America NOT great again…….

31 08 2018

One of the many things I see on TV news material that makes me shout at the screen is economic commentators raving about America’s booming economy……. nothing of the sort is happening. Economies are measured in dollars, and as debt grows exponentially, so does the money supply, and the throughput of money increases, and stupid moronic ‘economists’ whose only job is to make you all believe everything’s doing just fine will make you believe the increasing GDP is both good and a sign of growth…… Here’s an article that debunks all this fake news.

Go to the profile of umair haque

Let’s start at the beginning. The reason that crackpot American theories of economics are wrong is that they presume capitalism is the answer to everything. More jobs? Wages must rise! Hey presto! The economy fixes itself. Supply and demand, my dude — go capitalism!! But wait — what happens if those jobs are, well, not very good ones, because corporations don’t really have to compete, because its made of gigantic monopolies now, not mom-and-pop soda shoppes? If instead of being something more like stable middle class careers, with upward mobility, benefits, retirements, security, stability, meaning, belonging, and so forth, they are something more like jobs only in name — in reality, hollowed out? What happens if all that’s left in a “job” is the chance to work harder and harder every year, for shrinking income, opportunity, savings, a declining quality of life?

That’s exactly what’s happened in America. The “jobs” that are being created are not high quality ones. Like more or less everything else predatory capitalism creates, they are of astonishingly low quality. Not only are they concentrated in low-growth sectors, they’re composed of menial tasks, and they offer dead ends, not paths upwards, outwards, or forwards.

The result is the dismal litany of statistics that, by now, you should know all too well. It’s as alarming as it is astonishing. 80% of American live paycheck to paycheck. 70% have less than $1000 in savingsA third struggle to afford even healthcare, education, and shelter. As a result, America’s seeing what Angus Deaton calls “deaths of despair.” The suicide rate is skyrocketing, and longevity is falling, as people who can’t cope with the trauma appear to be simply giving up on life. It is no mistake to say that capitalism is killing Americans — and yet, Americans are tragically wedded to capitalism.

Yet at the same time, things have never been better for the ultra rich. They’ve captured more than 100% of gains over the last decade. The stock market is booming — but just 10% of Americans really own stocks, and maybe 1% earn a living from capital income. So, enjoying inequality that now puts classical Rome to shame, the mega rich quite literally have piled up fortunes so incredibly vast, there is literally nowhere left to put all the money — all the yachts, mansions, and lofts have been bought. That is why interest rates are permanently at zero: there is so much money piled up at the top of the economy, there is nowhere left to put it, except the one place it should go, which is right back to the people who need it: the middle class and poor, or if you like, the proletariat and the petite bourgeoisie in Marxist terms.

The result is an economy with an imploded middle class. That might sound trivial, but is crucial. A middle class is one of the defining creations of modernity — and what happens when a society loses its middle class is another defining creation of modernity — fascism. But we’ll get to that in a moment.

Remember Steve St Angelo describing the fracking industry cannibalising itself? Well this guy seems to think the entire US economy is doing this too…..

“Growth” has turned predatory. American economics supposes — because it assumes capitalism is the best solution to everything — that growth is always good. But growth is not always good. Not just because it eats the planet (though it does) — but in this case, for a more immediate reason. Capitalism isn’t just eating the planet. It’s eating democracy, civilization, truth, reality, the future, and you.

Read it all here.

Advertisements




The Price of Oil

10 02 2018

Another excellent article by Dave Pollard over at How to Save the World…..  my only criticism of this article is that he’s not factoring in collapsing ERoEI will have on the production side…..


The clueless gamblers that speculate on stock and commodity prices have been having a field day recently. Desperately chasing profits, like high-rollers who keep increasing their casino bets every time they lose, they have wiped billions out of share and pension values in a lemming-like panic about whether and when the colossally overpriced stock market is going to crash. And they have also pushed the price of oil up to near $70/bbl for the first time in several years. These speculators, who contribute nothing of any value to our economy, are some of the most destructive individuals on the planet, destabilizing markets on which many depend for their lives and livelihoods. (They also wreak havoc on land, real estate, food, and currency prices.) And many of them make millions in commissions and bonuses just rolling the dice for their employers and clients and praying that their lucky bets (mostly on prices rising perpetually) will continue.

A couple of years ago I wrote an article about the price of oil, explaining that the issue we’re going to face in the 21st century isn’t one of energy running out, but of affordableenergy running out. Just as, during great depressions and famines, masses of food is left rotting in the ground because no one can afford to buy it (or even retrieve it and give it away), having oil in the ground that costs $80/bbl to get to market (especially if governments run out of money for subsidies, or, god forbid, decide that oil companies should start to pay the huge external costs of their activities) is not especially useful when you can only afford, in an economy ruined by overexploitation, environmental degradation, excessive debt, inequality and waste, $30/bbl for it.

Before I go further, if you’re one of the many who have been persuaded that “peak oil is over” and that renewables and new technology will soon save us from energy collapse, you might as well not read this article. Instead, I’d suggest you read this, or this, or this, or any of the many other articles written by people who understand the laws of thermodynamics and how the economy actually works.

This time I thought I’d start with a review of oil prices in the past. The chart above plots the course of oil prices (in inflation-adjusted dollars) back to 1946. Green lines show supply curves; red lines demand curves, and the dots at intersections are annual average oil prices for those years. Follow the dots:

  1. 1946-72. Oil prices were remarkably stable at about $25/bbl (in current dollars) during this entire period. The world became dependent on OPEC. Virtually all global growth in real terms since 1946 is attributable to increasing use of oil. Almost none of it is ascribable to new technology (other than energy extraction technology) or “efficiencies” or “innovation” or “economies of scale”. That’s it. If you’re a believer in GDP or that growth is essential to the economy you might want to keep that in mind (and if you are invested in stocks or land or any other industrial resource, you’d better believe, because their “value” is all computed in terms of future growth in exchange value, production and profits). Between 1946 and 1972 the OPEC nations were in bed with the western corporatists (as they still are today, supporting them politically and militarily), fixing the price of oil at that price to ensure the economy could continue to grow, as required, endlessly.
  2. 1973-80. OPEC fights back, realizing that although they can make money at $25/bbl because of the size and ease of tapping their reserves, they have already pumped out more than half of it, and they have only a few decades’ worth left and nothing to support their economy when it runs out. So they constrain production, driving the price up to $60/bbl (1975) and then $110/bbl (1980). At that price they can set money aside for when their oil runs out, and avoid the massive humanitarian crises that the end of oil spells for them. But for the western corporatists, this is disastrous: their economies are in a shambles, with double-digit inflation ruining profits, and line-ups at the pumps.
  3. 1981-85. The western corporatists “convince” OPEC to turn the pumps back on, persuading them that there is a happy medium price for oil (more than the $25-30/bbl that makes exploration for new sources uneconomic, but less than the $75/bbl threshold beyond which the global economy cannot pay for it and hence cannot survive. By 1985, OPEC has increased supply so that, despite the new demand from expanding Asian countries, the price has settled back in the perfect $50-60/bbl range. Remember here that the amount of production and consumption of oil is so close (there’s no place to put much excess once it’s pumped, and there’s no margin for error if there’s a serious shortage) that any changes in production, intentional or not, have a huge impact on price.
  4. 1986-2002. At $60/bbl, there’s an incentive to put more into the market than you can sustainably continue to produce, and also an incentive to find new sources — and remember, a small increase in supply has a big impact on lowering price. From the late 1980s to 2002, the lingering effects of the early-1980s crash kept demand from increasing as it had been, and a number of (heavily subsidized, environmentally catastrophically damaging) new sources of “dirty” and “tight” (harder to extract) oil were found. As a consequence, prices tumbled back to the $30/bbl level. OPEC was not happy, but some of their own short-term-thinking members were opening the taps to try to bolster their struggling economies, and the new sources meant OPEC as a whole had less oligopoly power over supplies and hence prices.
  5. 2003-08. The low prices were unsustainable to many producers, especially those with higher production costs that ceased or curtailed exploring, and that, combined with increasing demand from third-world countries, began pushing prices up again, to $60/bbl in 2005 and $90/bbl in 2008. You remember 2008, the bubble year, right? Over-exuberance had enabled speculators to push the price of everything up to ridiculous levels, and oil was not spared. The crash of 2008 also weakened demand, as many people could not afford to pay for anything, including fuel. But everyone knew the $90/bbl couldn’t last, just as they knew it in 1980.
  6. 2009-17. Banking on continuing high oil prices, speculators jumped into fracking and other high-risk, costly (and heavily-subsidized) smaller-scale oil ventures. For the first time, people who can’t think further ahead than the next quarter’s profit report were saying that there was more than enough oil, and that peak oil was dead. More reasoned experts argued that the danger to our planet from climate change caused by burning oil now exceeded the danger of running out of it (we may well experience both in the years to come). But many of the new ventures depended on sustained high oil prices, and as supply rose, price inevitably dropped. This was exacerbated by a chronic global recession that (despite what you might read in the Wall Street press) has left 90% of the population with massively higher debts and less disposable income than they had back in the 1980s. That recession curtailed demand and added to the price slump that saw oil drop from $90/bbl in 2008 to $60/bbl in 2015 and then back to a near-ruinous (for producers) $40/bbl in 2016-17. Many of the new operators declared bankruptcy, but in the mean-time they (and the ongoing recession for all but the super-rich) had created a short-term oil glut. More people came to believe that oil would be abundant forever, at reasonable prices. Many OPEC countries’ governments, already struggling with unruly political movements, and a permanently unemployed youth workforce, were getting antsy.
  7. 2018. Surprise, surprise, the oil price has risen again, to as high as $70/bbl, though it seems to be hovering mostly around the ‘ideal’ (for producers and consumers) $60/bbl level. The problem is, that’s not quite as ideal as it used to be. The cost of bringing new oil to market has risen from very low-levels (near $15/bbl in the mid-20th-century OPEC countries, to $45/bbl for much “tight” oil extraction). So a very volatile $50-60/bbl price doesn’t provide much margin for producers in an economy that demands significantly increasing profits every year. And it’s expensive for consumers, who start to reduce consumption and turn to alternative sources of energy (where available) when prices move into that $50-60/bbl range.

So what does this mean for the future? The second chart, below, describes what I think we’ll see by the middle of this century. Here we go:

  1. 2018-2025: Just a guess, but there doesn’t seem to be any compelling short-term trend in supply or demand one way or another, so I’m guessing that we’ll have a few years of relative stability, with prices ranging from $40-80/bbl depending on producer actions, politics, climate change proclivities, carbon taxes and regulations, and the strange whims and misconceptions of speculators (damn I’d like to see a huge speculation tax on every do-nothing transaction gamblers put through).
  2. 2025-2050: In the medium term, all bets are off. I can see, as conventional sources of oil get depleted and new ones cost more and more, the cost of getting oil to market rising enough that any price under $70/bbl won’t be worth the risk. And I can see, as the real economy (not the economy-of-the-elite the NYT and WSJ reports on) continues to struggle and inequality widens to become a political and even military issue in many parts of the world, the affordable ceiling price for oil dropping to $40/bbl. So that means there is no “happy medium” that works for both producers and consumers — any price is either too low for producers (keeping/driving them out of the market) or too high for consumers (leading to hoarding, involuntary reductions in use (ie repo’d cars and foreclosed homes) — or both. So I see prices whipsawing between $30/bbl or less (when the economy is in especially bad shape) and $100/bbl or more during speculative frenzies, rationing (in black markets), severe shortages and short-lived “is the long depression over yet?” economic recoveries.
  3. 2050-2100: This is the period in which I’ve forecast economic and/or energy collapse and the onset of chronic serious climate change trends and events. I don’t think the US dollar will survive this, so it’s hard to set a price on anything in that currency. I do see it as a long era of scavenging, re-use, rationing, nationalization (until national governments collapse and leave energy management to struggling local communities), hoarding, black markets, and yes, even conservation at last.

