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Is Peak Oil here already ?

August 23rd, 2006

There’s been a lot of discussion about claims that world oil output is going to reach a peak some time soon. If you look at the recent numbers, there’s a pretty good case to be made that world all output has already reached its peak at about 73 million barrels a day, a level reached in mid-2004, and sustained for the past two years.

Now there are lots of local factors that explain weak output in particular countries. Still, if the claims made by those who think oil output can keep on growing were correct, I would have expected the massive increase in prices (from a brief low of $10/barrel and a medium-term price of $20/barrel in the late 1990s to $75/barrel today) to produce a substantial expansion in supply.

This argument is pretty robust to whether oil producers believe that there is plenty of oil (implying that prices will come down again) or not. If prices are going to come down, then there’s a strong incentive to pump more in the short term, use secondary recovery from depleted wells and so on. If prices are going to stay high, there’s a strong incentive to bring large new fields online, even if they are in high cost locations. As far as I can see, neither of these things is happening.

Supposing that oil output has peaked, the obvious point to be made is that Peak Oil isn’t so bad. Sales of Hummers are plummeting, apparently, and lots more people are using buses (at least in Brisbane). And of course, the less oil there is to burn, the easier it will be to stabilise CO2 emissions (though we can’t just rely on Peak Oil – apart from anything else, there’s almost unlimited coal in the ground, far more than we can burn without frying the planet in the process).

Even if supplies have peaked (or, more plausibly, flattened out at the top of the curve), I doubt that prices will go much higher than this, though $100/barrel is certainly possible. If current prices are sustained, a lot of alternatives will become cost-competitive, as already seems to be happening with biofuels in the US. More importantly, demand is bound to respond more than it already has.

These graphs from the US DOE illustrate the long-run increase in oil output and the recent stagnation. (Looking at the data, I’m pretty confident that the time scale for the monthly data is out by a year – it should be 2004-6.)
Oil output long-term
Monthly oil output

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  1. August 23rd, 2006 at 21:55 | #1

    Prof. Q,

    I wouldn’t be too optimistic that, if peak oil has indeed been reached, that it’s automatically good news on the global warming front.

    The trouble is that turning gas or coal into petrol or diesel puts out a lot of CO2 in the process, as well as the CO2 released when they are eventually burned. So, unless the “process CO2″ is sequestered, we’ll end up with a lot more CO2 in the atmosphere per litre of liquid fuel.

  2. August 23rd, 2006 at 22:03 | #2

    PrQ,
    I am not a technical analyst, but even to my eye there seems to be a disparity between the graphs. The top one shows a steady growth in output from 1983 and continuing – with 2 downturns in 1999 and 2002 – after both of which there has been a recovery to trend growth. No plateau there. If anything, there was an accelleration.
    The second one, at the month level, shows minimal growth over the period 2002 to current.
    Can you provide the actual numbers for production in b.p.d for each of the years 2000 to 2005 or at least link to the source of your data?
    As a comparson, I would be also interested in the results of the Venezualan strikes, and the effective removal of output from Iraq over the period 2001 to current, on output. I feel that, without these, production may well have increased as you would otherwise expect.

  3. August 23rd, 2006 at 22:06 | #3

    Well said Robert. The EROEI coal-to-liquids, gas-to-liquids or any kind of synfuel is poor. We’ll all be putting a lot more CO2 in the air per kilometre driven than before. Mind you, as fuel prices skyrocket we’ll be driving a lot less.

  4. jquiggin
    August 23rd, 2006 at 22:18 | #4

    There does seem to be something wrong with the graphs. The data is from the Energy Information Administration/Monthly Energy Review July 2006. I’ll try to fix this in the AM.

  5. August 23rd, 2006 at 22:35 | #5

    JQ – I think you will find that the EIA reports are a bit dodgy. Possibly the best analysis is from The Oil Drum. This one is a post on the plateau:

    http://www.theoildrum.com/story/2006/6/14/25151/9885

    And what could be wrong with the EIA reports:
    http://www.theoildrum.com/story/2006/8/3/31559/92662

    “Supposing that oil output has peaked, the obvious point to be made is that Peak Oil isn’t so bad. Sales of Hummers are plummeting, apparently, and lots more people are using buses (at least in Brisbane).”

    I am not entirely sure that you grasp all the implications of Peak Oil. How are we going to grow ethanol without fossil fuel made and transported fertiliser? CTL does release a LOT of CO2 and has a much lower EROI than oil. Again another analysis from the Oil Drum on EROI

    http://www.theoildrum.com/story/2006/8/2/114144/2387

  6. Rabee
    August 23rd, 2006 at 22:36 | #6

    My understanding is that major OPEC countries are not producing at their peak while a number
    of non-opec countries have reached peak.

    I was reading somewhere that our Saudi friends actually reduced oil production because they claimed that they couldn’t find buyers. I can’t remember the reference but it was a blog so I wouldn’t be too sure about the information:-)

    There is an argument that the hi oil prices are a result of a speculative bubble.

    My own feelings is that oil prices will return to $30/b after regime change in the US.

  7. August 23rd, 2006 at 23:52 | #7

    Rabee, My guess is about $40US/barrell. There are massive energy savings possible in China and India.

    Like global warming this will be a hickup without long-term consequence. Markets will force substitutions – JWH is moved already with his daft LPG subsidies – but the world won’t end.

  8. Rabee
    August 24th, 2006 at 01:54 | #8

    Harry,

    I’ve seen a number arguments explaining the oil market:
    1) The Environment partisans: it’s all about Peak Oil.
    2) The Stop the Iraq War partisans: It’s all about Iran and the Shiites.
    3) The US Liberals: What do you expect when oil men are in the White
    House.
    4) some “paper oil” traders: it’s a speculative bubble driven by
    moms and dads investors (or investors for investors).
    There is this argument, which I’m having trouble grasping:

    http://dhatz.blogspot.com/2006/06/oil-to-38657-per-barrel.html

    But looking at this graph

    http://photos1.blogger.com/blogger/6952/1801/1600/oil.png

    I see a spike when the Iraq war began, a
    dip when Bush declared “Mission Accomplished”,
    a spike when the first war with the Sader militias began (November
    2004) and 141 US soldiers died. The rest of the spikes are almost
    perfectly in tune with US threats against Iran over article IV of the
    NPT. Finally, there was a recent spike (not shown) during the
    Israel-Lebanon war (i.e., Israel-Iran war).

    The upward trend is also consistent with how bad we are doing in Iraq
    and how well Iran is doing. There is a perception that a strong Iran
    means the likelihood of trouble in all Shiite areas in the Middle
    East. As it happens God blessed the Shiites by putting the world’s
    “sweet” oil reserves smack in the middle of their population centers.

    So I guess if I war running this blog, I would have posted this item
    under the Politics/Economics header rather than the Environment header.

  9. August 24th, 2006 at 08:05 | #9

    Rabee – “My understanding is that major OPEC countries are not producing at their peak while a number of non-opec countries have reached peak.”

    Not quite true. All the supergiant older fields like Ghawar, Burgan and Cantarell in decline. All OPEC countries firmly resist supplying accurate details of their reserves. The North Sea is in terminal depletion. The Saudis tried to claim that they could not sell their oil however it was possibly heavy sour that nobody can refine.

    http://www.theoildrum.com/story/2006/8/13/232547/321
    http://www.theoildrum.com/story/2006/1/20/193723/259

    Harry Clarke – “Like global warming this will be a hickup without long-term consequence. Markets will force substitutions – JWH is moved already with his daft LPG subsidies – but the world won’t end.”

    What substitues? Do you think the oil will last forever? Why do you imagine that global warming will produce no hiccups????

  10. Bring Back EP at LP
    August 24th, 2006 at 08:23 | #10

    Whilst it is true that we do not know the reserves of OPEC nations one interesting fact to come from the four corners program on said topic was that both former Kuwaiti and Saudi minister of Oil or whatever their title is said that costs wee rising to produce oil thus indirectly giving evidence that both counties have peaked!

  11. August 24th, 2006 at 09:32 | #11

    IMO, its impossible to know if oil has peaked or not. Most proven reserves are in countries that extremely secretive, and the big oil companies aren’t exactly open and honest either. What is clear is that the era of cheap, less environmentally destructive, oil is coming to an end.

    High oil prices are good thing don’t get me wrong. As you say, it should put an end to the SUVs and Hummers, and encourage people to walk, bike and use public transport. The problem is EROEI. The optimists say there’s plenty of oil in the tar sands in Canada and Venezuela but these reserves have a very poor EROEI. For every three barrels of oil you produce you have to burn two (EROEI = 1.5:1) unlike Saudi crude where the EROEI is something like 10:1.
    So we might be driving less and driving far more fuel-efficient vehicles, but each barrel of oil we consume has cost much more energy to produce and has put a lot more CO2 in the air. In addition, because you are burning fuel to make fuel you run down the resource much faster.
    Like Ender, I recommend The Oil Drum. Yes, there are some hard-core doomers there, but also some high quality discussion.
    I blogged on the Triple Crunch 2020 facing society a few days ago.

  12. taust
    August 24th, 2006 at 09:37 | #12

    Remember that the price of oil is set (somewhat imperfectly ) by a cartel ie is not necessarily subject to free market explanation.

    The optimum price for a cartel is just below the price that encourages substitute.

    The cost of substitutes tends to rise as energy prices go up.

    The price of substitutes increases as demand goes up.

    Substitutes for oil become readily availble at about the $100/bbl price of oil ie it becomes economic to make the change to LPG/LNG Shale oil at this sustained price for oil.

    Thus there wil be no energy crisis though world economic acitivity will be lower than it would have been if energy prices were lower (except in the energy related sector)

    As for the climate, the increase in living standards in Asia (India and China etc etc) and hopefully Africa means that the only rational activities to spend money on is to adapt to the climate change as and where it occurs. eg move to the tropics where there will be the smallest relative change and no drought.

    There is 1.2 million years of history that supports the assumption that humans have the capacity to adapt.

    The climate change movement (not the climate change facts) seems to always come down to the need for actions that can only be taken by a centrally planned economy (I think experiencing the climate change may be a better option than central planning).

  13. Nanni
    August 24th, 2006 at 09:42 | #13

    Rabee,
    oil production is certainly affected by political/military events. But these events, in turns, aren’t themselves an indication of resource scarcity and resource insecurity ? Or do we still believe wars are fought for ideals?

  14. August 24th, 2006 at 09:56 | #14

    taust,

    Move to the tropics — sounds like a good plan, way better than (say) electrifying our transportation infrastructure and powering the grid with renewables, and (if we have to) nuclear.

