Peak oil was thirty years ago

by John Quiggin on August 5, 2011

Taking a break from my war with Murdochracy, my most recent column in the Australian Financial Review (over the fold) was about Peak Oil. Partly for tactical reasons, but mainly because I believe it’s basically correct in this case, I’m wearing my hardest neoclassical hat.

One of the more intriguing sidelights to debates over climate change and energy policy is the idea of Peak Oil. On the face of it, the Peak Oil hypothesis is a straightforward claim. The amount of oil generated by any given field follows a bell-shaped curve, first rising as the field is developed and then declining as the oil becomes harder and harder to pump.

The curve is referred to as the Hubbert curve, after US geologist M King Hubbert[1] who used it to predict the peak of US oil output around 1970. Applying Hubbert’s analysis to the world as a whole yielded the prediction that the global peak in oil production should be happening around now.

On the evidence available, the predictions of the Peak Oil hypothesis don’t look too bad. Despite near-record prices for oil, the output of crude oil has remained broadly constant for the last seven years. Such an apparent plateau is exactly what the Hubbert curve would predict, bearing in mind that commercial production began 150 years ago.

The economic effects of the depletion of oil resources will be mixed. Clearly, since underlying demand is rising with population and income growth, the price of oil must rise to clear the market. That’s good for suppliers of oil, as well as competing energy sources, and bad for consumers. Overall because of the unpriced negative effects of burning oil, the most important of which is the release of carbon dioxide, a reduction in oil output is beneficial for the planet as a whole.

This is all straightforward: economists have been analysing markets for exhaustible resources ever since the pioneering work of Harold Hotelling in the 1930s. The observed outcomes fit Hotelling’s model pretty well – rising real prices are needed to sustain an optimal extraction path.

But discussions around Peak Oil are dominated, not by economic analysis, but by a range of more or less apocalyptic scenarios. In these scenarios, an end to ever-growing output of oil means an end to industrial civilisation as we know it.

There are a number of misunderstandings here. A lot of discussion seems to assume that Peak Oil means an immediate end to oil production, when the Hubbert curve implies a gradual decline over 100 years or more.

More importantly, though, the Peak Oil story is about production. But, if oil is essential to modern civilisation, what matters is not production but consumption.

The Oil Peak that actually mattered was the peak in consumption per person, which took place back in 1980 at 5.3 barrels per person per year. Since then, consumption per person has dropped to 4.4 barrels per person per year. Given the growth of demand in Asia, consumption per person in the countries that were already rich in 1980 has fallen much faster. Meanwhile living standards have risen substantially[2], unconstrained by declining consumption per person of oil, and of energy more generally.

Oddly enough, most people who worry about Peak Oil are also environmentalists concerned about climate change. From this viewpoint, which I share, Peak Oil looks like good news rather than bad. But the optimistic interpretation is trumped by the spurious idea that there is a 1-1 relationship between oil (or energy) and economic activity. This fallacious idea is held both by Peak Oil fans and by the rightwing doomsayers who suggest that reducing emissions of CO2 will destroy the economy.

A particularly interesting subgroup of Peak Oil fans are those who see nuclear energy as the only possible solution, a view that was mooted by Hubbert himself. This part of the discussion is dominated by a belief in something called ‘baseload power demand’ which must be met at all times if disaster is to be avoided. The idea that demand responds to prices and market structures seems entirely foreign to this discussion.

One of the few upsides of the disastrous Fukushima meltdown is that it has allowed a perfect test of this theory. Following the meltdown, Japan has taken 38 of its 54 reactors offline. It’s now midsummer there, and the blackouts predicted by the scaremongers have not occurred. Instead, the reduction in supply has been handled by (mostly voluntary) efficiency measures.

Energy is important, but it is no more ‘essential’ or ‘special’ than many other goods and services in a modern economy. If the supply is reduced, the market will respond to bring demand into line, especially if this response is facilitated by sensible government policy. No single source or technology, such as oil, nuclear or solar is essential, although none should be dismissed out of hand.

fn1. A fascinating guy, by the way. He was associated with the Technocracy movement, which briefly in the 1930s looked like a serious contender as an alternative form of government for the US. Wikipedia has lots on this.

fn2. In the rich world as a whole, and in most of Asia. Those in the bottom half of the US income distribution and in some very poor countries haven’t done so well, but that has nothing to do with oil.

{ 114 comments }

1

stostosto 08.05.11 at 11:07 am

It may very weel be that it’s all straightforward! But it’s preciously seldom that it’s being put like it is. Thank you for that, and for the background on the Peak Oil idea. I had never heard of this Hubbert fellow.

Relatedly, I remember another post of yours on how an increase in the relative price of energy (or oil) would lead to numerous efficiency gains throughout the economy and at alle points in the value chain. That was a very useful and evocative explication of the efficacy of a CO2 tax as a policy instrument — but I can’t seem to find it anywhere. I wonder if you could point me to it? Thank you.

2

Steve LaBonne 08.05.11 at 11:25 am

I’m sorry, but on behalf of the Media and Blogging Standards Organization I have to inform you that it is strictly forbidden to discuss this topic without ZOMG WE’RE DOOMED END OF CIVILIZATION!!!1!!1!

Seriously, thanks for one of the best and most rational capsule summaries of this topic that I have seen.

3

bob mcmanus 08.05.11 at 12:29 pm

http://www.theoildrum.com/node/8185

Can Economic Growth Last

Tom Murphy, associate professor of physics at UCSD, Oil Drum, July 29, 2011

4

SamChevre 08.05.11 at 12:53 pm

Because of the unpriced negative effects of burning oil, the most important of which is the release of carbon dioxide, a reduction in oil output is beneficial for the planet as a whole.

A very clear and helpful exposition, for which I thank you–but I’m not sure this follows. Doesn’t the CO2 effect depend on the response? (If the response is to substitute from oil to coal, e.g. via electric cars, it seems likely that less oil=more CO2).

5

Th 08.05.11 at 1:07 pm

“The Oil Peak that actually mattered was the peak in consumption per person, which took place back in 1980 at 5.3 barrels per person per year. Since then, consumption per person has dropped to 4.4 barrels per person per year.”

We don’t appreciate how much Jimmy Carter’s energy plan changed the world. Getting the world’s biggest oil gluttons to go on a diet is still having an impact today.

6

marcel 08.05.11 at 1:28 pm

Because of the unpriced negative effects of burning oil, the most important of which is the release of carbon dioxide, a reduction in oil output is beneficial for the planet as a whole.

Doesn’t this conclusion presume a response that does not rely largely on coal? I know that coal is a poor substitute for oil in transportation, but elsewhere isn’t it a near perfect substitute, and doesn’t it contribute more to atmospheric CO2 per unit of energy than oil?

7

mds 08.05.11 at 1:38 pm

Energy is important, but it is no more ‘essential’ or ‘special’ than many other goods and services in a modern economy.

This seems a wee bit strong. Ever-increasing usage of energy isn’t essential. A particular level of energy usage for something isn’t necessarily essential. Both of these are presumably correctable by market forces. But energy usage in and of itself is absolutely essential, and I don’t really see how markets or anything else can completely remove energy from its privileged position. There’s still a dividing line between “making do with less” and “going without.”

8

Straightwood 08.05.11 at 1:40 pm

It is the predicted slope of the downward curve of oil depletion that is critical to forecasting social impacts. The number I recall is around 5% per year. This is too rapid a decline to permit orderly substitution of alternate energy sources, especially for vehicular uses, and is the basis for the claims of the doomsayers. We are departing the era of politics and entering the era of physics. The energy depletion numbers won’t lie, even if we wish to continue to lie to ourselves.

9

bigcitylib 08.05.11 at 2:09 pm

“Oddly enough, most people who worry about Peak Oil are also environmentalists concerned about climate change. From this viewpoint, which I share, Peak Oil looks like good news rather than bad.”

Well, the worrying idea is that you move from oil to coal and other perhaps even dirtier fuels. It seems to me that’s a plausible scenario.

10

Jay 08.05.11 at 2:10 pm

The way modern America is laid out, if we don’t have gas we can’t get to work. If we don’t have electricity at work, we stand uselessly outside the building until we give up and go home. Food doesn’t get to the supermarket unless there’s natural gas for fertilizer and gasoline to haul it.

If the shift to lower energy consumption happens slowly enough, society will adjust naturally. This shift will make a lot of current investments lose value (e.g., suburbs, big box stores, homes in Arizona that are prohibitive to cool) and require a lot of new infrastructure (e.g. big apartment buildings, mass transit).

If the shift happens too quickly, then society can’t adjust gracefully. That’s where your bad scenarios kick in.

11

sg 08.05.11 at 2:16 pm

I remember reading a long time ago that peak oil would lead to a sudden economic collapse – that it would creep up on industrialized economies and the gradual decline in production would be a catastrophe economically. I don’t remember where I read it though and can’t say now if it seemed like a reasonable claim.

About efficiency in Japan, I have a post on my blog about the experience of energy conservation. Today was a hot day – maybe 33 C, with >90% humidity – and the report on the trains was that we managed to keep our power usage below 80% of peak output for the whole day – which is what we have to do to avoid brownouts, apparently. My office was hotter than is comfortable but not unbearable, and in general life is continuing exactly as normal. Japan is showing that the predictions of catastrophe the anti-AGW folk were making are complete bullshit.

12

Cranky Observer 08.05.11 at 2:22 pm

> The way modern America is laid out, if we don’t have gas we can’t get to
> work. If we don’t have electricity at work, we stand uselessly outside the
> building until we give up and go home.

Absolutely. And this concept is also one which we are absolutely, utterly not allowed to address or even discuss as Americans.

> Food doesn’t get to the supermarket unless there’s natural
> gas for fertilizer and gasoline to haul it.

Diesel fuel to haul it, actually, which can be made from non-petroleum sources. With great difficulty, but it can be done. If we do manage to maintain a society based on personal vehicle mobility IMHO it will eventually be one of hybrid electric/biodiesel vehicles.

Cranky

13

mds 08.05.11 at 2:29 pm

Well, the worrying idea is that you move from oil to coal and other perhaps even dirtier fuels. It seems to me that’s a plausible scenario.

Or exploitation of tar sands becoming even more attractive.

