Dunster advertises, you would need a machine 4 metres in diameter. The lateral thrust it exerted would rip your house to bits.
Turbulence makes wind generators even less efficient. To avoid it, you must place them at least 11 metres above any obstacle within 100 metres. On most houses, this means constructing a minor hazard to aircraft. The higher the pole, the more likely you are to inflict serious damage to your house. In almost all circumstances, micro wind turbines are a waste of time and money. [...]
[S]eeking to generate all our electricity by [installing solar panels on residences] would be staggeringly and pointlessly expensive — there are far better ways of spending the same money. The International Energy Agency's MARKAL model gives a cost per tonne of carbon saved by solar electricity in 2020 of between £2200 and £3300. Onshore macro wind power, by contrast, varies between a saving of £40 and a cost of £130 a tonne.
[Another] problem is that the supply of solar electricity is poorly matched to demand. In the UK, demand peaks on winter evenings. Even if we could produce 407TWh a year from solar panels on our roofs, only some of it could be used. There would be a surge of production in the summer, during the middle of the day, and very little in the winter. While solar panels might reasonably supply 5-10% of our electricity, the size and inefficiency of the energy storage and standby power system required makes a purely solar network impossible.
Similar constraints affect all micro renewables: a report by a team at Imperial College shows that if 50% of our homes were fitted with solar water heaters, they would produce 0.056 exajoules of heat, or 2.3% of our total demand; while AEA Technology suggests that domestic heat pumps could supply only 0.022 eJ of the UK's current heat consumption, or under 1%. This doesn't mean they are not worth installing, just that they can't solve the problem by themselves.
Some campaigners accept that micro generators can make only a small contribution, but argue that they are still useful, as they wake people up to green issues. It seems more likely that these overhyped devices will have the opposite effect, as their owners discover how badly they have been ripped off and their neighbours are driven insane by the constant yawing and stalling of a windmill on a turbulent roof.
Far from shutting down the national grid,...we should be greatly expanding it, in order to produce electricity where renewable energy is most abundant. This means, above all, a massive investment in offshore windfarms. A recent government report suggests there is a potential offshore wind resource off the coast of England and Wales of 3,200TWh. High voltage direct current cables, which lose much less electricity in transmission than an AC network, would allow us to make use of a larger area of the continental shelf than before. This means we can generate more electricity more reliably, avoid any visual impact from the land and keep out of the routes taken by migratory birds. Much bigger turbines would realise economies of scale hitherto unavailable.
The electricity system cannot be run on wind alone. But surely it's clear that building giant offshore windmills is a far better use of our time and money than putting mini-turbines in places where they will generate more anger than power. [Emphasis added]
Driving along highway 18 in southwestern Wisconsin this weekend, Carie and I passed the Montfort windfarm — a string of 20 large turbines (30 Megawatt capacity) installed on a ridge running parallel to the road. The turbines are both stately and graceful — quite beautiful, in fact. The mere sight of them inspires hope. They are like visitors from a better future. They radiate peace. No carbon emitted, no oil wars required.
It should be a no-brainer.
September 02, 2006
|Feedback And Behavior Modification||Energy|
As many of you know, I got a new Prius a few months back (license plate: "PEAK OIL" — I couldn't resist). I love it. Just a great car.
The Prius has an LCD display on the dash that displays your instantaneous and average gas mileage, updated in real time, with a big bar chart that makes the instantaneous changes in mileage dramatic to your eye. You learn very quickly what kind of driving behavior helps your mileage and what hurts it. And since you know the first thing people ask a Prius owner is what kind of mileage you get, maximizing your mileage becomes a game you play with yourself. The result, for me, at least, is a pretty dramatic change in driving habits. It used to be about how fast can I go without getting a ticket. Now it's more likely to be how slow can I go without pissing off the people behind me. All because I can see the effects of my behavior. I.e., because of feedback.
So imagine if we had this kind of instantaneous feedback for all of our energy usage. If we all had these kinds of readouts on the walls of our homes and offices, for example, we'd all be a whole lot more likely to turn off our lights and air-conditioners. And so on.
Out of sight, out of mind. But make it visible, and change happens.
August 25, 2006
|On Chavez||Energy Peak Oil|
Policy Pete on Hugo Chavez:
So he likes Fidel, so what? This is business, not personal, as the Corleones used to like to say. The US just lost half a million barrels a day forever to the Chinese. Having managed to tick off every Muslim on the planet, it would have been expecting too much for an unsophisticated presidency to try to mend fences in the southern hemisphere. Why not anger everyone who will be supplying the marginal oil that the US will need pretty desperately in less than a decade? "We're imperious; you're the third world. We get to give you little lectures on Freedom and The Free Market, you get to ship us your crude."
While it is not impossible that this may be the right strategy for a secure US, more than a few foreign offices must be watching Washington with genuine puzzlement. Do the Americans really think that a policy aimed (unsuccessfully) at eradicating terrorists means the rest of the world will supply the US with its petroleum in gratitude?
It's going to be painful to live through, but the US is giving the world a pretty good object lesson on the futility of trying to dictate terms through intimidation and military force in a world that's becoming ever more fragmented, fluid, unconquerable and ungovernable, at an ever-accelerating pace. Bullies get what's coming to them, in the end.
The White House thought the US was the new Rome. They thought they could dominate the world's oil producers by purely military means. Ain't working out too well. For the near term, world oil markets will stay open to the highest bidder and oil will continue to be fungible. But who is to say markets won't begin to break down when the oil picture gets more desperate. Oil producers will have opportunities to exert leverage beyond just getting a good price. We're giving a lot of people a lot of reasons to look for payback.
August 12, 2006
|MIT To Go Full Bore On Energy Research||Energy Science/Technology|
Solar cells made from spinach. Algae-based biofuel fattened on greenhouse gas. Plasma-powered turbo engines. These are just some of the technologies being developed by a Manhattan Project-style research effort for new energy technologies at MIT.
Scientists at MIT are undertaking a big, ambitious, university-wide program to develop innovative energy tech under the auspices of the school's Energy Research Council.
"The urgent challenge of our time (is) clean, affordable energy to power the world," said MIT President Susan Hockfield.
Inaugurated last year, the project is likened by Hockfield to MIT's contribution to radar — a key technology that helped win World War II.
"As the example of radar suggests, when MIT arrays its capabilities against an important problem ... we can make an important contribution," said Hockfield in an e-mail.
David Jhirad, a former deputy assistant secretary of energy and current VP for science and research at the World Resources Institute, said no other institution or government anywhere has taken on such an intensive, creative, broad-based, and wide-ranging energy research initiative.
"MIT is stepping into a vacuum, because there is no policy, vision or leadership at the top of our nation," he said. "It's uniquely matched. MIT has tremendous strengths across the board — from science and engineering to management to architecture to the humanities. From that point of view, it's hugely significant."
Below are some examples of the MIT research projects the Energy Research Council will be sponsoring and developing:
Spinach solar power: Tapping the secrets of photosynthesis — engineering proteins from spinach — to make organic solar cells whose efficiency could outstrip the best silicon photovoltaic arrays today. Silicon superstrings: A novel approach to manufacturing conventional silicon photovoltaic arrays by pulling the chips in stringy ribbons out of a molten stew like taffy rather than slicing them from silicon ingots. Laptop-powered hybrids: Using a new generation of lithium-based batteries (which power most portable electronics today) to cut the price and charge-time of hybrid and electric car batteries. Tubular battery tech: Using "supercapacitors" made from carbon nanotubes to store charge — rather than the chemical reactions that power most batteries — resulting in a lightweight, high-capacity battery that could someday give even the laptop battery a run for its money. Hold the A/C: Optimizing air and heat flow on a new computer-aided design system, before a building's construction begins, allowing for the building's air conditioning costs to be cut by as much as 50 percent. Hybrid without the hybrid: Turbocharging an automobile engine with plasma from a small ethanol tank (which would need to be refilled about as often as the oil needs changing), reportedly increasing fuel efficiency almost to the level of a hybrid — but only adding $500-$1,000 to the car's sticker price. More light than heat: Generating a car's electricity photoelectrically (using a gas-powered light and a small, specially designed solar panel) rather than mechanically (using an alternator), substantially increasing fuel efficiency. Coal-powered biofuels: Bubbling exhaust from a coal-fired power plant through a tank of algae that's been bred to siphon off much of the exhaust's carbon dioxide — in the process, fattening the algae that can then be harvested as biodiesel.
Many of these projects are ongoing and will continue under the Energy Research Council banner. Others, such as a new effort to make cheap ethanol using a biochemical technique called metabolic engineering, apply the expertise of faculty and staff who had never worked on energy problems before. [Emphasis added]
The multidisciplinary aspect of this is very cool. Everything from nanotechnologists to architects, bioengineers to city planners.
Besides being good for us all, this has to be good for MIT as well. It should, for one thing, help them attract the very best and brightest. If you were a young science or engineering student, what could be better than getting an opportunity to help save the world?
August 03, 2006
|Tesla Motors' Master Plan||Energy Science/Technology|
This is absolutely, amazingly cool. 34-year-old Elon Musk, who's already made a couple of fortunes by co-founding Zip2 and PayPal, and who now runs space exploration company SpaceX, is chairman and principal investor in Tesla Motors, builders of a 100% electric high-performance roadster that goes 0 to 60 in 4 seconds while getting the equivalent of 135 mpg on a charge that lasts 250 miles. The Tesla Roadster ain't cheap ($89k), but Tesla Motors has a master plan. Elon Musk explains (via John Robb):
As you know, the initial product of Tesla Motors is a high performance electric sports car called the Tesla Roadster. However, some readers may not be aware of the fact that our long term plan is to build a wide range of models, including affordably priced family cars. This is because the overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution.
Critical to making that happen is an electric car without compromises, which is why the Tesla Roadster is designed to beat a gasoline sports car like a Porsche or Ferrari in a head to head showdown. Then, over and above that fact, it has twice the energy efficiency of a Prius. Even so, some may question whether this actually does any good for the world. Are we really in need of another high performance sports car? Will it actually make a difference to global carbon emissions?
Well, the answers are no and not much. However, that misses the point, unless you understand the secret master plan alluded to above. Almost any new technology initially has high unit cost before it can be optimized and this is no less true for electric cars. The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.
Without giving away too much, I can say that the second model will be a sporty four door family car at roughly half the $89k price point of the Tesla Roadster and the third model will be even more affordable. In keeping with a fast growing technology company, all free cash flow is plowed back into R&D to drive down the costs and bring the follow on products to market as fast as possible. When someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car. [...]
I wouldn’t recommend them as a dessert topping, but the Tesla Motors Lithium-Ion cells are not classified as hazardous and are landfill safe. However, dumping them in the trash would be throwing money away, since the battery pack can be sold to recycling companies (unsubsidized) at the end of its greater than 100,000-mile design life. Moreover, the battery isn’t dead at that point, it just has less range. [...]
Note the term hybrid as applied to cars currently on the road is a misnomer. They are really just gasoline powered cars with a little battery assistance and, unless you are one of the handful who have an aftermarket hack, the little battery has to be charged from the gasoline engine. Therefore, they can be considered simply as slightly more efficient gasoline powered cars. If the EPA certified mileage is 55 mpg, then it is indistinguishable from a non-hybrid that achieves 55 mpg. As a friend of mine says, a world 100% full of Prius drivers is still 100% addicted to oil. [...]
I should mention that Tesla Motors will be co-marketing sustainable energy products from other companies along with the car. For example, among other choices, we will be offering a modestly sized and priced solar panel from SolarCity, a photovoltaics company (where I am also the principal financier). This system can be installed on your roof in an out of the way location, because of its small size, or set up as a carport and will generate about 50 miles per day of electricity.
If you travel less than 350 miles per week, you will therefore be "energy positive" with respect to your personal transportation. [...]
So, in short, the master plan is:
Build sports car
Use that money to build an affordable car
Use that money to build an even more affordable car
While doing above, also provide zero emission electric power generation options
Don’t tell anyone.
Wow! There's lots more at the Tesla Motors site: specs and images of the roadster, energy calculations, engineering discussion, etc. Amazing stuff.
The roadster's a rich man's toy, but the goal is to have a reasonably-priced family car reasonably soon. They'll sell you the car and a solar panel to charge it with. Sweet. Wonder if they'll take my Prius in trade?
August 02, 2006
|Will Carbon Sequestration Save Us?||Energy Environment Peak Oil|
Oil's about to peak, but we've still got lots of coal, and coal, unfortunately, will become the path of least resistance. All that coal means lots more carbon in the atmosphere. Unless we can bury the CO2, permanently — so-called carbon sequestration.
For every tonne of anthracite [coal] burned, 3.7 tonnes of CO2 is generated. If this voluminous waste could be pumped back into the ground below the power station it would not matter as much, but the rocks that produce coal are not often useful for storing CO2, which means that the gas much be transported. In the case of Australia's Hunter Valley coal mines, for example, it needs to be conveyed over Australia's Great Dividing Range and hundreds of kilometres to the west.
Once the CO2 arrives at its destination it must be compressed into a liquid so it can be injected into the ground — a step that typically consumes 20 per cent of the energy yielded by burning coal in the first place. Then a kilometre-deep hole must be drilled and the CO2 injected. From that day on, the geological formation must be closely monitored; should the gas ever escape, it has the potential to kill.
The largest recent disaster caused by CO2 occurred in 1986, in Cameroon, central Africa. A volcanic crater-lake known as Nyos belched bubbles of CO2 into the still night air and the gas settled around the lake's shore, where it killed 1800 people and countless thousands of animals.
Earth's crust is not a purpose-built vessel for holding CO2, and the storage must last thousands of years so the risk of leak must be taken seriously.
Even the volume of CO2 generated by a sparsely populated country such as Australia beggars belief. Imagine a pile of 200-litre drums, ten kilometres long and five across, stacked ten drums high. Even when compressed to liquid form, that daily output would take up a cubic kilometre, and Australia accounts for less than 2 per cent of global emissions! Imagine injecting 50 cubic kilometre of liquid CO2 into the Earth's crust every day of the year for the next century or two.
If geosequestration were to be practised on the scale needed to offset all the emissions from coal, the world would very quickly run out of A-grade reservoirs near power stations and, especially if the power companies are not liable for damages resulting from leaks, pressure would be on to utilise B, C, D and E grade reservoirs.
As always when it comes to world energy usage, the fundamental issue is a question of scale. 50 cubic kilometers a day, every day, 'til the coal runs out. And it's got to stay buried. What are the chances?
July 24, 2006
|Oil Back Above $75||Energy Peak Oil|
Oil's back above $75 a barrel — $75.16 as I write this.
July 09, 2006
Don't get me wrong: I love nuclear energy! It's just that I prefer fusion to fission. And it just so happens that there's an enormous fusion reactor safely banked a few million miles from us. It delivers more than we could ever use in just about 8 minutes. And it's wireless!
That bright object in the sky: it's up and running, and will be for billions of years.
Meanwhile, classifying nuclear plants as "renewable" — as President Bush and others have done — may seem like some sort of joke, but there's a lot at stake: renewables get tax exemptions and utilities are increasingly mandated to derive a certain percentage of their power from renewable sources. The reality-based community responds.
April 25, 2006
|Political Instability And The Price Of Gas||Energy Peak Oil Politics|
As gas prices move higher, Republican politicians are sweating. With good reason. The graph below (from Professor Pollkatz, whom we first linked to back in 2004) plots Bush's approval rating in blue and the price of gasoline (inverted — i.e., lower on the graph means higher in price) in red (click to enlarge). Talk about correlation.
And so we're treated to Republican Bush today posed in front of a backdrop more befitting a granola-eating, Birkenstock-wearing Green, speaking about investigating Big Oil for price-gouging.
Republicans in both houses of Congress are jumping on the bandwagon. WaPo:
Sen. Arlen Specter (R-Pa.) said this week that a windfall-profits tax on oil companies is "worth considering."
Rep. Joe Barton (R-Tex.), chairman of the House Energy and Commerce Committee, joined other lawmakers yesterday in condemning high oil prices by taking aim at oil companies. Barton said his committee will hold hearings into the imbalance of supply and demand. He added that "it troubles me" that Exxon Mobil Corp.'s chief executive received a large pay and retirement package "while refinery capacity continues to lag behind demand in this country."
Republicans talking about taxing profits, of all things.
It would be nice if the Dems would use the opportunity to take the high ground via straight talk about the world supply future and the urgent need to take serious steps on fuel efficiency and development of alternatives. But, as usual, their proposals are mostly Republican Lite. (Although Bill Clinton, at least, did recently acknowledge Peak Oil in a speech in London.)
Meanwhile, the inverse correlation between gas prices and political fortunes bodes ill for our political future. So long as Americans are addicted to oil, the US political picture is going to be increasingly unstable. Billmon has a good post on this. Excerpt:
It's a little disconcerting to think that gas prices — not Iraq, not Katrina, not the extra-constitutional power grabs — could decide whether Shrub's presidency recovers or collapses into complete irrelevancy for the next three years. [...]
[The inverse correlation between gas prices and political fortunes] should be enough to make any would-be president (Demopublican or Republicrat) extremely nervous, since it seems high energy prices are likely to be a major fact of life for years to come — and maybe forever. If that turns out to be the case, then an absolutely necessary condition for future presidential success, or even survival, might be making sure the go juice keeps flowing at prices that won't drive the average American SUV owner onto the war path.
But that isn't going to be easy — not in a world in which everybody and their Chinese cousin is scrambling to lock up the available supply, where a number of major oil producing countries are a coup away from becoming failed states (if they're not there already), and that is already producing about as much of the light, sweet cheap stuff as it ever will.
Given the political incentives, it's possible to look a ways down the road — not a long ways — and see a U.S. military policy (formerly known as a foreign policy) that begins and ends with the protection of the oil lifeline. [...]
America's oil lifeline spans the earth...All of it has to be watched and guarded, stabilized and supervised. Even a partial loss of control could turn into a disaster, since in a global market supply disruptions anywhere can send prices soaring everywhere. And yet some of the most serious threats — like the separatist movement in the Niger delta — are outside the U.S. security "umbrella," traditionally defined.
What this implies, of course, is a terrible case of imperial overstretch, one which technology, firepower and Special Forces mojo may not be able to cure, no matter how much money gets thrown at the Pentagon. When the objective is to protect vital economic infrastructures, rather than blow them up, the U.S. military machine clearly lacks many of the right tools — like an adequate number of combat boots with soldiers' feet inside them.
For those who fear above all else the threat of hostile Middle Eastern regimes armed with WMD, this is potentially very bad news, at least in the long run. Unless stopping the (insert nationality here) Hitler can be done in a way that doesn't jack up the price of a gallon of regular, future U.S. administrations may be unwilling, or politically unable, to risk it.
Unfortunately, in the short run this could be even worse news for those of us who fear a wider war in the Middle East more than the future possibility of a nuclear Iran. Having seen what high gas prices have done to his popularity ratings, Bush may feel confirmed in his reported conviction that no future president will have the guts to take down Tehran. And having fallen into Jimmy Carter territory, he may also feel he has nothing left to lose, at least politically, by doing it himself. [Emphasis added]
Billmon goes on to suggest that Bush's failure may lead future administrations to return to a more cautious and prudent posture. I wonder.
At the end of the film 1975 Three Days of the Condor, Robert Redford's character, a CIA analyst, confronts his superior, played by Cliff Robertson. Remember, this was 1975:
Turner (Robert Redford): "Do we have plans to invade the Middle East?"
Higgins (Cliff Robertson): "Are you crazy?"
Turner: "Am I?"
Higgins: "Look, Turner..."
Turner: "Do we have plans?"
Higgins: "No. Absolutely not. We have games. That's all. We play games. What if? How many men? What would it take? Is there a cheaper way to destabilize a régime? That's what we're paid to do."
Turner: "Go on. So Atwood just took the game too seriously. He was really going to do it, wasn't he?”
