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    Gail Tverberg: Why There’s No Economically Sustainable Price For Oil Anymore

    Producers need higher prices that the public can't afford
    by Adam Taggart

    Sunday, October 23, 2016, 5:33 PM

Actuary Gail Tverberg returns to provide an update on where we are in the global energy story. Her outlook is not rosy: she doesn't see a path for society to transition to an affordable, plentiful substitute to petroleum as a transportation fuel. The physics as well as the funding do not pencil out, at least with today's known technologies.

Without such a solution in hand, the world finds itself now mired in a scenario where there really is no long-term workable range for the price of oil. It's either "too high" and demand suffers, or "too low" and producers can't afford to extract it. The acceptable middle ground has disappeared:

When on the rising side of the Hubbert curve, everybody has good wage level and everybody can feed themselves. You can build new oil wells and everything works out fine. But what happens as you get past the 50% mark is that you no longer have enough oil coming out for the economy to keep growing. It starts going down. And what happens then is that the economy doesn’t function in the same way. You start getting the prices to spike as you try to get higher-cost oil out. And this is what we saw in the 2007-2008 period.

The price of oil spikes and you get recession. Then the price of oil comes back down. But wages don't recover and you get the very low price problem that we have right now. So it doesn’t work right. You can’t keep getting the same amount of oil out, essentially because the wages of the people don’t stay up high enough in order to afford the output of the economy.

At this point, it has gotten bad enough that there is no price that works. The price that producers need is higher than what the market will bear.

If we go to a place like Saudi Arabia, you'd say: They can get it out of the ground for $20 a barrel. But then when you look at it, you discover that they really need a much higher price if you include in all of the taxes and all of the funding they need to keep social order, import lots of wheat and the many other things that their economy needs, and build a desalination plant. So they really can’t get along on $20 a barrel. They learned how they can get along on $100 or $120 a barrel, but they can’t get along on $50 a barrel  — even in Saudi Arabia.

So you end up with a situation where there isn’t any kind price that really will work. 

Click the play button below to listen to Chris' interview with Gail Tverberg (46m:06s).

Transcript

Chris Martenson: Welcome to this Peak Prosperity podcast. I am your host, Chris Martenson. It is October 17, 2016. Now, the big news for oil last year was its collapse in price, which destroyed a huge amount of necessary capital investment in the oil sector. Now, here is what I said during the intro to a podcast with Gail Tverberg back in January of 2015 – so that is a little more than a year and a half ago: “As I look at my trading screen right here on the 12th of January 2015 I see WTIC crude oil falling another 4.8% in the day and trading at less than $46 a barrel. These prices are damaging to oil exploration companies bottom lines today and tomorrow’s hope for production, and they are destabilizing to an increasing number of oil exporting nations.” Well listen, obviously the destabilization happened. Obviously, we have a lot more data now about the destruction of not just the oil exploration company’s bottom lines, but also their investments that were not made. Listen, energy is everything. The world has no legitimate plan B for liquid fuels at this point. Not one that I have seen at any rate. And no, electric cars, I am sorry to say, are not coming online fast enough to make a real difference – yet. But even when they do, we will discover that there is a big, complicated, messy, dirty world behind the receptacle into which we plug our nifty, green vehicles.

And more frighteningly, the world’s population is eating fossil fuels. Not directly, of course. Nobody is crunching down a piece of coal for breakfast this minute, but just one tiny step removed. Every calorie of food in the west has 10 or even 20 calories of fossil fuels silently embedded within them. So thinking about all this is difficult, emotionally challenging even. It is really something that most people and most governments would rather avoid. But look, keeping our heads in the sand about all this – that is not an option either.

To discuss all of this today we are welcoming back to the show Gail Tverberg to discuss this, and not a minute too soon. Now you all know Gail. She is a professional actuary. She applies her risk assessment expertise to finite world issues, oil depletion, natural gas depletion, water shortages and climate change. And for years Gail has offered some of the most informed analysis on the global net energy predicament and her posts first at the oil drum where I ran across her, but more recently on her very popular blog OurFiniteWorld.com; and there you will find both really intelligent articles and super intelligent comments. She has got a great thing going there. Gail, thank you so much for joining us again.

Gail Tverberg: I’m glad to be here.

Chris Martenson: Well, let’s start – look so much is happening in the world. We can easily get into the details, but before we do I want to back up, widen the view out first – if you were at an energy conference, say one focused on making a transition to alternative energy what would be some of the biggest fallacies or false beliefs or misconceptions that you would untangle if you could?

Gail Tverberg: Well, it is hard to know where to start. Part of the issue is that we need a transportation fuel. We need a liquid transportation fuel that operates in our existing vehicles. The biofuels are just not cutting it. There is no way that we can transfer to electric in a reasonable timeframe. This is one of the misconceptions that is out there. It is just – it is much too big of a problem. You got your caterpillar tractors and all of these things. It is not just our private passenger autos, and there is even the issue of how you keep making your roads and things like that. I mean, we use the asphalt for making the roads themselves, as well as for operating the machines that make the roads. So, all of it gets tied very much together. There is that issue, but there is another piece of it, too, is that intermittent energy isn’t at all the same as the other intermittent electricity; especially is not at all the same as regular electricity. In fact, as I have talked to some people that are are more involved in it from actually working with the transmission lines, it really – just trying to scale it up becomes just an unreasonable problem very quickly. The whole idea that we can push the problem over to those transmission people and they can magically wave a magic wand and make it happen isn’t going to happen. It is too much of a physics problem. You can’t get wind and solar to all kind of work together and somehow or other support the grid without spending many, many, many times the amount of energy that the wind and solar makes to fix your grid to make it work. So, the whole thing just falls apart when you look at it that way. But at best, the wind and solar are just a tiny supplement to what we have right now. It might slightly reduce our oil and gas usage, but not very much.

Chris Martenson: Right. The only credible plan I have seen, and by credible I mean it was within an order of magnitude correct, it is not a full plan but it was a thought piece put out by the director of China’s national grid which manages all of the electrical grid for China, proposing to the world that the world, if we really want it to move to alternative energies no one country could do it so they propose the world to do it and they would populate the Arctic with wind towers, because the wind is always blowing up there and we would populate deserts, desert regions with solar and we would then spend around $50 trillion globally to doing this to get this infrastructure in and then get the pipes necessary the grid pipes to bring that electricity to the markets. $50 trillion would be roughly two thirds of the entire world’s economic output that is a massive number. It is several orders of magnitude larger than everything else I’ve seen proposed. I don’t even know if it is off by a factor of two or three. I don’t know, but it was the only thing I saw that was remotely close to something I would say we could start with that as an idea.

Gail Tverberg: Right. Then of course this stuff would be subject to all kinds of hurricanes and all kinds of natural forces, so you constantly need to be repairing it all and replacing it over time. There would be an ongoing cost to it, as well. There is an energy loss problem when you start trying to ship your electricity thousands of miles. So, you would have to really over produce in order to make it work that way. Then you start ending up with resource problems and trying to keep up this whole big grid. You would end up with some large share, well at least large relative to what we are currently using share of the population working on keeping up this grid and trying to make everything work, because it would be so hard $50 trillion we are talking wages of a lot of different people would be working on this stuff. So, they would not be manufacturing other things that we need. That would not be good for us.

Chris Martenson: Well, absolutely, and I want to get to that economic component in a minute. The first thing I want to start though here is this – look, I read all the headlines. I have such compassion for the people who just want this all to turn out well. I get it. You read the headlines “Fossils Fuels are Dead” or, you know, “The Alternative Energy Future is Right Around the Corner.” They are really based on belief. This illustrates it really well. I was following Charlie Hall’s work with Prieto where they actually calculated the energy returned on energy invested for Spain’s solar systems, right? Which are some of the largest in the world and they got great data collection so instead of calculating it with numbers sitting at a desk going well theoretically this all works they said well what is the real world experience? They came out with a very disappointing energy return on energy invested of 2.45 for the solar system, which is not enough as you were saying to deal with the long-term issues of both maintaining and then rebuilding this thing when it inevitably fails. What I loved is instead of calculating this stuff behind the desk they went out into the world and they extended their analysis to include and I’m quoting here, “road access to the plants, foundations, canalizations, perimeter fences, evacuation lines, rights of way, module washing, security and surveillance, transportation” sometimes as far away as China, “premature phase out or unamortized manufacturing and other equipment. Insurance, fairs, exhibitions, promotions or conferences on and on and on. I’ll stop there. That is literally a tiny fraction of all the other stuff they said is actually involved in installing and running something as simple – I am using this word carefully, as the solar installation.

Gail Tverberg: Right. I think if they had gone farther they would have found that there are even more things; if they were to scale this up there would be an exponential increase in the cost of trying to keep the grid going, for example. And then there is also this issue of trying to finance the whole thing. Suppose we had an extra $50 trillion of this infrastructure. Do you think we have this saved up, so that we don’t have to finance it all? Somehow or other we would – where are we going to add an extra $50 trillion of debt to our current level of debt? It is just not going to happen.

Chris Martenson: Indeed. This is the part that I think is the critical part that is really missing out. So technically it is all possible. But from a resource standpoint maybe not. Maybe there are some questions is there enough neodymium to make enough strong force magnets that are needed in wind towers? Is there enough silver to create all of these connections between the solar panels as they are manufactured? But it is the energy and economy component -- you have a very recent piece out – came out on October 11th – “Why Energy Prices are Ultimately Headed Lower – What the IMF Missed.” I want to get to why prices are headed lower. But first, the very first chart – this is why I love your work so much – the first chart right at the top is world GDP compared to energy consumption. So, for people listening, if you have GDP graphed up the Y axis and you have energy consumption graphed across the X axis, you get a straight line – one dot lays on top of the next. That has been true for many decades. The punch line being if you want to have a growing economy, you need to have growing energy use. Let’s start there. Is you know sometimes people say “oh, the energy intensity of the economy is going way down. We need very little energy now. We will just become more efficient. That is how we get to nirvana.” What do you say to that?

Gail Tverberg: Well, what I say to that is you really have to look at the world situation. I think what tends to happen is a leader or an economist from, you know, some developed country says oh we by ourselves can solve our energy problems. We will send all of our manufacturing to China, and we will only in the future do financial services and maybe a little medical care, and we will do a little bit here and there, but when you get to the world picture what you find is that the energy use correlates very highly with the growth in GDP. You have to have more energy to get the GDP to grow. What happens with these alternatives is that they don’t scale up well at all, and so what you end up with is if you could use these alternatives they would produce only just a tiny fraction of what we have right now. So, on that basis alone it becomes very hard to scale. I mean for instance if we think about wood, we would deforest the world if we tried to gear our economy to just using wood even though it is theoretically renewable. I know people argue that the wind and solar are scalable, but you have to have an extra $50 trillion to spend maybe they are.

