you're passive/aggressive introductions to your posts are easy to see through. I'm surprised CM hasn't just ignored you, as it's become blatant IMO.
Arthur,
I suspect you are right that the "enhanced recovery" technologies for old oil fields have a pretty lousy EROEI and generally only make sense when oil prices are extremely high. If it were otherwise, the major players would probably have already used those methods. The good thing about getting to those high prices is that all sorts of renewable and conservation solutions make clear economic sense at high price levels too. As a society, once we have polluting solutions costing about the same as clean energy solutions, hopefully it will be a lot easier to make the right choices.
If we are lucky we can make that transition before the crazy money printing completely undermines our entire economy. But as you imply, its hard to be optimistic about that watching the news out of Washington.
Fred
When I suggested this was the case I was told I misunderstood. Now I just turn a blinds eye to his comments as I just assure myself I'm delusional. Now, I just play nice however, his "Resilience" piece was pretty good. Read it all before from the original thinkers but it was still good.I do agree, Erik T. has a style that is not quite as invisible as he would like.
I do not agree that PP should interfer with Erik T. and his visits here as a good muse is always appreciated.
I think in some way ET is jelous of Chris but that's all just my muse. Who knows and who cares?
BOB
If the forest tract was privately owned, would the owner be justified to use deadly force to protect it? Now is the time to establish a legal foundation for the defense of "property essential to sustainable life", for killing my tree today may threaten the lives of my family one, ten, or one hundred years from now.You seriously think it should be legal to kill a person to protect a tree?
there is a tendancy to look for data that confirms your theory, rather than actually look at the data for what it is.
for example Govts. have been printing money like water causing terrible inflation.
real inflation is around 10% a year when you look at things like university fees, cost of a soft drink, etc.
so oil at $30-40, 10-12 years ago, equals oil at $60-80 today. just because of the manipulation of the currency…
so arguing that new supply hasn't immediately jumped onto the market to shove oil back to $30-40 level, is not realistic, because $30-40 in 2013 is not worth anything like what it was in 2000-2002, and that has nothing to do with oil, only to with paper money printing…
why therefore should oil producers rush to create new supply, it's a tricky business storing millions of barrels of oil.
they are simply enjoying a more volatile market and an incresed risk premium as the focus has sifted from the cold war era into more complex politics surrounding the christian / islam issues.
discounting the $ value of oil alone, kills a greater part of your argument.
[quote=technet]there is a tendancy to look for data that confirms your theory, rather than actually look at the data for what it is.
(…)
discounting the $ value of oil alone, kills a greater part of your argument.
[/quote]
Technet,
the history of the oil patch is one of boom and bust. So many cycles of boom and bust over the years that I think it is incumbent on you to then explain how it is that this time all of the various oil companies and countries over the globe have managed to shrewdly transition to a scheme whereby they forgo current cash flows because of past inflation?
That one stumps me. Further, to toss some non-conforming data into your theory we might note that somehow the natural gas players in the US did not note the discounted $ value of their substance and even went on to completely bust their profitability by pursuing current max production at the expense of both current and future dollars.
I do hold a view, which comes from much analysis and observation and discussions with people in the business, that oil plays tend to be produced at their maximum rate. The only place that I know of that has at least given voice to the idea of leaving some in the ground now for the benefit of the future is Saudi Arabia.
However, all I have is one statement to this effect from the king several years back, and nothing more. On the data side, meanwhile, Saudi Arabia also has a very aggressive drill program going on, various complex and expensive enhanced recovery operations underway, and is generally behaving as if they too were most interested in getting the stuff out of the ground as fast as possible.
The nature of a boom-bust industry is that it regularly runs through cycles of immense profits as new supply is brought into high prices and then immense losses as too much supply is crammed into falling prices that, by definition, bust through the full cycle cost of production.
So I am not quite following your argument.
I will however agree that the cost to produce all this new oil is well above $30-$40 per barrel and that it is the new incremental cost of production that will set the ultimate floor for the price of oil. However, as in 2009, it is entirely possible for oil to bust right through this floor for a while.
That new floor, based on the deep water and shale plays is somewhere between $70 and $90.
In other words - adios cheap oil!
technet wrote:"real inflation is around 10% a year when you look at things like university fees, cost of a soft drink, etc. so oil at $30-40, 10-12 years ago, equals oil at $60-80 today. just because of the manipulation of the currency…"
…
Price inflation of energy has little to do with WCURCIR or the velocity of money (or, as you say, the "manipulation of currency"). "Real inflation" has hovered around 2-3% for the last 10 years, with an occasional glitch one way or another. True, certain goods and services have risen far faster than others: Health care, college tuition, and energy are 3 that come to mind.
