Luke Gromen: Peak Cheap Oil Will Drive The Next Sovereign Debt Crisis

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I’m a peak oiler from 2004. I remember reading LATOC late at night - if you don’t know what that was - you’re a newbie. I’ve read Heinberg’s “Party’s Over” and “Powerdown” and dozens of others. I founded and ran an activist group (wonderful volunteers!) who presented to our state politicians. I got permission from the producers of “End of Suburbia” (enlightening!) to do a half hour cut of their movie and burned it to DVD and sent it to every State and Federal politician in Australia. I spent every day and night online. I lost sleep. We presented the ASPO graph as part of a peak oil kit in the NSW State parliament theatre - and had some big names in to speak about the urgency of weaning off oil. We helped run a Richard Heinberg tour of Australia in 2005, organising speaking and book selling events. I get it. I was there. I was a freaked out reluctant doomer - looking for a way out of ‘energy decline’ and not finding it. I was almost ready to wear a placard downtown. And I did all that while I should have been focusing on my 5 year old boy who was sick with cancer! So I GET IT - OK?

But now decades later? Everything has changed. It seems ‘energy descent’ collapse is now avoidable. It seems like many of the old issues I used to read about late at night for years on end are now solved! But I know how easy it is to deceive myself - so I want to find out what my blind spots are. I thought I had collected enough peer-reviewed data and answered most of the questions. But then a year ago Michaux raised a new potential blind spot - minerals!

Yet eventually I saw that if we just swap out his expensive NMC EV supercar batteries for what the market will probably turn to - cheaper sodium and OFF-river pumped hydro - run the numbers - and his OWN PAPER shows we have enough minerals for the energy transition! Michaux sans batteries | Eclipse Now

Consider what has changed in the 20 years since I basically thought I had to get my boy through cancer (he made it) and maybe then get out to some kind of Prepper compound:

FACT: Back then renewables were over 10 times as expensive as they are now. While technically feasible - a 100% renewable grid was economically possible. But now EVEN WITH Overbuild - renewables are modelled to still be cheaper!
FACT: Even the EROEI of renewables has improved from more efficient material use and factory production. EG: Solar panels now use 1/3 of the silicon they did 20 years ago - but have the same insolation efficiency. Wind EROEI has increased as the tower size has increased and helped it reach ever higher, more abundant wind.
FACT: EV’s were expensive toys for the uber-rich. They’re now vastly cheaper - with the Dolphin mini (Seagull) possibly coming to Australia for $31k. (EV’s don’t need servicing and can get free fuel from our rooftops solar - so I could count $10k of that purchase price as a ‘prepaid lifetime servicing and fuel discount’).
FACT: The “When trucks stop running” scenario is gone now that the Tesla Semi has a half hour charge during a compulsory lunch break - can drive further than the driver is legally allowed on a shift. Also - every percentage increase in EV sales is a percentage decrease in oil and diesel demand - giving the mining industry time to go electric.
FACT: Janus Australia can do a 1 minute battery swap for 100 ton trucks! (Probably every 400 to 500 km.) This means even lower density sodium batteries could work in trucking - given it’s only 60 seconds for a guy on a forklift to swap the battery out. https://www.youtube.com/watch?v=9eYLtPSf7PY Will big mining EV’s battery swap - or charge on overhead catenary lines like the EV trucks in Canada do?
FACT: Thermal brick batteries can store heat at 1500 C and only lose 1% per day of bad weather, enabling industry to charge up from wind and solar but have a ready stream of heat as they need it.
FACT: EV’s are on a growth trend.
Sure - that’s slowed down a bit in 2023 due to inflation and interest rates, etc.
”In total, global sales of EVs, including BEVs, PHEVs (Plug-in Hybrid Electric Vehicles), and FCVs (Fuel Cell Vehicles), reached 13 million units in 2023, with a growth rate of 29.8% compared to 2022. The number, however, represents a significant slowdown from the 54.2% growth rate in 2022.”
https://www.visualcapitalist.com/visualizing-global-electric-vehicle-sales-in-2023-by-market-share/

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Also, the hit piece against Simon Micheaux is entirely too emotionally targeted to have any impact on me.

Oh my word! It’s funny how much Simon Michaux and his fans demand that everyone speak nicely about him - meanwhile ignoring his own behaviour and excusing him going on climate denier channels? His paper pushed absolute misinformation about the availability of pumped hydro worldwide - and yet I cannot find a study quoted in that whole huge 1000 page PDF?

Does ANYONE have his original source?

This is important and could go to Simon’s credibility - I WILL edit my Michaux page on my blog if anyone has this. I need the source he used to state pumped hydro was limited worldwide in his August 2021 paper. I tried reading the relevant sections for it - but just could not find it.

