More Peak Oil bad news…..

15 06 2017

There have been no end of new articles on the demise of the oil industry lately. I’ve been so busy building that it’s only now I can catch up with some blogging, so here’s your lot for the time being.

From the website comes this unbelievable analysis…:

While the Mainstream media continues to put out hype that technology will bring on abundant energy supplies for the foreseeable future, the global oil and gas industry is actually cannibalizing itself just to stay alive.   Increased finance costs, falling capital expenditures and the downgrade of oil reserves are the factors, like flesh-eating bacteria, that are decimating the once great oil and gas industry.

This is all due to the falling EROI – Energy Returned On Investment in oil and gas industry.  Unfortunately, most of the public and energy analysts still don’t understand how the Falling EROI is gutting the entire system.  They don’t see it because the world has become so complex, they are unable to connect-the-dots.  However, if we look past all the over-specialized data and analysis, we can see how bad things are getting in the global oil and gas industry.

Let me start by republishing this chart from my article, Future World Economic Growth In Big Trouble As Oil Discoveries Fall To Historic Lows:

The global oil industry only found 2.4 billion barrels of conventional oil in 2016, less than 10% of what it consumed (25.1 billion barrels).  Conventional oil is the highly profitable, high EROI oil that should not be confused with low quality “unconventional” oil sources such as OIL SANDS or SHALE OIL.  There is a good reason why we have just recently tapped in to oil sands and shale oil…. it wasn’t profitable for the past 100 years to extract it.  Basically, it’s all we have left…. the bottom of the barrel, so to speak.

Now, to put the above chart into perspective, here are the annual global conventional oil discoveries since 1947:

You will notice the amount of new oil discoveries (2.4 billion barrels) for 2016 is just a mere smudge when we compare it to the precious years.  Furthermore, the world has been consuming about an average of 70 million barrels per day of conventional oil production since 2000 (the total liquid production is higher, but includes oil sands, deep water, shale oil, natural gas liquids, biofuels and etc).  Conventional oil production has averaged about 25 billion barrels per year.

As we can see in the chart above… we haven’t been replacing what we have been consuming for quite a long time.  Except for the large orange bar in 2000 of approximately 35 billion barrels, all the years after were lower than 25 billion barrels.  Thus, the global oil industry has been surviving on its past discoveries.

That being said, if we include ALL liquid oil reserves, the situation is even more alarming.

Global Oil Liquid Reserves Fall In 2015 & 2016

According to the newest data put out by the U.S. EIA, Energy Information Agency, total global oil liquid reserves fell for the past two years.  The majority of negative oil reserve revisions came from the Canadian oil sands sector:

Of the 68 public traded energy companies used in this graph, total liquid oil reserves fell from 116 billion barrels in 2014 to 100 billion barrels in 2016.  That’s a 14% decline in liquid oil reserves in just two years.  So, not only are conventional oil discoveries falling the lowest since 1947, companies are now forced to downgrade their total liquid oil reserves due to lower oil prices.

This can be seen more clearly in the EIA chart below:

The “net proved reserves change” is shown as the black line in the chart.  It takes the difference between the additions-revisions, (BLUE) and the production (BROWN).  These 68 public companies have been producing between 8-9 billion barrels of oil per year.

Because of the downward revisions in 2015 and 2016, net oil reserves have fallen approximately 16 billion barrels, or nearly two years worth of these 68 companies total liquid oil production.  If these oil companies don’t suffer anymore reserve downgrades, they have approximately 12 years worth of oil reserves remaining.

But… what happens if the oil price continues to decline as the global economy starts to really contract from the massive amount of debt over-hanging the system?  Thus, the oil industry could likely cut more reserves, which means… the 12 years worth of reserves will fall below 10, or even lower.  My intuition tells me that global liquid oil reserves will fall even lower due to the next two charts in the following section.

The Coming Energy Debt Wall & Surging Finance Cost In The Energy Industry

Over the next several years, the amount of debt that comes due in the U.S. oil industry literally skyrockets higher.  In my article, THE GREAT U.S. ENERGY DEBT WALL: It’s Going To Get Very Ugly…., I posted the following chart:

The amount of debt (as outstanding bonds) that comes due in the U.S. energy industry jumps from $27 billion in 2016 to $110 billion in 2018.  Furthermore, this continues higher to $260 billion in 2022.  The reason the amount of debt has increased so much in the U.S. oil and gas industry is due to the HIGH COST of producing Shale oil and gas.  While many companies are bragging that they can produce oil in the new Permian Region for $30-$40 a barrel, they forget to include the massive amount of debt they now have on their balance sheets.

This is quite hilarious because a lot of this debt was added when the price of oil was over $100 from 2011 to mid 2014.  So, these companies actually believe they can be sustainable at $30 or $40 a barrel?  This is pure nonsense.  Again… most energy analysts are just looking at how a company could producing a barrel of oil that year, without regard of all other external costs and debts.

Moreover, to give the ILLUSION that shale oil and gas production is a commercially viable enterprise, these energy companies have to pay its bond (debt) holders dearly.  How much?  I will show you all that in a minute, however, this is called their DEBT FINANCING.  Some of us may be familiar with this concept when we have maxed out our credit cards and are paying a minimum interest payment just to keep the bankers happy.  And happy they are as they are making a monthly income on money that we created out of thin air… LOL.