What happens is that as a practical matter going to so called renewables would bring us to maybe you know 10% or, you know, some small percentage of our current level of energy use which would bring the whole thing way, way, way down and it would not allow us to keep our current systems operating. It would be a very, very big problem.

Chris Martenson: I totally agree. This is the important point, which is that we have to look at this globally because you are right a lot of the hey look we are way more energy independent than we used to be because we decoupled the GDP output from the energy use. But you are right. We are just offshoring the energy consumption to some other location and then not counting it. So a solar panel gets shipped into this country and we measured the cost of that, but not the energy it took to run that. Then we just say look we got all of this great economic benefit from a solar panel without measuring the energy input. So, you have to look at this on a global basis. On a global basis it couldn’t be more clear. We have many decades of data in front of this, which is economic expansion and oil consumption or energy consumption. Those few things, though, are they have a correlation coefficient of .99. They are awesome. They are really tightly linked. And of course this should be – see I am a biologist by training. My PhD is in a natural science. So, understanding how energy flows, in this case chemical energy or electrical – electron bond energy or food energy at the organismal level -- just understanding energy flows was something I was trained in. And of course, if you want to have a healthy creature, it has to have sufficient energy flows. And you had a piece in a recent article, which I thought was great. I get it, because I studied this. Maybe we can make this so other people get it as well, and it is the idea of the economy being a dissipative engine like I think the example you used is a hurricane is a dissipative engine. It is sitting there and taking the latent heat in the ocean and it does crazy, awesome, beautiful things with it and forms a tight eyewall and has all this beautiful organization, which is funded by energy and it is dissipating that energy. Eventually when it runs out of that energy – well what happens next?

Gail Tverberg: Well, if we look at a hurricane, you know when it goes over land what happens is that maybe it doesn’t fall flat when it gets over land, but it doesn’t take very many days or very many hours before it loses its force and it comes to an end. Even animals and plants and humans are considered dissipative structures of a somewhat similar form, and we take energy in and if you stop feeding us it doesn’t take very long before we no longer are alive. So, what happens is that without the energy the economy tends to collapse, contract and no longer become the same thing it was before.

Chris Martenson: And that is because it owes its complexity and order and structure and all of that to the energy that it is feeding on, right?

Gail Tverberg: Right, because we can build for instance the international companies with the energy we have. It allows those international companies to, you know, communicate with each other or to send their executives from country to country to send the various kinds of, oh, the raw materials they need from one place to another all of this requires energy. If you lose that kind of thing, then the big international organizations start to go, and you have a very different structure than what you had before.

Chris Martenson: A simpler structure, as it were. There was a great book by Eric Beinhocker called the origin of wealth, which I loved. It really changed me a lot and he has got this great piece in the beginning talking about how many stock keeping units askew – askew in a store would be one item on the shelf, but if that item is complex enough like a toaster oven even it has a number of sub skews in there, like, well, who made the plastic for the handle on this thing? Who made the glass and who made the heating element and all of that? And he noted that the world now has about 10 billion stock keeping units. 10 billion individual things that are measured, tracked, reduced and incorporated into our economy. And could that go to 20 billion? Sure. Here is the point. If and only if we can increase the energy because that complexity is driven by energy and we are seeing what is happening in Syria or other places where the energy is in decline. It is contracting and you know the social unrest and all of that are symptoms the withdrawal of the primary life force of any complex system, which is the energy that it gets to consume.

Gail Tverberg: Exactly.

Chris Martenson: So, let’s talk about this, because now we are at the heart of what I think is the most unappreciated, most important concept and I am struggling myself how to convey this. I can’t wait to get your view on this. Maybe I am making it too complex, but we went from wood to coal, right? Because coal is better. It is denser. You can do more things with it. It gets to a hotter temperature. It is just a better fuel. Still, it took 50, 60 years to get to about half of the energy mix being formed by coal. Then, we went to oil. Same reason – denser, better. You can do things with it you can’t do with coal. You can fly jets on it. It is amazing. Nuclear, decent. That was a nice sort of add on to that story, but now the world is saying oh we are just going to go from things like oil and coal, we are going to go to wind and solar which are more diffuse. They are a less dense energy source – tell us, well, what are some of the complexities that might arise there?

Gail Tverberg: First thing I would point out is everybody takes the story as far as you got it to the nuclear – the oil to nuclear. Then I think, you have to go back to – then we went back to adding more coal again because the price mix got too expensive for us. It was just too cost effective -- it was no longer cost effective to use the oil. And we use globalization to effectively raise coal production in China, India and some other parts of the world, and so that our coal percentage could go way back up again and help keep the costs down. I think we also brought hydroelectric up. And so, we had to work through these directions. We couldn’t just go in the way of more and more expensive energy. We had to find a way to balance it out to keep the cost down. Now when we talk about these more and more diffused energy sources, we have to get them channeled to the point where we really need them. I think what happens is a couple of things. One of them is that it is terribly expensive or at least very expensive just to put the solar panels or the wind turbines in everywhere, and then put in the transmission lines. What happens is even at that point they are not fully adjusted to what we need.

If I look at my energy consumption by month to year, it is very clear that in the United States the big energy consumption months are January and February. So this is the cold, dark time of the year. Now, we got to figure out how in the world are we going to suddenly fix this so that we can get this energy that we really need from the earlier of the year, use wind and solar, and somehow or other channel it to keep us warm when it is cold out. You know even if you put in batteries you can’t make it blast for six months. It is just kind of goofy. People just have not thought this through. Admittedly, you can put them in and you can say oh in the warm parts of the world we can make it so it is a little easier for people to have air conditioning. Oh, that is nice but that is not what we need to solve our problems.

Chris Martenson: So, let’s talk about how we do get to some of this. Certainly, obviously there are a lot of things we couldn’t do if we wanted to become more energy efficient. Let me pick on something easy. We have known for a long time if you just double the insulation of a house, over the life of that house the energy savings are extraordinary. Building codes still don’t require that in the US, you know, and I’m seeing houses go up right across the street and stick framed with woefully inadequate insulation. Given what we know and given the fact that the long-term carrying cost of that house will be vastly lower in a commercial building over its lifespan -- 70% of the cost. The lifecycle cost of that building is heating and cooling, and still you will find you know buildings made mostly of glass and other stupid things like that from an energy standpoint; beautifully architecturally and all of that. But from an energy standpoint we still don’t do that. And so, that is why I think what you do is so important. What I am trying to do is we need a different story around this. The story that we don’t have forever, and we don’t have infinite amounts of energy. What do you run up against when you try to share that set of ideas with people?

Gail Tverberg: Well, I guess a blank. Maybe that is the right answer.

Chris Martenson: Good answer. Good answer.

Gail Tverberg: People are they are busy working on C02 is their big concern and you know, okay, well by 2050 we would like to do something or other. It is not really – they don’t quite have the understanding that there is a problem now. The low oil prices are huge problem, and if you look at it it is really low oil, low coal, low natural gas prices and low prices on a lot of different kind of commodities. So, we have a real problem right here and now, and it is a low priced problem. It is really something that people aren’t realizing are a manifestation of what is wrong with our economy.

Chris Martenson: Well, connect that dot. That is counter intuitive to say that low oil prices are a signal of something that is wrong with our economy. How do you connect those dots?

Gail Tverberg: Well, it is kind of hard to explain, but our economy is a networked system and you have the workers play a double role and the workers, they receive wages, but then they also use those wages to buy things. And if the workers are getting a smaller and smaller share of the output of the economy in terms of wages, they have a harder and harder time buying things like houses and cars and these big items that really are what our economy grows with. Then it is the fact that there is not enough what we call demand that causes the problem. You know, it is basically the fact that the – the factory workers and the what I call non elite workers the people who have high school educations aren’t getting good enough wages that is causing the problem. And so – and also the fact that young people are spending so many years in college, and then after they get out of college and they are getting relatively low wage jobs when they get out, and they got this big debt as well and it all works out they can’t buy new houses. And they delay starting their families for the same reason. All of this cuts back on the demand and as a result the price drops lower. I guess the other side of the story is that the price of it – the cost of extracting oil and all of these other things has tended to go up, just because we extract the easiest to extract first, and that is the cheaper way to extract. And so we are not able to keep the prices up to the levels that they need to be. And it is the big problem – so we can get a problem -- the reason why our supply tends to get cut off is because the – at least in my view – is likely to be because the prices are too low, rather than too high.

Chris Martenson: Now, I want to get to that, because clearly these low prices are way below what is necessary for oil companies to successfully prosecute their investment decisions. Leaving aside the Wall Street Journal and Bloomberg keep talking about how shale operators have figured out how to make a lot of money at $40 a barrel. By the way, people, anybody listening, all you have to do is not read any more of those articles and wander over to the actual investment filings for these companies and you will discover they are bleeding at these prices. It is just extraordinary. At a wider level, you’ve seen the first investment decisions called FIDs of the major oil companies get real way back. Perhaps over a trillion dollars of investment not made since mid 2014. And so here we are without all of those investments being made such that in 2015 – 2014 and 15 those were collectively, each year was the worst for oil discovery since the 50s; you put them together back to back and we haven’t had a string that bad in a long time. Less than 3 billion barrels discovered during years when 30 billion barrels were burned. So, about a 10% replacement.

Gail, getting to that – that has to create a supply problem some day, doesn’t it?

Gail Tverberg: You would think so. It seems like it may not be very far away. I know natural gas supply is down this year in the United States, and coal supply is also down in the United States. We got all three of them down in the United States. Worldwide, I think coal supply is down and it may – well, we are getting more on a plateau with the oil. It may be down as well. So, we are going to start seeing a spike, but when we see a spike it will fall – what tends to happen when you get a spike in oil prices is it follows through to other prices as well, like food, and the result tends to be that recession because people find that they need to cut back on discretionary spending. You know, buying things that are optional because the – they have to cut back somewhere. And I know I was reading this morning quite a few restaurant chains are closing, because the young people, you know, in the whatever 18 to 35 year old range are not buying enough stuff at restaurants anymore. But, what you get is cutting back.

Chris Martenson: Certainly. Let’s talk about the floor/ceiling dynamic of this. You have a floor. You presented a number of demand destruction based events that would cause prices to fall. We have been seeing that worldwide. The world economy obviously limping along, not at its normal air quotes, which I think was abnormal, never to be repeated again longer story. But you know, growth rates of 4 and 5% on a real basis and 6 or 7 on a nominal basis not happening. So on the demand basis we can see this demand destruction and this leads to oversupply in the short term. It leads to lower prices, and this of course is destroying the companies that are there to produce oil, natural gas, coal. So we have been seeing some fall in their output, we have been seeing retracting investment. But we know that because of your wonderful chart that compares GDP to energy consumption that and consumption and production are the same thing. We don’t pull it out and store it for long so when we look at that we can just say that falling energy production has got to be associated with falling GDP. That is a bad thing. We have a very unstable financial system that either expands or collapses. It has a very awkward, very delicate in between moment in between those states.

