Home > Environment > Carbon: too much, not too little (crossposted at CT)

Carbon: too much, not too little (crossposted at CT)

March 23rd, 2006

Like Henry George’s theory of land taxation, Peak Oil seems to be one of those ideas, reasonable enough in itself, and modest in scope, that attracts a cult following in which it becomes the answer to all kinds of questions. This piece in Salon gives a tour of some of the wilder fringes (apparently serious people suggesting we are going back to the 13th century for example), and indicates the need for a correction.

The basic idea is simple enough, and reasonably plausible. Oil is a finite resource and sooner or later, extractions of oil must reach a peak. Application of a fairly simple model, with some previous successes to its credit, the Hubbert Curve, suggests that we are now at or near this peak, though lots of others disagree. Even if we are at the peak, it’s arguable that increasing prices will drive improvements in efficiency and reductions in demand sufficient to allow us to continue relying on oil in its main use (fuel for cars) for a long time to come, even as aggregate consumption declines gradually.

Suppose though, that availabilty of oil is going to decline to levels far below those of today. The question is, so what? A decline in the availability of oil would have a significant impact on various activities, but the availability and relative price of different goods change all the time. The increase in the cost of health care, for example, is much more significant than anything that has happened to oil or is likely to happen. Where do the Peak Oil crowed get their predictions of disaster?

The trick in the argument is to equate oil with fossil fuels in general. This is plausible enough for natural gas, which commonly occurs in the same places as oil, and is also in fairly limited supply. But the elephant in the corner in these arguments is coal. The US has enough easily accessible coal to supply hundreds of years of consumption at current rates, and the same is true of the rest of the world.

The Salon article mentions coal only a couple of times in passing. Yet coal and coal-fired electricity already compete directly with oil in all major uses except personal transport. If current oil prices are sustained for long, we can expect to see electricity displacing oil in home heating, and electrification of rail transport at the expense of diesel, reversing the trend of recent decades when diesel has been cheap. This is already happening.

As for cars, there are at least three well-established ways in which they could be fuelled by coal. First, there are electric cars. Second, there is coal liquefication, used on a large scale by South Africa in the sanctions period. Third, gasification could be used to replace liquid petroleum gas. All of these options have problems, but none are insurmountable given a high enough price; they might be competitive if oil stays above $60 a barrel long enough, and they would certainly be competitive at $150/barrel. Then there are more exotic options, like fuel cells using coal-based methanol.

The real problem with fossil fuels is not that we have too little but that we have too much. If we keep on burning them at current rates, we’ll cause highly damaging climate change. If we burned enough coal to run seriously short, we’d risk setting off a runaway greenhouse effect and making the planet uninhabitable. If Peak Oil is coming, it’s probably a good thing.

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  1. March 23rd, 2006 at 11:35 | #1

    Actually, there is a simpler convenient way of running fuel cells than with methanol, it’s just much less safe: hydrazine and/or ammonia, which don’t provide carbon compounds that have to be kept from poisoning the fuel cell operation. It’s a proven technology going back further than using methanol, but what hasn’t been worked out is how to make them safe enough to handle in field conditions.

  2. Crispin Bennett
    March 23rd, 2006 at 11:41 | #2

    “coal and coal-fired electricity already compete directly with oil in all major uses except personal transport”

    What about flying? Are there potential non-oil sources for aviation fuel?

  3. March 23rd, 2006 at 12:24 | #3

    Methanol works well enough for conventional internal combustion engines. Quite possibly even producer gas does, since gas producers don’t weigh much. I believe (but cannot confirm) that biodiesel and even unconverted vegetable oils will work in gas turbines. There have also been workable aviation diesel engines in the past. In fact, there was even a paraffin (kerosene) burning steam aeroplane tested in the ’30s. It’s not ultimately an insuperable engineering problem.

  4. conrad
    March 23rd, 2006 at 12:39 | #4

    A fourth option for cars is that people could just forget about them for the large part and use alternative transport like scooters to get around, as they do in many countries already.

  5. still working it out
    March 23rd, 2006 at 13:04 | #5

    There is also Tar Sand. There might be an even greater supply of oil available from tar sand than from conventional oil. Unfortunately it is very bad for greenhouse gas emissions as its highly energy intensive to extract.

    Biodiesel will probably be practical as the price of oil keeps rising. Especially if new techniques for making it from large scale salt water algae farms work out. Great for a big salty and sunny country like Australia.

    I get fed up with people who talk about Peak Oil without mentioning that there are practial, if more expensive, alternatives. It is such a simple and important fact that to write about Peak Oil and not mention it is to be as dishonest as alot of the global warming skeptics.

  6. March 23rd, 2006 at 13:19 | #6

    Nice post, but about that last paragraph…

    It’s broadly true that it is or will soon be technologically feasible to turn any one hydrocarbon into pretty much any other. And since we’re not going to run out of hydrocarbons any time soon, no new Dark Ages. Easy enough. The peak oil idea is, I think, primarily a failure of imagination.

    But why then doesn’t it similarly follow that we can also develop whatever related technologies we’ll need to minimize environmental impact and prevent “highly damaging climate change”? And how did “highly damaging” get equated with “climate change”? Too much imagination I think.

  7. Hermit
    March 23rd, 2006 at 13:20 | #7

    If Peak Oil turns out as dire as some predict then orthodox economics will have been asleep at the wheel. My take on it is that the relative effort required for replacement fuels (eg ethanol) and time lags (eg nuclear) will be too large to enable business-as-usual. Many activities may prove unaffordable such as hospitality, tourism and long distance transport, with consequent flow-on effects. If coal is used to replace current rates of petroleum use this will more than double CO2 emissions until it too finally runs out. In any case we probably can’t build coal based plants fast enough which are both profitable and NIMBY acceptable given the predicted 6% annual decline in oil output starting in a few years.