    None of this needs to be centrally planned. What we need is a price signal for carbon that reflects the damage it is doing to our planet. If the price is right, the market will sort it out.

    BTW, I believe the EROEI for shale oil is even worse than for tar sands.

  15. gordon
    August 24th, 2006 at 10:09 | #15

    And Taust sums it all up beautifully when he/she says: “The climate change movement (not the climate change facts) seems to always come down to the need for actions that can only be taken by a centrally planned economy (I think experiencing the climate change may be a better option than central planning).”

    The idea of coordinated action either within or across national borders is, of course, repugnant to those who think they will be OK (or at least relatively better off than others) in a world of higher prices and scarcer resources. To such people, the idea of an equitable and coordinated approach to either greenhouse or oil depletion is threatening.

    This raises the further, and interesting, issue of the effect of increasing resource scarcity on inequality. I suspect it would be easy to show that, given a number of social groups with unequal access to resources, increasing overall scarcity would exacerbate the inequalities between them.

  16. August 24th, 2006 at 10:17 | #16

    taust – “Substitutes for oil become readily availble at about the $100/bbl price of oil ie it becomes economic to make the change to LPG/LNG Shale oil at this sustained price for oil.”

    The substitutes for oil, tar sands and shale oil, all require massive amounts of water and natural gas to refine. The amount of natural gas is limited as is water. It does not matter how high the price rises you cannot get a rooster to lay an egg, to paraphrase a quote by the head of ABARE. It does not matter how high the price is if there is no gas or water to refine the product.

    “Thus there wil be no energy crisis though world economic acitivity will be lower than it would have been if energy prices were lower (except in the energy related sector)”

    Perhaps but unless we adapt early then there will be a gap period where the economy could be seriously damaged.

    “As for the climate, the increase in living standards in Asia (India and China etc etc) and hopefully Africa means that the only rational activities to spend money on is to adapt to the climate change as and where it occurs. eg move to the tropics where there will be the smallest relative change and no drought.”

    What if the people already at the tropics do not want you there? What if there is not enough food and water and/or land at the tropics for you??? What if you are too poor to move????? What if the tropics gets too hot – we have an energy crisis you cannot just turn on more airconditioners???????

    Simplistic statements like “oh well we will just move to the tropics” mean that you have not really thought through the implications of what you are saying. Populations cannot just move. They then become refugees and we know what we think of them in Australia.

  17. taust
    August 24th, 2006 at 10:24 | #17

    I will try to backtrack the reference, but there was a very interesting paper by some physicists from France who simulated an economy with random distribution of assests (physical and human) with a random outcome from trades.

    The resulting distribution of wealth fell within the range commonly experience ie 80% of the wealth owned by 10% of the people.

    The benefit of free trade in this model was a faster cycling of people through the wealthy/poor categories. Poverty is aleays going to be with us (not necessarily destitution) but at least in a free market you (or your children )have a better chance of experiencing wealth (and visa versa).

    My guess is that in a more resource constrained economy, inequality will oscillate about the current values and I understand there are many social values to be experienced in high measure in poor societies (but I have never been tempted to find out, mainly because I notice that the poor seem to go to great lengths to get to richer societies.)

  18. August 24th, 2006 at 10:25 | #18

    All these comments are addressed over the next few weeks in Australian capital cities, at Public Talks and seminars given by Richard Heinberg and David Holmgren see holmgren.com.au for schedule….. Powerdown strategies and Re-localisation.

  19. taust
    August 24th, 2006 at 10:36 | #19

    We have 100 hundred years or so for people to realise living in the tropics (say) is the better option for them and move.

    Refugees are a political problem there is nor reason why labour should not be as free to move as capital.

    If we need free movement of labour to manage the climate change problem this change in outlook will give something for the NGO to get on to.

    The immediate danger is high continuing cost solutions like subsidised pipelining water from the tropics just so people can avoid recieivng the signals that life is not the best where they currently live.

  20. August 24th, 2006 at 11:40 | #20

    RE Biofuels: Read this: Whither Cellulosic Ethanol?
    I used to be a big believer in biofuels (especially biodiesel) and I still believe it will have an important role in the short to medium term, but in the long term the only viable option is to electrify our transportation infrastructure.

    Growing crops for fuel is an extraordinarily inefficient way to produce energy for transportation. Think of the losses in planting the crops, fertilizing the crops, harvesting the crops, refining the fuel, transporting the fuel, and finally the losses in the internal combustion engine itself. Compare that with (say) a combined-cycle gas turbine (60% efficient), minimal transmission losses (compared with transporting liquid fuels), high-efficiency batteries (~85%) and electric motors (~85%).

    The more you look at this stuff the more you become convinced that electrifying transportation (converting the grid to renewables/nuclear) is the best solution.

  21. August 24th, 2006 at 12:14 | #21

    taust – “We have 100 hundred years or so for people to realise living in the tropics (say) is the better option for them and move.”

    Really, are you sure about that?? How sure can you be of this when climate scientists could not answer that question. The danger is that climate change once/if it gets going could happen very rapidly as has happened in the past. The time frame could be decades.

    However that does not answer the problem of whether the new area can support an influx of people and whether the people in the new area will allow entry of the refugees.

  22. August 24th, 2006 at 12:17 | #22

    carbonsink – “The more you look at this stuff the more you become convinced that electrifying transportation (converting the grid to renewables/nuclear) is the best solution.”

    Renewables – yes
    Nuclear – no – in my opionion.

    Once you get the electric cars and plug in hybrids you can use them to buffer renewable power so nuclear is just not needed. Better to avoid all the problems of nuclear entirely.

  23. August 24th, 2006 at 13:48 | #23

    Ender – I’d love to think renewables can do the job entirely. My point is, if we were forced to choose between nuclear and CCS/geosequestration I’d go nuclear. Why? Its a proven technology, and the amounts of waste produced are tiny. Compare that with the cubic kilometre of CO2 produced every day by coal-fired power stations in Australia.

    Taust – Are you concerned about the effects on the biosphere? Plants and animals cannot simply ‘move to the tropics’. Habitats have become isolated by land-clearing, animals can’t move up the mountain if there’s no more mountain, corals can’t build a new reef overnight. I cannot believe that any human being would not be concerned at the tragic loss of biodiversity the would result from rapid climate change.

  24. August 24th, 2006 at 14:14 | #24

    carbonsink – “I’d love to think renewables can do the job entirely. My point is, if we were forced to choose between nuclear and CCS/geosequestration I’d go nuclear.”

    They can if we are prepared to meet them halfway by increasing efficiency and stop wasting so much power. We also may have to accept the notion that some days there will not be much power. We accept that at the moment as no system is 100% reliable. My building has a UPS that testifies to the fact.

    The choice you are presenting is a false choice. There are in reality only 2 choices – sustainable or non-sustainable. Nuclear/CCS etc are non-sustainable as at some time in the near future their fuel source will be gone. Sustainable power means that it will last for the life of the sun which by any human standards is forever.

    Renewable solutions can include a low level of base load from fossil fuels. Used in this way they should last a lot longer. Nuclear power has too many unsolved problems to even consider.

  25. August 24th, 2006 at 14:46 | #25

    Ender – my heart agrees with you, my head says … maybe.

  26. taust
    August 24th, 2006 at 17:13 | #26

    It will take some 20 to 50 years for us to re-equip the economy with renewables or whatever so if a trigger pointis going to be reahced it will whatever we do.
    .
    The Indians and the Chineses are not going to voluntarly accept constraints on their economic activity (we do not why should they). The Chinese have a way of enforcing their will on their population so I might hedge a bit on the Chinese going for economic development.

    If the ‘temperate lands are so bad then the tropics will on average give a better than other options life style. Also the tropics were only an example of adaption there are other actions that can be taken eg build seawalls.

    However for Australia its a mere accident of history that we did not start by developing the tropics. Its time we did some nationa building in the name of climate change adaption.

    Nature is very very adaptable. If there is 4kcal difference in energy levels between two molecure states something will be having a feed. so something will fill in the transitions lands. I understand forsts in the northern hemisphere are expanding noth at some km per degree change in temperature. Think of the low price of wheat when Siberia is the wheat bowl of the world.

    If we lost all backboned animals in the world by what fraction would the world’s biodiversity have reduced? Would nature care? Let nature look after nature it has done a good job albeit with periodic mass extinctions.

    The opportunities for the scientific study of a mass extinction event as it and the inevitable recovery occur should be enough to make any biological scientist get exited. Climate change is a one in a thousand years chance to improve our scientific understnding of the way the world functions we should not throw this chance away without thinking it through.

  27. August 24th, 2006 at 20:41 | #27

    taust – ” If we lost all backboned animals in the world by what fraction would the world’s biodiversity have reduced? Would nature care? Let nature look after nature it has done a good job albeit with periodic mass extinctions.

    The opportunities for the scientific study of a mass extinction event as it and the inevitable recovery occur should be enough to make any biological scientist get exited. Climate change is a one in a thousand years chance to improve our scientific understnding of the way the world functions we should not throw this chance away without thinking it through. ”

    Yeah right. So you are happy to make all the animals extinct just so we can drive SUVs whenever we want and have electronic toys we want.

    Sure that is correct – what if one of the animals made extinct is us???

  28. taust
    August 24th, 2006 at 21:51 | #28

    Ender “–What if one of the animals made extinct is us?

    We are but part of nature and the majority of species evolved by nature are extinct. Almost certainly extinction will come to H Sap.

    The point I as trying to make and failed was that the extinctions through climate change are a very very small part of the biodiversity of the earth. Arguing that it is worth preserving them in my opinion needs to demonstrate how the worth arises.

    It can only arise from a human value
    .
    Lots of people claim to value them when it other peoples money to be spent, but do not care to spend their own money.

  29. August 24th, 2006 at 23:27 | #29

    taust – “It can only arise from a human value”

    So nothing has any value except what is set by humans???????????

    Are you serious? You may as well say that the odd murder here and there does not matter because there are plenty of humans and a couple would not be missed.

  30. Ian Gould
    August 25th, 2006 at 00:54 | #30

    “The point I as trying to make and failed was that the extinctions through climate change are a very very small part of the biodiversity of the earth. Arguing that it is worth preserving them in my opinion needs to demonstrate how the worth arises.”

    Actually we appear to be in the midsts of one of the greatest mass extinctions in the history of the planet and on past evidnece it will probably take millions or tens of millions of years to recover.

    But hey that’s obviously a small price to pay to defend your religious faith in the innate goodness of marekts in all situations.

    I mean if the facts clash with your prejudices it’s obviously the facts that have to give way.

    “There is no God but the market and Adam Smith is his Prophet.”

