Gail Tverberg: Why There's No Economically Sustainable Price For Oil Anymore

OK, so the Freeway of Fossil Fuels suddenly peters out in a slum. What now? Do we take that inviting broad turnoff called Renewables even though we know it too, peters out?
Or do we stop, get out of the car, hand in our man-card, and ask the locals, the experts.

That old man, Storms, he points to a narrow footpath. He says that if you abandon your baggage and take it eventually you may get to open country. 

Does he guarantee success? Of cause not. But we know which roads guarantee failure.

https://youtu.be/S4wUUpMBdQY

I am all for renewables, but they have a long, long, long way to go!

Yes, I agree that covering the basics is very important, and I thought that the first two thirds of the pod cast were very good, the problem was the punch line.  A 600 calorie diet.  Is that going to motivate people to change behavior?!  So here is the choice that we are presenting, listen to the happy talk that things are OK or listen to what is presented at PP and then go sit in my garage with the car running.  What is the average person going to choose?
Sun Tzu in the Art of War pointed out that if you push people into a corner, they fight to the death.  Pod casts like do more damage than good because they push people into a corner and lead them to defend their existing this belief system to the death. What alternative are we providing?  Ammo and homestead in some remote portion of the country?  After someone arrives here, receives and understands the message, then what?  Like the parody on preparedness for nuclear war from the sixties, bend over, put your head between your legs and kiss your ass good bye?

Yes, they exaggerate the claims of the rate of installation of alternative energy sources, but as screwed up as that may be, it may actually be doing more good in creating the actual change in behavior then Gail's pod cast.  I am certainly not advocating that, but information without a compelling vision can be destructive, as good as our intentions may be.

I wholly disagree with the assessment in bold for two reasons.

  1. The pace of installation is utterly insufficient to make anything but a partial dent by the time we are in a state of declining net energy from fossil fuels.  Once that insufficiency hits we're well on our way to having to triage our priorities.  Will we spend the fuel on the military or on feeding ourselves?  On maintaining our infrastructure or building new houses?  On expanding jobs and trade or on keeping ourselves warm?  

Choices will have to be made and it is not at all reasonable to propose that what we'll be doing is both replacing existing power generation AND expanding that base by installing renewables.  If we are not expanding power utilization then the economy is not expanding, and if the economy is not expanding then the financial system is collapsing.  If the financial system is collapsing then people are tossed out of work and the next layer of misery begins.  

  1. 99.9% of people, clinging to their beliefs, will read things like the FT article and come to the instant conclusion "Oh good, now I don't have to make any changes to my lifestyle."  Hence, no change in behavior.  None.  This thinking is rooted in the idea that our clever monkey selves will create enough new alternative energy that our behaviors will not have to be modified at all.

Really, it's not terribly difficult to understand people. The vast majority will do everything in their power to avoid having to change.  

So the larger question becomes…what leads people to change, besides pain?  The painful route is easy and predictable.  It's the usual choice.  

But what leads to change via insight?  Well, there has to be a compelling vision, and I agree a 600 calorie diet is not a very compelling vision, so Gail's view pretty much fails on that front.  But it does point to the eventual pain, so perhaps there's a tiny minority that can see the eventual pain and decide to change on their own now, before it's forced on them.  Call this the "pre-pain avoidance via insight" path.  Rare, but effective.

So what's the new vision that will guide us?  What is even more compelling than the luxury of modern life?

Well, modern life really 'wins' at covering the basics.  It's never been easier to work for one's daily calories, or warmth (or cool), or to get from point A to point B.  The bottom of Maslow's hierarchy of needs is well oiled.

But what of the higher levels of his pyramid of needs?  Ah.  Here's where so-called modern life fails miserably.  The statistics bear this out.  Obesity, depression, self-numbing and violence are all at epidemic proportions.

Here's where the new vision can come along and be even more compelling.

I don't exactly know how to go about creating that yet, but it has to be along the lines of moving away from the extractive and isolationist institutions, systems and cultural practices of old (described so well in Why Nations Fail) and towards new institutions, systems and practices that are regenerative and relational.

We are out of relationship with mother earth and each other.  There's no other way for me to view the way the protectors are being treated in North Dakota right now.   It's disrespectful in the extreme, violent, and only separated from how Columbus treated the Hispaniola by slight degrees.  