Energy costs shot up disproportionately to real inflation over the last few years simply due to supply and demand. If oil had followed real inflation, a $30/bbl in 2002 would today be around $40. Oil is getting harder to get, and world demand is rising, hence the price keeps heading north. It's not rocket science.
We're seeing a deflationary trend in U.S. natural gas prices relative to a few years ago. But as Chris points out, it will be some time before NG can displace petroleum in vehicles. And by that time, U.S. LNG exports (etc.) will likely set North American NG prices back to parity with world prices, reducing our current price advantage.
As noted earlier, I think most forecasters are underestimating the impact of renewable electricity 2010-2080. I think we will reach a maximum global electricity price somewhere around 2020-25, and then see a steady decline, sending "net present economic signals" that accelerate electric storage and mobility R/D far faster than we are anticipating. I think those signals are already at work. An added benefit will be a reduction in greenhouse gas generation as coal and NG plants are shuttered.
California is already generating 15% of its electricity from renewables, and on-target to be at 30% by 2022. Nearly half of all new U.S. energy infrastructure investment is renewable. Germany is on-target to be 80-100% renewable by 2050, with the EU not far behind. Desert PV generation is now under $0.09/kwh (without feed-in tariffs) with a conservative downward price curve to $0.02/kwh by 2040. Labs are currently achieving 5x-10x battery efficiency and cycle improvements with low cost, manufacturable techniques (nano, etc.)…
A renewable electrical technosystem is accelerating. Will it accelerate fast enough, and economically enough, to get us over the 2030-2060 hump without collpase? Nine billion people are a lot of mouths to feed. It's going to be interesting. JL
Hi,CantoL writes:
One forecast puts 2035 as the year when hybrid-EV-PI vehicles start to outsell IC. I think it will be sooner,I do too. I think the huge revolution that virtually no one sees is computer-driven vehicles. I think this will not only accelerate the trend towards electrical vehicles, it will completely revolutionize car ownership and car design. Right now, virtually everyone owns (or leases) their vehicles. In about 30 years, I think virtually no one will own or lease a vehicle. All vehicles will be ordered, like an airline ticket. Further, at present, there are virtually no cars in the U.S. that only accomodate a driver, whereas the majority of vehicle miles traveled in the U.S. are by drivers without a passenger. Therefore, I think that, within 30 years, most vehicle miles traveled will be in super-small battery-powered and computer-driven cars. Think of a Smart Car cut in half to eliminate the extra seat, and battery-powered. More details are here: http://markbahner.typepad.com/random_thoughts/2013/01/the-future-of-transportation.html
I listened last night to the BBC Radio 4 programme "In Business" called "Gas Leak" (http://www.bbc.co.uk/programmes/b006s609). I usually have great respect for the BBC - not this time.
It was taken as red that shale gas was making America self sufficient in energy, and that the very low price proved that a great energy transformation happened, and that this would happen all over the World. How wrong! No mention about depletion rates, actual quantities on the ground, and how America actually still imports most of its energy via Oil. The programme was extremely misleading.
The focus of the programme was on Gazprom and how it historical link of oil and gas prices was now discredited and that the discrepancy between US (low) and Europe (high) gas prices demonstrated market manipulation by Gazprom. It would seem to me that Gazprom gas prices are determined by how it obtains its gas and likely to be closely linked with oil. I'm not aware of liquified gas imports to Europe from the US that could reduce the price in Europe - it all sounds very unlikely. (of course I don't mean to imply that Gazprom is a squeaky clean company by any means). Gazprom is under investigation from the EU and is also accused of supporting anti Shale gas protests in order to protect its markets. This seems rather unlikely. A Gazprom official even said that Shale gas wouldn't come to much in Europe, but was totally ignored by the presenter.
For the BBC this was a very badly researched topic. I will be writing to the BBC to try and put them straight.
What I would like to see is a graph of net energy vs time (over a period, say, from 1000 a.d. to the present). Can anybody point me to data of this type? I've seen the 'cliff edge' graph used for illustrative purposes in the Crash Course - the one that shows that as ERoEI falls, net energy drops off dramatically. But I've not seen any attempt to quantify this in real world consumption figures (in MTOE, say)
It seems to me that such a graph would illustrate the problem with fewer distractions - e.g.dollar oil price, budget cuts (here in the UK, at least), unemployment rates, debt, US gas bonanzas, etc. Yes, I realise these are all related, but I'm looking for a fundamental conclusion like: 'we humans are trying to achieve the same things (grow food, heat homes, move ourselves around) with a smaller and smaller amount of energy per head.'