Higgins: "It was a renegade operation. Atwood knew 54-12 would never authorize it. There was no way, not with the heat on the Company.”
Turner: "What if there hadn't been any heat? Supposing I hadn't stumbled on a plan? Say nobody had?"
Higgins: "Different ball game. The fact is there was nothing wrong with the plan. Oh, the plan was alright. The plan would have worked."
Turner: "Boy, what is it with you people? You think not getting caught in a lie is the same thing as telling the truth?"
Higgins: "No. It's simple economics. Today it's oil, right? In 10 or 15 years - food, Plutonium. And maybe even sooner. Now what do you think the people are gonna want us to do then?
Turner: "Ask them."
Higgins: "Not now - then. Ask them when they're running out. Ask them when there's no heat in their homes and they're cold. Ask them when their engines stop. Ask them when people who've never known hunger start going hungry. Do you want to know something? They won't want us to ask them. They'll just want us to get it for them." [Emphasis added]
The correlation between oil prices and political fortunes will, as prices inevitably climb higher, open the door to opportunistic demagogues and hardliners, here in the US and throughout the world. Reason number 1,001 why we need to conserve — now.
April 23, 2006
|Peak Tires||Economy Energy Peak Oil|
Economists look at peak oil (and peak copper, peak nickel, and peak everything else) and say the market will provide. As commodity prices rise, producers will be able to make a profit extracting resources from places that previously were unprofitable, in effect increasing the supply.
But it's not that simple. The fundamental problem is the sheer scale of world resource use. It takes more than money. There are physical constraints on how quickly some things can be done. There's a lot of oil in Canadian tar sands, for example, but no amount of investment capital is going to make it possible to extract more than a few million barrels a day in the foreseeable future. Likewise, producers of conventional oil (i.e., oil from wells, not from tar sands or shale) may want to drill lots more wells, but all of the world's oil rigs are already in use. Building more will take time. And there are only a finite number of people with the needed expertise to make these things happen. Training more will take even more time.
Part of the problem is that price signals arrive too late. What causes prices to rise is a shortage in current production. Draining the world's reservoirs doesn't get reflected in prices until the situation has become so dire that producers can no longer pump oil fast enough. By then, it's too late. Investment in alternatives has a long lead time, so it should have started long before shortages show up in prices.
The worldwide thirst for stuff from the ground — materials as diverse as copper and coal, gold and oil — has set off a stunning boom in just about every commodity market. But there is one item that lately has dealers in the global mining industry really scrambling: the supersize tire.
Mining companies are complaining about a shortfall in the supply of the giant tires that go on large dump trucks and other heavy equipment. These outsize tires stand as tall as 12 feet tall and can spread 4 feet wide.
They are used prominently everywhere from the Canadian tar sands to open-air coal mines in the United States and China, but lately they have become almost as precious as gold and silver: prices have quadrupled for some of them in the last year to more than $40,000 a tire.
"This has never happened in the 35 years I've been in this business," said Michael Hickman, 63, who, together with his son, owns H & H Industries in Oak Hill, Ohio, one of the nation's largest retreaders of used mining tires.
"Right now the entire mining industry is going berserk, and we're feeding into it," said Mr. Hickman, whose company has tripled its work force to 160 in the last two years. [...]
[M]ining companies and tire manufacturers say the biggest reason is the rapid industrialization of China, India and other developing countries, which is expanding the appetite for basic commodities. [...]
Given the stress the commodities boom has unexpectedly created in an arcane area of the mining supply chain, some experts suggest that the tire shortage may keep prices higher longer than expected by limiting the ability of mining companies to meet the explosive demand for their products. But in the end, they say, there is little to worry about.
"This tire issue is, I believe, more a symptom of the mining industry's strength than its weakness," said Tibor Rozgonyi, head of the mining engineering department at the Colorado School of Mines. "It may be an acute concern at this moment, but the market has a way of taking care of these imbalances." [Emphasis added]
Eventually, the market will take care of the imbalances, it's true, but not necessarily by continuing to provide more of everything, forever. It may do it via ever-rising prices, which will price a lot of people out of the market. Demand destruction, as it's called. Meanwhile, we plow full steam ahead, as if the current way of doing things can continue indefinitely.
April 06, 2006
|Energy Execs To Senate: Cap Us!||Activism Energy Environment Politics|
In a Senate hearing Tuesday, executives representing a number of major energy companies actually requested federal legislation that would place caps on carbon emissions. Why? They're afraid of local and regional regulations that are gaining momentum. Grist:
Tuesday saw a tectonic shift in the climate-change debate during an all-day Senate conference on global-warming policy. A group of high-powered energy and utility executives for the first time issued this directive to Washington: Bring on the carbon caps!
The Energy and Natural Resources Committee heard statements from leaders representing eight big energy companies, including General Electric, Shell, and the two largest owners of utilities in the U.S., Exelon and Duke Energy. Six of the eight said they would either welcome or accept mandatory caps on their greenhouse-gas emissions. Wal-Mart too spoke in favor of carbon caps. The two outliers from the energy sector, Southern Company and American Electric Power, delivered pro forma bids for a voluntary rather than mandatory program, but they, too, broke with tradition by implicitly acknowledging that regulations may be coming, and offering detailed advice on how they should be designed.
Many industry players are increasingly concerned about the inconsistent patchwork of climate regulations that are being proposed and adopted throughout the U.S., from the Regional Greenhouse Gas Initiative that seven Northeastern states put forward in December to plans for greenhouse-gas caps unveiled in California this week. Worried companies say federal regulations would bring stability and sureness to the market. [...]
Senate hearings rarely manage to draw a crowd of 60, but for this one some 300 members of Congress, lobbyists, and advocates crammed themselves into the hearing room...and more watched via a live webcast.
"It's the most widely attended hearing that I've ever been to for this committee," said Sen. Dianne Feinstein (D-Calif.), "and that shows the gravity of this issue."
Said John Stanton, a vice president of National Environmental Trust, "I began the morning far more cynical than I felt at the end of the day." The conference was "remarkably devoid of the climate-skeptic malarkey that usually derails the debate at these sorts of events," he said. "You actually had real experts making real progress — hashing out the nitty-gritty of exactly how this emissions-trading system could be implemented."
Of course, there are still plenty of energy companies that oppose caps, and the conference didn't hear from anyone in the auto industry, a major contributor to greenhouse-gas emissions and a major opponent of moves to curb them. [Emphasis added]
Take note: local and regional activism matters! Getting local/regional regulations enacted forces the feds to act on the national level. That's the good news. The bad news is that federal legislation may turn out to be a watered-down version of what local/regional activists accomplished. Still, it's good to see the beginnings of movement on this front.
April 04, 2006
|Hans Blix: Iran At Least 5 Years From Bomb||Energy Iran|
Hans Blix, former UN chief weapons inspector and former head of the IAEA, says Iran is at least five years from developing a nuclear bomb. AP:
Former U.N. chief weapons inspector Hans Blix said Monday that Iran is a least five years away from developing a nuclear bomb, leaving time to peacefully negotiate a settlement.
Blix, attending an energy conference in western Norway, said he doubted the U.S. would resort to invading Iran.
"But there is a chance that the U.S. will use bombs or missiles against several sites in Iran," he was quoted...as saying. "Then, the reactions would be strong, and would contribute to increased terrorism."
Blix said there is still time for dialogue over Iran's nuclear enrichment program, which Tehran insists is for peaceful purposes but the West fears is part of a secret nuclear weapons program.
"We have time on our side in this case. Iran can't have a bomb ready in the next five years," Blix was quoted as saying.
Blix, also a former head of the International Atomic Energy Agency, urged the United States to take its time, as it is doing in a similar nuclear standoff with North Korea.
"The U.S. has given itself time and is negotiating with North Korea, while Iran got a very short deadline," he was quoted as saying. [Emphasis added]
It cannot be stated often enough: Iran (unlike US friends India, Pakistan, and Israel, which actually have nuclear weapons) is a signatory of the Nuclear Nonproliferation Treaty and is acting in accordance with its provisions.
Meanwhile, the US is patient with North Korea (which claims to already have the bomb), but not with Iran, which is years away. But then Iran is sitting on 10% of the world's proven oil reserves, according to Wikipedia, and the world's second largest natural gas reserves. Energy policy, à la Bush.
March 31, 2006
March 28, 2006
|The Long War||9/11, "War On Terror" Energy Iraq Peak Oil|
James Kunstler loves to go overboard, but in his latest missive, he's got a point: the Iraq debate is grounded in delusion. Kunstler:
This is how deluded the American public is now: Various polls are showing that the war in Iraq has reached new lows of unpopularity. The dumb bunnies in the news media are implying that when the numbers get low enough, we will pull our troops out and go home.
This is not going to happen. Our inordinate hubris has led us to believe that this conflict is optional.
Notice, too, that the war-weary public has done, and continues to do, nothing to change its habits of profligate oil use which have driven us to project our military into the Middle East. We have not even begun a discussion of what we might do. We just expect to keep running American society exactly the way it has been set up to run — as a nonstop demolition derby, with hamburgers and fries between laps around the freeway.
At the highest level of public discourse, the cluelessness is shocking. The New York Times Sunday Book Review ran a front-page piece yesterday on Francis Fukuyama's latest salvo, America at the Crossroads, which is largely about our Middle East war policy, without once using the word "oil." [...]
The plain truth is, if anything happens to upset the current management and allocation system of the the global oil markets, the industrial economies of the world will collapse, and America's will collapse hardest and worst because of the way we have arranged things for ourselves. The global oil markets currently revolve around Middle East oil production. If the region is overcome by instability, than it's simply GAME OVER. [...]
Our denial runs deep and hard. Even the educated minority (including the tech wonks) believe that we can run the freeways and the WalMarts on alternative fuels. They flatter themselves listening to the morning yammer about "renewables" on NPR as they make the daily commute from, say, the suburban asteroid belts of Northern Virginia into Washington, DC. They bethink themselves progressive, cutting edge, morally superior in their Priuses. [...]
What can we do? Oil man Jeffrey Brown of Dallas has made the interesting suggestion that we replace some or all of the national income tax with a substantial national gasoline tax. A congressional debate over that would be worth hearing. It would be a good start in concentrating our minds in the right direction: that is, toward the problems we have created for ourselves at home. There are many other things we could do also, from rebuilding our railroads to removing incentives for suburban development. They would all require major shifts in our behavior. We can either begin them voluntarily or wait for events to compel us to live differently. In the absence of that, our presence in Iraq is not optional. [Emphasis added]
Iraq is about oil. Obviously. And the oil problem isn't going away. We should understand, therefore, that the architects of the war — Bush, Cheney, Rumsfeld, Rice — have absolutely no intention of withdrawing US forces. Not till the oil runs out.
They have lied about everything else, and they will lie about this, too, but actions speak louder than words. We just need to look at the bases US forces are building in Iraq. AP (link via Deep Blade):
Balad Air Base, Iraq - The concrete goes on forever, vanishing into the noonday glare, 2 million cubic feet of it, a mile-long slab that's now the home of up to 120 U.S. helicopters, a "heli-park" as good as any back in the States.
At another giant base, al-Asad in Iraq’s western desert, the 17,000 troops and workers come and go in a kind of bustling American town, with a Burger King, Pizza Hut and a car dealership, stop signs, traffic regulations and young bikers clogging the roads.
At a third hub down south, Tallil, they're planning a new mess hall, one that will seat 6,000 hungry airmen and soldiers for chow.
Are the Americans here to stay? Air Force mechanic Josh Remy is sure of it as he looks around Balad.
"I think we'll be here forever," the 19-year-old airman from Wilkes-Barre, Pa., told a visitor to his base. [...]
The U.S. ambassador to Iraq, Zalmay Khalilzad, and other U.S. officials disavow any desire for permanent bases. But long-term access, as at other U.S. bases abroad, is different from "permanent," and the official U.S. position is carefully worded. [...]
U.S. Defense Secretary Donald Rumsfeld, asked about "permanent duty stations" by a Marine during an Iraq visit in December, allowed that it was "an interesting question." He said it would have to be raised by the incoming Baghdad government, if "they have an interest in our assisting them for some period over time."
In Washington, Iraq scholar Phebe Marr finds the language intriguing. "If they aren't planning for bases, they ought to say so," she said. "I would expect to hear 'No bases.'"
Right now what is heard is the pouring of concrete.
In 2005-06, Washington has authorized or proposed almost $1 billion for U.S. military construction in Iraq, as American forces consolidate at Balad, known as Anaconda, and a handful of other installations, big bases under the old regime. [...]
"The coalition forces are moving outside the cities while continuing to provide security support to the Iraqi security forces," [Major Lee] English said.
The move away from cities, perhaps eventually accompanied by U.S. force reductions, will lower the profile of U.S. troops, frequent targets of roadside bombs on city streets. [...]
Al-Asad will become even more isolated. The proposed 2006 supplemental budget for Iraq operations would provide $7.4 million to extend the no-man’s-land and build new security fencing around the base, which at 19 square miles is so large that many assigned there take the Yellow or Blue bus routes to get around the base, or buy bicycles at a PX jammed with customers.
The latest budget also allots $39 million for new airfield lighting, air traffic control systems and upgrades allowing al-Asad to plug into the Iraqi electricity grid — a typical sign of a long-term base. [...]
Here at Balad, the former Iraqi air force academy 40 miles north of Baghdad, the two 12,000-foot runways have become the logistics hub for all U.S. military operations in Iraq, and major upgrades began last year.
Army engineers say 31,000 truckloads of sand and gravel fed nine concrete-mixing plants on Balad, as contractors laid a $16 million ramp to park the Air Force's huge C-5 cargo planes; an $18 million ramp for workhorse C-130 transports; and the vast, $28 million main helicopter ramp, the length of 13 football fields, filled with attack, transport and reconnaissance helicopters. [...]
"[W]e're good for as long as we need to run it," [Lt. Col. Scott] Hoover said. Ten years? he was asked. "I'd say so." [...]
In the counterinsurgency fight, Balad's central location enables strike aircraft to reach targets in minutes. And in the broader context of reinforcing the U.S. presence in the oil-rich Mideast, Iraq bases are preferable to aircraft carriers in the Persian Gulf, said a longtime defense analyst.
"Carriers don't have the punch," said Gordon Adams of Washington's George Washington University. "There's a huge advantage to land-based infrastructure. At the level of strategy it makes total sense to have Iraq bases." [...]
"It's a stupid idea and clearly politically unacceptable," [Anthony] Zinni, a former Central Command chief, said in a Washington interview. "It would damage our image in the region, where people would decide that this" — seizing bases — "was our original intent." [...]
If long-term basing is, indeed, on the horizon, "the politics back here and the politics in the region say, 'Don't announce it,'" Adams said in Washington. That's what's done elsewhere, as with the quiet U.S. basing of spy planes and other aircraft in the United Arab Emirates. [...]
From the start, in 2003, the first Army engineers rolling into Balad took the long view, laying out a 10-year plan envisioning a move from tents to today's living quarters in air-conditioned trailers, to concrete-and-brick barracks by 2008. [Emphasis added]
In its latest Quadrennial Defense Review, the Pentagon stopped talking about a war on terror. Instead, they're talking about "the long war". They're not kidding.
It's all one big Gordian Knot: Iraq, peak oil, global warming. We need to understand that and not forget it. If we don't deal with energy, we will be stuck with war and catastrophic climate change. It's all one problem.
March 08, 2006
|Switchgrass To Ethanol||Energy Peak Oil|
In his State of the Union speech, President Bush made a point of mentioning switchgrass as a promising biomass input for ethanol production. The Oil Drum yesterday carried an illuminating post that looked at the hype vs. the reality regarding switchgrass. Excerpts:
Switchgrass is a perennial grass native to the great plains, suitable for marginal lands because it grows well with relatively moderate inputs and can effectively protect soil against erosion. So far so good - one of the major attractions to switchgrass is that it is more environmentally friendly than corn....Best [yield] estimates [from switchgrass are] roughly 1000 gallons of ethanol per acre. Corn, by comparison, offers about...350 gallons per acre. This is why so many folks are beating their drums over switchgrass - in theory, it can be grown on marginal lands with ethanol yields 3 times that of corn with "minimal inputs." From this description, one gets the sense of legends in the making. Let's take a critical look at some of them.
Legend 1: Switchgrass does not require fertilizer or irrigation...
Fact: Switchgrass is a perennial grass, just like the grass in people's lawns. If you bag all your lawn clippings from your lawn, very quickly you will notice that your lawn will start to become yellow, and your "yield" (the number of times you have to mow) will decrease. This is because of the lack of fertilizer. Each time you remove biomass from an environment, you remove nutrients, and future yields will suffer. Switchgrass is exactly the same - if you harvest switchgrass for biomass, fertilizer must be applied in levels very similar to those applied if corn is the primary crop....In addition, phosphorous and potassium (potash) must be applied in amounts consistent to the amount of biomass removed, which actually exceed that necessary for corn.
Regarding irrigation, it is true that you don't need to irrigate switchgrass, just like you never "need" to water your lawn. However, just like your lawn, switchgrass won't yield nearly as well if it doesn't have adequate moisture....Switchgrass yields vary strongly with precipitation - planting the dry plains, New Mexico, or Arizona with switchgrass will not yield much biomass.
Legend 2: It is estimated that 15 percent of the North American continent consists of land that is unsuitable for food farming but workable for switchgrass cultivation. If all that land was planted with switchgrass, we could replace every single gallon of gas consumed in the United States with ethanol.
Fact: There certainly is a significant amount of land that is non-productive for agriculture but could be planted with switchgrass....Switchgrass would certainly grow on [non-agricultural] land, but yields would not approach the 6-8 tons/acre on good agricultural land.
Legend 3: Switchgrass yields a certain amount now, but in the future, with selective breeding, etc., it will yield much more.
Fact: Switchgrass is a perennial, and needs to be seeded only once every decade. Is it reasonable to think that Monsanto is going to spend much research effort on seeds that they will only sell to farmers once a decade? Certainly one can select varieties of switchgrass that are more prolific..., but it is difficult to see that there will be much yield improvement beyond that, certainly not on timescales of a decade or so. For a wide variety of annually varying weather conditions, soil quality, etc., it is hard to argue that switchgrass yields will exceed the 6-8 ton/acre range. We've been growing alfalfa for many years for biomass with a very high incentive to increase yields per acre, without much success. Switchgrass probably won't be much different.
Legend 4: Switchgrass is substantially cheaper as a feedstock than corn for producing ethanol.
Fact: This is the big one. [...] Switchgrass must be cut, allowed to dry, raked, and then bailed for transport. For large, round bales of switchgrass (the cheapest method), estimated costs are $74/ton for 4 tons/acre yield, and $66/ton for 6 tons/acre yield. Presumably, that can be extended to $58/ton for 8 tons/acre yield, and so on. Note that these costs will generally be higher for smaller fields, another black mark against the use of [non-agricultural] land for growing switchgrass.
On top of those costs, there will be transportation, which currently is about $0.25/ton per mile. How far will the switchgrass have to be transported? That's a bit more involved. A reasonable sized bioreactor facility would be 10,000 bbl/d, as 200 such facilities in the US would produce about 15% of the daily gasoline usage. Such a facility would use roughly 2 million tons of biomass feedstock per year, which is the output of 250,000 acres at 8 tons/acre. That is an area of roughly 400 square miles, or about 20 miles on a side. Given that rural roads don't run straight, that 20 miles is a fair figure for the average load to travel, leaving travel costs of $5/ton. So, we are talking something in the $60-70/ton range delivered to the bio-reactor. However, that is assuming 100% of the land around the bioreactor is switchgrass. If we instead only plant marginal land, the transportation distance would go up by a factor of 3 (due to the sparseness of the switchgrass fields) to $15/ton, leaving the total cost $70-80/ton. At 70 gallons of ethanol per ton of biomass, this suggests a minimum cost of $1/gallon ethanol simply to get the switchgrass to the facility. Yields less than 8 tons/acre will lead to proportionally higher costs.