The optimistic scenario only works if the market signals actually lead to the desired outcomes. “Dropping all restrictions on extracting and burning coal, invading anywhere that still has a scrap of fossil fuels, or resuming killing the whales and seals for their oil, because we’re too frelling stupid and greedy to pursue alternatives” doesn’t seem entirely outside the realm of possibility in a world where PM Gillard is being relentlessly assaulted for mild attempts at action, or where one of the biggest players in the global economy is governed by those who think efficiency requirements for light bulbs are an unconscionable assault on liberty.

14

Matthew 08.05.11 at 2:38 pm

I don’t wish to distract from the point but using BP and UN data I get 5.0 to 4.7. And of course this is partly to do with the Soviet Union’s collapse, exclude that and you get 4.3 to 4.4. The

15

Sean Hillson 08.05.11 at 2:38 pm

“This fallacious idea is held both by Peak Oil fans and by the rightwing doomsayers who suggest that reducing emissions of CO2 will destroy the economy.”

I guess the operative word here is “destroy”. The economy can never be destroyed as long as barter is still occuring. However, yearly reductions in CO2 will most certainly lead to persistent contraction. The system we have in place expects perpetual growth, so that contradiction will have undoubtedly have negative consequences. And to pre-empt the claim that we can still grow the economy without increasing CO2 emissions, the entirety of human history pretty much refutes this. Unless you can present evidence that an economy can grow with decreasing CO2 emissions for an extended period of time (30+ years, the 5 or so years in the 80’s doesn’t count), I’ll stand by my position that it can’t be done.

“It’s now midsummer there, and the blackouts predicted by the scaremongers have not occurred. Instead, the reduction in supply has been handled by (mostly voluntary) efficiency measures.”

Summer highs in Japan can maybe get up to the mid-90’s, although checking temps today its more like the high 80’s. Try telling people in Dallas to not use their air conditioners for 35 straight days at 100+, not to mention the humidity. If conservation is needed to prevent blackouts in America, you’re going to have a much harder time implementing it than in Japan.

16

reason 08.05.11 at 2:44 pm

“Overall because of the unpriced negative effects of burning oil, the most important of which is the release of carbon dioxide, a reduction in oil output is beneficial for the planet as a whole.”

I see other people beat me to it – but this doesn’t follow, since the easiest substitute – coal is worse.

17

M. Incandenza 08.05.11 at 2:45 pm

So from 1980 until ca. 2005, we had gains in efficiency paired with growing production, which were significant enough to offset growing global demand (and even drove down prices to about $12/bbl in the late ’90s).

Since 2005 or so, we’ve had flat production paired with rising demand (especially in China and India), which further efficiency gains have been insufficient to compensate for.

The transition from the former state of affairs to the latter is the significant inflection point. It is the reason that any significant economic growth in the US can’t occur without oil prices being pushed so high that the economy comes crashing back down again.

18

reason 08.05.11 at 2:52 pm

I think also John (and generally I’m on your side on most issues) I think you are missing the point. The point is not that we can’t increase the efficiency with which we use energy. The point is that we can’t increase the efficiency ENOUGH given all the other strains placed on the planet by the combination of population growth and economic growth to allow those two growths to continue (not just to continue at or near present rates, but to continue at all). Merely showing that the rate of change of efficiency > 0 doesn’t answer the question.

19

mik3 08.05.11 at 2:54 pm

“The Oil Peak that actually mattered was the peak in consumption per person, which took place back in 1980 at 5.3 barrels per person per year. Since then, consumption per person has dropped to 4.4 barrels per person per year”

Is this because actual usage per person has dropped or because there are many more people using it? The worldwide trend in usage has been steadily upward. Where did those numbers come from?

20

nick s 08.05.11 at 2:59 pm

If the shift happens too quickly, then society can’t adjust gracefully.

It’s not just the curve, it’s the attitude towards it, which is compounded by a political environment that has proved itself ill-suited for preparatory adjustments. The perceived non-negotiability of the American way of life is likely to remain so; we’re still somewhere between ‘anger’ and ‘denial’ on the Kübler-Ross trajectory, and the ‘bargaining’ stage is, I suspect, more likely to follow mds’s narrative than a more appropriate alternative.

21

onymous 08.05.11 at 3:20 pm

One point many commenters on this thread are missing is that electric cars are more efficient than cars running on internal combustion engines, and produce less CO2 even if their power comes from a grid powered entirely by coal.

22

nathanlindquist 08.05.11 at 3:22 pm

This post makes the observation, so often overlooked, that oil production has been on a plateau for seven years. So far so good. But then the post retreats to the fantasy that the market fairies will save the day. Also overlooked is this–Isn’t it likely that oil scarcity and high prices have already negatively affected the economy–combining with enormous debt leverage to create the current recession? Look at Professor James Hamilton’s work on Econobrowser. He has shown that 9 out of the last 10 recessions were preceded by an oil price spike. The 2005-2008 spike was the largest spike, thus we have had the largest recession. A plateau of oil production means the recession is going to continue unless we massively restructure our economy. Blithely saying that the market will correct for oil as our prime source of transportation fuel, without recognizing the massive shift required to the globalized economy to accomplish this, is not being awake to reality.

If our political system and media were pushing the kind of shift we need to make, I would not feel very alarmist about peak oil. But they are not, and thus we are not doing anything. Thus I am very alarmist.

23

kingtoots 08.05.11 at 3:25 pm

As a person who has some experience with power engineering, I have to take issue with one thing said here.


“This part of the discussion is dominated by a belief in something called ‘baseload power demand’ which must be met at all times if disaster is to be avoided.”

Belief in “baseload power” is not like belief in Santa or something. It is a real thing. Replace it with “global warming” and you sound like Lord Monkton to a power engineer.

A power grid is like a breathing thing and “baseload power” is like a heart beat. All power is not created equal (at least if you want to transmit it). If you remember when the power grid in North America went down a few years ago, it took about a week for it to come back up again because you had to sync power stations to the grid.

It occurs to me that we might be talking at cross purposes. You may be using that phrase in a way that is not the same as a power engineer. I recommend you talk to someone in the engineering department who has expertise in power grids for a fuller explanation.

24

Jim Demintia 08.05.11 at 3:26 pm

According to this study, it’s feasible to switch from current energy sources to a mix of wind, solar, and water in 20 to 40 years without huge cost differences, given the political will. So, yeah, Thunderdome here we come.

25

piglet 08.05.11 at 4:07 pm

I agree with much of the post but this: “Energy is important, but it is no more ‘essential’ or ‘special’ than many other goods and services in a modern economy” is unfortunately just the kind of wrongheaded nonsense that an economist would say. It is a law of nature that organized systems need low-entropy energy inputs to maintain their structure. It is not a law of nature that we need mortgages or cars or roads or plumbing or I don’t know what “goods and services” Quiggin was thinking of. Plus, there are no goods or services produced in the modern economy that do not require energy inputs. In the end, Quiggin can’t resist the economic fallacy that whatever we need, markets will find a way to provide it. They will not for example provide enough food without the technical energy needed for making fertilizer.

26

Tangurena 08.05.11 at 4:12 pm

Refining the “tar sands” requires huge amounts of energy and water. Depending on a number of factors, it takes between 2 and 5 gallons of water to produce 1 gallon of “oil” out of the sands. Depending a number of other factors, between 70 and 95% of the water can be reused.

I’m of the mind that we’re already participating in mds’ scenario. Invading Iraq, threatening to invade Iran, political issues with Venezuela (who currently supplies the US with huge amounts of oil) all fall into line with the “we have the strongest military in the world, we can just take what we want” mentality.

Top suppliers to the US

Extensive list

There are a number of entries in the extensive list that would be surprising to most readers.

27

Omega Centauri 08.05.11 at 4:41 pm

A pretty good discussion of the topic. Usually you can’t get beyond the “we are all going to die, versus we will never run out” hype, so it is refreshing to see a more nuanced discussion.

I’m not so sure Japan’s post Fukishima experience shows that the rest of the world will adapt. The degree of social cohesion and attitudes towards shared sacrifice are so much greater in Japan than elsewhere IMHO, that the lessons may not transplant.

I think saying economic growth was not constrained by oil supply, paints too rosy a picture. Economic growth has probably been negatively affected by the costs of oil. Perhaps it is the decrease in rich world growth rates which have fueled the bubble-blowing which has led to the current economic mess. The increasing cost is not just greater rents accruing to producers, but a major portion of the price increase is caused by tapping into tougher and tougher geologic sources, whicht require much more effort per barrel. This means an increasing percentage of economic effort, both capital and labor, go into producing a roughly steady volume of oil. Obviously there is a race between improving technology, and depleting resources going on. There is no guarantee we can stay ahead in this race indefinitely.

And not all uses of oil are as easily substituted. The easy part, substituting coal and natural gas for oil in electricity generation was largely accomplished during the 7 seventies. Today we are beginning to push efficiency and beginning electrification of transport, but these changes are happening slowly, and winning the race against the effects of depletion is not assured.

28

Michael Giberson 08.05.11 at 4:47 pm

Not sure what it is in the history of oil prices or extraction rates that convinces you “observed outcomes fit Hotelling’s model pretty well.” Post WWII, prices declined slowly up until the early 1970s, mostly due to the stabilizing impact of the largest international oil companies. Since OPEC began asserting itself and the market has opened up a bit, prices have been much more responsive to supply and demand events. Beginning in the 1970s quantities supplied have also responded to prices, with a lag of three or four years. Not that resource exhaustion doesn’t matter, but Hubbert’s approach ignores a host of relevant factors.

29

TallDave 08.05.11 at 4:56 pm

It’s now midsummer there, and the blackouts predicted by the scaremongers have not occurred. Instead, the reduction in supply has been handled by (mostly voluntary) efficiency measures.

A fairly silly argument in what is otherwise an interesting piece. That’s a temporary response to a terrible tragedy, not a permanent reduction in living standards that no sane person would advocate, and you don’t tell us what happened to prices.

30

Omri 08.05.11 at 4:58 pm

“The idea that demand responds to prices and market structures seems entirely foreign to this discussion.”

Price of food goes up -> some people go hungry.
Price of heating oil goes up -> some people suffer in the cold.
The set of demand responses includes lots of things that involve lots of people suffering.

31

mulp 08.05.11 at 5:28 pm

Oil consumption fell from 5.3 to 4.4 while the population doubled, so the consumption based on 1980 is 8.8 per 1980 population…..