According to the EIA, these 68 public energy companies are now spending 75% of their operating cash flow to service their debt compared to 25% just a few years ago:

We must remember, debt financing does not mean PAYING DOWN DEBT, it just means the companies are now spending 75% of their operating cash flow (as of Q3 2016) just to pay the interest on the debt.  I would imagine as the oil price increased in the fourth quarter of 2016 and first quarter of 2017, this 75% debt servicing ratio has declined a bit.  However, people who believe the Fed will raise interest rates, do not realize that this would totally destroy the economic and financial system that NEEDS SUPER-LOW INTEREST RATES just to service the massive amount of debt they have on the balance sheets.

As an example of rising debt service, here is a table showing Continental Resources Interest expense:

Continental Resources is one of the larger energy players in the Bakken oil shale field in North Dakota.  Before tapping into that supposed “high-quality” Bakken shale oil, Continental Resources was only paying $13 million a year to finance its debt, which was only $165 million.  However, we can plainly see that producing this shale oil came at a big cost.  As of December 2016, Continental Resources paid $321 million that year to finance its debt…. which ballooned to $6.5 billion.  In relative terms, that is one hell of a huge credit card interest payment.

The folks that are receiving a nice 4.8% interest payment (again… just a simple average) for providing Continental Resources with funds to produce this oil at a very small profit or loss… would like to receive their initial investment back at some point.  However….. THERE LIES THE RUB.

With that ENERGY DEBT WALL to reach $260 billion by 2022, I highly doubt many of these energy companies will be able to repay that majority of that debt.  Thus, interest rates CANNOT RISE, and will likely continue to fall or the entire financial system would collapse.

Lastly…. the global oil and gas industry is now cannibalizing itself just to stay alive.  It has added a massive amount of debt to produce very low-quality Shale Oil-Gas and Oil Sands just to keep the world economies from collapsing.  The falling oil price, due to a consumer unable to afford higher energy costs, is gutting the liquid oil reserves of many of the publicly trading energy companies.

At some point… the massive amount of debt will take down this system, and with it, the global oil industry.  This will have an extremely negative impact on the values of most STOCKS, BONDS & REAL ESTATE.  If you have well balanced portfolio in these three asset classes, then you are in serious financial trouble in the future.

Then…….  on ABC TV’s lateline (I’m rarely up late enough to watch it, so this was an omen…) this interview came up. I have to say, I found the whole Qatar thing rather bizarre, but this commentator thinks that Saudi Arabia is already in trouble

And now Zero Hedge has this to say as well….

Oil Prices Suffer First ‘Death Cross’ Since 2014 Collapse

For the first time since September 2014, after which oil prices collapsed almost 75%, Brent and WTI Crude futures both just flashed a ‘death cross’ signal as the 50-day moving-average crossed below the 200-day moving-average.

The crossover is typically seen a loss of short-term momentum and last occurred in the second half of 2014, when prices collapsed due to oversupply amid surging U.S. shale oil production.


As Bloomberg notes, OPEC and its partners will be hoping their efforts to curb output will be enough to support prices and counteract any fears of growing downside risk.


However, this morning’s news of “real” OPEC production may raise more doubts about the cartel’s commitment (and going forward, the Qatar debacle won’t help).




57 responses

15 06 2017

Excellent article. Would be interested in your opinion of Duncan’s Olduvai Theory which suggests that electric power generation may be the most critical measure of peak energy rather than peak oil.

15 06 2017

Well I’ve been saying for years that without cheap and abundant oil, the mainteneance of the grid will quickly go downhill….. which is why I’ve gone off grid!

31 07 2017
Eclipse Now

At least you’re consistent! You have been saying that for years. But what about when the vehicles that maintain the grid are all electric or synthetic diesel? Oh, I remember, electric cars are impossible because of the range anxiety, the energy density, the this, the that.
But the $35k all electric family car just went into mass production.
Dear oh dear. How will you sell your secular Jonestown next?

1 08 2017
1 08 2017

Yeah right……. I guess you have a link for electric helicopters..?

2 08 2017
Eclipse Now

Electric helicopters? OK, so you concede everything else I’ve been saying with that terse reply? Great! Now, there’s no need for electric helicopters or airlines.
The US Navy has developed jet-fuel from seawater so they don’t have to keep supplying tanker ships back and forth, making their missions vulnerable to supply line attacks. This can *also* be tweaked to produce “Blue Crude” which:-
* cracks CO2 and hydrogen out of seawater
* the cost of the nukes and electricity to run this process is included in the end price of the diesel
* includes the price of buying the reactors in the price of the electricity
* can scale up the nukes as we scale up the Blue Crude industry
* is already economical with electricity from today’s reactors
* might be cheaper yet if we build hot thermal reactors to crack the water directly in thermochemical reactions rather than generate electricity to do it.
* as the US navy developed this to make fighter jet fuel at sea in nuclear aircraft carriers, it can also be fine tuned to produce all the jet fuel we need.
* This industry will scale up as oil and diesel scales down.
* Then we will save millions of lives from fossil fuel pollution as well as preventing climate change
* We will have a sustainable electricity grid and transport system that will not suddenly run out of resources.
* Job done!

1 08 2017
Chris Harries

Some of what Eclipse Now is saying will hold true. It’s true that (whatever our views on potential collapse) the environmental movement is almost as one, gung-ho in favour of the Musk electric dream.

