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Peak Oil -- So What?

by asdf Wed Nov 16th, 2005 at 02:47:44 AM EST

From the front page ~ whataboutbob

There have been a lot of predictions here at ET about how the sky is falling as far as the global oil supply is concerned. Chicken Little is running all over the village announcing that we're all going to freeze to death in the dark--if we don't starve first--because in only a matter of weeks the world will run out of oil.

But what do the experts think? Is this something we should worry about? Or is it just a case of a hysterical extrapolation of irrelevant production curves that doesn't add up to anything?


Well, if you had been in Denver, Colorado, last week you could have gone to the Denver World Oil Conference, presented by the Association for the Study of Peak Oil & Gas.
http://www.aspo-usa.com/

A big flock of Chicken Littles got together here to discuss the topic, and came to the predictable conclusion that the sky is indeed falling, and that we had better start running around in circles.
http://www.denverpost.com/news/ci_3207731

First up was Denver mayor John W. Hickenlooper (I love that name) who quoted the world renowned technical journal The New York Times which recently printed a list of prominent scientists and analysts who "predicted" that oil production will eventually peak. Following his emminence the Mayor was a parade of Chickens who agreed with him and made significant pronouncements about how the end of the World As We Know It is right around the corner.

But does any of this make sense? What are we really talking about here?

We're talking about the balance of supply and demand for energy, and the fact that there is an inevitable balance between the two (regardless of politically driven attempts to change reality), and that as the supply of a given natural resource is gradually expended the price of it goes up.

D'oh!, as nuclear power plant operator Homer Simpson would say.

Bottom line? Oil gets more expensive, and gets replaced by other energy sources, like wind or tidal generation, atomic energy, coal, or solar photovoltaic. As these alternative sources become competitive with oil, the supply curve steepens and the price stabilizes at a new operating point--until that new source also becomes depleted. And if the new source is fundamentally undepleteable, then the price of energy stabilizes at that new point for a long, long time.

So if wind power, to pick a EuroTrib favorite, has an oil-equivalent cost of, say, $75 per barrel, then we should expect energy price stability at that point. For a long time.

Poll
Is the energy "sky" falling?
. Yes, but I have my tin-foil hat so I'll be ok. 75%
. No, because globalized free trade will solve the problem. 0%
. Maybe, but only John W. Hickenlooper knows for sure. 0%
. I don't know, but I'll buy an ET windmill share just to be safe. 25%
. Who cares? I live in France and will live on hot air. 0%

Votes: 4
Results | Other Polls
Display:
Hickenlooper is a petroleum geologist and probably knows what he's talking about...
by asdf on Sun Nov 13th, 2005 at 12:29:36 PM EST
The equilibrium price determined by the balance of supply and demand can change instantly (in fact, it is likely to overshoot and then relax to the right level later) but the economic, social and technological adaptations of the new "equilibrium" can take 5, 10 or 15 years to take place. In the long term you're right, but in the long term we're all dead, too.

There is a serious likelyhood of severe disruptions of suburbia, a recession, resource wars, you name it. The fact that 15 (or 30?) years later everything will have settled onto a new equilibrium is not the point.

As for whether this is the end of the world as we know it, a friend of mine used to say "sure, every day is the end of the world as you know it so far". Today is the first day of the rest of your life.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Sun Nov 13th, 2005 at 12:37:00 PM EST
We come from the same school so I just have to stress the same. It all depends on how long the adaptation lasts and if the present economy can be sustained in the process. The main aspects of the economic system can change, and then adapt.. but this is called collaps of the system. Of course, a new equilibrium point will be reached but nobody can guarantee that it will have anything to do with the present one.

SO the potential for serious disruption is there, but the possibility of a wonderful smooth transition (for the better) is also there...

So restating what Migeru said..we have different atractors, not only the one this diary describes.

A pleasure


I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Sun Nov 13th, 2005 at 01:00:24 PM EST
[ Parent ]
And if the new source is fundamentally undepleteable, then the price of energy stabilizes at that new point for a long, long time.
You are confusing total supply and production rates. An undepletable source may be available only at a negligible rate.