32

Frank Youell 08.05.11 at 6:09 pm

This is a sad example of an author writing about a subject he knows little about. At the peak (in per-capita terms), oil was used on a vast scale as boiler fuel. After oil prices rose (from the early 1970s onwards), the world shifted away from oil as a primary source of heat. Natural gas, coal, and nuclear expanded rapidly as alternatives.

At this point, oil is primarily used as transportation fuel, with petrochemicals, lubricants, etc. as secondary applications. It is easy to replace oil as boiler fuel. It vastly harder to replace oil for any of its other major uses. In other words, just as the “easy oil” is gone, so are the “easy substitutions”.

That makes the future look considerably less bright than the past. Future oil savings will be much more painful and expensive that what we saw from the 1970s to the 200s.

Of course, greenhouse gas emissions are also an issue. Of course, natural gas yields less CO2 per unit of energy compared to oil, and nuclear produces none. Conversely, coal produces much more CO2 per BTU than oil. Net, the shift away from oil has probably raised, not lowered CO2 output. For example, China is now (by far) the number one CO2 emitter and China gets most of its energy from coal.

Some number of years ago I read a silly article about how Sweden was creating an “oil free” society. At first it sounded impressive. Oil consumption had fallen by 50% over a period of years. Then I looked at the actual numbers. All of the oil savings were from replacing oil as boiler fuel with natural gas, nuclear, and hydro. Consumption of oil as transportation fuel had actually risen considerably over the period in question.

Global petroleum coke production provides another metric. Petroleum coke production has risen much faster than oil production over the last 30 years. Why? Because petroleum coke is what you get when you convert residual fuel into transportation fuel (via coking, other processes exist).

My comments here are a simplification of a more complex reality. In truth some countries still burn material quantities of oil as boiler fuel. However, the overall picture should be clear.

33

Matt McIrvin 08.05.11 at 6:21 pm

I spent a while wondering aloud, in various places, where the idea came from that there would be a sudden, catastrophic collapse of industrial civilization right at the production peak (which was very not-obvious to me). Carlos Yu said he thought it may have come from the original Limits to Growth computer model runs, in which society tended to collapse when about half of the limiting resource had been consumed.

34

zamfir 08.05.11 at 8:08 pm

@matt, I don’t think the half-way is supposed to have a special meaning. It’s more that people are very, very used to the idea that production of stuff grows over time. And that more investment and better technology can always make it grow faster if really needed.

Basically, focussing on the peak is a way of saying that future market clearing of oil will work through demand reduction, and not by production increases. Which might perhaps be the smooth and generally beneficial process that Quiggin describes, but there has over the decades been a remarkable resistance to the idea that there might a production peak within foreseeable time at all.

There’s one theyng that always bothers me about the optimistic smooth-and-gradual transition scenarios (which I do think sound convincing): how would tell they are true? What if the smooth-and-gradual process of adaptation to lower production and higher oil prices does in fact gradually lead to a very bad situation? How will we tell in time whether lack of oil is or is not slowly doing a structural damage to the economy, among allb the other factors that impact the economy?

35

Ryan Cousineau 08.05.11 at 8:16 pm

Frank, your point about peak oil consumption being driven by the decline in oil-burning for stationary power is interesting, but I think you overestimate the difficulty of marginal reductions in transportation oil.

There is a _lot_ of low-hanging fruit that can happily phase into ground transportation needs: CNG conversions, incremental efficiency gains on gas and diesel engines, electrification of train systems, or electric vehicles.

None of these are a solution to every use-case, or a complete solution to oil usage, but all of them exist in the real world right now, at a price, and if oil costs enough, then a lot of Nissan Maximas and Chevy Equinoxes will get traded in on Nissan Leafs and Chevy Volts, or at least Nissan Versas and Chevy Sonics.

Admittedly, air transport is a harder challenge, and I know little about the options for sea transport (wind and coal again?)

36

gmoke 08.05.11 at 8:16 pm

“No single source or technology, such as oil, nuclear or solar is essential, although none should be dismissed out of hand.”

As a simple person attracted to the obvious, I would point out that if the sun went out, if there was no longer any solar energy input to this world, we’d be pretty much done for. No photosynthesis and thus no food. World temperatures would drop precipitously. No light and perpetual night. Obvious point but one we usually neglect.

We are all primarily solar-powered but very little of that input energy is calculated in the annual energy budget because it’s “free.” The amount of sunlight used to grow the food we eat is at least three times the amount of energy in our annual, computed energy budgets.

US annual energy budget is a little less that 100 quadrillion btus (2010 data). According to my calculations, nearly 58% of that energy is “rejected energy,” as Lawrence Livermore Labs puts it. There are lots of things we can do to become more energy efficient (exergy, exergy, exergy). Japan is and will do them because they have to. The US and the rest of the world would be wise to follow suit.

In this article are some links to Tokyo’s lights before and after Fukushima, a collection of electricity conservation posters for the current energy efficiency campaign, and a short video about the magnitude of the clean-up necessary, 107 years worth of garbage in one day: http://www.dailykos.com/story/2011/07/01/990358/-Japan-Aftermath

37

Omega Centauri 08.05.11 at 8:43 pm

34) “How will we tell in time whether lack of oil is or is not slowly doing a structural damage to the economy, among allb the other factors that impact the economy?”
I tried to make the point above, that the lowered growth rates, which via desperation may have motivated the serial bubble blowing may be related. The drag in growth caused by more expensive oil, may push the growth rate below the level needed by current social instititions. Then lower growth rates exacerbate all kinds of other stressors in society, gradually increasing unemployment, driving up governmnet deficits, and the upsetting of assumptions about funding levels for retirement plans etc. Add a headwind, but don’t allow the runner to slow down, and sooner or later he will become exhausted.

35) Sea transport. This is actually one of the easier ones. Most obviously, slow down. The fuel consumption per mile grows as roughly the square of boat speed, so slowing ships down can save a great deal of fuel. This was pretty commonplace during the 2008 oil spike. Secondarily, larger ships use less fuel per ton mile. Lastly add sails or kites to take some load off the engines when the wind is favorable. None of these replace the need for fuel completely, but if all were implemented fuel needs could be reduced several fold.

38

Matt 08.05.11 at 8:47 pm

I vigorously disagree that there is no low-hanging fruit left to pluck with economizing oil use. Denmark, France, Switzerland, Germany, Austria, Italy, and the United Kingdom consume about half or less oil per capita than the United States. Japan, Sweden, and New Zealand consume better than 40% less per capita. Even Australia consumes 1/3 less. These are all prosperous nations by any reasonable standard and they didn’t need science fiction technology or the Dictatorship of the Eco-Police to get where they are relative to the United States.

At this point in the discussion disagreement usually pleads for America the Exceptional to explain why other countries’ frugality with oil cannot be imitated. America the Exceptionally Entitled: “It’s all well and good for foreigners to use less but here driving 4 blocks to buy groceries is non-negotiable.” America the Exceptionally Big: “Nobody who’s lived in a tiny place like France can appreciate the Texan need for gasoline and pickup trucks.” Or America the Exceptionally Foolish: “Americans will spend more on fuel than on mortgage payments before they choose more efficient cars or use public transit.”

39

Cranky Observer 08.05.11 at 9:01 pm

> I spent a while wondering aloud, in various places, where the idea
> came from that there would be a sudden, catastrophic collapse of
> industrial civilization right at the production peak (which was very
> not-obvious to me). Carlos Yu said he thought it may have come
> from the original Limits to Growth computer model runs, in which
> society tended to collapse when about half of the limiting resource
> had been consumed.

Well, one can make a DYNAMO model do pretty much whatever one wants, whether it is display limits or display techo-triumphalism. However, I can’t see that that is actually a bad rule of thumb for predicting when complex systems will hit the avalanche point. Whether or not oil will actually play the role that burned out buildings do in a city neighborhood, or whether it can be replaced soon enough or at all, is the question on the table.

Cranky

40

Metatone 08.05.11 at 9:25 pm

I actually believe the world economy can transition successfully to other energy sources. However, it’s going to take a lot of political will and foresight to make it a smooth transition. The market doesn’t do every transition well. As Amartya Sen pointed out, famine is a market solution.

However, there are details in this piece I’d take issue with.

1) Historically energy has been special – world GDP tracks fossil fuel exploitation pretty well, even up to the present day. As others note, there are reasons for that. As yet, our physical needs are not yet solved and that makes energy a difficult to replace input.

2) The assessment of the Japanese situation is just misguided. Just as one example, I have extensive exposure to the camera industry – and many big factories are located in the tsunami affected areas. This has resulted in severe shortages of high end equipment as they go on reduced output to save electricity… not a good model for arguing that energy reduction doesn’t affect economic output.

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John Quiggin 08.05.11 at 9:40 pm

@Metatone – can you clarify. It sounds to me from what you write as if the causality is the other way around – firms affected by the tsunami are still closed down, which might reduce electricity demand.

As I read the news wrt Toyota in particular, these disruptions are now coming to an end.

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Thomas Jørgensen 08.05.11 at 9:45 pm

Obvious substitutions for oil:

Shipping -> nuclear – this actually works out to be a cost saving, tough it does make the shipping industry much more capital intensive – freight ships burn a fortune each year on fuel. Nuclear freighters would cost quite a lot more to build, but would be much cheaper to run.
Transport -> electric. And ammonia for heavy machinery. Ammonia can easily be synthesied from any source of electricity. It isnt currently, but that is not because it is hard to do so, merely because at current NG and electricity prices, producing the hydrogen for the process from NG is slightly cheaper. This also takes care of fertilizers.
And so on and so forth. Oil is convenient, it is not irreplacable.

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Thomas Jørgensen 08.05.11 at 9:49 pm

Re ; Japan. . honestly, given how very shitty the geography and climate of Japan is for any and all kinds of renewables, I am pretty damm sure that those reactors are going to be turned back on and then more are going to get built. Its either that or import massive amounts of coal /gas with the attendant pollution, and that is not going to fly.

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John Quiggin 08.05.11 at 9:56 pm

As to whether Peak Oil is good news. Obviously not if conventional oil is replaced by coal/tar sands. But these sources are more expensive, and their profitability more marginal hence more vulnerable to carbon prices.

By contrast, Saudi (and most other ME) oil has historically been so cheap to extract that even a CO2 price of $100/tonne (about $30 barrel) wouldn’t do much to reduce extraction from these sources. Essentially, all that oil is going to be burned unless it gets used in petrochemicals or similar, which currently account for only a small share of demand. So, it’s a good thing that the Saudis and others appear to be at or past their peak extraction.