How does that compare to corn? That's a bit more dicey, as corn is heavily subsidized. Wholesale corn currently costs about $1.90/bushel, while the Iowa 2006 Crop Production Cost is $3.40 per bushel (if the difference between those numbers seems incredible, remember that you, the US taxpayer, are picking up the tab). Corn is much more dense than switchgrass biomass in terms of energy per unit mass, so transportation costs are much less, certainly under $0.10/bushel. At retail, this suggests a cost of $0.80 per gallon to get the corn to the ethanol facility based upon wholesale, and $1.40/gallon based upon the Iowa Crop Production cost of $3.40/bushel.
Given that the switchgrass costs more to make into ethanol once at the bioreactor due to need for enzymes ($5-10/barrel or $0.20-$0.40/gallon plus extra energy used), there doesn't appear to be any advantage to switchgrass over corn for ethanol. [...]
As a final note, there is sensitivity to energy prices in this analysis. However, it appears to go the wrong way for switchgrass....This suggests that corn may become more competitive with switchgrass as time moves forward and energy costs rise, exactly the opposite interpretation most people would have anticipated. [...]
What's the moral in all of this? If corn ethanol is marginal on an energy returned on energy invested (EROEI) basis, it is very difficult to argue that biomass grown to make ethanol will be any better. To be blunt, if there are concentrated stocks of waste biomass in place, such as at lumber mills, then biomass ethanol probably makes sense. Otherwise, it appears to be more or less equivalent to corn based ethanol - in other words, a wash. [Emphasis added]
The analysis seems plausible, and it appears to make the case that if switchgrass is better than corn for making ethanol, it's not by much. Which means that ethanol from switchgrass won't be a net energy winner any more than corn is. Ouch.
One caveat: this analysis may be applicable in the near term only. Before long, currently unanticipated developments in bioengineering and nanotechnology may lead to entirely new ways of processing biomass, for example. The pace of technological change in bioengineering and nanotechnology (as in computer technology) is currently exponential, so we are likely to be fooled if we simply extrapolate the current pace of change linearly into the future — thinking, for example, that the next twenty years will lead to about as much change as the last twenty years. In fact, barring a catastrophic disruption in world systems, the amount of technological change over the next twenty years is likely to be orders of magnitude greater (possibly many orders of magnitude greater) than over the last twenty years.
That's the (potentially) good news. The bad news is that we are faced with a near term problem right now — assuming world oil production is already peaking, as it appears to be. Technology may provide answers in time, but there is likely to be significant turmoil and hardship in the interim.
March 05, 2006
|A Crock Of — Manure||Energy Environment|
Not every alternative energy idea is a good one. The NYT has an illuminating op-ed today about the use of manure as a source of energy. Excerpts:
Talk of reducing our dependence on foreign oil through alternative energy sources like biomass is everywhere these days — even on our president's lips. As a livestock farmer and environmental lawyer, I've paid particular attention to discussion about using manure as "green power." The idea sounds appealing, but power from manure turns out to be a poor source of energy. Unlike solar or wind, it can create more environmental problems than it solves. And it ends up subsidizing large agribusiness. That's why energy from manure should really be considered a form of "brown power."
Manure is used mainly in methane digesters, incinerators and certain biodiesel plants. Digesters, often at dairy farms, liquefy manure, then put it in large tanks with anaerobic bacteria. As the liquid decays, the bacteria produce methane, which is purified and used like natural gas. Incinerators generate power by burning animal waste, usually from poultry. Biodiesel involves creating a gas from manure, then combining it with oil from animal fat or plants (often soybeans or corn).
Government officials tout such projects as energy generation that benefits both nature and agriculture, and are pouring public funds into them. Few seem to question whether the projects make economic or environmental sense. And there are plenty of questions that need to be addressed. For starters, manure simply does not contain enough energy to produce cost-effective power. Studies show that manure power projects are probably not viable without large public subsidies and are likely to remain so. An analysis by researchers at the University of Minnesota's Applied Economics Department found that methane digesters are dependent on big subsidies to break even. [...]
Part of the problem is that the digesters, incinerators and biodiesel plants are expensive to build and run. Cost and technical complexity make these manure power projects more economical when done on an industrial scale, with operations that produce vast quantities of manure. It's telling that one of the first major manure biodiesel plants in the United States will use the millions of pounds of waste produced by the 500,000 pigs at a Smithfield Foods operation in Utah.
But even the largest projects require significant public money for construction and operation. This has also been Europe's experience with manure power projects.
And those subsidies tend to help factory farms. Traditional farms, which usually both grow plants and raise animals, recycle manure as organic fertilizer and thus bear the full cost of handling their waste. But large livestock operations can't do that. They put their manure — and there is a great deal of it — in huge piles or storage pools that often leak into nearby streams and ground water and exude stenches that make life miserable for neighbors. For them, manure isn't valuable fertilizer but a vexing disposal problem.
The stampede for power from manure gives these huge livestock operations a subsidized way to deal with this problem — and even gives them an incentive to expand. An article about methane digesters in The Des Moines Register quoted a farmer saying that doubling his dairy herd allowed him to justify the expense of a digester. This could well be a typical response, with manure power projects everywhere resulting in still larger herds and flocks.
But as the United Nations Food and Agriculture Organization noted last month, concentrated livestock operations threaten the environment and human health in a way that traditional farms do not. It is increasingly clear that traditional, smaller-scale farming is better than factory farms for people, animals and the environment.
Even manure power projects' immediate environmental benefits are dubious. Digesters, for example, don't make the manure disappear; instead, a manure slurry (which is sometimes larger than the original volume of manure) is left over and still has to be stored somewhere. Moreover, the slurry contains most of manure's original pollutants... [...]
Despite President Bush's statement that biodiesel "is one of our nation's most promising alternative fuel sources," making biodiesel from manure is also unlikely to be an environmental gain. Burning biodiesel may increase a greenhouse gas, nitrogen oxide, according to the Energy Department. And the full environmental costs of biodiesel fuel include soil erosion and water pollution caused by growing the soybeans and corn used. These crops are now the leading cause of both nitrogen water pollution in the United States and soil erosion.
Using manure as power sounds like a good idea, but it's not. The energy that can be generated from manure is not worth the expense. And by lowering industrial animal operations' cost of production, subsidizing manure power pushes family farms further toward the brink of extinction. Our money would be better spent investing in truly sustainable, sensible ways of producing energy and food. [Emphasis added]
The agribusiness giants have the political muscle to push ideas like this, and on the surface it sounds like a great sustainability move: what could be better than reusing "waste"?
But as this example shows, it's important to consider the full range of costs and consequences associated with alternative energy proposals. Just because we have to do something to deal with the impending energy crunch doesn't mean we have to do something stupid. And we don't have to subsidize stupidity with public funds.
February 25, 2006
|Honda To Launch Hybrid Under $12,000||Energy Peak Oil|
A Japanese paper reports Honda will launch a gas-electric hybrid version of its Fit subcompact with a price tag under $12,000, as early as next year. Reuters:
Honda Motor Co. plans to sell a low-cost hybrid car, a version of its popular Fit subcompact, a Japanese daily reported, signaling the auto maker's long-term commitment to the fuel-sipping powertrain.
Japan's third-biggest auto maker aims to sell the Fit hybrid as early as next year for around ¥1.4 million ($11,790), or about ¥200,000 more than the gasoline-only version, likely making it the world's first hybrid to cost less than ¥2 million ($16,840), the leading Japanese business daily said Wednesday.
The model could be launched in the business year starting April 2007 and would be sold globally, the paper said. [...]
A decision to offer a hybrid version of the mass-volume Fit — Honda's best-selling model in Japan and due to debut in the United States soon — would suggest the auto maker is a step closer to committing to the powertrain longer-term.
Good news. Hybrids aren't the ultimate answer, but anything that helps us conserve fuel helps us buy a little time. Considering the colossal scale and urgency of the transition confronting humanity, time is in desperately short supply. Conservation is the only thing that can buy us time, and every little bit helps.
February 20, 2006
|Bush: Energy Breakthroughs Coming||Energy Politics|
Bush has taken his show on the road to talk up the energy proposals he outlined in the State of the Union. AP:
Saying the nation is on the verge of technological breakthroughs that would "startle" most Americans, President Bush on Monday outlined his energy proposals to help wean the country off foreign oil. [...]
One of Bush's proposals would expand research into smaller, longer-lasting batteries for electric-gas hybrid cars, including plug-ins. He highlighted that initiative with a visit Monday to the battery center at Milwaukee-based auto-parts supplier Johnson Controls Inc. [...]
While Bush is highlighting his budget proposals to help wean America from foreign oil, the lab he visited is meeting a $28 million shortfall by cutting its staff by 32 people, including eight researchers. [...]
Rep. Ed Markey, D-Mass., questioned Bush's energy policies Monday, saying the administration also supports subsidies for luxury SUVs.
"This single tax subsidy dwarfs anything being done for hybrid batteries," Markey said in a news release. [Emphasis added]
More inadvertent irony, as he makes his big speech at a lab that's cutting back for lack of funding.
It's a good thing, I guess, that Bush is calling attention to energy issues. But if he were a serious-minded grownup, he'd be pushing conservation as our highest priority. Raising CAFE standards. Ending subsidies on gas-guzzlers. Incentivizing fuel efficiency. But it's more expedient politically to tell people that technology will wave a magic wand and somehow make our problems go away, painlessly, no behavior changes required. Unfortunately, that's the exact wrong message to be sending.
The idea that technology will save us even if we do nothing — let alone do the wrong thing — is an idea that could prove fatal.
February 03, 2006
|Wind Blah, Ethanol Blah, Alternative Energy Blah Blah Blah||Energy Politics|
There's talk, and there's action. Buried at the very bottom of a NYT article today on Bush's energy talk in the SOTU, we find this:
The Energy Department will begin laying off researchers at the National Renewable Energy Laboratory in the next week or two because of cuts to its budget.
A veteran researcher said the staff had been told that the cuts would be concentrated among researchers in wind and biomass, which includes ethanol. Those are two of the technologies that Mr. Bush cited on Tuesday night as holding the promise to replace part of the nation's oil imports.
The budget for the laboratory, which is just west of Denver, was cut by nearly 15 percent, to $174 million from $202 million, requiring the layoff of about 40 staff members out of a total of 930, said a spokesman, George Douglas. The cut is for the fiscal year that began on Oct. 1. [Emphasis added]
Of course, we knew it was just speechifyin', but still. This is kinda, shall we say, ironical.
February 01, 2006
|On Reducing US Dependence On Middle East Oil||Energy Peak Oil Politics|
Bush has gotten a lot of press today for his SOTU vow to reduce America's dependence on Middle East oil by 75% by 2025. Except, the White House now hastens to add, he didn't really mean it. Knight-Ridder:
One day after President Bush vowed to reduce America's dependence on Middle East oil by cutting imports from there 75 percent by 2025, his energy secretary and national economic adviser said Wednesday that the president didn't mean it literally.
What the president meant, they said in a conference call with reporters, was that alternative fuels could displace an amount of oil imports equivalent to most of what America is expected to import from the Middle East in 2025.
But America still would import oil from the Middle East, because that's where the greatest oil supplies are.
The president's State of the Union reference to Mideast oil made headlines nationwide Wednesday because of his assertion that "America is addicted to oil" and his call to "break this addiction."
Bush vowed to fund research into better batteries for hybrid vehicles and more production of the alternative fuel ethanol, setting a lofty goal of replacing "more than 75 percent of our oil imports from the Middle East by 2025."
He pledged to "move beyond a petroleum-based economy and make our dependence on Middle Eastern oil a thing of the past."
Not exactly, though, it turns out.
"This was purely an example," Energy Secretary Samuel Bodman said.
He said the broad goal was to displace foreign oil imports, from anywhere, with domestic alternatives. He acknowledged that oil is a freely traded commodity bought and sold globally by private firms. Consequently, it would be very difficult to reduce imports from any single region, especially the most oil-rich region on Earth.
Asked why the president used the words "the Middle East" when he didn't really mean them, one administration official said Bush wanted to dramatize the issue in a way that "every American sitting out there listening to the speech understands." The official spoke only on condition of anonymity because he feared that his remarks might get him in trouble.
Presidential adviser Dan Bartlett made a similar point in a briefing before the speech. "I think one of the biggest concerns the American people have is oil coming from the Middle East. It is a very volatile region," he said. [Emphasis added]
So it was bull, and they knew it was bull, but they said it anyway because it was something "every American sitting out there listening to the speech understands". How you "understand" something that's not true is left as an exercise for the reader.
On the other hand, oil geologist Byron King notes, a 75% reduction in US oil imports from the Middle East is really a prophesy, not a goal. It's going to happen, but not for the reasons Bush cited:
Replace 75% of US oil imports from the Mideast by 2025? Viewed in another way, this is not a "goal," it is a prophesy. There is no way that the US will be importing as much oil from the Mideast in 2025 as it imports today. And there is no way that the nations of the Mideast will be exporting as much oil in 2025 as they are exporting today.
Whether or not the Bush statement is a "goal," in 2025 the US will not be importing much in the way of petroleum from the Mideast, nor from anyplace else. The oil just will not be there for one side to export, nor for the other side to import. Welcome to the future. [Emphasis added]
Bush had nothing to say about coal other than a mention of "zero-emission coal-fired plants" — the idea here is to store carbon dioxide emissions below ground. No mention at all of natural gas, which is likely to become a critical problem even sooner than oil.
January 29, 2006
|A Truly Stunning Graph||Energy Peak Oil|
As the Oil Drum says, this graph is a mind-blower:
Cement, of course, is used to make concrete, which in turn is used to make things like highways, factories, cities. All of which require enormous quantities of energy, both now (in their construction) and in the future (in their maintenance and use). If you think things are headed in a sustainable direction, look at that graph once more.
January 07, 2006
|The New Red, White, and Blue||Energy Environment Peak Oil|
I'm not a Thomas Friedman fan ordinarily, but this is good — and the guy does have clout. From WattHead, via WorldChanging, here's an excerpt from a stirring new Friedman piece that calls energy independence and environmental sustainability the top issue facing America today:
What's so disturbing about President Bush and Dick Cheney is that they talk tough about the necessity of invading Iraq, torturing terror suspects and engaging in domestic spying — all to defend our way of life and promote democracy around the globe.
But when it comes to what is actually the most important issue in U.S. foreign and domestic policy today — making ourselves energy efficient and independent, and environmentally green — they ridicule it as something only liberals, tree-huggers and sissies believe is possible or necessary.
Sorry, but being green, focusing the nation on greater energy efficiency and conservation, is not some girlie-man issue. It is actually the most tough-minded, geostrategic, pro-growth and patriotic thing we can do. Living green is not for sissies. Sticking with oil, and basically saying that a country that can double the speed of microchips every 18 months is somehow incapable of innovating its way to energy independence — that is for sissies, defeatists and people who are ready to see American values eroded at home and abroad.
Living green is not just a "personal virtue," as Mr. Cheney says. It's a national security imperative.
The biggest threat to America and its values today is not communism, authoritarianism or Islamism. Its petrolism. [...]
We need a persident and a Congress with the guts not just to invade Iraq, but to impose a gasoline tax and inspire conservation at home. That takes a real energy policy with longterm incentives for renewable energies — wind, solar, biofuels — rather than the welfare-for-oil-companies-and-special-interests that masqueraded last year as an energy bill.
Enough of this Bush-Cheney nonsense that conservation, energy efficiency and environmentalism are some hobby we can't afford. I can't think of anything more cowardly or un-American. Real patriots, real advocates of spreading democracy around the world, live green.
Green is the new red, white and blue. [Emphasis added]
January 03, 2006
|Kunstler On 2006||Economy Energy Peak Oil|
James Kunstler starts 2006 cheerful as ever. He's got a very long post, full of alarming predictions. The following is a scattering of highlights:
From 2001 through 2005, consumer spending and residential construction had together accounted for 90 percent of the total growth in GDP, while over two-fifths of all private sector jobs created since 2001 were in housing-related sectors, such as construction, real estate and mortgage brokering. Much of the money spent did not really exist except as credit — incomes as yet unearned, hallucinated liquidity, wished-for wealth, all based on the expectation that house values would continue to rise at 10 to 20 percent a year forever. It became a reckless racket, all predicated on sustaining an economy that had lost its other means for generating wealth — foremost its infrastructure for making things besides suburban houses. [...]
The velocity of change in the housing bubble (and the psychology involved) will be greatly affected by oil and gas prices. It seemed to many of us watching the energy markets that the world may indeed have passed through its all-time oil production peak in 2005. Production in 2005 was nearly flat over 2004. The world was producing and also using roughly 82 million barrels of oil a day. Oil coming into new production was not making up for signs of depletion showing among virtually all the world's major producers. Iran, Russia, Mexico, Venezuela, the North Sea, and, of course, the USA, were all past peak. The big mystery was Saudi Arabia, but their inability to boost production from the 50-year-old fields that comprised their main reserves suggested that they were topping out, too. Which left an energy-hungry world with the need to either A.) make other arrangements for powering industrial economies, or B.) contesting for control of the remaining oil reserves, which were substantially concentrated in the Middle East and Central Asia.
Here, I hasten to remind the reader that peak is peak, meaning right now we are all operating on the basis of a lot of oil flowing around the world. The comfort level is still high. The factories are still humming in China, and the six-lane commuting corridors are still full of big cars around Atlanta, Dallas, Denver, and Minneapolis. The problem is that the oil supply will soon steadily diminish at a rate of at least three percent a year, and that necking down of supply is likely to be expressed in greater geopolitical friction and turmoil between the great nations who crave oil. The US entered into the military phase of this turbulence before any other nation. We used our superpower status to set up a centrally-located Middle East garrison in Iraq, under the idealistic cover story that we were removing a dangerous head-of-state and helping to set up a model democracy that would invite us to stick around the vicinity indefinitely, and thus retain some control over the deportment of other oil-rich states in the region. [...]
High gasoline, heating oil, and methane gas prices will absolutely kill the housing bubble...The production home builders will be idle, stuck with huge inventories in places that never should have been suburbanized in the first place. A lot of Americans holding "creative" mortgages — no money down, interest only, adjustable rate, what-have-you — will be crushed by the expense of their obligations. Many of them will go bankrupt under new bankruptcy laws that leave no wiggle room for escaping partial repayment. Their houses will flood the real estate markets in an orgy of distress selling. [...]
With the cratering of the housing bubble, the US economy has to fall on its ass. [...]
The sheer falloff in new mortgages will send a tsunami through financial markets addicted to continuous supplies of new "money" to preserve the illusion of expansion. I'd called for a Dow-4000 late in 2005. I think that was just an error in timing, and still call for the Dow to sink into that range, or worse, in 2006. This will represent a moment of painful clarity for market professionals, as they realize that an industrial economy and the finance that serves it must be based on the expectation of generating real future wealth, not on zero-sum rackets, games of monetery musical chairs, or casino legerdemain. Hedge funds, which depend on predictable stability, will be especially vulnerable. They will certainly take some large banks down with them when they go. I'll call for the so-called government sponsored entities of Fannie Mae and Freddie Mac to groan under and then drown in a sea of non-performing loans, probably with overtones of criminal irresponsibility.
If these things occur, ugly things would happen to the dollar. [...]
The commercial airline industry is already whirling around the drain. 2006 will send it decisively down that drain. [...]
By similar reasoning, I see an excellent chance for General Motors and Ford to go out of business in 2006. Sales of their stupid SUVs were already tailing off in the second half of last year, and they are not positioned to offer much of anything else. [...]
As America roils in economic pain, factory workers in China will be thrown out of work. They will be extremely pissed off, and as their appeals go unappeased, they might start making political trouble in their country. That could easily stimulate Chinese leaders to divert their nation's attention with a compelling military project...Sooner or later, China eventually will go cuckoo from a shortage of fossil fuels. It only remains to be seen how this will express itself. [...]