Also true that the Musk dream will eventually bring on a very strongeconomic and political demand for nuclear energy to enable supply to match this growth. I’m not advocating, it’s just what I foresee as writing on the wall.

There’s a ideological quirk there… an unspoken diabolical connection that almost nobody is yet admitting to.

In its dying days our civilisation will, most ironically, press the full forward buttons ramping up production of electric cars batteries and what not and all this will be carried out in the name of sustainability. This is the ultimate irony. But it’s unstoppable.

The bets are on as to where it may all come unstuck. 2017 has been the worst ever year for nuclear advocates, with Toshiba / Westinghouse going bust and France committing to reduce its nuclear production to 50% of generation for economic reasons.

I’ve been tagging the long awaited production of promised small, safe nuclear power plant for some 25 years and have maintained a neutral position on that possibility right through, but the time delay is tragic for its backers. Nearly the whole of society has meanwhile been sold on the renewables surge. At least for the time being nuclear is dead in the water.

1 08 2017
Eclipse Now

Yep, a few cost overruns here and there and soon the doomers are seeing a full on trend! Of course, they’re cherrypicking with the best denialists, but that’s doomers for you.

Expensive nuclear power is a particularly American problem, due to their unique regulatory framework that cripples American nuclear. There are countries building nuclear far cheaper than America. Check South Korea!

>“We find that trends in costs have varied significantly in magnitude and in structure by era, country, and experience. In contrast to the rapid cost escalation that characterized nuclear construction in the United States, we find evidence of much milder cost escalation in many countries, including absolute cost declines in some countries and specific eras. Our new findings suggest that there is no inherent cost escalation trend associated with nuclear technology.”

The historical FACTS remain: France built out 3/4 of their grid in 15 years, and it’s some of the most affordable reliable clean power in Europe.

1 08 2017
Chris Harries

Facts remain, and yes they do. So what’s France’s problem? What’s Britain’s problem with nuclear energy?

I’m not advocating for or against, but wouldn’t like to be a nuclear energy advocate in 2017. Annus horribulus for them. Fred Pearce is one, and e’s prepared to be honest.

As said, I am predicting that in time there will be a strong political and economic thrust to revive nuclear energy in the energy mix and it ironically will be the advance of EVs by the millions that will be the main reason for that resurgence. (That’s not a view that’s shared by the renewables lobby generally.)

But too many other trends are crowding in to safely predict the world’s energy future, or it’s economic future for that matter. We can safely say that there are hard limits to resource extraction and environmental pollution and we appear to have seriously gone into overshoot already in some area. So time is not on our side.

We ought to be able to discuss these things without resorting to pejorative language. Nobody has a sure fire solution to the multi-layered human predicament.

1 08 2017
Eclipse Now

I wouldn’t want to be a renewables advocate with the National Academy of Sciences smacking down Mark Jacobson’s hydro storage fantasies. Will Al Gore, Leonardo DiCaprio and Mark Ruffalo apologise to the public and retract their belief in renewables now that the key study they quote has been utterly debunked? I don’t think so! I also wouldn’t want to be a fan of Solar PV given it creates THREE HUNDRED times the waste of nuclear power….

Former anti-nuclear activist Shellenberger explains why we need South Korea’s approach to nuclear.

American nuclear is on the nose, as are a few cherrypicked examples from the UK and Europe. The factors impacting American nuclear have been analysed by Phd’s and peer-review. It’s not the technology, but the legislative framework that keeps intruding and forcing redesigns every step of the way. They never get to bulk build. They never put reactors on the assembly line. Every single reactor in America these days is a hand crafted Bentley, and not a Hyundai. But I’ve seen too many studies to believe the childish and terse claims of Stasse. Today’s nukes could easily come in at $5bn per GW baseload, reliable, clean power. But next gen breeders that are modular and built on the assembly line could EASILY come in at $2bn or even $1bn per GW, radically reducing the price of coal. And I’d rather live in the Fukushima or Chernobyl exclusion zones than next to a deadly coal plant! That is not hyperbole. The science is in. Those sites just aren’t that ‘hot’.

Cherrypicking is easy, but dishonest. But how else do you maintain a doomer worldview in the face of breeder reactors that could provide abundant clean power for the human race forever, and even run diesel and jet-fuel from seawater at an affordable price?

I’m not saying what will happen. America elected Trump. For all I know, we could all disappear in a bright light very soon. But I’m saying there is no *technological or resource* reason we won’t make it. Mike does claim that, and it’s pure fiction.

2 08 2017
Chris Harries

Yeah, well, you’ve made that point several times, Eclipse. But Mike’s analysis seems to bug you. For having a different world view? Or for some other reason?

I don’t agree with your analysis but I absolutely respect your right to throw it in the mix and I don’t feel the need to head butt you in the head for having a differing world view.

Time will tell who’s thinking is more close to the mark. If we are still in here debating in 20 years time I’m happy to mull over the history that happened and more than happy if I turn out to be wrong and everything has magically turned the world around. But surprised too!

