Odd solar power?

[GRG55]

Re: Odd solar power?

I think the biggest culprit going forward is that people cling too much to old ways and old methods...

At the dawn of the age of the automobile most people felt the same way...the very idea of giving up their horses for these noisy, smelly, unreliable (and expensive!) new contraptions was preposterous...

[wayiwalk]

Re: Odd solar power?

Every day I commute to work in NJ (and often carpool) and see the highways and sideroads still jammed with large vehicles, SUVs, and one of my favorites - the double wheel in the back large pick up trucks (carrying basically nothing in the bed), I realize just how far everyone has their heads in the sand.

Also, it is a good indication of how much so many people will suffer when gas starts it's price climb to the double digits.....where will all these people see their <20 mpg vehicles?

[GRG55]

Re: Odd solar power?

We have struggled for years to try to explain to readers why oil is irreplaceable. To our way of thinking the reason for oil's irreplaceability ought to be obvious: it was manufactured for us millions of years ago for free, and it's hard to compete with free. All we have to do is find it and dig it up...

Everybody here knows that I have spent most of my career in the oil and gas industry. However, I do find there is an analogy here to solar and wind power...albeit an imperfect one.

To maintain such an astronomical flow of oil requires millions of pumping units large and small.

Pumping Unit Belridge Oil Field, Kern County, CA

"To maintain such an astronomical flow of electrons requires millions of solar panels & wind turbine units large and small..."

PS: Nice picture from your recent trip to Bakersfield Eric. It's generally rare to find a beam pump that clean! For EROEI fans, note the electric motor that drives this oil pump...converting stationary power, perhaps from one of California's "renewable" electric energy sources, into liquid transportation fuel. And for those that think these oil pumps spoil the landscape, how is it much different for a wind farm...other than the stark white vs oil black colour of the equipment

This is to retrieve the oil that already exists, that has already been manufactured by nature millions of years ago. It is available for the cost of finding it, pumping it out of the ground, refining it, transporting it, and storing it.

...

"This is to retrieve the solar energy that already exists, that has already been manufactured by nature 8.3 light minutes ago. It is available for the cost of capturing it, refining it [into electricity], transporting it [over wires], and storing it [in batteries]."

As I said, imperfect analogy. But hopefully food for thought...

At present wind and solar combined account for less than 1% of global primary energy demand. And nobody is suggesting they are a viable substitute for liquid hydrocarbons as a transport fuel.

But it does seem wind and solar will be a part of the inevitable adaptation that will be driven by PCO and the policy decisions that will continue to flow from the climate change bandwagon (it is irrelevant whether one believes or denies; it is here to stay because there are now too many vested interests, especially tax-hungry governments, to alter the outcome). That is because those raw energy sources, the sun and the wind, are abundant and seen as "free" (every economist should cringe at that last observation).

And adaptation it will be. All the talk around here of PCO poverty-striken commuters being forced to suddenly revert to mopeds and shoe leather is hilarious. Humans are incredibly adaptive and incredibly ingenious, so we will adapt while we (well most of us here) continue to seek life, liberty and the pursuit of happiness (Department of Homeland Security notwithstanding). A few years ago, on another thread, I lamented the fact that the retirement of the Concorde jets marked the first time in human history that we removed a form of transportation and did not replace it with something even faster. But I see there is a posting by another iTuliper here that demonstrates yet again we have not reached the limits of our ingenuity (or our desire to go faster and further).

Governments will do what they usually do. Try to "help", but often instead create an unintended negative consequence. C1ue is correct (in his post on this thread) that the global fossil fuel subsidies, that get so much attention from the renewable energy/climate change cohort, are dominated by oil producer and developing nations directly subsidizing their citizens. Saudi Arabia and Iran alone accounted for $140 Billion of the estimated 2011 total $525 Billion of global fossil fuel subsidies (on my last trip to the Persian Gulf in August the price of a litre of petrol in the US$-pegged local currency was exactly the same as when I moved there 12 years earlier...which means the size of the subsidy in real terms is increasing). Factor in all the other petro-kleptocracies trying to avoid their own Arab Spring plus consumer nations such as China and India, that are politically incapable of escaping the growing hydrocarbon consumer-subsidy monsters they have created, and the picture hopefully becomes clearer. "Green" or "renewable" energy subsidies, on the other hand, tend to go directly to the rent-seeker interests of politically-favoured corporations (few of which are in developing nations), and their FIRE economy financial backers (hello hydrogen buses at Whistler, B.C.). It's apples and oranges folks.

