The green car myth

28 06 2017

How government subsidies make the white elephant on your driveway look sustainable

And this comes on top of this article that describes how just making electric cars’ battery packs is equivalent to eight years worth of driving conventional happy motoring.

I have written before about the problems with bright green environmentalism. Bright greens suggest that various technological innovations will serve to reduce carbon dioxide emissions enough to avoid catastrophic global warming and other environmental problems. There are a variety of practical problems that I outlined there, including the fact that most of our economic activities are hitting physical limits to energy efficiency.

The solution lies in accepting that we can not continue to expand our economies indefinitely, without catastrophic consequences. In fact, catastrophic consequences are in all likelihood already unavoidable, if we believe the warnings of prominent climatologists who claim that a two degree temperature increase is sufficient to cause significant global problems.

It’s easy to be deceived however and assume that we are in the process of a transition towards sustainable green technologies. The problem with most green technologies is that although their implementation on a limited scale is affordable, they have insufficient scalability to enable a transition away from fossil fuels.

Part of the reason for this limited scalability is because users of “green” technology receive subsidies and do not pay certain costs which users of “grey” technology have to shoulder as a result. As an example, the Netherlands, Norway and many other nations waive a variety of taxes for green cars, taxes that are used to maintain the network of roads that these cars use. As the share of green cars rises, grey cars will be forced to shoulder increasingly higher costs to pay for the maintenance of road networks.

It’s inevitable that these subsidies will be phased out. The idea of course is that after providing an initial gentle push, the transition towards more green driving will have reached critical mass and prove itself sustainable without any further government subsidies. Unfortunately, that’s unlikely to occur. We’ve seen a case study of what happens when subsidies for green technologies are phased out in Germany. After 2011, the exponential growth in solar capacity rapidly came to a stop, as new installs started to drop. By 2014, solar capacity in Germany had effectively stabilized.1 Peak capacity of solar is now impressively high, but the amount of solar energy produced varies significantly from day to day. On bad days, solar and wind hardly contribute anything to the electricity grid.

Which brings us to the subject of today’s essay: The green car. The green car has managed to hide its enormous price tag behind a variety of subsidies, dodged taxes and externalities it has imposed upon the rest of society. Let us start with the externalities. Plug-in cars put significant strain on the electrical grid. These are costs that owners of such cars don’t pay themselves. Rather, power companies become forced to make costs to improve their grid, to avoid the risk of blackouts, costs that are then passed on to all of us.

When it comes to the subsidies that companies receive to develop green cars, it’s important not just to look at the companies that are around today. This is what is called survivorship bias. We focus on people who have succeeded and decide that their actions were a good decision to take. Everyone knows about the man who became a billionare by developing Minecraft. As a result, there are droves of indie developers out there hoping to produce the next big game. In reality, most of them earn less than $500 a year from sales.2

Everyone has heard of Tesla or of Toyota’s Prius. Nobody hears of the manufacturers who failed and went bankrupt. They had to make costs too, costs that were often passed on to investors or to governments. Who remembers Vehicle Production Group, or Fisker automotive? These are companies that were handed 193 million and 50 million dollar in loans respectively by the US Federal government, money the government won’t see again because the companies went bankrupt.3 This brings the total of surviving car manufacturers who received loans from the government to three.

To make matters worse, we don’t just subsidize green car manufacturers. We subsidize just about the entire production chain that ultimately leads to a green car on your driveway. Part of the reason Fisker automotive got in trouble was because its battery manufacturer, A123 Systems, declared bankruptcy. A123 Systems went bankrupt in 2012, but not before raising 380 million dollar from investors in 2009 and receiving a 249 million dollar grant from the U. S. department of energy back in 2010.

Which brings us to a de facto subsidy that affects not just green cars, but other unsustainable projects as well: Central bank policies. When interest rates are low, investors have to start searching for yield. They tend to find themselves investing in risky ventures, that may or may not pay off. Examples are the many shale companies that are on the edge of bankruptcy today. This could have been anticipated, but the current financial climate leaves investors with little choice but to invest in such risky ventures. This doesn’t just enable the growth of a phenomenon like the shale oil industry affects green car companies as well. Would investors have poured their money into A123 Systems, if it weren’t for central bank policies? Many might have looked at safer alternatives.

One company that has benefited enormously from these policies is Tesla. In 2008, Tesla applied for a 465 million dollar loan from the Federal government. This allowed Tesla to produce its car, which then allows Tesla to raise 226 million in an IPO in June 2010, where Tesla receives cash from investors willing to invest in risky ventures as a result of central bank policies. A $7,500 tax credit then encourages sales of Tesla’s Model S, which in combination with the money raised from the IPO allows Tesla to pay off its loan early.

In 2013, Tesla then announces that it has made an 11 million dollar profit. Stock prices go through the roof, as apparently they have succeeded at the task of the daunting task of making green cars economically viable. In reality, Tesla made 68 million dollar that year selling its emission credits to other car companies, without which, Tesla would have made a loss.

Tesla in fact receives $35,000 dollar in clean air credits for every Model S that it sells to customers, which in total was estimated to amount to 250 million dollar in 2013.4 To put these numbers in perspective, buying a Model S can cost anywhere around $70,000, so if the 35,000 dollar cost was passed on to the customer, prices would rise by about 50%, not including whatever sales tax applies when purchasing a car.

We can add to all of this the 1.2 billion of subsidy in the form of tax exemptions and reduced electricity rates that Tesla receives for its battery factory in Nevada.5 The story gets even better when we arrive at green cars sold to Europe, where we find the practice of “subsidy stacking”. The Netherlands exempts green cars from a variety of taxes normally paid upon purchase. These cars are then exported to countries like Norway, where green cars don’t have to pay toll and are allowed to drive on bus lanes.6

For freelancers in the Netherlands, subsidies for electrical cars have reached an extraordinarily high level. Without the various subsidies the Dutch government created to increase the incentive to drive an electrical car, a Tesla S would cost 94.010 Euro. This is a figure that would be even higher of course, if Dutch consumers had to pay for the various subsidies that Tesla receives in the United States. After the various subsidies provided by the Dutch government for freelance workers, Dutch consumers can acquire a Tesla S at a price of just 25,059 Euro.7

The various subsidies our governments provide are subsidies we all end up paying for in one form or another. What’s clear from all these numbers however is that an electric car is currently nowhere near a state where it could compete with a gasoline powered car in a free unregulated market, on the basis of its own merit.

The image that emerges here is not one of a technology that receives a gentle nudge to help it replace the outdated but culturally entrenched technology we currently use, but rather, of a number of private companies that compete for a variety of subsidies handed out by governments who seek to plan in advance how future technology will have to look, willfully ignorant of whatever effect physical limits might have on determining which technologies are economically viable to sustain and which aren’t.

After all, if government were willing to throw enough subsidies at it, we could see NGO’s attempt to solve world hunger using caviar and truffles. It wouldn’t be sustainable in the long run, but in the short term, it would prove to be a viable solution to hunger for a significant minority of the world’s poorest. There are no physical laws that render such a solution impossible on a small scale, rather, there are economic laws related to scalability that render it impossible.

Similarly, inventing an electrical car was never the problem. In 1900, 38% of American cars ran on electricity. The reason the electrical car died out back then was because it could not compete with gasoline. Today the problem consists of how to render it economically viable and able to replace our fossil fuel based transportation system, without detrimentally affecting our standard of living.