By coming back into relationship we will find greater purpose, joy and meaning.

Modern life is, let's face it, really meaningless.  If there were some higher meaning in acquiring stuff, power, privilege and money then rich people would be the happiest people ever alive.  But they are not, and quite often the exact opposite.  So that cultural meme is not just wrong, but really wrong.

So what to do?  We begin by living our own lives with greater meaning, health, connection, and joy.  And people will see that and some will be curious and want to join in.  Either we do that enough to create a critical mass in time, or we don't.

But we don't do it by telling people about it alone.  We do it by living it too.  Words alone are insufficient.  Actions matter.

Flashback WWII. Germany invades Russia. Russian chances look good at first. Then German supply lines break down. Not enough fuel. Technology fails. Germany fails. Russia “wins”. Many die on both sides.
There is no compelling vision at this point in time. Our choice is to side with fuel and technology OR or the overwhelming force of our planet. The battle front is pourous.
Expect losses on both sides. Hopefully, some of us will be among them. Then the compelling vision(s) will emerge.
This is our predicament as I see it.

Going a bit Straussian on us, are you?

Shoud read “Russian chances look bad!” sorry

The Mainstream Media is putting out a very different narrative, a very different "universe of information" than what we are about here at the PP site. So I completely agree that Chris and all the other contributors need to keep hammering away. Better to err on the side of repetition, since as somebody already said, we do have guests and new people coming on the site.
Taking action, of course is all-important, but without the reminders of how things really are that we get here, it is so easy to become complacent. I need to remind my self sometimes why there is a for sale sign in front of my house. (It is there so I can have a hobby farm and be more self-sufficient ASAP.) The internet has its weaknesses, lots of the "What Should I Do" kinds of things are probably better learned face-to-face with people you know in real life. But I'm part of PP because I need to stay informed

btw, Mother Jones has been covering the NoDAPL  situation in N. Dakota: http://www.motherjones.com/politics/2016/10/dapl-protest-photos-dakota-access-pipeline-arrests

We need much more of this:

I don't exactly know how to go about creating that yet, but it has to be along the lines of moving away from the extractive and isolationist institutions, systems and cultural practices of old (described so well in Why Nations Fail) and towards new institutions, systems and practices that are regenerative and relational.

We are out of relationship with mother earth and each other.  There's no other way for me to view the way the protectors are being treated in North Dakota right now.   It's disrespectful in the extreme, violent, and only separated from how Columbus treated the Hispaniola by slight degrees.  

By coming back into relationship we will find greater purpose, joy and meaning.

Modern life is, let's face it, really meaningless.  If there were some higher meaning in acquiring stuff, power, privilege and money then rich people would be the happiest people ever alive.  But they are not, and quite often the exact opposite.  So that cultural meme is not just wrong, but really wrong.

So what to do?  We begin by living our own lives with greater meaning, health, connection, and joy.  And people will see that and some will be curious and want to join in.  Either we do that enough to create a critical mass in time, or we don't.

There is so much to explore there, that is meaningful and important.  I would have loved to hear that posed to Gail.  Thanks for your response.

My FaceBook feed is alive with Standing Rock right now: Redirecting...

I've been Tweeting, etc.

This is one of the most significant movements of our times.

Question:  If one were to suddenly decide to say "no" to continued corporate exploitation of the earth and its inhabitants, what would that actually look like?

Answer:  Standing Rock.

So don't let it be said "nobody is doing anything."  People are doing something.  The correction question is "what are you doing?"

Question:  What would an over-the-top and wildly inappropriate use of tactics and subtle messaging look like if used against a nation's own peaceful protestors?

Answer:  this.

 

Where I live, I turn down the thermostat to 15 C. at night (we live north of the fiftieth parallel ) and crawl under my wool comforter, sleep like a baby because I don't hear the furnace come on during the night. We don't flush the toilet after every "piddle", don't shower every morning, make a trip to the store every couple of weeks(rural living), walk to the neighbors for a coffee occasionally and compost every scrap of waste produce we generate which ends up around the tomatoes or raspberries. We turn off the light when we leave a room, eat well, but in not in excess (my BMI is 24.2) and try to enjoy each others company and watch the Boob tube about 4 hours a week. 
I live in one of the richest countries in the world and waste more energy in a day than most Indian's use in a week. Improvements are made by increments and if we all did a bit, we may all avoid the pickle we face.