Not a very rosy picture, but those who’ve studied the economy and have been following oil prices for a while tend to support much of this hypothesis. Ultimately, it’s the economy, (not so) stupid. The economy is the tail that wags the energy dog, but ultimately the global industrial economy is founded entirely on the preposterous and untenable requirement that growth must continue forever, and the only thing that has provided sustained growth for the past couple of centuries has been cheap hydrocarbons.

And I understand oil doesn’t keep very well.





Lithium’s limits to growth

7 08 2017

The ecological challenges of Tesla’s Gigafactory and the Model 3

From the eclectic brain of Amos B. Batto

A long but well researched article on the limitations of the materials needed for a transition to EVs…..

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

Many electric car advocates are heralding the advent of Tesla’s enormous battery factory, known as the “Gigafactory,” and its new Model 3 electric sedan as great advances for the environment.  What they are overlooking are the large quantities of energy and resources that are consumed in lithium-ion battery manufacturing and how these quantities might increase in the future as the production of electric vehicles (EVs) and battery storage ramps up.

Most of the credible life cycle assessment (LCA) studies for different lithium-ion chemistries find large large greenhouse gas emissions per kWh of battery. Here are the CO2-eq emissions per kWh with the battery chemistry listed in parentheses:
Hao et al. (2017): 110 kg (LFP), 104 kg (NMC), 97 kg (LMO)
Ellingsen et al. (2014): 170 kg (NMC)
Dunn et al. (2012): 40 kg (LMO)
Majeau-Bettez et al. (2011): 200 kg (NMC), 240 kg (LFP)
Ou et al (2010): 290 kg (NMC)
Zackrisson et al (2010): 440 kg (LFP)

Dunn et al. and Hao et al. are based on the GREET model developed by Argonne National Laboratory, which sums up the steps in the process and is based on the estimated energy consumption for each step. In contrast, Ellingsen et al. and Zackrisson et al. are based on the total energy consumption used by a working battery factory, which better captures all the energy in the processing steps, but the data is old and the battery factory was not very energy efficient, nor was it operating at full capacity. Battery manufacturing is getting more energy efficient over time and the energy density of the batteries is increasing by roughly 7% a year, so less materials are needed per kWh of battery. It is also worth noting that no LCA studies have been conducted on the NCA chemistry used by Tesla. NCA has very high emissions per kg due to the large amount of nickel in the cathode, but is very energy dense, so less total material is needed per kWh, so it is probably similar in emissions to NMC.

The big debate in the LCA studies of battery manufacturing is how much energy is consumed per kWh of battery in the battery factory. In terms of MJ per kWh of battery, Ellingsen et al. estimate 586 MJ, Zachrisson et al. estimate 451 MJ and Majeu-Bettez et al. estimate 371-473 MJ. However, the energy for the drying rooms and factory equipment is generally fixed, regardless of the throughput. Ellingsen et al (2014) found that the energy expended to manufacture a kWh of battery could vary as much as 4 times, depending on whether the factory is operating at full capacity or partial capacity. Since the Gigafactory will probably be operating a full capacity and energy efficiency is improving, let’s assume between 100 MJ and 150 MJ per kWh of battery in the Gigafactory (which converts to 28 – 42 kWh per kWh of battery). It is unlikely to be significantly less, because it is more energy efficient to burn natural gas for the drying rooms than use electric heaters, but the Gigafactory will have to use electric heaters to meet Musk’s goal of 100% renewable energy.

If producing 105 GWh of batteries per year at 100 – 150 MJ per kWh, plus another 45 GWh of packs with batteries from other factories at 25 MJ per kWh, the Gigafactory will consume between 3,229 and 4,688 GWh per year, which is between 8.3% and 12.0% of the total electrical generation in Nevada in 2016. I calculate that 285 MW of solar panels can be placed on the roof of the Gigafactory and they will only generate 600 GWh per year, assuming a yearly average of 7.16 kWh/m2/day of solar radiation, 85% (1.3 million m2) of the roof will be covered, 20% efficiency in the panels and a 10% system loss.

Solar panels in dusty locations such as Nevada loose roughly 25% of their output if they are not regularly cleaned. Although robots have been developed to clean panels with brushes, water will most likely be used to clean the Gigafactory’s panels. A study by Sandia National Laboratory found that photovoltaic energy plants in Nevada consume 0.0520 acre-feet of water per MW of nameplate capacity per year. The solar panels at the Gigafactory will probably have 25% less area per MW than the solar panels in the Sandia study, so we can guesstimate that the solar panels on the Gigafactory roof will consume 11.1 acre-feet or 13,700 cubic meters of water per year.

Solar panels can also be placed on the ground around the factory, and but consider the fact that the Gigafactory will only receive 4.23 kWh/m2/day in December, compared to 9.81 kWh/m2/day in July. With less than half the energy from the panels during the winter, the Gigafactory will need other sources of energy during the times when it is cloudy and the sun’s rays are more indirect. Even during the summer, the Gigafactory will probably have to use temporary battery storage to smooth out the solar output or get additional energy with electric utilities which use gas peaking, battery storage or buy energy from the regional grid to give the Gigafactory a stable supply of electricity.

The original mockup of the Gigafactory showed wind turbines on the hillsides around the plant, but wind energy will not work onsite, because the area has such low wind speed. A weather station in the Truckee River valley along I-80, near the Gigafactory, measures an average wind speed of 3.3 m/s at a height of 6 meters, although the wind speed is probably higher at the site of the Gigafactory. Between 4 to 5 m/s is the minimum wind speed to start generating any energy, and between 5 and 6 m/s is generally considered the minimum for wind turbines to be economically viable. It might be possible to erect viable wind turbines onsite with 150 m towers to capture better wind, but the high costs make it likely that Tesla will forgo that option.

The region has good geothermal energy at depths of 4000 to 6000 feet and this energy is not variable like solar and wind. However, there is a great deal of risk in geothermal exploration which costs $10 million to drill a test well. It is more likely that Tesla will try to buy geothermal energy from nearby producers, but geothermal energy in the region is already in heavy demand, due to the clean energy mandates from California, so it won’t be cheap.

Despite Musk’s rhetoric about producing 100% of the Gigafactory’s energy onsite from renewable sources, Tesla knows that it is highly unrealistic, which is why it negotiated to get $8 million in electricity rebates from the state of Nevada over an 8 year period. It is possible that the Gigafactory will buy hydroelectric energy from Washington or Oregon, but California already competes for that electricity. If Tesla wants a diversified supply of renewable energy to balance out the variability of its solar panels, it will probably have to provide guaranteed returns for third parties to build new geothermal plants or wind farms in the region.

I would guesstimate that between 2/3 of the electricity consumed by the Gigafactory will come from the standard Nevada grid, whereas 1/3 will be generated onsite or be bought from clean sources. In 2016, utility-scale electricity generation in Nevada was 72.8% natural gas, 5.5% coal, 4.5% hydroelectric, 0.9% wind, 5.7% PV solar, 0.6% concentrated solar, 9.8% geothermal, 0.14% biomass and 0.03% petroleum coke. If we use the grams of CO2-eq per kWh estimated by IPCC AR5 WGIII and Bruckner et al (2014), then natural gas emits 595 g, coal emits 1027 g, petroleum emits 880 g, hydroelectric emits 24 g, terrestrial wind emits 11 g, utility PV solar emits 48 g, residential PV solar emits 41 g, concentrated solar emits 27 g, geothermal emits 38 g and biomass emits 230 g. Based on those emission rates, grid electricity in Nevada emits 499 g CO2-eq per kWh. If 2/3 comes from the grid and 1/3 comes from rooftop PV solar or a similar clean source, then the electricity used in the Gigafactory will emit 346 g CO2 per kWh. If consuming between 3,229 and 4,688 GWh per year, the Gigafactory will emit between 1.12 and 1.62 megatonnes of CO2-eq per year, which represents between 3.1% and 4.5% of the greenhouse gas emissions that the state of Nevada produced in 2014 according to the World Resources Institute.

Aside from the GHG emissions from the Gigafactory, it is necessary to consider the greenhouse gas emissions from mining, refining and processing the materials used in the Gigafactory. The materials used in batteries consume a tremendous amount of energy and resources to produce. The various estimates of the energy to produce the materials in batteries and their greenhouse gas emissions shows the high impact that battery manufacturing has on the planet.

ImpactPerKgBatteryMaterials

To get some idea of how much materials will be used in the NCA cells produced by the Gigafactory, I attempted to do a rough calculation of the weight of materials in 1 kWh of cells. Taking the weight breakdown of an NMC battery cell in Olofsson and Romare (2013), I used the same weight percentages for the cathode, electrolyte, anode and packaging, but scaled the energy density up from 233 kW per kg in the NCA cells in 2014 to 263 kW per kg, which is a 13% increase, since Telsa claims a 10% to 15% increase in energy density in the Gigafactory’s cells. Then, I estimated the weight of the components in the cathode, using 76% nickel, 14% cobalt, and 10% aluminum and some stochiometry to calculate the lithium and oxygen compared to the rest of the cathode materials. The 2170 cells produced by the Gigafactory will probably have different weight ratios between their components, and they will have more packaging materials than the pouch cells studied by Olofsson and Romare, but this provides a basic idea how much material will be consumed in the Tesla cells.

BatteryMaterialsIn1KWhGigafactory

The estimates of the energy, the emissions of carbon dioxide equivalent, sulfur dioxide equivalent, phosphorous equivalent and human toxicity to produce the metals are taken from Nuss and Eckelman (2014), which are process-sum estimates based on the EcoInvent database. These are estimates to produce generic metals, not the highly purified metals used in batteries, and the process-sum methodology generally underestimates the emissions, so the estimates should be taken with a grain of salt but they do give some idea about the relative impact of the different components in battery cells since they use the same methodology in their calculations.

At this point we still don’t know how large the battery will be in the forthcoming Model 3, but it has been estimated to have a capacity of 55 kWh based on a range of 215 miles for the base model and a 20% reduction in the size of the car compared to the Model S. At that battery size, the cells in the Model 3 will contain 6.3 kg of lithium, 26.4 kg of nickel, 4.9 kg of cobalt, 27.9 kg of aluminum, 56.6 kg of copper and 21.0 kg of graphite.

Even more concerning is the total impact of the Gigafactory when it ramps up to its planned capacity of 150 GWh per year. Originally, the Gigafactory was scheduled to produce 35 GWh of lithium ion batteries by 2020, plus package an additional 15 GWh of cells produced in other factories. After Tesla received 325,000 preorders for the Model 3 within a week of being announced on March 31, 2016, the company ambitiously announced that it would triple its planned battery production and be able to produce 500,000 cars a year by 2018–two years earlier than initially planned. Now Elon Musk is talking about building 2 to 4 additional Gigafactories and one is rumored to have signed a deal to build one of them in Shanghai.