This brings us to the other elephant, the one in our room rather than our driveway. The real problem here is that we wish to sustain a standard of living that was built with cheap natural resources that are no longer here today. Coping with looming oil shortages will mean having to take a step back. The era where every middle class family could afford to have a car is over. Governments would be better off investing in public transport and safe bicycle lanes.

The problem America faces however, is that there are cultural factors that prohibit such a transition. Ownership of a car is seen as a marker of adulthood and the type of car tells us something about a man’s social status. This is an image car manufacturers are of course all too happy to reinforce through advertising. Hence, we find a tragic example of a society that wastes its remaining resources on false solutions to the crisis it faces.


1 – http://www.ise.fraunhofer.de/en/publications/veroeffentlichungen-pdf-dateien-en/studien-und-konzeptpapiere/recent-facts-about-photovoltaics-in-germany.pdf Page 12

2 – http://www.gameskinny.com/364n3/report-most-indie-game-devs-made-less-than-500-in-game-sales-in-2013

3 – http://www.forbes.com/sites/joannmuller/2013/05/11/the-real-reason-tesla-is-still-alive-and-other-green-car-companies-arent/

4 – http://evworld.com/news.cfm?newsid=30195

5 – http://www.rgj.com/story/news/2014/09/04/nevada-strikes-billion-tax-break-deal-tesla/15096777/

6 – http://www.elsevier.nl/Economie/achtergrond/2015/4/-1742131W/

7 – https://www.cda.nl/mensen/omtzigt/blog/toon/auto-rijden-op-subsidie/

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Ugo Bardi on the end of cars…..

25 05 2017

The Coming Seneca Cliff of the Automotive Industry: the Converging Effect of Disruptive Technologies and Social Factors

This graph shows the projected demise of individual car ownership in the US, according to “RethinkX”. That will lead to the demise of the automotive industry as we know it since a much smaller number of cars will be needed. If this is not a Seneca collapse, what is? 



Decades of work in research and development taught me this:

Innovation does not solve problems, it creates them. 

Which I could call “the Golden Rule of Technological Innovation.” There are so many cases of this law at work that it is hard for me to decide where I should start from. Just think of nuclear energy; do you understand what I mean? So, I am always amazed at the naive faith of some people who think that more technology will save us from the trouble created by technology (the most common mistake people make is not to learn from mistakes).

That doesn’t mean that technological research is useless; not at all. R&D can normally generate small but useful improvements to existing processes, which is what it is meant to do. But when you deal with breakthroughs, well, it is another kettle of dynamite sticks; so to say. Most claimed breakthroughs turn out to be scams (cold fusion is a good example) but not all of them. And that leads to the second rule of technological innovation:

Successful innovations are always highly disruptive

You probably know the story of the Polish cavalry charging against the German tanks during WWII. It never happened, but the phrase “fighting tanks with horses” is a good metaphor for what technological breakthroughs can do. Some innovations impose themselves, literally, by marching over the dead bodies of their opponents. Even without such extremes, when an innovation becomes a marker of social success, it can diffuse extremely fast. Do you remember the role of status symbol that cell phones played in the 1990s?

Cars are an especially good example of how social factors can affect and amplify the effects of innovation. I discussed in a previous post on Cassandra’s Legacy how cars became the prime marker of social status in the West in the 1950s, becoming the bloated and inefficient objects we know today. They had a remarkable effect on society, creating the gigantic suburbs of today’s cities where life without a personal car is nearly impossible.

But the great wheel of technological innovation keeps turning and it is soon going to make individual cars as obsolete as would be wearing coats made of home-tanned bear skins. It is, again, the combination of technological innovation and socioeconomic factors creating a disruptive effect. For one thing, private car ownership is rapidly becoming too expensive for the poor. At the same time, the combination of global position systems (GPS), smartphones, and autonomous driving technologies makes possible a kind of “transportation on demand” or “transportation as a service” (TAAS) that was unthinkable just a decade ago. Electric cars are especially suitable (although not critically necessary) for this kind of transportation. In this scheme, all you need to do to get a transportation service is to push a button on your smartphone and the vehicle you requested will silently glide in front of you to take you wherever you want. (*)

The combination of these factors is likely to generate an unstoppable and disruptive social phenomenon. Owning a car will be increasingly seen as passé, whereas using the latest TAAS gadgetry will be seen as cool. People will scramble to get rid of their obsolete, clumsy, and unfashionable cars and move to TAAS. Then, TAAS can also play the role of social filter: with the ongoing trends of increasing social inequality, the poor will be able to use it only occasionally or not at all. The rich, instead, will use it to show that they can and that they have access to credit. Some TAAS services will be exclusive, just as some hotels and resorts are. Some rich people may still own cars as a hobby, but that wouldn’t change the trend.

To have some idea of what a TAAS-based world can be, you might read Hemingway’s “Movable Feast”, a story set in Paris in the 1920s. There, Hemingway describes how the rich Americans in Paris wouldn’t normally even dream of owning a car (**). Why should they have, while when they could simply ride the local taxis at a price that, for them, was a trifle? It was an early form of TAAS. Most of the Frenchmen living in Paris couldn’t afford that kind of easygoing life and that established an effective social barrier between the haves and the have-nots.

As usual, of course, the future is difficult to predict. But something that we can say about the future is that when changes occur, they occur fast. In this case, the end result of the development of individual TAAS will be the rapid collapse of the automotive industry as we know it: a much smaller number of vehicles will be needed and they won’t need to be of the kind that the present automotive industry can produce. This phenomenon has been correctly described by “RethinkX,” even though still within a paradigm of growth. In practice, the transition is likely to be even more rapid and brutal than what the RethinkX team propose. For the automotive industry, there applies the metaphor of “fighting tanks with horses.”

The demise of the automotive industry is an example of what I called the “Seneca Effect.” When some technology or way of life becomes obsolete and unsustainable, it tends to collapse very fast. Look at the data for the world production of motor vehicles, below (image from Wikipedia). We are getting close to producing a hundred million of them per year. If the trend continues, during the next ten years we’ll have produced a further billion of them. Can you really imagine that it would be possible? There is a Seneca Cliff waiting for the automotive industry.

(*) If the trend of increasing inequality continues, autonomous driven cars are not necessary. Human drivers would be inexpensive enough for the minority of rich people who can afford to hire them.

(**) Scott Fitzgerald, the author of “The Great Gatsby” is reported to have owned a car while living in France, but that was mainly an eccentricity.





Peak Airplane Speed

10 03 2017

Having just flown over 5000km (return) to visit my family for my recent retirement milestone, I was attracted to this story… and I have to say that while everyone else in the plane takes the experience for granted, it never ceases to amaze me when it takes off that we are able (still..?) to do this.

Recently, a story surfaced on Facebook that had me in stitches…:

Airbus is looking to a future faster than the speed of sound as it filed another patent intended to help aircraft fly supersonically.

Details have emerged of a (sic) application filed in the US by the pan-European aerospace company for a design of a spaceplane capable of taking off and landing like a normal aircraft but able to fly at supersonic speeds at altitudes “of at least 100 kilometres”.

