The problem with renewable energy

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switters's picture
switters
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The problem with renewable energy

Pedro Pietro gave an excellent presentation at the Association for the Study of Peak Oil (ASPO) conference which is happening right now.  He made the following very important point:

"...what we call Renewable Energies today are in fact non-renewable systems capturing renewable energy. The renewable infrastructure being built uses a great deal of fossil fuel inputs that need to be taken in account."

This is absolutely crucial to understand and unfortunately it is left out of almost every discussion of renewable energy that I see.  All of the technologies and infrastructure we use to capture, generate and distribute renewable energy is dependent upon dwindling fossil fuel resources (primarily oil).  Some people refer to this as the "oil subsidy" that renewable energy production depends upon.  

Pietro makes another important point:

"...we won't make the transition away from fossil fuels by simply concentrating on electricity generation. Some sectors are still heavily reliant on fossil fuel products (e.g. Transport, Mining) and industries like Wind in turn rely heavily on these fossil-fuel dependent industries."

Renewable energy generates electricity, not liquid fuel.  However, generating this electricity from renewable sources is highly dependent upon liquid fuels. "Alternative" liquid fuels like biofuels and hydrogen (which is an energy storage medium, not a fuel) are right now dependent upon oil for their production.

What we have is a vicious cycle of alternatives that are all currently dependent to some degree or another on a quickly depleting, non-renewable resource - oil.  This is why it is almost certain that the future will be less energy-dense than it is today, and why many of the the optimistic projections about renewables that are bandied about in the media and on internet forums are unlikely to be realized.

The entire cycle of energy generation must be considered in the EROEI calculations, or they are worthless.

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Re: The problem with renewable energy
You've cast a little and much needed light on what I call the "Oil as pixie dust" cunundrum. There's simply no escaping oil's pervasiveness in our lives.
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Re: The problem with renewable energy

thanks for the post switters.

that is why our current financial meltdown is such a tragedy.

the money that could be used  for the development of alternative sources is being urinated away.

i recently attended a sustainablity summit. and there was much discussion about alternative fuels.

it appears that the only viable replacement is algae. it is the closest to the energy from the sun.

but it still needs huge inputs of oil to get off the ground. one good thing about it is you can also get 

plastics from it. but all in all i am not encouraged with the way  our current energy issues are being handled.

at the moment the best solution is to conserve as much as we can as per amory lovins and rmi.

i have watched the debates and listened to obama and mccain and have yet to hear the term peak oil mentioned.

the dialog is all about getting off middle east oil, yet that is an impossibility. 

so i guess we should all emigrate to dubai..........as jim rogers suggests

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Re: The problem with renewable energy

 

I certainly agree that EROEI is a required consideration.  Charles Hall's posts on various sources at TOD are sobering, even if some of his conclusions are very preliminary and some are contested (I recall the nuclear numbers in particular being subject to widely different assessments; see for example Charles Barton's comments on his site for some healthy skepticism).  And I can't argue that we will need huge oil imputs to get a renewable infrastructure off the ground.  But don't we still have that?  And isn't the good (ok, maybe better) news delivered by PO that we are not running out of oil -- there's plenty of it -- just not so much that it will still be cheap in light of exploding demand?  A quick look at Hutter's compilation of 23 scenarios suggests that in 2075 -- a good 68 years away -- flow rates will still be at 60-70mbd range (predictions are all over the place, but this seems a fair gloss of most, tho I see that Campbell breaks far from the crowd and comes in at around 20mbd).  If the 60-70 figure is roughly right, don't we have a long time to get to a point where we use a lot less oil?  Wouldn't we in fact want to be using less than this amount well before then?

Just stepping back a bit, I have (before these posts) been less worried about whether we are energy intensive or not and more about whether we can have enough (dare I say "more than enough") energy for sustainable, happy lives (for all of us).  But I sense in other comments that "energy intensive" is considered to be intrinsically related to economic growth (and maybe environmental degradation) and therefore less energy intensive is required for a future in which fewer of us live  well.  Is this correct?  And if so, does energy intensity and economic growth/environmental degradation have to go together?

And just to be transparent, I don't ask rhetoric questions and I don't do sarcasm on the internet (it too oftens sails wide).  I really am trying to puzzle my way through this -- and I'm grateful for the responses I've gotten so far. 

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Re: The problem with renewable energy
[quote=Akrotiri21]

 

I certainly agree that EROEI is a required consideration.  Charles Hall's posts on various sources at TOD are sobering, even if some of his conclusions are very preliminary and some are contested (I recall the nuclear numbers in particular being subject to widely different assessments; see for example Charles Barton's comments on his site for some healthy skepticism).  And I can't argue that we will need huge oil imputs to get a renewable infrastructure off the ground.  But don't we still have that?  And isn't the good (ok, maybe better) news delivered by PO that we are not running out of oil -- there's plenty of it -- just not so much that it will still be cheap in light of exploding demand?  A quick look at Hutter's compilation of 23 scenarios suggests that in 2075 -- a good 68 years away -- flow rates will still be at 60-70mbd range (predictions are all over the place, but this seems a fair gloss of most, tho I see that Campbell breaks far from the crowd and comes in at around 20mbd).  If the 60-70 figure is roughly right, don't we have a long time to get to a point where we use a lot less oil?  Wouldn't we in fact want to be using less than this amount well before then?[/quote]

As you point out, there are widely varying estimates on depletion rates once peak hits.  Those estimates depend upon a large number of variables that can't be predicted in advance.  For example, it's hard to factor in the effects of a terrorist attack on major production facilities and/or another war in the Middle East.  That said, I've seen estimates in a range between 2.5% and 9% a year (as Chris pointed out, the recent IEA report before it was amended suggested the number would be 9% without $300+ billion investment).