Because I can only find the study that he references in a youtube talk. 60 seconds - that’s all it takes. Anyone see the problem here?

The copper ONLY takes 289 years if you build the “bridge out of gold” - or use his ridiculously energy dense, expensive, Critical Mineral dependent NMC batteries! The reality you’ve GOT to check out is that the market for grid storage simply does not need these - and will soon be moving away from them because even the EV market is moving away from them. LFP uses NO Critical Minerals other than Copper.

“Lithium iron phosphate (LFP) batteries accounted for a 34 percent share of the global electric vehicle battery market in 2022. This figure is forecast to increase up to 39 percent by 2024.”

Basically - just swap out his NMC batteries for sodium and pumped hydro - and crunch the numbers from his OWN PAPER and this is the result. This is “at current rates” which as peak oilers you know are the 3 most deceptive words in resource estimates. When there’s the demand and the boom is on, there are no “current rates.” Doubling curves hit. Which on the flipside is a “halving time” curve when applied to achieving certain resource mining goals.

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Look if the tone of my Michuax page is that off that genuine peak oilers cannot even read it - I might have to chop the top few paragaphs down a bit. But unless someone can find a decent study reference that he used to declare there were just not enough sites for pumped hydro - and the above Youtube clip really IS where he got that quote - I have to ask - do YOU HONESTLY think he doesn’t deserve a little scorn when discussing this paper?

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You probably answered my original question, but I’m dense and didn’t get it.

I’ll give you mine. Maybe it will help clarify what I’m asking.

I saw Chris and Bret (Weinstein) talk in ~October 2023. Those two guys together are a dynamo! I love the way Bret thinks and I loved the way Chris thinks. I visited PP and found his videos and his thought process interesting. I wanted more. I want to learn from him and learn to think “like” him (not necessary the same thoughts, but in the same manner). When I found a professor I admired, I took more classes from that prof. On the web, I sign up and spend time absorbing information and watching how a person I admire processes data and communicates.

So that is what brought me to PP.

Is your peak oil comment suggesting you are here to try to “correct Chris’ view”? Are you here to try to reassure us that rumors of the coming energy crisis are unwarranted? I guess that’s where I’m confused. So far I haven’t seen what drew you to PP since nearly everything you’ve said conflicts with the ideas here. Again, conflict is welcome, just puzzled what drew you here :slight_smile:

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So far I haven’t seen what drew you to PP since nearly everything you’ve said conflicts with the ideas here

Sorry - I was so busy writing about my original experience with peak oil I didn’t properly answer your question. Chris’s Crash Course was - in my mind - one of the definitive peak oil summaries. I used to highlight it on my blog. But then a mate with an economics background started to insist money supply didn’t work like that - and now with MMT challenging even traditional economics - I started to ask questions.

Then with the rise of EV’s and the economies of scale kicking in for renewables, and learning rates bringing them down to the cheapest power the human race has ever enjoyed, I needed to double check all my old assumptions. I had been a nuclear activist in Australia where nuclear power is currently illegal! Those were some hard years for an activist.

But now that renewables are 1/4 nuclear LCOE (Lazard 2023) I finally conceded defeat. My old concerns about Overbuilding renewables costing too much were finally irrelevant -as out of date as something Leonardo Da Vinci might have cooked up.

I became a pro-renewables AND pro-nuclear advocate (for those countries that might not be able to HVDC to the “Sunshine Belt” for political reasons).

Finally - I found myself ricocheting back into peaknik circles after encountering Simon Michaux’s arguments! A sick feeling in my guts brought all the old arguments rushing back - and I had to devote myself to some study. So after being a ‘long-time listener, first time caller’ I came back here - looking for answers. Why did Michaux quote a study about the viability of Singapore - where the highest hill is only 15 meters - as proof that the WORLD didn’t have enough pumped hydro? Why did Simon choose GERMANY as proof that the WORLD needed 28 days storage - when most of the world’s population live where there IS NO WINTER!? Why did Simon ignore sodium batteries which can be made from sea-salt, agri-waste and aluminium? All super-abundant, all endlessly recyclable.

So far I have had no answers. Just claims that my page was “too emotional” - which sounds like an excuse to avoid discussing inconvenient truths.

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I remember when the gold was just taken from Gerald Celente.
He never got it back. It was in storage and owned by him.
It didn’t matter.

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If I had gold, I would never ‘store’ it.

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Its kinda heavy…although today’s price makes it easier

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@slyon is there context to the taking? I am unaware of this taking but surely the government does whatever it wants legal or not. Do you have a reference or know the reason his gold was taken?

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I wish i could remember…bankruptcy of the company I think, but I would have to google…he was angrier than I’ve ever seen him.
sorry, If I have a minute to look it up, I will revert.