[GRG55]

Re: Odd solar power?

Every day I commute to work in NJ (and often carpool) and see the highways and sideroads still jammed with large vehicles, SUVs, and one of my favorites - the double wheel in the back large pick up trucks (carrying basically nothing in the bed), I realize just how far everyone has their heads in the sand.

Also, it is a good indication of how much so many people will suffer when gas starts it's price climb to the double digits.....where will all these people see their <20 mpg vehicles?

What you observe is actually showing how small a change so many people in the USA need to make to dramatically cut their consumption (and costs)...without materially reducing their standard of living, or suffering some sort of "hardship". Long before we all end up jammed 6-to-a-carpool in a hydrogen powered jelly-bean, the dually pick-ups will have been traded for a much more efficient and just as comfortable diesel sedan, and USA oil consumption will have continued on the long term, slow decline trend it has been on since 2005.

[EJ]

Re: Odd solar power?

Everybody here knows that I have spent most of my career in the oil and gas industry. However, I do find there is an analogy here to solar and wind power...albeit an imperfect one.

"To maintain such an astronomical flow of electrons requires millions of solar panels & wind turbine units large and small..."

PS: Nice picture from your recent trip to Bakersfield Eric. It's generally rare to find a beam pump that clean! For EROEI fans, note the electric motor that drives this oil pump...converting stationary power, perhaps from one of California's "renewable" electric energy sources, into liquid transportation fuel. And for those that think these oil pumps spoil the landscape, how is it much different for a wind farm...other than the stark white vs oil black colour of the equipment



"This is to retrieve the solar energy that already exists, that has already been manufactured by nature 8.3 light minutes ago. It is available for the cost of capturing it, refining it [into electricity], transporting it [over wires], and storing it [in batteries]."

As I said, imperfect analogy. But hopefully food for thought...

At present wind and solar combined account for less than 1% of global primary energy demand. And nobody is suggesting they are a viable substitute for liquid hydrocarbons as a transport fuel.

But it does seem wind and solar will be a part of the inevitable adaptation that will be driven by PCO and the policy decisions that will continue to flow from the climate change bandwagon (it is irrelevant whether one believes or denies; it is here to stay because there are now too many vested interests, especially tax-hungry governments, to alter the outcome). That is because those raw energy sources, the sun and the wind, are abundant and seen as "free" (every economist should cringe at that last observation).

And adaptation it will be. All the talk around here of PCO poverty-striken commuters being forced to suddenly revert to mopeds and shoe leather is hilarious. Humans are incredibly adaptive and incredibly ingenious, so we will adapt while we (well most of us here) continue to seek life, liberty and the pursuit of happiness (Department of Homeland Security notwithstanding). A few years ago, on another thread, I lamented the fact that the retirement of the Concorde jets marked the first time in human history that we removed a form of transportation and did not replace it with something even faster. But I see there is a posting by another iTuliper here that demonstrates yet again we have not reached the limits of our ingenuity (or our desire to go faster and further).

Governments will do what they usually do. Try to "help", but often instead create an unintended negative consequence. C1ue is correct (in his post on this thread) that the global fossil fuel subsidies, that get so much attention from the renewable energy/climate change cohort, are dominated by oil producer and developing nations directly subsidizing their citizens. Saudi Arabia and Iran alone accounted for $140 Billion of the estimated 2011 total $525 Billion of global fossil fuel subsidies (on my last trip to the Persian Gulf in August the price of a litre of petrol in the US$-pegged local currency was exactly the same as when I moved there 12 years earlier...which means the size of the subsidy in real terms is increasing). Factor in all the other petro-kleptocracies trying to avoid their own Arab Spring plus consumer nations such as China and India, that are politically incapable of escaping the growing hydrocarbon consumer-subsidy monsters they have created, and the picture hopefully becomes clearer. "Green" or "renewable" energy subsidies, on the other hand, tend to go directly to the rent-seeker interests of politically-favoured corporations (few of which are in developing nations), and their FIRE economy financial backers (hello hydrogen buses at Whistler, B.C.). It's apples and oranges folks.