Which brings us to the extremely sore subject of Iraq. I maintain that our reasons for being there have not changed one bit, namely to make sure that we don't lose access to Middle East oil in any shape or form. Now my stating that does not mean I think we will necessarily succeed...I predict that circumstances will impel us to withdraw from the Iraqi cities but that we will not give up large bases near the oil production areas of the north and south. [...]
Generally, I predict 2006 will see a shift in power to the big energy bear, Russia. [...]
Japan has nearly been forgotten. It now imports 95 percent of the fossil fuel it needs to run itself. God knows what they will do if geopolitical turmoil shuts down the shipping lanes that bring a steady stream of oil tankers to the islands. [...]
Meanwhile, Mexico's premier oil field, Canterall, has entered depletion. They depend on imports of natural gas from us, and under the rather insane terms of NAFTA, we in the US depend on imports of gas from Canada to make up for the stuff we have to sell to Mexico. [...]
Here in USA, I predict that we will be diverted by a fantastic circus of congressional hearings and court proceedings. It will be scandal-o-rama for the Bush administration and the Republican party. [Emphasis added]
There's lots more at the post, including predictions of $100/barrel oil, $4/gallon gasoline, and $20/million BTU natural gas at some point during 2006.
Kunstler seems to revel in making dire pronouncements, but his basic points are, I think, well taken. US economic growth truly has become something of a mirage, based on consumer spending and the housing bubble, financed by debt. The trade deficit tells the story. We no longer make what we need, we buy it from foreigners and pay for it with money loaned us by foreigners. Kunstler's stock market predictions may not pan out — there is a glut of capital worldwide, and it has to go somewhere — but the US can't go on forever with a negative savings rate and a living standard financed by going further and further into debt.
January 02, 2006
|Living In A Pre-War Era||Energy Iran Iraq Peak Oil|
A chilling note from diarist Stirling Newberry at dKos:
On this, the first working day of the New Year, we are already getting a good stiff taste of the running theme of 2006. If 2004 and 2005 saw resource inflation, 2006 is the year when resource rich countries begin using those resources as weapons, and resource poor countries begin taking aggressive steps to secure resources. The current world market approach to energy is going to break down, as more and more nations are forced to jostle for position.
Somewhere in the next two years it will dawn on the American public that we live in the pre-war, not post-war, era, and that Iraq was a foreshock. [Emphasis added]
With Iran in the crosshairs, Russia withholding natural gas shipments to the Ukraine, and Iraq facing an oil supply crisis, 2006 is off to an ominous start. Horrifying to contemplate: Iraq may be just the beginning.
December 31, 2005
|A Picture Worth A Thousand Words||Energy Peak Oil|
Modern techniques do such a good job of extracting oil from the ground that when production falls off, the fall-off is likely to be precipitous. The following picture (source, via Oil Drum) says it all:
Here's Oil Drum's description:
[The diagram] shows a vertical slice taken through the Abqaiq oilfield in Saudi Arabia, using an instrument that measures the relative fluid densities at different levels in the field.
The shape is that of the carbonate rock which is the oil reservoir, although the vertical scale has been exaggerated considerably to show the current contents of the field. By using different colors the authors have shown the different fluid densities, and these can simply be translated into four zones. Over time the field has been injected with water (the blue zone) and this has pushed up the oil (the green zone) into the wells. The red is the overlying gas cap. When the reservoir was untapped it was likely all red and green. Ater all these years of pumping you can see how little of the green - the oil - remains....If there is a picture that speaks to depletion this to me, is it. [Emphasis added]
The injected water keeps the pressure up, keeps pushing oil out, so at the well-head everything looks peachy, until suddenly there's nothing left.
The good news is that modern methods squeeze most of the toothpaste out of the tube. The bad news is that they do it so well that when the end comes, it comes suddenly. We'll think the big oilfields (like Saudi Arabia's Ghawar) are doing fine — and then we'll be in free-fall.
December 30, 2005
|Energy Illiteracy And Jevon's Paradox||Economy Energy Peak Oil|
American affluence hides from us the kind of intuitive, experience-based knowledge we're going to need if we are to move toward a more sustainable energy future. Where does electricity come from? How much do we really use? Who knows. We just flip a switch. Ditto for gasoline, heating oil, natural gas. We have no idea how much energy we use, or what it took to bring it to us.
For the world's poor, the situation is very different. Monte Myers:
[R]esidents of poor nations are acutely aware of every aspect of their energy use; every stick of wood (sometimes carried for miles) and every gallon of cooking fuel is closely watched.
Few Americans ever get close to this kind of awareness, except dimly, perhaps, when camping.
Our obliviousness — our "energy illiteracy," Myers calls it — will work against us as we increase the efficiency of energy use in an effort to conserve. We're likely to encounter a form of unintended consequences known as Jevon's Paradox: increased efficiency can lead to increased, rather than decreased, use of a resource. A more efficient car, for example, costs less per mile to drive, which prompts people to drive more miles, or drive a bigger vehicle, than before. They may — and historically generally do — end up using even more gas than previously, not less.
If we had to carry our own wood, dig our own coal, etc., we'd understand conservation in our bones. But so long as energy is just effortless magic that happens when we flip a switch, so long as the cost of energy is just a number that appears on a monthly bill, it's almost a given that if the cost is reduced, usage will increase. Too bad for us.
December 22, 2005
|Coal In Your Stocking||Energy Humor & Fun|
In other Christmas news, here's a little item from The Onion:
With winter's onset driving the demand for surface coal to record-high levels, the mineral's cost is now beyond the reach of low- and middle-income Americans who wish to punish their naughty children. "Coal in one's stocking is meant to serve as an admonishment or warning, not as a dependable grade-B investment," said William Menchell, a commodities adviser for T. Rowe Price.
December 15, 2005
|Sleepwalking Into Winter||Energy Peak Oil|
An alarming article in US News details what the US is facing this winter in the way of sharply higher fuel costs and potential shortages. It's not a pretty picture. The article's long, but I've cut it down substantially. I think you'll want to read it in any case. It's important. Excerpts:
Falling gasoline prices make it easy to believe the nation has seen the last of the energy woes that swept in behind this year's Gulf Coast hurricanes. [...]
With the season's first snowfall hitting the Northeast last week, it is becoming apparent that Hurricanes Katrina and Rita did far more to the nation's energy equation than spoil Labor Day vacation drives. The storms upset the already precarious balance of the nation's supply and demand for fuel. So much Gulf of Mexico oil and natural gas production remains in disarray that even with a mild winter, Americans face a Big Chill: astronomical heating bills — on average, 38 percent higher than last year's record costs for natural gas and 21 percent higher for oil.
That means hundreds of closed factories and enormous hardship for low-income and working poor families, who can expect scant federal government help. And if bitter cold rides in on Mother Nature's coattails, extraordinary measures will be needed to keep energy flowing, particularly in the Northeast, as natural-gas shortages spill over into oil and electricity supplies...."People are talking not just about high prices but actual shortages."
Adds Matthew Simmons, a prominent Houston energy investment banker, who has warned of a new era of scarcity: "We're headed into a winter that could be a real winter of discontent." [...]
The simple economic rule of supply and demand is now at work: The market price of natural gas hit $15 per million British thermal units (Btu) last week, well over double what traders paid last year. [...]
Hundreds of factories will be...forced to lay off workers or freeze or cut wages because of high natural gas prices this winter, says the National Association of Manufacturers. Many large companies, like chemical giant Dow, have moved major operations overseas near cheaper fuel. But smaller domestic companies don't have that option. "In manufacturing, there's just one way to use less energy, and that's to make less widgets," says Paul Cicio, executive director of the Industrial Energy Consumers of America.
Industrial shutdowns are actually vital to the current energy market because they curb demand. Without them, prices would be even higher for consumers trying to heat homes. [...]
[S]ays Jerry McKim, chief of Iowa's Bureau of Energy Assistance: "[Many] households are carrying significant debt from last winter into this winter — that's something people aren't catching," he says. In Iowa, one of the few states that keep such statistics, overdue utility accounts in October reached a record 221,558, up 5 percent over the previous year. [...]
While the Big Chill will hit low-income households the hardest, no one may be immune if the weather turns foul. New England and perhaps all of the Northeast, including New York City, are a special worry. Gas companies grant big price breaks to customers year-round if they agree to have their service cut when supplies are short. Chances are great these discount customers will be shut down this winter, and they include manufacturers, some schools and hospitals, and, ominously, about 77 percent of New England's gas-fired electric power generation, which requires large quantities of fuel.
The curtailment of "interruptible" customers will trigger a double squeeze on consumers throughout the Northeast. First, costs for home heating oil will skyrocket, as scores of power plants and other interruptible gas customers switch fuels and make a grab for all the oil on the market. Even though heating oil is a major fuel source in the Northeast, there are no oil pipelines from refineries into New England, which relies on deliveries by tanker or barge. And in recent years, the oil industry — following the U.S. industrial trend — has been keeping inventories low to promote efficiency...[I]n the most recent severe cold snap, January 2004, the industry simply could not ship in sufficient supplies. "The just-in-time inventory system, when put together with the utility policy of having interruptible gas customers, creates a very volatile situation where literally in a week, New York harbor went dry [of heating oil shipments] because utility customers went on line...Your middle American ends up paying more to support this situation."
The second threat is a severe electricity shortage in the Northeast — with possible brownouts or blackouts. Deregulated natural-gas-fired power generators, under no legal obligation to serve customers as the old monopoly electric companies were, can simply stop generating power. Some plants will be interruptible customers with no backup fuel source. But in other cases, power plants that have firm natural gas contracts will stop generating electricity anyway and sell their fuel at enormous profit. That is precisely what happened during the three-day January 2004 cold snap, when more than 25 percent of New England's generating capacity went off line and the reserve margin was near zero. The market weathered that storm, but ISO New England, the organization responsible for managing the electric grid, says that even under normal weather conditions, electricity demand this winter most likely will set a new record surpassing that of the perilous 2004 cold snap....[A]s long as power generators are allowed to shut down and sell natural gas during a weather crisis, there is a risk of the kind of market chaos, as well as manipulation, that roiled California in 2000 and 2001. "The result could be a calamity." [...]
"New England clearly has a looming energy crisis, not just this winter," due to overreliance on natural gas for electricity.
Unstable electricity in one region can cascade into another, as New York City learned...Also, much of Manhattan relies on a 123-year-old steam power system, the largest in the world, for both heating and cooling. Although it proved robust during the 1965 and 1977 blackouts and the Sept. 11, 2001, terrorist attacks, it failed during the 2003 outage. [...]
A winter failure could prove catastrophic, because any extended loss of heat could cause water pipes to burst in residential and commercial buildings alike. Also, the thousands of "traps" where steam escapes (and billows from manhole covers) could freeze and fail, causing distribution pipes to crack or lose pressure. Former Central Intelligence Agency chief Jim Woolsey, now active on energy issues, argues that parts of the city "could resemble a frozen New Orleans." Also, repressurizing the system could prove laborious and hazardous, because of the power of steam escaping from cracks. [...]
Whether because of cost or cold, officials are bracing for human suffering across America this winter. "Forces can come together that turn crisis for some into disaster — that's really what I think we could be looking at this winter," says Iowa energy assistance director McKim. "I hate to sound like the voice of doom, but somebody has to say this stuff. It's just like Hurricane Katrina. They knew it was coming, but little was done to prepare an effective response. And the same thing is happening here."
In case you didn't catch it: because of deregulation, electricity-generating plants that have a contract to buy natural gas at a fixed price can, if the price shoots up, decide it's more profitable to shut down and resell their natural gas to someone else. This is not hypothetical; it happened the winter before last. The joys of deregulation.
The comments about Katrina are more than a little chilling. You think: surely the experts and the government see this coming. Surely they've got a plan. But then you remember New Orleans.
December 14, 2005
|BMW: New Steam Hybrid Engine System||Energy Science/Technology|
BMW has announced a new hybrid engine system that captures much of the heat generated by the internal combustion engine and uses it to power a steam engine. The system is said to boost normal engine efficiency by 15%. Gizmag:
A large percentage of the energy released when petroleum is burned disappears out the exhaust system as heat. This has always been the case but the amount of energy released looks set to be cut by more than 80% thanks to a new system devised by BMW. BMW's announcement of the new technology is somewhat of a technological bombshell as it adds yet another form of hybrid automobile – a turbosteamer. The concept uses energy from the exhaust gasses of the traditional Internal Combustion Engine (ICE) to power a steam engine which also contributes power to the automobile – an overall 15 per cent improvement for the combined drive system. Even bigger news is that the drive has been designed so that it can be installed in existing model series – meaning that every model in the BMW range could become 15% more efficient overnight if the company chose to make the reduced consumption accessible to as many people as possible.
Combining the innovative assistance drive with a 1.8 litre BMW four-cylinder engine on the test rig reduced consumption by up to 15 percent and generated 10 kilowatts more power and 20 Nm more torque. This increased power and efficiency comes for, well, ... nothing. The energy is extracted exclusively from the heat in the exhaust gases and cooling water so it is essentially a quantum leap in efficiency. [...]
Ongoing development of the concept is focusing initially on making the components simpler and smaller. The long-term development goal is to have a system capable of volume production within ten years. [Emphasis added]
Cool idea, though if it's really ten years off — well, a lot can happen in ten years. Still, it's intriguing that the same idea could be applied to any engine that wastes energy as heat.
|US Natural Gas Prices Sets Record||Economy Energy Peak Oil|
Natural gas prices hit a record high yesterday as winter demand kicks in. AP:
Natural gas prices surged to an all-time high Tuesday, as cold weather in the U.S. and disrupted production in the Gulf of Mexico caused traders to worry that supplies of home-heating fuels will be tight this winter.
Natural gas for January rose as high as $15.78 per 1,000 cubic feet, then settled at $15.378 on the New York Mercantile Exchange, up 53.7 cents from Monday's settlement price. The previous record close was $14.994 on Dec. 8.
"The last thing consumers needed to have happen is a cold snap early in the season," said John Kilduff, analyst at Fimat USA, noting that temperatures have been well below normal in many parts of the country.
"With a quarter of natural gas offline in the gulf, it's just stoking the winter supply fears."
By Wednesday, a storm will bring snow to the upper Midwest, while an ice storm will move up the East Coast by Thursday, according to Accuweather forecasters. December has been colder than usual, and many forecasters are saying below-average temperatures will persist throughout the winter.
Natural gas is most commonly used to heat homes in the Midwest, while heating oil is most commonly used in the Northeast.
Kilduff predicted that the price of natural gas could rise as high as $20 per 1,000 cubic feet by the middle of January. [Emphasis added]
If gas does go to $20, a lot of people are going to have a tough time paying their heating bills. $15 is bad enough. The effect will spill over to the economy as a whole, as money spent paying for heating is money not spent elsewhere.
|Record US Oil Demand Last Week||Energy Peak Oil|
U.S. oil demand surged 1.1 million barrels a day to 21.642 million barrels a day in the week ended Dec. 9, the highest weekly level on record, data from the Energy Information Administration show.
The 5.4% gain in the latest week comes amid extremely cold temperatures across much of the U.S.
The latest figure is up 3.4%, or 714,000 b/d above the 20.928 million b/d reported for this week last year by EIA.
The jump in apparent demand - measuring movements out of primary storage, not actual consumption of oil - comes as gasoline use averaged 9.268 million b/d, its highest level since Aug. 26, around the time Hurricane Katrina struck the U.S. Gulf Coast. [...]
Demand for propane, used as heating fuel, rose 26.5% in the latest week... [Emphasis added]
Average temperatures were unusually warm this fall, letting us off easy after Gulf of Mexico production took a hit from hurricanes Katrina and Rita. Temperatures have turned colder lately, however, and furnaces have switched on over much of the country. Winter demand is kicking in in earnest.
November 28, 2005
|Biotech, Nanotech, And The Transition Ahead||Energy Peak Oil Science/Technology|
From time to time, I've suggested that the wildcards in our energy future may be genetic engineering and nanotechnology. Before too long, we may be able to create genetically-engineered organisms or nanomachines that synthesize fuels or that can efficiently extract fuels from the environment.
Now CNet reports that Craig Venter, whose company Celera Genomics first mapped the human genome, is starting a company to genetically engineer organisms to produce fuels:
J. Craig Venter, who gained worldwide fame in 2000 when he mapped the human genetic code, is behind a new start-up called Synthetic Genomics, which plans to create new types of organisms that, ideally, would produce hydrogen, secrete nonpolluting heating oil or be able to break down greenhouse gases.
The initial focus will be on creating "biofactories" for hydrogen and ethanol, two fuels seen as playing an increasing role in powering cars in the future. Hydrogen also holds promise for heating homes and putting juice into electronic devices.
The raw genetic material for these synthetic micro-organisms will come from a diverse set of genes from a variety of species, according to the company. While many of the genes will come from some of the aquatic micro-organisms that Venter and his colleagues discovered during extensive ocean voyages in the last two years, the company will also experiment with genes from large mammals such as dogs.
"Rapid advances in high throughput DNA sequencing and synthesis, as well as high performance computing and bioinformatics, now enable us to synthesize novel photosynthetic and metabolic pathways," Venter said in a statement earlier this year. "We are in an era of rapid advances in science and are beginning the transition from being able to not only read genetic code, but are now moving to the early stages of being able to write code."
A small but growing number of researchers are examining ways to tap the power of biology. At Stanford University, for instance, professor James Swartz has been conducting experiments on a soil micro-organism that uses energy absorbed from light to split water molecules, a chemical reaction that produces hydrogen. Typically, organisms that derive energy from the sun — look no farther than the oak tree or the grass in your backyard — exploit that energy to grow.
In Cambridge, Mass., GreenFuel Technologies has created "bioreactors" filled with algae. The algae are fed with sunlight, water and carbon-carrying emissions from power plants. The algae are then harvested and turned into biodiesel fuel.
Engineering organisms for the benefit of humanity creates obvious risks. Both Stanford and Synthetic Genomics have said they are aware of the potential ethical and environmental issues of their work and will take actions to prevent unwanted consequences. Lab-created species could escape into the wild and unpredictably alter the local habitat. [Emphasis added]
Since genetic engineering and nanotechnology are both, to a great extent, applications of information technology (computation, data management, networking), and since information technology continues to advance at an exponential rate, we may well be surprised by the apparent suddenness of energy-related advances in genetic engineering and nanotech. They may one day seem to appear out of the blue.
But worldwide energy use and fossil fuel depletion are also increasing at exponential rates. I.e., we have exponential depletion working against us, and the exponential advance of technology working for us. The race is on.
Energy pessimists like James Kunstler think nothing will ever really replace oil, so we're headed into a "long emergency". Energy pollyannas think new technologies will automatically come online as rapidly as they are needed, making for a smooth and relatively painless transition. The pessimists make the mistake of assuming future technology won't be qualitatively different from current technology. The pollyannas make the mistake of failing to grasp the colossal scale and urgency of the transition that has to occur.
My own view is somewhere in between: fossil fuel production is indeed peaking and we are in for a difficult, turbulent couple of decades as we transition out of our current way of doing things. But if we make it through the needle's eye (without, for example, blowing ourselves up in a world war over oil) genetic engineering and nanotechnology will almost certainly open up new sources of energy — or, rather, new ways of capturing the energy of the sun. The world isn't going to go dark. Genetic engineering and/or nanotechnology on the scale required to satisfy the world's energy appetite are likely to introduce dangerous new problems, but one way or the other we are likely to find ways to capture the sun's energy and make it available for human use. It's just not going to happen overnight, so there's rough sledding ahead in the near term, and success is far from guaranteed.
