Steve Keen exposes next global economic shockwaves

18 01 2017

Most of DTM’s readers will know this, but as it’s rather well done and amusing to boot, here it is anyway….. some lighthearted relief.





The price of fuel…. yep, Australia still bang on target to run out of oil by 2020

18 01 2017

Following on from the article I recently published regarding the sudden rise in the cost of fuel in Australia by a whopping 14% in one day, and the absence of any logical reason despite the mainstream media falsely rabbitting on about the soaring cost of oil, I started thinking about the series of articles I wrote years ago about Australia running out of oil by 2020……. the last time I investigated this was almost three years ago. How time flies when you move interstate and start again…!

Finding current data turned out difficult, as usual. My traditional source from the government has still not updated its spreadsheets beyond September last year, so 2016 totals were not yet available.

This chart is from http://www.tradingeconomics.com/australia/crude-oil-production and means I don’t need to produce my own..!

australia-crude-oil-production

Predictably, we are still bang on target to totally run out of oil by 2020, now just three years away.

I still believe that the oil companies are in serious financial trouble, but the fact that we are continually importing more and more liquid fuel from overseas instead of producing our own cannot be helping the situation. How much you will have to pay for the fuel for your favorite vehicle three hears hence is anyone’s guess…. except it’s unlikely to be less!

You may also remember I commented about the huge shale oil deposit found in South Australia over four years ago. Why has nothing yet happened about this scenario changing event, as we were promised by the ranting media of the time…?

A year ago, the Advertiser, Adelaide’s main newspaper wrote..:

THE company sitting on potentially significant shale oil reserves in the state’s far north has dismissed its previous claims to deliver a US-style economic boom for Australia.

AND…..

“We just don’t have the resources on the ground to facilitate it and it makes it harder for us to attract investment from major traditional oil investment markets such as the US because if you look at it pound for pound, you are investing in a remote area in a remote part of the globe,” he said.

Don’t expect that chart to change any time soon……..





Feeding 9 billion

16 01 2017

I have just been tipped off to this fantastic Joel Salatin video…… I think it’s ironic that Eclipe, a fan of Polyface Farm, is in complete disagreement with Joel who is totally anti hi-tech farming. In fact, like me, Joel believes in walking away from the Matrix (exemplified in this video by McDonald’s), and he lets both barrels go at the establishment…..

Enjoy.





PV ERoEI may be negative…

16 01 2017

Well THIS will stir the hornet’s nest……. Pedro Prieto now thinks many solar panels won’t last 25-30 years, EROI may be negative……

pedro

Pedro Prieto

It must be remembered that Pedro, whose work has been published here several times, has vast experience in this, having been involved in large scale PV and wind installations in Spain. I don’t know if this article is how he wrote it in English, or whether it was poorly translated from the Spanish, but it is often difficult to read, even when you have the technical knowledge to know what he’s talking about. I had a go at editing it, see what you think… This piece certainly didn’t make me feel good about my new power station, especially after seeing ads on Tasmanian TV by someone who thinks he sells better equipment showing blown up inverters and burnt out connectors on the front face of panels….. there is a lot of rubbish out there, that’s for sure, I’ve had first hand experience of this myself, but if even best quality gear won’t last 25 years, then we will be going back to the stone age……

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Our study concluded that, when what we called “extended boundaries energy inputs” were analysed, about 2/3 of the total energy inputs were other than those of the modules+inverters+metallic infrastructure to tilt and orient the modules.

So even if the cost of solar PV modules (including inverters and metallic infrastructure) were ZERO, our resulting EROI (2.4:1) would increase by maybe 1/3.

Without including the financial energy inputs (you can easily calculate them if most of the credits/leasing contracts at 10 years term with interests of between 2 and 6% were included, even if you consider energy input derived from the financial costs, only the interests (returning the capital, in my opinion, would theoretically only return the previous PREEXISTING financial (and therefore, energy) surplus, minus amortization of the principal, if any (when principal is tied to a physical preexisting good, which is not the case, I understand in most of the circulating money of today, but you know much better than me about this).

We also excluded most of the labor energy inputs, to avoid duplications with factors that were included and could eventually have some labor embedded on it. And that was another big bunch of energy input excluded from our analysis.

As I mentioned before, if we added only these two factors that were intentionally excluded, not to open up old wounds and trying to be conservative, plus the fact that we include only a small, well-known portion of the energy inputs required to stabilize the electric networks, if modern renewables had a much higher or even a 100% penetration,  it is more than probable that the solar PV EROI would have resulted in <1:1.