2 08 2017
Eclipse Now

” being purportedly totally safe”
No one *respectable* is saying that, just as there were plenty of respectable nuclear engineers who would *never* have said “Too cheap to meter.” But they *are* already safer than us dumbarse human beings who get drunk, fall asleep, text, or are just plain too dumb to do something like direct a ton of metal responsibly through a crowded city. There could even be disasters with the occasional terrorist event courtesy of Russian hackers.Please also keep in mind that I’m a New Urbanist, and prefer public transport and walking distance town plans. Please *also* keep in mind that I’m also open to market forces and maybe Elon will be crushed by the coming battle with Volvo etc. Whether or not he wins the war for EV dominance is not the issue – that he started it is.

3 08 2017
Chris Harries

Thanks Eclipse, I do read your posts and don’t label you as a fanatic. I engage with people across the spectrum of ‘what people believe’ in these rather crazy times. It’s generally a particular feature of male psychology to head butt each other like rutting stags to try to prove a point. The internet is rife with such exchanges, much of which is fruitless.

Having been involved in the sociology of environmental sustainability for a few decades I’ve arrived at a conclusion that climate change is a much lesser problem for civilisation than is resource depletion overall. The latter will hit us harder and earlier than will climate change – though catastrophic climate change will have much greater implications for nature and the general ecosphere.

Because climate is the ‘in’ subject these days nearly all focus is on that subject (and marriage equality!) and correctly so. But my reckoning tells me that even if the climate crisis was magically resolved today, we are faced with an impossible array of other sustainability problems that are all lined up banging on our doors.

Many people who arrive at this conclusion point to human population and see the need for this to be decimated either by policy or by dreadful circumstance, as is happening right now in North Africa. But even that focus is a cop out. One billion wealthy people all bent on economic growth and consumer living can easily destroy the planet’s life support. In fact, that is what is taking place. Meanwhile, on the perpetual growth front all of our major institutions dancing in unison.

So, as chaos envelopes us, we on the ground are behaving in two way. Most citizens are like those paralysed native animals caught in the headlights of an oncoming car. They prefer not to look. Others who do see urgency ahead and the need to act are like frantic ants running all over a burning log.

I wend my way through this stuff, as I’m sure you do, and respond In multifarious ways – because it’s stupid to be too cocksure about any grand solutions. I do read extensively and know that the universally accepted “be optimistic” meme is leading society into a dangerous level of complacency and delusion. Therefore I appreciate those brave ones who are prepared to be unpopular and honestly and baldly say it as it is. That’s why this website has value in the spectrum of analysis out there.

Like that bloke who recently wrote an essay on the New York Times, Mike does a service in trying to jolt society out of its torpor.

3 08 2017

You’re far more diplomatic than me Chris….. 🙂

What REALLY gets me about these techno utopians is that they are encouraging more mining, more greenhouse emissions, more environmental destruction, and you have to ask yourself, for WHAT? The eventual outcome is that we WILL run out of everything, at the expense of a dead planet.

3 08 2017
Eclipse Now

Hi Chris,
there’s some *very* short backstory to all this that I’d like to explain, about my son being sick etc. Can you please send me an email so I can unpack it a bit for you? See contact details below. Just one short email, no spamming or hassling.

15 06 2017

Bugger the debt, we need the actual oil. The debt is just numbers in accounts and can be paid out by monetary sovereign operations just as they did during the GFC. It’s not that debt doesn’t matter but in the pecking order of importance compared to not have oil, it is trivial.

15 06 2017

Thanks for that! Yes, you are very much on the ball. Best wishes.

15 06 2017
Chris Harries

A formular for sinking the world economy, EJ.

Meanwhile, from the horses mouth:

At the end of the day oil barons and investors in the industry can’t ignore debt. They don’t invest in oil altruistically.

15 06 2017

You missed my point. The government will bail out the drillers.

15 06 2017

Sure……. with more debt!

besides, YOU missed the point…. the oil industry is now consuming 25% of the oil they extract just to keep drilling and producing….. the ERoEI is already so bad, it’s tanking the economy, and once that’s over, NOBODY will be buying oil, and any price….

15 06 2017

No, wrong!.WRONG!
Why do that when the government bailed out the GFC banks without causing debt? They just marked up the accounts the banks held in the fed with numbers. Suddenly no more debt. It’s a net credit operation, without liability.

I repeat, please understand, the debts are wiped out and the oil drillers can carry on. No way will debt stop the drilling unless the whole economy goes belly up.

The government will see to it. They can do it any time. Just in case you don’t know, the Fed spent 29 TRILLION dollars bailing out the GFC banks 2008-2010. They can do it again any time and as often as necessary, and they WILL. It buys time and every extra moment counts. The oil will be virtually free, courtesy of the government paying the drillers. The government will also pay us so we can buy bread etc.

16 06 2017

Errrr sorry but, when the banks were bailed out, heaps more debt was created.

And how do you think everyone involved in the fracking gets paid? DEBT! If you stop/can’t print more debt to pay the workers, they will stop working. Money is the lubricant of the economy.

Unless ABSOLUTELY EVERYONE in the world decides to work for nothing (ie no money) and merely keeps doing what they are doing right now only without a single cent being exchanged – something I suggested years ago – then everything will grind to a halt. It’s what happened in the last great depression. We had virgin continents full of resources back then – unlike now – and still everything ground to a halt from lack of money.