Unfortunately, current US policy seems to combine the worst extremes of the positions of the pessimists and the pollyannas. On the pessimistic side, the administration appears to assume that the nations of the world teeter on the brink of a grim and deadly struggle for the oil that remains, so the solution is the military occupation of the world's oil-producing regions. Hence, Iraq. On the pollyanna side, the administration seems to assume that it has no responsibility to raise public awareness and foster the development of alternative energy sources and increased efficiency: the market will provide, all by itself. But the price signals that move the market will arrive too late. If we wait for a crisis, we will have waited too long.
Better to take the middle path: cooperate with other nations in equitably distributing the fossil fuels that remain, while putting public resources to work in a crash program to develop solutions for tomorrow. Like grownups.
November 16, 2005
|Demand Destruction||Economy Energy Peak Oil|
High fuel prices cause demand destruction, but not because people suddenly change their driving habits and become conservationists. Rather, plants close and people lose their jobs. High natural gas prices are already taking a toll. NYT:
Unexpectedly warm weather has bathed much of the United States in recent weeks, but fears persist that a classic energy shock may be unfolding as the nation heads into winter.
This time, though, the coming squeeze is in natural gas rather than oil.
Executives at companies that consume large amounts of natural gas are warning — almost screaming — about the costs they expect to face over the coming months.
"Our monthly natural gas bill has doubled since August, from $700,000 to $1.4 million," said Fletcher Steele, president of Pine Hall Brick in Winston-Salem, N.C. Mr. Steele said he planned to shut half of his production in January, when natural gas prices are expected to resume climbing again because of cold weather.
It is a problem that has been building for several years.
Thanks to a huge buildup of natural-gas-fired electricity plants in the 1990's even as exploration has slowed, demand has outstripped supply; the nation now depends on natural gas for 24 percent of its energy requirements, compared with 23 percent for coal and 40 percent for oil. [...]
And with more than half of the nation's homes heated by natural gas, millions of Americans are already bracing for big price increases this winter. The Energy Information Administration recently predicted that the cost of heating a typical home with natural gas could rise by more than 40 percent in coming months, or an average of $306 a household.
At the same time, officials are warning businesses that they face possible disruptions in the natural gas supply in some states this winter. Under long-established rules, utilities will give the highest priority to supplying natural gas to homes, possibly cutting off some companies and forcing some manufacturers to turn to other energy sources.
Beyond the fear of supply disruptions, higher natural gas prices have stoked concern of price increases cascading through the economy, with the most recent monthly inflation gauge at 1.2 percent in September, the largest increase in a quarter-century. The United States now has the highest natural gas prices of any industrial country, surpassing those in Germany, the Netherlands and China.
The prices have been pulling back from a post-hurricane spike in October that sent them above $14 per thousand cubic feet, but they remain at unusually high levels, with the futures contract for December closing at $11.61 on Monday. Only three years ago, during a glut, natural gas was selling for as little as $2 per thousand cubic feet.
High prices are inflicting pain across the country, hitting hard at utilities in the mountain states, grain elevators in the Midwest and chemical manufacturers along the Gulf Coast. Announcements of job losses in energy-intensive industries are mounting.
For instance, Lyondell Chemical of Houston said last month that it was shutting a foam chemicals plant in Lake Charles, La., cutting about 280 jobs. The reason was higher energy costs, the company said, though Lyondell also cited damage from Hurricane Rita.
Other companies unable to pass all their higher natural gas costs to customers are starting to announce big losses. For example, CMS Energy, Michigan's largest natural gas utility, reported a $263 million loss this month.
The hurricanes made a bad situation worse. The American Chemistry Council estimates that 100,000 jobs at companies that rely largely on natural gas have been lost since prices for the fuel began climbing in 2000. Chemical companies have been particularly outspoken in calls for the Bush administration and Congress to focus on curbing consumption and repairing energy infrastructure in the Gulf of Mexico.
"We need to declare a national crisis," Andrew N. Liveris, the chief executive of the Dow Chemical Company, said in recent testimony before the Senate. Dow, the nation's largest chemical maker, has shut 23 plants in the United States in the last three years...as it shifted production to Kuwait, Argentina, Malaysia and Germany, where natural gas is cheaper.
"Call it demand destruction," Mr. Liveris said. "Dozens of plants around the country have closed their doors and gone away, and are never coming back." [Emphasis added]
Natural gas is different from oil or coal in that it is extremely difficult to ship overseas, requiring special ships and ports that simply don't exist in significant numbers, at present. As a result, we're pretty much stuck with whatever is present on the North American continent, and North American natural gas production has already peaked.
One-fourth of our energy comes from natural gas, and supplies are declining. So it is small wonder that our prices are the highest in the industrialized world, and the situation is only going to get worse. The result will be a very unpleasant sort of demand destruction.
November 11, 2005
|Will Non-Conventional Oil Save Us?||Energy Peak Oil|
Clearly, non-conventional oil from Canada and Venezuela, if it could be made available quickly enough, would have enormous impact. If. So what are the prospects?
Venezuela's non-conventional oil is in the form of extra-heavy oil. It can be pumped out of the ground like conventional oil, but a long, complex process is required to turn the raw stuff into synthetic crude for use in typical applications. At current prices, the processing is profitable, but it places an upper bound on how quickly output can be increased. Projections show Venezuela producing less than 1.5m b/d (million barrels per day) by 2020:
Canada's non-conventional oil is in the form of oilsands (also called tar sands or bitumen). The production of oil from oilsands is more of a mining and manufacturing process than a typical oil production process. Jerome-a-Paris quotes from a Financial Times article. Excerpts:
Four existing projects produce about 1m b/d of oil. Suncor's site, which started production in 1967, moves close to 1m tonnes of rock a day, making it by that measure the biggest mining operation in the world. [...]
Recent projects have been dogged by delays and cost overruns. The bill for Shell's Athabasca project, commissioned in April 2003, climbed from C$3.9bn to C$5.6bn. An expansion of the Syncrude mine and upgrader, currently under construction, will cost more than C$8bn, close to double the initial estimate.
Soaring prices of natural gas are a concern for oilsands operations, which use huge quantities of gas to produce steam for the extraction process and to upgrade bitumen to crude oil. [Emphasis added]
As Jerome-a-Paris says,
[I]t's extraordinarily heavy industry, with multi-billion dollar upfront investments, complex industrial processes and massive environmental impact. Costs are hard to control, and, as the process is extremely energy-intensive, there is a negative feedback loop from energy prices.
Again, as in the case of Venezuela, the complexity and expense of the processing place an upper bound on how quickly ouptput can be increased. (This is another way of saying the era of cheap and easy oil is behind us.) Canada is projected to increase non-conventional production from 1 mb/d to 3 mb/d by 2020. Much of the increased production from oilsands will be offset by falling production from onshore conventional oilfields. Another chart from Jerome-a-Paris:
So, will non-conventional oil save us? Barring some technological miracle, the answer is no. Non-conventional oil production is projected to increase from about 1.5m b/d today to only 4-4.5m b/d by 2020. In percentage terms, that's a big increase, but in absolute terms it's an increase of just 3m b/d, best case. Current world oil consumption is 85m b/d, so 3m b/d is less than 4% of current world demand, and world demand is projected to grow significantly in the meantime.
Bottom line: non-conventional oil is important, but it's not the answer. Yes there's a lot of it, but we are not going to be able to turn it into usable oil quickly enough. Not in the next decade and a half, anyway. The fundamental problem is the colossal scale of the world's appetite for oil. Next to that, non-conventional oil is a drop in the bucket.
November 07, 2005
|The Other Shoe||Energy|
As noted here a week ago, the US, post-Katrina and -Rita, has been importing 80% of its oil. We've been able to get by because the EU has been sending us 2 million barrels a day — which they are now going to stop doing. James Howard Kunstler, in his missive for this week, calls attention to the likely result:
[S]ince the hurricanes shredded our Gulf of Mexico oil and gas capacity, Europe has been sending us 2 million barrels of crude oil and "refined product" a day from its collective strategic petroleum reserve. The "refined product" includes 800,000 barrels of gasoline, plus diesel, aviation, and heating fuel. Meanwhile, US domestic production has fallen to around 4 million barrels of conventional crude a day. America uses close to 22 million barrels of oil a day. Bottom line: post-hurricane, total imports have accounted for 80 percent of America's oil consumption.
Now, the important part of all this is that last week the International Energy Agency (IEA), Europe's energy security watchdog, declared that it would now end the 2 million barrel a day shipments to the US. Not because they are hateful meanies, but because, after all, it is Europe's strategic reserve and they can't sell it all to us because, well, some strategic emergency might come up for them, too.
It will take a few weeks for the last of Europe's tankers to offload supplies and for the various fuels to work their way through the US fuels retail system. With US production and refining still crippled, we can look forward to watching the price of gasoline, heating oil, diesel and aviation fuel kick back up through Thanksgiving and on into the heart of the Christmas shopping season. At the same time, homeowners will be getting their first substantial heating bills of the season.
This will be very bad news to the guys in charge. The Hooverization of George W. Bush will resume and accelerate. [Emphasis added]
Most Americans think Katrina and Rita are old news, but roughly half of Gulf of Mexico production is still shut-in. Nearly 15% of annual oil production from the Gulf has been lost already, and more than 11% of natural gas production. Those numbers will continue to climb through the remainder of the year.
November 01, 2005
|Not What You'd Expect||Energy|
Higher oil prices should bring an uptick in drilling and production, as projects that formerly were unprofitable become profitable. At least that's what you'd expect if everything else remains constant.
But everything else doesn't remain constant. An oil industry insider reports to The Oil Drum that Katrina and Rita have caused sharp increases in prices for pipe and other materials needed for offshore drilling. Prices have jumped so much, in fact, that projects that had been considered economical now are being killed, even with higher oil prices. Fewer projects will be started next year, not more. Excerpt:
Tubulars (pipe) are up 300% with a waiting list for delivery. We have numerous projects pushed out due to delivery of tubulars already, and hurricane repairs are also being slowed by lack of tubular inventory and steel products. Cement and mud costs have doubled in 2005 as well.
The fallout in prices from Katrina/Rita/etc. in terms of jackup rig daily costs going into 2006 is:
H2O Depth 2004 2006 200 $30K $90k 300 $35k $130k 300+ $42K $150k
The numbers for each project scheduled for next year have been rerun with these newer costs, and the higher costs have resulted in a preliminary project death rate of at least 25%. For those interested, this includes moving the expected sales price of the oil upwards to between $30-$40/bbl. Even with the new income calculations, many projects are simply too small to provide profit. Thus our project portfolio is actually shrinking in the face of current prices.
Small pockets of oil will not be worth recovering until the price of oil reaches a level of between $100 and $150/bbl. At those prices, rig costs begin to recede in importance. At current prices, it simply means that there aren't enough economic reasons to drill and produce small fields or additions. [Emphasis added]
October 31, 2005
|Majority Of Gulf Of Mexico Production Still Shut-In||Energy|
As Policy Pete points out, 60 days after Katrina the Gulf of Mexico (GoM) oil and gas production picture isn't improving. Here are the "shut-in" (i.e., shut-down, not producing) figures from the DOE:
Date Shut-in Oil
% of Total
% of Total
10/28/2005 1,022,313 64.9% 5,559 55.0% 10/27/2005 1,022,313 64.9% 5,559 55.0% 10/26/2005 1,022,515 64.9% 5,563 55.1% 10/25/2005 1,033,621 65.6% 5,582 55.3% 10/24/2005 1,018,478 64.6% 5,472 54.2% 10/21/2005 986,805 62.6% 5,337 52.8% 10/20/2005 967,734 61.4% 5,196 51.4% 10/19/2005 973,084 61.7% 5,242 51.9% 10/18/2005 982,011 62.3% 5,346 52.9% 10/17/2005 996,291 63.2% 5,498 54.4% 10/14/2005 1,008,909 64.0% 5,647 55.9%
Nearly two-thirds of Gulf oil production remains offline, more than half of gas production, and the numbers aren't moving. With winter on the way, this isn't good. As Tom Whipple says:
That the US's hurricane-disrupted crude production fell to less than 4 million barrels per day during September — the lowest since 1943 — does not seem to bother anybody. Just for the record, this means we are currently importing or withdrawing from our strategic reserve some 80 percent of our daily oil consumption.
Why didn't we fall flat on our backs with much of our crude production and significant pieces of our refinery production still out of service in the last six weeks? The answer is, our fellow members in the International Energy Agency (IEA) are letting us have an additional 800,000 barrels of gasoline per day out of their reserves. Moreover it seems our domestic refineries are still deferring maintenance and are still cranking out gasoline rather than switching over to more heating oil production at the end of the summer driving season. It is this combination that has kept us going.
The IEA, however, has already voted to stop letting us have world reserves beyond what was voted immediately after Katrina and the advent of colder weather will quickly force a choice between driving and staying warm.
Meanwhile, Salon reports that China's oil imports for September are up nearly 5% from a year ago.
If it's a cold winter, look out.
October 21, 2005
|Impact Of Gasoline Prices On Behavior||Energy|
When gas prices go up, Americans drive less, carpool, etc. Right? Sounds plausible, but what does the data show? From The Oil Drum:
The number of miles we collectively drive is almost perfectly correlated with GDP. As the economy (and population) gets bigger, we drive more.
Here are gasoline prices in constant dollars (click the image for a larger, clearer version):
Look at those two graphs. There is essentially no correlation between gas prices and miles driven.
People presumably will move to more efficient cars if prices stay high, but that will be a slow process. Meanwhile, the above data suggests, people are going to keep right on driving. Partly this is cultural, partly it's a matter of many people having no viable alternative. Better public transportation would help. Duh.
October 19, 2005
|Greenspan On Oil||Economy Energy Peak Oil|
I know from emails and comments I receive that more than one regular reader of Past Peak thinks Alan Greenspan walks on water and all talk of oil production shortfalls and impending peak is bunk. What happens then when Alan Greenspan starts to talk, in his usual veiled prose, about chronic shortfalls in world oil production and possible peak? Will those readers' heads explode?
Here are excerpts from a speech Greenspan gave Monday in Tokyo. First, Greenspan acknowledges that the world has pretty much run out of spare production capacity:
Even before the devastating hurricanes of August and September 2005, world oil markets had been subject to a degree of strain not experienced for a generation. Increased demand and lagging additions to productive capacity had eliminated a significant amount of the slack in world oil markets that had been essential in containing crude oil and product prices between 1985 and 2000. In such tight markets, the shutdown of oil platforms and refineries last month by Hurricanes Katrina and Rita was an accident waiting to happen. In their aftermath, prices of crude oil worldwide moved sharply higher, and with refineries stressed by a shortage of capacity, margins for refined products in the United States roughly doubled. Prices of natural gas soared as well.
Oil prices had been persistently edging higher since 2002 as increases in global oil consumption progressively absorbed the buffer of several million barrels a day in excess capacity that stood between production and demand....Although the global economic expansion appears to have been on a reasonably firm path through the summer months, the recent surge in energy prices will undoubtedly be a drag from now on. [...]
How did we arrive at a state in which the balance of world energy supply and demand could be so fragile that weather, not to mention individual acts of sabotage or local insurrection, could have a significant impact on economic growth? Even so large a weather event as August and September's hurricanes, had they occurred in earlier decades of ample oil capacity, would have had hardly noticeable effects on crude prices if producers placed their excess supplies on the market or on product prices if idle refinery capacity were activated. [My emphasis]
In a short recap of the history of twentieth century oil production, Greenspan notes that early on the US was by far the world's greatest supplier of oil and therefore was able to control prices. But, he notes:
[T]hat historical role ended in 1971, when excess crude oil capacity in the United States was finally absorbed by rising world demand.
This is an interesting formulation, since what actually happened in 1971 was that US oil production peaked. It has been declining ever since. Surely Greenspan knows this, and the fact that he cites that specific year as the turning point cannot be an accident: he knows that knowledgable listeners will recognize the date. Greenspan tends to speak in a sort of code. It's worth noting, then, that his code for peak is "excess capacity finally absorbed by rising demand".
Greenspan then turns his attention to the current state of production outside of OPEC, where he acknowledges that new sources of oil are getting scarce:
Much of the innovation in oil development outside OPEC, for example, has been directed at overcoming an increasingly inhospitable and costly exploratory environment, the consequence of more than a century of draining the more immediately accessible sources of crude oil. [...]
In early August, prices for delivery in 2011 of light sweet crude breached $60 per barrel, in line with recent increases in spot prices. This surge arguably reflects the growing presumption that increases in crude oil capacity outside OPEC will no longer be adequate to serve rising world demand going forward, especially from emerging Asia. Additionally, the longer-term crude price has presumably been driven up by renewed fears of supply disruptions in the Middle East and elsewhere.
But the opportunities for profitable exploration and development in the industrial economies are dwindling... [My emphasis]
The text highlighted in red sounds an awful lot like Greenspan's coded description of the US peak in 1971, quoted above. I.e., Greenspan could be saying that non-OPEC production has peaked, as many observers believe. Whether or not you buy that interpretation, it's clear that Greenspan is at least saying that if world oil production is going to keep pace with demand, the needed production increases will have to come primarily from within OPEC.
But, he says, OPEC countries are failing to make the investments needed to increase production adequately:
In such a highly profitable market environment for oil producers, one would have expected a far greater surge of oil investments. Indeed, some producers have significantly ratcheted up their investment plans.
But because of the geographic concentration of proved reserves, much of the investment in crude oil productive capacity required to meet demand, without prices rising unduly, will need to be undertaken by national oil companies in OPEC and other developing economies. Although investment is rising, the significant proportion of oil revenues invested in financial assets suggests that many governments perceive that the benefits of investing in additional capacity to meet rising world oil demand are limited. [My emphasis]
So non-OPEC countries can't meet surging world demand, and OPEC countries won't, because they are not making the needed investments. Taken together, these statements imply that world production will continue to be inadequate for some time.
Greenspan also notes that the oil that is being produced is increasingly heavier oil containing greater amounts of sulfur, the lighter, "sweeter" oil having been used up first:
[There is a] growing mismatch between the heavier and more sour content of world crude oil production and the rising world demand for lighter, sweeter petroleum products.
So the supply side's not looking too good. What about demand? Greenspan indicates that higher prices will start to move people in the US and Europe toward more efficient usage patterns. But then he slips in this little doozy:
[A]t present, China consumes roughly twice as much oil per dollar of GDP as the United States, and if, as projected, its share of world GDP continues to increase, the average improvements in world oil-intensity will be less pronounced than the improvements in individual countries, viewed separately, would suggest. [My emphasis]
In other words, as China's oil usage continues to surge, the fact that China's usage is roughly twice as inefficient as usage in the US and Europe means that efficiency gains in the West will be more than erased by China's insatiable appetite: demand is going to keep growing.
Greenspan has faith that market pressures will eventually correct the current imbalances. But his closing words indicate that the changes won't happen overnight. In the meantime, it's going to continue to be rough sledding:
In fact, the development and application of new sources of energy, especially nonconventional sources of oil, is already in train. Nonetheless, the transition will take time. We, and the rest of the world, doubtless will have to live with the geopolitical and other uncertainties of the oil markets for some time to come.
Greenspan is always careful not to speak too plainly lest he upset the markets, but I think the import of this speech is pretty clear. World oil demand is going to continue to grow and production won't be able to keep pace. Stay tuned for shortages and ever-higher prices.
October 18, 2005
|The Environmental Cost Of Oil Sands||Energy Environment Peak Oil|
Canadian production of oil from oil sands is ramping up. The NYT recently looked at the environmental cost accompanying that production. It's not a pretty picture. Excerpt:
Just north of this boomtown of saloons and strip malls, a moonscape is expanding along with the price of oil.
Deep craters wider than football fields are being dug out of the pine and spruce forests and muskeg swamps by many of the largest multinational oil companies. Huge refineries that burn natural gas to refine the excavated gooey sands into synthetic oil are spreading where wolves and coyotes once roamed.
Beside the mining pits, propane cannons and scarecrows installed by the companies shoo away migrating birds from giant toxic lakes filled with water that was used in the process that separates oil sands from clay and dirt.