Shot a fair number of photos and videos there to use in our PCO video.

My cousin explained that most of these pumping units run on gas recovered locally. Didn't see any evidence of any birds flying into them and getting chopped up into breast and thigh meat.

The story of Belridge is fascinating. For readers who saw "There Will Be Blood," the movie was shot in Texas (no telephone wires to date scenes) but is about the rough and tumble world of oil field development in nearby Kern where we stopped for lunch and to take a few photos. The who thing was owned by one family up until the 1980s when it was sold to Shell for something like $1.8 billion. On hearing this my wife noted wryly that at the top of the tech bubble one of the companies we were invested in, Arrowpoint, in had a valuation of nearly $5 billion when it was sold to Cisco. We sold the stock at the earliest opportunity a few months later. Years later Cisco wrote it down to a few million bucks. Now Belridge is mostly owned by an Israeli energy company.

I particularly like this shot of an old telegraph pole with the telegraph wires still hanging off of it. Indicates just how old these still-productive fields are.

I was lucky to have a cloudy day; unusual there, and good for contrast and mood.

PCO doesn't mean Mad Max, at least not in developed countries.

My message has always been that conservation is the name of the PCO game for the US. Germany gets by just fine with about half the per capita oil consumption of the US. In fact, the idea of the TECI Economy is to re-build the productive economy with a focus on the development and commercialization of energy-saving technologies. Government's role can be to resolve chicken-and-egg market barriers, as the US government did by investing billions in a national highway transportation system.

The future of personal transportation in the U.S. is not donkey carts and mopeds but fewer, smaller, and more efficient cars.

How small and efficient? Accelerate the weight decline and mileage increase trend since the 1970s.

Also. more of these will go into service for the increasing numbers of people who will not be able to afford cars and the fuel to run them:

Add it up and it's not the end of the world, but is will mark a stage in a long process of adjustment to a new high oil price reality.

[GRG55]

Re: Odd solar power?

Shot a fair number of photos and videos there to use in our PCO video.

My cousin explained that most of these pumping units run on gas recovered locally...

Usually there is some associated gas that comes from the reservoir with the oil production, and this low pressure "casing head gas" can be used to run a single-cylinder "put-put" gas engine with flywheel that drives the beam pump. However, one can see from the poles and wires in your photographs that this field has been electrified. The electric motors are more reliable, quieter and cost less to maintain. Electrifying the field also has the advantage that the motors/pumps can be put on timers to balance depleted inflow rates against pump capacity. Finally, in fields with thousands of closely spaced wells it is now common to replace costly operators in trucks with supervisory control and data acquisition (SCADA) systems that use radio links and computers to monitor and control the wells, and send the operators only to those wells that the system indicates need manual intervention or attention. The massive Permian Basin fields in West Texas are one good example of these sorts of changes.

Looking forward to the video!

The story of Belridge is fascinating. For readers who saw "There Will Be Blood," the movie was shot in Texas (no telephone wires to date scenes) but is about the rough and tumble world of oil field development in nearby Kern where we stopped for lunch and to take a few photos. The who thing was owned by one family up until the 1980s when it was sold to Shell for something like $1.8 billion. On hearing this my wife noted wryly that at the top of the tech bubble one of the companies we were invested in, Arrowpoint, in had a valuation of nearly $5 billion when it was sold to Cisco. We sold the stock at the earliest opportunity a few months later. Years later Cisco wrote it down to a few million bucks. Now Belridge is mostly owned by an Israeli energy company.

I particularly like this shot of an old telegraph pole with the telegraph wires still hanging off of it. Indicates just how old these still-productive fields are...

We shall see something similar with the shale gas wells that have been drilled in recent years. Rapid depletion leading to a relatively stable but very low inflow/production rate that will go on for many, many years as the fractures are fed by the tight-rock shale matrix. These gas wells will be shut-in during the low part of the price cycle, just as the stripper oil wells in Kern County and West Texas were as crude prices fell through the 1980s and 1990s. And they will be put back on production as soon as they become economic...which will be defined as covering their marginal operating and maintenance costs...the huge capital investments having been long written down as a loss just as Cisco did with Arrowpoint. 50 years from now these expensive shale gas wells will still be producing and most likely will have been rejuvenated a few times, using improved well workover technologies, to extend their life in the same fashion as the Kern oil wells in your photos.