And I do not believe we can make solar modules with even 25 ~ 30 years lifetime. There are certainly working modules that have lasted 30 years+ and still work. Usually in well cared and maintained facilities in research labs or factories of the developed world. But this far away from expected results when generalized to a wide or global solar PV installed plant. Dreaming of having them 100 or 500 years is absolutely unthinkable.

Modules have, by definition, to be exposed more than anything else, to solar rays (to be more efficient). Just look at stones exposed to sun rays from sunrise to sunset and to wind, rain, moisture, corrosion, dust, animal dung (yes, animal dung, a lot of it from birds or bee or wasp nests on modules) and see how they erode. Now think of sophisticated modules  exposed to hail, with glass getting brittle, with their Tedlar, EVA and/or other synthetic components sealing the joints between glass and metallic frames eroding or degrading with UV rays and breaking the sealed package protecting the cells inside, back panels with connection boxes, subject to vibration with wind forces and disconnecting the joints and finally provoking the burning of the connectors; fans in the inverter housings with their gears or moving parts exhausted or tired, that if not maintained regularly, end failing and perhaps, if in summer, elevating the temperature of the inverter in the housing and provoking the fuse to blown or some other vital components, etc.

I have seen many examples of different manufacturers of all types of modules (single/mono, multi/poli, amorphous, thin film high concentration with lenses, titanium dioxide, etc.) in the test chambers, after warranty claims by the clients to the manufacturers. I have attended test fields of auditing companies contracted by retailers, detecting hot spots in faulty internal solder joints straight from the factory to the customers.

I have seen a whole batch from a promising leading US brand specializing in thin film modules(confidentiality does not permit me to name, as yet) having to return it because it did not comply with specs. Now, as I mentioned, I am in contact with a desperate retailer, seeking replacement modules or reimbursement (the manufacturer is broke and has disappeared) that will last a little loger than those he purchased (not Chinese) about 6 years ago and of which about 2/7 of the total have failed, without a practical replacement being available because present modules in the market have higher nominal output power than those originally contracted for and with different voltage and currents that do not permit unitary replacements in arrays or strings, being forced to a complex and costly manipulation to reconfigure arrays with old modules and creating new arrays with new modules and adapting inverters to the new currents and voltages delivered (Maximum Power Point Tracking or MPPT)

We mentioned many other examples of real life affecting functionality of solar PV systems in our book. The reality, 2 years after the publication of the book, proved us very optimistic. Imagine when you install a solar village in a remote area of Morocco, or Nigeria or Atacama in Northern Chile and the nearest replacement of a single broken power thysristor or IGBT that is stopping a whole inverter from operating, plus the entire plant behind it (not manufactured in the country) and about 2,000 Km -or more- from the factory that needs to pass customs like the one in Santos (Brazil), where tens of thousands of containers are blocked for more than one week (plus the usual 6 to 10 weeks custom procedures) because of a fire in a refinery close to the only motorway leaving the Santos port to Sao Paulo..

100 or 500 years lifetime? ha, ha, ha.





Fanny Farm update….

13 01 2017

It’s raining again, and too wet for fencing… so I’ll keep my faithful readers up on what’s been happening for the past few days.

Firstly, my amazing neighbour who had the most unfortunate accident that caused his expensive ute to be written off (nobody got hurt, which I have to tell you was pretty amazing…), flew to Melbourne the other day to pick up a replacement. japanesebathHe offered to pick stuff up there for me, and lo and behold, I discovered that someone in Melbourne manufactured round Japanese plunge baths that would finish the circular theme of our new bathroom. Sometimes, things are just meant to happen…. I’ve been looking for something like this for ages, but they were either unavailable, or just plain too expensive.

It turns out, this one was made by the bloke who sold it to me, and, wait for it, his factory was just two streets away from where Matt picked up his new car…!

Now I just need a house to put it in…. like the toilets, the bidets, the handbasins, the kitchen sink, the taps, I have accumulated a lot of stuff for this house already.

The same day the bath arrived, all the reinforcing steel was also delivered. On a very large truck, that the driver had to reverse the entire 400m back out to the main road…

20170111_122920

Then yesterday, as part of the rezoning of this block of land, Julia and Matt, my current wwoofers from America and I moved the entire composting system from where I first sited it a year ago to where it will be needed, next to the market garden.