    Shorter version; we’re heading for a sustained global energy crisis. Those who see this is as a proving ground for human ingenuity will be up against the laws of physics.

  8. Paul Norton
    March 23rd, 2006 at 13:39 | #8

    When will the dynamic interplay of human technological ingenuity and market forces result in biomedical science finding a way to satisfy the undoubted market demand for physical immortality?

  9. smiths
    March 23rd, 2006 at 14:13 | #9

    john,
    i really think you are dealing with peaking oil supply as if it is in a bubble,
    as if it is any other commodity where the availability and relative price do change all the time,
    but it isnt any other commodity,
    it is truly the life blood of the modern industrial system,
    most of what you talk about as solutions are theoretical, unproven,
    trucks, big trucks supply most of our food interstate, no-one anywhere is building electric fuel cell trucks, ships provide international commodities, what are they supposed to run on if the cost of diesel triples,
    and why the belief in an orderly decline, a nice smooth curve?
    not only that but we are talking about the raw material for the production of lubricants, asphalt, insecticides, ethylene, methanol, propylene, plastics, synthetic fibres, synthetic rubbers, detergents and chemical fertilizers not to mention its very intensive use in the production of pharmaceuticals

    how much real effort is going into solutions at the moment other than nuclear which is contrary to most of what i read low-carbon, not carbon free

  10. Katz
    March 23rd, 2006 at 14:44 | #10

    “When will the dynamic interplay of human technological ingenuity and market forces result in biomedical science finding a way to satisfy the undoubted market demand for physical immortality?”

    As Keynes meant to say, “In the long run a long run will be a short run.”

  11. jquiggin
    March 23rd, 2006 at 15:37 | #11

    smiths, there’s nothing unproven about coal. It was the basis of the industrial system when oil was a curiosity, and can be used to produce nearly all the products you mention. It’s also still the primary source of electricity which has a much better claim than oil to be the lifeblood of modern industry.

    On the other hand it’s messy, hard to move about and a potent source of greenhouse gases and other forms of pollution.

  12. smiths
    March 23rd, 2006 at 16:03 | #12

    look, i’ll admit i am no expert
    but by my reckoning it still requires a massive change in processes,
    how do you get coal powering a truck or an ocean going bulk carrier,
    by turning it into deisel? surely that involves very large cost increase,
    how much do you think fruit and veg would cost then,
    given that average people are on the verge of general life simply costing more than their wages can cover even a 20% cost increase would surely be a big problem
    how many electric cars are on the roads,
    where do they fill up on long distance runs
    so many questions

  13. smiths
    March 23rd, 2006 at 16:11 | #13

    what do you use to extract and transport coal?

  14. Hal9000
    March 23rd, 2006 at 16:47 | #14

    “what do you use to extract and transport coal? ”

    Synthetic oil, a 95 year old technology.

    1913: Friedrich Bergius in Germany develops Hydrogenation process for production of synthetic oil from coal dust

    Source: http://www.synlube.com/synthetic.htm

  15. jquiggin
    March 23rd, 2006 at 17:30 | #15

    Or, if you want to be really retro, a coal-fired steam shovel for digging and a steam locomotive for transport.

  16. Razor
    March 23rd, 2006 at 17:32 | #16

    smiths question – “what are they supposed to run on if the cost of diesel triples,[?]”

    Bio diesel – a plant producing 170 million litres per year will open in Darwin this year. Turns Palm oil into diesel. Plant planned for Botany Bay in next couple of years. Same company has plans to build three plants in Singapore and some in Texas (exept using soya bean oil).

    It is cost competitive at current prices with proven technology.

    I, too, would like an answer to Crsipin Bennet’s question – is there an alternate source/technology to make jet fuel, which is basically kerosene (I will accept guidance on this). How will the greenies and anti-globalisation protestors fly around the globe to get together to conference and protest about the evils of the western world without jets???

  17. smiths
    March 23rd, 2006 at 17:34 | #17

    hal, the specs on the real good synthetic oil says

    “HIGH Production cost is the only relative disadvantage as typical Syn-Sol costs are in $20 to $35 range per quart. Also the rare chemicals that are used for production are available only in a very limited quantities.”

    what rare chemicals?

  18. Ian Gould
    March 23rd, 2006 at 17:37 | #18

    Smiths – the UK got through World War II largely using coal (and wood) gasification to run civilian vehicles.

    There are very few items for which transportation fuel costs are 20% – 2% is a more realistic figure, meaning a doubling in few costs would increase costs by 4%.

    The realistic wrose-case scenarios for Peak Oil are on par with the 1970′s oil crisis or the recession of the early 90′s.

    That won’t be fun but neither will it be Mad Max time.

    If we start preparing now for the possibility (e.g. tax concessions for biofuels and hybrid vehicles) we can avoid a lot of that pain.

  19. smiths
    March 23rd, 2006 at 17:41 | #19

    come on john, i am asking serious questions with genuine puzzlement

    and you are suggesting ‘steam locomotives’, are you serious,
    again i would ask how long do you think it would take to roll out modern designed steam locomotives, and do coal fired steam shovels compete in terms of power and efficiency, or would there be a reduction in the amounts extracted in all mining operations

  20. Ian Gould
    March 23rd, 2006 at 17:57 | #20

    Actually Smiths there has been a project underway for several years to develop a modernised steam locomotive for use in Africa (using wood which is readily available locally rather than coal).