But on the same side, if we flip to the other side, we get to the short fall and prices spike. Then that will be too high for the world that is indebted with hundreds of trillions of dollars of outright debt and even four or five times that amount of unfunded liabilities and other unstated liabilities off balance sheet. Four which is too low for the energy companies to actually survive and thrive in and then there is a price that is too high for the economy to operate in that to me is the – is the floor and the ceiling that I wish people at these energy conferences understood a little better because when the floor and the ceiling touch my view is that what is now possible is a fraction of what is possible in a prior time.

Gail Tverberg: Right. And I think we have gotten to the situation where the floor and the ceiling touch. You know, things it has gotten bad enough so that we don’t have – there is no price that works. You know, that the price that producers need is higher than what the market will bare. And in fact, if we go to a place like Saudi Arabia, you would say oh they can get it out of the ground for $20 a barrel or some low price, but then when you look at it you discover that they really need the much higher price if you include in all of the taxes and the need for all of the funding they have so they can keep social order and so they can import lots of wheat and many other things that the economy needs. and they can build a desalination plant. So, they really can’t get along on $20 a barrel. They learned how they can get along on $100 a barrel or $120 a barrel but they can’t get along on $50 a barrel even in Saudi Arabia.

So you end up with a situation where there isn’t any kind of a price that really will work when you consider the overall needs of these companies.

Chris Martenson: Yea, so that is a great point I still have the floor and the ceiling in my brain apart a little bit, but I think you are right. If we can say there is a price – obviously the prices that exist right now are not working for countries and large companies, energy producers and energy exporting nations. Too low. Obviously it has already killed Venezuela that is cooked and we are just waiting to write the post mortem on that. Saudi Arabia in the process of disintegrating it at this point. Russia seeming to do a little better with it all, possibly because they have still priced everything in rubles and the ruble fell, too. They had a little bit of for financial reasons lessening of the pressure of that valve. At the same time here is a price which we can clearly see is going to create immense demand destruction on the other side. The idea that those are almost the same number now, to me that has got to be – to me that is one of the most hair raising frightening moments because the only way we are going to build this next future whatever it is is with the energy we have got period. There is no other way for me to analyze this story. Of course it is much more complex because of the amount of debt that has been involved, people’s belief systems, the complexity involved all of that. How do we start to – listen doing nothing is not an option as I mentioned before. We have to do something. So what do we do here?

Gail Tverberg: Well, I have a hard time coming up with something. It is sort of like saying well we have looked at this and with the energy sources that we will be able to have with just the renewables and such things it is going to be equivalent to living on a 600 calorie a day diet. So, we would like you to figure out how you can nicely transition to a 600 calorie a day diet and I think you will look forward to this new view of life that you are able to take on as you change your diet. You are going well, I don’t think so. This just doesn’t work. You know, it is the same kind of thing you know. Well, what do you give up? Do you give up taking care of your electric transmission lines? Do you give up taking care of your oil and gas delivery lines? Do you give up taking care of your roads? All of this infrastructure stuff by itself would take the equivalent of your 600 calorie diet. And so you suddenly discover that all of the pieces that you depended on are the parts that so desperately need energy. So it is very, very hard to cut back or at least the way I look at it is.

Chris Martenson: Oh absolutely. I agree with that. It is a complex relationship. To perhaps tease this apart a little more illustrated in a recent post you said “The popular idea that we extract 50% of a resource before peak and 50% after peak will be found not to be true. Much of the second 50% will stay in the ground.” There is a lot of deep thinking embedded in that deceptively simple quote. Help us unpack that, would you?

Gail Tverberg: Yes. I think an awful lot of people listen to or looked at the work of Hubbard and said well what Hubbard has said is the absolutely gospel true story for all times and all places in all conditions and what we can expect is this nice Hubbard shaped curve so to speak. It goes up and it goes down sort of slowly. So this is what we should expect going forward and so oil supply will kind of continue like it has before. It will decline rather slowly going forward. Well, that is – you know that is true if you are talking about a particular well and there are new wells taking its place and the price of the oil and the new well is roughly the same as in the old well and everything is going along fine. Everybody has good wage level you know, everybody can feed themselves. You can build new oil wells and everything is working out fine. But what happens as you get past the 50% mark is that you no longer have enough oil coming out so that the economy can keep growing. It starts going down. And what happens then is that the economy doesn’t function the same way. You know you start getting the prices to spike as you try to get higher cost oil out. And this is what we saw like in the 2007, 2008 period.

When that happens, then the prices spike, you get recession, it comes back down. People these higher prices don’t come back through to wages and then you get the very low price problem that we have right now. So, it doesn’t work right. You can’t keep getting the oil out essentially, because the wages of the people don’t stay up high enough in order to afford the output of the economy.

Chris Martenson: Now, as I travel the world, Gail, and I go to all of these different countries, every capital city is the same. They are all the same. It doesn’t really matter which nation I am in or which continent I am on. They are all the same and they are all jammed with cars. I always make a point of looking at the cars to find out how many are internal combustion engines and how many are electric. Guess what? It is very hard to find electric cars. You see the very rare Tesla in some of the key metropolitan area and that is it. And so, you know I have this other idea which is that the world absolutely has to have oil in order to even keep functioning at all. Don’t you think that governments would nationalize and overspend even if it doesn’t make sense from an energy or a dollar standpoint to get those last drops of oil out?

Gail Tverberg: Well, I mean you start with Saudi Arabia. It has already nationalized its oil company and okay at this price the price is way too low. Now where would Saudi Arabia get the money from to subsidize its oil industry? It gets all of its money from the oil industry. It can subsidize it and we have got Russia out there and where would it subsidize its oil industry from? That is where it gets its taxes from. As you look around the world, that is the situation. Oil is a big source of taxes, but you are talking about say the United States, maybe. But you know how many people are going to vote for a politician who says well we have decided that our oil industry needs $120 a barrel oil and the price is only about 50. So, we would like to increase the price by that amount. We would like to subsidize our oil companies to that effect, and how many voters are going to vote for that, because that is going to come through to higher cost at the pump and it is going to come through well, I guess I’m not quite sure where they are going to get the subsidy from, otherwise.

Chris Martenson: We will just print it up.

Gail Tverberg: We will just print it up. Yea, right. I think that we are going to end up with some situations where you get them the falling dollar relative to the other currencies. And so then if you are getting the falling dollar, then you get the oil price to go back up again to some extent. But and this – all of this gets to be a big mess. I am not sure that – I don’t think the politicians would do it in the first place, but printing the dollars would also affect the relativity, so all of it gets to be complicated.

Chris Martenson: Yea, big moving pieces. I only slightly joked about the printing it up. I think we would try that because you know currently we have got another delusion out there which is look we can print tons and nothing bad happens. But again, that is not just storing potential energy for a future date. We will see how that works out.

But ultimately the dollar price doesn’t matter that is the hard part I find in this conversation. It doesn’t matter is it a penny a barrel, is it a million dollars a barrel. What really matters I the net energy that is available to flow through the system. What constructs we build around it and what we price money at and what we call that is interesting, necessary, complex to understand but ultimately irrelevant if we have falling net energy per capita we are going to discover that it is harder and harder for the average person to get by and that creates political pressure, social pressures all kinds of other things. That really when people say oh I remember in the 70s one person could earn the wage necessary to support a house even at minimum wage. Like yep. That is kind of where we hit our net energy per capita coming out of our own oil fields, and it has been kind of downhill every since. That is an explanatory and maybe even a predictive sort of an analysis that you can put on there that overlays quite nicely, but very few people still have that energy awareness of the role that it really actually plays, and everything is a little bit of a derivative form that even though it is an interacting derivative.

You know with that we are out of time. I just wanted to thank you so much for your time today and especially Gail, for your work in educating people about something most don’t really still want to be educated about, but boy, still as necessary as ever. I will direct people back to your website ourfiniteworld.com. Is there any other way people can track you or keep in touch with you, or maybe go see you at a conference?

Gail Tverberg: Well, I guess there is Twitter it is gailtheactuary all one word. I don’t have any upcoming conferences that are – well, the one that I know of that is upcoming is in Europe and I don’t think it is something that I would advertise right now. So, I think ourfiniteworld is probably the best place.

Chris Martenson: Well, great. Hopefully you would post there when you do have an upcoming conference so I would invite people to read the site, read the blog, see you if they can and we will have you back on at some point. I know this conversation is just starting for the world.

Gail Tverberg: Okay. Thanks for calling. Yes. Appreciate it. Bye.

Chris Martenson: My pleasure.

About the Guest
Gail Tverberg

Gail Tverberg is an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.

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83 Comments

  • Sun, Oct 23, 2016 - 11:54pm

    #1

    pinecarr

    Status Gold Member (Offline)

    Joined: Apr 13 2008

    Posts: 1088

    Fantastic discussion with Gail Tverberg!

    Chris and Gail, thanks for the fascinating discussion on our current energy situation/predicament, and what we might expect going forward.  I loved Gail's analogy of a future with less available energy, likening it to telling a person they are going to go on a 600 calorie/day diet, and what a fantastic thing this will be to look forward to (not!).

    Even though we are aware of the Energy "E" here, I still find it eye-opening to look at the world through the Energy lens.  It sure puts a different perspective and focus on things (like Gail's warning of the "600 calorie diet" to come).

    Thanks for the great podcast Chris and Gail; it was a real treat to listen-in on a conversation between two people who are so well versed on our energy predicament. 

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  • Mon, Oct 24, 2016 - 1:17am

    #2
    robie robinson

    robie robinson

    Status Gold Member (Offline)

    Joined: Aug 25 2009

    Posts: 879

    "That's all folks"

    Hope your mare is settled and your milch coo has freshened.

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  • Mon, Oct 24, 2016 - 2:17am

    #3
    edpell

    edpell

    Status Member (Offline)

    Joined: Oct 24 2016

    Posts: 1

    total cost of RE

    Gail makes a good point that there is a continuous cost for maintenance, depreciation, replacement with new at end of life. 15 years is a long life for a wind turbine at sea due to the corrosive effects of salt water.

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  • Mon, Oct 24, 2016 - 8:12am

    #4

    Arthur Robey

    Status Platinum Member (Offline)

    Joined: Feb 03 2010

    Posts: 1814

    The Committee of Humans

    Capitalism is domed and from its ashes New Capitalism will emerge.

    In New Capitalism money serves money serves humanity, humanity does not serve money.

    In New Capitalism it is illegal to make a profit. Every cent has to be justified before a board of humans. Unauthorised profits attract Severe penalties. 

    Planned obsolescence  is illegal. Product lifetime projected use and disposal are mandated. A clear plan of design usage and disposal must be submitted before production may commence. Priority will be given to products that are designed to last last centuries. All bearings are standardized.