I was lucky to have a cloudy day; unusual there, and good for contrast and mood.

PCO doesn't mean Mad Max, at least not in developed countries.

My message has always been that conservation is the name of the PCO game for the US. Germany gets by just fine with about half the per capita oil consumption of the US. In fact, the idea of the TECI Economy is to re-build the productive economy with a focus on the development and commercialization of energy-saving technologies. Government's role can be to resolve chicken-and-egg market barriers, as the US government did by investing billions in a national highway transportation system.

The future of personal transportation in the U.S. is not donkey carts and mopeds but fewer, smaller, and more efficient cars.

How small and efficient? Accelerate the weight decline and mileage increase trend since the 1970s.

Also. more of these will go into service for the increasing numbers of people who will not be able to afford cars and the fuel to run them:

Add it up and it's not the end of the world, but is will mark a stage in a long process of adjustment to a new high oil price reality.

[shiny!]

Re: Odd solar power?

We shall see something similar with the shale gas wells that have been drilled in recent years. Rapid depletion leading to a relatively stable but very low inflow/production rate that will go on for many, many years as the fractures are fed by the tight-rock shale matrix. These gas wells will be shut-in during the low part of the price cycle, just as the stripper oil wells in Kern County and West Texas were as crude prices fell through the 1980s and 1990s. And they will be put back on production as soon as they become economic...which will be defined as covering their marginal operating and maintenance costs...the huge capital investments having been long written down as a loss just as Cisco did with Arrowpoint. 50 years from now these expensive shale gas wells will still be producing and most likely will have been rejuvenated a few times, using improved well workover technologies, to extend their life in the same fashion as the Kern oil wells in your photos.

You answered the question I've had for a long time, that of "how long will those shale gas wells be producing?". Thank you!

If I may ask, what is your opinion on Texas' long-term oil and gas production? Still a lot to go or mostly played out?

[EJ]

Re: Odd solar power?

You answered the question I've had for a long time, that of "how long will those shale gas wells be producing?". Thank you!

If I may ask, what is your opinion on Texas' long-term oil and gas production? Still a lot to go or mostly played out?

Berman doesn't claim the wells will stop producing gas, but that reserves are far lower than claimed by the guys banking the projects because depletion rates are understated by the guys banking the projects.

The blue line is the banker's extrapolation. The red line is what Berman's team saw
in measurements in aggregate at 1,000+ wells. The orange line is my extrapolation.
Note the log scale.

Yes, the gas will flow for 100 years. No, not at the volume required to replace oil.

Art's presentations are worth a skim.

[GRG55]

Re: Odd solar power?

Berman doesn't claim the wells will stop producing gas, but that reserves are far lower than claimed by the guys banking the projects because depletion rates are understated by the guys banking the projects.

The blue line is the banker's extrapolation. The red line is what Berman's team saw
in measurements in aggregate at 1,000+ wells. The orange line is my extrapolation.
Note the log scale.

Yes, the gas will flow for 100 years. No, not at the volume required to replace oil.

Art's presentations are worth a skim.

The game is to manage the reserves to production [R/P] ratio...if the production is allowed to fall then it becomes more difficult to maintain the absolute reserves numbers and the NPV of the reserves being touted. So that means drill lots more wells, ever more exotic completion techniques (expensive, multi-stage fracing) and the premature installation of wellhead and field compressors to lower the pressure the tight shale reservoirs have to produce against.

As my friend said, "economically irrational" when judged by the standards of a technically and financially sound depletion plan for the resource. But perfectly rational when viewed through the lens of a Wall Street financed promotion.

...If I may ask, what is your opinion on Texas' long-term oil and gas production? Still a lot to go or mostly played out?