    Big improvements in efficiency over the old designs are possible – but realistically we’ll probably use more electric-powered trains using coal-fired power.

  21. Waratah
    March 23rd, 2006 at 19:04 | #21

    Does the entire peak oil crowd predict disaster? Don’t some just predict peak oil with room to change our nasty ways before the ceiling collapses around our ears?

  22. jquiggin
    March 23rd, 2006 at 20:12 | #22

    Smiths, the serious point that I’m making is that there are plenty of well-established alternatives to oil. As I said in the post, electric trains are the relevant alternative, and there’s nothing implausible about them. Given sensible policy, adjustment will not be that difficult

    I’m not claiming that a sharp decline in oil output won’t cause disruption, particularly if policy isn’t sensible; disruption of one kind or another is always going on, and policy is often silly. But we’re not talking collapse of civilisation as we know it here.

    Waratah, you’re right that there are sensible Peak Oil types (I have a foot in that camp myself) but they seem to be being drowned out by the lunatic fringe.

  23. Joe
    March 23rd, 2006 at 20:53 | #23

    There’s a report by Robert L. Hirsch, PEAKING OF WORLD OIL PRODUCTION: IMPACTS, MITIGATION, & RISK MANAGEMENT (widely available, eg at http://www.hilltoplancers.org/stories/hirsch0502.pdf) that considers many of the questions asked in this post. Hirsch talked about his report recently to David Room (see http://www.globalpublicmedia.com/interviews/615 ). Hirsch concludes that we need to begin to move away from oil at least 10 years before the peak if we are to avoid severe disruption. The problem is when don’t know when the peak will be. If we have already passed the peak, or are close to it, as many geologists believe, then we face very severe disruptions because of the long lead times to introduce replacement systems. For example, if you increase the efficiency of new vehicles by 10%, this increases efficiency overall by only 1% because only 10% of the vehicle fleet is renewed each year. And that’s disregarding the fact that it takes 3 – 5 years to design a new vehicle. Again, a coal liquefaction plant would take at least 5 years to build and during that 5 years the supply of oil will have fallen at least 10%.
    But if the peak is more than 10 years away, how do you get anyone to invest in the necessary new systems? There are plenty of people who believe that we have enough oil for another 30 years and in our society 10 years is an eternity.
    Note that Hirsch believes that if we do get to a crisis, economic issues will take precedence over environmental issues, that is, you can forget about ameliorating climate change. Note too that most of the proposed solutions have a poor energy return for energy invested. For many the ratio is less than one. This is not a bad thing if the output is better than the input (electricity and coal) but it is if they are comparable (palm oil and oil-based fuels). (George Monbiot wrote recently that bio-diesel from palm oil was an ecological disaster.)
    I don’t think that you can be taken seriously in peak oil discussion unless you have read Hirsch and if you disagree, tell us where he is wrong.

  24. SJ
    March 23rd, 2006 at 21:13 | #24

    Joe Says: “But if the peak is more than 10 years away, how do you get anyone to invest in the necessary new systems?

    You start with government intervention, e.g., a tax on oil like a huge number of countries have adopted, but the U.S. has not.

  25. March 23rd, 2006 at 22:13 | #25

    You don’t need to know the ins and outs of the relative costs of replacement technologies, to know that oil has been the cheapest and most versatile energy source going for a century now. Whether oil substitutes come easy or hard, there are plenty of folks scratching each other’s eyes out at the moment to ensure they are not the ones who need to think lateral first.

    Anybody who thinks the present unpleasantness in Iraq is all about restless idealists trying to enlighten our Eastern brethren on the backwardness of their ways, has no idea of the sheer momentum of the USA’s economic imperative to maintain its traditional energy source. The true neocons do exist, I don’t deny it, but their greatest contribution to history is as the useful idiots of a larger and more prosaic cause.

    The only reason for the invasion and long-term occupation of Iraq that has yet to be disproven, is the economic one. The greenbacks being spent in Iraq are but a moderate government work for the dole programme and which will pay dividends down the track once the pipelines are hardened to allow Iraqi oil to be brought online. The thought that because Iraqi oil is not being shipped to the West yet proves something to the contrary misses the very point of Peak Oil.

    Iraq is a gigantic strategic reserve. The black stuff isn’t going into India or China or anywhere else neither. For the moment.

  26. JR
    March 23rd, 2006 at 22:19 | #26

    Smiths, re: your query about transporting the coal, I think Queensland Rail has electrified its coal rail freight system (hence it runs on mainly coal-fired electricity). As for vessels, they can be run on steam turbines instead of fuel oil/diesel engines, but I grant you the steam turbines are not as efficient. The big problem with coal is the CO2 emissions from combustion and the fugitive methane from production. Sydney Ferries is trialling biodiesel at the moment I think.

  27. March 23rd, 2006 at 22:56 | #27

    Smiths, we already use castor oil as a preferred feedstock to petroleum products for one of the ingredients of nylon (sebacic acid, which I looked into as a possible organic light hydrocarbon source). We are already partway along the continuum between fossil and renewable feedstocks. But you were right to criticise JQ’s shallow approach to coal technology – see my guest post on trnasport changes somewhere in JQ’s archives.

    The thing is, it has long been known that “the only cheap thing you can do with coal is burn it”. Technologies that used this were developed to apply it in a labour intensive, skilled way (automated shovelling doesn’t work too well, since it doesn’t have the stoker’s skill in judging where to feed the fire). Wood is similar, and it is only a cheap replacement fuel in Africa because labour costs are lower (it doesn’t walk out of the jungle and into the furnace).