If we take 5% as a mean, in 10 years we'd have 50% less oil production than we do now.  Since we're currently producing 84mbd, that means we'd hav only 42mbd per day by that time.  The problem, of course, is that demand will increase during that time because of India and China.  Both of these opposing factors will contribute to the supply gap / shortage.

Unconventionals like tar sands, oil shale, etc. may make up some of the difference, but again we need large amounts of conventional crude to get that stuff out and as conventional gets more expensive the EROEI of those unconventionals becomes less and less attractive.  The same goes for all "renewable" sources of energy that depend upon non-renewable, oil intensive infrastructure to be utilized.

[quote]Just stepping back a bit, I have (before these posts) been less worried about whether we are energy intensive or not and more about whether we can have enough (dare I say "more than enough") energy for sustainable, happy lives (for all of us).  But I sense in other comments that "energy intensive" is considered to be intrinsically related to economic growth (and maybe environmental degradation) and therefore less energy intensive is required for a future in which fewer of us live  well.  Is this correct?  And if so, does energy intensity and economic growth/environmental degradation have to go together?

And just to be transparent, I don't ask rhetoric questions and I don't do sarcasm on the internet (it too oftens sails wide).  I really am trying to puzzle my way through this -- and I'm grateful for the responses I've gotten so far. 

[/quote]

You cannot have economic growth without a growth in the supply of energy.  I have not seen a single economist who is taken seriously argue with that fundamental truth.

As to whether economic growth necessarily equals environmental destruction, those who advocate for "sustainable growth" or "green development" would say no.  However, as I pointed out in another post the phrase "sustainable growth" is an oxymoron.  There is no such thing.  Growth is inherently unsustainable on a finite planet with finite resources.  So, by definition, all growth is ultimately environmentally destructive.

The sooner we accept these basic tenets and begin to restructure our civilization accordingly, the better off we'll be in the future.  The heartbreaking and tragic reality that is just too difficult for most of us to face (myself included at times) is that billions of people are going to die during this transition and there will be a lot of pain and suffering along the way for those who do make it.

On the other hand, I truly believe that the way of life we will be forced to live in the future will be more rewarding and satisfying for nearly everybody.  Those of us alive now may not live to see that time, but I am committed to working towards it nonetheless.

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Re: The problem with renewable energy
[quote]

"...what we call Renewable Energies today are in fact non-renewable systems capturing renewable energy. The renewable infrastructure being built uses a great deal of fossil fuel inputs that need to be taken in account."

[/quote]

Wow, really!

Heres how it works:

When renewable energy resources make up 0% of the total energy system. It is inherent that all renewable energy sources must be built with non-renewable energy.

When renewable energy resources make up 100% of the total energy system. It is inherent that all renewable energy sources must be built with only renewable energy.

We can therefore conclude, that every time we increase the renewable proportion of all produced energy, that the amount of renewable energy used in the production of all future renewable energy sources will likewise increase. This relationship may not, however, be directly proportional.

We can also conclude, that while our proportion of renewable energy remains relatively small, that any derision or silliness that questions that non-renewable energy is being used to produce our new renewable energy sources, is itself silly and perhaps deserving of some derision.

At least, that is, until the proportion of renewable energy as compared to all energy is sufficiently high (30-60% would be a good starting number). At which point such things may deserve discussion.

A long story short, this is not the time to be concerned about what type of energy is being used to produce our renewable energy. Instead, we should focus primarily on increasing the percentage of our energy that is renewable. If the production systems and infrastructure does not follow when the percentage of all energy that is renewable has become high. Then and only then does a push to force those production systems to 'all renewable' deserve merit.

To be frank, I don't think such a push is, or will be necessary. There are plenty of technologies to supplement nearly every peice of the infastructure... provided of course, that there already is renewable energy available!

These technologies will, however, never gain ground until these energy resources have already made deep penetration into our economic system.

--

Steve

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Re: The problem with renewable energy

I'm casting a big objection to the cost effectiveness of this use of cost analysis.

On the user end - IF solar, wind or other alt energy items are used and integrated properly - then they will reduce dependency on oi/gas for the long term.The whole alt energy mentality takes an adjustment of your thinking -to think you are going to continue to live as you do now but just converting to wind or solar is nuts.  

As few examples:

We bought a solar panel to heat & cool my home. The cost of the 15watt panel was $150 ($105+s/h), 150 ft of dryer flex tubing ($82), and a dc fan recycled from a car radiator. My time (3 hours at $60/hr) means I spent $367 to add supplemental heating and completely replace cooling via ac in my house for the life of the system. IF I live 20 more years - it cost me $18.35 to save about $60/year (at present rates) of natural gas and electricity. The pay-back time is about 6 years.