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John Quiggin 08.05.11 at 10:08 pm

@23 My point exactly – a coal-based or nuclear-based electricity supply system is characterized by what might be called “baseload supply” that has to be kept going (with modest variations) if the system is to be kept functioning. That means low prices for unwanted “off-peak” electricity, among other things. Given this need, there is no meaningful notion of “baseload demand” – the system as set up cannot help but meet more than the minimum demand. I’ve added a link to a more detailed explanation.

46

Bruce Wilder 08.05.11 at 10:13 pm

Two points about Peak Oil:

1.) One formulation of the Peak Oil Hypothesis is to put output in terms of net energy production. This basic insight is that the amount of energy required to extract a unit of usable petroleum energy, decreases over the course of a field’s early life as the production system is put into place, but increases as a field ages past its peak. Add to this, the insight that the net energy output of difficult fields (North Sea, Deep Gulf, Tar Sands, etc) starts out much higher. So, consumption of energy in final production is declining, as efficiency in final production is increasing, but consumption of energy in producing energy is rising.

What’s the net net?

2.) Peak oil is predicted to be at a production plateau for a while, with net available petroleum, a stable rate. But, the amount of energy required to produce that rate of net available petroleum will be increasing.
During the plateau period, the throughput of petroleum passing thru the elaborate system of transportation and processing will hold steady, delivering predictable returns to sunk cost capital infrastructure, but offering only insurance returns to slack and excess storage. So, the plateau will be a period of volatile prices
What about after the plateau?

After the plateau, the world will have a massive excess of sunk cost capital in the form of infrastructure to transport and process petroleum, begging to be used, begging to be liquidated. Big Oil will go from being the world’s most profitable large industry to being a close analogue to a Saturday morning yard sale.

Will the liquidation of sunk cost capital subsidize squandering fossil fuels? Will it subsidize environmental degradation?

Last Point — not about Peak Oil particularly, but about Energy as economically special. Energy is special: it is required for production, and because using energy in production entails waste. Oil is not the only source of energy, so it may not be so special. But, using energy entails waste. Our capacity to handle error and waste is a limit, too.

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Omega Centauri 08.05.11 at 10:37 pm

Bruce, without mentioning the term is making the EROEI (Energy Returned On Energy Invested) argument has introduced the concept. Generally the energy required to mine/pump the lower quality sources that are left alone during the early phase of the industry increases, perhaps dramatically with time. In a pure case, where the only energy input for mining oil comes from oil, when EROEI reaches one you are done. In the real world other cheaper forms of energy can be substituted. For example in the southern California oil fields heat for steam injection is being generated from solar thermal sources. Nevertheless a greater fraction of our roughly constant supply during the plateau period is being consumed to acquire more oil (or liquid fuels), rather than being available for end products. So a simple graph of the volume of production versus time will give a deceptively optimistic impression of the situation. That is clearly true of the commonly stated production numbers labeled “all liquids”. An increasing volume of all liquids is biofuel, which requires high oil inputs to produce. Some of the rest is what are called natural gas liquids, fluid hydrocarbons associated with natural gas production which have a lower energy content per barrel. And these lower energy density fluids are increasing as a percentage of the total. So there are reasons to be skeptical that usable energy per oil has been maintained recently.

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Misaki 08.05.11 at 11:30 pm

>Those in the bottom half of the US income distribution and in some very poor countries haven’t done so well, but that has nothing to do with oil.

Or does it?!

“…But in 1991 the situation changed. The much trumpeted “self-reliance’’ of North Korea proved to be a complete fake. The Soviet decision to discontinue sales of oil and other goods at hugely discounted prices wrought havoc in the country’s economy. The agricultural sector was especially vulnerable, since without the heavy input of energy and resources it stood no chance of survival. Tractors required diesel oil, which was not forthcoming, and electric pumps could not operate when power stations were idle due to a shortage of spare parts.”
koreatimes.co.kr

The two nuclear power plants the United States promised to provide, but never did: http://en.wikipedia.org/wiki/Agreed_Framework

*the fuel oil which was meant to be provided until the completion of the two 1-GW reactors works out to 260 MW of electricity at 39% efficiency for the heating and electricity-generation plants which were the only authorized use of the oil.

And of course, no one thought the cost of the Iraq war would easily be paid for by oil taken from that country.

Otherwise an interesting article, which shows one of the dangers of relying on increased consumption to support economic growth and raise the standard of living. While higher energy consumption does increase available options as seen in the popularity of cars in the US, so would sharing of the existing amount of work giving people more time to use energy-efficient ways of travel as would happen with a shift of perceptions about the meaning of work.

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piglet 08.05.11 at 11:51 pm

Matt 33: “I spent a while wondering aloud, in various places, where the idea came from that there would be a sudden, catastrophic collapse of industrial civilization right at the production peak (which was very not-obvious to me).”

Could this perhaps be a strawman? I think most peak oilers aren’t saying that peak oil is the end of the world, but the end of cheap oil, and that an industrial society that has been predicated on the availability of cheap oil for about a century will have to undergo some drastic change in order to adapt to that new reality. There may be stronger versions of that thesis but the main point of difference, say with economists like Quiggin, is that
(1) oil isn’t just any other commodity somehow regulated by supply and demand: it’s the stuff on which industrial society depends
(2) a successful transition to post-oil energy economy won’t just happen gradually and by itself; it requires some drastic adaptations and unless we get serious about preparing for it, major disruptions are likely.

Now just observing the coincidence of sustained high oil prices and one of the worst global economic crises in history, and just observing the anomaly of the last decade (record high oil prices, record low economic growth) seems to me to give some plausibility to a disruption scenario.

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John Quiggin 08.05.11 at 11:58 pm

“just observing the anomaly of the last decade (record high oil prices, record low economic growth)”

I would say: record high economic growth in China -> record high oil prices -> minor drag on US and EU economies which ceased to be relevant when they imploded as a result of financial speculation

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piglet 08.06.11 at 12:15 am

And what Bruce and Omega said.

And I have a quibble with Quiggin’s per capita argument. Most population growth since 1980 has of course occurred in countries that had low per capita consumption rates. This alone would explain why the world average has gone down even though most individual countries increased their per capita use. It is true that per capita use in many advanced countries has stabilized or slightly declined from their peak (in no small part due to de-industrialization) but overall these numbers are not indicating any meaningful increase in efficiency. I am not arguing, of course, that such efficiency increase couldn’t happen, only that it isn’t yet happening at the scale needed.

As an aside: google energy use per capita and you’ll get a nice interactive google chart where you can select multiple countries. US per capita use already peaked in 1978 (this is total energy, not just oil) and was 16% lower in 2009. That may surprise many. But of course, half of the decline is due to the recession.

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sg 08.06.11 at 1:35 am

TallDave, as I said at my blog, what’s happening in Eastern Japan is not actually so much of a reduction in living standards as the doomsayers on the right would have you believe, and electricity prices haven’t changed. All the reductions are voluntary, they’ve been going on for 4 months now and are expected to last at least until winter. I go about my life completely normally, I just make sure to use my aircon more sensibly, and my workplace is a little hotter and a little darker.

A brief anecdote about this process: a violinist who returned from London to Japan to do a charity concert just after the earthquake was asked “it must seem very dark and cold to you here because of our voluntary energy conservation,” and replied “No, it’s just like London any day of the week.” Energy conservation hardly even need affect our lives.

Metatone, if your suppliers were in the tsunami-affected area it seems more likely that their work has been disrupted by infrastructure problems than by electricity supplies.

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JP Stormcrow 08.06.11 at 2:40 am

Jay@10: homes in Arizona that are prohibitive to cool
Sean Hillson@15: people in Dallas to not use their air conditioners for 35 straight days at 100+,

Just a small side point (and one I forget frequently): energy use for residential heating in places with cold winters significantly exceeds energy use for the cooling in the examples mentioned. Averaged across the US residential heating energy use is ~3x that for cooling (the gap, however, is smaller for commercial spaces). I think there are a number of factors that contribute to this general cold climate “bias”, but in the end it would do as well or better to use as examples the need to heat homes in Minneapolis or Montreal (and of course a lot of places get their fair share of both heating and cooling*). There are obviously more readily available non-energy intensive countermeasures against cold than heat, but in these discussions no one seems to implicitly advocate that Northerners wear coats when inside much less abandon their homes.

*All else being equal, coastal areas come out the best, especially Mediterranean climates such as coastal Southern California.

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Lord 08.06.11 at 3:31 am

Does someone have a per capita oil chart? If it fell it wouldn’t be due much to prices but to regulations and taxes. It would be interesting to know the price elasticity over the midterm from the level that they are at. If unemployment is correlated with gas prices two years earlier, it may be 1 to 1 with economic growth for quite some time as it would be in the short term even if it declines over time.

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piglet 08.06.11 at 3:55 am

sg, do you have numbers about the reduction in electricity use, and where the savings come from?

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John Quiggin 08.06.11 at 4:00 am

@Piglet, as you say, energy use per person has declined by about 16 per cent in the US. For oil, consumption per person has fallen from 2.8 gallons/day at the peak in 1978 to 2.1 gallons/day today, or 25 per cent. And, despite the current recession, US incomes have risen a lot since then, admittedly much more so at the top end than the bottom.

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Charles S 08.06.11 at 5:32 am

Could this perhaps be a strawman? I think most peak oilers aren’t saying that peak oil is the end of the world, but the end of cheap oil, and that an industrial society that has been predicated on the availability of cheap oil for about a century will have to undergo some drastic change in order to adapt to that new reality.

I think it is a half-strawman. I have certainly known believers in peak oil who allowed the peak oil concept to play a major role in their fantasies about apocalyptic collapse and the need to go become subsistence farmers. I think if queried closely they would acknowledge that post-peak oil would just lead to significantly curtailed economic growth, but peak oil definitely plays a major role in the (fairly common) societal collapse fantasies.

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sg 08.06.11 at 5:44 am

piglet, I’m running purely on the power of anecdote here BUT every day on my trainline the train tvs present a graph showing an hour by hour breakdown of our electricity use, and the peak time (2-6pm, roughly) is always at the 80% mark. The figures come from TEPCO (so take that as you will). There is a lot of stuff on the train and TV about saving energy at home and work – it’s a collective effort but I think it’s mostly being done by industry.

