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 And, that chart is already out of date, the extraction rate is now in freefall…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.





The Energy Cliff Revisited

22 10 2014

Gough Whitlam died yesterday.  The whole country seems to have paused for thought, many media outlets are even saying things like “where to from here”, and the cluelessness abounds.  Where to from here indeed……  Today, our politicians are elected to office based on false promises.  They promise things they can’t deliver, and we continue to be perpetually shocked when they don’t deliver.  We never seem to get tired of this game, we always lose.

I have spent little time posting here, mainly for fear of simply repeating myself.  As I am doing now, really…. but once you ‘get it’, what else is there to say?  As the price of oil fell to $80 last week, much wringing of hands and gnashing of teeth occurred on the subject of how long the unconventional oil drillers of oil would last….  while some commentators were despairing at the thought that cheaper fossil fuels would mean the end of the current push for renewables, if you can still call it that.

When I pointed out to these people that the fossil fuel companies were actually going broke, I was met with the derision I am now accustomed to.  I’m getting quite immune to that now, if you don’t believe me, it’s your problem, not mine…  mind you, as we approach ‘the knee’ of the energy cliff curve, it is baffling as to why the price of oil dropped so much, when it should have in fact risen, and risen substantially.  The answer of course is that the global economy is on its knees.  Growth is fetid at best, and in Europe, things are going from bad to worse, even prompting some people to predict that ‘the big one’ was going to occur on the 27th anniversary of the Black Monday crash.  Didn’t happen, unfortunately…..  but the ducks have all lined up in waiting.

Most of us here have surely heard of the seven stages of grief…. Shock, Denial, Anger, Bargaining, Guilt, Depression, Acceptance. Where are we in our journey through these stages when it come to the financial crisis, and to growth? There’s only one stage that even remotely sounds right: Denial. We’re not even close to Anger yet, not when it comes to the larger population.  Me, I’d like to add another stage:  REACTION….!

justwalkawayIf enough people just walked away, the whole mess would end.  Any time people post whinges on FB these days, I reply with that picture.

Apart from denial, there is of course ignorance.  The concept of the energy cliff is foreign to just about anyone who doesn’t follow blogs such as this one.  It occurred to me that we have been sliding down the edges of the energy cliff for a very long time.  At the beginning of the oil era, when the ERoEI was 100:1, everything was easy.  We just had to invent it, and we had so much surplus energy that we could fumble our way around and build outrageous cars and airplanes, steel skyscrapers, huge ships, growth was easy…..  and when the ERoEI of oil dropped to 50:1, who noticed?  We still had 100:1 oil to make the equipment needed to get that oil (which, let’s face it, was still amazing value…)http://www.terrysmithblog.com/.a/6a0120a5f40b9d970b01347fbc85dd970c-400wi

As the easy pickings were exploited, it was still easy to burn 25:1 and even 15:1 energy sources…. but it is at this stage that we approach ‘the knee’ of the nett energy curve, and start falling off its cliff.

Building 5:1 solar energy gizmos with 15:1 oil, let alone with more 5:1 PVs or those appallingly inefficient tar sands and shale oil suddenly becomes a struggle.  This is what people who argue that we don’t need fossil fuels to make renewables do not understand.  Bad ERoEI compounds when you use one low source to get another.  Social complexity utterly relies on surplus energy.  It was with surplus energy that Europe’s cathedrals were build during the middle ages, and the same applies to building wind and solar farms.

If you are new to these concepts, I urge you to watch the video below from Chris Martenson’s excellent crash course series, a must watch program of videos for anyone who doesn’t yet know why the world is going to hell in a handbasket……  NOTE:  This video shows solar as having an ERoEI somewhere around 20:1.  This is because it was made in 2009, and in the intervening 5 years, it has been established that it is fact less than 5…. maybe even less than 3!  This is displayed more accurately in the more recent chart above……