I bought no mowing grasses to replace a high maintenance lawn at $230. I used a chemical to kill off the old lawn for $97 and some machinery to do some leveling and added compost (rental & gas was $250) -total $1057 (plus my time +8 [email protected]$60). At 2 hours a week maintenance on my lawn for a 6 month growing season - (2hours*$10 per hr*4wks*6months - paid help when I can find it), equipment ($1,500/10 years life = $150 a year PLUS GAS . . .when it's not needing some kind of repair) is about $630 a year. That is a pay back time of about 2 years - and some peace of mind and relaxation for the non-future use of gas/oil at the present price - let alone the future price. . . not to mention - the reduction in labor. Note I could have gone with some goats or sheep.

Last example we're in process of: I need to replace my septic system in a watershed zone. The cost of a convention holding tank would be about $6,000. For me to replace the system with a methane digesting was under $400 - AND I GET FREE COOKING FUEL FOR LIFE

Things that have not been so great a change- anything with a battery or storage of energy because it doubles the cost of the system. I'm still on the fence about this and can't decide if I want to switch to air pressure, h or dive $ into lithium ion batteries. . . though the best battery technology I ever saw was made from ratio-active waste and the batteries I've had for 18 years are still running (in a calculator).  Another cost we haven't bought into yet is a solar room to collect heat winters; solar hot water, buut that will mainly be recycled parts and that's time issue.

And yes, conservation is the key - but I'm sure some one can do a cost analysis on how conserving takes up gas/oil too.

Think long term, think how you can conserve in the life stlye you now live and envision how you will live without any energy supporting you - then use alt energy technology to lock in your costs where you can now - before it gets too late.

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Re: The problem with renewable energy
[quote=srbarbour]

A long story short, this is not the time to be concerned about what type of energy is being used to produce our renewable energy. Instead, we should focus primarily on increasing the percentage of our energy that is renewable. If the production systems and infrastructure does not follow when the percentage of all energy that is renewable has become high. Then and only then does a push to force those production systems to 'all renewable' deserve merit.

[/quote]

I'm not "concerned" with what type of energy is being used to produce renewables; I am merely pointing out that it takes energy to produce renewable energy, and right now that energy is mostly liquid fuel (oil, specifically).  

And that's what it will be for the foreseeable future.  We do not currently have the technology to run long-haul, multiple axle trucks or heavy machinery like tractors or boats on electricity.  Infrastructure development is heavily dependent upon these methods of moving things around.  Liquid fuel alternatives (with the possible exception of algae biofuels) are among the least energy dense renewables from an EROEI perspective, and they are quite heavily dependent upon conventional oil themselves (although this of course could be offset by future production of biofuels).

I'm not saying we won't develop renewable technology and infrastructure.  We will.  I'm not saying we won't/can't use oil to do it.  We will and we should.  I'm just saying that it's highly unlikely we'll be able to replace oil with renewables in a smooth and pain-free way.  I'm also saying that I personally believe we will never fully replace oil with renewables and that we are living right now in the most energy-rich society the world will see for quite some time - possibly ever.  Of course I can't "prove" that, and I wouldn't even try to.  It's just an opinion based on my analysis, research and observations on human behavior.

 

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Re: The problem with renewable energy
[quote]

I'm not "concerned" with what type of energy is being used to produce renewables; I am merely pointing out that it takes energy to produce renewable energy, and right now that energy is mostly liquid fuel (oil, specifically). 

[/quote]

Ah.  I apologize then.   Its just I've heard this kind of argument used to dismiss various technologies over and over again.

I agree, that for the foreseeable future most things will be built and run on non-renewable energy.  That is a direct consequence of our energy primarily being non-renewable.   That shift though, will occur much faster in a constrained energy environment.

[quote] Liquid fuel alternatives (with the possible exception of algae biofuels) are among the least energy dense renewables from an EROEI perspective, and they are quite heavily dependent upon conventional oil themselves (although this of course could be offset by future production of biofuels).[/quote]

I'd add that various cellulosic ethanols are rated at 5:1 energy ratios.   Almost all of these can be produced without a drop of oil additive, though not in so large of quantities. 

[quote] I'm just saying that it's highly unlikely we'll be able to replace oil with renewables in a smooth and pain-free way.[/quote]

Agreed.   There rarely is a smooth and pain free transition for any major economic shift -- as the buggy whip manufactures can attest. Tongue out

[quote]I'm also saying that I personally believe we will never fully replace oil with renewables and that we are living right now in the most energy-rich society the world will see for quite some time - possibly ever.[/quote] 

I'd disagree there.   Solar energy has the potential to swell human energy consumption several magnituedes higher.

Some order of magnitude:

[quote]15 TW - geo: average total power consumption of the human world in 2004

174.0 PW - astro: total power received by the earth from the sun...
[/quote] 

In otherwords, the total energy hitting earth is ~1.74x10^17 and the total energy consumed in 2004 is ~1.5x10^13

Therefore, if we covered 1% of the Earth surface with solar cells that collected/stored energy at 1% efficiency we'd still beat the 2004 energy consumption of the world by 16%.  With, uh, lots of room for expansion.   

(Space based solar has finite limits that defy all human conception.) 