    IG, “civilian” use of cars in the UK in 1939-45 is rather ambiguous. Practically all truly civilian uses ceased, with cars being put up on blocks for the duration (there was an amusing article in Punch about this). Essential war needs like doctors’ cars qualified for petrol, there was a very limited ration, and gasification processes weren’t too practical in Britain because there were shortages of their feedstocks too. But they were used in Germany, Australia, and (as my father remembered seeing) Algeria.

    The issue of time lags and costs in converting in the face of a shock collapse is real. It’s a bit like the subtleties of Malthus’s analysis that most people miss. However, it isn’t caught in the vicious circle of dependency on fossil fuel to convert in the first place; problems before, e.g. in war time, came up in the face of general shortages not just of petrol.

    Gas producers are easy to make (if you know how – but it is possible to screw up thoroughly), and light oils can be cracked from vegetable oils without too much chemical engineering equipment being set up first. In fact, if all you want is hydrogen, you can make it fairly easily by the methods worked out to fill blimps nearly a century ago.

  28. March 23rd, 2006 at 23:06 | #28

    I should have mentioned, paraffin (kerosene) was first discovered as a product of the destructive distillation of peat (not in commercial quantities, of course). This is form my recollections of a 1940s Encyclopadia Britannica that I cannot confirm on line. It does tend to show that the technology is straightforward if expensive, though.

  29. observa
    March 23rd, 2006 at 23:23 | #29

    Adelaide opened a biodiesel fuel plant today, fed by used cooking oils and canola.

  30. observa
    March 23rd, 2006 at 23:28 | #30

    Make that ‘officially opened’ today by this mob
    http://www.arfuels.com.au/default.asp?V_DOC_ID=778

  31. Seeker
    March 24th, 2006 at 02:28 | #31

    Straight ethanol (methanol?) is used in Brazil to fuel piston engine, propeller driven light aircraft. Biodiesel might work in piston engine aircraft, provided the torque and power characteristics of biodiesel fuelled engines are suitable for flight. As far as I know neither alcohol nor biodiesel fuels are suitable for turbine engines. Personally, I think the day and age of mass lighter-than-air transport, for people or freight, is coming to an end.

    The fundamental problem with liquid biofuels generally is that the amount of conventional agricultural production that is required to directly replace liquid hydrocarbon fuels is far too large, and would seriously displace and reduce food and fibre production. We do not yet have the biofuel technology to supply the absolute quantities of energy we currently use, and may never.

    However, there are interesting developments. Two recent articles on producing fuels from biological processes are in the March 2005 edition of ‘Modern Chemical Industry Monthly’:
    ‘Fermentative biological production of hydrogen by digesting high strength organic wastewater’, LI Yong-feng, REN Nan-qi, HU Li-jie.
    ‘Research progress of converting lignocellulose to produce fuel ethanol’, LIU Na, SHI Shu-lan.
    The full abstracts for each can be found on this page:
    http://www.xdhg.com.cn/article/2005/abs/e-abs-2005-03.htm

    And here’s some more:
    http://www.livescience.com/othernews/ap_050819_make_life.html
    http://www.livescience.com/environment/060126_ethanol_better.html

    Scooters, motorbikes, and powered bicycles are going to become very common over the next few years. Sales of road registered scooters in Australia increased by 30% in 2005, and road registered motorbikes went up by 20%, figures manufacturers of cars (or anything else) would kill for. The basic engineering (including safety), production, and marketing for these three classes of transport is well established, and the engineering (and safety) in particular are making big strides at the moment. Watch this space.

    I have thought for years that in Australia we will have to learn to live with about 1/3 to 1/2 of our current per capita energy use. Using less (per capita) is the single biggest part of the equation. Insulate your homes, get efficient appliances, smaller cars, and fly less. But most of all, get used to it.

  32. Crispin Bennett
    March 24th, 2006 at 06:30 | #32

    Seeker: thanks for the biofuels info. Also well said on the need to stop whinging and face facts. To add your suggestions: pressure your institutions to save energy.

    JQ’s and mine (UQ), for example, is atrocious in various ways, particularly notably in its tender encouragement of car use. It’s the first city University I’ve come across where it is easy (and cheap) even for undergraduates to park their cars on a daily basis. Not the best use of such a large and lovely campus. It also fakes provision for cyclists, eg. claiming in its web site and literature to provide locked bike parking which in practise the facilities people say “doesn’t work” any more, with no plans for repair. Hard to imagine it pulling that stunt with UAV facilities.

  33. John McKeon
    March 24th, 2006 at 08:30 | #33

    Razor said: “How will the greenies and anti-globalisation protestors fly around the globe to get together to conference and protest about the evils of the western world without jets???”

    Well, speaking for ‘greenies’, it should be stated that the Greens have a policy to institute a carbon tax in such a way as to promote conservation of fossil fuels, reduce greenhouse gas emissions and to increase the economic possibilities for other energy sources. I would be very happy to pay more for travel under such conditions. [As long as jet flight is available then people - including 'greenies' - will use it. {Yes I know - that was a truism.} I'm sorry but I just could not let Razor's cheap shot pass without comment.]

  34. Ian Gould
    March 24th, 2006 at 09:44 | #34

    “IG, “civilianâ€? use of cars in the UK in 1939-45 is rather ambiguous. Practically all truly civilian uses ceased, with cars being put up on blocks for the duration (there was an amusing article in Punch about this). Essential war needs like doctors’ cars qualified for petrol, there was a very limited ration, and gasification processes weren’t too practical in Britain because there were shortages of their feedstocks too. But they were used in Germany, Australia, and (as my father remembered seeing) Algeria.”

    That’ll teach me for getting my history from “Dad’s Army”.