    Human work is considered an evil and a maximum per dollar cost of the finished product is mandated. (ie 1 minute per dollar cost.)

    Arts and non profit amusements are exempt from scrutiny. As soon as money changes hands for these amusement the full weight of The Committee of Humans is brought to bear.

     

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  • Mon, Oct 24, 2016 - 10:13am

    #5

    Arthur Robey

    Status Platinum Member (Offline)

    Joined: Feb 03 2010

    Posts: 1814

    Frustration

    $50 Trillion?

    That rings a bell. That is the amount that Catherine Austin Fitts mentions that has gone AWOL. Hmmm.?

    I have long since given up on In-the-box thinking. Give me a good EM drive and the Japanese and I will go get all the energy you need..But there is a caveat. You wont be able to live at the bottom of this gravity well anymore.

    Why? Because we turn energy into babies. 

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  • Mon, Oct 24, 2016 - 7:26pm

    #6
    John Roberts

    John Roberts

    Status Member (Offline)

    Joined: Oct 24 2016

    Posts: 1

    Thermodynamics of oil decline

    Another great Tverberg discussion. Something that needs to be considered on any artificial means of sustaining the oil industry is that the energy it takes to produce a usable barrel of oil is approaching 1/1 ratio. So price is a symptomatic problem not the real problem hense money can't fix the problem neither will military force. We've exceeded oils life cycle. For more information visit http://www.thehillsgroup.com. Also view this complementary video. https://m.youtube.com/watch?v=k7gJcfjyFpA

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  • Tue, Oct 25, 2016 - 2:05am

    #7
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    correction for above link to Hill's Group

    A search showed the correct site to be http://www.thehillsgroup.org. It has a very good and detailed prediction of the current and future price of oil. It is headed down very rapidly as the usable energy available (EROEI) drops.  EROEI is what runs the economies of the world. When EROEI hits zero oil becomes wothless. Except for borrowing from future prosperity there is no way to prop up the dropping EROEI. Whenever the word gets out that all that borrowed money will not be repaid the game is finally up.

    Right now we are in a hybrid phase of weakening EROEI + confidence in technology + confidence in borrowed money being repaid.  If my Prius runs out of gas, it is not long before all the stored battery electrons are gone and the fancy technology is useless.  The Hill's Group is putting us out of gas in about 6 years!

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  • Tue, Oct 25, 2016 - 4:51pm

    Reply to #7

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Interesting Website

    aggrivated,

    Thanks for going a bit further to find the correct website. I'm always leery of following any links from a new member who only has 1 post. (Sorry, John Roberts. It usually ends up at some spam site.) Since aggrivated posted the correct link, it suddenly became interesting to me. So, I clicked there. I read the home page first and was intrigued enough to subsequently read all the pages.

    The website is really just a store front for selling their $69 paper on "Depletion: A determination for the world's petroleum reserve." If they are like most store front sites, they're giving away 1/2 to 3/4 of the content for free in order to get customers interested enough to fork out the $69 for the full report (2013.) The order page was updated in December, 2015 and now shows the price for version 2 to be $28. (It disturbs me that they haven't bothered updating all their pages. It isn't that much work.)

    From what I saw of their approach, they're looking at the amount of petroleum in the ground from the perspective of thermodynamic laws and price. An analogy for the model is that we always pick the low hanging fruit first. Once it is gone, we need to do more work to get the higher fruit. At some point, there is still fruit on the tree, but because it is more work to retrieve than it is worth, it essentially doesn't exist.

    They are looking at the ETP, an acronym for Total Production Energy. (First time I'd seen this.) It is similar to EROEI, but they claim that they can determine it from 3 variables only. Here is a paragraph from their "overview" page that explains the basic concept of their methodology:

    The smaller error results from a much more compact model than what is produced by the quantity approach. To be implemented, the quantity approach requires the evaluation of thousands of values; usually many of them are not precisely known. The energy approach (the ETP model,Total Production Energy) requires only three. The model is derived from the fundamental physical properties of petroleum, First and Second Law statements, and the cumulative production history of petroleum. To generate values the model requires the mass of crude removed over a period of time, the mass of water removed, and the temperature of the reservoir. Although somewhat complex from a mathematical perspective, it employs only one value of which we are not very certain; that is, petroleum's production history.

    When they say "temperature of the reservoir," they are talking about the API (American Petroleum Institute) temperature. There is a strong negative correlation between API and BTUs contained in a unit of petroleum. A low temperature reservoir (light, sweet crude) has more energy per unit than a high temperature reservoir (heavy, sour crude.)

    It takes a lot of energy to get the finished product to the end consumer. Because the easy to find oil gets exploited first, more and more energy is required going forward. (It is net energy that we consumers get.) At some point, the energy required to get the oil explored, drilled, pumped, transported, refined, delivered, and sold requires all the embedded energy. At that point, petroleum is no longer an energy source. It can still be used as an energy carrier by using other sources of energy (eg. windmills) to pump oil.

    One outcome of their methods is the petroleum price curve (first graph) shown on this page: http://www.thehillsgroup.org/depletion2_022.htm.

    The Maximum Consumer Price curve was also developed from the ETP model. It represents the maximum price that the end consumer can pay for petroleum. It is based on the observation that the price of a unit of petroleum can not exceed the value of the economic activity that the energy it supplies to the end consumer can generate.

    The price curve has a sharp kink in it starting in 2012 when half the energy contained in oil was needed to produce the end product. From that point on, utility to the end consumer drops rapidly and the maximum price drops rapidly. Their calculations say that by 2020, the maximum consumer price will be $11.76 per barrel. That's down considerably from 2016's maximum consumer price of about $65. In 2013, when they wrote their report, the max price was about $95 per barrel. Is that why the price has plummeted or is it just a huge coincidence?

    ++++++++++++++

    I don't know that I buy their methodology, but it is an interesting take on the situation. What adds credence to their predictions is that oil prices have generally followed their predicted price. We'll know in the next few years if the economy can actually handle oil prices as high as they are now. This information will stay close to the front of my mind for a few years.

    Nonetheless, information that doesn't influence a decision is just noise. For me, I'm not going to change any decisions as a result of being informed about this. If I had children who were considering future careers or about to make a big life changing decision, I'd buy the report and read it.

    Their calculations necessarily work on averages. To be an average, half has to be more and half has to be less. As prices drop, the less efficient wells/reservoirs can't be operated profitably. They won't expand at these fields. At some point, they'll stop pumping because it isn't worth it. Fields that still have good EROEI can still be operated profitably, but we'll have much less petroleum available to drive the economy. The overall economy will suffer mightily.

    Perhaps this is the real reason we invaded Iraq. They have large, higher than average EROEI petroleum reservoirs. Perhaps this is why Hillary is talking tough about Russia since they have military weaponry that can stop us from getting "our" oil out from under Iraq.

    For those who think that Hubbert's peak is a bunch of BS … they may be right (for the wrong reason.) Hubbert thought we would transition to nuclear power as our main energy source before we ran out of oil. Without having a replacement energy source for petroleum, his curve may have been too optimistic.

    Grover

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  • Tue, Oct 25, 2016 - 5:21pm

    #8
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    Thanks Grover for your review of the site

    I agree with you that the rather precise tracking of the oil price grabbed my attention more than their approach.   Their approach seems valid, but there are so many moving parts in the energy world that getting as accurate correlation to the price as they are getting could just be pure luck.

    If, as Chris seems hopeful, Thorium reactors get going in China, even if they don't share the science openly, then it will lessen the world wide demand for fossil fuels in general and change the timing. I would check back from time to time and see if the site gets either updated or is at least still accurately tracking oil's price. 

    I would love it if Chris could get an interview with the site's founder and see what the back story is on his research.

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  • Tue, Oct 25, 2016 - 6:16pm

    #9

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Referenced Chart

    [quote= aggrivated]

    I would love it if Chris could get an interview with the site's founder and see what the back story is on his research.

    [/quote]

    aggrivated,

    I agree completely! I would love to hear a layman's version of the material. Chris is excellent at distilling complex topics like this and making common sense of it all.

    After sleuthing a bit, I found the first graph from http://www.thehillsgroup.org/depletion2_022.htm
    that I referenced in post #8. Note the black "Maximum Consumer Price" line. If that is all we can afford, we're in a world of hurt. I wouldn't put too much faith in Thorium. It takes a long time to scale up and learn the necessary lessons. If their analysis is correct, we don't have that time. Our petroleum enabled lifestyle will come to a screeching halt in short order. Even the CB printing won't be able to supersede physical reality.

    It's better to develop personal action plans to put in place if this comes to pass. Where do you want to die? Where can you go and what can you do to thrive while still alive? At what point is it too late to make a move? I'd say that we still have a couple of years before things get dire. By 2020, it may be too late to do anything about it. At some point, you'll be cemented in place.

    Grover

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  • Tue, Oct 25, 2016 - 7:28pm

    Reply to #7

    Stan Robertson

    Status Gold Member (Offline)

    Joined: Oct 07 2008

    Posts: 516

    Reality check

    [quote=Grover]

    . . . The price curve has a sharp kink in it starting in 2012 when half the energy contained in oil was needed to produce the end product. From that point on, utility to the end consumer drops rapidly and the maximum price drops rapidly. Their calculations say that by 2020, the maximum consumer price will be $11.76 per barrel. That's down considerably from 2016's maximum consumer price of about $65. In 2013, when they wrote their report, the max price was about $95 per barrel. Is that why the price has plummeted or is it just a huge coincidence?

    /quote]

    Coincidence, or worse. First, the oil price did not begin to drop until June 2014. What actually happened with oil prices in 2014 is complex, but a large part is explained by the fact that U.S. oil production increased by about 4 million barrels per day between 2010 and 2014, due primarily to new production from shales and tight sands. That destabilized the supply/demand balance leaving OPEC and Saudi Arabia with the decision to either cut production to sustain prices or to cut prices and try to eliminate their new competition. What is actually likely to happen in the future is that some of the new competitors will live (e.g., Permian basin) and some new market balance will be achieved somewhere in the vicinity of $70 per barrel. Don't hold your breath waiting for that $11.76 barrel of oil.

    Stan

    I don't know of any present production for which half of the energy contained in oil is needed to produce the end product. The worst cases of which I am aware are shale and tight sands production for which the ERoEI is no worse than 10, on average, at the wellhead. That means that for each barrel of oil extracted, 0.9 barrels of oil was used in the drilling and completion process. To that we add the refining and distribution losses of about 15% and we have about 75% of the available energy delivered to the consumers.

    Now it is true that the consumers may use a good portion of their 75% to build highways, produce pipe and drilling rigs, run service stations and garages and all the rest of the businesses that revolve around oil, but as long as there is enough remaining energy to see that all are fed and clothed, that game will continue. There are humongous oil reserves available in the world with an ERoEI of 10 but we are not in an equilibrium economic situation with that yet. The interesting question is whether they can sustain a world economic structure that was built with an ERoEI of about 100.