Even funnier, it was illustrated with the following image……

Image result for patented supersonic airbus

Just look at that thing…….. it doesn’t even look like it can fly, way too fat for its wings, almost a cartoon of an airplane actually. And I doubt any plane manufacturer has ever taken out a patent for an entire plane. Bits of planes, for sure, but a whole plane..? Which goes to show you can’t believe anything you read in the Telegraph, though mind you, it seems quite a few other media outlets were also taken in…… there’s a hilarious video by some unknown Indian man demonstrating how little he knows about aerodynamics there too.

Even if this were serious, it would never fly, because it takes years to develop projects like this, and I doubt that plane manufacturers are not aware of our energy predicaments, even if they son’t say so publicly.

Then along comes this latest article from Ugo Bardi……

So, it is true: planes fly slower nowadays! The video, above, shows that plane trips are today more than 10% longer than they were in the 1960s and 1970s for the same distance. Airlines, it seems, attained their “peak speed” during those decades.

Clearly, airlines have optimized the performance of their planes to minimize costs. But they were surely optimizing their business practices also before the peak and, at that time, the results they obtained must have been different. The change took place when they started using the current oil prices for their models and they found that they had to slow down. You see in the chart below what happened to the oil market after 1970. (Brent oil prices, corrected for inflation, source)

It is remarkable how things change. Do you remember the hype of the 1950s and 1960s? The people who opposed the building of supersonic passenger planes were considered to be against humankind’s manifest destiny. Speed had to increase because it had always been doing so and technology would have provided us with the means to continue moving faster.

Rising oil prices dealt a death blow to that attitude. The supersonic Concorde was a flying mistake that was built nevertheless (a manifestation of French Grandeur). Fortunately, other weird ideas didn’t make it, such as the sub-orbital plane that should have shot passengers from Paris to New York in less than one hour.

If this story tells us something is that, in the fight between technological progress and oil depletion, oil depletion normally wins. Airlines are especially fuel-hungry and they have no alternatives to liquid fuels. So, despite all the best technologies, the only way for them to cope with higher oil prices was to slow down planes, it was as simple as that.

Even slower planes, though, still need liquid fuels that are manufactured from oil. We may go back to propeller planes for even better efficiency, but the problem remains: no oil, no planes, at least not the kind of planes that allow normal people to fly, something that, nowadays, looks like an obvious feature of our life. But, as I said before, things change!

 





Peak Uranium by Ugo Bardi

12 01 2017

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THIS should get Eclipse all stirred up……..

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Modeling Future Uranium Supplies

Uranium supply and demand to 2030

 

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

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

This said, the model assumes the following points:

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

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

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

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

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

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

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





More on the thermodynamic black hole…

12 10 2016

I recently wrote about the thermodynamic black hole; articles about ERoEI keep popping up in my in tray that truly baffle me…… As Alice Friedemann told Chris Martenson in the podcast I discussed in the aforementioned blog post, “everyone disagrees on what to leave in or out of their ERoEI analyses”….

I was pointed to another blog called Ramez Naam where the following was published…:

There’s a graph making rounds lately showing the comparative EROIs of different electricity production methods. (EROI is Energy Return On Investment – how much energy we get back if we spend 1 unit of energy. For solar this means – how much more energy does a solar panel generate in its lifetime than is used to create it?)

This EROI graph that is making the rounds is being used to claim that solar and wind can’t support an industrialized society like ours.

But its numbers are wildly different from the estimates produced by other peer-reviewed literature, and suffers from some rather extreme assumptions, as I’ll show.

Here’s the graph.

eroi-of-solar-wind-nuclear-coal-natural-gas-hydro-800x630

This graph is taken from Weißbach et al, Energy intensities, EROIs, and energy payback times of electricity generating power plants (pdf link). That paper finds an EROI of 4 for solar and 16 for wind, without storage, or 1.6 and 3.9, respectively, with storage. That is to say, it finds that for every unit of energy used to build solar panels, society ultimately gets back 4 units of energy. Solar panels, according to Weißbach, generate four times as much energy over their lifetimes as it takes to manufacture them.

Personally, I think these figures are a bit on the optimistic side, yet the author has a problem with them for being too low…!  Ramez Naam, who was born in Cairo, Egypt, and emigrated to the US at the age of 3 is a computer scientist, futurist, angel investor, and award-winning author, who also worked for Microsoft.  Enough said?  And what on Earth is an angel investor?

Anyhow, he further writes…:

Unfortunately, Weißbach also claims that an EROI of 7 is required to support a society like Europe. I find a number that high implausible for a number of reasons, but won’t address it here.

I’ll let others comment on the wind numbers. For solar, which I know better, this paper is an outlier. Looking at the bulk of the research, it’s more likely that solar panels, over their lifetime, generate 10-15 times as much energy as it takes to produce them and their associated hardware. That number may be as high as 25. And it’s rising over time.

I have seen others, like Susan Krumdieck claim that to keep our complex matrix going, an ERoEI of at least 10 is needed, so it’s interesting that Weißbach aims lower.

What I’d like to know is, how can anyone claim “ it’s rising over time.”?  Last time I looked, all renewables were entirely made using fossil fuels, and their ERoEI is plummeting…

Remember the “Twilight of the age of oil” series published here some time ago? One of the charts in that series of article resurfaced on another blog (through Zerohedge)……

The Coming Thermodynamic Oil Collapse Is Worse Than I Realized

Last week, I spoke with Bedford Hill of the Hills Group about their “Thermodynamic Oil Collapse” model.  What an interesting conversation it was.  Bedford Hill was the project manager of a group of engineers that put over 10,000 hours in designing their Thermodynamic Oil Collapse model.

Bedford told me that after they ran the model, the results were so shocking, they sat on the damn thing for two years before publishing.  I asked him did any of the engineers that worked on the model disagree with the results?  His answer was, “Not a single one disagreed.”

It has taken me some time to digest this new energy information as well understand the details by talking with Bedford Hill and Louis Arnoux of nGeni.  Again, I will be interviewing these gentlemen on this Thermodynamic Oil Collapse model and the implications shortly.

EROI levels

Anyone interested in reading the Hills Group work, you can go to their website, thehillsgroup.org, or check out their detailed report.

The rapidly falling EROI – Energy Returned On Invested is gutting the entire U.S. oil industry and economy.  Instead of the United States enjoying real fundamental growth based on increased energy consumption, we have turned to inflating electronic digits as an indication of our wealth.

As I explained in the beginning of the article, U.S. energy consumption has been flat for the past six years, while U.S. GDP has increased nearly 25%, as our supposed net worth has jumped 54%.  Again, this goes against any sound fundamental economic theory.  We have totally removed ourselves from reality.

While the Fed and Central Banks will continue to prop up the markets by printing money and buying bonds and stocks, they can’t print barrels of oil or energy BTU’s.

There lies the Rub…

So I ask…….. how can the ERoEI of anything, let alone solar power, go up, when the primary source of energy to do all those thing, mainly oil, is falling off a cliff?

But wait, there’s more…..   Geoff Chia sent me an email regarding an open letter he sent to the Doomstead Diner in which Louis Arnoux gets mentioned again….  Here’s what Geoff wrote…:

This open letter to The Zeitgeist Movement replaces an essay I originally promised to Diners, “Peak Oil Revisited Part 2: Why business as usual guarantees that global industrial collapse will be complete by 2030”. I have not had the time to elucidate all aspects of my argument in detail and Dr Louis Arnoux is probably doing a better job with his articles on this topic anyway. He is a true energy expert, I am merely a lay person trying to interpret the thoughts of the experts for the general public.