  35. Terje
    March 24th, 2006 at 10:31 | #35

    If Peak Oil is coming, it’s probably a good thing.

    This is an odd remark for John Quiggin to make. For a given measure of energy output burning coal releases more CO2 than burning oil. Given the CO2 climate change thesis it would be better for the world to have thousands of years of Oil in the ground and a “Peak Coal” crisis.

    If Coal is the alternative to Oil, then an Oil shortage should accelerate climate change. Assuming of course that CO2 released by burning fossil fuels is the cause of climate change.

    If however you are unconcerned by CO2 and you are simply wishing for a hybrid electric car revolution to reduce Urban smog, then an oil shortage is just the ticket.

  36. March 24th, 2006 at 10:32 | #36

    So lets start on a few of the extraordinary statements that have appeared in the comments to this entry.

    “it’s just much less safe: hydrazine and/or ammonia, which don’t provide carbon compounds that have to be kept from poisoning the fuel cell operation.”

    Hydrazine – HYDRAZINE!!!!! This is a compund that is incredibly toxic to humans and is absorbed through the skin. One spill could kill many people.

    “There is also Tar Sand. There might be an even greater supply of oil available from tar sand than from conventional oil. Unfortunately it is very bad for greenhouse gas emissions as its highly energy intensive to extract.”

    Tar Sands are a very expensive way of turning Natural Gas into an oil subsitiute. If the entire present NG exports of Canada were used to produce Tar Sand oil then they think that they could produce about 10 million barrels per day by 2020. As oil demand will be about 120 million barrels per day then this is a drop in the ocean.

    “It’s broadly true that it is or will soon be technologically feasible to turn any one hydrocarbon into pretty much any other. And since we’re not going to run out of hydrocarbons any time soon, no new Dark Ages. Easy enough. The peak oil idea is, I think, primarily a failure of imagination.”

    Assuming that we used coal for electricity and turned it by Fischer-Troph process to make up for the shortfall in oil we would have peak coal in about 2046 and run out in about 2080. That is if we have 1 trillion tons of coal in reserves at the moment. If we have 3 trillion tons the peak is about 2060 and we run out in 100 years.

    “Smiths, the serious point that I’m making is that there are plenty of well-established alternatives to oil. ”

    Yes there are but they ALL suffer from a low EROI. You cannot expect to replace a 20:1 EROI source of energy with one of 5:1 and expect there to be no changes.

    I am not saying that there will be a Mad Max situation however unless we start NOW changeing to energy conservation, battery electric cars and trucks, plug in hybrid cars and trucks and renewable power we might experience a large gap between the present status-quo and acceptable alternatives. This gap period could be nasty. Throw in climate change as well and it could get even nastier.

  37. hazym
    March 24th, 2006 at 10:49 | #37

    “The basic idea is simple enough, and reasonably plausible. Oil is a finite resource…”

    What if its not a finite resource? What if it is a renewable…

    http://www.freerepublic.com/focus/f-news/574189/posts

    I’m in no position to evaluate the theory that oil is not the result of decaying matter, but it would be wonderfully ironic if this one turned out to be true.

  38. March 24th, 2006 at 11:34 | #38

    hazym – “I’m in no position to evaluate the theory that oil is not the result of decaying matter, but it would be wonderfully ironic if this one turned out to be true.”

    Nothing I have seen makes this abotic theory even plausible. Trillions of barrels of oil have been found using the biotic theory and the oil and oil bearing strata has fossils and biomarkers.

    Even if it was true then oil is still essentially finite as abotic oil would still take millions of years to accumulate. I cannot see it refilling the oil wells at 83 million barrels per day.

    There is only one place abotic oil can be one possible explanation and that is deep basement reseviours that have been drilled in Vietnam. Mind you abotic oil is only one of 6 possible explanations and not the best one.

  39. Hal9000
    March 24th, 2006 at 12:23 | #39

    “I think the day and age of mass lighter-than-air transport, for people or freight, is coming to an end”

    And I thought lighter-than-air transport went up with the R101 and the Hindenburg. Seems I was wrong ; – )

  40. Sam R
    March 24th, 2006 at 13:00 | #40

    If I’ve got peak oil theory right, we are likely to see substantial increases in oil prices – some say massive, and rapid. So if I run an oil company, and I believe this day is coming, why am I still extracting oil and selling it at today’s prices? Wouldn’t I be tempted to leave most of it in the ground so that I can get twice or three times as much for it when peak oil arrives? And if every oil producer thinks this way, won’t that level out the supply/demand curve, so that there is no sudden peak?

  41. March 24th, 2006 at 13:48 | #41

    Whoo hooo – we are away again. Another 600+ post comment thread. Can’t wait.

  42. Hungry Hippo
    March 24th, 2006 at 14:33 | #42

    Professor Quiggin,

    “Smiths, the serious point that I’m making is that there are plenty of well-established alternatives to oil.”

    Try as I might I can’t see how any of the alternative fuels will replace the oil-based fertilisers and pesticides used for monoculture primary production. Do you know of anyone who is fertilising their fields with liquified coal? There is also harvesting and transport to consider. No amount of market-driven innovation is going to prevent the massive disruptions, price hikes and (further) instances of mass starvation in developing countries when oil becomes too expensive to convert to fertiliser.

  43. March 24th, 2006 at 15:10 | #43

    Ian Gould: There are very few items for which transportation fuel costs are 20% – 2% is a more realistic figure, meaning a doubling in few (sic, ?fuel) costs would increase [total] costs by 4% (sic).

    Er actually by just 2%.