If the components for 1 kWh of Gigafactory batteries is correct and the Nevada plant manages to produce as much as Musk predicts, then the Gigafactory and the cells it packages from other battery factories will consume 17,119 tonnes of lithium, 71,860 tonnes of nickel, 13,292 tonnes of cobalt, 154,468 tonnes of copper and 75,961 tonnes of aluminum. All of these metals except aluminum have limited global reserves, and North America doesn’t have enough production capacity to hope to supply all the demand of the Gigafactory, except in the case of aluminum and possibly copper.

150GWhInGigafactory

When the Gigafactory was originally announced, Telsa made statements about sourcing the battery materials from North America which would both reduce its costs and lower the environmental impact of its batteries. These claims should be treated with skepticism. The Gigafactory will reduce the transportation emissions in battery manufacturing, since it will be shipping directly from the refineries and processors, but the transportation emissions will still be very high because North America simply doesn’t produce enough of the metals needed by the Gigafactory. If the Gigafactory manufacturers 150 GWh of batteries per year, then it will consume almost 200 times more lithium than North America produced in 2013. In addition, it will also consume 166% of the cobalt, 133% of the natural graphite, 25.7% of the nickel, and 5.6% of the copper produced by North American mines in 2016. Presumably synthetic graphite will be used instead of natural graphite because it has a higher purity level of carbon and more uniform spheroid flakes which allow for the easier flow of electrons in the cathode, but most synthetic graphite comes from Asia. Only in the case of aluminum does it seem likely that the metal will come entirely from North America, since Gigafactory will consume 1.9% of North American mine production and the US has excess aluminum refining capacity and no shortage of bauxite. Even when considering that roughly 45 GWh of the battery cells will come from external battery factories which are presumably located in Asia, the Gigafactory will overwhelm the lithium and cobalt markets in North America, and strain the local supplies of nickel and copper.

GigafactoryMetalConsumption

Shipping from overseas contributes to greenhouse gases, but shipping over water is very energy efficient. The Gigafactory is located at a nexus of railroad lines, so it can efficiently ship the battery materials coming from Asia through the port of Oakland. The bigger problem is that most ships on international waters use dirty bunker fuels that contain 2.7% sulfur on average, so they release large quantities of sulfur dioxide into the atmosphere that cause acid rain and respiratory diseases.

A larger concern than the emissions from shipping is the fact that the production of most of these battery materials is an energy intensive process that consumes between 100 and 200 mejajoules per kg. The aluminum, copper, nickel and cobalt produced by North America is likely to come from places powered by hydroelectric dams in Canada and natural gas in the US, so they are comparatively cleaner.  Most of the metal refining and graphite production in Asia and Australia, however, is done by burning coal. Most of the places that produce battery materials either lack strong pollution controls, as is the case in Russia, the Democratic Republic of Congo (DRC), Zambia, Philippines or New Caledonia, or they use dirty sources of energy, as is the case in China, India, Australia, the DRC, Zambia, Brazil and Madagascar.

MineProductionByCountry

Most of the world’s lithium traditionally came from pumping lithium rich subsurface water out of the salt flats of Tibet, northeast Chile, northwest Argentina and Nevada, but the places with concentrated lithium brines are rapidly being exhausted. The US Geological Survey estimates that China’s annual production of lithium which mostly comes from salt flats in Tibet has fallen from 4500 tonnes in 2012 to just 2000 tonnes in 2016. Silver Peak, Nevada, which is the only place in North America where lithium is currently extracted, may be experiencing similar production problems due to the exhaustion of its lithium, but its annual production numbers are confidential.

Since 1966 when brine extraction began in Silver Peak, the concentration of lithium in the water has fallen from 360 to 230 ppm (parts per million), and it is probably around 200 ppm today. At that concentration of lithium, 14,300 liters of water need to be extracted to produce 1 kg of battery-grade lithium metal. This subsurface water is critical in a state that only receives an average of 9 inches of rain per year. Parts of Nevada are already suffering from water rationing, so a massive expansion of lithium extraction is an added stress, but the biggest risk is that brine operations may contaminate the ground water. 30% of Nevada’s water is pumped from underground aquifers, so protecting this resource is vitally important. Lithium-rich water is passed through a series of 4 or 5 evaporation pools over a series of 12 to 18 months, where it is converted to lithium chloride, which is toxic to plants and aquatic life and can contaminate the ground water. Adams-Kszos and Stewart (2003) measured the effect of lithium chloride contamination in aquatic species 150 miles away from brine operations in Nevada.

As the lithium concentrations fall in the water, more energy is expended in pumping water and evaporating it to concentrate the lithium for processing. Argonne National Laboratory estimates that it takes 3 times as much energy to extract a tonne of lithium in Silver Peak, Nevada as in the Atacama Salt Flats of Chile, where the lithium is 7 times more concentrated.  Most of the lithium in Chile and Argentina is produced with electricity from diesel generators, but in China and Australia it comes from burning coal, which is even worse.

For every kg of battery-grade lithium, 4.4 kg of slaked lime is consumed to remove magnesium and calcium from the brine in Silver Peak. The process of producing this lime from limestone releases 0.713 kg of COfor every kg of lime. In addition, 5 kg of soda ash (Na2CO3) is added for each kilo of battery-grade lithium to precipitate it as lithium carbonate. Production of soda ash is also an energy intensive process which produces greenhouse gases.

Although lithium is an abundant element and can be found in ocean water and salty lakes, there are only 4 places on the planet where it is concentrated enough without contaminants to be economically extracted from the water and the few places with concentrated lithium water are rapidly being exploited. In 2008, Meridian International estimated that 2 decades of mining had extracted 20% of the lithium from the epicenter of the Atacama Salt Flats where lithium concentrations are above 3000 ppm. According to Meridian’s calculations, the world only had 4 million tonnes of high-concentration lithium brine reserves remaining in 2008.

As the best concentrations of lithium brine are being exhausted, extraction is increasingly moving to mining pegmatites, such as spodumene. North Carolina, Russia and Canada shut down their pegmatite operations because they couldn’t compete with the cheap cost of lithium from the salt flats of Chile and Argentine, but Australia and Zimbabwe have dramatically increased their production of lithium from pegmatites in recent years. Between 2004 and 2016, the percentage of global lithium from pegmatites increased from 39% to 44%.

LithiumFromPegmatites

In 2016, Australia produced 40.9% of the global lithium supply by processing spodumene, which is an extremely energy-intensive process. It takes 125 MJ of energy to extract a kilo of lithium from Chile’s salt flats, whereas 850 MJ is consumed to extract the same amount of lithium from spodumene in Australia. The spodumene is crushed, so it can be passed through a flotation beneficiation process to produce a concentrate. That concentrate is then heated to 1100ºC to change the crystal structure of the mineral. Then, the spodumene is ground and mixed with sulfuric acid and heated to 250ºC to form lithium sulfate. Water is added to dissolve the lithium sulfate and it is filtered before adding soda ash which causes it to precipitate as lithium carbonate. As lithium extraction increasingly moves to pegmatites and salt flats with lower lithium concentrations, the energy consumption will dramatically increase to produce lithium in the future.

Likewise, the energy to extract nickel and cobalt will also increase in future. The nickel and cobalt from Canada and the copper from the United States, generally comes from sulfide ores, which require much less energy to refine, but these sulfide reserves are limited. The majority of nickel and cobalt, and a sizable proportion of the copper used by the Gigafactory will likely come from places which present ethical challenges. Nickel from sulfide ores generally consumes less than 100 MJ of energy per kg, whereas nickel produced from laterite ores consumes between 252 and 572 MJ per kg. All the sulfide sources emit less than 10 kg of CO2 per kg of nickel, whereas the greenhouse gas emissions from laterite sources range from 25 to 46 kg  CO2 per kg of nickel. It is generally better to acquire metals from sulfide ores, since they emit fewer greenhouse gases and they generally come from deeper in the ground, whereas laterite ores generally are produced by open pit and strip mining which causes greater disruption of the local ecology. Between 2004 and 2016, the percentage of global primary production of nickel from laterite ores increase from 40% to 60% and that percentage will continue to grow in the future, since 72% of global nickel “resources” are laterites according to the US Geological Survey.

globalNickelProduction

Cobalt is a byproduct of copper or nickel mining. The majority of the sulfide ores containing copper/cobalt are located in places like Norilsk, Russia, Zambia and the Katanga Province of the Democratic Republic of Congo, where there are no pollution controls to capture the large amounts of sulfur dioxide and heavy metals released by smelting. The refineries in Norilsk, Russia, which produce 11% of the world’s nickel and 5% of its cobalt, are so polluting, that nothing grows within a 20 kilometer radius of the refineries and it is reported that Norilsk has the highest rates of lung cancer in the world.

The Democratic Republic of Congo currently produces 54% of the world’s cobalt and 5% of its copper. Buying cobalt from the DRC helps fuel a civil war in the Katanga Province where the use of children soldiers and systematic rape are commonplace. Zambia, which is located right over the border from Katanga Province, produces 4% of the world’s cobalt and copper and it also has very lax pollution controls for metal refining.

Most of the cobalt and nickel produced by the DRC and Zambia is shipped to China for refining by burning coal. China has cracked down on sulfur dioxide and heavy metal emissions in recent years, and now the DRC is attempting to do more of the refining within its own borders. The problem is that the DRC produces most of its energy from hydroelectric dams in tropical rainforests, which is the dirtiest energy on the planet. According to the IPCC (AR5 WGIII 2014), hydroelectric dams typically emit a medium of 24 g of  CO2-eq per kWh, but tropical dams accumulate large amounts of vegetation which collect at the bottom of the dam where bacteria feeding on the decaying matter release methane (CH4) in the absence of oxygen. There have been no measurements of the methane released by dams in the DRC, but studies of 3 Amazonian hydroelectric dams found that they emit an average of 2556 g CO2-eq per kWh. Presumably the CO2 from these dams would have been emitted regardless of whether the vegetation falls on the forest floor or in a dam, but rainforest dams are unique environments without oxygen that produces methane. If we only count the methane emissions, then Amazonian hydroelectric dams emit an average of 2044 g CO2-eq per kWh. Any refining of copper/cobalt in the DRC and Zambia or nickel/cobalt in Brazil will likely use this type of energy which emits twice as much greenhouse gases as coal.

To avoid the ethical problems with obtaining nickel and cobalt from Russia and cobalt and copper from the DRC and Zambia, the Gigafactory will have to consume metals from laterite ores in places like Cuba, New Caledonia, Philippines, Indonesia and Madagascar, which dramatically increases the greenhouse gas emissions of these metals. The nickel/cobalt ore from Moa, Cuba is shipped to Sherritts’ refineries in Canada, so presumably it will be produced with pollution controls in Cuba and Canada and relatively clean sources of energy. In contrast, the nickel/cobalt mining in the Philippines and New Caledonia has generated protracted protests by the local population who are effected by the contamination of their water, soil and air. When Vale’s $6 billion high pressure acid leaching plant in Goro, New Caledonia leaked 100,000 liters of acid-tainted effluent leaked into a local river in May 2014, protesters frustrated by the unaccountability of the mining giant burned a third of its trucks and one of its buildings, causing between $20 and $30 million in damages. The mining companies extracting nickel and cobalt in the Philippines have shown so little regard for the health of the local people, that the public outcry induced the Duterte administration to recently announce that it will prohibit all open pit mining of nickel. If this pronouncement is enforced, the operations of 28 of the 41 companies mining nickel/cobalt in the country will be shut down and the global supply of nickel will be reduced between 8% and 10%.