The other “Peak Oil Revisited” essay I promised, “Part 1b: Is an International Standardised Energy Dollar feasible?” has proved to be much more complicated than originally envisioned and is the lowest of my priorities at the moment. Even if an ISED is feasible it is unlikely to ever see the light of day for political reasons.

graph1-theelm-300x226As you know I ran sustainability meetings for doctors and scientists from 2006 to 2013. I note your Zeitgeist group is holding a meeting on sustainability on 10 September 2016. As a starting point for your discussion you may wish to display on your projection screen the letter I wrote earlier this year to “Doctors for the Environment Australia” . When I subsequently met with the Queensland DEA representative, Dr David King, he could not offer any factual or logical objections against my letter. His only comments were that although my views were consistent with those of many scientists, he felt he had to give DEA members “hope”. DEA are operating on the false hope they can fix rampant global warming which has now spiralled out of control. They have completely ignored more immediate energy and economic issues.

graph2-elm-over-netenergy-300x179Energy analyst Dr Louis Arnoux has informed me that world average1 EROI (energy return over invested, or to use the proper mathematical description for this ratio, energy return divided by energy invested) for petroleum fell below 10:1 a few years ago. Dr David Murphy’s figure for world average EROI of 17:1 for 2013 was an overestimate because Murphy himself wrote in his paper (published by the Royal Society) that his figure did not account for the energy costs of fuel refinement and transportation2.

graph3-net-energy-cliff-300x240According to other EROI luminaries, Drs Hall and Lambert3, a ratio of 10:1 is the minimum required for a complex industrial economy to function properly.

Some parts of the industrial world can continue to function at present because they have captured4 the few remaining high EROI (>10:1) sources for themselves. Others areas eg Southern Europe are losing or have lost access to such high net energy sources (“Hi-NES”)5, hence they are now deindustrialising and collapsing. The rest of the world will never industrialise. We have no significant liquid hydrocarbon replacements for conventional petroleum. Unconventional petroleum, with its woeful EROI of 3:1 or less, is an environmentally devastating scam and a stock market Ponzi scheme.

Decline in Hi-NES is the primary reason for the current global economic contraction6, a fact that conventional economists are too venal or too stupid to acknowledge. The present low price of oil is deeply misleading and is hiding the fact that oil has become less affordable/available for most people around the world due to demand destruction and deflation, temporarily freeing up more oil for “lucky” countries such as Australia.

Dr Jeffrey Brown’s export land model (ELM) shows that oil availability for oil importing countries will eventually fall off a cliff (see graph 1 from postpeakliving.com in which I have corrected a caption: the red line shows GROSS world oil production, which does NOT take into account the energy invested in that oil production. Hence the yellow circle is an overestimate of when zero oil will be available to oil importing countries). A more accurate curve on which to superimpose the ELM should be downslope of the Net Hubbert curve as shown in graph 2. Prior to me doing this, I do not believe anyone else has combined ELM and EROI concepts and it is high time someone did so.

A most vital concept to understanding why global industral societies will soon suddenly and catastrophically collapse, just as a teetering Jenga tower suddenly collapses, is the mathematical fact that the net energy available (= energy return minus energy invested) falls off a cliff when EROI declines to 5:1 (see graph 3).

Sudden catastrophic collapse is consistent with the view of Dr Ugo Bardi, one of the original “Limits to Growth” scientists, who calls this phenomenon the “Seneca cliff”. Dr Bardi is an incredibly smart scientist whose dire warnings over many years have been blithely ignored by all the stupid sheeple around him, hence he titled his blog “Cassandra’s Legacy”.

In human terms, plummeting EROI in the absence of any plan to transition to a post carbon lifestyle, will mean social breakdown, war, starvation7and mass die off on a monumental scale. No part of the world which depends on petroleum will be spared.

We can understand why TPTB promote false hopes for the future to the clueless sheeple, using extravagant bread and circuses like the Olympics. Such theatrics keep the herd distracted and subdued. Be assured that once the masses revolt, the drones will be deployed.

On the other hand, offering intelligent people false hope for the future is in my view deeply inappropriate, especially if useful measures can be taken right now to mitigate impending hardships. Unfortunately the window of opportunity is closing fast. What is your transition plan?

You may vehemently reject my warnings and choose to ignore this letter because everything seems “fine” to you now, however denial will not make a looming catastrophe magically disappear.

One of your previous speakers promoted manned space travel to Mars. How useful, do you think, is that sort of meeting?

Regards

Geoffrey Chia, August 2016

IF you like further homework, I found some most interesting links on that SRSrocco website, including videos called the Hidden Secrets of Money made by Mike Maloney who was interviewed by Chris Martenson, and another articles on the collapse of the USA through analysing  its disintegrating infrastructure…..

It’s raining here, still, and I may go to the Community House to watch the hidden secrets of money there before I run out of bandwidth……

Enjoy!

Geoff Chia’s footnotes

Footnotes:

  1. Global “average” EROI of below 10:1 at present means that most oil fields now yield EROI below 10:1 (eg perhaps only 8:1 or 6:1). However there are a few oil fields which continue to yield a high EROI (eg perhaps 20:1), oil fields which the vultures are now circling.

  2. Murphy DJ. 2014 The implications of the declining energy return on investment of oil production. Phil. Trans. R. Soc. A 372: 20130126.

  3. Lambert, Jessica G., Hall Charles A. S. et al. 2014. Energy, EROI and quality of life. Energy Policy 64:153–167 “There is evidence…that once payments for energy rise above a certain threshold at the national level (e.g. approximately 10 percent in the United States) that economic recessions follow. “

  4. Such capture can be accomplished by fair means (eg providing useful products to the oil vendors in exchange for their oil), or foul (eg the criminal protection racket known as the Petrodollar).

  5. Being starved of credit

  6. In China, intolerable pollution has been a major factor for their economic slowdown, as well as the marked reduction in overseas demand for their industrial output

  7. Mass agriculture is crucially dependent on petroleum (also natural gas)





Some reflections on the Twilight of the Oil Age (part III)

21 07 2016

Guest post by Louis Arnoux, republished from Ugo Bardi’s excellent blog

Part I

Part 3 – Standing slightly past the edge of the cliff

The Tooth Fairy Syndrome that I discussed in Part 2 is, in my view, the fundamental reason why those holding onto BAU will grab every piece of information that can possibly, superficially, back up their ideology and twist it to suit their viewa, generating much confusion in the process.  It is also probably fair to say that the advocates of various versions of“energy transition” are not immune to this kind of syndrome when they remain oblivious to the issues explored in Parts 1 and 2.  Is it possible to go beyond such confusion?

The need to move away from ideology

The impact of the Tooth Fairy Syndrome is all the more felt in the main media and among politicians – with the end result that so many lay people (and many experts) end up highly confused about what to think and do about energy matters.  Notably, we often encounter articles advocating, even sensationalising, various energy transition technologies or instead seeking to rubbish them by highlighting what they present as problematic issues without any depth of analysis.  For example, a 2013 article from the Daily Mail was highlighted in recent discussions among energy experts as a case in point.[1]  The UK is indeed installing large numbers of subsidized, costly diesel generators to be used as back-up at times of low electricity supplies from wind turbines. This article presented this policy as very problematic but failed to set things in perspective about what such issues say about the challenges of any energy transition.