  44. March 24th, 2006 at 15:19 | #44

    For one thing, you can run gas turbines (jets) on a wide variety of fuels.

    For another, if you can churn out both petrol and diesel from coal, you can certainly get kerosene (jet fuel). As a baseline, cracking is already used in petroleum refineries for the purpose of converting some of the less valuable distilled components of crude oil into more valuable petrol.

    As for fertilisers, as I understand it, the key component in the Haber Process is hydrogen which is obtained from natural gas. Well, surprise surprise, you get hydrogen from coal gasification, the same process used to make town gas over a century ago.

    Quiggin is right. We will be forced to stop burning fossil fuels because of the environmental consequences long before we run out of the things.

  45. smiths
    March 24th, 2006 at 15:29 | #45

    can anyone explain to me,
    if biotic oil theory is right,
    why it is that the vast majority of biological material necessary for this theory was concentrated in one region of earth (middle east/caspian), intensively over a huge period of time,
    surely that doesnt make sense

  46. Hank Roberts
    March 24th, 2006 at 15:52 | #46

    Why is it you think that “the vast majority of biological material necessary for this theory was concentrated in one region of earth” — can you tell us where you read or heard that statement and why you trust it to be true?

  47. smiths
    March 24th, 2006 at 16:10 | #47

    it starts with the biogenic theory

    from wikipedia

    Most geologists view crude oil, like coal and natural gas, as the product of compression and heating of ancient vegetation over geological time scales. According to this theory, it is formed from the decayed remains of prehistoric marine animals and terrestrial plants. Over many centuries this organic matter, mixed with mud, is buried under thick sedimentary layers of material.

    and then melds with the geography of oil resources

    from wikipedia again

    It has been estimated that there is a total of 2,390 billion barrels (380 km³) of crude oil on Earth, of which about 70% has been used so far. The World Energy Resources Program of the United States Geological Survey produces the official estimates of the world oil resources for the U.S. Federal Government.
    The Middle East has about 50% of the known remaining world oil reserve. The USGS estimates the total reserves are about three times the known amount.

    now personally i would revise this 50% figure upwards

    anway, my probably flawed logic suggests to me that over ‘geological timeframes’ a massive concentration of plants and animals must have been occurring in that one small region,
    please demonstrate to me how i have gone wrong

  48. March 24th, 2006 at 16:25 | #48

    Actually, the Dad’s Army gasbag converted van was tried in the UK, early on in the war. The TV series quite accurately showed the problems.

    Ender, you are quite right about hydrazine being that dangerous. That’s precisely why I said that the problem there was a safety issue. Newvertheless, it has been a proven way to run fuel cells for a long time; there was an electric bicycle that demonstrated this in the 1960s. But if you really want danger, try concentrated H2O2. That was what dissolved German pilots in rocket planes, not the hydrazine they were using.

    Low EROI issues only count if the fuel feedstock is expensive or if you wilfully use the fuel as part of producing the feedstock (the criticism of using sugar cane for ethanol). But you don’t have to do that; even without reverting to labour intensive ways of growing renewable feedstocks, you can use tractors with gas producers – a different and cheap fuel input.

    Coal gas wasn’t the way to make hydrogen. The method used for getting hydrogen for blimps involved passing steam over red hot coke with an excess of quicklime.

    Looking again at JQ’s comment about shovelling coal mechanically, it seems he was talking about digging. Someone either doesn’t know or doesn’t care about the difference between a spade and a shovel.

  49. smiths
    March 24th, 2006 at 16:27 | #49

    heres the monboit article on biofuels for anyone interested

    http://www.monbiot.com/archives/2004/11/23/feeding-cars-not-people/

  50. March 24th, 2006 at 16:47 | #50

    PML, the point I was trying to make is that you *can* get hydrogen from coal in commercial quantities, not necessarily that the method I was proposing was the ideal choice. I don’t imagine making the effort to gasify coal, converting it to diesel, and then cracking it back into kerosene is the easiest way to make jet fuel out of coal either; but, at a minimum, it shows the feasibility of doing so.

  51. Ian Gould
    March 24th, 2006 at 16:57 | #51

    Smiths:

    “can anyone explain to me,
    if biotic oil theory is right,
    why it is that the vast majority of biological material necessary for this theory was concentrated in one region of earth (middle east/caspian), intensively over a huge period of time,
    surely that doesnt make sense”

    Smiths it makes more sense that a biological process would be focused in particular areas than it does that methane upwelling from the Earth’s core ala Gold would be so focussed.

    Funny isn’t how when we excavate tunnels and mine for mineral oils in non-sedimentary areas we never turn up the oil fields which the abiotic theory predicts should be there.

  52. Xander
    March 24th, 2006 at 17:08 | #52

    One of the Senate committees is sort of looking at this question – “Australia’s future oil supply and alternative transport fuelsâ€?. There have been over 160 submissions http://www.aph.gov.au/Senate/committee/rrat_ctte/oil_supply/submissions/sublist.htm from quite a wide range of people and organizations, a number of whom come from a peak oil perspective. It should be interesting to see what comes out of the final report though I would expect the response of the Liberals to be fairly muted or dismissive (some of Labor seems to at least have realised it is an issue).

    On the question of coal the bloggers at the Oil Drum http://www.theoildrum.com/ have a good piece on the Governor of Montana’s proposal to go big in coal to liquid http://www.theoildrum.com/story/2005/10/17/153632/95) (They are a good site for general reading on this issue as are the newsletters of ASPO http://peakoil.net/).