Most refining of laterite ores in the world is done with dirty energy, which is problematic because these ores require so much more energy than sulfide ores. Much of the copper/cobalt from the DRC and Zambia and the nickel/cobalt from the Philippines is shipped to China where it is refined with coal. The largest nickel/cobalt laterite mine and refinery in the world is the Ambatovy Project in Madagascar. Although the majority of the electricity on the island comes from hydroelectric dams, the supply is so limited that Ambatovy constructed three 30 MW coal-powered generators, plus 30 MW diesel powered generators.

It is highly likely that many of the LCA studies of lithium-ion batteries have underestimated the energy and greenhouse gas emissions to produce their metals, because they assume that the lithium comes from brine operations and the copper, nickel and cobalt come from sulfide ores with high metal concentrations. As lithium extraction increasingly shifts to spodumene mining and nickel and cobalt mining shifts to laterite ores, the greenhouse gas emissions to produce these metals will dramatically increase.

As the global production of lithium-ion batteries ramps up, the most concentrated ores for these metals will become exhausted, so that mining will move to less-concentrated sources, which require more energy and resources in the extraction and processing.  In 1910, copper ore in the US contained 1.9% copper. By 1950, this percentage had fallen to 0.9% copper, and by 1980 it was at 0.5% copper. As the concentration of copper in the ore has fallen, the environmental impact of extraction has risen. In a study of the smelting and refining of copper and nickel, Norgate and Rankin (2000) found that the energy consumption, greenhouse gas emissions and sulfur dioxide emissions per kg of metal rose gradually when changing from ore with 3% or 2% metal to 1% metal, but below 1% the environmental impacts increased dramatically. MJ/kg, CO2/kg and SO2/kg doubled when moving from ore with 1% metal to ore with 0.5% metal, and they doubled again when moving to 0.25% metal. Producing a kilo of copper today in the US has double the environmental impact of a kg of copper half a century ago and it will probably have 4 times the impact in the future.

The enormous demand for metals by battery manufacturers will force the mining companies to switch to less and less concentrated ores and consume more energy in their extraction. If the Nevada Gigafactory produces 150 GWh of batteries per year, then it will dramatically reduce the current global reserves listed by the US Geological survey. The Nevada Gigafatory will cut the current global lithium reserves from 400 to 270 years, assuming that current global consumption in other sectors does not change (which is highly unlikely). If the Gigafactory consumes metals whose recycled content is the US average recycling rate, then the current global copper reserves will be reduced from 37.1 to 36.9 years, the nickel reserves from 34.7 to 33.9 years, and the cobalt reserves from 56.9 to 52.5 years.

Recycling at the Gigafactory will not dramatically reduce its demand for metals. If we assume that 80% of the metal consumed by the Gigafactory will come from recycled content starting in 15 years when batteries start to be returned for recycling, then current global reserves will be extended 0.04 years for copper, 0.09 years for nickel, 0.9 years for cobalt. Only in the case of lithium will recycling make a dramatic difference, extending the current reserves 82 years for lithium.

The prospects for global shortages of these metals will become even more dire if the 95.0 million vehicles that the world produced in 2016 were all long-range electrics as Elon Musk advocates for “sustainable transport.” If the average vehicle (including all trucks and buses) has a 50 kWh battery, then the world would need to produce 4750 GWh of batteries per year just for electric vehicles. With energy storage for the electrical grid, that total will probably double, so 64 Gigafactories will be needed. Even that might not enough. In Leonardo de Caprio’s documentary Before the Flood, Elon Musk states, “We actually did the calculations to figure out what it would take to transition the whole world to sustainable energy… and you’d need 100 Gigafactories.”

Lithium-ion batteries will get more energy dense in the future, but they are unlikely to reach the high energy density of the NCA cells produced in the Gigafactory, if using the LMO or LFP chemistries. For that kind of energy density, they will probably need either an NCA or an altered NMC chemistry which is 70%-80% nickel, so the proportion of lithium, nickel, cobalt and copper in most future EV batteries is likely to be similar to the Gigafactory’s NCA cells. If 4750 GWh of these batteries are produced every year at an energy density of 263 Wh/kg, then the current global reserves will be used up in 24.5 years for lithium, 31.2 years for copper, 20.2 years for nickel, and 15.4 years for cobalt. Even if those batteries are produced with 80% recycled metals, starting in 15 years time, the current global lithium reserves would be extended 6.6 years, or 7.4 years if all sectors switch to using 80% recycled lithium. Using 80% recycled metal in the batteries would extend current copper, nickel and cobalt reserves by 0.7, 0.5 and 0.1 years, respectively. An 80% recycling rate in all sectors would make a difference for copper, extending its reserves by 11.5 years, but only 2.8 years for nickel and 0.2 years for cobalt. In other words, recycling will not significantly reduce the enormous stresses that lithium-ion batteries will place on global metal supplies, because they represent so much new demand for metals.

As the demand for these metals increases, the prices will increase and new sources of these metals will be found, but they will either be in places like the DRC with ethical challenges or in places with lower quality ores which require more energy and resources to extract and refine. We can expect more energy-intensive mining of spodumene and  more strip mining of laterite ores which cause more ecological disruption. The ocean floor has enormous quantities of manganese, nickel, copper and cobalt, but the energy and resources to scrap the bottom of the ocean will dramatically increase the economic and ecological costs. If battery manufacturing dramatically raises the prices of lithium, nickel, cobalt, copper (and manganese for NMC cells), then it will be doubly difficult to transition to a sustainable civilization in other areas. For example, nickel and cobalt are essential to making carbide blades, tool dies and high-temperature turbine blades and copper is a vital for wiring, electronics and electrical motors. It is hard to imagine how the whole world will transition to a low-carbon economy if these metals are made prohibitively expensive by manufacturing over a billion lithium-ion batteries for EVs.

Future batteries will probably be able to halve their weight by switching to a solid electrolyte and using an anode made of lithium metal, lithiated silicon or carbon nanotubes (graphene), but that will only eliminate the copper, while doing little to reduce the demand for the other metals. Switching the anode to spongy silicon or graphene will allow batteries to hold more charge per kilogram, but those materials also dramatically increase the cost and the energy and resources that are consumed in battery manufacturing.

In the near future, lithium-ion batteries are likely to continue to follow their historical trend of using 7% less materials each year to hold the same amount of charge. That rate of improvement, however, is unlikely to last. An NCA cathode currently holds a maximum of 200 mAh of energy per gram, but its theoretical maximum is 279 mAh/g. It has already achieved 72% of what is theoretically possible, so there is little scope to keep improving. NMC at 170 mAh/g is currently farther from its theoretical limit of 280 mAh/g, but the rate of improvement is likely to slow as these battery chemistries bump against their theoretical limits.

Clearly the planet doesn’t have the resources to build 95 million long-range electric vehicles each year that run on lithium-ion batteries. Possibly a new type of battery will be invented that only uses common materials, such as aluminum, zinc, sodium and sulfur, but all the batteries that have been conceived with these sorts of material still have significant drawbacks. Maybe a new type of battery will be invented that is suitable for vehicles or the membranes in fuel cells will become cheap enough to make hydrogen a viable competitor, but at this point, lithium-ion batteries appear likely to dominate electric vehicles for the foreseeable future. The only way EVs based on lithium-ion can become a sustainable solution for transport is if the world learns to live with far fewer vehicles.

Currently 3% more vehicles are being built each year, and there is huge demand for vehicles in the developing world. While demand for cars has plateaued in the developed world, vehicle manufacturing since 1999 has grown 17.4% and 10.5% per year in China and India, respectively. If the developing world follows the unsustainable model of vehicle ownership found in the developed world, then the transition to electrified transport will cause severe metal shortages. Based on current trends, Navigant Research predicts that 129.9 million vehicles will be built in the year 2035, when there will be 2 billion vehicles on the road.

GlobalAutoProduction

On the other hand, James Arbib and Tony Seba believe that autonomous vehicles and Transport as a Service (TaaS) such as Uber and Lyft will dramatically reduce demand for vehicles, lowering the number of passenger vehicles on American roads from 247 to 44 million by 2030. If 95% of passenger miles are autonomous TaaS by 2030 and the lifespan of electric vehicles grows to 500,000 miles as Arbib and Seba predict, then far fewer vehicles will be needed. Manufacturing fewer electric vehicles reduces the pressure to extract metals from laterite ores, pegmatites, the ocean floor, and lower-grade ores in general with higher ecological costs.

Ellingsen et al (2016) estimate that the energy consumed by battery factories per kWh of batteries has halved since 2012, however, that has to be balanced by the growing use lithium from spodumene and nickel and cobalt from laterite ores, and ores with lower metal concentrations that require more energy and produce more pollution. Given the increased energy efficiency in battery manufacturing plants and the growing efficiencies of scale, I would guesstimate that lithium-ion battery emissions are currently at roughly 150 kg  CO2-eq per kWh of battery and that the Gigafactory will lower those emissions by a third to roughly 100 kg  CO2-eq / kWh. If the Model 3, uses a 55 kWh battery, then its battery emissions would be roughly 5500 kg  CO2-eq.

Manufacturing a medium-sized EV without the battery emits 6.5 tonnes of  CO2-eq according to Ellingsen et al (2016). Electric cars don’t have the huge engine block of an ICE car, but they have large amounts of copper in the motor’s rotor and the windings and the Model 3 will have far more electronics than a standard EV. The Model S has 23 kg of electronics and I would guesstimate that the Model 3 will have roughly 15 lbs of electronics if it contains nVidia’s Drive PX or a custom processor based on the K-1 graphics processor. If the GHG emissions are roughly 150 kg  CO2-eq per kg of electronics, we can guesstimate that 2.2 tonnes of  CO2-eq will be emitted to manufacture the electronics in the Model 3. Given the large amount of copper, electronics and sensors in the Model 3, add an additional tonne, plus 5.5 tonnes for its 50 kWh battery, so a total of 13 tonnes of  CO2-eq will be emitted to manufacture the entire car.

Manufacturing a medium-sized ICE car emits between 5 and 6 tonnes, so there is roughly a 7.5 tonne difference in GHG emissions between manufacturing the Model 3 and a comparable ICE car. A new ICE car the size of the Model 3 will get roughly 30 mpg. In the US, a gallon of gasoline emits 19.64 lbs of CO2, but it emits 24.3 lbs of  CO2e when the methane and nitrous oxide are included, plus the emissions from extraction, refining and transportation, according to the Argonne National Laboratory. Therefore, we will need to burn 680 gallons of gasoline or drive 20,413 miles at 30 mpg to equal those 7.5 extra tonnes in manufacturing the Model 3.

At this point, the decision whether the Model 3 makes ecological sense depends on where the electricity is coming from. Let’s assume that the Model 3 will consume 0.30 kWh of electricity per mile, which is what the EPA estimates the Nissan Leaf to consume. The Model S will be a smaller and more aerodynamic car than the Leaf, but it will also weigh significantly more due to its larger battery. If we also include the US national average of 4.7% transmission losses in the grid, then the Model 3 will consume 0.315 kWh per mile. After driving the Model 3 100,000 miles, the total greenhouse gas emissions (including the production emissions) will range between 14.1 and 45.3 tonnes, depending on its energy source to charge the battery.