In New Zealand, where I lived close to half of my life before a return to my dear Provence (De reditu suo mode, as a wink to an earlier post by Ugo) about 73% of electricity is deemed renewable (with hydro 60%, geothermal 10%, wind 3%, PVs about 0.1%); the balance being generated from gas and coal.  There is a policy to achieve 90% renewables by 2025. Now, with that mix we have had for many years something like what the UK is building, with a number of distributed generators for emergency back-up without this being a major issue.  The main differences I see with the UK are that (1) in NZ we have only about 5M people living in an area about half that of France (i.e. the chief issue is a matter of renewable production per head of population) and (2) the system is mostly hydro, hence embodying a large amount of energy storage, that Kiwi “sparkies” have learned to manage very well.  It ensues that a few diesel or gas generators are not a big deal there.  By contrast, the UK in my view faces a very big challenge to go “green”.

The above example illustrates the need to extricate ourselves from ideology and look carefully into systems specifics when considering such matters as the potential of various technologies, like wind turbine, PVs, EVs, and so on, as well as capacity factors and EROI levels in the context of going 100% renewable.  All too often, vital issues keep being sidestepped by both BAU and non-BAU parties; while ignoring them often leads to erroneous “solutions” and even dangerous ones.  So as a conclusion of this three-part series focused on “enquiring into the appropriateness of the question”, here are some of the fundamental issues that I see in front of us (the list is not exhaustive):

“Apocalypse now”

At least since the early 1970s and the Meadows’ work, we have known that the globalised industrial world (GIW) is on a self-destructive path, aka BAU (Business as usual). We now know that we are living through the tail end of this process, the end of the Oil Age, precipitating what I have called the Oil Fizzle Dragon-King, Seneca style, that is, after a slow, relatively smooth climb (aka “economic growth”) we are at the beginning of an abrupt fall down a thermodynamic cliff.

The chief issue is whole system change. This means thinking in whole systems terms where the thermodynamics of complex systems operating far from equilibrium is the key.  In terms of epistemology and methods, this requires what in anthropology is called the “hermeneutic circle”: moving repeatedly from the particulars, the details, to the whole system, improving our understanding of the whole and from this going back to the particulars, improving our understanding of them, going back to considering the whole, and so on.  Whole system replacement, i.e. going 100% renewable, requires a huge energy embodiment, a kind of “primitive accumulation” (as a wink to Marx) that presently, under the prevailing paradigm and technology set, is not feasible.  Having the “Energy Hand” in mind (Figure 5), where does this required energy may come from in a context of sharp decline of net energy from oil and Red Queen effect, and concerning renewable, inverse Red Queen/cannibalisation effects?  As another example of the importance of whole system thinking, Axel Kleidon has raised the question of the viability of very large-scale wind versus direct solar.[2]

Solely considering the performances and cost of this or that alternative energy technology won’t suffice.  Short of addressing the complexities of whole system replacement, the situation we are in is some kind of “Apocalypse now”.  The chief challenge I see is thus how to shift safely, with minimal loss of life (substantial loss of life there will be; this has become unavoidable), from fossil-BAU (and thus accessorily nuclear) to 100% sustainable, which means essentially, in one form or another, a direct solar-based society.

We currently have some 17 TW of power installed globally (mostly fossil with some nuclear), i.e. about 2.3kW/head, but with some 4 billion people who at best are grossly energy stressed, many who have no access to electricity at all and only limited transport, in a context of an efficiency of global energy systems in the order of 12%.[3]  To address the Oil Fizzle Dragon-King and the Perfect Storm that it is in the process of whipping up, I consider that we need to move to 4kW/head for the whole population (assuming it levels off at some 8 billion people instead of the currently expected 11 billions), plus some 10TW additional to address climate change and other ecological energy related issues, hence about 50TW, 100% direct solar based, for the whole spectrum of energy uses including transport; preferably over 20 years.  Standing where we now are, slightly past the edge of the thermodynamic cliff, this is my understanding of what’s required.

In other words, going “green” and surviving it (i.e. avoiding the inverse Red Queen effect) means increasing our Energy Hand from 17 TW to 50 TW (as a rough order of magnitude), with efficiencies shifting from 12% to over 80%.

To elaborate this further, I stress it again, currently the 17 TW do not even suffice to cater for the whole 7.3 billion global population and by a wide margin.  Going “green” with the current “renewable” technology mix and related paradigm would mean devoting a substantial amount of those 17 TW to the “primitive accumulation” of the “green” system.  It should be clear that under this predicament something would have to give, i.e. some of us would get even more energy stressed, and die, or as the Chinese and Indians have been doing for a while we would use much more of remaining fossil resources but then this would accelerate global warming and many other nasties. Alternatively we may face up to changing paradigm so as to rapidly steer away from global EROIs below 10:1 and global energy efficiency around 12%.  This is the usual “can’t have one’s cake and eat it” situation writ large.

Put in an other way, when looking at whole societal system replacement one must look at the whole of what’s required to make the system work, including people and their own energy requirements – this is fundamentally a matter of system boundary definitions related to problem definition (in David Bhom’s sense).   We can illustrate this by considering the Kingdom of Saudi Arabia (KSA).  As a thought experiment, remove oil (the media have reported that KSA’s Crown Prince has seen the writing on some wall re the near end of the oil bonanza).  This brings the KSA population from some 27M down to some 2M, i.e. some 25M people are currently required to keep oil flowing at some 10M bbl/day (including numerous Filipino domestics, medics, lawyers, and so on) plus about three times that population overseas to supply what the 25M require to keep the oil flowing…

Globally, I estimate very roughly that some 1.5 billion people, directly related to oil production, processing distribution and transport matters did require oil at above $100/bbl for their livelihood (including the Filipino domestics).  I call them the Oil People. [4]  Most of them currently are unhappy and struggle; their “demand” for goods and services has dropped considerably since 2014.

So all in all, whole system replacement (on a “do or die” mode) requires considering whole production chain networks from mining the ores, through making the metals, cement, etc., to making the machines, to using them to produce the stuff we require to go 100% sustainable, as well as the energy requirements of not only the Oil People but the full compendium of the Energy People involved, both the “fossil” ones and the “green” ones; while meanwhile we need to keep existing fossil-based energy systems going as much as possible.  Very roughly the Energy People are probably in the order of 3 billion people (and it is not easy to convert a substantial proportion of the “fossil” ones to “green”, including their own related energy requirements – this too has a significant energy cost).  This is where Figure 2, with the interplay of Red Queen and the inverse Red Queen, comes in.

Figure 2

redqueen
In my view at this whole system level we do have a major problem.  Given the very short time window constraint, we can’t afford to get it wrong in terms of how to possibly getting out of there – we have hardly enough time to have one go at it.