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sg 08.06.11 at 5:59 am

More broadly, Tokyo is clearly not suffering the kind of “end of civilisation” return to the dark ages that, e.g. opponents of carbon trading claim would happen if we reduced the amount of energy available. A 20% reduction in generating capacity in the middle of summer and we’re all going about our business as usual. I think this means efficiency could have a big role to play when the crunchy end of AGW hits, or at least a bigger role than many “serious” thinkers are willing to admit.

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Thomas Jørgensen 08.06.11 at 7:16 am

And in the final reckning : our society doesnt run on oil, it runs on energy, and energy is quite fungible. In the event fossile fuels run out, and the dreams of renewable advocates turn out to be mirages, the consequence will not be societial collapse – but the utter crushing of the opposition to nuclear energy and reactors popping up like toadstools, because – with breeders – fission resources are sufficiently abundant to power civilization until sometime after the sun burns out.

61

Frank Youell 08.06.11 at 7:44 am

Ryan Cousineau.

“There is a lot of low-hanging fruit that can happily phase into ground transportation needs: CNG conversions, incremental efficiency gains on gas and diesel engines, electrification of train systems, or electric vehicles.”

Really? Gasoline has been expensive for years now. People buy smaller cars and drive less to be sure. Demand hasn’t collapsed (save for the impact of the Great Contraction). CNG is considerably cheaper than gasoline (per-BTU). How many CNG cars do we have? What is the growth rate? Electrification of train systems if very expensive and the maintenance costs are substantial. Electricity is cheaper than gasoline and has been forever. Battery technology has always been the limiting factor for electric cars.

gmoke,

“The amount of sunlight used to grow the food we eat is at least three times the amount of energy in our annual, computed energy budgets.”

Wow is that far off. The U.S. produces around 400 million tons for grain per year. Coal production is in the range of 1 billion tons per year. One ton of coal has far more BTUs than a ton of grain. Of course, we produce and consume vast quantities of oil and natural gas as well.

Matt,

“Even Australia consumes 1/3 less. These are all prosperous nations by any reasonable standard and they didn’t need science fiction technology or the Dictatorship of the Eco-Police to get where they are relative to the United States.”

Oz does use less oil per-capita. However, Canada use more oil per-capita. On a per-dollar of GDP basis, the U.S. is inline with the rest of the world in terms of oil consumption.

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Thomas Jørgensen 08.06.11 at 11:26 am

The battery limitation is going to stop being an issue with shocking abruptness, because it is a treshhold thing. – Apart from the battery, electric drive trains are much cheaper to manufacture and maintain, so approximately one month after someone perfects a battery which gives acceptable range, you will be unable to sell petrol powered cars.

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Pete 08.06.11 at 11:47 am

Thomas Jørgensen: uncontaminated land is not a renewable resource.

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Matt McIrvin 08.06.11 at 12:10 pm

Europeans think Americans’ perception of expensive gasoline is hilarious.

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sg 08.06.11 at 12:38 pm

Never been to Hiroshima then have you Pete?

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Matt McIrvin 08.06.11 at 1:54 pm

I definitely have seen the sudden-imminent-collapse notion about. The people who are most into it tend to be either libertarians with survivalist fantasies, or people who just read an article by Kunstler. Whether Kunstler himself believes it can be hard to gauge, but he does seem to think the world is going to be knocked back to a preindustrial tech level at least part of the time.

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JP Stormcrow 08.06.11 at 1:59 pm

“Why am the I one that always has to do the cooking on preindustial day?”

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Sean Hillson 08.06.11 at 2:00 pm

JP Stormcrow@53

energy use for residential heating in places with cold winters significantly exceeds energy use for the cooling in the examples mentioned. Averaged across the US residential heating energy use is ~3x that for cooling (the gap, however, is smaller for commercial spaces). I think there are a number of factors that contribute to this general cold climate “bias”, but in the end it would do as well or better to use as examples the need to heat homes in Minneapolis or Montreal </i<

You are right that the energy needed to heat homes is more than that needed for air conditioning, but we are talking about different forms of energy – electricity vs. heat (and despite what Thomas Jorgensen says above, all forms of energy are not created equal). The point raised about Japan doing OK with nuclear offline vs trying to implement conversation in a Texas summer has to do with electricity; heating does not (predominantly natural gas), so the comparison to Minnesota winters is not valid. There is a different argument to be made about the ability to heat these areas on the basis of peak natural gas, but to reiterate this does not relate to baseload electricity shortages.

To elaborate: The laws of thermodynamics define the maxium efficiency, or coefficient of performance*, of heat pumps, e.g., air conditioner, refridgerator (use of work to move heat) vs. the pure heating value of a fuel vs. heat engines (use of heat to produce work). The coefficient of performance of these are roughly 3:1:1/3, for normal operating temperatures.
*http://en.wikipedia.org/wiki/Coefficient_of_performance
(Wikipedia gives the equations for COP of heat pumps and engines; for heating value it is simply COP = Q/Q = 1, neglecting any losses from furnace/boiler/ductwork/etc.)

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Thomas Jørgensen 08.06.11 at 2:06 pm

Pete: …Ehh. No, it is. Radiotoxins have halflives, which means that unlike chemical pollutants, they go away over time. In particular, Chernobyl will be right as rain in 300 years. That is one heck of a lot sooner than the planet is going to recover from the damage from coalburning.
In any case, I was using nuclear as an existance proof. Civilization will not run out of juice, because if all other schemes to produce electricity fail, fission is guaranteed to work.

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Anandakos 08.06.11 at 2:29 pm

I think you are ignoring the unique chemical properties of hydrocarbons and other petroleum fluids. Humanity literally eats a significant portion of the natural gas and petroleum produced around the world as Nitrogen fertilizers and fuel for farm implements and food distribution. Temperate zone humanity uses another large tranche of natural gas production to warm its houses in the cold months.

There are no ready substitutes for the agricultural uses of petroleum liquids. Yes, we might substitute electricity for home heating (we used to do that in the Northwest, but new construction primarily uses Canadian gas), but to do so without a huge increase in coal burning would require an enormous increase in the primary north/south transmission system and the commitment of stupendous acreage in the sunny and windy parts of the country.

Basically, humanity is screwed when the hydrocarbons are gone. We’re trust fund babies spending down a 120 million year old stash.

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Straightwood 08.06.11 at 3:37 pm

I think it would be a helpful mental exercise to imagine restructuring an advanced nation to attain a goal of 1/10 of current per capita energy consumption, because that is where the pessimistic oil depletion forecasts lead us. With a maximum application of high technology and prudent government policies, this can probably be accomplished within 50 years, but we probably only have 15-20 years in which to do it.

Unfortunately high technology and professionalization have been applied equally to all of mankind’s pursuits, including the amplification and political exploitation of fear, hatred, and superstition. The United States and other advanced nations have thousands of highly-paid technicians of irrationality whose mission is to deflect and retard rational policies that are inconvenient to special interests. Combining the natural inertia of energy policies with the powerful obstructionism of professional propagandists is likely to result in a failure to deploy appropriate policies before petroleum depletion reaches crisis levels.

Thus, barring the arrival of some miraculous renewable power source ex-machina, a pessimistic forecast for severe negative societal impacts of energy depletion is quite reasonable.

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Straightwood 08.06.11 at 5:42 pm

Advocates of nuclear power have difficulty explaining why this industry would not exist without government subsidy. The technology is so risky that no private insurer would ever back it. The Japanese government must now cover Tepco’s massive losses, which would have completely wiped out any private electric generating enterprise.

The Fukushima situation has been deftly removed from the public eye, but it remains very bad, with new readings of lethal radiation contamination in the last few days. There is still no satisfactory plan for stopping the radiation release at Fukushima, and there is no assurance that a similar disaster could not occur at many similar nuclear plants around the world.

How is it that the magic of the marketplace has brought Japan an industry where profits are private and massive losses are absorbed by taxpayers? That could never happen in America.

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JP Stormcrow 08.06.11 at 6:05 pm

Sean Hillson@63: There is a different argument to be made about the ability to heat these areas on the basis of peak natural gas, but to reiterate this does not relate to baseload electricity shortages.

Yes, I was not disputing your specific point (and should have just left my response to the Arizona mention). Rather just the tendency in general discussions of energy usage for people to highlight air-conditioning over the generally more large energy used in heating.

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Frank Youell 08.06.11 at 8:09 pm

Anandakos,

You are mostly right about agricultural dependence on liquid fuels. However, you would be amazed at how little liquid fuel America’s farms actually consume. See “Energy Use in Agriculture: Background and Issues” (http://www.nationalaglawcenter.org/assets/crs/RL32677.pdf). A rough calculation shows that America’s farms burn around 80 million barrels of diesel each year. Total agricultural energy consumption is around 1% of the total.

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Matt 08.06.11 at 8:33 pm

I think it would be a helpful mental exercise to imagine restructuring an advanced nation to attain a goal of 1/10 of current per capita energy consumption, because that is where the pessimistic oil depletion forecasts lead us.
According to the EIA’s Annual Energy Review 2009, in 2009 petroleum accounted for 37% of primary energy use in the United States. It is the single largest primary energy source in the US but nowhere near 90% of the total.

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Omega Centauri 08.06.11 at 8:40 pm

@Frank. Correct, agricultural liquid fuel needs could be met with agriculturally grown bio-diesel. Nitrogen can be fixed without natural gas as well. But thats largely irrelevant, oil and gas isn’t going to completely go away on even the century timescale. We will still be producing minor amounts a hundred years from now. Of more fundamental concern is Phosphorus, which at current rates will be depleted in about a century.

Nearer term food production is challenged by a combination of climate change, and groundwater depletion, but thats an entirely diferent discussion.

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piglet 08.06.11 at 8:43 pm

“Total agricultural energy consumption is around 1% of the total.”

Your 1% estimate can’t be right. It obviously only counts the diesel and disregards fertilizers and other inputs. Michael Pollan estimates that “after cars, the food system uses more fossil fuel than any other sector of the economy — 19 percent.” That includes transport and processing and so on.

http://michaelpollan.com/articles-archive/farmer-in-chief/

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Straightwood 08.07.11 at 12:26 am

Strangely absent from the optimists’ discussion of energy substitution is jet fuel. There will be no electrically-powered transport aircraft, and neither hydrogen nor LNG are easy to use as aircraft propellant. The petroleum depletion time machine is going to take air travel back to its early status as a perquisite of the wealthy and powerful. The rest of us will take slow boats on long journeys.