So, a) does this one simple conclusion do too much violence to the complexity of the situation?, and b) if not, can someone point me to the data?
Thanks.
Wasn't thinking straight, was I? What I described - a graph of net energy, would just be a graph of consumption. What I really ought to ask for is a stacked graph, net energy underneath the energy taken to acquire it.
[quote=DaveOxford]Wasn't thinking straight, was I? What I described - a graph of net energy, would just be a graph of consumption. What I really ought to ask for is a stacked graph, net energy underneath the energy taken to acquire it.
[/quote]
Dave,
this is a great request an such a chart would be a truly excellent thing to have. Why? Because it is pretty much everything to how and (more importantly) when our future unfolds.
However, such a chart does not exist. At least not with any rigorous study behind it. Why? Because the various energy departments all over the world have never studied the matter. Even now there are jsut a very small handful of pitifully funded university efforts doing such studies, and even then only on a very limited and 'hand wavy' basis (such as using production costs as a proxy for the energy in side of the equation).
Here's one hypothetical chart of net energy (by one of the former graduate students in one of the small academic departments I referred to eariler) that I think explains why the topic is even more important than intuition might suggest:
(Source)
The basic idea here is that net energy will drop off more rapidly than gross, or total energy, because typically the later stuff is harder, deeper, goopier, and/or smaller than the earlier stuff.
Thats a keeper. (Right Mouse Click->Save Picture as->)
Alarmists make a living from breeding panic. For this racket to work, one has to count on the audience being ignorant of both history and the actual underlying factors at work. Every minute and every challenge must be presented as if it is brand new and never encountered before. The fact is that the rosy past never happened. Oil never had an EROI of 100:1. It was first recovered in quantity in the US by sopping it up off of water with blankets and wringing it into buckets. The early wells were drilled at the pace of a couple feet a day by hand with four men jumping up and down on the iron bit while a fifth turned it by hand. Only a small fraction of wells were gushers, and then only for a short time before a thousand new wells erected by fellow speculators a few feet away drained the same reservoir. Far more people have been bankrupted in oil than have made money, and claiming it has been government subsidized is like claiming the California gold rush was government subsidized. The first wells found oil at a depth of 70 feet. When all the 70-foot oil was found, why didn't oil become too expensive to use? Because steam engines began to turn rotary rigs and oil in greater quantities was now accessible at greater depth and with improved EROI despite the greater upfront capital cost. That pattern of scarcity -> price spike -> massive wildcatting, exploration, capital investment and technology evolution -> massively increased production -> glut -> price collapse -> suspension of exploration and capital investment -> scarcity -> price spike has repeated itself at least 4 times in the US alone with the price spikes occurring in 1919, 1934, 1979 and 2008. Each time capital investment paid of with increased production--but there was a 6-10 year lag for the market and prices to catch on, and then one to several decades of low prices that put the crisis to sleep until the next price spike. The last glut/lull was 1986 to 2003 with sustained average crude prices of $20-$30 per barrel in 1990 dollars, which also happens to be the inflation-corrected historical average. The capital investment for our next lull began when the prices started up in 2003 and has largely already been accomplished in both proved reserves ready to be put into production and the efficiency gains on the consumption side that also inevitably come with price spikes. It remains for the markets to figure it out and for the prices to collapse again like they did in 1986.
Bottom line is that man is an autotrophic creature--we make our own food and the fuel required by our civilization. It costs energy and intelligence to make it, but we have figured it out from wood to charcoal to straw to olive oil to tallow to whale oil to hydro and wind to coal to kerosene to gasoline and diesel and natural gas to pitchblend uranium ore to PV solar. We've been making ethanol for five millennia, but it has always better served as a beverage than a fuel (more history we've forgotten). We are now figuring out light tight oil and gas and tar sands. In the future we will figure out methane hydrates and helium-3. There is growing evidence that the deep earth is a factory for making inorganic hydrocarbons. Even if that should prove true and petroleum be discovered to be a renwable resource, the alarmists will still find something to stir panic.
Bottom line is that man is an autotrophic creature--we make our own food and the fuel required by our civilization. It costs energy and intelligence to make it, but we have figured it out from wood to charcoal to straw to olive oil to tallow to whale oil to hydro and wind to coal to kerosene to gasoline and diesel and natural gas to pitchblend uranium ore to PV solar. We've been making ethanol for five millennia, but it has always better served as a beverage than a fuel (more history we've forgotten). We are now figuring out light tight oil and gas and tar sands. In the future we will figure out methane hydrates and helium-3. There is growing evidence that the deep earth is a factory for making inorganic hydrocarbons. Even if that should prove true and petroleum be discovered to be a renwable resource, the alarmists will still find something to stir panic.