     

     

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  • Tue, Oct 25, 2016 - 7:31pm

    Reply to #7

    Stan Robertson

    Status Gold Member (Offline)

    Joined: Oct 07 2008

    Posts: 516

    Reality check

    [quote=Grover]

    . . . The price curve has a sharp kink in it starting in 2012 when half the energy contained in oil was needed to produce the end product. From that point on, utility to the end consumer drops rapidly and the maximum price drops rapidly. Their calculations say that by 2020, the maximum consumer price will be $11.76 per barrel. That's down considerably from 2016's maximum consumer price of about $65. In 2013, when they wrote their report, the max price was about $95 per barrel. Is that why the price has plummeted or is it just a huge coincidence?

    [/quote]

    Coincidence, or worse. First, the oil price did not begin to drop until June 2014. What actually happened with oil prices in 2014 is complex, but a large part is explained by the fact that U.S. oil production increased by about 4 million barrels per day between 2010 and 2014, due primarily to new production from shales and tight sands. That destabilized the supply/demand balance leaving OPEC and Saudi Arabia with the decision to either cut production to sustain prices or to cut prices and try to eliminate their new competition. What is actually likely to happen in the future is that some of the new competitors will live (e.g., Permian basin) and some new market balance will be achieved somewhere in the vicinity of $70 per barrel. Don't hold your breath waiting for that $11.76 barrel of oil.

    Stan

    I don't know of any present production for which half of the energy contained in oil is needed to produce the end product. The worst cases of which I am aware are shale and tight sands production for which the ERoEI is no worse than 10, on average, at the wellhead. That means that for each barrel of oil extracted, 0.9 barrels of oil was used in the drilling and completion process. To that we add the refining and distribution losses of about 15% and we have about 75% of the available energy delivered to the consumers.

    Now it is true that the consumers may use a good portion of their 75% to build highways, produce pipe and drilling rigs, run service stations and garages and all the rest of the businesses that revolve around oil, but as long as there is enough remaining energy to see that all are fed and clothed, that game will continue. There are humongous oil reserves available in the world with an ERoEI of 10 but we are not in an equilibrium economic situation with that yet. The interesting question is whether they can sustain a world economic structure that was built with an ERoEI of about 100.

     

     

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  • Wed, Oct 26, 2016 - 2:19am

    #10
    Uncletommy

    Uncletommy

    Status Bronze Member (Offline)

    Joined: May 03 2014

    Posts: 524

    Is it any wonder?

    Interesting discussion, but I think most of the PP crowd is aware of the mechanics oil price. The really sad part of the whole situation is that we are using debt to keep the bubble from collapsing. The fundamentals of supply and demand will, in the long run, determine how this situation plays out. The essentials of societal collapse have proven, demonstrably over the centuries, to be dependent on cheap labor/energy. As scarcity raises its ugly head, so goes the inequality of its citizens. So what's going to change/ Thank you Jamie Dimon:

    Goldman Sachs has been increasing its derivatives volumes since the crisis, and it had a portfolio of about $48 trillion at the end of 2013. Bloomberg Businessweek recently reported that as part of its growth strategy, Goldman plans to sell more derivatives to clients. Citibank, too, has been increasing its derivatives portfolio, despite the numerous capital and regulatory challenges, In fact, its portfolio has risen by over 65 percent since the crisis — the most of any of the four banks — to $62 trillion.

     

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  • Wed, Oct 26, 2016 - 5:33am

    #11

    Arthur Robey

    Status Platinum Member (Offline)

    Joined: Feb 03 2010

    Posts: 1814

    Another line of attack.

    Ruby Carrot made a video to set everyone's nostrils aflare in indignation.

    Ignorance plus ego will do that.

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  • Wed, Oct 26, 2016 - 8:10am

    Reply to #7

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Double Check

    [quote=Stan Robertson]

    Coincidence, or worse. First, the oil price did not begin to drop until June 2014. What actually happened with oil prices in 2014 is complex, but a large part is explained by the fact that U.S. oil production increased by about 4 million barrels per day between 2010 and 2014, due primarily to new production from shales and tight sands. That destabilized the supply/demand balance leaving OPEC and Saudi Arabia with the decision to either cut production to sustain prices or to cut prices and try to eliminate their new competition. What is actually likely to happen in the future is that some of the new competitors will live (e.g., Permian basin) and some new market balance will be achieved somewhere in the vicinity of $70 per barrel. Don't hold your breath waiting for that $11.76 barrel of oil.

    [/quote]

    Stan,

    To begin, I want you to understand that I have zero experience with oil exploration, production, refining, distributing, marketing, or selling. I have some experience in building infrastructure for transportation. I'm more or less just reporting my thoughts and impressions of what I read in the public version of their paper. I don't know what energy/financial/etc. costs they are including in their calculations to say that we've passed the point where half the energy produced is needed to produce the next unit. If you've got experience in any of these endeavors, you have me at a disadvantage.

    That said, if you look at the graph I posted, you'll see that oil prices bounced considerably from the neat best-fit black line. That prices didn't fall until June 2014 isn't too damning. Gail has been saying for years (I'm paraphrasing) that the price of oil will be set by what the consumers can afford. I see the kink in the graph and the sharp downward slope as denoting what consumer utility remains as more and more of the available energy is consumed in the production of final goods.

    If consumers still have credit available, they can overpay for the product. It is when credit is constrained or people have a wake up call and realize that the product isn't worth the current price … that's when things change. As an example, the price of beef has skyrocketed the last few years. I love a good steak, but it isn't worth mortgaging the farm to get one. As a result, I reserve good steaks for special occasions. When the price eventually drops to what I consider reasonable, I may indulge more frequently. If the price drops sufficiently, any day of the week that ends in "y" is special enough.

    Back to your post … if producers go out of business and others don't ramp up production, supply will be constrained and price will jump to balance supply and demand. (Isn't that the way free markets are supposed to work?) But, looking at it from a consumer's viewpoint, how much are they going to consume if the price goes up? (If credit weren't available, it would be an easier calculation.) People would use less until supply and demand were balanced. If the average consumer's internal calculator says that oil is only worth $11.76 per barrel, they won't consume oil that averages more than that. If suppliers can't supply sufficient oil for $11.76 per barrel, our whole energy based economy grinds to a standstill.

    So, frankly, I'm not holding my breath waiting for $11.76 oil.

    [quote=Stan Robertson]

    I don't know of any present production for which half of the energy contained in oil is needed to produce the end product. The worst cases of which I am aware are shale and tight sands production for which the ERoEI is no worse than 10, on average, at the wellhead. That means that for each barrel of oil extracted, 0.9 barrels of oil was used in the drilling and completion process. To that we add the refining and distribution losses of about 15% and we have about 75% of the available energy delivered to the consumers.

    Now it is true that the consumers may use a good portion of their 75% to build highways, produce pipe and drilling rigs, run service stations and garages and all the rest of the businesses that revolve around oil, but as long as there is enough remaining energy to see that all are fed and clothed, that game will continue. There are humongous oil reserves available in the world with an ERoEI of 10 but we are not in an equilibrium economic situation with that yet. The interesting question is whether they can sustain a world economic structure that was built with an ERoEI of about 100.

    [/quote]

    Stan, remember that we're talking all-in prices here. Just because a well head can produce 10:1 EROEI doesn't mean that all of them do so. Some are duds. That has to be factored in. Then, you have materials like steel pipe, fracking fluids, equipment, labor hours, land leases, taxes, etc. – and that's just to get a product at the well head. Crude oil needs to be transported to a refinery, refined, and then distributed to the gas stations for the end consumer. All of those energy costs need to be included.

    I know when I buy gasoline, there are federal and state taxes included in every gallon I buy. Theoretically, that pays for all the infrastructure I drive on. (It is really just the down payment, but let's pretend that it covers all the costs.) At current unit prices, the taxes alone add approximately 15% to the final cost. All of those costs need to be included for they diminish the value of the oil to the consumer. That may be what the authors refer when they say that half the energy is lost.

    If your example is reasonable, we get 10 units of oil at the well head for 0.9 units invested. Then, we've got the magic 15% overhead for refining, etc. That adds 1.5 units of investment and a remainder of 8.5 units. So, we've invested 2.4 units to net 8.5 units. In your simple example, we're down to about 3.5 EROEI. It goes down quickly, doesn't it?

    I'd appreciate if you read their public documents and can find where they went wrong. It took me a little more than an hour to read everything. If you've got experience with oil, you should be able to do it quicker. Let us know what your thoughts are.

    Thanks in advance,

    Grover

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  • Wed, Oct 26, 2016 - 12:36pm

    #12
    treebeard

    treebeard

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    Posts: 551

    Agrivated

    Horrible discussion.  I couldn't listen to the end, for the first time ever on a podcast. Wow, are we great at standing around shooting fish in a barrel or what.  This is the definition of insanity, having the same discussion over and over again and expecting different results.  Rob Hopkins figured this out a long time ago, that negative environment campaigning was ineffective, what was needed was postulating an alternative – even it is not positive.  600 calorie diet, please! Isn't the purpose of analysis to discover solutions?  Wasn't the name of the site changed to "Peak Prosperity".

    We know that enlightened change ahead of the problem is not going to happen for the mass majority of people, economics is going to drive change.  Large centralized solutions are not going to work for the reasons cited in detail again.  Centralized exploration of diffuse solutions is unlikely especial because of vested interests of those currently benefiting, and momentum of existing capital investments.

    I did read Gail back in the days of the Oil Drum, detailed analysis back then was appropriate, but now?  We are going to transition somehow, even if it's mad max, mass die off.  But what we do now does matter, even if it is .5% less mad max than it otherwise would have been.  Even the "dumb guy in the street" who is so often put down already knows in his bones that things are not right and is starting to do something without any detailed knowledge of what is "going on". Certainly the younger generations are getting it.

    There is still this almost unconscious background double speak here, which is truly where the problem lies.  We are so concerned with detailing out the "problem", that we are unconsciously buying into the infinite growth paradigm as the only solution which created the very paradox we say that we are trying to avoid. Kids not moving out their parents basement is cited as problem, because why?  Less population growth and less consumption.  Isn't that the solution!?!?! Isn't that what we are looking for?  Does is it mean a terrible quality of life for the child because he is not going to have the American dream?

    He get married later in life, has fewer children himself.  The family doesn't fracture, no mortgage, perhaps less money pressure, parents are there for the grand kids, perhaps he can do something more meaningful with his life because he is not on the maximize material consumption treadmill? Few material possessions and a smaller living space, is that worth destroying the planet for.  There is so much material to explore in this transition, please lets not rehash the same old stuff.  It is unproductive.