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Cranky Observer 08.07.11 at 1:31 am

> Strangely absent from the optimists’ discussion of energy substitution
> is jet fuel. There will be no electrically-powered transport aircraft,
> and neither hydrogen nor LNG are easy to use as aircraft propellant.
> The petroleum depletion time machine is going to take air travel back
> to its early status as a perquisite of the wealthy and powerful. The rest
> of us will take slow boats on long journeys.

Boeing, Airbus, Lufthansa, Virgin, and the USAF have all tested bio-derived jet fuels under operational conditions. IMHO the question of whether plant-derived diesel fuel can be sustainable produced on a large enough scale is the one that will determine whether or not we can maintain a high-intensity industrial society (if you have diesel fuel you can make jet fuel).

The USAF of course has a backup plan in the form of natural gas- and coal-derived fuels. Won’t work for everyone, but the nation that has the last bomber flying…

Cranky

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Omega Centauri 08.07.11 at 1:49 am

I don’t know the numbers, but I think aviation is only a few percent of gloabal oil product use. I don’t expect oil production to drop that low (assuming it is only used for aviation) for more than a hundred years. The real kicker will be cost, not availability. The cost of flying will go up, because there are real physical limits to the efficiency of heavier than air flight. Generally newer designs are more efficient, but usually the improvements are only a few percent.

There are a few experimental electrical aircraft. Range is seriously limited however, so flights across the big ponds would be out.

With ground transport. If we could right size and right speed the fleet. Two person cigar-shaped vehicles traveling no more than 45 miles per hour say, would be several times more energy efficient than our current vehicle fleet. We could still maintain a lifestyle that a Martian would think only differed from current in minor ways. And a several fold reduction in energy needs makes a lot of alternatives reasonable.

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John Quiggin 08.07.11 at 2:26 am

Most business travel could be replaced by videoconference, probably with a net gain in efficiency. As regards leisure travel, if people took fewer, longer holidays, and flew in large modern planes (an A380 in all-economy 800 passenger configuration uses something like 2l/100pkm) we could cut fuel use by 75 per cent without any change noticeable to a Martian observer.

It’s interesting in this context, that the debate typically starts with an apocalypse scenario required a need for radical lifestyle changes or at least significantly curtailed economic growth. But when I say things like “energy use for holiday travel would be halved if we took holidays that were twice as long and half as frequent”, the response is something like “but that would be so inconvenient, no one would accept it”.

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Thomas Jørgensen 08.07.11 at 5:45 am

Most of the fossile fuel use for agriculture is the production of hydrogen from natural gas to synthezise ammonia with. This is one of the very easiest places to substitute electricity for fossile fuel in our entire industrial economy. Electrolysis is simple, has fuck-all capital requirements and can be done with intermittent (wind) or night time surplus power production (French nuclear- then export the ammonia). Then once you have a non-fossile ammonia production infrastructure going, you can run the farm machinery on ammonia as well (people already do this) and suddenly the only oil based substance farming uses is lubricants.

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Joshua Maciel 08.07.11 at 6:17 am

sg, I work for a major Japanese manufacturer for the power industry. The TEPCO figures ignore industrial generation because they don’t own it. A lot of steel mills, for instance, are a net power producer. The blast furnace gas is mixed with natural gas to run a gas turbine for instance. Oil refineries will run a steam turbine connected to a generator before using the steam for heat in their processes.

A lot of these industrial generation methods are less efficient than full-blown power plants, so they don’t always produce electricity if the prices from utilities are cheaper. The power generation in any country follows the same pattern — the majority of the peak load gets handled by the most efficient plants, with less efficient plants providing peak power. In the US especially, plants are mothballed for efficiency reasons but can be brought back online if extra power is needed.

The situation in Japan has industrial producers generating electricity and selling it to neighboring plants to ensure that they have enough electricity for production. TEPCO could buy that electricity to cover the gap, but the lower profits (higher generation costs) would make it less than ideal for their business, so that generation isn’t counted.

Lots of the countries around the alps have two benefits:
1) they have tons of hydroelectric potential (Switzerland is 50% hydroelectric)
2) they are next to France which is 80% nuclear and happy to sell excess to it’s neighbors

The world electricity market isn’t simple, and it involves too many factors to compare at face value

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sg 08.07.11 at 11:59 am

Joshua, that must mean that the electricity readings I’m seeing on the train are for the service and domestic components of the economy only (plus transport). I think that’s still a large part of Japan’s economy – and a sizable portion of the industrial sector must use the grid too, right?

So the TEPCO figures don’t so much ignore industrial production as under-estimate it, I’m guessing?

85

Joshua Maciel 08.07.11 at 1:10 pm

Sorry, I did a rather poor job of explaining since I was posting from a mobile device.

There are 10 regional utilities in Japan (TEPCO, Kansai Power, Chubu Electric are the biggies). Each one owns a whole boatload of plants. According to wikipedia, TEPCO owns 3 nuclear power plants (12 units). They own 15 thermal power plants (fossil fuels) with at least 34 units (there are lots of blanks — there are a lot more than 34 units, I just don’t have the figures handy). They also have 7 hydroelectric plants.

20% of the total generating capacity from those plants got lost during the quake (at least one thermal plant I know of, and all of the Fukushima units).

All utilities look at two things:
1) “Base Load” power — how much the minimum power load on the system needs to be to cover minimal use around the clock/year
2) “Peak Load” power — how much electricity is required on the most electricity intensive day/hour of the year

Base Load is primarily covered by Nuclear power (the generating cost of nuclear is incredibly low, despite the high initial capital investment), and by high-efficiency combined cycle power plants (a gas turbine generates electricity using natural gas, and the exhaust gases are used to generate steam which runs a steam turbine). Peak power is covered by Hydroelectric Pumped Storage (they pump water to the top of the dam during the night when electricity is cheap, and run it through the turbines to generate power during peak hours), and by thermal power (plants with lower efficiencies, but quicker start-up times).

Like any other piece of equipment, power plants get better as technology advances, and the average life of a gas turbine is somewhere from 20-30 years (for coal plants with a steam turbine, that life is significantly longer). So to cope with increasing power demand, new plants with better efficiency get built, and handle more of the load (because they produce power less expensively), and the older plants are used to cover that peak load.

What you end up getting are plants that fill one of three primarily roles:
1) Base Load (always running)
2) Intermediate Load (maybe shut down for weekends only, or maybe for a certain season)
3) Peaker/Cyclic Load (start up only when needed for peak generation — for instance only run for 5 hours a day from the hours of 2-7, and never in spring/fall)

That is a lot of background, but it’s needed to answer your question. The figure TEPCO shows you is the max peak potential of their fleet of power plants. If the figure goes over 100%, there is a possibility of rolling blackouts or brownouts based solely on their generation capacity.

But as I said before, they aren’t the only power producers. There are also plenty of other people out there generating electricity. In Japan, but in general around the world, industrial concerns tend to gather together in the same industrial regions. Those plants all require electricity as well. In any industrial complex, there is usually a plant that has electrical generation capacity. It could be a refinery that uses super high-pressure steam to run a steam turbine, taking the outlet steam for use in their processes (refineries use a lot of steam). Or it could be steel mills using exhaust blast furnace gas mixed with natural gas to run a gas turbine (or combined cycle) power plant and produce electricity. Or it could be a refinery/petrochemical plant that uses some of its low-calorie gas (syngas) mixed with natural gas to run a gas turbine. Or it could be a central provider of energy like steam/electricity who makes a profit by centralizing production for various industries.

Anyway, there are a lot of additional power producers. However, those producers aren’t dedicated to producing just electricity like a modern power plant is — that means their efficiency is lower than the utilities’ plants. If the utility will sell them enough electricity cheaper than it costs for them to generate it, they will just buy from the utility. But if they are suffering from potential shortages, you’d better bet they fire up their generators, because for large 24/7 industry, downtime is a huge (multi-million dollar) loss for their production.

That generation capacity is not counted in TEPCO’s totals. So the total TEPCO shows (with a loss of 20%) is indicating what THEIR generation is, not the generation of the region. In reality there is more electric generation potential that they could tap into if they were willing to pay for it. Since it would be more expensive than producing it themselves, they are reluctant because it would cut into their profits.

The electricity use that TEPCO is showing is for all sectors of the economy (not just for service and domestic), it’s just that the denominator doesn’t include industrial generation or even houses with solar panels on the roof and the like.

It also likely doesn’t include the potential electricity imports from other utilities (like Chubu Electric) who supplied a whole bunch of power post-3/11.

In general, Japan is a unique country when it comes to electricity. There are very few natural resources at the moment when it comes to fossil fuels. There is some coal, but it’s expensive to dig up. There is no real natural gas or oil. There are methane beds in the ocean, but nobody knows how to safely tap those yet (once they do it could probably be used like blast furnace gas or syngas mixed with natural gas).

After the oil shocks of the 1970’s, Japan pushed hard to minimize use of energy. To visit a refinery in Japan vs. the US is like black and white. Japanese refineries are VERY conscious about re-using condensate in whatever form possible, and to minimize the loss of steam. US refineries, on the other hand, have a much lower energy cost and are less likely to make a larger capital investment with a long-term return. If you look at a graph of energy use per capita vs. GDP growth, most countries see an increase of energy use with GDP growth, whereas Japan has a markedly different curve post-70’s and the oil shocks.

Anyway, I apologize for the long post. Feel free to post here and/or e-mail if you have other questions. I’ll do my best to answer.

86

piglet 08.07.11 at 5:07 pm

JQ 81: Very true. We could dramatically reduce aviation without it causing a terrible inconvenience. But we aren’t. In fact, there are currently huge amounts of capital sunk into the expansion of aviation capacity. Industry as well as government “experts” keep telling us that aviation will, and must, expand at something like 5% growth per year and that only cave-dwellers would question that growth.

I am worried less about our technical than our political ability to adapt to peak oil and transition to a low carbon economy. I don’t see much evidence of rational energy policies being implemented anywhere, least of all in the US, and I don’t believe for a second that “the market” will fix this on its own.

87

Straightwood 08.07.11 at 5:49 pm

It all comes down to how quickly petroleum prices rise. An aggravating factor is the likely shifting of exports to domestic supply as producer countries choose to meet domestic needs rather than continuing exports. Canada and Russia cannot be forced to sell their oil on world markets if their own people are running short. This means that petroleum market prices will begin to rise sharply well before substantial depletion of petroleum resources.