We will definitely live in a much more energy rich world in the future.  We might though, face a 10-30 year gap before finally surpassing a short term peak.

We will also definitely replace oil with renewables.  Oil is, after all, just a carbon chain.

--

Steve 

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Re: The problem with renewable energy

 

Switters,

A couple of things I am not sure about in your last response.  One is your statement that:

If we take 5% as a mean, in 10 years we'd have 50% less oil production than we do now.  Since we're currently producing 84mbd, that means we'd hav only 42mbd per day by that time.  The problem, of course, is that demand will increase during that time because of India and China.  Both of these opposing factors will contribute to the supply gap / shortage.

Here are my concerns:

(1) I gather you use 5% as the mean between 2% and 9%, but this seems to be prior to yearly capacity additions and the bringing on of any non-conventionals.  Yearly capacity additions over the last 8 years have been something like 4mbd, or 4-5 % and we should be able to expect something -- 2-3 mbd from other sources coming on -- for a few years, anyway.  So if 5% is prior to these additions, then decline is roughly flat; if after, then I think you are assuming a pretty high underlying decline rates -- something like 10-11%.  That latter may be right, but it is currently an outlier prediction.  (Even Campbell has used a 2.5% net decline rate).

(2) As I run the numbers, a 5% yearly decline rate doesn't get us 50% less or from 84 to 82, but to 65.

How I get there: multiplying 84mbd by 95% gets us 79.8 after year 1; multiplying 79.8 by 95% gets us 75.81 after year two; multiplying 75.81 by 95% gets us 72.01 after year three; multiplying 72.01 by 95% gets us 68.4 after year four; multiplying 68.4 by 95% gets us 64.99 after five years.  So 5 full years later we have a 23% total reduction.  I don't know if I have done this incorrectly, but it falls squarely in the range of most projections (as graphed by Hutter).

(3) As I understand it, demand is a member of a 3-part equation, with price bringing supply into equilibrium with demand.  Where production is very cheap (plentiful) demand will be high.  Kind of like with cheap electricity, we all wander around leaving lights on and buy greedy appliances.  But if electricity becomes very expensive, then demand diminishes very quickly (cut the lights, install energy savers).  So it seems to me misleading to take current levels of demand at current prices and suggest that this is what demand will be and anything less than that equals a shortage; it is what demand would be at the same very cheap prices.  But we agree that scarcity will be kicking in, rapidly sending signals to consumers to substitute, converserve, forego use.  And here is where I agree with you about something that makes me a bit optimistic about our demand elasticity: our current way of life doesn't actually make us very happy, so making changes isn't really sacrifice, and many of us are already ready to do it.  Anecdotally I think of one Japanese teenager's response to a question about what kind of car she would like:  None: "Cars are so 20th century."

Next, you wrote:

 You cannot have economic growth without a growth in the supply of energy.  I have not seen a single economist who is taken seriously argue with that fundamental truth.

This is, I think, in response to my question:

 But I sense in other comments that "energy intensive" is considered to be intrinsically related to economic growth (and maybe environmental degradation) and therefore less energy intensive is required for a future in which fewer of us live  well.  Is this correct?

All I was asking was whether energy intensive somehow entailed economic growth, not whether growth required additional energy; put differently, can one have an intensive-energy-steady-state-economy, or is that somehow incoherent?

Regarding the "fundamental truth", isn't it true that you can have economic growth with a static supply of energy if you capture efficiency gains?  Or is that a mistake?

I think we at least agree that -- one way or another -- we will be moving to a way of life that is more sustainable and enjoyable.  Thanks again for the conversation. 

 

 

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Re: The problem with renewable energy
[quote=srbarbour]

We will also definitely replace oil with renewables.  Oil is, after all, just a carbon chain.

[/quote]

There's no doubt that solar has the potential to replace the energy density of oil.  The question is whether we'll learn to harness the energy in that quantity and then build the infrastructure to take advantage of it.

I must point out that this is far from being the "certainty" that you say it is.  Solar panels require conventional oil and a lot of  technology to produce.  As conventional oil becomes ever-more expensive that process will become more costly and difficult.  Furthermore, as I've pointed out several times in this thread we do not currently have the technology or infrastructure developed to utilize electricity for trucks, heavy machinery, boats or airplanes.  This presents a real problem since these uses account for 63% of all oil used for transportation.

You are predicting that in the next 30 years we will:

  1. Build billions of solar panels.  It has been estimated that you would have to run 91,250,000 solar panels for 50 years to equal the energy that is obtained from oil in one year.  Therefore, one year's worth of oil would require 4,625,000,000 solar panels. 
  2. Invest trillions in PV production.  It's difficult to develop a clear estimate, but I've seen numbers in the quadrillions of dollars in order to produce enough solar energy to make up for what we'll lose from oil, coal and natural gas.  Certainly improvements in technology and efficiency will bring the cost down, but those decreases will be mitigated by the increasing cost of oil which is necessary for solar PV production.
  3. Invest trillions in infrastructure. Replacing our existing liquid-fuel based transportation infrastructure would cost trillions.  As mentioned above, there is no existing technology to run aviation or shipping on electricity.  Furthermore, these infrastructure developments are highly dependent upon increasingly expensive and decreasingly available oil.
  4. Develop the political will to implement these changes. The country is still in massive denial.  To begin the kind of effort you are suggesting we will embark on would entail a miraculous shift of attention, energy, resources and money towards the development of renewable technology and infrastructure.  No current national political office holder (with the exception of a few congresspeople like Kucinich and Bartlett) has come even remotely close to acknowledging the true problems we face, much less suggesting real solutions.