VehicleEmissions100000miles

In comparison, driving a 30 mpg ICE car (with 5.5 tonnes in production emissions) will emit 42.2 tonnes of  CO2-eq after 100,000 miles. If we guesstimate that manufacturing a Toyota Prius will emit 7 tonnes, then driving it 100,000 miles at 52 mpg will emit 28.2 tonnes. Only in places like Kentucky which get almost all their electricity from coal is an ICE car the better environmental choice. The Model 3, however, will have worse emissions than most of its competitors in the green car market, if it is running on average US electricity, which emits 528 grams of CO2-eq per kWh. It will emit slightly more than a plugin hybrid like the Chevy Volt and an efficient hybrid like the Toyota Prius and substantially more than a short-range electric, like the Nissan Leaf.

Most previous comparisons between electric cars and ICE cars were based on short-range electrics with smaller batteries, such as the Nissan Leaf, which is why environmental advocates are so enthusiastic about EVs. However, comparing the Model S and Model 3 to the Nissan Leaf, Chevy Volt and Toyota Prius hybrid shows that the environmental benefits of long-range EVs are questionable when compared to short-range EVs, plugin hybrids and hybrids. Only when running the Model 3 on cleaner sources of electricity does it emit less greenhouse gases than hybrids and plugin hybrids, but in the majority of the United States it will emit slightly more. Many of the early adopters of EVs also owned solar panels, so buying a Model 3 will reduce their carbon footprint, but the proportion of EV owners with solar panels on their roofs is falling. According to CleanTechnica’s PlugInsights annual survey, 25% of EV buyers before 2012 had solar panels on their roofs, compared to just 12% in 2014-2015. Most people who own solar panels do not have a home battery system so they can not use their clean energy all day, and most EV charging will happen at night using dirtier grid electricity.

Another factor to consider is the effect of methane leakage in the extraction and transport of natural gas. There is a raging scientific debate about what percentage of natural gas leaks into the atmosphere without being burned. A number of studies have concluded that the leakage of methane causes electricity from natural gas to have GHG emissions similar to coal, but there is still no consensus on the matter.  If the leakage rate is as high as some researchers believe, then EVs will emit more greenhouse gases than hybrids and efficient ICE cars in places like California which burn large amounts of natural gas.

On the other hand, many people believe that EVs will last 300,000 miles or even 500,000 miles since they have so few moving parts, so their high emissions in manufacturing will be justified. However, the EV battery will probably have to be replaced, and the manufacturing emissions for a long range EV battery can be as high as building a whole new ICE car. Another factor that could inhibit the long life of Telsa’s cars is the fact that the company builds cars described as “computers on wheels,” which are extremely difficult for third parties to fix and upgrade over time. Telsa only sells its parts to authorized repair shops and much of the functionality of car is locked up with proprietary code and secret security measures, as many do-it-yourselfers have discovered to their chagrin. When Tesla cars are damaged and sold as salvage, Tesla remotely disables its cars, so that they will no longer work even if repaired. The $600 inspection fee to reactivate the car plus the towing fees discourage Teslas from being fixed by third parties. These policies make it less likely that old Teslas will be fixed and their lifespans extended to counterbalance the high environmental costs of producing the cars.

Although the Model 3 has high greenhouse gas emissions in its production and driving it is also problematic in parts of the world that currently use dirty energy, those emissions could be significantly reduced in the future if they are accompanied by a shift to renewable energy, more recycling and the electrification of mining equipment, refining and transport. The car’s ecological benefits will increase if the emissions can be decreased in producing battery materials and the greater energy density of batteries is used to decrease the total materials in batteries rather than keep extending the range of EVs. Producing millions of Model 3s will strain the supply of vital metals and shift extraction to reserves which have higher ecological costs. However, the Model 3 could become a more sustainable option if millions of them are deployed in autonomous Transport as a Service fleets, which Arbib and Seba predict will be widespread by 2030, since TaaS will cost a tenth of the price of owning a private vehicle. If the Model 3 and future autonomous EVs become a means to drop the global demand for private vehicles and that helps reduce the demand for lithium, nickel, cobalt and copper down to sustainable levels, then the high environmental costs of manufacturing the Model 3 would be justified.

Nonetheless, the Model 3 and the NCA 2170 batteries currently being produced by Tesla offer few of those possible future ecological benefits. Most of the metal and graphite in the battery is being produced with energy from fossil fuels. In the short term at least, Telsa batteries will keep growing in capacity to offer more range, rather than reducing the total consumption of metals per battery. The extra sensors, processing power and electronics in the current Model 3 will increase its ecological costs without providing the Level 4 or 5 autonomy that would make it possible to convince people to give up their private vehicles. In the here and now, the Model 3 is generally not the best ecological choice, but it might become a better choice in the future.

The Model 3 promises to transform the market not only for EVs, but cars in general. If the unprecedented 500,000 pre-orders for the Model 3 are any indication of future demand, then long-range electrics with some degree of autonomous driving like the Model 3 will capture most of the EV market. Telsa’s stunning success will induce the rest of auto-makers to also start making long-range EVs with large batteries, advanced sensors, powerful image processors, advanced AI, cellular networking, driving data collection and large multimedia touchscreens. These features will dramatically increase the environmental costs of car manufacturing. Whether these features will be balanced by other factors which reduce their environmental costs remains to be seen.

Much of this analysis is guess work, so it should be taken with a grain of salt, but it points out the problems with automatically assuming that EVs are always better for the environment. If we consider sulfate emissions, EVs are significantly worse for the environment. Also, when we consider the depletion of critical metal reserves, EVs are significantly worse than ICE vehicles.

The conclusion should be that switching to long-range EVs with large batteries and advanced electronics bears significant environmental challenges. The high manufacturing emissions of these types of EVs make their ecological benefits questionable for private vehicles which are only used on average 4% of the time. However, they are a very good option for vehicles which are used a higher percentage of the time such as taxis, buses and heavy trucks, because they will be driven many miles to counterbalance their high manufacturing emissions. Companies such as BYD and Proterra provide a model of the kinds of electric vehicles that Tesla should be designing to promote “sustainable transport.” Tesla has a few ideas on the drawing board that are promising from an ecological perspective, such as its long-haul semi, the renting out of Teslas to an autonomous TaaS fleet, and a new vehicle that sounds like a crossover between a sedan and a minibus for public transport. The current Model 3, however, is still a vehicle which promotes private vehicle ownership and bears the high ecological costs of long-range lithium batteries and contributes to the growing shortage of critical metals.

Clearly, EVs alone are not enough to reduce greenhouse gas emissions or attain sustainable transport in general. The first step is to work on switching the electric grid to cleaner renewable energy and installing more residential solar, so that driving an EV emits less CO2. However, another important step is redesigning cities and changing policies so that people aren’t induced to drive so many private vehicles. Instead of millions of private vehicles on the road, we should be aiming for walkable cities and millions of bikes and electric buses, which are far better not only for human health, but also for the environment.

A further step where future Model 3s may help is in providing autonomous TaaS that helps convince people to give up their private vehicles. However, autonomous EVs need to be matched by public policies that disincentivize the kind of needless driving that will likely occur in the future. The total number of miles will likely increase in the future due to autonomous electric cars driving around looking for passengers to pick up and people who spend more time in the car because they can surf the web, watch movies, and enjoy the scenery without doing the steering. Plus, the cost of the electricity to charge the battery is so cheap compared to burning gasoline that people will be induced to drive more, not less.





Not happy, Jan…….

8 04 2017

If you’ve been following this blog, you will know I’ve been saying for quite some time that out of the ludicrous Lithium battery rush happening right now as a ‘fix it’ for all and sundry energy problems, a lot of disappointed people will surface. Well, one just has, and he’s one of the most high profile person in the sustainability movement.

I met Michael Mobbs almost certainly before 2010, which is the year I went working for the solar industry. He gave a public lecture about sustainability in Pomona at the Rural Futures Network; I wonder how that’s going now..? Mobbs has undertaken converting an old terrace house in Sydney to ‘sustainability’ by disconnecting from the water grid and sewerage. He also went grid tied solar, the whole project is well documented on his website, and you have to give him credit for doing the almost impossible…. in Sydney no less. I for one would never undertake such a project, it’s so much easier to start from scratch in the country! And that’s hard enough, let me tell you….

It now appears, Mobbs decided to also cut himself off from the electricity grid…. and it seems that didn’t go so well….

mobbsbatteriesOn Mobbs’ website, there is an “invitation to install & supply an off-grid solar system” It seems he had one installed in March 2015, but it’s not working as it should, or at least as Mobbs thought it should…..

Firstly, let’s start with what he got……. It’s a bit hard to tell from the photo, apart from the fact it is an Alpha ‘box’. From the blog, I also established that this comes with a 3kW inverter, itself a problem, it appears to be too small. Going to Alpha’s website, I cannot find the system Mobbs appears so proud of in the above photo; and let’s face it, two years is a long time in the world of technology. All the products on display say that the output of these cabinets is 5kW, but nowhere does it say it even features an inverter.  Solarchoice’s website shows a 3kW Storion-S3 cabinet, but not even it looks like what Mobbs has in the photo – it only has one door, the ‘new ones’ have two….. The inverter is called an AEV-3048, and perhaps the A stands for Alpha, and 3048 means 3000W/48V, but it’s all guesswork because finding information is a problem.

So why is a 3kW inverter a problem in a house with a claimed baseload of 86W, very close to what we achieved in Cooran actually…..

Another huge flaw with the Alpha system that I’ve recently become aware of also stems from the fact that all the energy first goes through the batteries: the Alpha system’s output is always limited to 3,000W regardless of the solar size; it can’t deliver above this. This is an extremely important point to understand because it affects the way I live and how I’m able to use my appliances. I’ll break it down in a way that’s practical and simple; prepare yourself to be blown away by this outrageous system limitation.

We’ve already established that the base load of my house is 86W. Let’s say I wake up in the morning, turn on a couple of lights in the kitchen because it’s still dark (20W), turn on the toaster because I’m in the mood for toast with butter for breakfast (1,200W), and my daughter (who happens to be staying with me) turns on her hair dryer while getting ready (1,500W) and she decides she needs to put on a load of laundry before she leaves the house (500W). Doesn’t seem too out of the ordinary, right? Well, we would be in trouble: all of the power would cut off, and the Alpha system would shut down because we would have exceeded its 3,000W limit. Regardless of the size of my solar system, I can NEVER exceed 3,000W of power consumption in my house while using the Alpha system. This was very hard to swallow.

Oh Michael…….  welcome to living off the grid!

Mobbs gives a brief description of how he worked out this baseload….

Step one, determining my total base load, wasn’t as easy as I expected, especially given the fact that I have three different monitoring systems that could provide me with the information. The Efergy and Wattwatchers systems confirmed what I already knew: my house’s base load was about 86W (60W for the aerator and roughly 20W for the fridge occasionally turning on).However, where I ran into problems was with the Alpha ESS reporting system: it was saying my base load was 257W, which is three times larger than the base load reported for the house.At first I thought this difference of 171W was the base load of the Alpha system itself, but their numbers just didn’t add up.

I do have a theory here, he may have got the sums wrong because he used to be grid tied, and maybe, just maybe, his figures did not include what was exported. But I’m only guessing. My main reason for thinking this is that he is running a conventional fridge, while we achieved our low baseload using a freedge which consumes 20% of the energy a conventional fridge does…. make no mistake, a conventional fridge’s ‘baseload’ is half or more of his 86W. He’s claiming 20W for his fridge (480Wh/day, 20W x 24 hrs), but I have never seen any fridge perform that well…. Most fridges today still consume a whole kilowatthour a day. So there could be another error there.