16 06 2017

Dedt works as a part of the economy, like you say, in NORMAL times. We are no now talking about normal times. Ever heard of the Debt jubilee? Debts are forgiven so the economy can reset.
Your problem is that you are in thrall to mainstream economics ideas. They notoriously don’t work. The economy motors along with their input, which is basically trying to forecast the future of tomorrows trading etc.
Where did you get the idea that heaps more debt was created when the banks were bailed out? The debt was Already There. The bail out wiped it out as the government can spend to pay debts. It does not create debt. It buys debt. It does not create liabilities, unlike banks. The government ‘spends’ into existence, the banks ‘lend’ into existence.

Please try to understand!

31 07 2017
Eclipse Now

Meh, a sudden peak oil crisis could be really good for us in the long term. The Greater Depression would suck, but there’s a *vast* difference between a Greater Depression and Mad Max.

15 06 2017

I’m guilty of just skimming over the article, but it’s worth noting that without having the exploration figures (i.e. how much were they actually *looking* for oil) to compare with the rate of new discoveries, it’s hard to know how bad availability really is.

Don’t get me wrong, I’m not disputing that the whole thing is a giant shitshow that surely must be circling the drain to some extent or other, but there’s economic reasons (pushing up the price for example) other than EROEI which can explain falling new discoveries.

15 06 2017

Nice to see your foundations settling in tassie. I’m intrigued watching such a narrow house develop, guess I haven’t studied passive solar design nearly enough. I’ve just finished installing an esse tied into a solar hot water system and bathroom radiator on our little old house on the button grass in Strahan, very happy with the results too. Hope one day to get down to check out your finished house, maybe on sustainable house day. Anyway good luck with it all, and the weather, even though you don’t seem to get much rain (just spent the last 2 weeks down that way- family in blackmans bay).

16 06 2017

Thanks Lloyd…. the narrow footprint is inspired by the Earthship. The idea of a one room wide house isn’t new. This way, every single room in the house gets access to the sun (and light) without having to resort to glazing facing every which way. It also allows for the rear (southern wall) to be bermed, thus increasing the thermal mass of the building to otherwise impossible levels….

15 06 2017

Mike … we are also offgriders AND IMO when the black gold runs dry we will go down together for any number of reasons.

One thing for sure …. maybe not yet .. but one day the Fanny Farms of the world will become the new black gold and a great attraction for the sheeple.

On a brighter note…. there are mixed orchards popping up everywhere in the Huon.

16 06 2017

I’m of the opinion that Fanny Farms of this world should become community centres where people can learn how to make many more Fanny Farms…… this concept needs spreading, in a big way!

16 06 2017

The problem has been kicked down the road again and again, I really do not see how it can be kicked any further. Negative interest rates and banning cash transactions and no large denominations will probably all happen very soon.

None of which solves the fundamental problem that oil expensive enough to be produced, is too dear for the economy to work. Might hide the problem for a very short time longer.

What is a bitcoin worth without an internet? What is a pipeline wort without customers at the other end? What use a can of beans without a can opener? Soon we will know the answers to these questions.

17 06 2017

Very curious to hear how your off-grid electricity generation is going now that its the depths of winter & southern Tassy sunlight will be every weaker than in Victoria for Chris @ ?

20 06 2017

It’s generally going well enough to supply our design demand of 2kWh/day. Most days the system generates 1.8 to 2.4 kWh/day, though we had one day that was so dark we only got 0.1kWh! I could not believe it go so low…. of course that’s what the batteries are for, the very next day was so sunny we got 3.6.

The trick is to design for the conditions…..

19 06 2017

Jewbucks can be printed to infinity. Resources and gold cannot.
Outcome: terminal global hyperinflation.

19 06 2017

What’s a jewbuck? It can’t be dollars as dollars can only be created to pay for a debt!. No debt = no dollars. Simple as that. It goes for the government and it goes for the banks.

23 06 2017
Chris Harries

This guy normally talks sense. But not today.

View story at

23 06 2017

G’day all, Chris, What’s the plan for Trucks, Shipping,Trains. By my reasoning we can do with out cars and planes, but transport of goods how that going to be achieved?

31 07 2017
Eclipse Now

First, HALF of world shipping is fossil fuels. We should crack down and build nuclear as fast as the French did in the 1970’s, when they spun 75% of their grid out as nuclear in 15 years. (The other quarter is hydro). Breeder reactors are coming soon that convert nuclear waste into fuel, and America already has enough to last her 1000 years, the UK 500. Trucks? Elon’s announcing something BIG in September, something to do with long-haul heavy trucking. I know I know, the energy density is impossible, the range anxiety… etc. We shall see. Battery swaps twice as fast as filling up manually? He did that with some Model S cars. Fast charge, while the truckie has a meal break? Or… are they automated? Will there even be a truckie?

1 08 2017
1 08 2017

One of two nuclear power projects under construction in the U.S. was scrapped after one of the co-owners said halting work would save customers almost $7 billion.

1 08 2017
1 08 2017
Eclipse Now

The other thing Mike would always rant against is that the industry would never scale up. America sold 17.5 million cars last year, and EV’s were only a tiny part of that. But now Elon is on the scene, and selling 1/35th that (500k), he’s starting to shake up the car market. It’s not just what Tesla alone might do, but what they’re doing to their competitors. The race to green cars is on. Volvo is abandoning oil only vehicles from 2019 and will only produce 100% EV or hybrid.,-ditches-cars-powered-solely-by-gas/8683850

Various nations are starting to announce an end-of-life for oil cars. Once electricity becomes the transport medium of exchange, big oil will finally die. But here’s another nail in the coffin. We might not have to wait for America to sell 17.5 million electric cars, but rather 1.75 million electric ROBOT CARS.