I think it's safe to say that what you're suggesting is far from certain.

I should point out that even companies who are involved in solar energy are not as optimistic as you are about the potential for solar.  Richard Meyer, Head of Technial Analysis Concentrating (Solar Power) at Epuron in Germany, gave a presentation at ASPO VII the other day called "Potential of Solar Energy for Replacing Fossil Fuel".  His most optimistic assessment was that we could replace 35% of the US's total energy with solar by 2050.

This is incredibly optimistic because the financing for such a deployment of solar would include a $5 tax on every MWh produced from fossil fuels.  I find it difficult to imagine that our government would implement such a tax anytime soon.

I could go on, but suffice to say that although solar holds tremendous potential, there are many  obstacles and challenges to realizing that potential.  These have to be adequately considered in order to develop an accurate working model for what is possible with solar.

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Re: The problem with renewable energy
[quote=Akrotiri21]

 

Switters,

A couple of things I am not sure about in your last response.  One is your statement that:

If we take 5% as a mean, in 10 years we'd have 50% less oil production than we do now.  Since we're currently producing 84mbd, that means we'd hav only 42mbd per day by that time.  The problem, of course, is that demand will increase during that time because of India and China.  Both of these opposing factors will contribute to the supply gap / shortage.

Here are my concerns:

(1) I gather you use 5% as the mean between 2% and 9%, but this seems to be prior to yearly capacity additions and the bringing on of any non-conventionals.  Yearly capacity additions over the last 8 years have been something like 4mbd, or 4-5 % and we should be able to expect something -- 2-3 mbd from other sources coming on -- for a few years, anyway.  So if 5% is prior to these additions, then decline is roughly flat; if after, then I think you are assuming a pretty high underlying decline rates -- something like 10-11%.  That latter may be right, but it is currently an outlier prediction.  (Even Campbell has used a 2.5% net decline rate).[/quote]

I think many of the estimates for nonconventionals do not adequately take into account the amount and cost of conventional oils needed to extract them.  Nor do the estimates factor in the very real effects that extracting these nonconventionals will have on the environment (climate change, drawdown of water, etc.) and the economy (economic impacts of severe weather events, drought, food shortages, etc. caused by rapid increase in greenhouse gases from burning tar sands).

Therefore, I find it difficult to accept that we will get a smooth and continuous contribution of 4-7mbd from nonconventionals in the coming years.  According to Jeremy Legget, the oil industry won't be able to extract more than 2.5mbd from tar sands even in the most optimistic scenario.

[quote](2) As I run the numbers, a 5% yearly decline rate doesn't get us 50% less or from 84 to 82, but to 65.

How I get there: multiplying 84mbd by 95% gets us 79.8 after year 1; multiplying 79.8 by 95% gets us 75.81 after year two; multiplying 75.81 by 95% gets us 72.01 after year three; multiplying 72.01 by 95% gets us 68.4 after year four; multiplying 68.4 by 95% gets us 64.99 after five years.  So 5 full years later we have a 23% total reduction.  I don't know if I have done this incorrectly, but it falls squarely in the range of most projections (as graphed by Hutter). [/quote]

Sorry for the fuzzy math... I was in a hurry yesterday when I wrote that post and didn't check my numbers.  

[quote](3) As I understand it, demand is a member of a 3-part equation, with price bringing supply into equilibrium with demand.  Where production is very cheap (plentiful) demand will be high.  Kind of like with cheap electricity, we all wander around leaving lights on and buy greedy appliances.  But if electricity becomes very expensive, then demand diminishes very quickly (cut the lights, install energy savers).  So it seems to me misleading to take current levels of demand at current prices and suggest that this is what demand will be and anything less than that equals a shortage; it is what demand would be at the same very cheap prices.  But we agree that scarcity will be kicking in, rapidly sending signals to consumers to substitute, converserve, forego use.  And here is where I agree with you about something that makes me a bit optimistic about our demand elasticity: our current way of life doesn't actually make us very happy, so making changes isn't really sacrifice, and many of us are already ready to do it.  Anecdotally I think of one Japanese teenager's response to a question about what kind of car she would like:  None: "Cars are so 20th century."[/quote]

Certainly demand destruction (from a deflationary recession/depression and/or higher prices) and conservation will have some impact on consumption.  However, analysts like Jeremy Legget have warned against relying on these market mechanisms:

But, some will say, demand has been falling fast since oil hit $147, and that will head off the problem. It is true that the transport sector is changing, and it shows the scope we have for cutting global energy demand and changing supply if we try. But there are problems with relying on this market mechanism.