About 82,000 acres of forest and wetlands have been cleared or otherwise disturbed since development of oil sands began in earnest here in the late 1960's, and that is just the start. It is estimated that the current daily production of just over one million barrels of oil - the equivalent of Texas' daily production, and 5 percent of the United States' daily consumption - will triple by 2015 and sextuple by 2030. The pockets of oil sands in northern Alberta - which all together equal the size of Florida - are only beginning to be developed.
Because the oil sands region is so remote, the environmental damage receives little attention from the Canadian news media or public comment from Prime Minister Paul Martin's government. But industry leaders acknowledge that they face an enormous challenge because refining oil sands is several times more energy intensive than conventional oil production. In addition, the process is a major source of heat-trapping [greenhouse] gases and far more destructive to the landscape than traditional drilling. [...]
[E]nvironmentalists have a list of warnings, starting with the energy costs of extracting the oil.
"What bugs me about oil sands is that it is a resource that is being inefficiently used," said Marlo Raynolds, executive director of the Pembina Institute, an environmental research group based in Calgary. "We're using natural gas, which is the cleanest fossil fuel, to wash sand and make a dirtier fuel. It's like using caviar to make fake crabmeat."
The environmentalists also warn that the growing oil sands industry threatens to tear up a huge stretch of Canada's boreal forest, which is a nursery for hundreds of bird species and where bogs filter water and store carbon that would otherwise be released into the atmosphere. They say the enormous volume of water the industry needs threatens fish in the Athabasca River, the principal water source. They predict that increases in emissions of sulfur dioxide and nitrogen oxide will increase levels of acid rain and destroy lake fish across northern Canada.
They also say that Canada, already behind in its commitments to reduce greenhouse gas emissions under the Kyoto Protocol on climate change, will not be able to reach its Kyoto targets if production of oil sands keeps rising at the current rate. [...]
"There are no moose, no rabbits, no squirrels anymore," complained Howard Lacorde, 59, a Cree trapper whose trapline has been interrupted by a new oil sands project developed by Canadian Natural Resources. "The land is dead," he added, shaking in anger, as he walked through a construction site that was once his trapline.
Suncor, the EnCana Corporation and Shell Canada Ltd. are talking about setting up a cooperative effort to capture, transport and sell carbon dioxide that otherwise would be released into the air from oil sands production. Total S.A. is considering building a nuclear power plant here to extract the oil sands without having to use increasingly expensive natural gas and reduce emissions of heat-trapping gases, which many scientists associate with global warming. [...]
"There is no environmental minister on earth who can stop the oil from coming out of the sand, because the money is too big," said Canada's environment minister, Stéphane Dion, in an interview. "But we have to be very strict on environmental impact." [My emphasis]
The article makes the following barrel-for-barrel comparison of pollution emitted by conventional oil production and production from oil sands:
Emissions Conventional Oil Oil Sands Sulfur dioxide (g) 43 106 Nitrogen oxides (g) 95 132 Greenhous gases (kg) 29 78 Water use (barrels) 0 3-5
Canadian oil sands production currently amounts to just over 1% of world oil production. By 2015, it may be 2-3%. If world production peaks in the meantime, production from oil sands won't make a great deal of difference.
Oil companies are taking steps to reduce the environmental damage, and technology improvements will help, but we should not kid ourselves about the tradeoffs here. The environmental cost will be very considerable. Future generations are not going to be happy with us.
October 15, 2005
|Processing Oil With Nuclear||Energy Peak Oil|
French oil giant Total SA, amid rising oil and natural-gas prices, is considering building a nuclear power plant to extract ultraheavy oil from the vast oil-sand fields of western Canada.
This comes as oil prices — driven even higher by Hurricane Katrina and now the threat of Hurricane Rita — are removing lingering doubts about the long-term profitability of extracting the molasseslike form of oil from sand, despite the fact that the output is much more expensive to produce and to upgrade than is conventional crude.
At the same time, prices of natural gas — which oil-sands producers have relied on to produce the steam and electricity needed to push the viscous oil out of the ground — have risen 45% in the past year. That is prompting Total, which holds permits on large fields in Alberta that contain oil sands, to consider building its own nuclear plant and using the energy produced to get the job done. [My emphasis]
The fact that Total is considering making the enormous investment in a nuclear plant to process oil sands is as clear a signal as one could hope for that they've concluded that the era of cheap oil is coming to an end, never to return.
October 13, 2005
|EIA Estimates Of Heating Costs This Winter||Energy|
Look at the Expenditures rows. If you heat with natural gas, EIA says you should expect to pay almost 50% more than you paid last winter (two-thirds more if it's a cold winter). With oil, expect to pay nearly a third more (58% more if it's cold). With propane, about 30% more (54% more if it's cold).
This is going to hit a lot of people pretty hard.
October 10, 2005
|Playing Make-Believe||Economy Energy|
Following Katrina and Rita, Gulf of Mexico oil and gas production is still largely shut down. The US is getting by — temporarily — on borrowed oil. We are in for a rude awakening. Jim Kunstler:
For the moment, it's back to business-as-usual for Easy-motoring Nation.
Yet 73 percent of oil from the Gulf of Mexico remains "shut in" or unavailable because of hurricane damage, and about 63 percent of natural gas production. Prior to the hurricanes, 24 percent of the nation's non-imported supply of crude came from the gulf. There are also eight refineries still shut down representing 2.1 million barrels a day of refined product capacity...
For the past month, the European Union has been sending two million barrels of crude a day to the US out of its own emergency reserves...The EU imports over 15 million barrels of oil a day itself, somewhat more than the US did in pre-hurricane times.
The Federal government has loaned the oil companies crude from the Strategic Petroleum Reserve. [...]
These actions have beaten down the price of crude oil on the various futures markets. At the same time, gasoline pump prices have leveled off from the refinery squeeze. I doubt that the motoring public is driving a whole lot less. The commutes haven't magically gotten any shorter out in Dallas and Denver over the past month. The national fleet of SUVs has not been changed out either.
What's happening, therefore is that we have entered an eerie hiatus. Some band-aids have been applied to our oil and natural gas supply injuries and the bleeding seems to have stopped. But the truth is that our energy supplies are badly compromised and at the worst time of the year — just as we slide into the home heating season. Here in the northeast, we have barely had to turn on the furnaces yet, but that will change in a week or two. [...]
When the furnaces go on, the WalMart aisles will be empty. If there is any reduction in car trips, it will be because Americans are making fewer visits to the Big Box stores. There will also be fewer trips out to visit the model homes in the new subdivisions.
Another unpleasant truth about the situation is that the US public wants to pretend that everything is okay as much as its leaders do. The public is not so much being misled as demanding that its leaders in government, business, and the news media continue a game of make-believe — that we can still run a cheap oil economy without cheap oil. [My emphasis]
If Kunstler is right, this winter is going to come as a shock to a lot of people, especially people who heat with natural gas and who have low, fixed incomes. And if Kunstler is right, this winter will come as a shock as well to the economy as a whole. Money spent heating the house is money not spent elsewhere.
September 27, 2005
|Extreme Vulnerability||Energy Peak Oil|
Katrina and Rita have demonstrated all too clearly US vulnerability to disruptions in the flow of oil. If someone wanted to cripple the US economy, the place to do it would be in Saudi Arabia. As Christopher Dickey writes in Newsweek:
The shoot-out earlier this month around a seafront villa in the Saudi Arabian city of Ad Dammam lasted almost 48 hours, and ended only when security forces brought in light artillery. They blasted the opulent home until the roof came down on the people inside... Police...found enough weapons for a couple of platoons of guerrilla fighters. The inventory given out by the Saudi Interior Ministry included more than 60 hand grenades and pipe bombs, pistols, machine guns, rocket-propelled grenades, two barrels full of explosives, video equipment, a large amount of cash and forged documents.
It was the documents that really set off alarms. According to a Saudi Interior Ministry statement, they included forged passes to enter "important locations." The Saudi daily Okaz quoted the minister, Prince Nayef, saying the cell — which was linked directly to Al Qaeda — had planned major attacks on some of Saudi Arabia's key oil and gas facilities. "There isn't a place that they could reach that they didn't think about," said Nayef. And their ultimate target was the global economy. Saudi Arabia is the greatest source of oil on earth, with a quarter of known reserves and a proven policy of trying to stabilize prices even in today's volatile markets.
If the incident made few headlines at the time, it's because it ended on Sept. 6, when the United States — and oil traders — were focused on the impact of Hurricane Katrina. Yet precisely because of the shortages brought on by that storm and the damage still being counted from Hurricane Rita, Saudi Arabia is more important than ever to world oil supplies. What's worse, according to several analysts, Al Qaeda knows it. "They're watching Katrina. They're watching Rita. They're watching what it's doing to the United States," says former CIA agent Robert Baer, who has written extensively on Saudi Arabia's vulnerabilities. A few ruptured pipes could be repaired quickly, says Baer, but a concerted attack at several points could bring on the kind of nightmare scenario that U.S. officials have been dreading since the Reagan years, pushing oil prices up from their current prices in the range of $60 to $70 a barrel to well over $100 for weeks or even months. [My emphasis]
There will be a sort of grim poetic justice, I suppose, when the thing that brings down the energy-greedy American Empire turns out to be its very greed for — and utter dependence on — energy. And there is nothing currently on the political horizon to suggest that anything less than disaster will be enough to cause us to change course.
But pay no attention to those icebergs. As everyone knows, the Titanic is unsinkable.
August 31, 2005
|Gas To Hit $4 Per Gallon||Economy Energy|
Expect to pay $4 for a gallon of gas soon. CNN:
Consumers can expect retail gas prices to rise to $4 a gallon soon but whether they stay there depends on the long-term damage to oil facilities from Hurricane Katrina, oil and gas analysts said Wednesday.
"There's no question gas will hit $4 a gallon," Ben Brockwell, director of pricing at the Oil Price Information Service, said. "The question is how high will it go and how long will it last?" [...]
Brockwell said with gasoline prices now exceeding $3 a gallon before even reaching the wholesale level, it "doesn't take a genius" to expect retail prices to hit $4 a gallon soon. [My emphasis]
August 30, 2005
|MarketWatch's Assessment||Disasters Economy Energy Peak Oil|
From what little is known, MarketWatch offers a sobering assessment of the potential economic/energy fallout from Hurricane Katrina. Excerpts:
"There is a real sense of foreboding about the economy now that Katrina has struck with full force," said Bernard Baumohl, executive director of Economic Outlook Group. "The Louisiana and Mississippi Gulf region represent the soft underbelly of the U.S. energy industry."
Katrina took aim at a vulnerable chokepoint for U.S. energy markets. The region not only produces a large percentage of domestic oil and gas, it is also a transportation hub for both imported and domestic production.
And much of the petroleum that Americans use is refined at facilities along the ravaged Gulf coast. [...]
Even in the best-case scenario, production of crude petroleum, natural gas and refined gasoline are likely to be severely stunted for at least several weeks as Gulf production and refineries go back on line.
Last year, Hurricane Ivan, which tracked further east than Katrina, knocked out about 10% of U.S. energy production for about four months. [...]
If disruptions in Gulf energy supplies are limited, retail gasoline prices could top $3 a gallon for a couple of months, said Nariman Behravesh, chief economist for Global Insight. High energy prices would likely cut consumption and knock 0.3 to 0.5 percentage points off U.S. gross domestic product.
"We are not at the worst-case scenario," Behravesh told MarketWatch. "But we are moving in that direction" as companies assess the damage to their facilities.
In a worst-case scenario, the storm could shut down deliveries of as much as 25% of U.S. energy needs for several months.
In that case, gasoline prices would average $3.50 a gallon for the next four to six months, Behravesh said, cutting U.S. growth to zero in the fourth quarter. [...]
The key unknown is how much damage petroleum refineries suffered. The U.S. could conceivably import more crude petroleum to replace Gulf production, but it's almost impossible to replace lost refinery capacity.
Americans could be swimming in crude, but wouldn't have a drop of gasoline to run their cars. [...]
The vital Louisiana Offshore Oil Port, the only U.S. port that can handle supertankers, apparently escaped major damage, the manager of the port told Dow Jones NewsWires.
The major onshore port at Port Fourchon, also escaped major damage, according to Dow Jones NewsWires. The port is the base for oil service operations for oil rigs in the Gulf.
However, the channel leading to the port may have suffered severe silting from the storm surge. Dredging the channel could take weeks or longer. There could be a "very large impact to the energy supply," if the port can't reopen, port manager Ted Falgout told CNBC. [My emphasis]
It should be stressed that an awful lot remains unknown at this point.
|Nearly All Gulf Of Mexico Oil/Gas Production Remains Offline||Disasters Energy Peak Oil|
In the aftermath of Hurricane Katrina, most of the oil (95%) and gas (88%) production in the Gulf of Mexico (GOM) remains "shut-in" (the industry term for "available oil or gas which is not being produced from an existing well") according to figures released this afternoon by the Interior Department. The GOM normally accounts for about a quarter of domestic oil production. MMS:
Today's shut-in oil production is 1,427,969 BOPD. This shut-in oil production is equivalent to 95.20% of the daily oil production in the GOM, which is currently approximately 1.5 million BOPD [barrels of oil per day].
Today's shut-in gas production is 8.798 BCFPD. This shut-in gas production is equivalent to 87.99% of the daily gas production in the GOM, which is currently approximately 10 BCFPD [billion cubic feet per day]. [My emphasis]
Shut-in production has actually increased from yesterday's figures.
Preliminary reports indicate that the damage to refineries in the area is not catastrophic, with some sustaining only "minimal" damage. The extent of the damage to terminals, pipelines, and other infrastructure is still unknown. AP:
By late Monday, several refiners said damage at their plants appeared to be minimal and oil prices retreated from the day's highs above $70 a barrel. But if a bleaker picture emerges in the days ahead — it may take more time to assess damage, depending on how rough the seas are — prices could run up once again, analysts said.
Based on conversations with oil and gas companies operating in the Gulf, Goldstein said it appeared that Katrina will not interrupt the region's operations as significantly as last year's Hurricane Ivan. [...]
The powerful storm hit an area crucial to the U.S. energy infrastructure — offshore oil and gas production, import terminals, pipeline networks and numerous refining operations in the southern states of Louisiana and Mississippi. [...]
The Louisiana Offshore Oil Port [LOOP], the largest oil import terminal in the United States, evacuated all workers and stopped unloading ships on Saturday. Any significant damage to the port would have a devastating impact, analysts said. [...]
"The damage to the electric power grid is the most important source of damage to consider in evaluation of the impact of Hurricane Katrina," said energy analyst Dan Lippe of Petral Worldwide in Houston. [My emphasis]
Some reports today indicate that the Louisiana Offshore Oil Port, or LOOP, may be able to get back in operation when power is restored. MarketWatch:
At least five big Gulf Coast refineries...remained shut [Tuesday], as was the Louisiana Offshore Oil Port, or LOOP — the nation's only deepwater oil terminal.
The LOOP typically receives tankers delivering about 1 million barrels of oil a day, or 10% of the nation's imported crude.
Media reports, quoting a port official, said the LOOP had not sustained significant damage and could likely resume operations as soon as power is restored on the the facility, which sits about 20 miles off the Louisiana coast. [My emphasis]
Getting New Orleans back up and running looks to be an entirely different matter. The levee between New Orleans and Lake Pontchartrain suffered a major break and water from the lake is flooding the city, which is below the level of the lake. Water will continue to flood into the city until the levels are equalized or the levee is repaired (which means getting heavy equipment to the site). Once the levee is repaired, the only way to get the water out of the city will be to pump it out.
It's hard to imagine all that taking less than a number of weeks to accomplish. The devastation to buildings and homes that have been underwater for that long is going to be enormous. How soon are the workers who run the oil and gas infrastructure going to be able to return home? How soon are the offices from which that infrastructure is managed going to reopen? Meanwhile, the water continues to rise.
July 18, 2005
|Sustainable Ethanol Production From Plant Biomass||Energy Environment Peak Oil Science/Technology|
A recent post looked at the net energy loss involved in producing ethanol the way it's currently done in the US: by raising corn or other crops for the purpose of turning them into ethanol. This practice has a variety of drawbacks that make it a net loser in energy and environmental terms. For one thing, a great deal of fossil fuel is expended in growing and processing the corn, so the energy used up in manufacturing the ethanol is greater than what you get out when you burn it. You'd have been better off just burning the fossil fuels directly. For another thing, the expenditure of fossil fuels in manufacturing the ethanol produces a net increase in the CO2 emissions into the air. The upshot is that this kind of commercial ethanol production is just making things worse.
That's the bad news. Here's some good news.
A Canadian called Iogen (link via Xymphora) is pioneering a process that produces ethanol not from grains but from cellulose fibre that's generated as a waste by-product of agriculture (plant stalks, and so on). Cellulose is the most abundant organic molecule on the planet.
The manufacturing process uses enzymes to break down (digest) the cellulose, producing sugars which are then fermented and distilled to produce ethanol. Since enzymes are used rather than fossil fuel inputs as in the usual commerical manufacturing process, no net CO2 emissions are produced. (I.e., the carbon in the plants is carbon that was taken out of the air. It is returned to the air when the ethanol is burned, but it's recycled carbon, not new carbon dug up in the form of petroleum or coal.)
Also, since the cellulose is a non-food, waste by-product, extra energy is not being expended to produce it (i.e., it's already part of the normal cycle of food production) and it's not competing with food production for humans and livestock. Some energy is used to transport the cellulose for processing, but by locating processing close to where the cellulose is produced, that energy usage could be minimized.
Iogen doesn't say what the net energy gain is, but they say the process has "a high level of sustainability". Here's more from Iogen's website:
While cellulose ethanol, and conventional (grain derived) ethanol are the same final product that can easily be integrated into the existing fuel distribution system, they have several distinct differences. Conventional fuel ethanol is derived from grains such as corn and wheat.
Cellulose ethanol, on the other hand, is an advanced new transport fuel with a unique combination of attributes. These include:
low life-cycle greenhouse gas (GHG) emissions;
a high level of sustainability;
made from the non-food portion of renewable feedstocks such as cereal straws and corn stover;
has the potential to have a large-scale, world-wide impact.
Cellulose ethanol is also a cost-efficient way to reduce GHGs and gasoline use in transport, especially when compared to vehicle solutions. As a result, advanced new transport fuels and vehicle technologies are equally effective in addressing the market to reduce GHG emissions.
Cellulose ethanol, and conventional (grain derived) ethanol are the same final product, but the production technologies are very different. The two types of ethanol also differ in the following ways:
a) the manufacturing process does not consume fossil fuels, but rather uses plant byproducts to create the energy to run the process (this leads to a net zero greenhouse gas emissions profile),
b) the technology is new and emerging and has only recently become practical, and
c) the raw material does not compete as a food source for humans and is available today based upon existing farm practices.
The agricultural industry produces vast amounts of [cellulose] residue that has little use today. Most is burned or some is left on the land to enrich the soil. The practice of burning has become a major environmental issue and many governments have established guidelines as to when burns can take place, or have banned burning altogether.
Until recently, producing cellulose ethanol has been very costly because of the expensive and inefficient bioprocesses required to produce it. Recent innovations in both biotechnology and process technology have made large-scale cellulose ethanol production a reality.
EcoEthanol™ is the patented name of Iogen’s cellulose ethanol process. The process uses an enzyme hydrolysis to convert the cellulose in agriculture residues into sugars. These sugars are fermented and distilled into ethanol fuel using conventional ethanol distillation technology.
Commercial cellulose ethanol production facilities will be located in feedstock producing areas, and will provide a solution for the surplus residue, while at the same time, create substantial economic opportunities in these rural areas. [My emphasis]
Currently, Iogen only has a test plant in operation. They are seeking investors to build the first large-scale plant.