But it gets worse……

Now you see why I said that I probably made a huge mistake by purchasing the Alpha system when going off-grid. The simple truth is that the Alpha system is not designed to be used in an off-grid setting, and they have not implemented the necessary retrofits to make it work in that environment. However, during my recent research, I came across a product that is designed specifically to be used off-grid and shows great promise for high efficiency and effective energy management: the SMA Sunny Island system.

Bad news Michael……  the SMA Sunny Island is not designed for off the grid either, it’s made to work with other SMA grid tied units in a hybrid grid/backup batteries system.

Worse still, he also seems to have storage issues….

For the last few weeks, in the particularly cloudy and rainy weather Sydney has had to endure, Mobbs had to turn off his fridge (bloody fridges, they are a curse…) during the day to ensure that the house, which he shares with two others, has enough power for a “civilised life” at night-time. Worse than that, the system has a bug in it that causes it to trip out every couple of days. It seems flashing digital lights have become part of his life….!

“I’m running short of power,” Mobbs said complaining that the system that he has in place is delivering 1kWh/day less than he expected. “I thought this would be a walk in the park, but I appear to have tripped over.”

I’m seriously starting to think a lot of installers have no idea what they are doing. I recently related the story of my friend Bruce whose inlaws replaced a perfectly good system (because of a fridge no less!), and they were sold a Sunny Island, with I was told over the phone just two days ago, gel cells for storage……… completely not what either Bruce or I would have bought. Solar companies (including this well known one who shall remain nameless) have simply turned into salespeople selling whatever it is they have in stock off catalogues…….

Mobbs then writes……

The main difference between the Alpha and Sunny Island system: Sunny Island can send solar energy directly to the house when it is needed and completely bypasses the system’s batteries. SMA’s Sunny Island system not only extends battery life by not cycling all loads through them, but using solar directly into loads means items can be set to run on timers during the day, (washing, dishwasher etc) to maximise the benefit of an abundant afternoon supply of solar. It also has a larger peak design capacity than Alpha. For example, if you have a 4kW solar system, with the SMA units that would allow a potential delivery of 4kW of solar (in optimum conditions) directly into the house’s load + the 4.6kW of power from the batteries delivered by the Sunny Island controller (they can run in parallel to each other).  That’s a big potential 8.6 kW of continuous capacity to loads.  As I’ve already pointed out, in contrast the Alpha output is always limited to the 3,000W delivery of the battery inverter regardless of the solar size.

More bad news Michael…… this only works that way if you are grid tied with a hybrid system!

Michael also doesn’t seem to understand how off the grid works…

Alpha has an inefficient way of managing my solar energy (by diverting all of it through my batteries first), which decreases my battery life by constantly charging and discharging them…

Errr…..  Michael, that’s how battery storage works! Which is of course exactly why Lithium batteries are not good at this. Mobbs also wrote…:

Like any system that transfers and converts energy from one form to another, there are going to be losses. No system is perfect. However, as I started doing more research, I became aware of a key element of the way the Alpha system operates that may mean my decision to purchase it was a huge mistake: the Alpha system transfers all its incoming solar energy through the batteries before it delivers it to the house. When I learned this, I was devastated. One of the most important figures of merit in a system such as mine are the battery losses. If you put 1kWh into a battery it doesn’t all come out! There are losses associated with both charging and discharging. The higher the charge/discharge rate, the greater proportion of energy is lost and the shorter my battery life becomes. So, I repeat, all my energy is getting charged and discharged through the batteries before I ever even see it in the house. For someone living off-grid, this level of energy loss and battery depreciation is unacceptable, and I was never made aware of it by the installer.

This is why I know there will be a lot of disappointed grid disconnectors. They have swallowed the idea that living off grid is just like living on it hook line and sinker, when it cannot possibly be. How long have I been saying solar has shortcomings?

If you’re going to go off the grid, first, you need to know exactly how much energy you’re consuming. Then you need to know what your peak power demand will be so you can size your inverter. Then, you must size your battery bank so that you can go on living through a series of cloudy days without your batteries falling over. Accurate climate data is really important. And if you ask me, any off the grid system should be tailor made for the household, not all fitted in a box…..

The comments on Mobbs’ blog are interesting, including one from Alpha who obviously can do without the bad publicity and are suggesting entering into consultation….. well if you ask me, the time for consultation is before installation, not after it’s established the gear does not perform as needed….

Furthermore, and this is most important, get batteries that can be flattened and recharged for as many times as you like, almost forever if you go the way of Nickel Iron batteries……

At least Mobbs is aware of what his system is doing, but most consumers don’t. They will buy these cabinets, not understand what the monitors tell them, and the Lithium batteries will be cycled to death, failing early without a doubt, driving incompetent solar companies broke and giving solar power a really bad name. Plus, let’s face it, by the time all these systems die, you won’t be able to get replacement bits in a post collapse world….

There is one more issue…… on his blog Mobbs shows..:

In 1996, I installed 18 solar panels, each with 120-watt capacity. It reduced the amount the house took from the grid by more than 60%. Since then, I have installed 12 additional panels, bringing my home’s total system capacity to just over 3.5kW. mobbs panels

In addition to the roof solar cells, the house uses sunlight to heat water through a standard solar hot-water system. The environmental savings achievable by using solar hot-water heaters are summed up by Gavin Gilchrist in his book, The Big Switch:
“If all the electric water heaters in Australia were replaced with solar ones, greenhouse gas emissions from Australia’s households would be cut by one-fifth.” One fifth is one mighty big saving!

The Bottom Line… I am saving hundreds of dollars every year not paying electricity bills by powering my household appliances using the Sun. 

I totally concur re the solar water heaters. Amazingly, I have friends in Geeveston who have one, and they hardly ever boost, which is astonishing considering how everyone was telling me how poorly solar would work in Tassie.

BUT…… all those original PVs were replaced when Mobbs cut the cord and increased his array size from 2kW to 5kW…… they were only ten years old, and as Prieto pointed out recently, the early retirement/replacement of PVs and balance of system can drive the ERoEI of solar to negative territory….. I can’t find mention of what happened to the obsolete 120W panels for which it might be hard to find compatible equipment.

One last thing……  his baseload of 86W is clearly wrong if a 3.5kW array can’t drive it. Our electricity habit was run for years on just 1.28kW, and I intend to now do it in Tassie with just 2kW. I rest my case.





It’s the nett energy George…..

7 02 2016

George-Monbiot-L

George Monbiot

George Monbiot has written another piece on the current oil situation, but whilst I agree mostly with what he says, he still doesn’t ‘get it’………

Oil, the industry that threatens us with destruction, is being bailed out with public money

By George Monbiot, published in the Guardian 3rd February 2016

Those of us who predicted, during the first years of this century, an imminent peak in global oil supplies could not have been more wrong. People like the energy consultant Daniel Yergin, with whom I disputed the topic, appear to have been right: growth, he said, would continue for many years, unless governments intervened.

Oil appeared to peak in the United States in 1970, after which production fell for 40 years. That, we assumed, was the end of the story. But through fracking and horizontal drilling, production last year returned to the level it reached in 1969. Twelve years ago, the Texas oil tycoon T. Boone Pickens announced that “never again will we pump more than 82 million barrels”. By the end of 2015, daily world production reached 97 million.

Following one of those links, I have to admit, surprised me…..  I had no idea the US’ oil production had almost reached its 1970 peak….. I may have confused how much they were extracting with what they were consuming. And, that chart is already out of date, the extraction rate is now in freefall…

usoilprod

What everyone who comments on this fails to say is that whilst the numbers of barrels tabled in their spreadsheets might well be there, and they may be following the money, absolutely nobody is following the nett number of Megajoules.  A barrel of oil from the last dot on the above chart may well contain less than a quarter of the nett energy content of one from a dot at the toe of the curve.

George then adds….:

Saudi Arabia has opened its taps, to try to destroy the competition and sustain its market share: a strategy that some peak oil advocates once argued was impossible.

Methinks he should visit Gail Tverberg’s site for proper analysis….

saudiexport

Saudi Arabia has been pumping flat out for years, with no discernible market flooding power.  It may in fact be trying very hard to meet its own fast growing domestic demand which is having an obvious impact on how much it is exporting, which is discernably less than it was way back in 1980……. so how can you blame them for flooding the market?

George continues with…..:

Instead of a collapse in the supply of oil, we confront the opposite crisis: we’re drowning in the stuff. The reasons for the price crash – an astonishing slide from $115 a barrel to $30 over the past 20 months – are complex: among them are weaker demand in China and a strong dollar. But an analysis by the World Bank finds that changes in supply have been a much greater factor than changes in demand.

Whilst Gail Tverberg says…..:

Some people talk about peak energy (or oil) supply. They expect high prices and more demand than supply. Other people talk about energy demand hitting a peak many years from now, perhaps when most of us have electric cars.

Neither of these views is correct. The real situation is that we right now seem to be reaching peak energy demand through low commodity prices. I see evidence of this in the historical energy data recently updated by BP (BP Statistical Review of World Energy 2015).

Growth in world energy consumption is clearly slowing. In fact, growth in energy consumption was only 0.9% in 2014. This is far below the 2.3% growth we would expect, based on recent past patterns. In fact, energy consumption in 2012 and 2013 also grew at lower than the expected 2.3% growth rate (2012 – 1.4%; 2013 – 1.8%).

Figure 1- Resource consumption by part of the world. Canada etc. grouping also includes Norway, Australia, and South Africa. Based on BP Statistical Review of World Energy 2015 data.

Recently, I wrote that economic growth eventually runs into limits. The symptoms we should expect are similar to the patterns we have been seeing recently (Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.)). It seems to me that the patterns in BP’s new data are also of the kind that we would expect to be seeing, if we are hitting limits that are causing low commodity prices.

Of course, people like George who want to keep growth going, only using wind and nuclear power, don’t understand we are hitting limits.

When oil hit $147 at the time of the GFC, it literally bankrupted the economy. Having hit peak conventional oil, trillions of dollars had to be invested (read, borrowed…) to capitalise on the much higher hanging and less energetic fruit. Which made us get less with more, when we should be doing the exact opposite, doing more with less…..

George then has a big whinge about fossil subsidies at the expense of renewables.  The way I see it however, is that as all renewables are manufactured with fossil fuels, as they get cheaper, the costs of making the renewables also goes down, so that to some extent, any fossil subsidy is a hidden renewables subsidy…..  Furthermore, without further subsidies, oil and coal companies will go bust to which George says….:

A falling oil price drags down the price of gas, exposing coal mining companies to the risk of bankruptcy: good riddance to them.

Which, George, unfortunately also means good riddance to renewables….  He then ends with…….:

So they lock us into the 20th Century, into industrial decline and air pollution, stranded assets and – through climate change – systemic collapse. Governments of this country cannot resist the future forever. Eventually they will succumb to the inexorable logic, and recognise that most of the vast accretions of fossil plant life in the Earth’s crust must be left where they are. And those massive expenditures of public money will prove to be worthless.

Crises expose corruption: that is one of the basic lessons of politics. The oil price crisis finds politicians with their free-market trousers round their ankles. When your friends are in trouble, the rigours imposed religiously upon the poor and public services suddenly turn out to be negotiable. Throw money at them, trash their competitors, rig the outcome: those who deserve the least receive the most.

At last……  George recognises systemic collapse, for all the wrong reasons unfortunately. It may look like corruption to him, but it sure as hell looks like limits to growth to me.





BP Data Suggests We Are Reaching Peak Energy Demand

25 06 2015

Some people talk about peak energy (or oil) supply. They expect high prices and more demand than supply. Other people talk about energy demand hitting a peak many years from now, perhaps when most of us have electric cars.