First, continuing growth in demand in China and India is likely to drown out any reduction in demand from structural changes in the west. Second, the oil industry has – almost incomprehensibly – been investing less in exploration in recent years. Too much of the vast profit we saw from BP earlier this week goes on share buybacks. Third, the industry is relying on aged oilfields, aged infrastructure and an aged workforce just at the time when oilfields are becoming more difficult to find and are taking ever longer — sometimes more than a decade — to bring onstream even when found. Fourth, the oil- and gas-producing nations have massive and growing infrastructure programmes that increasingly cut into their scope for export. Fifth, we worry that Opec has been subject to the same irrational exuberance about delivery capacity as the international oil companies have been.

[quote]Next, you wrote:

 You cannot have economic growth without a growth in the supply of energy.  I have not seen a single economist who is taken seriously argue with that fundamental truth.

This is, I think, in response to my question:

 But I sense in other comments that "energy intensive" is considered to be intrinsically related to economic growth (and maybe environmental degradation) and therefore less energy intensive is required for a future in which fewer of us live  well.  Is this correct?

All I was asking was whether energy intensive somehow entailed economic growth, not whether growth required additional energy; put differently, can one have an intensive-energy-steady-state-economy, or is that somehow incoherent?

Regarding the "fundamental truth", isn't it true that you can have economic growth with a static supply of energy if you capture efficiency gains?  Or is that a mistake?

I think we at least agree that -- one way or another -- we will be moving to a way of life that is more sustainable and enjoyable.  Thanks again for the conversation. [/quote]

I don't know the answer to this question.  I suppose, theoretically, that it would be possible to have an energy-intensive steady-state economy.  I know that William Catton would scoff at that idea.  He's say that humans are no different than any other organism: give them an abundant supply of energy and they'll multiply and grow.

Others would argue that humans can and will figure out a way to resist that biological imperative, and maintain equilibrium with their environment.  

If energy supply is flat but efficiencies are increasing, then the supply of available (usable) energy is still growing so I imagine we could still have economic growth in those circumstances.

The question I have is how likely it is that these efficiencies will be realized in a world reeling from the impacts of climate change, energy decline, resource depletion and economic instability.  Perhaps this is a difference in the way that you and I are imagining the next 30-50 years.  I think there's going to be a lot of disruption and disintegration of current systems, and that it will not be possible to simply continue with business as usual.  Even during the best of times, it would be a monumental challenge to respond to the "triple threat" of the Three Es; it will be exponentially more difficult as the impacts of these challenges are experienced more directly.

Of course I could be wrong.  And I actually hope that I am! 

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Re: The problem with renewable energy
[quote=srbarbour]

I'd add that various cellulosic ethanols are rated at 5:1 energy ratios.   Almost all of these can be produced without a drop of oil additive, though not in so large of quantities. 

[/quote]

Steve,

Have you seen this article on TOD on the Coskata cellulistic ethanol hype?

 

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Re: The problem with renewable energy

[quote]Steve,

Have you seen this article on TOD on the Coskata cellulistic ethanol hype?[/quote]

I don't care about one company's hype. There are well over a dozen entities that are involved directly or indirectly in the production of cellulosic ethanol. Some make more dramatic claims than others. Most of these techniques are directly competitive with $3+ gasoline -- this is proven by already existing manufacturing. Many have claimed the potential, if given the time and investments, to become competitive with $1.50+ gasonline. Since this is a rather mild improvement, and cellulosic ethanol is massively underdeveloped, there is plenty of reason to believe it has merit.

(Corn ethanol is already fairly competitive with $1.50+ gasoline...)

In any case, what is provided in that article is merely healthy skeptisim of Coskata's claims. My feelings? The government and other entities should 1) Do their research, 2) Invest in a wide variety of techologies and find out which ones are pure bullshit and which ones are real.

We have, frankly, spent hundreds of billions of dollars on much stupider things than a large scale experiment that has huge implications for our energy future. The worst that happens is it all goes bust, and everyone knows for sure we need to look elsewhere.

Besides, even if they go bust, chances are one of the technologies developed from the whole mess will be worth more than the entire investment combined.

--

Steve

 

 

 

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Re: The problem with renewable energy

Regarding the IEA report which estimated depletion at 9.1%, Richard Heinberg writes the following:

"Considering regular crude oil only, this means that 6.825 million barrels a day of new production capacity must come on line each year just to keep up with the aggregate natural decline rate in existing oilfields. That's a new Saudi Arabia every 18 months."

He goes on to cast serious doubts on the IEA's qualifying statment that the world can still achieve higher levels of production with "adequate investment" in exploration and nonconventionals like tar sands:

"In other words, if the $12 trillion that vanished from the world stock markets last week were invested in new tarsands projects, then theoretically a few more years of total oil production growth could be eked out (not growth in net energy production, mind you, but in the gross—and I do mean gross—production of exotic, very expensive stuff that it's physically possible to run your car on, assuming you could afford to do so)." 

He also said that if the IEA estimate is accurate, then oil production almost certainly peaked in July 2008.

Matt Simmons, for example, and Jeffrey Brown, the creator of the Export Land Model have both been telling as many people as they can that the decline rates, for a host of reasons, are going to be higher than most people expected.  Maybe they anticipated this. 

Even Shell thinks peak will happen before 2015:

“Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.” - Jeroen van der Veer, CEO Shell 

Some of the decline may be offset by unconventionals coming online.  The IEA has estimated the unconventional output for 2008 to be 3.42mbd.  For the sake of argument, let's assume crude oil + NGL did peak at 82.6mbd (IEA estimate of August 2008 production).  If conventionals do decline at 9.1% a year, that's a loss of 7.52mbd the first year, which translates into a net decline of 4.10mbd (or 4.95%). 