For playing a bit of devils advocate to pull this out in the open, but it is important in the extreme to me.  It pulls together the disparate cultural, economic, political changes that will a critical part of our transformation to a sustainable society.  Putting meat on those bones is something that we can build together to truly create a world that we can hand to our children.  The critical act of analysis "what is" is no substitute for creative act of manifesting a world worth inheriting.  The fields are ripe, but the workers few.

Two daughters had just flown in on urgent flights, one from Boston and one from San Francisco.  They gathered their mother up in their rental car and brought her directly from the airport to the hospital for an “intervention” with the medical team caring for her.  Both daughters were highly intelligent professional women who cared deeply for their mother. 
It was Saturday and the oncology, primary care, endocrinology and radiation therapy centers were not open.  So naturally, they brought her to the only open medical department–the ER.

They explained that “things just were just not getting done.”  Her care was “slipping through the cracks.”  They concluded that there mother was “not being assertive enough,” and as a result, just was “not getting the care she needed.”  They were not going to put up with this any longer and were here to insist that she was treated effectively and promptly.

I left the patient room and returned to the doctor’s work-area to look through her chart and piece together the background.  She had a malignancy.  It was first found to be metastatic 6 months earlier and 10 days ago she presented with a headache leading to the discovery of metastases in skull, ribs and spine.  A whole body survey scan found mets in multiple organs –all progressing.  Both the primary and “rescue” chemo protocols had failed.   Her appetite was gone, she was weakening.  She was in the final weeks of life.

The family’s story (conceptualization) was that the mother was sick and that “good medical care” would restore her to health.  They concluded (from afar) that the medial system was uncaring and negligent and required the intensity of their physical presence to demand an awakening from its indifference and get “this cancer problem resolved.”  But their story was not accurate.

Sometimes the situation is that a person is dying and that there is no effective treatment.

Their task was to find a new narrative, in synch with reality, to make the next stage of life as meaningful and full of caring as possible.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to see interviewed again is Nate  - also from the Oil Drum.
 

In a 2009 paper published at www.mdpi.com/journal/energies Charles Hall, Balough and Murphy state that their research shows an “extended EROI” of 3 to 1 as being the minimum necessary to support any transportation fuel. 3:1 gets the oil based fuel to be delived to the service needed (hauling freight, heating a house & so on.) It does not include environmental degradation, military support, or even the human labor costs of getting the fuel.With this number there is also no surplus for art, education, health care and similar “non productive” pursuits of civilization. They did not weigh in on agriculture but did say that any alternative energy source with an EROI of less than 10:1 was being susidized by fossil fuel. The paper is “What is the Minimum EROI that a Sustainable Society Must Have?”

I'm on the steering committee of our local 350 activist group trying to address climate change.  A couple of days ago, someone in the group told me about an online gathering starting to work on formulating new economics that move beyond the current fraud-based, planet assaulting system.  I just saw one of the people in the video linked below, climate activist Bill McKibben.  He spoke at an event I helped conceive and arrange locally last Friday.   He's a low key guy, but a phenomenal, historic figure, as far as I'm concerned.  
I'm sure that some PP members would have different approaches to their ideal future than the elements this particular group is forming up, linked below.  Great!  Let's hear them!   I was glad to hear Arthur's thoughts about the Committee of Humans and out-of-the-box thinking.  I wrote a response that was then somehow lost in the new bot detection system, and had to move on to other work.

The point is, I'm glad that I'm finally seeing more talk about what the world could look like beyond the great dysfunction we all see happening.  In politics, I've been feeling troubled by the fact that, here in the US, I have to pull for a deeply corrupt Establishment reign to continue, just so a dangerously self-absorbed, uninformed, divisive and fatally flawed human being won't be put in charge of one of the most powerful countries in the world.  No real choice.  Better to do my basic civic duty for the passing, old world, but work and look far beyond…

It's possible to be over-fascinated by the spectacular, end-over-end car crash underway (I know I often am).   Better to keep our eyes on the prize…

http://thenextsystem.org/

With my fall garden. Kelsey pulled the cultivator while Quin whinnied from separation anxiety. Mom was grateful for meaningful work with me, away from her 500lb. 3mos old daughters demands.
we still need a miller and a tanner/harness maker.