With energy policy in advanced nations crippled by propaganda-induced political paralysis, the conditions for resource wars are developing. Fear and hatred will lead to decisions to steal oil that can no longer be easily bought. In a nuclear-armed world, this will be a perilous development.

Professor Quiggin suggests that there are straightforward answers to the energy challenge and plenty of time to apply them to the problem. The record of complacency, neglect, and incompetence in US energy policy thus far suggests that timely remedies will not be applied and that a pessimistic outlook is justified.

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Bruce Wilder 08.07.11 at 5:49 pm

ditto piglet

I have all the confidence in the world in our ability to solve a constrained maximization problem; what I doubt is our political ability to institutionalize an appropriate constraint in a timely way.

The neo-classical analysis is misleading, because it fails to acknowledge institutions, as the necessary intermediary between social life and the demands and constraints of the natural, physical world — an intermediary, which makes effective social and economic cooperation possible.

The popular apocalyptic scenarios, even when drawn with good intentions to motivate popular support for institutional reform, are as implausible as the typical Hollywood global disaster, special-effects extravaganza. But, they are not completely misplaced: the failure to reform institutions results can and does result in “surprise” system crashes. Crashes, which neo-classical analysis is notoriously good at failing to anticipate.

There’s no technical obstacle to making huge reductions in energy consumption, by a combination of technical efficiency improvements and relatively minor adjustments to the customs and structures of daily life, which enable large conservation gains. But, to have Mr. Market solve this constrained optimization problem correctly, an appropriate constraint has to be institutionalized, by political fiat.

Otherwise, we’re no smarter than yeast, who double their numbers every day, consuming the guar and sugar on a petri dish, being advised by their neo-classical yeast economists, that fully half the dish remains unexploited and there’s nothing whatsoever to worry about, this dish’s yeast population has reached a new, permanently high plateau . . .

89

Thomas Jørgensen 08.07.11 at 8:16 pm

… Energy is *not* the constraint. Ffs. This drives me insane. There is not going to be any shortage of primary energy supply, ever. What there will be is a shortage of liquid hydrocarbon chains. EG: Oil. This is not remotely the same thing. This confusion is widespread, and it causes people to think that examples of shortages of *electricity* are at all relevant to what the actual consequences of peak oil are going to be. And that is very silly, because we do, in fact have an excellent historical experiment demonstrating what happens when oil suddenly becomes much scarcer. It’s called the “oil crisis”. So, carless sundays, carpooling.. ect.

90

John Quiggin 08.07.11 at 9:01 pm

As various commentators have pointed out, the fact that we can easily adapt to peak oil, climate change and so on does not mean that we will. My optimism only extends as far as saying we will probably get around to fixing the problems before it’s too late, but at a cost several times as high as if we had started a decade or so ago.

But, in this context, the kind of Peak Oil fan who insists that renewable energy won’t work, baseload power demand is unchangeable, oil is essential and so on is an ally of the Republican DooLittle/Delay types who make exactly the same points in support of their obstructionism.

91

piglet 08.07.11 at 9:37 pm

There are plenty of peak oilers who deserve that criticism (and there may be plenty who don’t – I’m not following peak oil debates too closely these days) but still I give them credit for insisting that physical constraints are real, a fact that a surprising number of very clever people are nowadays ignoring. Their biggest mistake is probably that they overlook or downplay that Climate Change will almost certainly be a far bigger issue than energy scarcity. I think it was Lester Brown who said that “we are not running out of resources, we are running out of planet”. Nevertheless I think it is delusional to imagine that resource scarcity won’t also affect us any time soon.

92

Straightwood 08.07.11 at 10:09 pm

The larger issue related to peak oil is the challenge to the economic dogma of unlimited growth. There will be an extractive peak for just about everything that is mined from the Earth, and there is a maximum tolerable burden of ecological damage that the Earth can sustain. We are badly in need of a new economic doctrine grounded in human sustainability. The era of regarding wastes and environmental damage as “externalities” is rapidly drawing to a close, but there is no coherent economic theory that harmonizes business incentives with global environmental sustainability. This is the undiscovered country of modern economics, and the sooner it is explored the sooner the dismal science can repair its tattered reputation.

93

stephen thiel 08.08.11 at 12:27 am

I read somewhere that 15 of the largest 16 oil companies (in terms of reserves) are state-owned. Only Exxon-Mobil had large enough reserves to crack this tight group. I don’t think these brain-dead,inefficient enterprises have any clue how much oil they have, much less being able to get it out of the ground. If any of them ever do, the price should plummet due to the inelasticity of demand (for example, I don’t use more gasoline just because it is cheaper).
I think, as these state-run economies get into more trouble (inevitable), they will have to turn to the private oil and gas sector to recover their crude. That can lead to almost permanent crushing supplies.

94

Ed 08.08.11 at 12:38 am

How about looking at this the other way round. It is the year 2111, everybody in the world lives fully resourced lives.

What can you say about what is needed for this to happen?
– Oil is not part of it as it peaked in 2032 and then declined to near nothing.
– Biofuels are out as all the aquifers have all been drained and the only sources of fresh water are rivers.
– Hot fusion is progressing well but will not be ready for another 10 years (honest)
– Uranium ore yields have got so low that it is not worth the diesel to extract it.
– Wind, tide, geothermal and direct solar are all used as they do not require large inputs of anything after construction. The same conditions they are working in now will last for thousands of years.

Lets stop mucking around with the consumables and concentrate on the long term energy sources that have reasonable EROEI and exist.

95

GG 08.08.11 at 12:54 am

Thomas Jørgensen, surely a peak in Oil supply would affect every other energy source — coal is not mined with coal-powered (or manufactured, or maintained) equipment after all!

Going by a historical example, Easter Islanders could have instituted a program of tree conservation so that they would always have a supply of timber from which to build canoes. That they didn’t do this tells us something about human nature.

96

sg 08.08.11 at 1:49 am

Joshua, does that mean that in terms of AGW mitigation (just as a thought experiment), shutting down a coal-fired plant (assuming it’s reasonably dirty) and forcing those other industrial generators to use their byproduct electricity all the time would be a potentail net improvement? It sounds a bit like some of the “disaggregation” ideas of the 70s peak oil /alternative energy crowd.

97

Bruce Wilder 08.08.11 at 2:53 am

If neo-classical economics had a better explanation for, provided a better intuition about, the sources of economic growth in the industrial revolution, we’d be a bit more alarmed about “running out of planet”, as well as being a bit more realistic in our alarm.

It seems to me that neo-classical economics is also a frequent ally for DooLittle and Delay. With its refusal to adopt an even halfway realistic theory of production (incorporating, yes, energy and pollution), and its blithe insistence that prices will adjust to clear the market, and everything will be just hunky dory, neo-classical analysis is ready-made for Mr. DooLittle, and Miss Delay. Have you ever run across Michael Kahn (UCLA), author of Climatopolis, who is just ever so optimistic that capitalism, with its innovative adaptability, will enable the rich, at least, to “adapt”?

Have you seen Brad DeLong do his “our descendants in 100 years will be x times richer than we are, and well able to afford to cope with climate change”? And, on what basis? Drawing a GDP growth curve with a straight-edge on graph paper because Bob Solow said he could?

And, even when our neo-liberal friends, employing neo-classical analysis, are willing to cry two cheers for addressing global warming, they always carefully insist on a frame in which the necessary measures will reduce economic growth and welfare. It will reduce future economic growth by a “small, affordable” amount.

Even at their most lurid, Kunstler and the other purveyors of apocalypse, are a lot more realistic, in recognizing that what is required is a fairly radical change, and that we need that radical change, to prevent a fairly catastrophic slide toward ecological collapse and worldwide impoverishment.

98

Bruce Wilder 08.08.11 at 2:58 am

thiel @93: “I don’t use more gasoline just because it is cheaper”

not to pick on thiel particularly for this, but the willingness to flatly deny the one genuine and certain insight neo-classical economics offers us, is one of the things that makes me voluntary human extinction may be the only viable option.

99

Straightwood 08.08.11 at 3:08 am

The great taboo in the discussion of the glorious emerging world Plutocracy is the notion that some of these very special people do not wish to see a harmonious future in which the greatest good is enjoyed by the greatest number. What must not be mentioned by serious commentators is that some of our would-be overlords find the prospect of vast population die-offs and ecological calamity rather thrilling (when the arena of misery is viewed from a protected sky box). This is the darkest component of pessimistic forecasts of social impacts of resource depletion: for many of the people who control world politics, it is not enough to prosper and survive; others must fail and die.

100

JP Stormcrow 08.08.11 at 3:29 am

for many of the people who control world politics, it is not enough to prosper and survive; others must fail and die.

Gore Vidal writ large.

101

Omega Centauri 08.08.11 at 3:34 am

What Bruce Wilder and Straightwood said.

I really think our biggest difficulty is our disfunctional politics and media. If we are able to muster up an adaptive response we should do OK. But, the odds are the US’s response will be maladaptive cloaked in denial. Some countries, which are not caught up in an internal culture war, won’t have such great impediments seeing the situation clearly. But, I fear we won’t be among them.

102

JP Stormcrow 08.08.11 at 3:42 am

And as long as we are exploring the pessimistic side of the ledger, a recent trip to Houston (a place I had lived many years ago) convinced me that if you think we are going to do anything other than build more freeways and freeway lanes and drive big vehicles on them until the oil is mostly gone, you should have another think*.

*This is somewhat unfair, time spent in the suburbs of most any American metropolis would serve as well, but it is just so … palpable in Houston.

103

Thomas Jørgensen 08.08.11 at 6:52 am

..Ed: I know the precise paper you are thinking of re; Uranium mining energy costs – It is extremely popular and so wrong as to be laughable. Comparing the theoretical energy use they predict for various ore concentrations with actual existing mines operating on ores of those concentrations proves that they are off by several orders of magnitude. Further, given breeder reactos – and breeders are not theoretical. There are breeders producing power today – any random bit of the earths crust – including the soil in your back garden! contains enough fissionables that it has a signficantly higher energy content than coal does. Fission power is more renewable than solar power because the sun will literally stop being a viable powersource before we run out of things to fission.
GG: Mining equipment is very frequently electrified due to air quality issues for the miners. Doing so in all cases would not exactly be much of a hindrance to operations.