  31. taust
    August 25th, 2006 at 04:27 | #31

    Enders
    please could you explain to me how value arisre without the presence of human value systems?

    Ian
    I agree that the evidence supports the view that we are in the middle of a mass extintion period. probably caused by the change to H.Sap becoming a dominant life form. This gives a so far unique chance to scientifically study such an event and the recovery. If we do not commence the study right now some data will be lost for ever it is thus urgent to commence the study.

    I do not believe that markets have an innate goodness. I do believe that oin a wide range of circumstances they lead to a greater satisfaction of huma wants than other systems lead to. Both free markets and other ‘systems’ have failures. In a wide range of circumstances free market systems lead to less human misery than other systems. I think there is a strong body of evidence to support my belief.

    So far I have not seen any need to postulate the existence of a god. From the current day evidence it can be dangerous to choose the wrong brand.

  32. August 25th, 2006 at 08:27 | #32

    taust – “please could you explain to me how value arisre without the presence of human value systems?”

    If I have to explain this to you then obviously you cannot understand the explanation. I suggest that you go to http://www.soul.com and see if there are any for sale there.

  33. gordon
    August 25th, 2006 at 08:51 | #33

    This is getting interesting. I said: “I suspect it would be easy to show that, given a number of social groups with unequal access to resources, increasing overall scarcity would exacerbate the inequalities between them.” Taust said: “My guess is that in a more resource constrained economy, inequality will oscillate about the current values…” One of us must be wrong, or at least wrong in certain circumstances.

    It seems an obvious question, and I wonder whether anybody has tried to create a model of resource decline as it interacts with inequality? Maybe Taust could find the reference to “some physicists from France” to get the ball rolling. I would have thought that economists also might have done some work on this.

  34. gordon
    August 25th, 2006 at 08:58 | #34

    As far as the “human values” issue is concerned, surely the answer is evolutionary, not supernatural. We evolved in a particular world with a varied and self-correcting ecology. That is where we flourish best. To preserve our ecology is to protect ourselves.

  35. taust
    August 25th, 2006 at 09:08 | #35

    Getting back to the topic of Peak Oil;

    The rate of oil production eg barrelsa per day is in the short term related to the money invested in production facilities (although obviously reserves are needed to sustain the production rate in the longer term.

    Oil is no different from say iron ore or coal both of which are undergoing price rises while production capacity catches up with demand. So price rise does not necessarily indicate a loomong failure of reserves.

    There are a number of estimates of total discoverable reserves for oil most of which do indicate that in the relatively short term the rate of discovery of reserves will fall below the rate of use at the then current price. Most assumed more or less $20/bbl oil so there may be some upside to the estimates.

    The trouble with Peak Oil predications is that they will be true one day but have been regularly made since mineral oil saved the whales by driving Whale oil from the market by selling at a lower price then Whale oil. (Perhaps the Japanes are taking precaution to give them a renewable source of an oil substitute?)

  36. August 25th, 2006 at 10:03 | #36

    taust – “The trouble with Peak Oil predications is that they will be true one day but have been regularly made since mineral oil saved the whales by driving Whale oil from the market by selling at a lower price then Whale oil. (Perhaps the Japanes are taking precaution to give them a renewable source of an oil substitute?)”

    That is not quite true. M King Hubbard correctly predicted the peak in the lower 48 states of the USA oil production. Oil as a resource is totally unique because of the amount of embodied energy that it has and the fact that it is a room temperature liquid and is quite dense.

    Oil ‘substitutes’ have much lower energy returns and/or have huge environmental implications for their exploitation. Our global economy has grown the way it has because of the enormous EROI of fossil fuels. To adapt to lower EROI energy sources will require changes.

  37. August 25th, 2006 at 11:20 | #37

    Ender,
    Predicting it for the US, where the geology is well known and it has been fully explored was a fairly trivial exercise. Predicting it for the whole world is another matter entirely. There are still large areas of the planet that remain unexplored and many fields, particularly those under the control of national (read government) oil companies that have not been explored using modern methods and where the geology is, at best, uncertain.
    I am not saying there are some more supergiants out there – I, like you, do not know either way. With several of the countries with realistic prospects having been war zones for substantial periods, who can say?
    Either way, there will come a time when oil becomes more expensive. As I have said before we will then transition off it. It will come at a cost, but it will also be gradual as the cheaper fields dry up and we move on to the more expensive. At no stage will we simply wake up one morning and find that all the wells have suddenly run dry.

  38. August 25th, 2006 at 11:45 | #38

    Andrew – “Predicting it for the US, where the geology is well known and it has been fully explored was a fairly trivial exercise. Predicting it for the whole world is another matter entirely. There are still large areas of the planet that remain unexplored and many fields, particularly those under the control of national (read government) oil companies that have not been explored using modern methods and where the geology is, at best, uncertain.”

    Oil is a very special resource. The underlying organic material has to have a certain type of cap and the carbon has to be cooked for a very specific time to form either light sweet or light sour. Cook it a bit too long and you get Heavy sour.

    http://en.wikipedia.org/wiki/Petroleum#Biogenic_theory
    “Three conditions must be present for oil reservoirs to form: first, a source rock rich in organic material buried deep enough for subterranean heat to cook it into oil; second, a porous and permeable reservoir rock for it to accumulate in; and last a cap rock (seal) that prevents it from escaping to the surface.”

    Now while areas exist that are unexplored they are unexplored for a very good reason that there is no possibility of oil there. Wildcat holes are extremely expensive to drill and getting more and more expensive as rigs are getting scarce. Most of the possible areas have been explored. Also the idea that government controlled oil companies do not explore as well as private is also pretty false. They employ the same exploration companies and expertise as any private firm.

    Yes we will transition however it will not be and unchanged society. We have to be prepared to make significant changes to adapt to the lower EROI of the alternatives. If we don’t we will just use up the Earths increasingly scarce resources at a greater rate and accelerate climate change.

  39. derrida derider
    August 25th, 2006 at 14:34 | #39

    Andrew, you’re right about Peak Oil not resulting in us “running out” unexpectedly one day, and that capitalism will, on past form, adapt pretty painlessly to gradually rising oil prices.

    But I think the far more plausible scenario here is the exhaustion of supplies where the spigot can be turned on off quickly – ie existing developed fields requiring only relatively modest investment in time and money to pump up output. This means that in the short run supply of oil can’t respond very well to rises and falls in spot prices. Given that we know that in the short run demand doesn’t change much in response to prices, this means that prices are likely to vary wildly in response to relatively small factors that change supply or demand (eg a local war, the Chinese start driving cars, etc).

    That both demand and supply are much more responsive in the long run (new oil fields, new technology, alternative fuels, etc) means that the average price will rise only slowly, but we can expect a lot more instabilty about that average.

    On a separate but related topic, the US consumes nearly a third of the world’s oil. Inelastic supply means that if the silly buggers had enough sense to slap on a decent fuel tax the (pre-tax) price of oil would fall sharply (the post-tax price would only rise modestly). That means that most of the tax will be paid by the sheiks, not by Americans.

  40. Mike Hart
    August 25th, 2006 at 15:32 | #40

    JQ, interesting post, with some predictable responses. If three world experts on oil exploration say what we’ve got is what we’ve got and it is not what we think nor can we use like we do and they include an American expert, A Britain and an Iranian, then I guess we need to get serious about what we’ve done. This coming problem has all the hallmarks of a classic multi-factor accident or calamity occuring; crude stock declining, refined stock consumption increasing and climate change from the past century of fossil fuels probably arriving all about the same time.

    The issue is not substitution, that is possible but simple economic inputs, land, labour and capital. We have invested extraordinary amounts of capital in a system based on cheap oil, look around you, the very cities and transport systems we depend upon are based on cheap oil. Who is going to bear the cost of replacement and subsitution, simple market price will not suffice because the price signals will be so distortional as to create a fundemental crisis. Where is the capital going to come from to rebuild;motor car based city transportation sytems. just in time production methodologies that rely on rolling stock (trucks) as warehousing, the transportation of goods across the world at speed in aircraft and ships not to mention some of the other issues. We are effectively looking at a rapid depreciation of our whole industrial and social infrastructure over a probable time period of twenty years. The introduction of electricity may solve some transport problems but you can’t use electricity as a feedstock for nitrogenous fertilisers to start with (so there goes the so called green revolution), as food output diminishes because of diminishing returns the fertiliser substitutes will have to be found (sewarage waste is one) but there will be a substantial cost to building and developing transportation and processing systems, not cheap solutions as in Sydney of pumping it into the ocean. Then we add into the mix climate change and every oil substitute simply aggravates or makes much worse the current situation of warming and Co2 emissions. The lead times to design, get approved and build plants to generate electricity (say nuclear) and process coal are significant and the completion times way into the future. Ditto for C02 sequestration (even if viable, yet unproven). Bio fuels are a falacy, every litre of fuel produced from food will place pressure over time on food prices, so the question will become, food to eat or food for fuel. Social upheaval will solve that one not the market.

    At even $100 per barrel, half the worlds airlines will go broke, most are already insolvent. The future of air transportation except as a luxury consumption good or state based needed service is pretty well a foregone conclusion.

    But no doubt we will be all still arguing about the obvious when it all happens, this brings to mind J Diamonds famous hypothetical, ‘what did Easter Islanders think they were doing when they cut down the last tree?’ what we are doing now, believing something will miraculously substitute itself, forget we need to competely rebuild and restructure the way we live, commute, travel and do business. Once we have lost the means to do so or it has become so prohibitively expensive we will be forced to live with some very brutal market and social adjustments, the market may be efficient but it is remarkably anti-social.

    Post-script- have a look at what the Japanese having been doing in terms of electricity generation, moving labour intensive activities dependent on oil O/S and building superb public infrastructure to quickly and cheaply adapt to mass transport systems. And they have already dealt with the folly of their real estate bubble and are coming to grips with their demographics.

  41. August 25th, 2006 at 19:29 | #41

    “capitalism will, on past form, adapt pretty painlessly to gradually rising oil prices”

    Bollocks! Typical economist thinking. Of course we’re not going wake up one morning and find that all the oil is gone. The fundamental problem is that each barrel of oil we produce in the future will cost more in terms of CO2 emitted. The cheap oil is gone. We can’t just stick a hole in the ground and have it gush out like we did in the 1960s. Every barrel of oil we produce in the future will use more energy to produce than it did the year before.

    Since capitalism (in its current form) does not place a dollar value on the GHGs we pump into the air, Peak Oil will accelerate climate change, not slow it down. Believe me, I’d like to think otherwise, but I don’t know how you could come to any other conclusion.