I've mentioned before that biotechnology (and, eventually, nanotechnology) could be the wildcards in our energy future. Iogen's process is an early example, where biotechnology has been harnessed in the development and manufacture of the enzymes that break down the cellulose.
Note also that since ethanol is already being used in vehicle fuels, no new distribution infrastructure has to be created.
Another interesting point from Iogen's site: they have a graph that compares how much various solutions cost per litre of gas saved, amortized over five years — in other words, the cost-effectiveness, or bang for the buck, of various ways to save gas. Check it out. According to their data, cellulose ethanol is a clear winner over things like hybrid engines, and it doesn't require the replacement of the currently-existing fleet of cars. Interestingly, reducing aerodynamic drag turns out to be the most cost-effective gas-saving method of all the ones they looked at.
This technology is in its infancy, and an enormous amount of investment will be required to ramp it up to a globally-significant scale. But it is also a technology that can be employed in the relatively near term in smaller-scale, decentralized, local solutions by communities making the commitment to sustainability. It is a hopeful sign at a time when hopeful signs are much needed.
July 13, 2005
|Plant Biomass Fuels Not The Answer||Energy Peak Oil|
For a fuel to be useful, however, the energy you get out of it has to be greater than the non-renewable energy you put in. New research from Cornell and UC-Berkeley says plant biomass fuels do not produce more energy than they consume:
Turning plants such as corn, soybeans and sunflowers into fuel uses much more energy than the resulting ethanol or biodiesel generates, according to a new Cornell University and University of California-Berkeley study.
"There is just no energy benefit to using plant biomass for liquid fuel," says David Pimentel, professor of ecology and agriculture at Cornell. "These strategies are not sustainable."
Pimentel and Tad W. Patzek, professor of civil and environmental engineering at Berkeley, conducted a detailed analysis of the energy input-yield ratios of producing ethanol from corn, switch grass and wood biomass as well as for producing biodiesel from soybean and sunflower plants. [...]
In terms of energy output compared with energy input for ethanol production, the study found that:
corn requires 29 percent more fossil energy than the fuel produced;
switch grass requires 45 percent more fossil energy than the fuel produced; and
wood biomass requires 57 percent more fossil energy than the fuel produced.
In terms of energy output compared with the energy input for biodiesel production, the study found that:
soybean plants requires 27 percent more fossil energy than the fuel produced, and
sunflower plants requires 118 percent more fossil energy than the fuel produced.
In assessing inputs, the researchers considered such factors as the energy used in producing the crop (including production of pesticides and fertilizer, running farm machinery and irrigating, grinding and transporting the crop) and in fermenting/distilling the ethanol from the water mix. Although additional costs are incurred, such as federal and state subsidies that are passed on to consumers and the costs associated with environmental pollution or degradation, these figures were not included in the analysis.
"The United State desperately needs a liquid fuel replacement for oil in the near future," says Pimentel, "but producing ethanol or biodiesel from plant biomass is going down the wrong road, because you use more energy to produce these fuels than you get out from the combustion of these products."
Although Pimentel advocates the use of burning biomass to produce thermal energy (to heat homes, for example), he deplores the use of biomass for liquid fuel. "The government spends more than $3 billion a year to subsidize ethanol production when it does not provide a net energy balance or gain, is not a renewable energy source or an economical fuel. Further, its production and use contribute to air, water and soil pollution and global warming," Pimentel says. He points out that the vast majority of the subsidies do not go to farmers but to large ethanol-producing corporations.
"Ethanol production in the United States does not benefit the nation's energy security, its agriculture, economy or the environment," says Pimentel. "Ethanol production requires large fossil energy input, and therefore, it is contributing to oil and natural gas imports and U.S. deficits." He says the country should instead focus its efforts on producing electrical energy from photovoltaic cells, wind power and burning biomass and producing fuel from hydrogen conversion. [My emphasis]
It is conceivable that future advances (genetically-modified plants, say) could alter the picture, but in the short to medium term converting plant biomass to liquid fuel isn't the answer.
The problem is urgent. We don't have the luxury of time to chase solutions that really aren't solutions. Ethanol subsidies would be much better spent on renewables and R&D.
Update [7/18/2005] - But, see also this, a promising process for producing ethanol from cellulose without using significant amounts of fossil fuels.
June 05, 2005
|Saudis Furious Over Call To Discuss Women Driving||Energy Politics Rights, Law|
Men in our ally Saudi Arabia are in an uproar because a government official there had the nerve to suggest that they might consider discussing the possibility of maybe studying the feasibility of someday allowing women to drive. Article (via Fark):
Consultative Council member Mohammad al-Zulfa has unleashed a storm in this conservative country.
His cellphone rings constantly with furious Saudis accusing him of encouraging women to commit the double sins of discarding their veils and mixing with men. He gets SMS messages calling on Allah to freeze his blood.
Chat rooms bristle with insulting accusations that al-Zulfa is "driven by carnal instincts". There even have been calls to kick him out of the council and strip him of his Saudi nationality.
All he wanted was for his colleagues in the government's legislative arm to discuss the possibility of conducting a study into the feasibility of ending the ban on women drivers — the only prohibition of its kind in the world.
The uproar may be astounding to outsiders but in strictly Islamic Saudi Arabia the religious establishment defines women's freedoms.
Conservatives believe women should be shielded from strange men; they say driving will allow a woman to leave home whenever she pleases and go wherever she wishes.
"Driving by women leads to evil," wrote Munir al-Shahrani in a letter to the editor of the Al-Watan daily. "Can you imagine what would happen if her car broke down? She would have to seek help from men."
Only Saudi Arabia bans women from driving. But Saudi Arabia is our treasured friend.
Forget human rights. There's oil involved.
May 28, 2005
|Reducing Demand For Oil In Transportation||Energy Peak Oil|
PolicyPete has an interesting graph that shows how various measures might affect demand for oil in transportation:
The low-hanging fruit here in the US: car-pooling and lower speed limits. Which is to say, modifying our behavior. The last national politician I can think of who advocated such changes was Jimmy Carter, and it probably cost him a second term.
Americans want a painless techno-fix, but we're going to have to face reality. The cheap oil's almost gone. It's time to grow up and start treating oil like the finite, irreplaceable treasure that it is.
Oil is a one-time gift to humanity. When it's gone, it's gone forever.
May 05, 2005
|Fiddling While The World Burns||Energy Peak Oil Politics|
Molly Ivins on the energy bill just passed by the House:
When the history of this administration is written, I suspect the largest black mark against it will be wasting time. The energy bill just passed by the House is a classic example of frittering away precious time and resources by doing exactly nothing that needs to be done about energy. The bill gives $8.1 billion in new tax breaks to the oil companies, which are already swimming in cash.
ExxonMobil's profits are up 44 percent, Royal Dutch/Shell up 42 percent, etc. According to the business pages, the biggest problem oil executives face is what to do with all their cash. So why give more tax breaks to the oil companies? Makes as much sense as anything else in this energy bill. Nothing about conservation, higher fuel efficiency standards or putting money into renewable energy sources. It's so stupid, it's painful.
And their genius answer to "energy independence"? Drill in the Arctic National Wildlife Refuge. Look, the total oil under ANWR is 1 billion barrels less than this country uses in a year, according to Robert Bryce, the Texas journalist who specializes in energy reporting. The bill is just riddled with perversity: We continue to subsidize people who buy Hummers, but no longer grant tax rebates to those who buy hybrid cars that are more than six times as fuel efficient. This is not how you get to "energy independence." [My emphasis]
Judging by their foreign policy, administration leaders are keenly aware of the looming world oil crisis. Why, then, they refuse to lift even the slightest finger to promote conservation of the oil that remains is — well, "incomprehensible" is not a strong enough word. If there's no political payoff in it for them, they just won't do it. These people conduct their affairs like mobsters.
March 06, 2005
|Oil And The Soviet Collapse||Energy Iraq Peak Oil|
Kenneth Deffeyes, in his new book Beyond Oil, offers an intriguing take on what caused the Soviet Union to collapse. He begins with a multiple choice question:
Who gets credit for causing the collapse of the Soviet Union?
a. Ronald Reagan, for promoting Star Wars
b. the pope, for being Polish
c. Mikhail Gorbachev, for allowing dissention
d. the KGB, for abusing the people
e. Saudi Aramco, for lowering oil prices
Stephen Kotkin points out that the Soviet Union, up to 1985, was exporting two million barrels of oil per day. The hard currency from oil allowed the Soviets to import items that were internally in short supply, from electronics to soap. At that time, Soviet oil production was larger than Saudi production by a factor of three, but Saudi Aramco had much lower production costs. Saudi Aramco resorted to a familiar tactic: a price war. They flooded the world with oil and drove the world price of crude oil below the Soviet cost of production and transportation...[S]evere shortages of everything...developed within the Soviet bloc. [...]
After six years without hard currency, the Soviet Union collapsed. Control of the world's dominant energy source carries enormous power.
This account is important for two reasons. First, it reminds us that the history we learn in school is at best incomplete, at worst self-serving propaganda. Of more immediate relevance, though, is the way it illustrates the enormous geopolitical leverage that comes with control of the world's industrial lifeblood.
Some people argue that oil could not have been an important motivation for the US invasion of Iraq. After all, the argument goes, the US could always acquire Iraqi oil simply by buying it on the world market. As the Soviet story illustrates, however, this is an absurdly naive reading of the situation. There is much, much more at stake than just filling our gas tanks. Whoever controls the world's oil — especially in years to come as world oil production falls increasingly short of the world's needs — controls the fate of nations.
February 14, 2005
|Tar Sands||Energy Environment Peak Oil|
As noted in a recent post, one sometimes hears that the world doesn't have an oil problem because so-called "tar sands" will provide a vast new source of oil. It is unlikely, however, that oil production from tar sands can reach the scale required to make a dent in world oil production quickly enough to make a real difference.
Even if it could, though, there are other enormous problems with tar sands: production of oil from tar sands is extremely energy-intensive (so the net energy gain is low and the amount of carbon that goes into the atmosphere correspondingly large per unit of energy) and enormously destructive to the environment. When all factors are taken into account, tar sands are far from the deus ex machina they are sometimes said to be.
Here's a nice summary of the issues, taken from the recent book Crude: The Story of Oil, by Sonia Shah:
Across the bleak landscape of northeastern Alberta, [Canada] over millions of years, a giant oilfield had risen from its grave. Freed from its rocky tomb, the oilfield's light molecules of oil and gas evaporated, leaving behind a thick, tarry sludge to bask in the thin northern sun. The sludge gummed up with the Alberta sand.
If the oil lingering in these sands, called "tar sands" or "oil sands," could be recovered, Alberta could provide 300 billion barrels of oil, more than the proven reserves of Saudi Arabia, awed industry groups said. [...] [I]t isn't the only such deposit, either. Another giant deposit of tar sands sits in the Orinoco belt in Venezuela, buried deep underground. [...]
The [Alberta] tar sands lay fallow for years until the Canadian government started to aggressively subsidize their development. In 1995, the Canadian federal government announced that...oil companies ...could write off 100 percent of their expenses. [...]
The trouble is, Alberta's tar sands are nothing like conventional crude oil, which is why trade magazines and government agencies historically haven't taken tar sands into account when tallying up the world's reserves of crude. Thick and tarry, tar sands oil can't be conveniently bundled off down a pipeline to the refinery. It must be treated first, with natural gas and other petroleum products, in order to flow. Not just with a little bit either; the tar sands require over five times more of these precious petroleum products than regular heavy crude.
Even when begrudgingly flowing, the oil is heavier than most refineries can handle. New refineries must be built or revamped in order to process it, and all they may be able to turn out is road asphalt or boiler fuel. Alternatively, yet more fuel can be burned to heat tar-sands oil into a synthetic crude oil.
For each barrel of tar-sands oil, no less than two tons of sand and clay must be mined, using the widely reviled methods pioneered by the coal industry: forest-killing open-pit mining. With all the eviscerating procedures and additional treatment the tar sands required, extracting oil from the sands sucks up two-thirds of the energy they ultimately render, poisoning the atmosphere with carbon in the process. Producing a single barrel of oil from tar sands emits no less than six times more carbon dioxide than producing a barrel of conventional oil.
By 2002, over $10 billion had been invested in Alberta's oil sands, and the industry planned to squeeze out more than 3 million barrels a day by 2012. By then, a handful of companies that had been mining the tar sands, using the world's biggest shovels and trucks, had depleted most of the shallow deposits. Companies turned to the deeper deposits, more than six hundred feet down. Open-pit mining wouldn't do, but they could drill holes and shoot steam down, to push the oily sands out. The new technique, "steam assisted gravity drainage," sent the price of producing a barrel of tar sands plummeting down to around $5 to $7 a barrel. It also required vast amounts of precious fresh water, which after being contaminated with chemicals is pumped into giant festering lakes of waste water.
The oil-sands industry gorges on a quarter of Alberta's scarce fresh water — each barrel of oil needing six barrels of water to flush it out — and burns up to a fifth of the entire nation's natural gas supply. According to a leaked report from a Canadian environmental agency, the pollutants from the expanding tar-sands operations will result in enough acid rain to destroy much of the region's majestic forests as well. [My emphasis]
It is a measure of our collective irrationality that we'd rather create a wasteland than forego driving our SUVs. Lunacy.
February 04, 2005
|A Question Of Scale||Energy Peak Oil|
To appreciate the magnitude of the Peak Oil crisis confronting us, it's necessary to come to grips with the colossal scale of the world's appetite for oil. Humanity currently consumes about 82 million barrels of oil per day, 30 billion barrels per year, and demand is increasing more or less exponentially (i.e., doubling at a constant rate). How big of a number is 30 billion barrels? It's roughly equal to one barrel per second, every second, for a thousand years. That's our annual consumption, and it's growing rapidly.
To put this in perspective, consider the debate over drilling in the Arctic National Wildlife Refuge (ANWR). ANWR drilling proponents often talk about it in a context of "US energy independence." This is a cruel joke. Optimistic order-of-magnitude estimates of ANWR oil reserves are in the vicinity of 10 billion barrels. For the sake of argument, let's suppose 100% of this oil can be recovered (it can't). 10 billion barrels is enough to satisy world oil consumption for a mere four months. If it all went to the US, it would satisy US consumption for less than a year and a half. Then what?
Humanity will doubtless work to implement substitute sources of energy (e.g., nuclear, wind, solar) and to extract oil from currently marginal sources (e.g., tar sands). But, if world oil production does peak in the current decade as it appears poised to do, there seems to be zero chance that humanity can react quickly enough to prevent a catastrophic shock to industrial societies and the world in general. It's a question of scale. We should have gotten started long ago.
Consider nuclear. To replace oil with nuclear, it would be necessary to build thousands of nuclear power plants, costing untold trillions of dollars. Even if that were desirable, it's an undertaking of unprecedented scale. As Cal Tech physicist David Goodstein, author of Out of Gas, has said:
[I]n order to make enough nuclear energy to replace all of the fossil fuel we burn today, you would have to build ten thousand of the largest nuclear plants possible. Ten thousand. That's not impossible but it is certainly a daunting task. Even if you did that, the known uranium reserves would last at that burn rate for only one or two decades. [My emphasis]
And it doesn't stop there. Currently, 95% of transportation runs on oil. To employ nuclear energy to power transportation, it would be necessary to convert the generated energy to a form usable in transportation vehicles, such as hydrogen. That means the construction of thousands of hydrogen-generation facilities, the construction of a vast new infrastructure for the distribution and storage of hydrogen, and the conversion or replacement of hundreds of millions of vehicles to use hydrogen power. These changes clearly would take decades. If Peak Oil projections are correct, we don't have decades.
Or consider tar sands. In several regions of the world (notably, in Alberta, Canada) there are substantial amounts of oil in a form known variably as "tar sands" or "oil sands." Tar sands are formed when the light molecules of oil and gas evaporate from an oil field, leaving behind a thick, tarry sludge that over time mixes with sand and hardens. It is possible to recover the oil by mining and processing the tar sands, but the process is extremely energy-intensive (so the net energy gain is relatively low) and environmentally damaging.
The tar sands are definitely real, and some say they may even double output by 2010 — but that will only take them to 2 million barrels per day, which is not even 3% of [current] world demand, and by then this would only offset one year's predicted decline in global oil production [i.e., would only postpone Peak Oil by one year]. It might take another 5 years to gain another 1 million barrels a day, by which time we may have lost more than 10 million barrels a day in the wider world.
Of course, oil won't disappear all at once, overnight. But once production falls significantly short of demand the consequences will be immediate and severe. Perhaps most ominous is the dependence on oil of agriculture (fertilizers, pesticides, irrigation — not just farm machinery) and food distribution (processing, refrigeration, transportation).
To make matters worse, the world's appetite for oil continues to grow exponentially. In China and India, which together contain 2.4 billion people, energy demand is sky-rocketing. As the Christian Science Monitor reported on 20 Jan 2005:
The challenge is huge. For China and India to reach just one-quarter of the level of US oil consumption, world output would have to rise by 44 percent. To get to half the US level, world production would need to nearly double. That's impossible. The world's oil reserves are finite. And the view is spreading that global oil output will soon peak.
So, even if we could somehow find a way to replace the shortfall in energy supply as oil production falls, that won't nearly be enough. I.e., just holding energy production at current levels, keeping it from falling, isn't sufficient. To meet demand, energy production must grow exponentially — or else industrial society hits the wall and nations begin fighting tooth and nail for the energy that remains.
Where is the political leadership we need at this critical time? For all practical purposes, it doesn't exist, at least not here in the US. One is forced to conclude either that politicians are clueless — or in denial — about these issues, or they've cynically decided that we, the people, cannot be persuaded to act until there is a deadly crisis unmistakably staring us in the face. I.e., that things have to get a whole lot worse before people will be willing to change how they live. In the meantime, a bearer of bad news is likely to get voted out of office, so the careerists lay low.
There are people who claim that there will automatically be a smooth transition to new energy sources, that demand will magically create its own supply, that energy is essentially infinite. Given the scale of the transition that must be made, though, such claims seem like wishful thinking.
The point is not that nothing can be done. The point is that the scale and immediacy of the problem is such that we should already be working flat out now to prepare for a post-oil world. If we get to work, it's possible that we can soften the landing. If we continue to let things slide, a hard crash is inevitable. In that event, we will have no one to blame but ourselves.
November 17, 2004
|NZ Scientist Warns Of Human Extinction||Energy Environment Religion|
Professor Peter Barrett, recipient of New Zealand's Marsden Award for lifetime achievement in the sciences, believes global climate change may threaten the very survival of the human species, and much sooner than we think:
A top New Zealand researcher is using a prestigious award ceremony in Christchurch to warn that humans face extinction by the end of the century.
Professor Peter Barrett will be presented with the Marsden Medal tonight for his 40-year contribution to Antarctic research, latterly focusing on climate change.
The director of Victoria University's Antarctic Research Centre expects to use his acceptance speech to warn climate change was a major threat to the planet.
"After 40 years, I'm part of a huge community of scientists who have become alarmed with our discovery, that we know from our knowledge of the ancient past, that if we continue our present growth path, we are facing extinction," Barrett said. "Not in millions of years, or even millennia, but by the end of this century." [My emphasis]
One of the truly remarkable and, to me, inexplicable characteristics of the Bush administration is its complete unwillingness to face facts and begin to tackle even one of the really large-scale issues confronting humanity: climate change, diminishing energy supplies, increasing shortages of fresh water, etc.
Take energy. I understand that the focus of this White House is on rewarding its supporters, so I fully expect them to push projects like opening the ANWR to oil exploration. But how would it hurt them politically if they were simultaneously to embark on a crash technology program for greater energy efficiency, development of alternative fuels, and so on? Even if we got started today, it would take a long time for any new solutions to come on-line on anything like the required scale, so the administration's oil cronies are still going to get to pump every last drop of oil. And there will be plenty of other opportunities to make money developing and exploiting the new technologies. But the White House seems incapable of envisioning anything except more drilling and more invasions of the world's oil-producing regions.