I've been thinking about the Hill's Group and SRSRocco's interview with Louis Arnoux. I'm having a bit of cognitive dissonance. Their theory is that oil only has so much energy per unit. The more that is required to produce the final product, the less that is available to the end consumer. (So far, so good.) They've gone further and calculated what the theoretical consumer value of petroleum is at any time. Here's where I have my cognitive dissonance. The gasoline I buy today has about the same energy value as the gasoline I bought 10, 20, 30 years ago. Why is it worth less? I just can't wrap my mind around that concept.
I would think that enterprises that have a mix of wells/processors that aren't profitable would just go out of business. As a result, there would be less supply on the market and prices would go up accordingly. Today, there appears to be plenty of petroleum on the market. Is it because all the producers who can't make a profit at these prices are still able to get funding so they can continue?

As Stan said, it is complicated. Saudi Arabia/Russia didn't want to lose market share so they kept pumping to drive prices down and bankrupt the shale oil producers. I agree that happened, but thermodynamics can't be cheated. If the energy didn't come from oil, it came from somewhere else - electricity, coal, natural gas, etc.

At some point, each well will progress to the point that it isn't worth pumping - unless other energy sources like wind or solar are used to lift the oil to the surface. (Even then, at some point it won't be worth pumping.) As individual wells drop out of production, the amount of energy available to the end consumer will also drop. Without expanding energy supplies, our economy can't grow. Our expansionist economy doesn't work well in reverse, but that is where we're headed.

It is seductive to think that real world results will follow a calculable mathematical construct that predicts exactly when failure arrives. The authors have made simplifying assumptions and treat the entire industry as a single "average" system. There are too many moving parts and individual interests to rely too heavily on their simplified analysis.

If oil prices can't rebound above $100/barrel without causing recession, I'll put more stock in their theoretical approach. Meanwhile, we're still heading toward the same lower energy future. We just don't know exactly when.

Grover

I must say I'm a bit suspicious of their numbers.  Maybe the justifications are contained in the $69 report, but I think their exaggerating just how little net energy is available now and will be in the next 5-10 years.  I would think we'd be further along the collapse curve if they were correct.  Maybe they're right and we're getting by right now by neglecting/consuming infrastructure/capital?  I'd love to see a careful analysis of current oil EROEI to confirm exactly where we're at right now.
Another thing that disturbs me is this image:

which can be found here:

https://www.theautomaticearth.com/2016/10/why-the-global-economy-will-disintegrate-rapidly/

What is the top portion of the barrel "Unavoidable waste heat - 2nd law of thermodynamics?"  If we just count the actual fuel used by the machines that are engaged in processing, transporting the oil, etc, any waste heat is already accounted for.  To not count it, would require the near impossible task of computing the actual work done by the machines rather than just their fuel consumption.  Are they double counting or am I missing something?

Most engines that consume fossil fuels are less than 25% efficient at converting the available chemical energy into useful work. This means that about 75% of the available energy is discarded as waste heat, so the thermodynamic situation is far worse than depicted in your graphic. But since the analysis begins with this gross error, it is very misleading. If it requires, say, 3 barrels of oil recovered for each barrel of oil used in exploration, drilling, producing, refining, transportation and providing other infrastructure in order to have a sustainable economy, then for each barrel of oil produced, 2/3 of a barrel will be available for other purposes. The ratio of oil returned to oil invested is 3 to 1. But the ratio of useful work to chemical energy invested is more like 25% of the chemical energy in 2/3 of a barrel, to 100% of the energy of one barrel, which is 1 to 6. But who cares?

When folks speak of ERoEI, they really are not talking about chemical energy and thermodynamic work, but rather the barrels of oil returned per barrel of oil invested in some aspect of producing it. The worst of viable exploration prospects have an ERoEI ratio of at least 10 through the exploration, drilling and completion process of producing a new well and estimating its recoverable reserve. By the time you add refining, transportation and other infrastructure costs in barrels of oil equivalents, this drops to about 3.5 to one. But folks in the oil business prefer to do their accounting in dollars. They have been drilling prospects in the continental U.S. for decades while being quite happy to have an ultimate 3 to 1 return on their nominal dollars invested. This is sufficient to allow small producers to survive, but it is not enough to produce the quantities of oil that our economy requires. That is the problem.