  42. Joe
    August 25th, 2006 at 20:47 | #42

    Robert Hirsch, the well-known energy analyst has just released a report, “Economic Impacts of Liquid Fuel Mitigation Optionâ€? that considers how the US might meet its liquid fuel needs. He reckons that it can be done with a crash program over 20 years, costing one trillion dollars per year. Last time I looked, the US didn’t have a spare trillion dollars, rather the reverse. And Hirsch doesn’t factor in climate change.

  43. Mike Hart
    August 25th, 2006 at 21:01 | #43

    Re the above graphs, the DOE is overly optimistic about anything to do with energy, here is a little snippet from a trusted source in the US Oil Industry about the real situation:

    “”Based on EIA crude + condensate numbers through May, world oil production is down by 1.3% since December. However, as I have been predicting, production from the top 10 net oil exporters is down more–3% since December. Since domestic demand in the exporting countries has to be satisfied first, and since domestic consumption in most exporting countries is rising quite rapidly, the effective drop in net exports from these 10 countries is probably more than 5%. In other words, net exports are probably dropping about three to four times faster than world oil production is falling.”

    The whole issue of peak oil is that it is a half way point, we passed it several years back according to Campbell et al. Demand is already way ahead of output and the China – India entry into the demand side merely steepens the curve down. Can;t support HC’s optimism about energy gains. The sting in the tail is recoverability v reserves, just because you have 10% left does not mean you can get it. Gas reserves are not that further behind.

    Sleepwalking into the future is one way one commentator described it.

  44. Ian Gould
    August 25th, 2006 at 22:01 | #44

    “I agree that the evidence supports the view that we are in the middle of a mass extintion period. probably caused by the change to H.Sap becoming a dominant life form. This gives a so far unique chance to scientifically study such an event and the recovery. If we do not commence the study right now some data will be lost for ever it is thus urgent to commence the study.”

    Thank you Taust for reminding me why, severla mothns away I walked in disgust from the trolls, right-wing ideologues and racists who dominate the comment section of this blog. (to be clear I don’t think you’re a racist just an ideologue.)

    I have this image of you in 1945 “We’ve never been able to observe the extermination of six million peopel before, let’s make sure we gather all the possible data and let’s not interfere with this great scientific opportunity.”

    Thanks for ensuring I won’t be wasting any more of my time here.

  45. August 26th, 2006 at 09:56 | #45

    Here are a couple of posts from the oil drum by a person called westexas. He/she is in the oil industry at quite a high level. They summerise the problem quite neatly:

    “”Is it the case, then, that the URR is limited more by today’s technology than yesterday’s price? Put another way, does the oil pumped diminish so quickly as URR is approached that rising price doesn’t provide access to a meaningfully increased amount?”

    The Lower 48 and the North Sea both peaked at about 50% of Qt, based on the HL method. The Lower 48 peaked in 1970, the North Sea, in 1999–29 years apart. Note that despite better technology, the North Sea peaked at the same stage of depletion as the Lower 48.

    Also, in the Lower 48, we have tried primary, secondary and tertiary recovery techniques, combined with horizontal drilling and 3D seismic, etc.

    Can we make money, find new fields and increase the recovery from existing fields in the Lower 48? Yes. Will it help? Yes. Will it make any kind of real difference? No. ”

    and

    “You can tell that the OPEC guys are lying (if their lips are moving).

    When you look at a production rate versus time graph, if you integrate the area under the curve, you get URR, or Deffeyes’ Qt.

    The question is, what is the area under the curve, especially when the graph shows primarily rising production with time?

    There are a lot of engineering terms–proven, proven undeveloped, probable, possible, etc. The USGS uses some very optimistic methods to get their reserve estimates, and I recall that someone at Saudi Aramco suggested at one time that they were using USGS estimates.

    However, I prefer the Hubbert Linearization (HL) method to estimate Qt for large producing regions and for the world.

    Using the HL method, if we have a enough production history, we have been able to demonstrate pretty accurate results. I would especially point to the Lower 48 case history, where Khebab took the production data through 1970, to generate a post 1970 predicted production profile. The post-1970 cumulative Lower 48 production was 99% of what the HL model predicted.

    We have consumed about 1,000 Gb of crude + condensate, and Deffeyes estimates that the world has about 1,000 Gb of conventional crude + condensate left. IMO, the only areas left that could really change this estimate would be the north and south polar regions.

    In any case, as predicted by Deffeyes, world oil production has been falling since December, and as Khebab and I predicted, production by the top oil exporters has been falling faster than world oil production is falling.

    I really can’t think of a time when Yergin and/or Lynch have been right.

    I can point to multiple examples of the HL method being correct, especially for large producing regions.

    Take your pick. ”

    The problem is depletion of existing fields. CERA and the IEA do not properly account for depletion and also they include reserve growth that is not necessarily justified. The original post that these comments were posted at is here:
    http://www.theoildrum.com/story/2006/8/25/13013/4877#more

  46. rog
    August 26th, 2006 at 12:28 | #46

    Ender says “Here are a couple of posts from the oil drum by a person called westexas. He/she is in the oil industry at quite a high level. ”

    Ender knows this to be true..

  47. Joe
    August 26th, 2006 at 17:11 | #47

    John, what would be the “correct” economic response to a rise in inflation caused by high oil prices? It seems to me that increasing interest rates would not be sensible because the problem is lack of supply, not too much demand.

    Joe

  48. August 26th, 2006 at 23:08 | #48

    Anyone seen ‘An Inconvenient Truth’ yet?

    http://www.springhillvoice.com/reviews.html

    I’m also getting chills while reading James Howard Kunstler’s ‘The Long Emergency’

  49. Mike Hart
    August 27th, 2006 at 07:40 | #49

    Joe, the problem you allude to is called ‘stagflation’ a governments worst nightmare. The oil price shocks of the seventies did a lot of US industries in one of which was the small to medium aerospace industry (The reinsurers applied the coup de gras a few years later). It gave rise to a lot alternative fuel source work which was promptly forgotten once oil prices resumed a low level.

    Megan, Kunstler although a journalist has put together some quite sound facts and placed the hypotheticals into everday language. I checked many of his sources, little hyperbole there.

    I really wish people would get their heads around how oil dependent our current economic system is and stop merely thinking of the obvious the car which is the least of our problems. Oil based products drive pharmaceuticals, plastics, engineering, agriculture to mention but a few. There are replacements for some and not for others. Then consider the replacement costs for substitution, and the inexorable decline in oil availablity as the law of diminishing returns kicks in. I understand the Saudi fields are pumping in more seawater to get oil out than they get out oil and the Russian fields are no saviours either, they are pretty clapped too.

    I am not posturing a doomsday scenario but the need to get going now and have some serious community discussion about how we are going to manage the inexorable rise in prices and the need to find substitutes is to my mind becoming critical as is climate change. For instance how much of our vaunted export industry will wither and collapse when transport costs rise back to the problem we had a hundred years ago as a nation – ‘The tyranny of distance’. Everything is going to get smaller and more local and we need to plan and work on that now.

  50. taust
    August 27th, 2006 at 10:10 | #50

    Enders

    Good post explaining the methodology well and giving an accurate view of the current status.

    About the only additional point to be drawn out is that the size of new discoveries needed to provide a continuing say ten years forward reserves is increasing as annual demand increases.

    However as the price of oil increases (as it will if the forecast is correct) demand will fall as oil substitutes come to be economic. As is repeatedly demonstrated a number of oil substitues are known so that the transition can be expected to occur without any ‘gaps’.

    One interesting development is that for example Dupont and Tate & Lyles (a sugar company originally) have a joint venture using sugar as a feedstock for plastics currently based on petro-chemicals). Dupont must be risk managing the higher oil prices scenario.

    All the fuss seems to be about transport fuels but get very much higher prices on petro-chemicals and we would not need forcing to give up plastic bags at the supermarket.

  51. August 27th, 2006 at 10:33 | #51

    taust – “However as the price of oil increases (as it will if the forecast is correct) demand will fall as oil substitutes come to be economic.”

    You have not addressed the EROI issue of the ‘substitutes’. All of then are in the 5:1 or less range. Where does the extra energy come from?

  52. taust
    August 27th, 2006 at 10:45 | #52

    Ender;

    be patient, I need my lesson for the day EROI means ?

  53. gordon
    August 27th, 2006 at 11:13 | #53

    Joe, until Prof. Quiggin responds to your question you could try thinking about price control and rationing on the analogy of wartime. After all, the general price inflation you anticipate is the same thing as an uncontrolled black market.

    And Mike Hart says: “We have invested extraordinary amounts of capital in a system based on cheap oil, look around you, the very cities and transport systems we depend upon are based on cheap oil. Who is going to bear the cost of replacement and subsitution, simple market price will not suffice because the price signals will be so distortional as to create a fundemental crisis.” True, but you have left out the military. It seems to me that a major force for violent dispute over remaining oil – as opposed to creative adaptation to a lack of oil – will be the world’s armies, navies and air forces. They are not without political influence, and will be very badly affected by an oil shortage. What general wants to re-learn cavalry tactics? What admiral wants to revert to coal-fired dreadnoughts (or even perhaps to the age of sail)? And what air marshal wants to wrestle with the idea of a steam-powered dirigible?

  54. taust
    August 27th, 2006 at 11:19 | #54

    In reply to Gordon sometime ago;
    the reference to the two French physicists is

    arxiv.org/abs/con-mat/0002374

    Bouchard & Mezard are their names.

    You postulate we have a self correcting ecology. Whilst I am inclined to accept this as a high probability I would give a self sustaining ecology a higher probability.

    If the ecology is self correcting then it can be expected to manage the changes wrought by just another species coming to dominance.

    So the question is can we by planning and coordinated action reduce the costs to society from the coming changes?

    Having seen the costs of planning and coordinated actions in the drive for a better life throughout history I am very wary of accepting that this is the time when planning and coordinated action will produce a better than other optioons outcome.

    i am even more wary when the costs I am avoiding are to ‘nature’ and the costs I am increasing are to humans.

    I went through the structural changes to the economy to give us a more free economy. The net gains were trumpeted far and wide by our policy elites; the scrapping of half a generation of teenagers and half a generation of 50+ were never disclosed and never adequately managed.

    I am sure that the responses to climate change are going through the same policy elite driven debate and the costs to human society that will occur by the change are not being addressed. The emphasis is almost completely on the cost to nature of climate with the human costs of climate change only thrown in a frighteners. there is very little discussion of the benefits of climate change.

  55. August 27th, 2006 at 12:31 | #55

    taust – EROI means Energy Return On energy Invested. To shorten it from EROEI to make it a bit less unwieldy however the concept is a ratio of the Energy Return you get compared to the Energy Invested in obtaining that energy.