Texas will be producing oil at slowly but steadily declining trend rates for many years to come. There are still a lot of known reserves in Texas. What will determine the actual outcome will be crude oil price and the cost to find, develop and produce [which includes potential carbon taxes]. If you want to see the effect that changing oil price has on Texas reserves have a look a the chart at this link: http://www.eia.gov/dnav/pet/hist/Lea...CRR01STX_1&f=A


Not only are more reserves economic at higher prices, but the higher price also drives the technology innovation that allows even more reserves to be extracted over time. That is plainly visible with what has happened with Texas reserves in that EIA chart. However, remember that although the reserves trends are sound, just as with shale gas it is not difficult for absolute numbers to be overpromoted by the companies, consultants, financiers and government officials...

[shiny!]

Re: Odd solar power?

Thank you, GRG55 and EJ. I appreciate you taking the time for my ignorant questions.

[dlew22]

Re: Odd solar power?

Thank you, GRG55 and EJ. I appreciate you taking the time for my ignorant questions.

Hi Shiny,

keep asking, if you are asking then there are a lot of other students thinking the same way!

[bpwoods]

Re: Odd solar power?

dlew22: There are two crucial issues with fossil fuels. The money costs and the energy costs. The former is getting a good airing and whilst not-un-important, it is the latter that is the 'rate-limiting' determinant. This is not strictly accurate, but it will do as a quick-and-dirty approximation.

Previously, exploration, extraction and refining was paid out of retained earnings and credit. Now its virtually all front-loaded credit and consequently the financial return has to be that much greater. Its much easier to earn an income from interest than finding and selling a commodity - no matter how much it is in demand. Why are the majors buying existing reserves? And how are they financing those purchases?

If you do not input any energy, you will not get any energy - irrespective of the nature of the final energy you are talking about. Energy units (and there are several) never change in energy value terms - but they sure do in money value terms. You must understand this carefully.

The only 'primary' (nature supplied) energy sources are solar, hydro and wind. The energy in each of these needs sophisticated engineering technologies to generate a usable form of energy (usually electricity). The embedded energy in the technologies is colossal and this includes maintenance of existing generating capacity (which tends to wear out) and new stuff - they consume a lot of concrete, steel and copper. The fossils are coal, oil and gas, each of which has to be 'found', extracted and refined in some manner, then delivered to consumers in a usable form. Again the technologies have very large embedded energy contents - and if you are considering 'newer' and more difficult to access coal, oil and gas - you have to input more and more of your existing energy (fuels and electricity) to extract them. In economic terms the fixed costs (already spent) are not a future problem (apart from any debt overheads), its the future variable costs (in energy units) that will cause significant social and political problems.

By all means keep a careful watch on the money costs of your energy needs - its much easier. But if you fail to consider your energy costs - which is not so easy, your in big trouble. An increase in technologial innovation and capability comes with an increasing (not decreasing) energy cost! Many folk do not understand this.

[Polish_Silver]

Re: Odd solar power?

. . . Hell, even the bankers that bankroll that rational consumer garbage flowing out of the Chicago School blow money on $10,000 suits and yachts and other frivolous nonsense that's not economically viable in that way for no damned rational reason. They just all do it. I don't see why energy should be any different than any other sector.

A $10k suit is not a clothing solution for a national economy. Neither is a $100k electric powered sports car a transportation solution. There are high priced niche markets in every sector, but these are not long term solutions for mass economic needs, which is what we need for energy.

There may be no "single solution" to oil depletion. We will have smaller cars, live closer to work, carpool, etc.
Nuclear power may produce most of our electricity. Plane travel will become gradually more expensive.


Solar power at best solves a grid power problem, which could also be solved by nuclear power. It does not solve the "liquid fueled transportation" problem.

[EJ]

Re: Odd solar power?

dlew22: There are two crucial issues with fossil fuels. The money costs and the energy costs. The former is getting a good airing and whilst not-un-important, it is the latter that is the 'rate-limiting' determinant. This is not strictly accurate, but it will do as a quick-and-dirty approximation.

Previously, exploration, extraction and refining was paid out of retained earnings and credit. Now its virtually all front-loaded credit and consequently the financial return has to be that much greater. Its much easier to earn an income from interest than finding and selling a commodity - no matter how much it is in demand. Why are the majors buying existing reserves? And how are they financing those purchases?

If you do not input any energy, you will not get any energy - irrespective of the nature of the final energy you are talking about. Energy units (and there are several) never change in energy value terms - but they sure do in money value terms. You must understand this carefully.