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  • Wed, Oct 26, 2016 - 9:17pm

    #13

    pyranablade

    Status Member (Offline)

    Joined: Nov 08 2010

    Posts: 211

    Treebeard

    You sound angry. Oh yeah, there is a lot to be angry about: burning fossil fuels until the polar ice caps melt, not having any fossil fuels to burn, etc., etc. But are you saying we shouldn't be discussing this stuff?

    I think this is some really important stuff. Should we read it critically? Of course. Should we try to "put a good face on it"? Maybe that would be disingenuous. But maybe phrases like "where do you want to die" should be left out of the discussion.

    But like I was saying, this is really important stuff, so let's keep the discussion going. Knowing when and if TEOTWAWKI (the end of the world as we know it) is coming would help me get properly focused!

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  • Wed, Oct 26, 2016 - 9:21pm

    #14
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    Two faces of peak prosperity

    On the one hand there is ongoing analysis and discussion of resource depletion and its financial consequencs. On the other is the AA for oil addicts.I would also like to see a more focused attention to the second area, but like AA it must be led by the sober. I, personally, am attending meetings regularly but also fall off the wagon frequently. Maybe those members more successful will gain a podcast forum focused on their struggles and successes.

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  • Wed, Oct 26, 2016 - 11:21pm

    #15

    Arthur Robey

    Status Platinum Member (Offline)

    Joined: Feb 03 2010

    Posts: 1814

    Stuck in the Mud

    I was listening to a radio program about the battle of Flanders Field in WW1.

    An observer saw a man up to his waist in mud begging for help. There was none to be had. Tens of thousands of men were drowning in mud.

    A while later the observer passed that way again and the man had sunk up to his neck and had lost his mind. He was howling at the moon. 

    Such is the nature of a predicament.

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  • Thu, Oct 27, 2016 - 1:59am

    #16
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    Buying into the infinite growth paradigm

    It is a very unusual person who voluntarily reduces their standard of living. I get a distinct sense that ‘ eat drink and be merry for tomorrow you will die’ informs the repeated borrowing habits of our culture. If there is a 0.5% who buck the flow then when the flow stops, those 0.5% will be the only ones moving. They become leaders almost by default.

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  • Thu, Oct 27, 2016 - 4:27am

    #17
    treebeard

    treebeard

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    Joined: Apr 18 2010

    Posts: 551

    End game

    At this point in time, discussions need to go somewhere.  "Hey you know the bridge is out and if we don't cross the river soon we are in real trouble.  OK, so now what do we do.  You know I wonder if it was the rebar in the bridge deck that failed or the rusting beams below that caused the collapse. I don't know, I thought you said we had to cross the river?  Well you know maybe the abutments moved that put lateral stresses in the beams that cause bending failure, lets go down and take a closure look.  Hey don't we have to figure out how to cross the river?…….."  I guess it suddenly hit me this morning, it was starting to feel way to much like analysis paralysis.  We are seriously out of the analysis phase, time to start the visioning process. Sure if a little bit of analysis as a preamble to a next step.

    We are in collapse now, the beginning stages of it anyway and it is going to continue to be complicated, multidimensional and unpredictable.  And it is going to take a while.  It seems that those who are most angry and frustrated with the situation (and for good reason) seem to imagine a sudden event that will end it all.  Its seems to  be a bizarre kind of death wish.  It ain't going to be that simple.

    Reporting of the numerical data, GDP, inflation, unemployment rates, interest rates, commodity prices, reserves, consumer confidence, etc., are becoming more and more suspect and divergent from underlying realities. The euro group is dictating economic policy to European finance ministers,  past American presidents are telling us that we no longer have a functioning democracy, corruption endemic. In spite of knowing all this while being lucid about the underlying disease, we seem to get tangled up in tracking the symptoms, this half baked mess of data, looking for sign posts, prognostications for future events. But analysis can only take you so far, it is trapped by the limitations of what is known now.  What we need is to build an alternative narrative that will take us into the unknown. 

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  • Thu, Oct 27, 2016 - 5:47am

    #18

    AKGrannyWGrit

    Status Bronze Member (Offline)

    Joined: Feb 06 2011

    Posts: 464

    Yeah, Gail Again!

    I love the interviews with Gail Tverberg!

    As Chris says "Oil" is the master resource and understanding what is happening in the Oil Industry should interest us all. I don't agree that a lot of people get it and ever so many young people are completely clueless with zero thought to the limitations of our master resource preferring, I think, to believe technology will save us.  There will come a time when people will say "I wish I had known".

    I listened to the podcast at least three times.  If we can understand the resource limitations we face then we can take steps to mitigate the impact to our lives and those of our children and grand-children.  Remember new people  are coming to this site all the time and what we old-timers have heard before may be completely new to a visitor.  Discussing oil on this site doesn't happen often enough, in my opinion.  But then I live in an oil state and the changes I see are deeply concerning for the state and all the people that live here.  Our future is precarious. The oil hurricane has petered out up here and the economy is slowing.  So discussing the master resource will always be welcome in my opinion! Knowledge is power ignorance is not.

    Please don't wait so long to bring Ms. Tverberg back.

    AKGrannyWGrit

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  • Thu, Oct 27, 2016 - 6:38am

    #19

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Leftovers Again?

    treebeard,

    I'm sorry that you feel that we are just rehashing the same material. I was waiting for the transcript before listening to the podcast, so I just finished hearing it. There were lots of items that could be considered rehashing, but I personally enjoyed the discussion. It has lots of relevance to me.

    So, why do we "rehash" old discussions? Be honest with yourself, when was the last time you looked up something in the archives here? I've looked things up that I kind of remember and want to get a better picture before shoving my foot in my mouth, but I don't go looking for stuff I don't know that I may care about. Besides, information gets dated quickly. Although 90% may be a total rehash, there are enough new facts, perspectives, insights, etc. that make the trip worthwhile.

    There are areas of this site that I stay away from as much as possible. Others may view the particular subjects as potentially catastrophic, but I don't. Does that mean that I should demand that they quit discussing it (over and over) because it bothers me? Unless someone makes an egregious error or is just marketing their personal doom without any redeeming options, I exercise my right to remain silent.

    Grover

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  • Thu, Oct 27, 2016 - 7:40am

    Reply to #18

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 185

    Keep talking...

    Totally agree, I hold Gail in the same high esteem as Chris and Adam. well worth having her back on.

    I've always viewed a large purpose of this site is to break down peoples misconceptions and get them to recognise their views on what the future will be are just hopes & beliefs, based on little evidence or even worse, inaccurate data and normalcy bias.

    If we stop reaching out and stop trying to convince new people (sometimes repeated efforts) to take some action, the site loses a lot of its value.

    I'd also be very interested on Chris'es detailed analysis of Louis Arnoux's presentation on the ThermoDynamic collapse of Oil. Do Govs or Oil companies publish EROEI for an average Barrel. My guess the the last decade Globally its been about 10:1?

    But would love to see upto date accurate stats and predictions from Chris.

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  • Thu, Oct 27, 2016 - 11:45am

    #20
    treebeard

    treebeard

    Status Bronze Member (Offline)

    Joined: Apr 18 2010

    Posts: 551

    Forward thinkng

    I admit that I am almost obsessively forward thinking,  There are always solutions, always. They may take us outside of our comfort zone and they may not be to our liking but they are always there.  This is like debating whether winter is coming or not or standing at the bar of the Titanic arguing with someone about whether the ship is sinking or not.  Sometimes this debate isn't even with another party, but just a dialogue in our own head, a way of reinforcing our own sense of reality.

    To me this is a form of procrastination or avoidance.  There is so much preparation needed.  It seems if we are talking about solutions, we are way down in the weeds, talking about the best way to grow strawberries.  But once we get to ten thousand feet, we are back in rehash mode.  I do have a lot of respect for Gail, which was why I was so critical, this kind of conversation is irresponsible.  This is not a dress rehearsal, solutions, solutions, solutions.  Throwing your hands in the air saying we're all going to die just doesn't cut it any more.

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  • Thu, Oct 27, 2016 - 12:54pm

    #21
    chipshot

    chipshot

    Status Member (Offline)

    Joined: Mar 15 2010

    Posts: 50

    Lower Standard of Living Needed

    One conclusion we should draw from discussions like this:  we need to lower our standard of living.  ASAP.

    Guess the name of this website alludes to that.  But it should probably be more directly addressed.Along with a reminder that lower standard of living does NOT have to result in a lesser quality of life!

    As for nationalizing oil production and printing money to pay for it, that sounds like just the solution politicians (and US citizens) will go for.  What alternatives would be palatable?

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  • Thu, Oct 27, 2016 - 2:57pm

    #22

    sand_puppy

    Status Platinum Member (Offline)

    Joined: Apr 13 2011

    Posts: 1938

    Forward thinking

    Treebeard,

    I would welcome more forward thinking.  And I would invite YOU should take the lead here.

    What vision(s) do you have?

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  • Thu, Oct 27, 2016 - 6:34pm

    #23
    MJB

    MJB

    Status Bronze Member (Offline)

    Joined: Jan 05 2016

    Posts: 117

    I see you treebeard

    I can understand your frustration, if I understand correctly it can be summed up with “all talk, no action.”

    I don’t know that there will be any (meaningful) action until there is more pain. Pain is here already for many Americans but they don’t have a loud enough voice yet. I don’t think many who are hurting fully understand the situation (I don’t either for that matter) nor are they comfortable with the prospect with an even lower standard of living.

    Consciously they want a reset (change), but I don’t believe many understand the pain that will come with that reset. It is my opinion that discussing solutions now is great but will get NO traction until we are forced to make a change. The fact that Chris’s message has reached the UN is remarkable in my mind, but as he said it is a huge bureaucracy that moves very slowly.

    The Crash Course opened my mind to a new way of thinking, since then my impatience with an unsustainable system has gotten the better of be countless times. Looking back I have gained the virtue of patience. Patience not to go leverage up and buy every ounce of silver I can, patience to keep stockpiling food, water, ammo and toiletries at the expense of being called crazy, patience with my peers’ decisions to live a borrow and consume lifestyle.

    Talking solutions at this point is no different than having a discussion about solving the world’s problems. The people in power who run system aren’t listening yet. Solutions will come but not before more pain is felt and the yells get deafening. It is the human phenomena of procrastination. 

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  • Thu, Oct 27, 2016 - 6:57pm

    #24
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    The people in power

    MJB.  I agree with you that solutions will come when the people in power wake up. The first step in that process for me was to look in the mirror and realize that I was the person in power. I may not have power over as much as some, but where I do I need to make the changes I can and be visible enough about it that others can see what I'm doing. Just be ready to be labeled. If you stand angainst the mainstream you will stand out.  "Hey!, why aren't you floating downstream like the rest of us?" Unlike the sticks and stones may break your bones ditty we have all heard, words do hurt, so be mentally ready for a few digs here and there.  Most don't deserve a reply.