    Our global economy is based on the fantastic energy return of fossil fuels. For every uniit of energy invested in obtaining fossil fuels you get sometimes over 20 times the energy return from it this would be an EROI of 20:1 or an energy return of 19.

    The Alberta Tars sands EROI is less than 5:1, Shale Oil is worse at 3:1. Extra Heavy Oil is about 8:1. All these resources require another readily usable fuel source to be present to be extracted. Crude oil basically is pumped out and sent to a refinery. The subsitutes require large volumes of water and natural gas to be processed to a state where it can be refined. That is why the energy return is much lower. Also if there is no natural gas there is not oil possible. At the moment Canada exports most of its natural gas to the USA. Assuming that all this gas was diverted to Alberta for Tar Sands refining then this would allow an output of about 10 million barrels per day of oil. This is less than half of what the USA currently cosumes per day. It also leaves gas consumers in the USA without most of the natural gas they need. The question is what do they want the oil or the gas??

    Ethanol’s EROI is around 5:1 with 7:1 available from sugar cane. As modern industrial agriculture has been described as a process to turn fossil fuel into food it really does not make much sense to then turn this food back into fossil fuel substitute. The EROI of ethanol is only this high because fossil fuels are used as the energy input.

    The fact that you had to ask what EROI is gels with you thinking that the transition can be easy. EROI is all that matters. There can be a transition however as I said before there will need to be changes to adapt to the lower EROI of alternative fuels.

  56. August 27th, 2006 at 14:05 | #56

    “You have not addressed the EROI issue of the ’substitutes’. All of then are in the 5:1 or less range. Where does the extra energy come from?”

    eg
    http://bridge.berkeley.edu/PresentationArchives/2006/Panel%202/Coelho.pdf

    Both crop breeding and process technology still provide avenues for this value to rise further over time

    http://findarticles.com/p/articles/mi_m0BEK/is_7_13/ai_n14874191

  57. August 27th, 2006 at 14:11 | #57

    The bridge Berkely link in the previous comment documents EROI for sugar cane to ethanol in Brazil is approachin 10:1 in current practice.

    At least sugar cane makes sense from energy efficiency arguments.

    Ender should remember I have had a previous discussion with him about this topic, mentioning the 10:1 value . We also discussed the minimal use of petroleum based fertilisers in Brazilian sugar cane.

  58. taust
    August 27th, 2006 at 14:14 | #58

    Enders
    Thanks for the explanation. the oft favoured Hydrogen economy (rather a way of transporting energy than energy itself I know) must have a negative EROI.

    There is a quote I like (Unfortunatly I never been able to track down the original) which said (approximatley) problems were like mountains you appear to get different views from different perspectives but to know the mountain you needed all the views.

    However I still think the transition is not in need a centralised planning and enforcement.

    The world has gone through energy changes already eg wood to coal (if you go to Ironbridge in the UK you can see the first coal based blast furnace _ a truly worthy World Heritage site).

    The EROI will be reflected in the relative prices of the energy sources these prices will guide both uptake of the various alternatives and the research needed to develop better options.

    The USA invested vast sums into coal bed methane in the energy crisis in the 1970′s. Only now is coal bed methane open market economic. There cannot have been a reasonable financial rate of return on the 1970′s investment. I fear the current investment in windfarms, biofuels etc will be shown to be as premature but at least in Australia the investment of public funds has been relatively small although the excise breaks are well hiddden in total value.

    As the price of energy rises relative to the price of labour can we expect to see a return of the navvy. I’m not sure I would regard the re-emergence of the renewable energy of back breaking labour as an advantage.

    At least the increased demand for physical strength will reduce the inequality in society as the price for those individuals prepared to do the work increases.

  59. August 27th, 2006 at 19:17 | #59

    Ender wrote – “The fact that you had to ask what EROI is gels with you thinking that the transition can be easy. EROI is all that matters”

    Ender you are too kind. The fact that taust had to ask what EROEI means shows that he doesn’t have a clue what he’s talking about!

    FYI: For people on the east coast 60 minutes is about to show a Peak Oil story. There has been truckload of stuff about peak oil and global warming in the media this weekend, with more to come on 4 Corners tomorrow night. Details here: Essential reading and viewing.

  60. taust
    August 27th, 2006 at 21:10 | #60

    Who was it that said ‘roughly’ that the person who realises that they do not know is wise.

  61. August 27th, 2006 at 23:14 | #61

    I’m late to this thread. Harry Clarke said something (a day or two back) about John Howard and his ‘daft’ LPG subsidies.

    You’ve got to be joking, Harry. They’re not daft. They’re very carefully calculated. Have a think about who does best out of the conversion of a petrol vehicle to LPG. Obviously the person/family who drives the furthest. Who is that in political terms?

    Why surprise, surprise, it’s the voter/family living on the outskirts of our major cities and commmuting significant distances every day to and from work in the city. And they just happen to live in a marginal electorate. That’s who is getting the subsidy. Now who’s daft? Not John Howard.

  62. August 28th, 2006 at 10:51 | #62

    detribe – “Ender should remember I have had a previous discussion with him about this topic, mentioning the 10:1 value . We also discussed the minimal use of petroleum based fertilisers in Brazilian sugar cane.”

    Actually this is quite false. Brazil actually only produces about 10% of it liquid fuels from sugar cane:
    http://www.financialsense.com/fsu/editorials/rapier/2006/0623.html

    “The question then arises: “Just how much did widespread use of ethanol in Brazil contribute toward their energy independence?â€? The answer is: “Not muchâ€?. In 2005, Brazil produced 4.8 billion gallons of ethanol, or 114 million barrels. However, a barrel of ethanol contains approximately 3.5 million BTUs, and a barrel of oil contains approximately 6 million BTUs. Therefore, 114 million barrels of ethanol only displaced 67 million barrels of oil, around 10% of Brazil’s oil consumption. In other words, Brazil’s energy independence miracle was 10% ethanol and 90% domestic crude oil production. Brazil did not farm their way to energy independence.”

    In the last discussion I did not have these facts. Therefore 90% of the liquid fuels used to produce the ethanol is from fossil fuels. This is probably why the EROI of Brazillian sugar cane ethanol is so high. As we also said before the sugar cane yields obtained per acre are only possible because of fertilisers. Without them the yields would be a less than a tenth of what they are now. Finally the destruction of the Amazon rainforest is being accelerated to make fuel: From
    http://www.biofuelwatch.org.uk/background5.php

    “Biodiesel and the Amazon

    Soya is almost certainly the most damaging choice – not just because it has very few greenhouse gas and energy savings compared to petrol or diesel. Soya cultivation is understood to be responsible for more Amazon destruction than any single other business in present times – including cattle ranching or logging. It is also linked to destruction of Brazil’s Atlantic forests.

    Palm oil is, so far, a small business in Brazil, but also targets the Amazon.

    Deforestation rates in the Amazon had been coming down for eight years until 2003 and then suddenly increased, almost solely due to soya monocultures. The business is largely controlled by a company belonging to the governor of the Amazon state Mato Grosso – Gruppo Maggi – and the US corporation Cargill as the main exporter. So far, it has been grown largely for animal feed in Europe, the US and China, and to satisfy Europe’s demand for GM-free soya. A soya-based biodiesel programme, supported by President Lula’s government, is almost certain to accelerate the destruction of the Amazon forest. Vast tracts of Amazon forest are being set ablaze to clear the land for soya – and fires spiral out of control during droughts.

    Whilst soya businesses are reaping high profits and helping the government to pay foreign debt, infant mortality and starvation have reached record levels around Mato Grosso’s soya plantations. Ongoing violence against indigenous people has been recorded by Amnesty International and by the United Nations. As Survival International quote from one tribe: “Soya is killing usâ€?14.”

  63. Chris O’Neill
    August 28th, 2006 at 22:44 | #63

    “adapt to the climate change as and where it occurs. eg move to the tropics where there will be the smallest relative change”

    With logic like the above, who needs a silly argument.

  64. August 29th, 2006 at 10:47 | #64

    Endor, the links I gave mentioned recycling of vinasse waste from ethanol factories as a fertilizers obviating use of petrochmeical fertiliser. I’d be interested to see your source for use of petrochem fertilisers in Brazilian sugar cane.
    QUOTE Use of fertilisers in sugarcane fields is controlled. Replaced with
    by-products of industrial production (vinasse and filter cake).UNQUOTE

    I dont see your point about extent of ethanol use as a fuel disputes the prposition that sugar to ethanol EROI value is close to 10 in Brazil.

    But there seem to be other views on how much ethanol fuel is being used in Brazil now, that put it at 40% trasport fuel

    http://www.worldwatch.org/node/4081
    In 2005, Brazil produced 16.5 billion liters of fuel ethanol (45.2 percent of the world’s total) with the United States a close second at 16.2 billion liters, or 44.5 percent of the total. Ethanol provides roughly 40 percent of Brazil’s non-diesel fuel and 2–3 percent of U.S. non-diesel fuel.

  65. gordon
    August 29th, 2006 at 11:50 | #65

    Taust, thanks for the Bouchaud and Mezard reference, but I don’t see that it applies to a situation of declining resources, only to the distribution of existing resources – as far as I could tell, as a mathematical semi-literate.

    Here is a simple conceptual model. “Given initial inequality of wealth, and given that the price of a declining nonrenewable resource tends to rise over time, then access to that resource will tend to be more and more limited to the wealthy over time (only the wealthy will be able to buy it). If the resource is an income-producing asset, then the incomes of the wealthy will also tend to rise over time.”

    This increase in inequality will be due to the decline in the amount of resource and the corresponding concentration of its ownership, not because of any overall tendency of societies or economies to concentrate existing wealth, as proposed by Bouchard and Mezard.

    There is an interesting article on “wealth condensation” in Wikipedia here.

    I understand your scepticism about the effectiveness of government action in response to crises like global warming. But I think we have to try, because the alternative is just to let the “have-nots” die by the million. And the experience with CFCs (the Montreal Protocol) was pretty positive.

  66. August 29th, 2006 at 11:55 | #66

    PrQ,
    I note that the graphs have not yet been changed. Could you point to your source data so that we can see the data for ourselves?

  67. August 29th, 2006 at 17:42 | #67

    detribe – “Ethanol provides roughly 40 percent of Brazil’s non-diesel fuel and 2–3 percent of U.S. non-diesel fuel.”

    Farm machinery and transport trucks etc are almost all diesel. As you can see from the production figures Brazil produces only 10% of its transport energy from ethanol – do you dispute these figures?