The only 'primary' (nature supplied) energy sources are solar, hydro and wind. The energy in each of these needs sophisticated engineering technologies to generate a usable form of energy (usually electricity). The embedded energy in the technologies is colossal and this includes maintenance of existing generating capacity (which tends to wear out) and new stuff - they consume a lot of concrete, steel and copper. The fossils are coal, oil and gas, each of which has to be 'found', extracted and refined in some manner, then delivered to consumers in a usable form. Again the technologies have very large embedded energy contents - and if you are considering 'newer' and more difficult to access coal, oil and gas - you have to input more and more of your existing energy (fuels and electricity) to extract them. In economic terms the fixed costs (already spent) are not a future problem (apart from any debt overheads), its the future variable costs (in energy units) that will cause significant social and political problems.

By all means keep a careful watch on the money costs of your energy needs - its much easier. But if you fail to consider your energy costs - which is not so easy, your in big trouble. An increase in technologial innovation and capability comes with an increasing (not decreasing) energy cost! Many folk do not understand this.

Nuclear has the lowest electricity production cost among three major types in the U.S., coal, gas, and nuclear.

We ignore petroleum in this analysis because oil burning plants disappeared in the mid 1970s after the dollar and thus oil was no longer fixed to gold. Burning oil to produce electricity suddenly became wildly expensive. For countries like France that relied on oil fired electricity generation plants, the price spike proved disastrous. The 1970s oil price shock induced France to undertake a crash nuclear program that made France the largest nuclear power generator to this day.

Nuclear is cheaper than all other forms of fuel-fired plants despite far higher operations and maintenance costs.

The reason is that nuclear fuel is cheap and abundant.

High nuclear O&M costs present an opportunity.

O&M as Percent of Total Production Costs
Nuclear: 69%
Coal: 22%
Gas: 12%

If nuclear O&M costs can be lowered, then we'd have cheap and abundant electricity that can be used, for example, in the production of oil that is currently uneconomical because the energy input costs from oil, coal, and gas are too high.

A friend who invested in one of the companies I ran as CEO retired from the VC industry and, being an intellectual sort of person and easily bored, decided to get a Harvard PhD in the nuclear energy field. His dissertation, which I can probably distribute to subscribers if there is interest, concluded two years ago:

1) The NRC in the U.S. shot itself in the foot in the 1960s and 1970s by overreaching and approving unsafe reactors. After the Three Mile Island disaster, the NRC went overboard in the other direction and for all intents and purposes put the industry on ice.
2) Starting in the middle of the first decade of the 2000s, not coincidentally in my opinion around the time global oil production stopped growing, a resergence of interest and investment in nuclear power plants re-emerged in the form of a technology race to produce the next generation of small, modular, safe, and cheap plants.

The Obama administration's view on this race and the regulatory trend are unmistakably positive.

Bottom line, within ten years there will be several competing, factory-produced small nuclear plant products, such as those from Hyperion Power Generation, that will be available for under $25 million each. Total average 10 year production cost per kWh will be around $.01 or 1/6 that of nat gas once nat gas prices rise to long-term market levels in line with oil prices.

No surprise that many of Hyperian's initial 100 orders are from the oil industry.

Next generation nuclear, as a low cost form of fixed energy production, will be used to maintain the supply of liquid transportation fuels such as diesel from crude refined from shale, as dwindling oil supplies become more energy-intensive to extract.

[BadJuju]

Re: Odd solar power?

Bottom line, within ten years there will be several competing, factory-produced small nuclear plant products, such as those from Hyperion Power Generation, that will be available for under $25 million each. Total average 10 year production cost per kWh will be around $.01 or 1/6 that of nat gas once nat gas prices rise to long-term market levels in line with oil prices.

No surprise that many of Hyperian's initial 100 orders are from the oil industry.

Next generation nuclear, as a low cost form of fixed energy production, will be used to maintain the supply of liquid transportation fuels such as diesel from crude refined from shale, as dwindling oil supplies become more energy-intensive to extract.

New nuclear reactors are finally starting to come online in this region after being mothballed for a long time. I hope to see many more as I think nuclear is the best option we have going forward. The whole blowback against it is utterly silly. At least with nuclear power, the waste can be controlled and pollution minimized greatly. With coal and gas, you cannot do a damn thing but breathe it in.