    If you have trouble getting started, go to your main power switch for your house and turn it off for 24 hours. That will get your perspective realigned quickly. If you can learn to live with this power down on a regular basis you will be much more prepared both mentally and physically.

    Treebeard is correct! We are in collapse. It is time to discuss, but it is also get up and make change now time.

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  • Thu, Oct 27, 2016 - 7:19pm

    #25

    InfiniteSelf33

    Status Member (Offline)

    Joined: Jan 24 2015

    Posts: 9

    Some thoughts...

    I'm not a scientist or accountant and I do not have a graduate degree so I have to say I agree with treebeard. I have the ability to understand the concepts presented here and that is all that is necessary in my mind. The particular numbers and ratios are irrelevant to me. What is important is having an understanding of what the problems are and coming up with solutions that can be put into action. Action is the most important factor in my mind. We could talk all day about problems and solutions but nothing will change if it's all talk. One thought that came to mind after listening and reading the comments was that Chris just casually mentioned insulating buildings and no one brought this topic up in the comments. If I remember correctly buildings are one of the greatest consumers of energy. We don't need to acquire any alien technology to greatly reduce these needs. I do understand that transport fuels are the main concern. It seems to me that we still have a lot of lessons to learn from observing nature. Maybe if you choose to live in Manhattan you may only be able to afford 600 calories a day on an average wage but that's a choice. There is a system that is in place we sometimes call nature that can be tapped into. Permaculture principles seem to have many worthwhile solutions to problems we think may arise in the future. Being sustainable isn't good enough. Regenerative should be the goal. Personal responsibility is a big key in any aspects of our society. I believe if I am going to complain then I need to be willing to do things that I don't want to do like participate in government. Maybe just attend a local two meeting. People like Alan Watts may also have a lot to teach us. Our minds and thoughts can greatly alter our realty without any change on the physical domain. This brings to mind our health and the gut brain connection……..stay positive as we acknowledge and confront the negative.

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  • Thu, Oct 27, 2016 - 7:35pm

    #26
    RoseHip

    RoseHip

    Status Bronze Member (Offline)

    Joined: Feb 05 2013

    Posts: 144

    A plan helps

    Leaving the systems of the world destroying machine behind is the goal, one step at a time. Do not fall victim. Do it in your own way in your own timing. What isn't started can never be accomplished. Replace existing systems with newly created ones, be creative and take risk. For example that idea of retirement maybe better used else wheres and in different ways. 

    Do what is possible today then reassess tomorrow, tomorrow. Find your people and connect to them with bonds of shared values and experiences. Turn off the financial stats and turn up the highly experiential volume then open your eyes and get to work. 

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  • Thu, Oct 27, 2016 - 8:15pm

    #27

    pyranablade

    Status Member (Offline)

    Joined: Nov 08 2010

    Posts: 211

    For me this chart was

    For me this chart was instructive:

    \college.mptc.techStaffhomejsiemersDesktop2016-10-27_1513.png

    not sure if you'll be able to see that

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  • Thu, Oct 27, 2016 - 8:23pm

    Reply to #27

    Chris Martenson

    Status Platinum Member (Offline)

    Joined: Jun 07 2007

    Posts: 4703

    Nope, the link is incomplete

    [quote=pyranablade]

    For me this chart was instructive:

    \college.mptc.techStaffhomejsiemersDesktop2016-10-27_1513.png

    not sure if you'll be able to see that

    [/quote]

    Need a complete link…I tried several variations and got nowhere.

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  • Thu, Oct 27, 2016 - 8:31pm

    #28

    pyranablade

    Status Member (Offline)

    Joined: Nov 08 2010

    Posts: 211

    I spent some time editing

    I spent some time editing that and then my edit didn't get saved.

    Anyway,

    https://www.youtube.com/watch?v=k7gJcfjyFpA&app=desktop

    That link was given out earlier in the thread. Please take a look at the chart at 43 minutes.

     

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  • Thu, Oct 27, 2016 - 9:09pm

    Reply to #24
    MJB

    MJB

    Status Bronze Member (Offline)

    Joined: Jan 05 2016

    Posts: 117

    Misunderstanding

    I can get on board with personal preparedness and ‘be the change you want to see in the World’ thinking. I thought Treebeard was referring to larger problems that affect the masses i.e. Obamacare premiums going up and the penalty (tax) for not subscribing doubling. This unfortunately is out of our hands. The fact that people’s pensions will be cut in half and social security is broke is also out of my hands.

    I look around (read the news) every day and it seems that once in a lifetime events are occurring more and more often. Not to mention the complete dysfunction in Washington. I do not believe that politicians act this way in a healthy democracy/system. I don’t want to seem narcissistic but I am ready for a major shakeup. At the very least it will wake the masses up and at the worst? Not MadMax but an extremely pissed off public, one that will make the BLM riots seem like church picnics. Maybe a war with Russia (scares the sh*t out of me).

    There is nothing you or I can do to prevent the collapse that has already started; we can hope to make ourselves and others around us as comfortable as possible during the worst of it. It will not last forever. I admit I am not prepared for every scenario but I am fairly smart, fairly resourceful and flexibly resilient. My goal is to come out of this better than when I went in: IF I can increase 5 of the 8 forms of capital while holding 3 constant I win!

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  • Thu, Oct 27, 2016 - 10:00pm

    #29

    David Huang

    Status Bronze Member (Offline)

    Joined: Jan 20 2010

    Posts: 67

    narratives

    I enjoyed the podcast and hope ones like this continue to be produced if for no other reason than that they continue to support my thoughts that I am doing the right thing as I try to prepare.  I don't know about the rest of you, but I'm pretty much all alone when it comes to discussing, let alone acting on these subjects in my daily life.  So while I probably shouldn't need it, it is comforting in an odd way to hear others speak intelligently about the topics.

    That said, I understand what Treebeard seems to be voicing as well.  Talking about a problem and raising awareness is one thing, but at some point actions need to be taken, and it does seem long past the time we should be taking actions.  Maybe I'm being a cynic but I don't think any significant actions are going to happen beyond those we each take at a personal level, or perhaps family level.  I imagine there will be, or are, some enlightened small towns capable of doing more as a small community but I don't see that I live in one.

    I think we mostly know this, that individual actions are our best actions at this point, and there's no one stopping us from doing them.  However, discussing these actions never seems to generate much significant interest, because they really aren't all that exciting.  I could tell you how I made major modifications to my small home to massively increase the insulation, or discuss any of the other things I've done or hope to do to decrease my energy use in the future.  I'm guessing though that for the most part we all know about these already in abstract, and what to do specifically is going to depend on each specific situation.  So how do we really talk about these sorts of individual actions?  Do we set up a specific scenario and make a game of it suggesting ways to reduce energy use and increase quality of life?

    As has been mentioned on this site before altering our narratives is probably the most powerful way to change our own actions and those of others.  Sometimes that involves recognizing narratives that guide our own lives without our conscious awareness.  I'll share a small specific thing that struck me yesterday.  Were I live yesterday was a cold miserable day, solid overcast skies and a constant all day soaking rain making it seem even colder.  I had errands I had to run in the nearby village and rather than ride my bike in as I have been trying to do lately I told myself the story that, "I can't ride my bike to town on a day like today."  So I hopped in the car and drove.  Thoughts resulting from this podcast and the one linked to above regarding thermodynamic oil collapse made me think later what would I be doing on a day like this in perhaps the not to distant future if I couldn't just default to using a car?  I realized the problem of walking or riding a bike in cold rain is not some hyper complex problem no one has a solution for.  I believe the solution is called good rain gear.  It's something I've never really investigated before because my narrative told me those were just days when I should use a car.  I need to see about getting good rain gear, esp. while such things are still readily available.  If I then put it to use in public perhaps I can start shifting the narrative for others.  Yesterday in fact, the teller at my bank had commented that I wasn't going to be riding my bike today.  What if I was demonstrating that it was normal behavior for me at least to still be riding?

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  • Thu, Oct 27, 2016 - 10:31pm

    Reply to #28
    Tim Ladson

    Tim Ladson

    Status Member (Offline)

    Joined: Sep 22 2012

    Posts: 16

    SRSrocco Report Interview with Louis Arnoux

    pyranablade,

    This interview was posted on 10/23/16 by PP member amusedtodeath on an obscure thread. I think it is relevant to the discussion here and supports Gail Tverberg's stark warnings. I would add my voice to some here who have asked Chris to comment on the information presented in it. Thanks for posting this.

    Tim.

     

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  • Thu, Oct 27, 2016 - 10:40pm

    #30

    AKGrannyWGrit

    Status Bronze Member (Offline)

    Joined: Feb 06 2011

    Posts: 464

    Louis Arnoux

    I listened to the Louis Arnoux podcast.  It was 60 minutes of OMG the end of oil and 5 minutes of I am developing an eGene energy product and am looking for funding.  Lots of fishing line and yank the hook at the end.  What's the motivation here, it seems to me pile on the gloom and doom, spread the fear and get funding.  Is any government going to let an individual develop, market or give away a perpetual energy device?  Doubtful, governments are about control and if this were viable it would be a case of "in the interest of national security" and poof the product is gone.  So how accurate should we believe this podcast when there is an agenda attached?  Personally I would like Chris's opinion on this.

    AKGrannyWGrit

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  • Fri, Oct 28, 2016 - 1:03am

    #31

    Chris Martenson

    Status Platinum Member (Offline)

    Joined: Jun 07 2007

    Posts: 4703

    Here’s why I keep coving the basics

    Look, we here at PP generally understand the nature of our nested predicaments.

    But other people really don’t and there’s a near incessant drumbeat of happy talk and utterly ignorant claims being made faster than they can be refuted.

    Here‘s a recent example from the Financial Times:

    Renewables overtake coal as world’s largest source of power capacity

    Oct 25, 2016

    Well all right!  Let’s just stop right there!!  No need to read past the headline, my happy quotient for the day has been met.

    If I am eco minded I am now happy and can confidently tell people that renewables are now larger than coal proving that they work and to shut down the remaining fossil fuel plants all we need is just a couple more years like 2015.  Done!  Easy.

    Wait a minute…perhaps we should read a bit further in, just to be sure.  I know this is the Financial Times and they tend to get things right, but still maybe we should, just in case, read a bit deeper.

    About 500,000 solar panels were installed every day last year as a record-shattering surge in green electricity saw renewables overtake coal as the world’s largest source of installed power capacity.

    Two wind turbines went up every hour in countries such as China, according to International Energy Agency officials who have sharply upgraded their forecasts of how fast renewable energy sources will keep growing.

    We are witnessing a transformation of global power markets led by renewables,” said Fatih Birol, executive director of the global energy advisory agency.

    Part of the growth was caused by falls in the cost of solar and onshore wind power that Mr Birol said would have been “unthinkable” only five years ago.