    From Wikipedia:
    “Presently the use of ethanol as fuel by Brazilian cars – as pure ethanol and in gasohol – replaces gasoline at the rate of about 27,000 cubic metres per day, or about 40% of the fuel that would be needed to run the fleet on gasoline alone. However, the effect on the country’s oil consumption was much smaller than that. Although Brazil is a major oil producer and now exports gasoline (19,000 m³/day), it still must import oil because of internal demand for other oil byproducts, chiefly diesel fuel (which cannot be easily replaced by ethanol).”

    “QUOTE Use of fertilisers in sugarcane fields is controlled. Replaced with
    by-products of industrial production (vinasse and filter cake).UNQUOTE”

    And this is for every single farmer in Brazil?? The fact that all the transport and farm machinery is powered from oil means that this is really just a way of converting oil into food and then back into food – whats the point?

  68. August 29th, 2006 at 23:25 | #68

    Ender, I thank you for making it clear that diesel is big in Brazil.
    But your comments are irrelevant to whether sugar cane ethanol makes sense in itself
    Its the EROI value of 10 which saying that ethanol made sense in itself on energy terms. What it means is that the energy 1 input is trivial compared to the output 10. Sure with maize,EROI=1.3(fuzzy accounting tho) your argument is valid but with sugar cane no.

    I still dispute your assumption that there is heavy fertiliser use in sugar cane in Brazil and the related assumption that this invalidates the EROI which is calculated based energy inputs including fertilisers as part of the assessment. Fertiliser is counted in getting to EROI of 10 and 10 means energy for fertiliser is trivial (less that 10% of output) compared to output.The input calculation also includes the transport energy for tractors and such. That the whole point of the energy calculation

    Brazil in the past is a country that had little oil and the sugar cane indusry developed with minimal use of fertiliser. Its not like the fertiliser intensive maize sector in the US. The industry developed as a low cost industry and this includes breeding cane varieties that does well without fertilisers.

    As far as every farmer in Brazil. -I’m talking only about farms devoted to ethanol, where the RECYCLE their vinasse as a fertiliser- recycling is an ecological concept you would be familiar with. That all I have to talk about to demonstrate ethanol itself makes energy sense.

    As far as extending diesel from sugar cane, it may be that butanol would make some sense. BP and DuPont are about to build butanol plants in the UK using sugar beets.

    As far as your point about biofuels only being a fraction of total fuel demand, I completely agree. Their only an extender for oil to keep the farmers happy, and well have to go electrical hybrid and nuclear for sure, sooner or later, and travel less.

  69. August 30th, 2006 at 09:02 | #69

    Ps. Ender. I do think the biofuel hysteria has some tangible and valuable benefits. One is taking various EU subsidies for agriculture, including carbon-credits, which the green plant photosynthesis CO2 fixation ( biological carbon sequestration) achieves, and burning them in European cars, tractors and buses, instead of releasing them as subsidised food on world markets. EU farmers still get their subsidies but third world and Australian farmers get better prices for their crops. This is already showing up on world sugar and oilseed market traded prices.

    Yes, over all its food being turned into fuel, but the EU has too much food and not enough fuel, and the rural poor of the world have not enough income or income security, and should be given every opportunity to expand their income. Burning Belgian,s Butter,s Better.

    (sorry apostrophes not workin,)

  70. August 30th, 2006 at 10:27 | #70

    detribe – “As far as your point about biofuels only being a fraction of total fuel demand, I completely agree. Their only an extender for oil to keep the farmers happy, and well have to go electrical hybrid and nuclear for sure, sooner or later, and travel less.”

    I do see that we are in broad agreement which is good. I still am not sure that Brazil ethanol has an EROI of 10:1 however at the moment I do not have any data to the contrary – I will research it.

    Really we have to drive less. Electric cars and plug in hybrids, as good as they are, will still put an intolerable strain on the electricity infrastructure if we simply replace our huge heavy cars and wasteful driving habits with electric cars of the same size. An electric SUV is still a waste.

    The bottom line from Peak Oil and Global Warming is that changes have to be made to adapt to the lower EROI of alternative methods of transportation. We cannot nuke our way out of trouble as then we just run into other problems. The only real answer is to adapt to a lower and vastly more efficient energy regime. The times where we had enough energy to waste as much as we wanted to are coming to a close.

  71. August 30th, 2006 at 17:10 | #71

    I believe peak oil already happened as of December 2005. Production topped 85 million bpd and since then it has retreated. Gulf of Mexico production has recovered since, also the price of oil rose from $55 back then to over $70 for most of this year, yet the market didn’t receive more oil in response.

    theviewfromthepeak.net

  72. August 30th, 2006 at 20:25 | #72

    ETHANOL AND SUGAR PRODUCTION: SUGARCANE AGRIBUSINESS EVOLUTION IN BRAZIL, LUIZ CARLOS CORRÊA CARVALHO, 2005 (or earlier)

    http://www.abareconomics.com/outlook/presentations/carvalhol.ppt

    has a discussion and documentation, including energy balances, (actually EROI=10.5 in this presentation) of some of the points I was trying to make with Ender about the highly evolved efficiency of the Brazilian ethanol industry.

    There is an extensive literature online about Brazil, so this it the tip of the iceberg…

    And Ender, I don’t propose we JUST nuke our way out it , we are going to have to try every trick in the book, and in several million new books yet to be written, or decide just now we know there is only one real answer.

    Paul Erhlich tried that approach in India and would have condemned millions to starvation. I much prefer Norman Borlaug’s remedy – just get out there and do it .

    I prefer to be optimistic about how much can be done, rather than moan groan about what will have to be stopped. Its a glass half full or half empty thing.

  73. August 30th, 2006 at 20:47 | #73

    Enders quote of August 28th, 2006 at 10:51 am
    “Soya is almost certainly the most damaging choice – …
    … and to satisfy Europe’s demand for GM-free soya. A soya-based biodiesel programme”

    This is a standard mindless Green NGO rant. I wouldn’t trust much of it unless it was all put to searching scrutiny first, and I don’t have the time at the moment.

    But I’ll make one point : Just who were the so called “environmentalist” NGOs that forced Europe to switch away from US soybeans (grown nowhere near the AMazon) to Brazil to avoid US GM varieties based on a fraudulant scare blitzkrieg; Why werent they thinking about the Amazon then?

    Thats right the same groups currently these last weeks making a fuss about some the CONSEQUENCES of that trade shift, which they themselves created by their own fraudulant scare campaign (oh, that by the way produced a lot of donation revenue and publicity for those organasations)

    At the moment Greenpeace and friends are trying hard to cover their tracks on this fiasco.

    Fortunately a few of us have good memories on those events.

    Furtunately also soybean output is most recently shifting further, to Argentina for instance

  74. Seeker
    August 31st, 2006 at 02:25 | #74

    “The only real answer is to adapt to a lower and vastly more efficient energy regime. The times where we had enough energy to waste as much as we wanted to are coming to a close.”

    Exactly.

  75. taust
    August 31st, 2006 at 08:12 | #75

    Gordon Re your 29th inst.

    The model did not include a steady increase in the total wealth. However what it did show was wealth get distributed over time among a population (clogs to clogs in three generations is a anecdotal phrase which sums up the situation)

    My concern about doing something reducing climate change is magnified because I can see no set of actions that will have any reasonable prospect of reducing climate change. I am thus very much more interested in identifying the actions that will adapt our society to climate change.

    Certainly for Australia absolutly nothing we do will have the slightest effect on climate change. Therefore I am disinclined to support policies that will harm my fellow Australians for no practical purpose. OK if in order to trade I need to do something I will adopt the French method of passing the required law but having it full of loopholes.

    Australia is at long last in economic terms back to the situation at its founding by the British. Our nearest neighbours now want to trade with us. Now the East India Company no longer exist to stop us. We have an economic system in place that does not fool us that we can price ourselves independent of the market.

    The climate change nostrums all seem to assume we can make decisions without worrying about the economic consequences.

    My nostrums let economics dominate and adapt to the climate consequences because I believe this will do least harm to humans.

    Nature will do its adapting and appears not to need my help after some 3 billion years of the adaption thing. All right I know the universe has been evolving for 15 billion years.

  76. Rongo Tai
    August 31st, 2006 at 08:40 | #76

    Source: http://www.whiskeyandgunpowder.com

    I’ve taken the liberty of editing out the advertisments.

    —– Forwarded message from Whiskey & Gunpowder —–

    From: Whiskey & Gunpowder
    Subject: Peak Oil and Bakhtiari’s 4 Phases of Transition

    Greg’s Note: In this article, our intrepid correspondent Byron
    King presents some heretofore unpublished comments by one of
    the world’s foremost experts on Peak Oil, Dr. Ali Morteza Samsam
    Bakhtiari. Dr. Bakhtiari is recently retired as a director of the
    National Iranian Oil Company (NIOC). This, in and of itself,
    makes his viewpoint important to the world’s energy industry. We
    at Agora Financial and Whiskey & Gunpowder are pleased and
    privileged to be able to present this important and newsworthy
    report. We thank Dr. Bakhtiari for his willingness to share his
    thoughts with Byron. And if you want to share your thoughts, send
    an e-mail to your traveling managing editor here:
    [email protected]

    Whiskey & Gunpowder August 25, 2006
    by Byron W. King
    Pittsburgh, U.S.A.
    Peak Oil and Bakhtiari’s 4 Phases of Transition

    IN A RECENT ARTICLE entitled “Nothing Like Business as
    Usual,” published Aug. 11, 2006, in Whiskey & Gunpowder, I
    outlined the views on Peak Oil of a man named Ali Morteza
    Samsam Bakhtiari. Dr. Bakhtiari is a former senior energy expert
    who spent his long career, which started in 1971, employed by the
    National Iranian Oil Co. (NIOC) of Tehran, Iran. During the
    course of his employment with NIOC, he held many important
    positions of trust and responsibility.

    Dr. Bakhtiari is now fully retired from NIOC, in accordance with a
    mandatory age requirement. He has no current official link with
    the company. Still, and fortunately for us in the Western world, Dr.
    Bakhtiari is an independent energy consultant who writes and
    speaks to a worldwide audience on the subject of oil depletion in
    general, and Peak Oil in particular. He is among the pioneers of the
    global “Peak Oil” theory.

    What Are the 4 Phases of Transition?

    My recent article on Dr. Bakhtiari discussed in general his views
    and recent comments on Peak Oil and worldwide oil depletion. I noted his predictions of oil costing in the range of $100-150 per
    barrel in the not-too-distant future. And I referred to what Dr.
    Bakhtiari characterizes as the “Four Phases of Transition” (which
    he labels T1, T2, T3, and T4) in a world of declining conventional
    oil output. I received much e-mail from readers asking me to
    amplify what Dr. Bakhtiari means by these latter terms. That is,
    what are the “Four Phases of Transition”?