20170112_145937

20170112_153212No mean feat it turns out, I had way more compost than I realised, almost enough to fill the ute…. It was also a good opportunity to teach young people how to make compost, because it turns out they had no idea…… In fact, it may be an American thing, or maybe they’ve led sheltered lives, but they know very little about what’s going on in the world, particularly when compared to the young French people I’ve had here who have actually impressed me with what they already knew……

On the downside, my new pump is driving me insane…… it pumps when it feels like it, and when it won’t, I cannot get my head around why not. I’ve spent so much time flushing out the suction line, even wading out into the muddy bottom of the dam several times… I’ve modified the footvalve assembly to ensure it can’t suck air – and now it CAN’T because it’s anchored underwater permanently – but it still refuses to pressurise my sprinkler for more than three to five minutes….. my understanding of pumps is that they should work, or not work at all, but not this…..





Peak Uranium by Ugo Bardi

12 01 2017

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THIS should get Eclipse all stirred up……..

[ This is an extract of Ugo Bardi’s must read “Extracted”.  Many well-meaning citizens favor nuclear power because it doesn’t emit greenhouse gases.  The problem is that the Achilles heel of civilization is our dependency on trucks of all kinds, which run on diesel fuel because diesel engines transformed our civilization by their ability to do heavy work better than steam, gasoline, or any other engine on earth.  Trucks are required to keep the supply chains going that every person and business on earth depend on, as well as mining, tractors/harvesters, road & other construction trucks, logging etc.  Since trucks can’t run on electricity, anything that generates electricity is not a solution, nor is it likely that the electric grid can ever be 100% renewable (read “When trucks stop running”, this can’t be explained in a sound-bite).

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

Bardi, Ugo. 2014. Extracted: How the Quest for Mineral Wealth Is Plundering the Planet. Chelsea Green Publishing.

Although there is a rebirth of interest in nuclear energy, there is still a basic problem: uranium is a mineral resource that exists in finite amounts.

Even as early as the 1950s it was clear that the known uranium resources were not sufficient to fuel the “atomic age” for a period longer than a few decades.

That gave rise to the idea of “breeding” fissile plutonium fuel from the more abundant, non-fissile isotope 238 of uranium. It was a very ambitious idea: fuel the industrial system with an element that doesn’t exist in measurable amounts on Earth but would be created by humans expressly for their own purposes. The concept gave rise to dreams of a plutonium-based economy. This ambitious plan was never really put into practice, though, at least not in the form that was envisioned in the 1950s and ’60s.Several attempts were made to build breeder reactors in the 1970s, but the technology was found to be expensive, difficult to manage, and prone to failure. Besides, it posed unsolvable strategic problems in terms of the proliferation of fissile materials that could be used to build atomic weapons. The idea was thoroughly abandoned in the 1970s, when the US Senate enacted a law that forbade the reprocessing of spent nuclear fuel. 47

A similar fate was encountered by another idea that involved “breeding” a nuclear fuel from a naturally existing element—thorium. The concept involved transforming the 232 isotope of thorium into the fissile 233 isotope of uranium, which then could be used as fuel for a nuclear reactor (or for nuclear warheads). 48 The idea was discussed at length during the heydays of the nuclear industry, and it is still discussed today; but so far, nothing has come out of it and the nuclear industry is still based on mineral uranium as fuel.

Today, the production of uranium from mines is insufficient to fuel the existing nuclear reactors. The gap between supply and demand for mineral uranium has been as large as almost 50 percent in the period between 1995 and 2005, but it has been gradually reduced during the past few years.

The U.S. minded 370,000 metric tons the past 50 years, peaking in 1981 at 17,000 tons/year.  Europe peaked in the 1990s after extracting 460,000 tons.  Today nearly all of the 21,000 ton/year needed to keep European nuclear plants operating is imported.

The European mining cycle allows us to determine how much of the originally estimated uranium reserves could be extracted versus what actually happened before it cost too much to continue. Remarkably in all countries where mining has stopped it did so at well below initial estimates (50 to 70%). Therefore it’s likely ultimate production in South Africa and the United States can be predicted as well.

The Soviet Union and Canada each mined 450,000 tons. By 2010 global cumulative production was 2.5 million tons.  Of this, 2 million tons has been used, and the military had most of the remaining half a million tons.

The most recent data available show that mineral uranium accounts now for about 80% of the demand. 49 The gap is filled by uranium recovered from the stockpiles of the military industry and from the dismantling of old nuclear warheads.

This turning of swords into plows is surely a good idea, but old nuclear weapons and military stocks are a finite resource and cannot be seen as a definitive solution to the problem of insufficient supply. With the present stasis in uranium demand, it is possible that the production gap will be closed in a decade or so by increased mineral production. However, prospects are uncertain, as explained in “The End of Cheap Uranium.” In particular, if nuclear energy were to see a worldwide expansion, it is hard to see how mineral production could satisfy the increasing uranium demand, given the gigantic investments that would be needed, which are unlikely to be possible in the present economically challenging times.