Robot-taxis will be so cheap to hire, 1 robot-taxi will permanently displace people buying 10 to 30 regular cars! The era of buying cars is over. Instead we’ll just hire robot-taxis as we need it. The big car companies realise car-as-a-product is dead, and now want to provide transport-as-a-service instead. Instead of replacing 1 billion dirty oil cars, we’ll only have to replace it with 100 million EV’s. Instead of 800 Tesla gigafactories worth of batteries, we’ll only need 80.

It gets better. Robot-taxis will reshape our cities. Robot-taxis will return a third of city real estate trapped in parking to developers. Robot-taxis don’t stop and park, they drop you off and go pick up another cab fare. They don’t even charge in the CBD, but somewhere the real estate is cheaper for them to recharge. As a result, car parks will be returned to city developers. With a third of the land returned, we can convert those ugly car parks into homes and eco-apartments and businesses. This in turn raises the population density to the point where even robot-taxis will not cope with the traffic. Walkable, social neighbourhoods can replace traffic and isolation. It will raise the density of city cores, house more people on less land, and eventually require a new subway. I love the irony that super-robot cars could create demand for more subways. It’s not about eliminating the car but domesticating it, so that it cannot push its individualistic and isolating suburban town plan on us. We can have the best of both worlds: real walkable neighbourhoods using state-of-the-art subway systems and the convenience of a robot-car when you really need it. My sources are here.

1 08 2017

YOU just refuse to accept Limits to Growth….. there’s not enough Lithium let alone Cobalt to make enough cars for just the USA…… and as demand grows, the price will go up to making already unaffordable cars even more s.

Besides, the financial sector is going to hit the fan within 18 months, and Tesla will go bust….

1 08 2017
Eclipse Now

You promise Mike? The financial system is really truly woooly going to go kaput this time, unlike the last 6 times you said it? Look, I admit that financial systems go up and down, boom and crash and boom again. I’m just not going to listen to Gail Tverberg “the censor” about it though. She just likes being Queen of the echo chamber.

To replace the world’s 1 billion cars we’ll only need to build 100 million robot taxis. That *sounds* like a saving at first, but these robot cars will be working so hard that they might only last a few years, so we’ll need to keep rebuilding them. (But that also means that every time you’re hiring a car, you’re hiring the latest greatest model with ever increasing performance and services and comfort.)

As lithium gets rarer we’ll get better at recycling it. The GREAT thing about EV’s is the versatility of the base energy source. Then of course as the price goes up, more energy can be justified in obtaining it and smaller and smaller concentrations become economic. There’s no EROEI concerns, because the nuclear power provides all that. It’s just cost, which of course includes the electricity or diesel from seawater used to mine it. Gradually, the world’s lithium supplies could grow and grow as it is constantly recycled and added to. I wonder if lithium from seawater will become a thing?

We can use anything that produces electricity, and then anything that can carry it. Once we’re on electricity, we have the time to try so many other things. There are so many materials we can make batteries from. Will the next big battery be a super-micro-capacitor, sodium ion, foam, nano-yolk triple capacity, aluminium air or something else?

Or will we just infinitely recycle diesel-from-seawater? I hope not, as I like the cleaner air from EV’s. But it’s possible.

Dr James Hansen thinks infinitely recyclable boron powder is an option. Mike just laughed last time I mentioned that, until I mentioned Hansen supporting it. Then he went quiet. Boron is incredibly clean, like hydrogen.

Tim Flannery thinks giant floating kelp farms could de-acidify the oceans, sequester Co2, provide all our food and most of our energy.

Then there’s feeding kelp to vats, to get all our meat not from grazing a third of the land surface of the earth, but from the sea! Then we can return a third of the land back to ecosystems and parks.

Then there’s the coming automation revolution that could see ecobots out collecting plastics, harvesting weeds, killing crown of thorn starfish (oh, wait, they’re already doing that!), protecting endangered species from poachers, planting seeds, etc. There’s just so much going on out there, and yet I admit we do not know the future. Trump V Putin really could push the button! But hey, that’s all part of the mystery of life, isn’t it? I just wish Mike would admit how much his crystal ball has truly stuffed up till now. His oil prices, rationing scenarios, and even Mad Max stories from 13 years ago were just spot on hey? 😉

2 08 2017
Eclipse Now

Not enough lithium! Honestly dude, get a new song, you’re wearing this one out and sounding *bad*.
“According to this page on Waste Management’s recycling section only 3% of the cost of a Lithium-Ion battery is the actual lithium carbonate.
One article says a $10,000 Li-Ion battery only contains $100 worth of Lithium, so even if the cost of the Lithium were to double or triple, the manufacturing savings from economies of scale will still fall faster than the cost of raw materials.
Bolivia alone has enough Lithium for 4.8 billion car batteries, and that’s only half of the world’s currently known reserves.
10 billion cars worth of Lithium without even discovering new sources is more than enough to tide us over until a better battery technology becomes feasible.”