104

Joshua Maciel 08.08.11 at 12:06 pm

Joshua, does that mean that in terms of AGW mitigation (just as a thought experiment), shutting down a coal-fired plant (assuming it’s reasonably dirty) and forcing those other industrial generators to use their byproduct electricity all the time would be a potentail net improvement? It sounds a bit like some of the “disaggregation” ideas of the 70s peak oil /alternative energy crowd.

Not at all.

For instance, a refinery’s #1 priority is to refine oil — not to generate power. They will regulate the amount of power that they generate based on the amount of steam required to power their processes — not on the amount of electric demand. And excess of generation would mean an excess of steam, and if that steam isn’t used, it ends up being vented to atmosphere.

The goal of a refinery isn’t to have the most efficient power production, it’s to use a relatively low-cost oil (that is a natural byproduct of the refining process) to produce additional steam to generate electricity that is bought higher than the cost of producing it (or used internally at a lower cost than to buy it from a utility).

A coal powered plant, even though it uses coal, is designed solely to maximize the generation of electricity with minimal fuel. For many older coal plants, that may dip into the 30% efficiency range, but that could quite possibly be more than a 40% potential efficiency steam turbine generation in a refinery considering that the outlet steam would be wasted.

To point, most steam generation has three stages — high pressure steam is used to power a high pressure turbine, the exhaust steam is medium pressure and used to power a medium turbine, which follows to two low pressure turbines. Each successive stage requires higher capital cost (bigger turbines) and generates less power. The highest stage alone isn’t that efficient — the combination of the three different stages is. Since refineries use the steam from the turbines to power processes, they may only have a high pressure turbine. That high pressure turbine, especially if some of the outlet steam is vented to atmosphere, will end up being less efficient than even an aging coal plant.

For whether or not that results in higher CO2 generation or not, it would depend on the plant/process and the individual coal plant as well.

To add another problem, coal plants are usually pretty big (generating hundreds of megawatts per unit, with several units in the same plant). Industrial generation tends to be relatively small (less than a hundred megawatts) although, again, that depends on the individual plant (some plants have more generation because they have power purchasing contracts with surrounding plants, so that is an equally large portion of their business).

And then to add a third problem, how are you going to enforce this? Will the government force the refinery to sell power to the utility for distribution to residential areas rather than to honor existing contracts with surrounding industry?

It would be far more efficient for the government to tell utilities to build a new more efficient plant (like a combined cycle gas-steam turbine plant) to replace the low efficiency coal plant than it would be to ask the refinery to sell their power to the utility. The utility has a lot more available capital (or should) in most cases.

105

Straightwood 08.08.11 at 12:50 pm

We are all Easter Islanders now. The tiny fraction of mankind that thinks and acts rationally has no hope of altering the behavior of massive populations intent on cutting down the last tree (draining the last drop of petroleum) and killing anyone who gets in the way.

Homo Sapiens is biologically programmed to hold fast to dogmas and magical thinking, even when presented with massively contradictory evidence. This was a useful trait in strengthening group cohesion in primitive tribes fighting over renewable resources. In a nuclear-armed world with depleting resources and an overheating atmosphere, it is a one way ticket to extinction.

106

piglet 08.08.11 at 7:41 pm

Bruce Wilder 97, exactly. Let’s at least mention one of the few economists who tried, and utterly failed, to get academic economics to acknowledge physical reality. Herman Daly. He tells the story when he pointed out at the World Bank that their model diagram of the economy didn’t show any material inputs and waste outputs. They then drew a box around it and labeled it “the environment” or something like that. It is simply beyond belief that anybody would take seriously a model of “the economy” that fails to account for material flows.

107

Josh G. 08.08.11 at 8:09 pm

The Easter Island comparisons are ridiculous, because what happened on Easter Island was not self-inflicted ecological catastrophe; it was genocide. The arguments to the contrary were popularized by Jared Diamond, who in turn got them from Thor Heyerdahl, who based them on racialist ideology.
http://web.archive.org/web/20061108042333/http://www.staff.livjm.ac.uk/spsbpeis/EE%2016-34_Peiser.pdf

Unless we expect aliens to attack us, we need not fear an “Easter Island scenario.”

108

Bruce Wilder 08.08.11 at 8:53 pm

@107

I looked at the article you linked to, and it seems to be confused, tendentitious, ill-reasoned, and ill-informed. Its author, Benny Peiser, is a climate-change denialist.

109

John Quiggin 08.08.11 at 9:18 pm

I couldn’t follow the link, but I agree with Bruce – every word Peiser says is a lie, including “a” and “the”.

110

Peter T 08.09.11 at 7:09 am

Hmm. So if we let the market fairy do its magic work, then we can transition to lower and lower quality energy sources and maintain – even increase – welfare? We can go from easy oil to hard to get oil, back to coal, then to wood, and presumably then to dried seaweed and each time get richer and healthier. Why did we bother with the industrial revolution?

The Peak Oil people often get it wrong, but at least they are asking a sensible question – what difference does a lower quantity of high-quality energy make? JQ, wearing a neo-classical hat, seems unable even to formulate the question.

111

reason 08.09.11 at 8:10 am

I think part of the problem is that the increase in globalism has meant that the first world, where most of the pundits live, has exported a lot of the problems and imported a postponement of the worst consequences for themselves. Anybody looking at sub-suharan Africa could not be so blase in laughing at Malthus.

112

Alex 08.10.11 at 10:38 am

@74: The US EIA’s energy flow diagrams are a really useful resource if you want to know what actually uses most of the oil*, and also a fine example of good data visualisation. Farmers do *not* burn lots of oil – it’s a big budget item for them as individuals, but out of the total requirement for oil, it’s not very much.

(*Hint: it’s in the driveway.)

@5: We don’t appreciate how much Jimmy Carter’s energy plan changed the world.

This. I am a Carter revisionist: his energy plan had enormous and positive repercussions, and his decisions on defence basically created the modern US military via the Big Five procurements* (for good or ill – but most people would evaluate US presidents for their effects on US interests, as that’s what they’re elected to pursue). Also, a lot of decisions that went into GPS and the Internet go back to his watch. Further, legitimising human rights as a subject of international relations has been pretty handy too.

People constantly compare Obama to Carter. I wonder what, in 30 years’ time, alternative me would say “Everyone now forgets that Obama…but it’s proven to be enormously useful in the long term”?

42: Shipping is interesting because the container lines have done several waves of swapping between speed and frequency of service, driven by fuel prices. Malcolm McLean’s late 60s vision built the SL-7 ships, giant (for the time) containerships with really gigantic boilers and turbomachinery to give them a cruising speed of 33 knots. The idea was for a permanent round-the-world loop service, on which fast ships would be necessary to keep the voyages acceptably quick.

By the time the SS United States and her sisters were in service, the 70s oil crisis had hit and they were unacceptably expensive. The next generation was of even bigger ships, but wider and slower, with diesel machinery – and more of them. More?

Well, most container shippers don’t just want to move goods as a one-off. They want to trade regularly. Once you’ve started shipping goods from A to B, you usually intend to keep doing so. If you’re sending containers out daily, it’s the first shipment that takes the length of the voyage to arrive – for the subsequent ones, your customers receive them at the rate that ships call at the port of delivery.

So, in a sense, frequency of service is a substitute for speed. The industry moved to bigger, slower ships, and more of them, because bigger, slower ships are cheap to build – simple hull form and less costly machinery. I believe it flipped back at least once and then returned to slower ships. MV Emma Maersk cruises about 15-18 knots, I think.

Of course, the problem is when you have to change the product – then the minimum turnar0und time is set by the length of the voyage. This is why some textile companies have moved production back to Europe; Emma can change her look faster than Emma can steam from Shanghai to Rotterdam.

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piglet 08.10.11 at 6:43 pm

“I couldn’t follow the link, but I agree with Bruce – every word Peiser says is a lie, including “a” and “the”.”

I am aware that Peiser is a shill and I also read his Easter Island paper. He uses an aniti-imperialist argument about Rapa Nui being pillaged by colonial powers (which seems to be well founded) to dismiss the environmental argument. He may well be right about the role of imperialism, and Jared Diamond may well be guilty of ignoring it, but that doesn’t undermine reconstructions of pre-contact environmental history. My understanding is that the evidence for Diamond’s narrative isn’t as clear-cut as he makes it out (Diamond is quite a cherry-picker himself) and Easter Island isn’t such a good model society anyway.

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Bruce Wilder 08.10.11 at 7:25 pm

Alex @112

I think you have confused two different Malcolm McLean debacles.

The SL-7s were the fastest container ships ever built, and they were eventually did in by high oil prices, but not as quickly as you might think. Reynolds, the parent company to Sea-Land, anticipating the fuel costs, also bought an oil company, as part of its overall strategy, and the ships early success may have been somewhat enhanced by high oil prices, which did in their competition, though reality set in quickly enough.

The SL-7s were not, as far as I know, ever intended for a round-the-world service, though. I think you are confusing them with the Malcolm McLean venture with United States Lines in the 1980s, which was exactly the opposite of the SL-7 strategy. He commissioned Panamax containerships, which were deliberately slow and fuel-efficient. These ships were intended for a round-the-world service. That venture was done in, by low oil prices. (Ah, the ironies!)

Round-the-world services were an attempt to solve the problem that merchandise traffic is one-way, but the ships have to make round-trips. Persistent imbalances in traffic flows result in a lot of costly, empty ship-travel. The Chinese company, COSCO, runs a round-the-world service (in both directions!), and Panama expanded its locks, to accomodate their New Panamax ships.

The size of the Panama canal and the draft at major Atlantic ports, however, limit the size of ships. And, there are major economies of scale in the ship. When the generation of container ships that came after McLean’s US Lines vessels were built, the biggest ones exceeded the Panamax standard, and could only work the Pacific, where key ports, in Asia and the U.S. West Coast, are deep enough (and broad enough at the piers). Using integrated freight trains from U.S. West Coast ports to Chicago and New York, in combination with the bigger container ships, turned out to be both faster and cheaper that using a Panamax vessel through the canal — another fatal blow to United States Lines.

The SS United States was a passenger ship, not a container ship, the last regular service passenger vessel to win the Blue Riband trophy for fastest trans-Atlantic crossing, in 1952. It was owned by United States Lines, which later became the vehicle for the McLean venture.

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