    In regards to biofuels – another Monbiot article on the subject makes the important point of its effects on biodiversity – i.e. Palm oil plantations have come at the expense of important ecosystems. And in the last six years, only in 2004 did the world produce more cereals than it utilized (see FAO and Heinberg). That doesn’t indicate a whole lot of excess land to grow your crops to produce your biofuels or your oils for feedstock for chemicals, plastics, etc.

  53. March 24th, 2006 at 18:23 | #53

    P M Lawrence – ‘Low EROI issues only count if the fuel feedstock is expensive or if you wilfully use the fuel as part of producing the feedstock (the criticism of using sugar cane for ethanol)”

    No EROI is the critical factor that does matter the most and is most often neglected. If you have nothing else you have to use the fuel you produce to produce the feedstock for the fuel lowering the net energy out. At the moment we use a high EROI fuel oil to produce biofuels so the process works.

    BTW HTP is less toxic than hydrazine as it breaks down to water however I agree it is very nasty is you get it on your skin. Australia’s only satellite that was launched from Woomera used 85% HTP and RP5.

  54. Seeker
    March 24th, 2006 at 20:31 | #54

    Crispin Bennett. You’re welcome.

    HAL 9000. I meant, of course, heavier-than-air. Thanks for spotting it.

  55. SJ
    March 25th, 2006 at 00:18 | #55

    smiths Says: “why it is that the vast majority of biological material necessary for this theory was concentrated in one region of earth (middle east/caspian), intensively over a huge period of time, surely that doesnt make sense”

    At the relevant time there was, literally, only one region of earth – the continent called Pangaea.

    The current locations of the remnants of Pangaea are where the oil is now found.

    You’re quite wrong to suggest that there was a concentration in the “middle east/caspian”. There’s oil all over the place wherever Pangaea used to be.

    It’s more easily extracted in some places, however, and that relates to subsequent geological events. In some places, a nice cap of relatively impervious material formed, which trapped the oil and gas under it. The oil and gas, being lighter than the other material trapped under the cap, floats to the top and forms a nice reserviour ready to be tapped.

    In other places, no cap formed, and so the oil is still mixed with the clay and sand. The Wikipedia article estimates that 66% of the world’s oil is like this.

    So there’s absolutely nothing magical about middle eastern oil that makes abiotic theories plausible. It’s just the way the subsequent geology played out.

  56. Ian Gould
    March 25th, 2006 at 02:54 | #56

    SJ, add in also the fact that coal is the result of very similar processes which was simply subjected to different amounts of heat and pressure once buried.

  57. March 25th, 2006 at 12:55 | #57

    Ender, your second paragraph describes precisely the EROI-driven problems if you use the output fuel in the production process. The point I was getting at is that you don;t have to do it that way.

    I’ll spell it out a bit. Take biodiesel. If your farm and production machinery works on fossil fuels, you only have a small energy gain. If you switch them to run on biodiesel as well, you hardly gain at all, because EROI feeds back exponentially. But if you revert to older labour intensive methods, or if you use entirely different energy inputs for farm machinery like tractors running off producer gas, you avoid these issues. Instead of biodiesel EROI being an exponential factor, it’s a one off multiplier and the problems come down to the cost of the feedstock for the gas producers, allowing for the EROI on that – and there’s no material exponential feedback there.

    In many parts of the world, including Australia, this is a very practical approach.

  58. Joe
    March 25th, 2006 at 15:54 | #58

    To all you Candides and Pollyannas out there (and I would never have guessed that there were so many of you), have a look at The Oil Drum’s “Why peak oil is probably about now” at http://www.theoildrum.com/storyonly/2006/3/1/3402/63420 . Do not neglect the 378 comments.

  59. jquiggin
    March 25th, 2006 at 16:07 | #59

    Joe, no-one here (I think) is disputing the likelihood that we are at or near the peak for oil. The question, is, what does that mean for fossil fuels in general?

  60. March 25th, 2006 at 19:52 | #60

    P.M.Lawrence – “But if you revert to older labour intensive methods, or if you use entirely different energy inputs for farm machinery like tractors running off producer gas, you avoid these issues.”

    Where do you get the producer gas from? How much energy does it take to produce? Who feeds the labourers?

    EROI is not exponential at all. I think that you mean diminishing returns. It does not matter where the energy comes from, energy is energy. The EROI calculation sums up the energy inputs and sums up the energy produced and returns the ratio of input to output. Producer gas, biodiesel, external to the farm it does not matter.

  61. Frankis
    March 26th, 2006 at 11:36 | #61

    Ender’s right – why does it matter that you use a fraction of your biodiesel output to run the process that produces it? It takes energy to produce coal and oil supplies as well but people don’t usually quibble about the source of that energy. It obviously becomes an issue when the fraction of output energy that’s required as an input becomes “large”, and it’s also obvious that it’s hard to beat an oil well for cheap flows of energy. But that kind of thing is all very last millennium and tired by now. What we need is renewable energy sources – ones which are as efficient as possible in EROI terms of course. This is more challenging than digging stuff up and burning it (naturally), but considering us as a species – challenges are what we’ve proven to be good at.

  62. bruce
    March 26th, 2006 at 13:04 | #62

    One of the points that never seems to be addressed in discussions of this type is the relationship between oil supply and the stable, long term price of oil.

    Discussions about Peak Oil generally fail to be precise about their terms. What I think the Peak Oil advocates are REALLY saying is that reserves of sweet, easily won crude that turns a healthy profit at an oil price of US$20 per bble are running out.

    Anybody who knows anything about the subject knows that in fact there are simply huge resources of hydrocarbons on the planet, probably enough to last for hundreds of years if not more.