Enough for 4.8 billion cars, and can be recycled

“However, according to a 2011 study conducted at Lawrence Berkeley National Laboratory and the University of California, Berkeley, the currently estimated reserve base of lithium should not be a limiting factor for large-scale battery production for electric vehicles because an estimated 1 billion 40 kWh Li-based batteries could be built with current reserves[91] – about 10 kg of lithium per car.[92] Another 2011 study by researchers from the University of Michigan and Ford Motor Company found sufficient resources to support global demand until 2100, including the lithium required for the potential widespread transportation use. The study estimated global reserves at 39 million tons, and total demand for lithium during the 90-year period analyzed at 12–20 million tons, depending on the scenarios regarding economic growth and recycling rates.[93]
On June 9, 2014, the Financialist stated that demand for lithium was growing at more than 12 percent a year; according to Credit Suisse, this rate exceeds projected availability by 25 percent. The publication compared the 2014 lithium situation with oil, whereby “higher oil prices spurred investment in expensive deepwater and oil sands production techniques”; that is, the price of lithium will continue to rise until more expensive production methods that can boost total output receive the attention of investors.[94]”

Lithium from seawater
“That brings us back to the world’s largest repository of lithium: the sea. In recent years novel processes and materials, including graphene, have shown promise in making mining the sea a reality. Researchers at the University of North Carolina, for instance, designed a metal-organic framework to collect uranium-bearing ions from seawater. Hoshino believes his seawater dialysis cell for recovering lithium could be commercialized within five years.”

2 08 2017
3 08 2017
Eclipse Now

Wow Mike,
you quoted the other Queen of the echo-chamber, Energysceptic who also censors people *very* quickly on her blog, and a 2013 paper. Given the enormous speed at which both resource technologies *and* the exploration for world resources of lithium are changing, 2013 is *ancient.* The world demand for lithium is increasing so much that entire new lithium reclamation and recycling technologies are being invented. You did not comment on the possibility of lithium from seawater, and the many other recycling and mining technologies and regions being developed today.

The market’s reacting to cobalt demand.

As even your second link says,
“While new lithium resources can be developed if prices are high enough….”
(Seriously Mike, why even bother quoting the Queen Harpy of censorship? She’s in denial about modern technologies, and embraces self-contradictory and circular arguments all the time.)

And here’s the best bit. In 20 years, I doubt we’ll even *need* lithium or cobalt! There are dozens of new ways to do batteries being developed right now, some of which focus on the bizarre new physics of carbon nanotubes and other weird nanoparticle engineering.

Lastly, and this is not central to my argument by any means, but mining one ore-rich asteroid could supply the human race with more metals and rare earth’s than we’ve mined in our entire history. Just one. And while there are billions of space rocks, there are millions of metal rich asteroids. (And don’t quote “Do the math” at me about space mining – I vividly remember his work being smacked down in previous comments here.)

5 08 2017

I’m not surprised Alice shut you out of her blog quick smart….. she doesn’r suffer fools.

5 08 2017
Eclipse Now

And she doesn’t suffer known engineering facts and chemistries like EV’s, like boron powder, like synfuel from seawater, and like breeder reactors that could power the lot. Now, who does that remind me of? 😉

There’s a *reason* they call it the echo chamber Mike.

5 08 2017

Alice is the granddaughter of two scientists, she is genetically predisposed towards doing extensive research and exhaustive reading; she is a systems architect and engineer for over 25 years. I think she has a few more clues than you do, unable as you are to face the multifaceted predicaments facing civilisation……

I wouldn’t bother posting anything else here if I were you….. you have little to offer this readership.

1 08 2017
Eclipse Now

(I forgot the punchline.) If robot-taxis really do catch on, then it will not only prevent the manufacture of 90% of regular cars and all that embedded wasteful energy, but it will mean America sells 1.75 million cars instead of 17.5 million cars a year. As automation cranks up, and car-as-product scales down, it will mean Tesla’s 500k cars per year is already *nearly* a third of the way there! The Tesla Model 3 lacks fuel gauges, etc etc and basically has a big screen.

One day you’ll be able to blog or watch TV on that screen, or just have a nap. The robots are coming, and when they do, all Mike’s ranting about how many cars must be built and how much energy and resources it’s going to take and how hopeless it all is will sound like the Wizard of Christchurch ranting against the census, and getting in his little boat and going off shore so he can’t be counted. Good on you Mike, out there in your little lifeboat. You saved yourself from the evil peakoil. Meanwhile, Elon’s potentially saved us all.

1 08 2017
Chris Harries

Eclipse, you really and truly believe that the motor vehicle manufacturing industry is going to engineer a future for itself where it is reduced to a tiny shadow of what it is now?

This is the sales pitch, yes, but let’s wait. I vividly recall the nuclear industry promises to produce power that would be “too cheap to meter”. We laugh at that promise now.

I think we ought to embrace elegant new technology but not with naively.

1 08 2017
Eclipse Now

>Eclipse, you really and truly believe that the motor vehicle manufacturing industry is going to engineer a future for itself where it is reduced to a tiny shadow of what it is now?

Not at all. I really and truly believe they’ll be bitch-slapped into it, and many will go bankrupt. Remember, the chief scientist advisor for Telstra said on ABC radio that he thinks it is not only technically possible, but socially *desirable* to make human driving *illegal* by 2030! That’s only 13 years away.

2. Car companies are in an arms-race to get there first!

If the private car ownership model is dying, surely a trillion dollar industry would see this coming and be putting serious money into robot-technologies. Being first is everything, as Facebook learned at the expense of Google+. It should be like an arms race out there. Are there any signs of that?