Remaining time frame

Indeed, under the sway of the Tooth Fairy (see Part 2) and an increasingly asthmatic Red Queen, we no longer have 35 years, (say up to around 2050).  We have at best 10 years, not to debate and agonise but to actually do, with the next three years being key.  The thermodynamics on this, summarised in Part 1, is rock hard.  This timeframe, combined with the Oil Pearl Harbor challenge and the inverse Red Queen constraints, means in my view that none of the current“doings” renewable-wise can cut it.  In fact much of these stand to make matters worse – I refer here to current interactions between efforts at going green largely within the prevailing paradigm and die hard BAU efforts at keeping fossils going, as perhaps exemplified in the current UK policies discussed earlier.

Weak links

Notwithstanding its apparent power, the GIW is in fact extremely fragile.  It embodies a number of very weak links in its networks.  I have highlighted the oil issue, an issue that defines the overall time frame for dealing with “Apocalypse now”.  In addition to that and to climate change, there are a few other challenges that have been variously put forward by a range of researchers in recent years, such as fresh water availability, massive soil degradation, trace pollutants, degradation of life in oceans (about 99% of life is aquatic), staple food threats (e.g. black stem rust, wheat blast, ground level ozone, etc.), loss of biodiversity and 6th mass extinction, all the way to Joseph Tainter’s work concerning the links between energy flows, power (in TW), complexity and overshoot to collapse.[5]

These weak links are currently in the process of breaking or are about to break, the breaks forming a self-reinforcing avalanche (SOC) or Perfect Storm.  All have the same key timeframe of about 10 years as an order of magnitude for acting.  All require a fair “whack” of energy as a prerequisite to handling them (the “whack” being a flexible and elastic unit of something substantial that usually one does not have).

It’s all burnt up

carbonbudget

Figure 6 – Carbon all burnt

Recent research shows that sensitivity to climate forcing has been substantially underestimated, meaning that we must expect much more warming in the longer term than touted so far.[6]  This further exacerbates what we already knew, namely that there is no such thing as a “carbon budget” of fossils the GIW could still burn, and no way of staying below the highly political and misleading 2oC COP21 objective (Figure 6).[7]

The 350ppm CO2 equivalent advocated by Hansen et al. is a safe estimate – a boundary crossed in the late 1980s, some 28 years ago.  So the reality is that we can’t escape actually extracting CO2 from the atmosphere, somehow, if we want to avoid trying to survive in a few mosquito infested areas of the far north and south, while some 80% of the planet becomes non-habitable in the longer run.  Direct Air Capture of atmospheric CO2 (DAC) is something that also requires a fair “whack” of energy, hence the additional 10TW I consider is required to get out of trouble.

Cognitive failure

eroei

Figure 7 – EROI cognitive failure

The “Brexit” saga is perhaps the latest large-scale demonstration of cognitive failure in a very long series.  That is to say, the failure on the part of decision-making elites to make use of available knowledge, experience, and expertise to tackle effectively challenges within the timeframe required to do so.

Cognitive failure is probably most blatant, but largely remaining unseen, concerning energy, the Oil Fizzle DK and matters of energy returns on energy investments (EROI or EROEI).  What we can observe is a triple failure of BAU, but also of most current “green” alternatives (Figure 7): (1) the BAU development trajectory since the 1950s failed; (2) there has been a failure to take heed of over 40 years of warnings; and (3) there has been a failure to develop viable alternatives.

However, although I am critical of aspects of recent evaluations of the feasibility of going 100% renewable,[8] I do think it remains feasible with existing knowledge, no “blue sky” required, i.e. to reach in the order of 50TW 100% solar I outlined earlier, but I also think that a crash on the cliff side of the Seneca is no longer avoidable.  In other words I consider that it remains possible to partly retrieve the situation while the GIW crashes so long as enough people do realise that one can’t change paradigm on the down side as one may do on the upside of a Seneca, which presently our elites, in full blown cognitive failure mode, don’t understand.

To illustrate this matter further and highlight why I consider that production EROIs well above 30:1 are necessary to get us out of trouble consider Figure 8.

freelunch

Figure 8 – The necessity of very high EROIs

This is expanded from similar attempts by Jessica Lambert et al., to perhaps highlights what sliding down the thermodynamic cliff entails.  Charles Hall has shown that a production EROI of 10:1 corresponds roughly to an end-user EROI of 3.3:1 and is the bare minimum for an industrial society to function.[9]  In sociological terms, for 10:1 think of North Korea.  As shown on Figure 7, currently I know of no alternative, either unconventional fossils based, nuclear or “green” technologies with production EROIs (i.e. equivalent to the well head EROI for oil) above 20:1; most remain below 10:1.  I do think it feasible to go back above 30:1, in 100% sustainable fashion, but not along prevalent modes of technology development, social organisation, and decision-making.

The hard questions

So prevailing cognitive failure brings us back to Bohm’s “enquiry into the appropriateness of the question”.  In conclusion of a 2011 paper, Joseph Tainter raised four questions that, in my view, squarely address such an enquiry (Figure 9).[10] To date those four questions remain unanswered by both tenants of BAU and advocates of going 100% renewable.

We are in an unprecedented situation.  As stressed by Tainter, no previous civilisation has ever managed to survive the kind of predicament we are in.  However, the people living in those civilisations were mostly rural and had a safety net, in that their energy source was 100% solar, photosynthesis for food, fibre and timber – they always could keep going even though it may have been under harsh conditions.  We no longer have such a safety net; our entire food systems are almost completely dependent on that net energy from oil that is in the process of dropping to the floor and our food supply systems cannot cope without it.

Figure 9 – Four questions

perfectstorm2

Figure 10 summarises how, in my view, Tainter’s four questions, his analyses and mine combine to define the unique situation we are in.  If we are to avoid sliding all the way down the thermodynamic cliff, we must shift to a new “energy pool”.  In this respect, dealing with the SOC-like Perfect Storm while carrying out such a shift both excludes “shrinking”our energy base (as many “greens” would have it) and necessitates abandoning the present highly wasteful energy use paradigm – hence the shift from 17TW fossil to 50TW 100% solar-based and with over 80% useful uses of energy that I advocated earlier, over a 20 to 30 years timeframe.

Figure 10 – Ready to jumping into a new energy pool?

specialtimes

 

Figure 10 highlights that humankind has been through a number of such shifts over the last 6 million years or so.  Each shift has entailed:

(1) a nexus of revolutionary innovations encompassing thermodynamics and related techniques,

(2) social innovation (à la Cornelius Castoriadis’ imaginary institution of society) and

(3) innovations concerning the human psyche, i.e. how we think, decide and act.

Our predicament, as we have just begun to slide down the fossil fuels thermodynamic cliff, similarly requires such a nexus if we are to succeed at a new “energy pool shift”.  Just focusing on thermodynamics and technology won’t suffice.  The kind of paradigm change I keep referring to integrates technology, social innovations and innovation concerning the human psyche about ways of avoiding cognitive failure.  This is a lot to ask, however it is necessary to address Tainter’s questions.

This challenge is a measure of the huge selection pressure humankind managed to place itself under.  Presently, I see a lot going on very creatively in all these three intimately related domains.  Maybe we will succeed in making the jump over the cliff?

Bio: Dr Louis Arnoux is a scientist, engineer and entrepreneur committed to the development of sustainable ways of living and doing business.  His profile is available on Google+ at: https://plus.google.com/u/0/115895160299982053493/about/p/pub

[1] Dellingpole, James, 2013, “The dirty secret of Britain’s power madness: Polluting diesel generators built in secret by foreign companies to kick in when there’s no wind for turbines – and other insane but true eco-scandals”, in The Daily Mail, 13 July.

