Peak oil was thirty years ago

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.

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).

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?

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.

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.

> 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

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

“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.

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.

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.

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.

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.

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.

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.

“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.

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.

@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?

“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

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.”

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.

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.

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.

>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.

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.

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.

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.

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.

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.

Europeans think Americans’ perception of expensive gasoline is hilarious.

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.

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<

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.)

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.

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.

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.

@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.

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.

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.

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.

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?

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.

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 . . .

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

@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.

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.