As NBF reports GM President Dan Ammann believes transportation will change more in the next five years than it did in the last fifty years.
General Motors is investing $500 million and partnering with Lyft
Ford is partnering with Google
Consortium of German auto makers bought Nokia’s mapping assets
Uber partnered with Carnegie Mellon robotics department and hired 50 of them into the company
Tesla activated advanced driver assist and plans to technically have self driving cars safer than human driving within two years
Toyota will activate data gathering on all of its cars to improve its self driving software by 2020
Nutonomy made a deal with French automaker Groupe PSA (Peugeot, Citroen, DS brands) to build robot-Peugeot’s for their robot-taxi fleet which will expand to a dozen vehicles in 2018. Tests are underway now.
These are all the Corporations working on robot-cars (May 2017).
(Go to my webpage below and just look at the graphic!)

The old 1950’s promise of nuclear electricity “too cheap to meter” is such an old meme that it is irrelevant to discussions about the costs of today’s nuclear technology. It is a perfect example of “Poisoning the Well”. “Poisoning the well (or attempting to poison the well) is a fallacy where irrelevant adverse information about a target is preemptively presented to an audience, with the intention of discrediting or ridiculing everything that the target person is about to say.”

Honestly, I feel a bit sad for people that take that cheap shot at nuclear power. Back at the dawn of the nuclear era they were making such astonishing discoveries and advances so amazing and so fast that an exponential curve appeared to be opening where the end was hard to imagine. The first bombs quickly led to the first military reactors which led to the first commercial reactors, basically submarine reactors parked on the land. The energy potential was vast, with uranium about the size of a milk crate running a reactor for 3 months. (And that’s before we get into reprocessing!) Splitting the atom has a million times the energy density of chemical fuels. The potential seemed limitless. The military was in awe. The world was in awe. Aircraft carrier Task Force One tore around the world breaking all records for force-projection speeds at sea, without refuelling! Just look at the sailors standing on parade, formed up in the famous “E = mc2”

Back then, projecting that we would one day have power ‘too cheap to meter’ must have seemed reasonable, at least to the marketing types. But I still bet the early nuclear engineers winced when the meme got out. They have always had a more realistic appreciation of the sheer capital invested in a reactor! We cannot *rationally* condemn all reactor technologies because an old marketing campaign got carried away with itself!

So how expensive is nuclear power? Is it, as American renewables advocate Amory Lovins claims, dying of an ‘acute attack of the marketplace’? No. Amory is over-simplifying. That is a particularly American phenomena, due to their unique regulatory framework that cripples their reactors. There are countries building nuclear *far* cheaper than America. “In contrast to the rapid cost escalation that characterized nuclear construction in the United States, we find evidence of much milder cost escalation in many countries, including absolute cost declines in some countries and specific eras. Our new findings suggest that there is no inherent cost escalation trend associated with nuclear technology.”

And that’s with today’s reactors. Tomorrow’s BREEDER reactors are in the pipeline. This is not hypothetical, like fusion, but rather the end result of having 400 reactor years with real breeder reactors that can breed fuel from nuclear waste. (Reactor years = reactors multiplied by years in operation).
* GenIV breeder reactors will have standardised safety and parts, come off a production line, and burn nuclear waste. China are planning an assembly line GenIV nuke cheaper than coal in just 6 years!
* Many GenIV breeders will not use water as a coolant. This is a big deal for cost, as it lets them build a room pressure core, not the extremely huge single-cast steel reactor core of today that has to survive over 150 atmospheres of pressure!
* The assembly line will build the modular components in climate controlled factories, avoiding delays due to bad weather. Then the final pieces will be trucked to site for fast assembly. The whole process will crash prices, giving the world abundant and *reliable* clean power that can close coal ASAP.
* It will not be ‘too cheap to meter’, but may indeed get as low as $1 billion per GW, cheaper than coal! Indeed, some say some nukes are already there.

If you account for the externalised public health costs of coal and the absolutely unfathomable ‘costs’ of climate change (although ‘costing’ the potential end of civilisation is a pretty meaningless exercise!), nuclear power may already be cheaper than coal. “Too cheap to meter” was a terrible campaign. But affordable, safe, abundant, reliable, climate-friendly nuclear power that leaves clear skies and fresh air? Now that’s a marketing campaign I could get behind!

2 08 2017
Chris Harries

You’ve read me incorrectly, Eclipse. The point about the promise of “energy too cheap to meter’ isn’t about nuclear power. I’m comparing that wishful thinking promise to the wild promises now being made about technologies such as autonomous vehicles… being purportedly totally safe and shrinking the global vehicle fleet down to a tenth and so forth. I can guarantee you one thing: it won’t be quite such plain sailing.

Much of this dreaming over technological utopia is pure hype. That’s not to say there aren’t some brilliant minds out there, but society is more than technology.

I met a lovely, besotted young guy in Newcastle recently who described Elon Musk as the greatest person to be born on this Earth after Jesus Christ and Karl Marx. He’s got guru status all right. But let’s wait and see what comes up in the wash before buying statues of him for our mantle pieces.

3 08 2017

Tesla Burns A Record $13 Million Per Day In Q2… And It’s About To Get Worse

Zero hedge.

3 08 2017
4 08 2017
4 08 2017
Chris Harries

On the autonomous car future, here’s another cautionary article – to help balance out some of the salivation and hype:

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