The difference between renewable sources and extractive sources is that renewables have an inexhaustible supply but a limited rate of extraction (more at a higher price, with diminishing returns), whereas mined resources have a limited supply but an unlimited rate of extraction (limited only by price, again with diminishing returns). So, increases in oil demand could be made up by ramping up the extraction rate (something that Saudi Arabia has admitted it cannot or will not do any more), but with renewables an increase in demand has to be met by installing a new production unit, which takes time and requires the expectation that the demand will be maintained in the medium term. So, really, it's a different world coming up.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Sun Nov 13th, 2005 at 02:07:43 PM EST
I submit that if oil were at $75 a barrel for any time at all, the production rate of wind turbines would go through the ceiling. It's not that hard to make a turbine or to set it up, or to put in the required grid.
by asdf on Sun Nov 13th, 2005 at 02:13:55 PM EST
[ Parent ]
I submit you would see a very, very tough 12 months (at least) worldwide if that were to happen. And there's the problem of liquid fuels for transportation. You'd also have to set up synthetic fuel producing plants. Give it 5 years.

So, yes, the market will work it out, but what fun we'll have for 5 years while it happens.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Sun Nov 13th, 2005 at 02:26:35 PM EST
[ Parent ]
years but other than that...

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Sun Nov 13th, 2005 at 02:42:53 PM EST
[ Parent ]
How do you fly planes with windpower?

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Nov 13th, 2005 at 03:30:21 PM EST
[ Parent ]
You build gliders. You use wind power to power a Km-high elevator and launch the glider. Then you navigate the air currents. Full-3D hydrodynamic weather forecasting on steroids. Give it 50 years :-)

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Sun Nov 13th, 2005 at 03:34:00 PM EST
[ Parent ]
You teleconference.
by asdf on Sun Nov 13th, 2005 at 03:48:27 PM EST
[ Parent ]
My mother will be really happy to teleconference with me this Christmas.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Sun Nov 13th, 2005 at 04:20:03 PM EST
[ Parent ]
"...I-hope-that-some-one-gets-my message in a bottle...."

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Nov 14th, 2005 at 03:31:37 PM EST
[ Parent ]
I'm (hopefully) moving to either Nottingham or Edinburgh next year.  You're not suggesting that I canoe across the Atlantic, are you?

It's going to make trade rather difficult, too, since England, Ireland, and Japan are, you know, islands.

I had to recommend this diary, if for no other reason than the incredibly funny comments from Migeru and Jerome.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Nov 14th, 2005 at 03:22:05 PM EST
[ Parent ]
This is really worrysome. Almost all of my comments weree dead serious.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Mon Nov 14th, 2005 at 03:45:10 PM EST
[ Parent ]
Ditto here. Funny?! You don't want funny from me, mister!

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Nov 14th, 2005 at 05:14:25 PM EST
[ Parent ]
Tsk, touchy.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Nov 14th, 2005 at 06:47:00 PM EST
[ Parent ]
I dunno, maybe it's an American thing, when you asked about flying a plane with windpower?  and then teleconferencing at Christmas?  I was lmao!  You guys could practically take that show on the road.  :-)

Although I do understand the subject is deadly serious and all that...

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Mon Nov 14th, 2005 at 06:49:08 PM EST
[ Parent ]
Oil has become essential because it is an extraordinarily dense source of energy, thus great for individual-centered transportation networks and civilisations.

Substitutes exist at conceivably affordable prices, but they require a very different mindset: public transportation, probably less land per person as it becomes less sensible to live so far away, denser cities. This will require a lot of infrastructure to be built very quickly, and it will require people to change their behaviors in way they will resist. Cheap is not necessarily convenient, if you are able to pay part of your bill in time or other non monetary items.

As said above, the transistion will be a bitch, and may come with irreversible consequences (wars and the like)

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun Nov 13th, 2005 at 03:34:27 PM EST
[ Parent ]
You're right about the high energy density of gasoline, about 12000 Wh/kg.

But current projections for practical Lithium-Air batteries are in the neighborhood of 1000 Wh/kg, which isn't too bad...and the efficiency of conversion of this energy to motion is much higher (perhaps 90%) than today's gasoline internal combustion engines (about 30%).
http://www.batteriesdigest.com/id397.htm

by asdf on Mon Nov 14th, 2005 at 08:07:24 AM EST
[ Parent ]
So, 12 times denser in raw and 3 times less efficient than projected batteries means gasoline is still 4 times denser effectively. And Lithium is highly toxic, too.

Then again, who needs 200 Km/h when the speed limit is about 100 Km/h? Maybe it's a good thing that electric engines won't be able to deliver quite the same "umph" as internal combustion engines.

