Germany plans for Peek oil

[GRG55]

Re: Germany plans for Peek oil

...Think of it another way - the diminishing productivity of debt:


One can argue that the trend in the chart above also applies to the trend of energy extracted from energy used...

...

One can argue that the trend in the chart above also applies to everything that shows diminishing returns...and that covers a hell of a lot of territory. Just about everything taken to excess will show the same trend.

The chart above shows nothing more than the gradually diminishing quality of the allocation of [other people's] capital. Back in the "good ol' days", when mortgages were unheard of, if one married and formed a new household the choices were to live with parents or borrow money from family and friends, themselves often of limited means, to build a home. The introduction of mortgages dramatically increased the pool of capital available to be allocated to the construction of housing. Housing is a durable...a properly constructed and maintained home will last hundreds of years, well beyond the term needed to pay off the debt incurred to create it in the first place. It might also be argued that housing that is owned by the occupants creates other benefits, such as more stable and cohesive communities [debatable imo].

Today we can go into any corner gas station, pick up candy bars, chips ["crisps" for you Brits out there] and and a super-sized Coke [Diet Coke, of course, just to make us feel that we are doing the "right thing" for our bodies] and use credit card debt to buy them. Is it any wonder that the chart above slopes down into the lower right corner?

In recent years we have witnessed a period of housing being "flipped" to the next greater fool in line, all of whom were using mortgage debt...not to build the next durable housing unit, but more often than not to speculate on the ones that have already been created, in some cases years or decades before. Once again, is it any wonder that the chart above slopes down into the lower right corner?

Now maybe one can make the same argument with petroleum...that the initial uses for petroleum were the most valuable uses, but now we are using it to excess, and squandering it on low [or lower] value economic activities. I am sceptical of that argument. Unlike a 100 years ago, today we use petroleum to make all manner of specialized materials and plastics derivatives, critical agricultural inputs, specialized fuels and lubricants that were unheard of in the days of John Rockefeller, and even pharmaceutical inputs. All of these are far more valuable than the kerosene for lamps that prompted Rockefeller to refine the stuff in the first place, and that is one important reason why it makes economic sense [and is profitable] to find and extract higher cost sources of petroleum today.

[gnk]

Re: Germany plans for Peek oil

To extrapolate that trend ad infinitum is a fallacy...it won't happen. And there won't be a diminishing output of energy in aggregate. To suggest either of these outcomes is to ignore human history. What is already happening is that cheap and abundant forms of energy are being converted into more valuable forms [sunlight into electricity, for example].




The economy that will grow in the future won't look like the economy that we are in today, any more than the economy that was growing in, say, New England in 1750 looks anything like economy of New England in 2010. Albeit the transition looks likely to be disruptive for many, but then clinging to the past because of a fear of change or a fear of what the future might hold is also a long standing, well known human tendency

Your fundamental argument requires that one completely suspend all belief that humans can continue to progress and innovate. Once again I will argue that there is absolutely no evidence there is any limit to human ingenuity...and if by chance there is one, we are nowhere near reaching it any time soon.

I want to make it clear that I do not believe that mankind will ever stop inventing and discovering new technologies. Yes, knowledge is cumulative.

But what I am saying is that mankind's history has periods where technological innovation slows down, economies and societies crumble, and a standard of living is lost. It is not a permanent condition, but it is a significant one for those living thru such periods.

Oil is an incomparable source of energy. My take is that cheap oil will leave us and we will not be prepared. The political, economic status quo will not allow a transition until it is too late. Resource wars prove the point that we as a civilization and superpower prefer oil to anything else. It is the most strategic energy source that influences the global flow of money. Windmills and nuclear power plants do not affect petrodollar recycling - oil does.

Think complex systems - not linear, but 3 dimensionally. Try to think of everything that oil has accomplished the past 100 years and how and why it did so.

I believe that replicating oil's fantastic impact on human civilization these past 100 years is a tall order. Nothing comes close to the scale that oil has impacted the globe. Nothing.

Telling me that man is smart and that one day (but we don't know when), that something, (but we don't know what it is yet) will replace oil does not comfort me at all. We've heard it before: hope is not an investment strategy.

The past 30-40 years of intensifying resource wars and dimishing return on oil extraction (EROEI) tells me that things are not going swimmingly, despite mankind's brilliant technological accomplishments.

[jk]

Re: Germany plans for Peek oil

gregor macdonald likes to make the point that we need to use oil at this time for 2 simultaneous purposes: 1. to maintain our current energy consuming civilization, 2. to provide resources for the transition to alternative energy sources and conservation strategies. his conclusion: we don't have enough to do both.

[GRG55]

Re: Germany plans for Peek oil

I want to make it clear that I do not believe that mankind will ever stop inventing and discovering new technologies. Yes, knowledge is cumulative.

But what I am saying is that mankind's history has periods where technological innovation slows down, economies and societies crumble, and a standard of living is lost. It is not a permanent condition, but it is a significant one for those living thru such periods...