Folks familiar with projections on theoildrum will know that 2% declines mean reasonably painful adaptation, 5% declines spell very painful adjustments, while 10% declines mean societal breakdown on the larger levels. 

But remember, the effects of the current economic crisis on our capacity to increase or even maintain current production of both conventional and unconventional oil must be considered. 

The continued expansion of tar sands production, for example, is by no means assured.  From an article on Rigzone.com:

"Oil sands companies were the first to feel the pain of plunging oil prices and the credit crisis. Mining tar-like bitumen and shipping it to refineries costs more than extracting hydrocarbons from more conventional fields, bumping up the oil sands' price threshold. Analysts estimate some projects may need a long-term oil price of $100 a barrel or even higher to make a decent return.

The high upfront capital costs often lead to heavy reliance on the credit markets, especially for start-up firms with no independent cash flow. But this option has slammed shut amid the global liquidity crisis, and oil sands developers have already started rejiggering project plans as a result."

The cost of starting a new tar sands project has also risen dramatically over the past few years:

"Five years ago, the capital cost of building a project that mined bitumen and processed it into high-quality crude was around C$40,000 per barrel of production, reckons Andrew Potter, a UBS Securities analyst. The same project today could cost C$180,000 per barrel, or around C$18 billion for a typical 100,000 barrel-a-day development."

As far as conventional sources go, it's not reserves that matter.  Peak oil happens when new production flows are fully offset by production declines.  There are many factors which can affect flow rates:

  • geological constraints, i.e. North Sea
  • political constraints, i.e. Russia & Saudi Arabia
  • physical contstraints, i.e. Nigeria
  • human resource constraints, i.e. lack of skilled labor (experienced engineers)
  • capital constraints, i.e. Mexico & Venezuela

The complexity of how all of these variables fit together is staggering, and I think that's part of the reason that we often see projections for future production that ignore one or more of the variables.  My personal opinion is that when all of the variables are factored in, we are in for a very rough road over the next several years. 

 

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Re: The problem with renewable energy
[quote=srbarbour]

(Corn ethanol is already fairly competitive with $1.50+ gasoline...)

[/quote]

You can't be serious about corn ethanol being competitive with gasoline.  That price includes neither the huge subsidy corn gets nor the huge subsidy gasoline gets in this country.

Furthermore, it has been estimated that between 157 - 262% of existing U.S. cropland would be required to to produce just half of U.S. demand for liquid fuel using corn ethanol.  Corn ethanol requires heavy inputs of water, fertilizer, pesticides and energy to produce.  (Fertilizer is dependent upon NG, and pesticide and energy are oil dependent unless we can produce enough liquid fuel alternatives to make a significant dent).

Not to mention the fact that corn ethanol releases 81-85 kg of CO2 per megajoule of energy produced.  It's not exactly going to help with climate change.

 

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Re: The problem with renewable energy
[quote]

You can't be serious about corn ethanol being competitive with gasoline.  That price includes neither the huge subsidy corn gets nor the huge subsidy gasoline gets in this country.

Furthermore, it has been estimated that between 157 - 262% of existing U.S. cropland would be required to to produce just half of U.S. demand for liquid fuel using corn ethanol.  Corn ethanol requires heavy inputs of water, fertilizer, pesticides and energy to produce.  (Fertilizer is dependent upon NG, and pesticide and energy are oil dependent unless we can produce enough liquid fuel alternatives to make a significant dent).

[/quote]

Uh, no.   I think corn ethanol is terrible.  Worse, it is a distraction from the much better biofuels.   However, it is pertinent to point out the economic factors that make it difficult for corn ethanol to be unseated.

--

Steve 

 

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Re: The problem with renewable energy

Switters and Steve -

We will have to wait and see the IEA assessment, I guess.  Heinberg's observation about the volume required and what that would entail if decline is at 9.1% is indisputable; the industry apparently has averaged something 4mbd in additions each year, and we can apparently expect that to continue for a bit, with help from biofuels, nonconventionals, etc. -- but all said, net depletion will be setting in shortly and that could still be above 3%-4%.  I'm not disagreeing with any of this; just trying to figure out where along the spectrum from undulating plateaut to the roller coaster heading over the hill kind of plunge we are looking at.  I have seen a number of estimates -- including Ken Deffeyes -- that point to something like an undulating plateau until about 2020.  Obviously I -- I think we -- would prefer that for the time it affords for adapting once it has become clear to everyone business as usual must halt and we must now deal with this roaring, multi-headed hydra of a problem.

Brown's Export Land Model predictions are certainly unnerving -- not only because it shows that exports decrease more rapidly than depletion once a country peaks (at least for a bit; Brown has acknowledged that internal pressure to export can take hold as well, pushing exports back up), but also because it underscores the impact on the exporter in terms of lost revenues.  Mexico, for example, may well be on its way to being a failed state with horrendous consequences for its citizens.