I'd still go with synthetic fuels, and improving the efficiency of internal combustion engines. 30% is pathetic.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Mon Nov 14th, 2005 at 08:15:55 AM EST
[ Parent ]
You wont get much over 30% with internal combustion engines (thermodynamics).
by srutis on Mon Nov 14th, 2005 at 08:43:53 AM EST
[ Parent ]
Yep, I did fall asleep when the Thermo prof starting talking about the details of actual engines :-P It took me about two years after than to learn to love the subject.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Mon Nov 14th, 2005 at 08:49:19 AM EST
[ Parent ]
Efficiency of Internal Combustion Engines
The value found for the limit efficiency is coherent with other data. If we consider one Carnot Cycle between the adiabatic combustion temperature of gasoline (2,300 K) and the admitted working temperature for steel (925 K), the expected efficiency would be 59%. The largest efficiency already attained, in maritime Diesel engine with 90,000 HP is 52%. In Otto Cycle engines, which use C gasoline (with anhydrous alcohol), it reaches 32% and those which use hydrated alcohol reach 38%.On the other hand, if we consider efficiency as an exclusive function of the compression ratio, the hydrated alcohol engine, with compression ratio of 12 l should reach 52.5%. Therefore, one can notice that there still is a considerable margin for engine development, not sufficient to compensate for the petroleum extraction decline but still significant in terms of fuel saving and reduction of CO 2 and atmospheric pollutants emission ( CO, HC, Nox, aldehydes, etc.) The possibility of using the ternary mixture gasoline - alcohol - water, already demonstrated in preliminary experiments, will allow for combining gasoline and alcohol as a transition fuel for future solutions ( including the hydrated alcohol itself), combining the calorific properties of the former with the anti-knocking properties of alcohol and of water. It is probable that the development of internal combustion engine will be oriented by more refined analysis of the respective thermodynamic cycles. Comparing the expected efficiency for Otto Cycle engine, calculated as an exclusive function of the compression ratio, with efficiency measured in engines using the present technology, one can notice a large difference, demonstrating the inadequacy of the model used in analyzing the cycle, based exclusively on the Energy Conservation Principle. The possible refinement, at first sight, would stem from considering the irreversibility of real transformations undergone by the fuel mixture ( Second Law of Thermodynamics).


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Mon Nov 14th, 2005 at 08:54:07 AM EST
[ Parent ]
You're right -- I was searching for a text like the one you linked to, but didn't found it.

But 30 to 50 percent is still not the 90% mentioned above. And 30% efficiency is also only possible if the engine runs constantly at its optimal speed (Hybrid cars partially fix this problem).

by srutis on Mon Nov 14th, 2005 at 11:43:45 AM EST
[ Parent ]
90% was mentioned for Lithium batteries.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Mon Nov 14th, 2005 at 12:00:41 PM EST
[ Parent ]
The high efficiency of maritime Diesel engines is a bit misleading because of the difference between low speed and high speed Diesel engine cycles. Maritime engines are huge and run very slowly, which maximized their efficiency. It's hard to implement a low speed Diesel cycle in a car or truck.

The 90% number for batteries is probably also too optimistic, as current hybrid cars only use a relatively small fraction of the empty-to-full ratio because that helps with battery life. The Toyota Prius only uses about 40% of the rated capacity of the battery.

But, given that the complaint about electric cars is that a 75 mile range is inadequate, if that could be bumped up to say 150 or 200 it would considerably reduce the resistance to electric cars--particularly as oil gets more expensive.

by asdf on Mon Nov 14th, 2005 at 09:22:12 PM EST
[ Parent ]
Substitutes exist at conceivably affordable prices, but they require a very different mindset: public transportation, probably less land per person as it becomes less sensible to live so far away, denser cities.

A rise in prices can lead to more efficient cars. That's largely a matter of consumer choice. Double the price of gas, double average gas mileage (something well within current technology) and transport costs end up just where they started.  Furthermore, transport costs are only one factor. The increasing suburban sprawl of Europe over the past several decades coincided with a steady rise in gas prices through taxation. So even a rise in transport costs will not necessarily stop America's residential patterns.  Add to the fact that most Americans, liberal or conservative, strongly oppose higher density housing anywhere near where they live and I unfortunately don't see much chance of change in residential development patterns.  Does wonders for housing prices as well in NYC. A personal pet peeve of mine but I'm drifting off topic.

by MarekNYC on Mon Nov 14th, 2005 at 07:28:26 PM EST
[ Parent ]
Underwater currents can be tapped, inhabited areas of the Sahara desert can be equipped with solar panels and their output channeled under the Mediterranean for example, and eventually decent output nuclear fusion can be mastered.