Neither of these views is correct. The real situation is that we right now seem to be reaching peak energy demand through low commodity prices. I see evidence of this in the historical energy data recently updated by BP (BP Statistical Review of World Energy 2015).

Growth in world energy consumption is clearly slowing. In fact, growth in energy consumption was only 0.9% in 2014. This is far below the 2.3% growth we would expect, based on recent past patterns. In fact, energy consumption in 2012 and 2013 also grew at lower than the expected 2.3% growth rate (2012 – 1.4%; 2013 – 1.8%).

Figure 1- Resource consumption by part of the world. Canada etc. grouping also includes Norway, Australia, and South Africa. Based on BP Statistical Review of World Energy 2015 data.

Recently, I wrote that economic growth eventually runs into limits. The symptoms we should expect are similar to the patterns we have been seeing recently (Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.)). It seems to me that the patterns in BP’s new data are also of the kind that we would expect to be seeing, if we are hitting limits that are causing low commodity prices.

One of our underlying problems is that energy costs that have risen faster than most workers’ wages since 2000. Another underlying problem has to do with globalization. Globalization provides a temporary benefit. In the last 20 years, we greatly ramped up globalization, but we are now losing the temporary benefit globalization brings. We find we again need to deal with the limits of a finite world and the constraints such a world places on growth.

Energy Consumption is Slowing in Many Parts of the World 

Many parts of the world are seeing slowing growth in energy consumption. One major example is China.

Figure 2. China's energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

Based on recent patterns in China, we would expect fuel consumption to be increasing by about 7.5% per year. Instead, energy consumption has slowed, with growth amounting to 4.3% in 2012; 3.7% in 2013; and 2.6% in 2014. If China was recently the growth engine of the world, it is now sputtering.

Part of China’s problem is that some of the would-be buyers of its products are not growing. Europe is a well-known example of an area with economic problems. Its consumption of energy products has been slumping since 2006.

Figure 3. European Union Energy Consumption based on BP Statistical Review of World Energy 2015 Data.

I have used the same scale (maximum = 3.5 billion metric tons of oil equivalent) on Figure 3 as I used on Figure 2 so that readers can easily compare the European’s Union’s energy consumption to that of China. When China was added to the World Trade Organization in December 2001, it used only about 60% as much energy as the European Union. In 2014, it used close to twice as much energy (1.85 times as much) as the European Union.

Another area with slumping energy demand is Japan. It consumption has been slumping since 2005. It was already well into a slump before its nuclear problems added to its other problems.

Figure 4. Japan energy consumption by fuel, based on BP Statistical Review of World Energy 2015.

A third area with slumping demand is the Former Soviet Union (FSU). The two major countries within tithe FSU with slumping demand are Russia and Ukraine.

Figure 5. Former Soviet Union energy consumption by source, based on BP Statistical Review of World Energy Data 2015.

Of course, some of the recent slumping demand of Ukraine and Russia are intended–this is what US sanctions are about. Also, low oil prices hurt the buying power of Russia. This also contributes to its declining demand, and thus its consumption.

The United States is often portrayed as the bright ray of sunshine in a world with problems. Its energy consumption is not growing very briskly either.

Figure 6. United States energy consumption by fuel, based on BP Statistical Review of World Energy 2014.

To a significant extent, the US’s slowing energy consumption is intended–more fuel-efficient cars, more fuel efficient lighting, and better insulation. But part of this reduction in the growth in energy consumption comes from outsourcing a portion of manufacturing to countries around the world, including China. Regardless of cause, and whether the result was intentional or not, the United States’ consumption is not growing very briskly. Figure 6 shows a small uptick in the US’s energy consumption since 2012. This doesn’t do much to offset slowing growth or outright declines in many other countries around the world.

Slowing Growth in Demand for Almost All Fuels

We can also look at world energy consumption by type of energy product. Here we find that growth in consumption slowed in 2014 for nearly all types of energy.

Figure 7. World energy consumption by part of the world, based on BP Statistical Review of World Energy 2015.

Looking at oil separately (Figure 8), the data indicates that for the world in total, oil consumption grew by 0.8% in 2014. This is lower than in the previous three years (1.1%, 1.2%, and 1.1% growth rates).

Figure 8. Oil consumption by part of the world, based on BP Statistical Review of World Energy 2015.

If oil producers had planned for 2014 oil consumption based on the recent past growth in oil consumption growth, they would have overshot by about 1,484 million tons of oil equivalent (MTOE), or about 324,000 barrels per day. If this entire drop in oil consumption came in the second half of 2014, the overshoot would have been about 648,000 barrels per day during that period. Thus, the mismatch we are have recently been seeing between oil consumption and supply appears to be partly related to falling demand, based on BP’s data.

(Note: The “oil” being discussed is inclusive of biofuels and natural gas liquids. I am using MTOE because MTOE puts all fuels on an energy equivalent basis. A barrel is a volume measure. Growth in barrels will be slightly different from that in MTOE because of the changing mix of liquid fuels.)

We can also look at oil consumption for the US, EU, and Japan, compared to all of the rest of the world.

Figure 9. Oil consumption divided between the (a) US, EU, and Japan, and (b) Rest of the World.

While the rest of the world is still increasing its growth in oil consumption, its rate of increase is falling–from 2.3% in 2012, to 1.6% in 2013, to 1.3% in 2014.

Figure 10 showing world coal consumption is truly amazing. Huge growth in coal use took place as globalization spread. Carbon taxes in some countries (but not others) further tended to push manufacturing to coal-intensive manufacturing locations, such as China and India.

Figure 10. World coal consumption by part of the world, based on BP Statistical Review of World Energy 2015.

Looking at the two parts of the world separately (Figure 11), we see that in the last three years, growth in coal consumption outside of US, EU, and Japan, has tapered down. This is similar to the result for world consumption of coal in total (Figure 10).

Figure 10. Coal consumption for the US, EU, and Japan separately from the Rest of the World, based on BP Statistical Review of World Energy data.

Another way of looking at fuels is in a chart that compares consumption of the various fuels side by side (Figure 12).

Figure 8. World energy consumption by fuel, showing each fuel separately, based on BP Statistical Review of World Energy 2015.

Consumption of oil, coal and natural gas are all moving on tracks that are in some sense parallel. In fact, coal and natural gas consumption have recently tapered more than oil consumption. World oil consumption grew by 0.8% in 2014; coal and natural gas consumption each grew by 0.4% in 2014.

The other three fuels are smaller. Hydroelectric had relatively slow growth in 2014. Its growth was only 2.0%, compared to a recent average of as much as 3.5%. Even with this slow growth, it raised hydroelectric energy consumption to 6.8% of world energy supply.

Nuclear electricity grew by 1.8%. This is actually a fairly large percentage gain compared to the recent shrinkage that has been taking place.

Other renewables continued to grow, but not as rapidly as in the past. The growth rate of this grouping was 12.0%, (compared to 22.4% in 2011, 18.1% in 2012, 16.5% in 2013). With the falling percentage growth rate, growth is more or less “linear”–similar amounts were added each year, rather than similar percentages. With recent growth, other renewables amounted to 2.5% of total world energy consumption in 2014.

Falling Consumption Is What We Would Expect with Lower Inflation-Adjusted Prices

People buy goods that they want or need, with one caveat: they don’t buy what they cannot afford. To a significant extent affordability is based on wages (or income levels for governments or businesses). It can also reflect the availability of credit.

We know that commodity prices of many kinds (energy, food, metals of many kinds) have been have generally been falling, on an inflation adjusted basis, for the past four years. Figure 13 shows a graph prepared by the International Monetary Fund of trends in commodity prices.

Figure 9. Charts prepared by the IMF showing trends in indices of primary commodity prices.

It stands to reason that if prices of commodities are low, while the general trend in the cost of producing these commodities is upward, there will be erosion in the amount of these products that can be purchased. (This occurs because prices are falling relative to the cost of producing the goods.) If, prior to the drop in prices, consumption of the commodity had been growing rapidly, lower prices are likely to lead to a slower rate of consumption growth. If prices drop further or stay depressed, an absolute drop in consumption may occur.

It seems to me that the lower commodity prices we have been seeing over the past four years (with a recent sharper drop for oil), likely reflect an affordability problem. This affordability problem arises because for most people, wages did not rise when energy prices rose, and the prices of commodities in general rose in the early 2000s.

For a while, the lack of affordability could be masked with a variety of programs: economic stimulus, increasing debt and Quantitative Easing. Eventually these programs reach their limits, and prices begin falling in inflation-adjusted terms. Now we are at a point where prices of oil, coal, natural gas, and uranium are all low in inflation-adjusted terms, discouraging further investment.

Commodity Exporters–Will They Be Next to Be Hit with Lower Consumption?

If the price of a commodity, say oil, is low, this is a problem for a country that exports the commodity. The big issue is likely to be tax revenue. Governments very often get a major share of their tax revenue from taxing the profits of the companies that sell the commodities, such as oil. If the price of oil, or other commodity that is exported drops, then it will be difficult for the government to collect enough tax revenue. There may be other effects as well. The company producing the commodity may cut back its production. If this happens, the exporting country is faced with another problem–laid-off workers without jobs. This adds a second need for revenue: to pay benefits to laid-off workers.

Many oil exporters currently subsidize energy and food products for their citizens. If tax revenue is low, the amount of these subsidies is likely to be reduced. With lower subsidies, citizens will buy less, reducing world demand. This reduction in demand will tend to reduce world oil (or other commodity) prices.

Even if subsidies are not involved, lower tax revenue will very often affect the projects an oil exporter can undertake. These projects might include building roads, schools, or hospitals. With fewer projects, world demand for oil and other commodities tends to drop.

The concern I have now is that with low oil prices, and low prices of other commodities, a number of countries will have to cut back their programs, in order to balance government budgets. If this happens, the effect on the world economy could be quite large. To get an idea how large it might be, let’s look again at Figure 1, recopied below.

Notice that the three “layers” in the middle are all countries whose economies are fairly closely tied to commodity exports. Arguably I could have included more countries in this category–for example, other OPEC countries could be included in this grouping. These countries are now in the “Rest of the World” category. Adding more countries to this category would make the portion of world consumption tied to countries depending on commodity exports even greater.

Figure 1- Resource consumption by part of the world. Canada etc. grouping also includes Norway, Australia, and South Africa. Based on BP Statistical Review of World Energy 2015 data.

My concern is that low commodity prices will prove to be self-perpetuating, because low commodity prices will adversely affect commodity exporters. As these countries try to fix their own problems, their own demand for commodities will drop, and this will affect world commodity prices. The total amount of commodities used by exporters is quite large. It is even larger when oil is considered by itself (see Figure 8 above).

In my view, the collapse of the Soviet Union in 1991 occurred indirectly as a result of low oil prices in the late 1980s. A person can see from Figure 1 how much the energy consumption of the Former Soviet Union fell after 1991. Of course, in such a situation exports may fall more than consumption, leading to a rise in oil prices. Ultimately, the issue becomes whether a world economy can adapt to falling oil supply, caused by the collapse of some oil exporters.