There's this weird determination generally on the part of the Bush White House to be on the wrong side of every issue that's in any way related to science. Maybe their crackpot brand of Apocalyptic Christianity is behind it. Maybe it's a simple unwillingness to admit their opponents have ever been right about anything. It's baffling, but it's going to get a lot of people killed. If Barrett's right, it just may get us all killed. Talk about your issues of morality.
October 13, 2004
|Venezuela's Oil||Energy Politics|
Now we see why the US tried so hard to remove Venezuela President Hugo Chavez from power:
Venezuela has announced that it is increasing the royalties paid by foreign oil companies from 1% to 16.6%.
President Hugo Chavez said it marked the second and true phase of the nationalisation of the country's oil.
The days of giving oil away for free belong to the past.
I can think of no surer way to paint a bullseye on your own back. It must be glorious to have a national leader with that kind of integrity and guts. If only US politics could produce such a leader here.
[Links via Xymphora]
October 06, 2004
|Peak Oil In The News||Energy Peak Oil|
[For background on Peak Oil, please see my earlier post.]
In August, Texas oil baron, corporate raider, and Bush supporter T. Boone Pickens said, "Never again will we [the world] pump more than 82 million barrels [per day]." In other words, never again will the world pump more oil than it is pumping right at this moment: peak has arrived.
Late last week, oil dominated the agenda at the G7 finance ministers' meeting in Washington. They're concerned about oil prices and want to determine what's been driving them up. Reuters (excerpts, emphasis added):
Worried soaring oil prices could hurt the best global prospects in years, finance chiefs from wealthy nations [the Group of Seven, or G7] met on Friday to try to work out what lay behind the surge and how to buffer the economic expansion. [...]
"High and volatile oil prices pose a risk to the outlook, dampening consumer spending and company profitability," Britain's Chancellor of the Exchequer, Gordon Brown, warned on Friday. He said it was vital for the G7 "to improve the transparency and the efficiency of the oil market." [...]
Ministers are seeking energy market transparency to discover if world oil supplies may be scantier than they thought in May when they urged producers to open the spigots.
Middle East oil producers generally maintain they are pumping near capacity and, like oil consumers, are interested in smoothing out current volatility. [...]
Another G7 official suggested the rise in oil costs was rooted in such fundamental factors as over-estimated supplies and was not solely due to speculation.
There is "a recognition that oil resources are scarcer than was thought a few years ago," the official said. "We agree there is a need for more transparency on the potential supply of various areas."
If scarcity is the chief culprit, the oil price shock may not prove as temporary as hoped, the official said.
The call for transparency points to one of the fundamental problems in setting world oil policy: companies and countries have a variety of incentives to fudge the numbers when it comes to estimating remaining reserves. Claims made by OPEC nations, especially, have to be treated skeptically. Since their quotas are based on how much reserves they claim to have, they grossly overestimate reserves to increase their quotas, which allows them to pump more oil. I'll have more to say about this tendency in a future post.
The fact that the G7 nations now call for transparency suggests they're worried that reserves are significantly smaller than people have thought. They want to know where we really stand.
BBC North American business correspondent Steve Evans, who covered the G7 meeting, reported on it for BBC radio. From Deep Blade Journal:
In the radio report, heard on The World Today program, Evans says that ministers "don't know" what exactly is the source of the strain in the oil market. They "may have overestimated the supply of oil, they simply don't know how much oil is in the ground, and get-able". Also, the G7 wants to find out "how much speculation there is in the market". Hence the new "buzzword", transparency.
"All they know is something very odd has happened and they want to know what the reason is," reports Evans. [Italics in the original.]
The way to reduce oil prices short-term is to pump more oil. Saudi Arabia has said it will do so, but it may not actually have the capacity. This would be bad news. Deep Blade Journal quotes outspoken energy investment banker Matthew Simmons on Saudi Arabia:
They're the only significant producer left in the world that have any spare capacity. That's the only thing you have to know to say forget about all the others, this is the really important deal. In my opinion, having studied thirty-five years on the oil markets, there is no other oil producer on earth that could even begin over time to replace a significant shortfall in Saudi Arabia's oil. So if in fact Saudi Arabia is at their peak production, then so is the world. So this is really basically a big issue. [My emphasis]
The G7 ministers concerned themselves with the efficiency of markets, i.e., of pricing mechanisms. We await the day when they voice an equally urgent concern for the fuel efficiency of our transport, agriculture, and industry.
It is critical that we undertake a crash program of moving to more efficient use of fossil fuel energy. We have got to buy ourselves some time.
October 04, 2004
|It's The Peak, Stupid||Energy Essays Peak Oil|
[Third article in a series on the fundamentals of Peak Oil.] [Previous]
Everyone knows that the modern world runs on fossil fuels and fossil fuels will be exhausted someday. "Someday" is not far off. Oil, in particular, will run out in just a few decades given current and projected levels of demand. Coal will last a while longer. A few decades isn't much, but we tell ourselves we've got time. Somebody will figure something out; somebody will find something to replace oil.
What far fewer people realize, however, is that the critical date is not the date on which the last drop of oil is pumped from the ground. Rather, it's the date when oil “production” (i.e., extraction) begins its inevitable decline. At that point, rising demand will meet declining supply, and the result will be sky-rocketing prices, chronic shortages, and — especially after the people of the world wake up to the fact that oil production is falling, that oil is running out, permanently — bitter and violent competition among nations for the lifeblood of modern industrial society. Iraq may be just the beginning.
The key fact to understand is this: if you graph the rate of extraction of a resource like oil, it follows (approximately) a symmetrical bell-shaped curve. The rate ramps up slowly at first as people figure out how to find and extract the resource and as uses for it are discovered or invented. Soon, the rate accelerates, climbing the left-hand side of the bell curve. Because the curve is symmetrical, production peaks when half of the resource has been consumed.
The largest oil fields are discovered early on, since they're the easiest to find. (If you close your eyes and throw darts at a wall full of targets, chances are you'll hit the big targets first.) Inevitably, though, the large oil fields reach their peak and, individually, begin to decline. It becomes progressively harder to find new sources, and the ones that are found are progressively smaller. In time, the overall world-wide extraction rate flattens out and, finally, it too begins to decline. Not only does the rate decline, but extraction becomes harder and more expensive — it's a lot harder to get toothpaste from a nearly empty tube.
Discovery and extraction both have this kind of bell-shaped history. Extraction mirrors discovery (after a delay) since whatever is discovered eventually gets extracted, and you cannot extract what you haven't discovered. When discovery peaks and begins to fall, it is inescapable that extraction will follow suit, after a delay. World-wide, the extraction curve has mimicked the discovery curve, but with about a 30 year delay.
World-wide discovery peaked over 30 years ago.
So where are we?
Facts about oil:
- Currently, 95% of the world's transportation runs on oil.
- Most synthetic products – plastics, fertilizers, pharmaceuticals – depend on oil.
- Modern agricultural and food distribution systems run on oil.
- There is a finite supply of oil on earth.
- It is a one-time gift to humanity. Once it's gone, it's gone forever.
- The world has used about a trillion barrels of oil to date.
- About a trillion barrels of recoverable oil are left in the ground.
- It took humanity a century to burn through the first half of the world's oil.
- We consume oil so rapidly now that at current rates we will burn through the second half of the world's oil in just a few decades.
- The world currently consumes about 82 million barrels per day (bpd) of oil – 30 billion barrels per year.
- The scale of consumption is so colossal that all the recoverable oil in Alaska, for example, would satsify the world for just a couple of months.
- Do the math: if world consumption holds at 82 million bpd, the remaining trillion barrels will be totally consumed in less than 35 years.
- However, world oil consumption is projected to continue to increase rapidly, not hold steady at 82 million bpd.
- If consumption continued to increase as projected, the world's supply of oil would be exhausted in something closer to 20 years. (This won't actually happen, since supply won't be able to keep up with projected demand.)
- The rate of extraction of a resource like oil follows a roughly symmetrical bell-shaped curve over its history.
- Because the extraction curve is roughly symmetrical, the peak point occurs when about half of the resource has been extracted.
- After the peak point, annual oil extraction necessarily declines, slowly at first, then more rapidly, never to rise again.
- From #6 and #7 above, it follows the world is at or near the peak point right now.
- Increasing demand coupled with decreasing supply is a recipe for sky-rocketing prices, chronic shortages, international conflict. We are witnessing the early stages of this process already.
- National security planners and world financial institutions know all this. They're working up the nerve to tell the rest of us.
The main point to remember: it's not just the end of oil we should be thinking about, it's the peak.
To paraphrase James Carville: It's the peak, stupid. That's when all hell breaks loose. And it has already begun.
The first half of the Oil Age was marked by continual growth in the availability of oil. The second half will be marked by its continual decline.
But won't advances in technology find more oil for us? Can't we drill deeper? Can't we drill under the ocean? Won't the market save us? Won't rising oil prices give oil companies the profit incentive to keep finding more and more oil?
We'll consider those questions in the next installment.
August 24, 2004
|Exponential Growth Cannot Last||Energy Environment Essays Musings Peak Oil|
[This is the first article in a series on the fundamentals of Peak Oil. I'd like to start with some important ideas of a general nature. We’ll get to the specifics of oil soon enough.] [Next]
I’ve written about exponential growth before, but the concept is so essential to understanding the future that awaits us that I want to revisit it.
To say something grows exponentially is to say it grows at a constant percentage rate — for example, 3% per year. Anything that grows in this way doubles at a constant rate. You can estimate how long it takes to double by dividing the percentage growth rate into 72. So, for example, something that grows at a rate of 3% per year doubles every 24 years (72/3 = 24).
So, you can think of exponential growth as growth by doubling at a constant rate.
Doubling is an extraordinarily powerful process. Some examples (from M. King Hubbert):
1. If you start with a single pair, say Adam and Eve, in just 32 doublings you’d have a population greater than the total population of Earth today. Just 14 doublings later you’d have one person per square yard over the entire land surface of the planet.
2. If someone gives you a single grain of wheat for the first square of a chessboard, 2 for the second, 4 for the third, doubling at each square, by the time you finish the 64 squares of the chessboard you’d have more than a thousand times the total annual wheat production of Earth.
3. If you play the chessboard game with automobiles instead of wheat, by the time you finish the 64 squares you’d have so many automobiles that if you stacked them uniformly over the entire land surface of the earth, you’d have a layer 1,200 miles deep. (Think of that the next time some economist says world GNP can grow at 3% per year forever.)
What these examples show is that doubling (or exponential growth) is such a powerful process, that it takes only tens of “generations” of doubling — not hundreds, or thousands, or millions — to completely exhaust the physical environment of the planet. Put another way, in the physical world (as opposed to an idealized mathematical world) exponential growth cannot last for long.
When any living species is placed in a favorable environment — meaning an environment that doesn’t limit growth because of the lack of some necessity (e.g. food), the presence of a predator, or for some other reason — its population grows exponentially. In Nature, over the long run, limitations in their environments prevent species from multiplying exponentially. Otherwise, the world would long ago have been engulfed.
Why is all this important?
Early in a doubling sequence, the numbers grow slowly. Likewise, until recently in human history, human population grew slowly. Use of energy and material resources by humans also grew slowly, and the resources used were entirely of the renewable variety, except for tiny amounts of coal and metals. Everything else (food, energy, shelter, clothing, etc.) came from animals and plants (renewable), plus a small amount of energy from wind and water (renewable). If humans had continued to rely on renewable resources, that fact would have put a ceiling on population size.
Starting about two centuries ago, however, a revolution occurred in human life: people starting using non-renewable resources — hydrocarbon fuels and a variety of minerals — in a big way. This use of non-renewables removed the constraints on human population and activity, and exponential growth really kicked in. Not only has population grown exponentially, but human use of coal, oil, gas, iron, copper, tin, lead, zinc, etc. have grown exponentially as well, as has human damage to the environment. It’s the use of non-renewables — hydrocarbon fuels, especially — that has made this growth possible.
But, inevitably, we’re going to hit the wall, and sooner than we think. Even if we had infinite resources to draw on, exponential growth would soon fill up a finite environment, as we've seen. But that hardly matters, since we do not have infinite resources to draw on. Non-renewables are a one-time gift to humanity. They are finite. We’re burning through them at an exponential pace, and when they’re gone they’re gone forever.
Now, one of the really startling characteristics of growth by doubling is the following fact: if you consider the sequence of doubled numbers — 1, 2, 4, 8, 16, 32, etc. — each number in the sequence is greater (by one) than the sum of all the numbers that precede it.
Why do I call this startling? Consider oil. World oil consumption is now growing at a rate that will double it every 15-20 years. This means, as long as exponential growth continues, in the next 15-20 years the world will consume more oil than was used in all of human history up to this point. More than in the entire 19th and 20th centuries combined — in just 15-20 years — assuming exponential growth continues. I don't know about you, but I find that startling.
I want to finish with a riddle I posed in the earlier post on exponential growth. I repeat it here because I’d really like this riddle to stay with you. If it does, you’ll understand exponential growth better than 99.9% of your fellow citizens.
Suppose you put a small amount of bacteria in a Petri dish. Suppose further that the bacteria population grows exponentially (i.e., by doubling) at a pace that causes it to double each hour. Suppose finally that it takes 100 hours for the bacteria to completely fill the dish, thereby exhausting their supply of nutrients. (It's a large Petri dish.)
Question: When is the dish half full?
After 50 hours (half of 100)?
No. Because the population doubles each hour (including the final hour), the dish is half full just one hour before it’s full. For the first 99 hours the bacteria have got it made. Then wham!
To make this more vivid and memorable, imagine the following as an animated cartoon. For the first 99 hours the bacteria are just partying and congratulating themselves on how smart and successful they are. It’s party hats and noisemakers, Conga lines and champagne, the bacterial Dow Jones going through the roof. Woo hoo! No limits! After 99 hours, some of the bacteria start to worry, but the rest party on — after all, the dish is only half full. Plenty of room left, plenty of nutrients. The first half lasted 99 hours, and there's another whole half to go! Sure, somebody’s gonna have to figure something out eventually, but meanwhile life is good, and nonstop growth will only make it better! An hour later — the world ends.
When growth is exponential, limits are sudden.
July 01, 2004
|Energy Slaves||Energy Essays|
A few facts from The Party's Over by Richard Heinberg: The average sustained power output of a human being is about one-twentieth of a horsepower. We can use that fact to convert common energy applications into human terms. For example, to keep a single 150-watt light bulb burning would require the continuous work of five people. A car generating 200 horsepower is equivalent to the power output of 4000 people.
Now, if you add up all the power we middle-class Americans use, on average, to light and heat our homes, transport us, etc. and convert it to the human energy equivalent, it's as if each of us has 50 "energy slaves" working for us 24/7/365. That is an unimaginable opulence by the standards of all the humans who came before us, except perhaps a few pharoahs and kings.
Most of that energy opulence comes from fossil fuels, but fossil fuels won't last forever. Oil, in particular, will be exhausted within decades — i.e., within the lifetimes of my children — and will be subject to shortages much sooner than that. Fossil fuels are a one-time gift to humanity, and when they're gone, they're gone forever.
We must rein in our extraordinarily wasteful energy habits, and we must do it now. Toward that end, it may be useful to make a practice of visualizing the "energy slaves" that provide the energy we use.
If I leave a lamp burning on my desk when I leave the room, I should imagine five slaves on treadmills, condemned to generating the energy I'm not even bothering to use. It's time to give 'em a rest.
June 18, 2004
|Shell Oil Chairman's Blunt Warning on Climate Change||Energy Environment|
A front-page article and an interview in Thursday's issue of The Guardian quote Shell Oil Chairman Ron Oxburgh giving remarkably frank warnings about greenhouse gases and global warming. Here's an excerpt:
"No one can be comfortable at the prospect of continuing to pump out the amounts of carbon dioxide that we are at present," he says. "People are going to go on allowing this atmospheric carbon dioxide to build up, with consequences that we really can't predict, but are probably not good."
He believes the solution is something called sequestration, in which carbon dioxide from cars and power stations is captured and stored. "Sequestration is difficult," he says. "But if we don't have sequestration I see very little hope for the world."
It's an astonishing admission from someone ... at the head of one of the world's largest fossil fuel companies. The Norwegian company Statoil has been sequestering carbon dioxide underneath the North Sea for several years, but that is relatively pure gas released from a natural source nearby. Devising the technology to grab the gas from engine or boiler exhaust streams and finding the billions of [dollars] needed to pipe millions of tons offshore is another matter entirely.
"You might be right, the timescale might be impossible," he says. "In which case I'm really very worried for the planet. You can't slip a piece of paper between David King [the government's chief science adviser who said climate change was a bigger threat than terrorism] and me on this position."
June 17, 2004
|Oh, To Be a Serf||Energy|
Interesting little fact from The Party's Over by Richard Heinberg:
"Serfs were bound to the land as quasi-slaves... Ironically, however, it is also true that, in view of the many holidays and festivals celebrated in medieval societies, the typical serf back then actually enjoyed considerably more free time on a yearly basis than does today's typical American salaried worker."
June 14, 2004
|Follow the Carbon||Energy Environment Essays Science/Technology|
Last week, a trucker called in to Al Franken’s Air America Radio show. He said most of his fellow truckers ridicule the idea that greenhouse gas exhaust from internal combustion engines is a problem. Their “reason”: human beings and other living things supposedly emit far more carbon dioxide than engines do. The caller wanted someone to explain how to debunk this claim. For the next half hour or so, various people, including at least one environmental engineer, called in to explain that the amount of carbon dioxide emitted by a person is far less than that emitted by a truck.
True enough, but totally beside the point. If we look at this question more closely, we can learn something very important about how our Earth works. We need to follow the carbon.
The amount of carbon on earth is constant. Carbon atoms are neither created nor destroyed; they’re just recycled endlessly in what is known as the carbon cycle. In simplified form, this is what happens: Green plants take carbon (in the form of carbon dioxide) out of the air and combine it with water (using energy from sunlight) to create sugar and oxygen. Animals eat plants or other animals and do the reverse: they combine sugar and oxygen (that’s why we can’t live without oxygen) to create carbon dioxide and water, releasing the energy the plants got from sunlight. This cycle repeats endlessly. It seems like a perpetual motion machine, but it isn’t; what makes it work is the constant input of energy that plants receive from the sun.
Animals do release carbon dioxide (a greenhouse gas) back into the air when they exhale. The key point, though, is that the carbon that animals release into the air is carbon that plants earlier removed from the air. There is no net increase in the amount of atmospheric carbon dioxide. When we exhale, we’re not doing anything to increase global warming - not because the amount we exhale is negligible but because we're part of a balanced cycle.
That’s the simplest expression of the carbon cycle. There are a couple of wrinkles, though. Some carbon is “stored” in forms that get recycled only very slowly. Limestone, for example. From a global warming perspective, the key forms of carbon storage are 1) the trees and other plants of the Earth’s great forests and 2) fossil fuels: oil, gas, and coal. When humans cut and burn the great forests, and when they dig up and burn fossil fuels, they are causing a net increase in atmospheric carbon dioxide. They're taking carbon that was stored long ago – millions of years ago in the case of fossil fuels – and putting it back into the atmosphere. It is a qualitatively different act from breathing in and breathing out.
Now think about this: Fossil fuels were created from organic matter that was deposited during brief periods of intense global warming in the geologic past. Back then, carbon, in the form of hydrocarbons, was buried in the earth, carbon dioxide in the atmosphere was thereby reduced, and global warming subsided. What are we doing when we dig up and burn every last bit of fossil fuel we can get our hands on? Remember: it’s the same carbon that existed back then. Carbon atoms are neither created nor destroyed. We’re just locating all the carbon that once caused global warming, digging it up, and putting it back into the atmosphere. In other words, we’re recreating the conditions the caused global warming in the distant past.
Still, an awful lot of people want to convince themselves that somehow the outcome will be different this time around.