    I asked the good doctor this very question, and his reply was, “As
    for T1, T2, T3, and T4, they are still very vague concepts, but if
    you allow me a few days?I shall try to explain to you what I think
    about these four.” And good to his word, within a few days, Dr.
    Bakhtiari was kind enough to forward some amplifying thoughts
    on the matter. Here is what he sent to me, to share with the readers
    of this newsletter.

    Dr. Bakhtiari’s 4 Phases of Transition

    “The four Transition periods (T1, T2, T3, and T4) will
    roughly span the 2006-2020 era. Each Transition [will]
    cover, on average, three to four years.

    “The major palpable difference between the four Ts is their
    respective gradient of oil output decline — very small for
    T1, perceptible for T2, remarkable in T3, and rather steep for T4. In fact, this gradation in decline is a genuine
    blessing for those having to cope and adapt.

    “It should be borne in mind that these four Ts are only an
    overall theoretical structure for future global oil output.
    The structure is thus so orderly because [it is] predicted
    with ‘Pre-Peak’ methods, ‘Pre-Peak’ assumptions, and [a]
    ‘Pre-Peak’ set of rules.

    “The problem is that we now are in ‘Post-Peak’ mode, and
    that none of [the] above applies anymore.

    “The fact of being in ‘Post-Peak’ will bring about explosive
    disruptions we know little about, and which are extremely
    difficult to foresee. And the shock waves from these
    explosions rippling throughout the financial and industrial
    infrastructure could have myriad unintended consequences
    for which we have no precedent and little experience.

    “So the only Transition we can see rather clearly (or
    rather, we hope to be able to comprehend) is T1. It is clear
    that T1 will witness the tilting of the ‘Oil Demand’ and ‘Oil
    Supply’ scales — with the former dominant at the onset and
    the latter commanding toward the close (say, by 2009 or
    2010).
    “But even during that rather benign T1, the unexpected might become the rule and the orderly ‘Pre-Peak’ rapidly
    give way to some chaotic ‘Post-Peak.’

    “In any instance, the overall structure of the ‘Four
    Transitions’ is a general guideline for the next 14 years or
    so — as far as global oil output is concerned. In practice,
    reality might prove to be worse than these theoretical
    Transitions; but certainly not better.”

    Analogy to Chemical Phase Transitions

    Dr. Bakhtiari has a background in chemistry. He holds a B.Sc. and
    Ph.D. in chemical engineering, granted by the Swiss Federal
    Institute of Technology in Zurich, Switzerland. He has worked in
    industry and taught at a university level in the fields of both
    chemistry and chemical engineering for about four decades.

    I asked Dr. Bakhtiari if it would be fair to say that he is using the
    term “Transitions” in a manner similar to what are known as
    “phase transitions” in physical chemistry? Of course, the analogy
    need not be an exact chemical description. But I asked him if that
    concept from chemistry would be a proper way of helping to
    explain his thinking process.

    By way of definition, in physics and physical chemistry, a “phase
    transition” (or “phase change”) is the transformation of a thermodynamic system from one phase to another. The
    distinguishing characteristic of a phase transition is an abrupt
    change in one or more physical properties; in particular, the heat
    capacity of a unit of matter coupled with a small change in a
    thermodynamic variable, such as the temperature.

    Common examples of phase transitions are the solid-to-liquid
    transition (melting) and liquid-to-solid transition (freezing). Or
    consider the liquid-to-gas transition (boiling/evaporation) and gas-
    to-liquid transition (condensation). Or consider the solid-to-gas
    transition (sublimation) and gas-to-solid transition (deposition). In
    each case, a small change in the temperature of the system leads to
    a major transformation of its phase or state of matter.

    The reason I asked the question of Dr. Bakhtiari, and used terms
    from physical chemistry, was his statement, “The major palpable
    difference between the four Ts is their respective gradient of oil
    output decline.” My interpretation of that comment is that at each
    “transition” point where the gradient changes, we might view that
    as the “phase change” analogous to, say, frozen water melting, or
    hot water boiling.

    And as for how much we do not know in a post-Peak Oil world, as
    Dr. Bakhtiari noted, that could be analogous to the phenomenon
    known as “flash evaporation.” That is, if you raise the temperature
    of water to something well below its standard boiling point, but then rapidly change some other condition, such as lowering the
    atmospheric pressure above the water, the water “boils” at a lower
    temperature and lower pressure regime. This might be considered
    similar to some abrupt, unanticipated event reducing the supply of
    oil; for example, warfare, natural disaster, or unexpectedly rapid
    depletion and decline in a major oil-producing region of the world.

    Dr. Bakhtiari replied as follows:

    “I certainly like your idea of ‘phase transition,’?especially
    the analogy from ice to water, which occurs gradually.
    Start with ice and end with water, while to the very last
    second there is some ice present.

    “I also agree that at the junction of two Ts, there should be
    some kind of a milestone. For example, at the close of T1,
    Supply should totally dominate Demand?I am toying with
    [the] idea, very preliminary, that close of T2 could be
    OPEC [oil production] surpassing non-OPEC [oil
    production], although OPEC died in 2004.”

    Other Thoughts on World Oil Production

    Dr. Bakhtiari’s statement that “OPEC died in 2004″ is an
    interesting viewpoint, in light of his idea about the nature of T2,
    when OPEC production will surpass non-OPEC production. To explain this further, let me refer back to February 2006, in the
    ASPO-USA newsletter, in which Dr. Bakhtiari wrote:

    “It goes without saying that when assaying Middle Eastern oil
    reserves, one should tread carefully. Because, on the one hand, oil
    reserves’ estimation is both a science and an art; and on the other
    hand, seen from the point of view of most Middle Eastern
    countries, oil reserves are more political than geological. Thus,
    nonscientific views come to prime over science and further
    enhance the various types of shades that have led to an overall
    opaque situation in the Middle East.”

    Dr. Bakhtiari wrote this in the context of a discussion in which he
    estimated total oil reserves in the Middle Eastern group of major
    oil-producing nations (Iran, Iraq, Kuwait, Saudi Arabia, and the
    United Arab Emirates) as about half, or even less, than what the
    respective national governments claim. Here is a table, prepared by
    Dr. Bakhtiari, from that article:

    In a remarkable comment following this table of information, Dr.
    Bakhtiari noted in the article that:

    “As for Iran, the usually accepted official 132 billion
    barrels is almost 100 billion barrels over any realistic
    assay. If the higher figure was for real, its oil industry
    would not be struggling day in and day out to keep output at between 3.0-3.5 million barrels per day (inclusive of
    Persian Gulf offshore).”

    Coming from a former senior official of NIOC, this is an utterly
    astonishing comment with immense implications. It may explain
    much about the current Iranian government’s view of its options
    for setting future industrial, economic, political, and military
    policy, although Dr. Bakhtiari certainly did not say this, and I do
    not want to put words in his mouth.

    In February 2006, Dr. Bakhtiari further summarized his thinking
    on the subject of oil reserve estimates as follows:

    “Notwithstanding the importance of conventional oil
    reserves, their days might now be numbered (both in the
    Middle East and elsewhere).

    “Oil reserve estimates were useful in the era before ‘Peak
    Oil.’ But in the aftermath of the mighty Peak (as, for
    example, in the present ‘T1′ period), they tend to become
    stale and rather useless, as field-by-field analysis and
    prediction takes over (e.g., Ghawar, Cantarell).

    “So it will not be long now before we will have to say
    goodbye to all these mesmerizing oil reserve figures and
    dump the whole reserves file into the all-encompassing ‘dustbin of history.’”

    Irreversible Decline and the Need for Immediate Preparation
    In another recent statement, Dr. Bakhtiari has said this:

    “The decline of global oil production seems now
    irreversible. It is bound to occur over a number of
    transitions, the first of which I have called T1, which has
    just begun in 2006. T1 has a very benign gradient of
    decline, and it will take months before one notices it at all.
    But T2 will be far steeper?My World Oil Production
    Capacity model has predicted that over the next 14 years,
    present global production of 81 million barrels per day will
    decrease by roughly 32%, down to around 55 million
    barrels per day by the year 2020.

    “Thus, in the face of Peak Oil and its multiple
    consequences, which are bound to impact upon almost all
    aspects of our human standards of life, it seems imperative
    to get prepared to face all the inevitable shock waves
    resulting from that. Preparation should be carried out on
    individual, familial, societal, and national levels as soon as
    possible. Every preparative step taken today will prove far
    cheaper than any step taken tomorrow.”

    The Need to Cope and Adapt

    In his message to me, Dr. Bakhtiari stated that the “gradation in
    decline (between T1, T2, T3, and T4) is a genuine blessing for
    those having to cope and adapt.” Indeed, it is a blessing, but only if
    informed people and the industrial and political policymakers of
    the world will actually take Peak Oil as a serious matter and set
    policy accordingly.

    In this regard, when it comes to his efforts in explaining Peak Oil
    to a worldwide audience, Dr. Bakhtiari is a prophet. His efforts, his
    writings, and his work embody the old saying that “Time takes no
    holiday.” Simply allow me to end by expressing my deepest thanks
    to Dr. Bakhtiari for sharing his thoughts with me, and recalling the
    words of Dante Alighieri, who wrote in Purgatorio, Canto III, “It is
    the wisest who grieve most at the loss of time.”

    Until we meet again…
    Byron W. King

  77. August 31st, 2006 at 12:14 | #77

    taust – ‘My concern about doing something reducing climate change is magnified because I can see no set of actions that will have any reasonable prospect of reducing climate change.”

    No there are plenty of actions that will reduce climate change. What you are saying here is “My concern about doing something reducing climate change is magnified because I can see no set of actions” THAT WILL NOT COMPROMISE MY CUSHY WASTEFUL LIFESTYLE “that will have any reasonable prospect of reducing climate change”. If that is what you are really saying then this is true. The problem here is that without any supporting evidence you regard climate change as a problem that you can adapt to and have your lifestyle without change. However the 7 million ton elephant in the room is that you do not know this to be the case. Climate change could be so drastic so as to compromise the carrying capacity of the planet and lead to billions of deaths or it could be nothing at all. You or anyone else on this planet do not know which of these scenerios, or any scenerio in between, will come to pass. Yet you are prepared, just through your inability to compromise some wasteful luxuries, to bet the farm on climate change being adaptable to. Sounds like dinosaur thinking to me.

    “Certainly for Australia absolutly nothing we do will have the slightest effect on climate change. Therefore I am disinclined to support policies that will harm my fellow Australians for no practical purpose.”