Our Economy Has No Reverse Gear

None of the issues I raise would be a problem, if our economy had a reverse gear–in other words, if it could shrink as well as grow. There are a number of things that go wrong if an economy tries to shrink:

  • Businesses find themselves with more factories than they need. They need to lay off workers and sell buildings. Profits are likely to fall. Loan covenants may be breached. There is little incentive to invest in new factories or stores.
  • There are fewer jobs available, in comparison to the number of available workers. Many drop out of the labor force or become unemployed. Wages of non-elite workers tend to stagnate, reflecting the oversupply situation.
  • The government finds it necessary to pay more benefits to the unemployed. At the same time, the government’s ability to collect taxes falls, because of the poor condition of businesses and workers.
  • Businesses in poor financial condition and workers who have been laid off tend to default on loans. This tends to put banks into poor financial condition.
  • The number of elderly and disabled tends to grow, even as the working population stagnates or falls, making the funding of pensions increasingly difficult.
  • Resale prices of homes tend to drop because there are not enough buyers.

Many have focused on a single problem area–for example, the requirement that interest be paid on debt–as being the problem preventing the economy from shrinking. It seems to me that this is not the only issue. The problem is much more fundamental. We live in a networked economy; a networked economy has only two directions available to it: (1) growth and (2) recession, which can lead to collapse.

Conclusion

What we seem to be seeing is an end to the boost that globalization gave to the world economy. Thus, world economic growth is slowing, and because of this slowed economic growth, demand for energy products is slowing. This globalization was encouraged by the Kyoto Protocol (1997). The protocol aimed to reduce carbon emissions, but because it inadvertently encouraged globalization, it tended to have the opposite effect. Adding China to the World Trade Organization in 2001 further encouraged globalization. CO2 emissions tended to grow more rapidly after those dates.

Figure 14. World CO2 emissions from fossil fuels, based on data from BP Statistical Review of World Energy 2015.

Now growth in fuel use is slowing around the world. Virtually all types of fuel are affected, as are many parts of the world. The slowing growth is associated with low fuel prices, and thus slowing demand for fuel. This is what we would expect, if the world is running into affordability problems, ultimately related to fuel prices rising faster than wages.

Globalization brings huge advantages, in the form of access to cheap energy products still in the ground. From the point of view of businesses, there is also the possibility of access to cheap labor and access to new markets for selling their goods. For long-industrialized countries, globalization also represents a workaround to inadequate local energy supplies.

The one problem with globalization is that it is not a permanent solution. This happens for several reasons:

  • A great deal of debt is needed for the new operations. At some point, this debt starts reaching limits.
  • Diminishing returns leads to higher cost of energy products. For example, later coal may need to come from more distant locations, adding to costs.
  • Wages in the newly globalized area tend to rise, negating some of the initial benefit of low wages.
  • Wages of workers in the area developed prior to globalization tend to fall because of competition with workers from parts of the world getting lower pay.
  • Pollution becomes an increasing problem in the newly globalized part of the world. China is especially concerned about this problem.
  • Eventually, more than enough factory space is built, and more than enough housing is built.
  • Demand for energy products (in terms of what workers around the world can afford) cannot keep up with production, in part because wages of many workers lag thanks to competition with low-paid workers in less-advanced countries.

It seems to me that we are reaching the limits of globalization now. This is why prices of commodities have fallen. With falling prices comes lower total consumption. Many economies are gradually moving into recession–this is what the low prices and falling rates of energy growth really mean.

It is quite possible that at some point in the not too distant future, demand (and prices) will fall further. We then will be dealing with severe worldwide recession.

In my view, low prices and low demand for commodities are what we should expect, as we reach limits of a finite world. There is widespread belief that as we reach limits, prices will rise, and energy products will become scarce. I don’t think that this combination can happen for very long in a networked economy. High energy prices tend to lead to recession, bringing down prices. Low wages and slow growth in debt also tend to bring down prices. A networked economy can work in ways that does not match our intuition; this is why many researchers fail to see understand the nature of the problem we are facing.





A Degrowth Response to an Ecomodernist Manifesto

29 05 2015

Originally published on the Resillience website, I thought my followers would find this interesting….  having said that, the more work like this I read the more pessimistic I feel anything will be done!  Such is the momentum of the ‘Ecomodernists’

Critique Summary

Authors and Endorsers: Jeremy Caradonna, Iris Borowy, Tom Green, Peter A. Victor, Maurie Cohen, Andrew Gow, Anna Ignatyeva, Matthias Schmelzer, Philip Vergragt, Josefin Wangel, Jessica Dempsey, Robert Orzanna, Sylvia Lorek, Julian Axmann, Rob Duncan, Richard B. Norgaard, Halina S. Brown, Richard Heinberg


A group known as the “ecomodernists,” which includes prominent environmental thinkers and development specialists such as Ted Nordhaus, Michael Shellenberger, Stewart Brand, David Keith, and Joyashree Roy has recently published a statement of principles called An Ecomodernist Manifesto (2015). Many of the authors of the Manifesto are connected to an influential think tank called The Breakthrough Institute.
ecoutopia
The Manifesto is an attempt to lay out the basic message of ecomodernism, which is an approach to development that emphasizes the roles of technology and economic growth in meeting the world’s social, economic, and ecological challenges. The ecomodernists “reject” the idea “that human societies must harmonize with nature to avoid economic and ecological collapse,” and instead argue that what is needed is a reliance on technologies, from nuclear power to carbon capture and storage, that allow for a “decoupling [of] human development from environmental impacts.”
The Manifesto has already received strong criticism from an array of commentators, but none of these assessments has yet critiqued it from the perspective of “degrowth,” which is an approach that sees the transition to sustainability occurring through less environmentally impactful economic activities and a voluntary contraction of material throughput of the economy, to reduce humanity’s aggregate resource demands on the biosphere. From a degrowth perspective, technology is not viewed as a magical saviour since many technologies actually accelerate environmental decline.
With these disagreements in mind, a group of over fifteen researchers from the degrowth scholarship community has written a detailed refutation of the Ecomodernist Manifesto, which can be read here. The following is a summary of the seven main points made by the authors of this critique:
1. The Manifesto assumes that growth is a given. The ecological economists associated with degrowth assume that growth is not a given, and that population growth, inequalities, and the decline of cheap and abundant fossil fuels, which spurred the unprecedented growth of the global economy over the past century, means that the limits to growth are either being reached or will be reached in the very near future. The ecomodernists, by contrast, scoff at the idea of limits to growth, arguing that technology will always find a way to overcome those limits. Graham Turner, Ugo Bardi, and numerous others have shown through empirical research that many of the modelled scenarios, and the fundamental thesis, of the Club of Rome remain as relevant as ever—that is, that the human endeavour is bumping up against natural limits. Richard Heinberg has shown that the production of conventional oil, natural gas, and heavy oil all peaked around 2010, despite, but also due to, continued global reliance on fossil fuels, which still make up over 80% of the world’s primary source of energy. The history of industrialism to date suggests that more growth will be coupled with increasing environmental costs. Thus the Manifesto does nothing to question and rethink the growth fetish that has preoccupied (and negatively impacted) the world since at least the 1940s.
 
2. Ecomodernists believe in the myth of decoupling growth from impacts. Long the fantasy of neoclassical economists, industrialists, and many futurists decoupling is the idea that one can have more of the “good stuff” (economic growth, increased population, more consumption) without any of the “bad stuff” (declines in energy stocks, environmental degradation, pollution, and so forth). Yet to date, there has been no known society that has simultaneously expanded economic activity while reducing absolute energy consumption and environmental impacts. In terms of carbon-dioxide emissions, the only periods over the past century in which global or regional emissions have actually declined absolutely have occurred during periods of decreased economic activity (usually a political crisis, war, or a recession). While it is true that many countries have reduced their carbon intensity in recent decades, meaning that they get more bang for their energy buck, efforts to decouple GDP-growth from environmental degradation through technological innovations and renewable energies have failed to achieve the absolute emissions reductions and reductions in aggregate environmental impacts necessary for a livable planet. In short, absolute decoupling has not occurred and has not solved our problems.
3.  Is technology the problem or the solution? The ecomodernists cannot decide. The Manifesto is open and honest about the impact that modern technologies have had on the natural world, and especially emissions from fossil-fueled machines. However, as an act of desperation, the ecomodernists retreat to the belief that risky, costly, and underachieving technologies, such as nuclear power and carbon capture and storage, will solve the climate crisis and energize the sustainable society of the future. The reality, however, is that nuclear power provides less than 6 percent of the world’s energy needs while creating long-term storage nightmares and present-day environmental hazards. We cite Chernobyl and Fukushima as obvious examples. From the point of view of degrowth, more technology is not (necessarily) the solution. The energy crisis can be addressed only by reductions in throughput, economic activity, and consumption, which could then (and only then) create the possibility of powering global society via renewables.
4. Ecomodernism is not very “eco.” Ecomodernism violates everything we know about ecosystems, energy, population, and natural resources. Fatally, it ignores the lessons of ecology and thermodynamics, which teach us that species (and societies) have natural limits to growth. The ecomodernists, by contrast, brazenly claim that the limits to growth is a myth, and that human population and the economy could continue to grow almost indefinitely. Moreover, the ecomodernists ignore or downplay many of the ecological ramifications of growth. The Manifesto has nothing to say about the impacts of conventional farming, monoculture, pesticide-resistant insects, GMOs, and the increasing privatization of seeds and genetic material. It is silent on the decline of global fisheries or the accumulation of microplastic pollution in the oceans, reductions in biodiversity, threats to ecosystem services, and the extinction of species. Nor does it really question our reliance on fossil fuels. It does argue that societies need to “decarbonize,” but the Manifesto also tacitly supports coal, oil and natural gas by advocating for carbon capture and storage. Far from being an ecological statement of principles, the Manifesto merely rehashes the naïve belief that technology will save us and that human ingenuity can never fail. One fears, too, that the ecomodernists support geoengineering.
 
5. The Manifesto has a narrow, inaccurate, and whitewashed view of both “modernity” and “development.” The Manifesto’s assertions rest on the belief that industrialized modernity has been an undivided blessing. Those who support degrowth have a more complex view of history since the 18th century. The “progress” of modernity has come at a heavy cost, and is more of a mixed blessing. The ecomodernists do not acknowledge that growth in greenhouse gas emissions parallels the development of industry. The core assumption is that “development” has only one true definition, and that is to “modernize” along the lines of the already industrialized countries. The hugely destructive development path of European and Neo-European societies is the measuring stick of Progress.
 
6. Ecomodernism is condescending toward pre-industrial, agrarian, non-industrialized societies, and the Global South. The issue of condescension is particularly stark in the Manifesto. There is not a word about religion, spirituality, or indigenous ecological practices, even though the authors throw a bone to the “cultural preferences” for development. Pre-industrial and indigenous peoples are seen as backwards and undeveloped. The authors go so far as to say that humans need to be “liberated” from agricultural labour, as though the production of food, and small-scale farming, were not inherent goods. There is no adoration for simple living, the small scale, or bottom up approaches to development.
 
7. The Manifesto suffers from factual errors and misleading statements. The Manifesto is particularly greenwashed when it comes to global deforestation rates. It suggests that there is currently a “net reforestation” occurring at the international scale, which contradicts the 2014 Millennium Development Report that shows that afforestation and reforestation have, in fact, slowed deforestation rates, but that the world still suffered a net loss of forested land between 2000 and 2010 by many millions of hectares. Research by the United Nations Food and Agriculture Organization and the World Wide Fund for Nature confirms the reality of net forest losses. Further, the Manifesto makes dubious claims about net reductions in “servitude” over the past few centuries, and the role played by pre-historical native peoples in driving the megafauna to extinction.
In sum, the ecomodernists provide neither a very inspiring blueprint for future development strategies nor much in the way of solutions to our environmental and energy woes.