At the same time, the effects of the 2011 incident at the Fukushima nuclear power plant are likely to negatively affect the prospects of growth for nuclear energy production, and with the concomitant reduced demand for uranium, the surviving reactors may have sufficient fuel to remain in operation for several decades.

It’s true that there are large quantities of uranium in the Earth’s crust, but there are limited numbers of deposits that are concentrated enough to be profitably mined. If we tried to extract those less concentrated deposits, the mining process would require far more energy than the mined uranium could ultimately produce [negative EROI].

Modeling Future Uranium Supplies

Uranium supply and demand to 2030

 

Using historical data for countries and single mines, it is possible to create a model to project how much uranium will be extracted from existing reserves in the years to come. 54 The model is purely empirical and is based on the assumption that mining companies, when planning the extraction profile of a deposit, project their operations to coincide with the average lifetime of the expensive equipment and infrastructure it takes to mine uranium—about a decade.

Gradually the extraction becomes more expensive as some equipment has to be replaced and the least costly resources are mined. As a consequence, both extraction and profits decline. Eventually the company stops exploiting the deposit and the mine closes. The model depends on both geological and economic constraints, but the fact that it has turned out to be valid for so many past cases shows that it is a good approximation of reality.

This said, the model assumes the following points:

  • Mine operators plan to operate the mine at a nearly constant production level on the basis of detailed geological studies and to manage extraction so that the plateau can be sustained for approximately 10 years.
  • The total amount of extractable uranium is approximately the achieved (or planned) annual plateau value multiplied by 10.

Applying this model to well-documented mines in Canada and Australia, we arrive at amazingly correct results. For instance, in one case, the model predicted a total production of 319 ± 24 kilotons, which was very close to the 310 kilotons actually produced. So we can be reasonably confident that it can be applied to today’s larger currently operating and planned uranium mines. Considering that the achieved plateau production from past operations was usually smaller than the one planned, this model probably overestimates the future production.

Table 2 summarizes the model’s predictions for future uranium production, comparing those findings against forecasts from other groups and against two different potential future nuclear scenarios.

As you can see, the forecasts obtained by this model indicate substantial supply constraints in the coming decades—a considerably different picture from that presented by the other models, which predict larger supplies.

The WNA’s 2009 forecast differs from our model mainly by assuming that existing and future mines will have a lifetime of at least 20 years. As a result, the WNA predicts a production peak of 85 kilotons/year around the year 2025, about 10 years later than in the present model, followed by a steep decline to about 70 kilotons/year in 2030. Despite being relatively optimistic, the forecast by the WNA shows that the uranium production in 2030 would not be higher than it is now. In any case, the long deposit lifetime in the WNA model is inconsistent with the data from past uranium mines. The 2006 estimate from the EWG was based on the Red Book 2005 RAR (reasonably assured resources) and IR (inferred resources) numbers. The EWG calculated an upper production limit based on the assumption that extraction can be increased according to demand until half of the RAR or at most half of the sum of the RAR and IR resources are used. That led the group to estimate a production peak around the year 2025.

Assuming all planned uranium mines are opened, annual mining will increase from 54,000 tons/year to a maximum of 58 (+ or – 4) thousand tons/year in 2015. [ Bardi wrote this before 2013 and 2014 figures were known. 2013 was 59,673 (highest total) and 56,252 in 2014.]

Declining uranium production will make it impossible to obtain a significant increase in electrical power from nuclear plants in the coming decades.





The price of fuel..: what is going on..?

11 01 2017

Yesterday, I went to the big smoke for a medical appointment. I’m fine. But when I went to fill up to ensure I could make it home, I realised that the price of petrol had gone up by a whopping 20c/L in one hit. That’s a 14% increase……… in one day.Petrol price hike in Hobart

In the news, “Mr Moody (of the Royal Automobile Club of Tasmania) said prices were being driven up by increases in the global oil price, but he said the price should level out in Tasmania at about $1.40 a litre in about a month.”

Except that when I investigated this, the price of oil had not skyrocketed, it was still around $52 a barrel. Last time petrol was this expensive, oil was at $147 a barrel….. so what’s going on?

My take on this is that the oil companies must be finding it harder and harder to pay their interest bills. If they can’t make profits with oil, they’ll have to find them upstream at the pump.  Furthermore, maybe Peak Oil is on the cusp of getting really serious, and this might be the tip of the iceberg……. Nafeez Ahmed has just written the following article about how dire the oil situation is becoming…….