    And this is where you are the most incorrect. At the moment Australia is a shining beacon for inaction. As one of the highest per capita greenhouse emitters in the world we serve as a model for countries wishing to resist action on climate change. In our government’s stubborn refusal to reduce emissions in any meaningful way we are a prime example of a resource rich country unable to find a way to reduce emissions without affecting the economy. We also had a leading role in nobbling Kyoto so it became almost ineffective. In these ways our contribution to climate change emissions are far beyond what we actually emit.

    This could be so different. With our abundant renewable resources and a visionary government we could instead be the beacon for how to transition an economy to renewable energy. In this way we could be selling billions of dollars worth of value added manufactured renewable products to Asia creating thousands of meaningful Australian jobs rather than selling low value primary products like coal and woodchips. We would also be contributing to lowering greenhouse emissions in these countries and allow us to punch well above our weight in reducing climate change.

    All that is lacking is vision.

  78. August 31st, 2006 at 13:50 | #78

    On the 4 Corners programme the other night, John Howard said that Australia would be silly to impose a domestic carbon tax as that would just allow China to buy our coal more cheaply. It is a very good point. The same amount of coal would still be burnt – but in China rather than here. The amount of C02 pollution in our shared atmosphere would be the same.

    John Howard understands economics very well.

    The lesson for us as individuals is that it is ridiculously naive to cut our personal electricity consumption. This will just lower the price and allow savvier consumers to get a nicer lifestyle at cheaper cost.

    John Howard says he will not be part of a global system where China and India do not have the same stringent requirements as us. Likewise I refuse to turn of my lights, computers, A/C at home because I can’t be sure that every other bugger in Australia isn’t doing the same thing.

  79. August 31st, 2006 at 17:56 | #79

    wbb – Simple answer: Stop exporting coal.

    You think I’m being irrational? What course of action is more rational? destroying the planet’s climate –OR– forgoing a few billion in export income?

    Australia is the biggest coal exporter in the world. Howard and others say we can’t make a difference to GHG emissions on a global scale. Bollocks! We could stop exporting coal tomorrow and make a HUGE difference.

  80. August 31st, 2006 at 19:21 | #80

    FOR ENDOR
    Re The implications that Biodiesel doesn’t make energy sense in terms of an unfavourable EROI, here is evidence

    NREL/SR-580-24089 UC Category 1503 Life Cycle Inventory of Biodiesel and Petroleum Diesel for Use in an Urban Bus
    http://www.nrel.gov/docs/legosti/fy98/24089.pdf
    Estimates EROI=3.2 for soy biodiesel

    Also
    http://www.local23.org/biodiesel/Overview_of_Biodiesel_and_Petroleum_Diesel_life_Cycles.htm#5.1
    An Overview of Biodiesel and Petroleum Diesel Life Cycles

    Pimentel, D. and T.W. Patzek, “Ethanol Production Using Corn, Switchgrass, and
    Wood; Biodiesel Production Using Soybean and Sunflower,� Natural Resources
    Research, 14(1): 65-75, 2005
    A contrary view to NREL

    Comparison of Pimentel and NREL finding, establishing NREL estimate of EROI=3.2 for so biodisel is realistic
    http://www.uidaho.edu/bioenergy/NewsReleases/Biodiesel%20Energy%20Balance_v2a.pdf

    Biodiesel Energy Balance, Jon Van Gerpen and Dev Shrestha
    Department of Biological and Agricultural Engineering, University of Idaho

    NREL/SR-580-24089 UC Category 1503 Life Cycle Inventory Biodiesel Petroleum Diesel Urban Bus

    Its worth noting that Pimental’s conclusions on EROI for maize conversion to bioethanol are at variance with several other groups too, perhaps reflecting less detailed engineering expertise in his area. Or perhaps his co-author was an inexperienced student.

  81. September 1st, 2006 at 00:31 | #81

    detribe – “Re The implications that Biodiesel doesn’t make energy sense in terms of an unfavourable EROI, here is evidence”

    Just one question – where does the methanol come from?

  82. Mike Hart
    September 1st, 2006 at 08:30 | #82

    For those with the time here is failry conservative analysis of energy needs, coming supply problems and other scenarios, a very conservative paper but has some good basic work on alternatives and replacements. Source US Army (Engineers Corps) Could not past the link directly but here is the address: http://www.energybulletin.net/13737.html

  83. taust
    September 3rd, 2006 at 14:35 | #83

    enders

    If Australia changed its policy of inaction; which other country in the world would change its actions ?

    We have a poor per capita greenhouse emissions because we are a high standard of living country without signifcant access to hydro (a fault of nature) and nuclear energy (political and economics).

    All the doomsday scenarios have a time scale over which humans can adapt. In the past adaption has always proven to be the least costly solution for human beings.

    Marxism was touted as how to prevent capitalism (forecast to be an absolute catastrophe) adaption to capitalism so far has proven to be less costly to humans.

    You are correct my belief in my lifestyle is such as I do not believe in wearing a hair shirt and covering myself with ashes without good evidence that it will address the challenges in my life style

    Currently the big challenges I would like my politicians to address are: how to speed up good governance in Africa and to a lesser extent the Arabian peninsular and; how to prevent obesity becoming the killer of poor people throughout the world.

    Both of these if not addressed will kill more people in a more immediate time frame than the worse scenarios for climate change.

    Both of these have solutions which are practical without the need world government or for me to change my lifestyle.

    I am proud of what western civilisation has achieved (without being unaware of the achievements of other civilisations) and I am pained by the mistakes of the past and try to avoid making the same mistakes again.

    The climate change issue has all the making of an elite generated industry complete with its own history. All past experience is that such industries have a negative impact on reaching real solutions to the issues they purport to address.

    However your values mean you value being on the losing side so you will be fully satisfied in the future.

  84. September 3rd, 2006 at 19:03 | #84

    taust – the main point is that Australia could be a world leader in renewable power and lead by example rather than being the deputy sherriff. I would rather us be a leader rather than a follower. We export coal and woodchips and IMPORT the high tech lifestyle that you are so proud of. Western civilisation has done good things and bad things. To ignore the bad like environmental destruction is to ignore the ramifications of our technology. This no regrets strategy is OK as long as it lasts.

    I find in discussion with conservatives such as yourself (I hope you don’t mind being classified as this) is as a group you tend to be very black and white in your thinking. When someone like myself says that it would be a great ida to conserve energy and stop wasting so much and you respond with the hair shirt/live in a cave argument. Saving energy does not mean that you have to live in a cave. There is enormous potential for energy savings just by insulating houses and businesses better and investing in cooling and heating equipment that uses half the energy to do the same job. You can see it now with the difference between 6 star fridges and 3 star ones. Banning 3 star fridges and air conditioners and making 6 star the minimum has the potential to save massive amounts of power.

    Finally you do not know what will happen in the future. You do not know if you can adapt without massive loss of life. You do not have any plans for problems of energy supply. You only thought is to continue the way we are going because it seems to be working OK and hope for the best. Which is fine but why are you imposing this on the people that do not want it? You talk of communists etc is just a scare to the reds under the bed sort of stuff. None of what I say is communist or otherwise it is just common sense.

  85. Seeker
    September 3rd, 2006 at 21:55 | #85

    how to prevent obesity becoming the killer of poor people throughout the world.

    Interesting how you seem happy to assert this claim, while being dismissive, indeed slanderous, about no less sound claims of climate change and its consequences. To wit:

    The climate change issue has all the making of an elite generated industry complete with its own history.

    And the obesity ‘industry’ doesn’t? Hasn’t already?

    Your use of the word ‘elite’, is also interesting, perhaps even deliberately provocative and divisive.

    Are you seriously suggesting we take a democratic vote to decide if the science of climate change is reliable, or if climate change is a very serious problem for humans? While we are at it, maybe we could solve the energy problem by democratic fiat too, and simply vote it away. Might even work for old age, as well.

    Can I suggest it is not smart to be using the word ‘elite’ in this manner. It is illegitimate and inflammatory rhetoric, and does your case no credit.

    If you think climate change is just some self-serving fad by foolish and/or unscrupulous scientists and environmentalists, then show us how it is done and rebut the science. Should be easy enough. Like to see you try.

    And why is obesity is only a problem for “poor people throughout the world”? Truly poor people the world over do not die from obesity. They die from mostly preventable disease, malnutrition, overwork, and violent conflict, often at the hands of their own governments.

  86. September 7th, 2006 at 15:53 | #86

    My dear taust, you can deny climate change for as long as you like, but if oil production peaks it will be undeniable. You won’t be able to pretend its not happening, and you will have to deal with the reality that your lifestyle is no longer sustainable.

    I invite you to poke holes in the idea of Peak Oil here: Peak Oil Primer

    I’ve tried and I can’t. There may be arguments about the timing of the peak but the basic premise is hard to deny.

  87. taust
    September 8th, 2006 at 21:11 | #87

    There is no way of rationally denying peak oil. It will happen sometime.
    However the countries with free markets will access the oil they need at the price reigning for oil given the demand at the reigning price

    The world goes through these periodic changes to energy sources wood to coal to whale oil to petroleum.

    Ask yourself who gains through these periodic peak oil panics.

    Is it Petroleum companies who run the line more subsidies for exploration a myriad alternative energy sources who need subsidies for something? Who subsidizes the wealthy consultants who give advice to all the movers and shakers?
    Trust the market; save the subsidies and worry about something that is worth an individual worrying about?

  88. September 8th, 2006 at 22:03 | #88

    taust – “However the countries with free markets will access the oil they need at the price reigning for oil given the demand at the reigning price”

    And if it is not available??

    “Trust the market; save the subsidies and worry about something that is worth an individual worrying about?”

    Why not just trust God? Your belief in the market is wonderous to behold. How come a simple thing like a market can solve any problem no matter how complex? To me it is just you surrendering to a higher power, the market, because you want to believe that it will solve all your problems.

  89. rog
    September 9th, 2006 at 21:47 | #89

    You are becoming hysterical Ender, no one is equating a free market with God.

  90. September 10th, 2006 at 13:54 | #90

    rog – “You are becoming hysterical Ender, no one is equating a free market with God.”

    And neither an I. However you are suggesting surrending control to a higher power. the market, that will miraculously fix everything. You do not specify how the market will fix everything or provide examples where the market has fixed everything. You just ask us to have faith.

  91. rog
    September 11th, 2006 at 08:14 | #91

    I didnt suggest anything of the sort Ender, you are imagining things.

  92. September 11th, 2006 at 08:35 | #92

    rog – OK then rog how will the market fix everything?

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