All of these things produce only electricty, but electricity can be stored (Lithium...) so cell-powered cars can be expected.

Technological advancements are due in the area of renewable energy sources, seeing as how it is an area that's only just beginning to grow.

All in all I think it's time for a major shift in energy-consumption attitudes, if we don't want the last drop of oil to lead to total war ...

The upcost of a decent hybrid car (electrict+oil), nowadays, can be caught up with in 2 years time by going for less gasoline fill-ups for your car. I'm just saying this but I really don't care, as I only use my bicycle (or public transport, or occasionally get a lift to share a car). I never got around to getting a driver's licence so I just gave up on the idea of ever driving!!

I can tell you ... it's kind of fun to see the world from a non-driver perspective. It may be limiting at times, but you get to adapt.

by Alex in Toulouse on Mon Nov 14th, 2005 at 05:26:28 PM EST
I remember reading "The Mosquito Coast" a while back (forget the Harrisson Ford movie, the original book is nuts, and great). The main character keeps on saying that if they let it, he'd dig a hole to the center of the Earth and tap into the heat down there, and there would then be enough energy for everyone to be just fine ...

But I wonder how dangerous such a thing would be, by releasing heat from the core? Then again, pressure etc would still be the same down there, so I suppose it could adapt? Anyone an expert in this field? Did anyone not sleep during geothermics classes?

by Alex in Toulouse on Mon Nov 14th, 2005 at 05:35:03 PM EST
[ Parent ]
You don't have to dig down very far. But the low thermal conductivity of the earth means that when you cool off one area, you have to start over. This is a problem in thermal areas in New Zealand and California, and, I believe, in Iceland...
by asdf on Mon Nov 14th, 2005 at 09:23:40 PM EST
[ Parent ]
See also the detailed summary of the Denver ASPO conference over at the Oil Drum

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Nov 14th, 2005 at 05:32:24 PM EST
See also an alternate viewpoint at http://peakoildebunked.blogspot.com/ .
by srutis on Tue Nov 15th, 2005 at 01:49:58 AM EST
[ Parent ]
There has been discussions of possible consequences of possible peak oil phenomena in Finland. Although the discussion has been rather muted, some observations were drawn.

The question of oil substitutes has been (at least in public) most throughoutly studied by FDF (hardly a surprise) for military purposes (to survive embargoes and like). Effectively the changes would mean substitution of as much oil products as possible for domestic sources. Examples of such changes include wind power for field applications (like hospitals and headquarters), bio oils for vehicles and rationing if necessary. Necessary oil might also be constructed with gas methods if necessary (although with high cost). Such oil factories would ensure essential functionality of society's transportation needs. The electricity generation is not an issue as it can be carried out with variety of existing means (such as nuclear, hydro, renewables or coal).

Most of the crude oil and its subsequent oil products would be slowly turned into chemical industry raw materials. The high cost of gasoline would eventually change people's tranport habits via costs attached. For example railroad transportation would again become most important travelling method. Number of holiday trips both abroad and within country would fall somewhat. This naturally affects to logistics and job distribution within country although no public studies have been presented on that issue.

To give an idea of what change there is for regular person on grocery store: Seasonal products (like apples) would become seasonal again. The grocery stores would have less products from distant foreign countries because higher transportation cost would make them unavailable as every day products. Air mail would become extremely expensive again so surface mail would be more used. Similar substitutions would be on many other walks of life.

by Nikita on Tue Nov 15th, 2005 at 01:30:58 AM EST
This is utter fantasy to assume there will be a replacement for petroleum (aside from the pipe dream of fusion energy).

You haven't even looked at the amount of inputs needed to use biofuels, the number of needed wind generators, the reality of the great mass of people living on less than '$2' per day who must buy their food and who will starve.

by capslock on Tue Nov 15th, 2005 at 03:37:01 PM EST
You are correct that this whole discussion is skewed towards "The West" trying to maintain its current standard of living. Growth in the Far East and South Asia is likely to have a very significant impact on this entire problem. And while we worry about whether to drive cars or SUVs to work, people in Africa are starving...
by asdf on Wed Nov 16th, 2005 at 09:11:04 PM EST
[ Parent ]


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