Brace for the oil, food and financial crash of 2018

80% of the world’s oil has peaked, and the resulting oil crunch will flatten the economy

New scientific research suggests that the world faces an imminent oil crunch, which will trigger another financial crisis.

A report by HSBC shows that contrary to industry mythology, even amidst the glut of unconventional oil and gas, the vast bulk of the world’s oil production has already peaked and is now in decline; while European government scientists show that the value of energy produced by oil has declined by half within just the first 15 years of the 21st century.

The upshot? Welcome to a new age of permanent economic recession driven by ongoing dependence on dirty, expensive, difficult oil… unless we choose a fundamentally different path.

Last September, a few outlets were reporting the counterintuitive findings of a new HSBC research report on global oil supply. Unfortunately, the true implications of the HSBC report were largely misunderstood.

The HSBC research note — prepared for clients of the global bank — found that contrary to concerns about too much oil supply and insufficient demand, the situation was opposite: global oil supply will in coming years be insufficient to sustain rising demand.screenshot

Yet the full, striking import of the report, concerning the world’s permanent entry into a new age of global oil decline, was never really explained. The report didn’t just go against the grain of the industry’s hype about ‘peak demand’: it vindicated what is routinely lambasted by the industry as a myth: peak oil — the concurrent peak and decline of global oil production.

The HSBC report you need to read, now

INSURGE intelligence obtained a copy of the report in December 2016, and for the first time we are exclusively publishing the entire report in the public interest.

Read and/or download the full HSBC report by clicking below:

HSBC peak oil report

The HSBC report has a helpful, ten-point summary of the key arguments the bank makes, and what is going on right now. These arguments are summarised below…:

  1. Oil’s oversupply problem, which has caused most of the trouble in the markets in recent years will end by 2017, and the market will return to balance.
  2. Spare capacity will have shrunk substantially by then “to just 1% of global supply/demand.” This HSBC argues, will make the market more susceptible to disruptions like those seen in Nigeria and Canada in 2016.
  3. Oil demand is still growing by ~1mbd every year, and no central scenarios that we recently assessed see oil demand peaking before 2040.”
  4. 81% of the production of liquid oil is already in decline.
  5. HSBC sees between 3 and 4.5 million barrels per day of supply disappearing once peak oil production is reached. “In our view a sensible range for average decline rate on post-peak production is 5-7%, equivalent to around 3-4.5mbd of lost production every year.”
  6. Based on a simple calculation, HSBC estimates that by 2040, the world will need to find around 40 million barrels of oil per day to keep up with growing demand from emerging economies. That is equivalent to over 4 times the current crude oil output of Saudi Arabia.
  7. “Small oilfields typically decline twice as fast as large fields, and the global supply mix relies increasingly on small fields: the typical new oilfield size has fallen from 500-1,000mb 40 years ago to only 75mb this decade.” — This will exacerbate the problem of declining oil fields, and the lack of supply.
  8. The amount of new oil discoveries being made is pretty small. HSBC notes that in 2015 the discovery rate for new wells was just 5%, a record low. The discoveries made are also fairly small in size.
  9. There is potential for growth in US shale oil, but it currently represents less than 5% of global supply, meaning that it will not be able, single-handedly at least, to address the tumbling global supply HSBC expects.
  10. “Step-change improvements in production and drilling efficiency in response to the downturn have masked underlying decline rates at many companies, but the degree to which they can continue to do so is becoming much more limited.” Essentially HSBC argues that companies aren’t improving their efficiency at a quick enough rate, meaning that supply declines will hit them even harder.

Here is the chart showing the decline in production post-peak:

Oil peak production

As usual, the mainstream media is spruiking loads of rubbish, probably trying to not scare the children…… unless you peek elsewhere like this blog, or follow other bloggers who keep abreast of the truth, you could be forgiven for thinking America will be great again…. or some other such rubbish.

Under the current supply glut driven by rising unconventional production, falling oil prices have damaged industry profitability and led to dramatic cut backs in new investments in production. This, HSBC says, will exacerbate the likelihood of a global oil supply crunch from 2018 onwards.
So how do you improve profitability? You put the price of fuel up. Given that petrol is the single biggest purchase made by households on a weekly basis, the lift in petrol prices may lead to less household activity — a potential concern for retailers and the economy generally. High fuel prices combined with large debts is what broke the camel’s back in 2008, causing the GFC. Things are not only not different today, debt levels are even higher….. how long before GFC MkII kicks off is anyone’s guess, but it can’t be too far away now….