    There are coal deposits (black coal, brown coal, lignite), tar sands, bitumen sands, oil shales etc etc. There is also the residual oil in oilfields where the easily won crude has been depleted, but remaining oil can be recovered by secondary and tertiary recovery techniques. As well, there are substantial resources in places like Siberia that are yet to be developed.

    It is demonstrated that there is technology available to recover petroleum products from many of these sources, and at prices less than current.

    The real issue is that these projects are inevitably capital intensive, especially if the very real environmental issues related to their development are properly addressed. The projects also need to be at large scale in order to access scale economies.

    The main concern of financiers, especially debt providers (but also equity providers) is the reliability of the revenue stream. Cost streams are relatively easily established, but how can one decide what a 20 year forecast for the POO will be when over the past ten years alone the price has ranged from a low of US$10.73 per bbl in December 1998 to a high of US$69.81 in August 2005. I venture to suggest that ample financing would be available to develop these projects if a way could be found to provide a US$40 per barrel price on a reliable and sustainable basis for a financing period of say 20 years.

    Surely it is not beyond the wit of man to develop mechanisms by which this could be achieved. Certainly the costs of doing so would, I think, be rather less than the costs that would be associated with invading countries to assure oil supply (in case someone, somewhere is considering that as a possible strategy – I am not suggesting that that has happened.)

  63. March 26th, 2006 at 14:23 | #63

    bruce – “Anybody who knows anything about the subject knows that in fact there are simply huge resources of hydrocarbons on the planet, probably enough to last for hundreds of years if not more.”

    OK 2 things wrong with this.

    1. The reserves of hydrocarbons though large are not infinite. The heavy tars and oils are lower in EROI and some are close to 1:1 making it totally uneconomical to produce no matter what the price even if the energy was available to process them which in some case it is not. Coal, if used to substitute for oil, will start running short around 2050 or so and be gone a few years later.

    2. Using all the hydrocarbons on the planet will increase atmospheric CO2 to possibly 500 or 600ppm or even higher. This is the level that most scientists agree could trigger climate change with totally unpredictable effects on our society.

  64. March 27th, 2006 at 23:04 | #64

    Ender, I know that you don’t get exponentials when calculating EROI. It’s just that if you apply the same fuel source to producing the fuel, the EROI then turns up inside an exponential expression. With biodiesel, this is material, and with ethanol it gets ridiculous – which is the answer to Frankis’s point too, since what counts isn’t the energy needed to produce the fuel output but whether you have breakeven and, if so, whether you have enough non-energy input resources like land to provide the necessary inputs.

    Producer gas uses whatever scrap material is around, and making it doesn’t need a further cycle with its own exponential expression; it’s just inefficient, so you need cheap and plentiful feedstock for it. In Australia, it does not need special cultivation to get enough producer gas feedstock to fuel other agriculture.

    Likewise, if you were foolish enough to revert to unpleasant labour intensive methods of farming, Australia could do it by bringing more land into cultivation for the new peasant class (with its corresponding drop in lifestyle). It would not present an engineering obstacle, the way it would in the USA or third world countries (for slightly different reasons).

  65. March 29th, 2006 at 22:33 | #65

    I’m not an expert, just a mum & part time with a keen interest these issues. I also heard John Quiggin speak at the Brisbane Hilton last year, when Prof. Kjell Aleklett of Upsalla University (Sweden), gave a presentation on Peak Oil. May I suggest something? I think John should read Richard Heinberg’s book, “The Party’s Over.� It clarified many things for me, not the least being “EROEI,� and the inherent viability of many “alternative� fuels. Here’s a link to a short pdf booklet summary of Heinberg’s publication:-

    http://www.postcarbon.org/files/EndOfOilBooklet_0.pdf

    And here’s me crossing swords (so to speak), with Federal Australian Resources Minister, Ian McFarlane (just recently), in relation to so called “Alternatives� (coal liquefaction amongst them). Here’s his reply to me, and my further answer (widely circulated, as you’ll see):-

    http://www.kimspages.org/ianmcfarlane.htm

    “Point 3� (scroll down, it’s on the right hand side of the page), is my answer to McFarlane on this point (coal liquefaction). Also, as a qualified and practising psychiatric nurse of over 30 years experience, I’d like to say that phrases like “Cult following� – in relation to peak oil – are cheap shots that substitute for reasoned debate. It smears and denigrates, something like the term “Loony left� was used to put people beyond the pale. Richard Heinberg (for instance), is one of the coollest, most reasoned and most meticulous writers I’ve ever read. Neither do I think people like Bruce Robinson (ASPO Australia), Colin Campbell, Prof Kjell Aleklett and Matt Simmons (for example), are wild-eyed, irrational people (and I’ve met a few over the years). In fact, they’re frighteningly sane, sober and well reasoned. Come on John, I’m not a Professor – and I can grasp these things, and so can another Brisbane economist that comes to mind, Richard Sanders.

  66. Graeme Bird says:
    April 14th, 2006 at 13:57 | #66

    Wrong on every count Quiggin. Resign for Pete’s sakes.

    1. Georges land tax ideas are valid. But just not at 100%. It would be very much an improvement to substitute to land tax but only up to a point. You have not refuted it. Don’t pretend you have.

    2. Peak Oil is also an extremely good predictive model. And it will be a great source of stress since the substitution rate away from the main energy source is always painfully slow. There is so much capital imbedded in doing things the way we do them now. Of course its not going to worry you since you are a tax-eater and not a tax-payer. But the stress will fall on those who actually have to earn money to survive and carry you lot as well.

    3. The natural tendency is towards glaciation. CO2 is free fertiliser. So your Global warming take is another case of Wrong-Way Corriganism writ large.

    Wrong on all counts.

    Resign.

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