[2] As another example, Axel Kleidon has shown that extracting energy from wind (as well as from waves and ocean currents) on any large scale would have the effect of reducing overall free energy usable by humankind (free in the thermodynamic sense, due to the high entropy levels that these technologies do generate, and as opposed to the direct harvesting of solar energy through photosynthesis, photovoltaics and thermal solar, that instead do increase the total free energy available to humankind) – see Kleidon, Axel, 2012, How does the earth system generate and maintain thermodynamic disequilibrium and what does it imply for the future of the planet?, Max Planck Institute for Biogeochemistry, published in Philosophical Transaction of the Royal Society A,  370, doi: 10.1098/rsta.2011.0316.

[3] E.g. Murray and King, Nature, 2012.

[4] This label is a wink to the Sea People who got embroiled in the abrupt end of the Bronze Age some 3,200 years ago, in that same part of the world currently bitterly embroiled in atrocious fighting and terrorism, aka MENA.

[5] Tainter, Joseph, 1988, The Collapse of Complex Societies, Cambridge University Press; Tainter, Joseph A., 1996, “Complexity, Problem Solving, and Sustainable Societies”, in Getting Down to Earth: Practical Applications of Ecological Economics, Island Press, and Tainter, Joseph A. and Crumley, Carole, “Climate, Complexity and Problem Solving in the Roman Empire” (p. 63), in Costanza, Robert, Graumlich, Lisa J., and Steffen, Will, editors, 2007, Sustainability or Collapse, an Integrated History and Future of People on Earth, The MIT Press, Cambridge, Massachusetts and London, U.K., in cooperation with Dahlem University Press.

[6] See for example Armour, Kyle, 2016, “Climate sensitivity on the rise”, www.nature.com/natureclimatechange, 27 June.

[7] For a good overview, see Spratt, David, 2016, Climate Reality Check, March.

[8] For example, Jacobson, Mark M. and Delucchi, Mark A., 2009, “A path to Sustainability by 2030”, in Scientific American, November.

[9] Hall, Charles A. S. and Klitgaard, Kent A., 2012, Energy and the Wealth of Nations, Springer; Hall, Charles A. S., Balogh, Stephen, and Murphy, David J. R., 2009, “What is the Minimum EROI that a Sustainable Society Must Have?” inEnergies, 2, 25-47; doi:10.3390/en20100025. See also Murphy, David J., 2014, “The implications of the declining energy return on investment of oil production” in Philosophical Transaction of the Royal Society A, 372: 20130126,http://dx.doi.org/10.1098/rsta.2013.0126.

[10] Joseph Tainter, 2011, “Energy, complexity, and sustainability: A historical perspective”, Environmental Innovation and Societal Transitions, Elsevier





Some reflections on the Twilight of the Oil Age – part I

15 07 2016

Guest post by Louis Arnoux, republished from Ugo Bardi’s Cassandra’s Legacy blog…..

This three-part post was inspired by Ugo’s recent post concerning Will Renewables Ever ReplaceFossils? and recent discussions within Ugo’s discussion group on how is it that “Economists still don’t get it”?  It integrates also numerous discussion and exchanges I have had with colleagues and business partners over the last three years.

Introduction

Since at least the end of 2014 there has been increasing confusions about oil prices, whether so-called “Peak Oil” has already happened, or will happen in the future and when, matters of EROI (or EROEI) values for current energy sources and for alternatives, climate change and the phantasmatic 2oC warming limit, and concerning the feasibility of shifting rapidly to renewables or sustainable sources of energy supply.  Overall, it matters a great deal whether a reasonable time horizon to act is say 50 years, i.e. in the main the troubles that we are contemplating are taking place way past 2050, or if we are already in deep trouble and the timeframe to try and extricate ourselves is some 10 years. Answering this kind of question requires paying close attention to system boundary definitions and scrutinising all matters taken for granted.

It took over 50 years for climatologists to be heard and for politicians to reach the Paris Agreement re climate change (CC) at the close of the COP21, late last year.  As you no doubt can gather from the title, I am of the view that we do not have 50 years to agonise about oil.  In the three sections of this post I will first briefly take stock of where we are oil wise; I will then consider how this situation calls upon us to do our utter best to extricate ourselves from the current prevailing confusion and think straight about our predicament; and in the third part I will offer a few considerations concerning the near term, the next ten years – how to approach it, what cannot work and what may work, and the urgency to act, without delay.

Part 1 – Alice looking down the end of the barrel

In his recent post, Ugo contrasted the views of the Doomstead Diner‘s readers  with that of energy experts regarding the feasibility of replacing fossil fuels within a reasonable timeframe.  In my view, the Doomstead’s guests had a much better sense of the situation than the “experts” in Ugo’s survey.  To be blunt, along current prevailing lines we are not going to make it.  I am not just referring here to “business-as-usual” (BAU) parties holding for dear life onto fossil fuels and nukes.  I also include all current efforts at implementing alternatives and combating CC.  Here is why.

The energy cost of system replacement

What a great number of energy technology specialists miss are the challenges of whole system replacement – moving from fossil-based to 100% sustainable over a given period of time.  Of course, the prior question concerns the necessity or otherwise of whole system replacement.  For those of us who have already concluded that this is an urgent necessity, if only due to CC, no need to discuss this matter here.  For those who maybe are not yet clear on this point, hopefully, the matter will become a lot clearer a few paragraphs down.

So coming back for now to whole system replacement, the first challenge most remain blind to is the huge energy cost of whole system replacement in terms of both the 1st principle of thermodynamics (i.e. how much net energy is required to develop and deploy a whole alternative system, while the old one has to be kept going and be progressively replaced) and also concerning the 2nd principle (i.e. the waste heat involved in the whole system substitution process).  The implied issues are to figure out first how much total fossil primary energy is required by such a shift, in addition to what is required for ongoing BAU business and until such a time when any sustainable alternative has managed to become self-sustaining, and second to ascertain where this additional fossil energy may come from.

The end of the Oil Age is now

If we had a whole century ahead of us to transition, it would be comparatively easy.  Unfortunately, we no longer have that leisure since the second key challenge is the remaining timeframe for whole system replacement.  What most people miss is that the rapid end of the Oil Age began in 2012 and will be over within some 10 years.  To the best of my knowledge, the most advanced material in this matter is the thermodynamic analysis of the oil industry taken as a whole system (OI) produced by The Hill’s Group (THG) over the last two years or so (http://www.thehillsgroup.org).

THG are seasoned US oil industry engineers led by B.W. Hill.  I find its analysis elegant and rock hard.  For example, one of its outputs concerns oil prices.  Over a 56 year time period, its correlation factor with historical data is 0.995.  In consequence, they began to warn in 2013 about the oil price crash that began late 2014 (see: http://www.thehillsgroup.org/depletion2_022.htm).  In what follows I rely on THG’s report and my own work.

Three figures summarise the situation we are in rather well, in my view.