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Hi IrishPrince,
I have edited my page as it was quite emotional writing. I am invested in the subject because of a suicide on a peak oil forum I was on in 2005 - and I met up with the father afterwards.
But that Michaux page was particularly bad - even for me! :grimacing:
I have edited it.
If you wish to discuss the facts of the matter - I’m all ears.

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Also, the hit piece against Simon Micheaux is entirely too emotionally targeted to have any impact on me.

Hi Chris,
That line has haunted me for weeks. You were correct. I have edited it.

But rather than re-read all that there are just 3 main questions I have about Simon Michaux’s work:

But what about the evidence?

  1. 75% of us live where there is no German winter to need 4 weeks NMC batteries.
    25% of us live where HVDC lines could easily pipe in solar from the equator.
    Almost anywhere on earth with the budget for it can trade power across vast distances - trading northern wind with southern solar.
    Germany is in such a supergrid - the ENTSO-E. Where does Simon Michaux mention that? Ever heard of Geographic Smoothing by the law of large numbers? The bigger the grid - the smaller the storage. Why did Michaux choose a study into a hypothetically isolated German grid when the whole EU is in the much larger Entsi-E?

  2. What does Michauxs own paper show if we swap his choice of NMC batteries for sodium and OFF river pumped hydro?

  3. Where does his paper acknowledge that there are brands of EVERY bulk tech in the Energy Transition that AVOID critical minerals? Wind, solar, EVs, batteries, electric motors, even copper can ALL be substituted. Sure - electronics need Critical Minerals and rare earths. But batteries and EVs do not HAVE to. There are high performance brands that WANT them - but the tech will still work without them.

Michaux avoided the ENTSO supergrid, sodium and off river pumped hydro, and plainer brands. Any evidence as to why?

The reason I care? I’m a climate activist - and young people need hope - not energy sceptics. My peak oil group from 2005 had a suicide. I hold doomerism responsible. Hence the emotion on my blog
I’ve been honest with you. Can you be honest with me about why you think Michaux has an argument?

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Wow, that is quite tragic. I am sorry for all the pain that suicide has brought. And I agree with you that facts matter. There is far too much discussion (or programming) without facts and reasoned logic.

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Yes, but nearly everyone lives in places where you’d get at least 1 week of no wind or sun. That’s still A LOT of storage needed!

It’s a bit naive to think we can just send energy over great distances as a simple matter. You lose a ton of energy doing so. That’s why you don’t want to send energy thousands of miles. Yes, you can, but now you’ve got to generate so much more to overcome the resistance. (Mr. Ohm waves hello)

Yes you can substitute copper. But if you go aluminum, you increase resistance and thus increase line loss. There are trade offs everywhere. It’s not a simple substitution

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HVDC lines only lose 1.6% per 1000 km. That’s a solar farm on the equator running a hypothetical base at the North Pole 10,000 I’m away for just 16% line losses.

So even just the state of Texas with Overbuilt wind alone radically cuts storage requirements.

This concept is now quite old, and even entered popular culture when it hit Scientific American in 2015. Renewable Energy Intermittency Explained: Challenges, Solutions, and Opportunities | Scientific American

Offshore wind is about double the cost of on-shore - yet tends to work late into the evening when solar and even on-shore wind may have stalled.

But marry them all up and the results show the Law of Large numbers kicking in even better than the Texas wind.

Australia’s lucky in that we’re in the Sunshine Belt - and so only a 170% Overbuild is all our current electricity supplied with minimal storage. Like 5 hours for a firmed national electricity grid!

Professor Blakers (Queen Elizabeth engineering prize recipient) estimates Australia needs 2 days of storage. The first few hours are probably sodium batteries as they’re so cheap and non-flammable. But after the first hour or so - we would move to OFF-RIVER pumped hydro.

The world has about 100 TIMES the off-river PHES it needs - Australia about 300 times. https://re100.eng.anu.edu.au/global/
Blakers costed it as cheaper than coal back in 2017 - imagine today with the way wind and solar have come down in price?

Finally - the punchline?

As far as I can tell (but I’m no engineer) - all of these main infrastructures can be built without Critical Minerals or Rare Earths. Solar farms, wind farms, powerlines, EVs, electric generators and motors and batteries. I’ll go one further. 90% of these things can be built without COPPER if we really had to! It’s called the substitution game. Just spend a few months googling “Can you build X tech without XYZ minerals”

There are new brands of EV and wind turbines coming out that don’t need rare earths. Google it.

So Michaux omitted Overbuild in the ENTSO-E supergrid that marries northern wind with southern solarfrom the equator, sodium batteries, off river PHES, and new tech and brands that avoid rare earths in the first place. Is that paper still convincing anyone!?