One question I have -- and you touched on it indirectly by citing Leggett -- is the assumption that demand decrease in the US will be swallowed up by China and India.  I suspect this is based on extending out growth rates for I&C, but will these rates really hold?  With the world economy in recession, demand for Chinese and Indian goods and services way down, and then very high oil prices, should we assume these growth rates continue?  Up until now, and very broadly, these countries could subsidize their oil consumption due to large trade balances (or so I read); without that trade, doesn't production fall off (manufacturing use) and the consumer subsidies become increasingly burdensome?  I have seen China saying that it will now try to maintain its economy by growing internal demand, but is that possible when it has to import expensive oil and doesn't enjoy the trade revenue it previously had?  I frankly have no idea -- any thoughts?

 

 

 

 

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Re: The problem with renewable energy
[quote=Akrotiri21]

One question I have -- and you touched on it indirectly by citing Leggett -- is the assumption that demand decrease in the US will be swallowed up by China and India.  I suspect this is based on extending out growth rates for I&C, but will these rates really hold?  With the world economy in recession, demand for Chinese and Indian goods and services way down, and then very high oil prices, should we assume these growth rates continue?  Up until now, and very broadly, these countries could subsidize their oil consumption due to large trade balances (or so I read); without that trade, doesn't production fall off (manufacturing use) and the consumer subsidies become increasingly burdensome?  I have seen China saying that it will now try to maintain its economy by growing internal demand, but is that possible when it has to import expensive oil and doesn't enjoy the trade revenue it previously had?  I frankly have no idea -- any thoughts?

[/quote]

You raise a good question and I don't think that anyone really know the answer.  Leggett thinks that demand in I&C will continue to increase in spite of a worldwide recession/depression, simply because they are so much lower on the curve than we are.  In the case of China, it's arguable that they will weather the economic crisis better than most and thus be in a position to continue growing.  Of course others disagree and say that the decrease in U.S. demand for Chinese products will bring their economy to its knees.

Who knows what direction it will go in?  Will we have a plateau for 10 years?  For 20?  For two?  There are just too many variables to predict accurately, but in a sense it's a "lose-lose" scenario.  If we experience a depression bad enough to destroy demand for an extended period, the economic consequences of that are going to make development and production of both oil and renewables very difficult.  Peak might be pushed back a bit as a result, but we may end up in an even worse position than we are now to deal with it when it actually arrives.  If the recession is relatively controlled and demand continues to increase in India and China, then we'll likely hit peak very soon and be right up against all of the problems we've been discussing.

Either way, we should be on a crash course of developing renewables and making dramatic changes in our social and political ethos - not to mention our way of life - to prepare for the transition, whenever peak actually turns out to be.  That is what I ferverently hope for and work for every day.  Unfortunately, these changes aren't happening fast enough.  All we can do is prepare ourselves, our families and communities; keep spreading the word; and keep holding the vision for a better world for future generations.

 

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Re: The problem with renewable energy

Certainly Mish thinks China is going to go down with the rest:

For the third month in four, China's manufacturing is in contraction. July and August were in contraction as discussed in China's Manufacturing Contracts for Second Month.

Manufacturing in China expanded in September but has reversed to the downside once again. Amidst weak global demand China Manufacturing Contracts as Crisis Trims Exports.

Full post

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Re: The problem with renewable energy

Clifford Wirth on the challenges we face implementing renewables:

[quote]We need to examine solar and wind power. But no one has a real plan on how solar/wind will power tractors and combines, transport food and goods, or fertilize crops. Showing a photo of an electric powered tractor, truck, or train or saying we can do it is not a plan. What would the infrastructure for the electric economy look like? Where would the trillions of Euros in capital come from? How can governments pay for it when people are out of work and governments have little revenue? Where will the oil come from to manufacture, transport, and maintain the electric economy? Where will people get the money to buy electric vehicles when they are out of work and have little trade in value on their gasoline/diesel powered cars?

How can we maintain the power grid without diesel for trucks? When the highways fail from a lack of maintenance, there won't be replacement parts for the power grid, wind turbines, and solar panels. As I cruised the highways I saw some huge transformers and gigantic wind turbine blades being transported by trucks. Everything depends on trucks moving on the highways. Most food, goods, and people in Europe move by trucks, not trains. But like the construction cranes, those trucks will one day be idle -- and there goes food distribution, the power grid and everything. Without electric power, almost nothing mechanical or modern functions -- lights, sanitation, water purification and distribution, refrigeration, heating and air conditioning, pumping of diesel and gasoline, building systems, elevators, communications, emergency services, etc. Without the power grid, wind turbines and solar panels are mostly useless. In the future, wind turbines and solar panels will sit idle, monuments to misdirected policies that wasted fossil energy to manufacture, transport and maintain devices to produce electric power, when we need liquid fuels. The same can be said for nuclear power.

Shall we plan and prepare for the real future: a world without oil and without electric power. Or, shall we continue to avoid reality, dream about what will never happen, and waste time, effort, and capital on illusions?[/quote]

I don't take as dim a view on the prospects of the transition to renewables as he does.  But I do agree with his assessment of the challenges we face in that transition.  We need to prepare for a future that will be less energy-dense than the present.  It is highly unlikely that we'll ever replace the amount of energy we get today from oil with renewables.  And as I've pointed out earlier in the thread, that is ultimately a good thing.

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