Figure 1 – End Game

oilendgame

For purely thermodynamic reasons net energy delivered to the globalised industrial world (GIW) per barrel by the oil industry (OI) is rapidly trending to zero.  By net energy we mean here what the OI delivers to the GIW, essentially in the form of transport fuels, after the energy used by the OI for exploration, production, transport, refining and end products delivery have been deducted.

However, things break down well before reaching “ground zero”; i.e. within 10 years the OI as we know it will have disintegrated. Actually, a number of analysts from entities like Deloitte or Chatham House, reading financial tealeaves, are progressively reaching the same kind of conclusions.[1]

The Oil Age is finishing now, not in a slow, smooth, long slide down from “Peak Oil”, but in a rapid fizzling out of net energy.  This is now combining with things like climate change and the global debt issues to generate what I call a “Perfect Storm” big enough to bring the GIW to its knees.

In an Alice world

At present, under the prevailing paradigm, there is no known way to exit from the Perfect Storm within the emerging time constraint (available time has shrunk by one order of magnitude, from 100 to 10 years).  This is where I think that Doomstead Diner’s readers are guessing right.  Many readers are no doubt familiar with the so-called “Red Queen” effect illustrated in Figure 2 – to have to run fast to stay put, and even faster to be able to move forward.  The OI is fully caught in it.

Figure 2 – Stuck on a one track to nowhere

perfectstorm

The top part of Figure 2 highlights that, due to declining net energy per barrel, the OI has to keep running faster and faster (i.e. pumping oil) to keep supplying the GIW with the net energy it requires.  What most people miss is that due to that same rapid decline of net energy/barrel towards nil, the OI can’t keep “running” for much more than a few years – e.g. B.W. Hill considers that within 10 years the number of petrol stations in the US will have shrunk by 75%…

What people also neglect, depicted in the bottom part of Figure 2, is what I call the inverse Red Queen effect (1/RQ). Building an alternative whole system takes energy that to a large extent initially has to come from the present fossil-fuelled system.  If the shift takes place too rapidly, the net energy drain literally kills the existing BAU system.[2] The shorter the transition time the harder is the 1/RQ.

I estimate the limit growth rate for the alternative whole system at 7% growth per year.

In other words, current growth rates for solar and wind, well above 20% and in some cases over 60%, are not viable globally.  However, the kind of growth rates, in the order of 35%, that are required for a very short transition under thePerfect Storm time frame are even less viable – if “we” stick to the prevailing paradigm, that is.  As the last part of Figure2 suggests, there is a way out by focusing on current huge energy waste, but presently this is the road not taken.

On the way to Olduvai

In my view, given that nearly everything within the GIW requires transport and that said transport is still about 94% dependent on oil-derived fuels, the rapid fizzling out of net energy from oil must be considered as the defining event of the 21st century – it governs the operation of all other energy sources, as well as that of the entire GIW.  In this respect, the critical parameter to consider is not that absolute amount of oil mined (as even “peakoilers” do), such as Million barrels produced per year, but net energy from oil per head of global population, since when this gets too close to nil we must expect complete social breakdown, globally.

The overall picture, as depicted ion Figure 3, is that of the “Mother of all Senecas” (to use Ugo’s expression).   It presents net energy from oil per head of global population.[3]  The Olduvai Gorge as a backdrop is a wink to Dr. Richard Duncan’s scenario (he used barrels of oil equivalent which was a mistake) and to stress the dire consequences if we do reach the“bottom of the Gorge” – a kind of “postmodern hunter-gatherer” fate.

Oil has been in use for thousands of year, in limited fashion at locations where it seeped naturally or where small well could be dug out by hand.  Oil sands began to be mined industrially in 1745 at Merkwiller-Pechelbronn in north east France (the birthplace of Schlumberger).  From such very modest beginnings to a peak in the early 1970s, the climb took over 220 years.  The fall back to nil will have taken about 50 years.

The amazing economic growth in the three post WWII decades was actually fuelled by a 321% growth in net energy/head.  The peak of 18GJ/head in around 1973, was actually in the order of some 40GJ/head for those who actually has access to oil at the time, i.e. the industrialised fraction of the global population.

Figure 3 – The “Mother of all Senecas”

seneca
In 2012 the OI began to use more energy per barrel in its own processes (from oil exploration to transport fuel deliveries at the petrol stations) than what it delivers net to the GIW.  We are now down below 4GJ/head and dropping fast.

This is what is now actually driving the oil prices: since 2014, through millions of trade transactions (functioning as the“invisible hand” of the markets), the reality is progressively filtering that the GIW can only afford oil prices in proportion to the amount of GDP growth that can be generated by a rapidly shrinking net energy delivered per barrel, which is no longer much.  Soon it will be nil. So oil prices are actually on a downtrend towards nil.

To cope, the OI has been cannibalising itself since 2012.  This trend is accelerating but cannot continue for very long. Even mainstream analysts have begun to recognise that the OI is no longer replenishing its reserves.  We have entered fire-sale times (as shown by the recent announcements by Saudi Arabia (whose main field, Ghawar, is probably over 90% depleted) to sell part of Aramco and make a rapid shift out of a near 100% dependence on oil and towards “solar”.

Given what Figure 1 to 3 depict, it should be obvious that resuming growth along BAU lines is no longer doable, that addressing CC as envisaged at the COP21 in Paris last year is not doable either, and that incurring ever more debt that can never be reimbursed is no longer a solution, not even short-term.

Time to “pull up” and this requires a paradigm change capable of avoiding both the RQ and 1/RQ constraints.  After some 45 years of research, my colleagues and I think this is still doable.  Short of this, no, we are not going to make it, in terms of replacing fossil resources with renewable ones within the remaining timeframe, or in terms of the GIW’s survival.

Next: 

Part 2 – Enquiring into the appropriateness of the question

Part 3 – Standing slightly past the edge of the cliff

 

[1] See for example, Stevens, Paul, 2016, International Oil Companies: The Death of the Old Business Model, Energy, Research Paper, Energy, Environment and Resources, Chatham House; England, John W., 2016, Short of capital? Risk of underinvestment in oil and gas is amplified by competing cash priorities, Deloitte Center for Energy Solutions, Deloitte LLP.  The Bank of England recently commented: “The embattled crude oil and natural gas industry worldwide has slashed capital spending to a point below the minimum required levels to replace reserves — replacement of proved reserves in the past constituted about 80 percent of the industry’s spending; however, the industry has slashed its capital spending by a total of about 50 percent in 2015 and 2016. According to Deloitte’s new study {referred to above], this underinvestment will quickly deplete the future availability of reserves and production.”

[2] This effect is also referred to as “cannibalising”.  See for example, J. M. Pearce, 2009, Optimising Greenhouse Gas Mitigation Strategies to Suppress Energy Cannibalism, 2nd Climate Change Technology Conference, May 12-15, Hamilton, Ontario, Canada.  However, in the oil industry and more generally the mining industry, cannibalism usually refers to what companies do when there are reaching the end of exploitable reserves and cut down on maintenance, sell assets at a discount or acquires some from companies gone bankrupt, in order to try and survive a bit longer.  Presently there is much asset disposal going on in the Shale Oil and Gas patches, ditto among majors, Lukoil, BP, Shell, Chevron, etc….  Between spending cuts and assets disposal amounts involved are in the $1 to $2 trillions.

[3] This graph is based on THG’s net energy data, BP oil production data and UN demographic data.