Even when one society somewhere on the planet is ascending, such as coal-fueled England in the 19th century, and the oil-fueled USA in the twentieth century, some other society somewhere else is usually in some state of decline. So I think we agree that the situation that the USA finds itself in today is not unique in history...although a good number of its inhabitants seem to think so. Oil is a global commodity, effecting everyone. Even though the situation you describe [peak cheap oil, EROEI, etc.] applies globally, if you spend some time in greater Asia [not just China/SE Asia, but India, much of the Middle East, and even some of the Central Asia republics] you'll quickly discover they aren't agonizing about it the way some North Americans and Europeans seem to be...

Oil is an incomparable source of energy. My take is that cheap oil will leave us and we will not be prepared. The political, economic status quo will not allow a transition until it is too late. Resource wars prove the point that we as a civilization and superpower prefer oil to anything else. It is the most strategic energy source that influences the global flow of money. Windmills and nuclear power plants do not affect petrodollar recycling - oil does.

Think complex systems - not linear, but 3 dimensionally. Try to think of everything that oil has accomplished the past 100 years and how and why it did so.

I believe that replicating oil's fantastic impact on human civilization these past 100 years is a tall order. Nothing comes close to the scale that oil has impacted the globe. Nothing.

Telling me that man is smart and that one day (but we don't know when), that something, (but we don't know what it is yet) will replace oil does not comfort me at all. We've heard it before: hope is not an investment strategy.

The past 30-40 years of intensifying resource wars and dimishing return on oil extraction (EROEI) tells me that things are not going swimmingly, despite mankind's brilliant technological accomplishments.

I've spent most of my adult life finding and producing petroleum. The critical nature of oil in this world is one of the reasons I made a career out of it [that it pays my taxes and feeds my family is another reason], so I don't think you and I are far apart in that view.

Although it could be argued that "Nothing comes close to the scale that oil has impacted the globe", oil is but one of many, many transformative elements in human history. I would argue that widespread electrification of the globe, the discovery of vaccinations [for diseases such as polio] and antibiotics, the domestication of livestock and a whole host of other events and processes were just as important to mankind's current circumstance and standard of living as oil.

Finally, relying on mankind's ingenuity to find and exploit the next transformative element is anything but "hope". It is an absolute certainty...and based on our long history. As for oil, I don't see a need to "find" a direct replacement. All that will happen is that we will displace it, over time, in the most easily substituted uses and reserve what's left for the most valuable and most difficult to substitute applications. That does not mean that the transition is necessarily smooth and crisis free. The probabiliities of dislocative events such as a series of "oil shocks", and indeed more resource wars, is quite good given our past track record. However, we will still be producing and using oil a 100 years from now, but with any luck it won't have the economic and geopolitical stranglehold on us that it appears to have at this moment in time.

[bill]

Re: Germany plans for Peek oil

All that will happen is that we will displace it, over time,

True,

Similar players different product and controlled metering, phased in politically.
Not going to happen soon and not without more crisis.
Anyway here’s an interesting article about thorium.

http://www.popsci.com/technology/art...ust-five-years

08.30.2010
An abundant metal with vast energy potential could quickly wean the world off oil, if only Western political leaders would muster the will to do it, a UK newspaper says today. The Telegraph makes the case for thorium reactors as the key to a fossil-fuel-free world within five years, and puts the ball firmly in President Barack Obama's court.

The idea needs refining, but is so promising that at least one private firm is getting involved. The Norwegian firm Aker Solutions bought Rubbia's patent for this thorium fuel cycle, and is working on his design for a proton accelerator.

http://www.akersolutions.com/Interne...iumReactor.htm

[Starving Steve]

Re: Germany plans for Peek oil

I don't know if we will ever return to the days of heading out onto the freeway in your new Rocket 88, 8-cylinder, Oldsmobile with tail-lights that were part of fins, and at freeway speeds, in your mind at least, those tail-fins did become part of a rocketship into the future. Those were the good-ol'-days in America when my grandfather was showing me the future in his new 1957 Oldsmobile. In 1957, a new car was every two years, every three years for misers.

Well, let me go over my plan for the good-ol'-days to return to North America and spread around the world: We use nuclear power and natural gas and cheap coal, and hydro-electric power to LOWER electric rates to 7cents per kwh. Duke Power Company sells electricity to the public for 7c per kwh by using nukes, coal, nat gas, and hydro, so it can and is now being done in the South-east USA.

We would use cheap nat gas and nukes to heat tar sands and extract light oil from those sands, in vast quantities. That new oil would be added to the world market to lower the price of oil. The strategy would be for govn't and industry, working together, to drive-down the cost of energy by increasing energy supply.

It is totally irrelevant that more total energy in future will have to be used to extract new energy. Nat gas and nuclear, hydro-electric, and coal are not expensive now, no-where near being expensive. That is the way to proceed to flood the world energy market with oil from the tar sands of Alberta. And our ace-in-the-hole is that we have two-hundred years (200 years) of supply, at least.

And then we can drill the deep-sea floor, and in some places such as the California Bight, the shallow sea floor for oil.

And if we had an Energy Department in the US worthy of the name, we could add CHEAP ethanol to gasoline on the agreement that the gasoline would be sold to the public at a cheap price commensurate with the gasoline's reduced octane content. Is this too much to ask for, i.e that the public not be scammed by farmers and refiners in paying for over-priced ethanol fillers in gasoline?

There is no end to the cheap energy that we could render to the public on this planet, if we all use our heads. Let's do it.