    Average global generation costs for new onshore wind farms fell by an estimated 30 per cent between 2010 and 2015 while those for big solar panel plants fell by an even steeper two-thirds, an IEA report published on Tuesday showed.

    Wow!  So far no bogey-men, only awesome positive news, right?  Here we are a full five paragraphs deep in the article and all we know is that some sort of record-shattering surge in green electricity has taken place, and costs are dropping like a stone, and unthinkable things are now happening.

    Cool.  We can stop reading now right?

    Wrong.

    Keep going…

    An unprecedented 153 gigawatts of green electricity was installed last year, mostly wind and solar projects, which was more than the total power capacity in Canada.

    This was also more than the amount of conventional fossil fuel or nuclear power added in 2015, leading renewables to surpass coal’s cumulative share of global power capacity, though not electricity generation.

    A power plant’s capacity is the maximum amount of electricity it can potentially produce. The amount of energy a plant actually generates varies according to how long it produces power over a period of time.

    Because a wind or solar farm cannot generate constantly like a coal power plant, it will produce less energy over the course of a year even though it may have the same or higher level of capacity.

    Wait…what?  Now they've gone a bit wonky into a murky definition of "capacity."

    153 GW of solar and wind were installed but then some softer language about wind and solar not producing as much over a year was given…but no numbers…nothing to put anything in any sort of scale…

    So…the question now hangs…how much wind and solar was actually installed?  Was it 153 GW?

    Well, that was the theoretical capacity, meaning if the sun never set and the wind always blew hard enough, that’s how much these installations could have theoretically produced.

    But since we know that such things as night, and calm days, still occur with some frequency, that the actual generation capacity of wind and solar is usually about 30% of the rated capacity.

    So ~ 50 GW of actual wind and solar capacity was installed, not 153 GW.

    And the world installs roughly 75GW of coal every year (and retires 10 to 25 GW, so dial the bars back on this chart by that amount):

    (Source)

    In other words, more actual coal capacity was added last year than wind and solar.  Oh.  Well. 

    But what about the headline?  It said that renewables overtook coal as the largest source of power?  Did that happen?

    Well, no, that could not have happened and here's where the headline and opening paragraph failed miserably.  It (accidentally?) confused installed power with 2015's new additions.

    Even according to this paragraph much deeper in the article itself that idea is refuted:

    Coal power plants supplied close to 39 per cent of the world’s power in 2015, while renewables, including older hydropower dams, accounted for 23 per cent, IEA data show.

    Obviously 39% is much larger than 23% and even here that 23% includes hydro power, which is a large amount and not likely to grow by much because most of the useful rivers have already been dammed.

    So, the headline is obviously quite wrong.  Renewables have not overtaken coal as a larger source of power.  Not even close.  Some editor didn’t understand the topic and ran with a very misleading headline. 

    An amended headline might have more properly read, “Renewable installations theoretical rated capacity overtakes coal’s actual capacity installations as world’s largest new source of additional electrical power capacity”

    But that isn’t quite as sexy sounding or belief-confirming as the original headline, now is it?

    I made several important corrections there too, one of which is that renewables only supply electrical power…not “power” more generally.  To the extent that people insist on confusing the issue by misusing the word “power” when they mean “electricity production” is the extent to which we delude ourselves.

    Electricity is one of three main forms of energy we use with the other two being BTUs (for heating and industrial processes) and petroleum as a liquid fuel to move ourselves.

    At any rate, the article headline is misleading, as are the first six paragraphs (after which you’ve lost most of your readers usually) and even the following paragraphs do not provide much clarity.

    Are these articles written by numbskulls?  Possibly.

    But more likely they are written by people with an existing belief system which desperately wants things to be hopeful and rosy sounding.

    And I get that desire.

    But the reality is so far detached from the basics of the article that it takes an enormous effort to even unpack and explain one of these pieces of tripe and they come out 100x per day.  It’s impossible to refute them all, and even more pointless.

    The real point is that we have to continue to find ways to explain and describe the predicament in such a way that these article refute themselves.

    And so I continue my education efforts and interview people like Gail.  Hopefully to some benefit, but perhaps not. 

    Gotta keep trying though.

     

     

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  • Fri, Oct 28, 2016 - 2:02am

    #32

    Arthur Robey

    Status Platinum Member (Offline)

    Joined: Feb 03 2010

    Posts: 1814

    Renewables are a big, wide cul-de-sac.

    OK, so the Freeway of Fossil Fuels suddenly peters out in a slum. What now? Do we take that inviting broad turnoff called Renewables even though we know it too, peters out?

    Or do we stop, get out of the car, hand in our man-card, and ask the locals, the experts.

    That old man, Storms, he points to a narrow footpath. He says that if you abandon your baggage and take it eventually you may get to open country. 

    Does he guarantee success? Of cause not. But we know which roads guarantee failure.

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  • Fri, Oct 28, 2016 - 2:20am

    #33
    Dini

    Dini

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    Posts: 5

    More basics.

    I am all for renewables, but they have a long, long, long way to go!

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  • Fri, Oct 28, 2016 - 12:05pm

    #34
    treebeard

    treebeard

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    Basics

    Yes, I agree that covering the basics is very important, and I thought that the first two thirds of the pod cast were very good, the problem was the punch line.  A 600 calorie diet.  Is that going to motivate people to change behavior?!  So here is the choice that we are presenting, listen to the happy talk that things are OK or listen to what is presented at PP and then go sit in my garage with the car running.  What is the average person going to choose?

    Sun Tzu in the Art of War pointed out that if you push people into a corner, they fight to the death.  Pod casts like do more damage than good because they push people into a corner and lead them to defend their existing this belief system to the death. What alternative are we providing?  Ammo and homestead in some remote portion of the country?  After someone arrives here, receives and understands the message, then what?  Like the parody on preparedness for nuclear war from the sixties, bend over, put your head between your legs and kiss your ass good bye?

    Yes, they exaggerate the claims of the rate of installation of alternative energy sources, but as screwed up as that may be, it may actually be doing more good in creating the actual change in behavior then Gail's pod cast.  I am certainly not advocating that, but information without a compelling vision can be destructive, as good as our intentions may be.

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  • Fri, Oct 28, 2016 - 12:53pm

    Reply to #34

    Chris Martenson

    Status Platinum Member (Offline)

    Joined: Jun 07 2007

    Posts: 4703

    We aren't going to get there

    [quote=treebeard]

    Yes, they exaggerate the claims of the rate of installation of alternative energy sources, but as screwed up as that may be, it may actually be doing more good in creating the actual change in behavior then Gail's pod cast.  I am certainly not advocating that, but information without a compelling vision can be destructive, as good as our intentions may be.

    [/quote]

    I wholly disagree with the assessment in bold for two reasons.

    1) The pace of installation is utterly insufficient to make anything but a partial dent by the time we are in a state of declining net energy from fossil fuels.  Once that insufficiency hits we're well on our way to having to triage our priorities.  Will we spend the fuel on the military or on feeding ourselves?  On maintaining our infrastructure or building new houses?  On expanding jobs and trade or on keeping ourselves warm?  

    Choices will have to be made and it is not at all reasonable to propose that what we'll be doing is both replacing existing power generation AND expanding that base by installing renewables.  If we are not expanding power utilization then the economy is not expanding, and if the economy is not expanding then the financial system is collapsing.  If the financial system is collapsing then people are tossed out of work and the next layer of misery begins.  

    2) 99.9% of people, clinging to their beliefs, will read things like the FT article and come to the instant conclusion "Oh good, now I don't have to make any changes to my lifestyle."  Hence, no change in behavior.  None.  This thinking is rooted in the idea that our clever monkey selves will create enough new alternative energy that our behaviors will not have to be modified at all.

    Really, it's not terribly difficult to understand people. The vast majority will do everything in their power to avoid having to change.  

    So the larger question becomes…what leads people to change, besides pain?  The painful route is easy and predictable.  It's the usual choice.  

    But what leads to change via insight?  Well, there has to be a compelling vision, and I agree a 600 calorie diet is not a very compelling vision, so Gail's view pretty much fails on that front.  But it does point to the eventual pain, so perhaps there's a tiny minority that can see the eventual pain and decide to change on their own now, before it's forced on them.  Call this the "pre-pain avoidance via insight" path.  Rare, but effective.

    So what's the new vision that will guide us?  What is even more compelling than the luxury of modern life?

    Well, modern life really 'wins' at covering the basics.  It's never been easier to work for one's daily calories, or warmth (or cool), or to get from point A to point B.  The bottom of Maslow's hierarchy of needs is well oiled.

    But what of the higher levels of his pyramid of needs?  Ah.  Here's where so-called modern life fails miserably.  The statistics bear this out.  Obesity, depression, self-numbing and violence are all at epidemic proportions.

    Here's where the new vision can come along and be even more compelling.

    I don't exactly know how to go about creating that yet, but it has to be along the lines of moving away from the extractive and isolationist institutions, systems and cultural practices of old (described so well in Why Nations Fail) and towards new institutions, systems and practices that are regenerative and relational.

    We are out of relationship with mother earth and each other.  There's no other way for me to view the way the protectors are being treated in North Dakota right now.   It's disrespectful in the extreme, violent, and only separated from how Columbus treated the Hispaniola by slight degrees.  

    By coming back into relationship we will find greater purpose, joy and meaning.

    Modern life is, let's face it, really meaningless.  If there were some higher meaning in acquiring stuff, power, privilege and money then rich people would be the happiest people ever alive.  But they are not, and quite often the exact opposite.  So that cultural meme is not just wrong, but really wrong.

    So what to do?  We begin by living our own lives with greater meaning, health, connection, and joy.  And people will see that and some will be curious and want to join in.  Either we do that enough to create a critical mass in time, or we don't.

    But we don't do it by telling people about it alone.  We do it by living it too.  Words alone are insufficient.  Actions matter.

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  • Fri, Oct 28, 2016 - 1:25pm

    #35
    aggrivated

    aggrivated

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    Posts: 441

    Compelling vision or seige survivor

    Flashback WWII. Germany invades Russia. Russian chances look good at first. Then German supply lines break down. Not enough fuel. Technology fails. Germany fails. Russia “wins”. Many die on both sides.
    There is no compelling vision at this point in time. Our choice is to side with fuel and technology OR or the overwhelming force of our planet. The battle front is pourous.

    Expect losses on both sides. Hopefully, some of us will be among them. Then the compelling vision(s) will emerge.

    This is our predicament as I see it.

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  • Fri, Oct 28, 2016 - 2:38pm

    Reply to #34

    debu

    Status Bronze Member (Online)

    Joined: Aug 16 2009

    Posts: 37

    Treebeard

    Going a bit Straussian on us, are you?

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  • Fri, Oct 28, 2016 - 2:49pm

    Reply to #35
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    Edit for my above post

    Shoud read “Russian chances look bad!” sorry

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  • Fri, Oct 28, 2016 - 2:54pm

    #36

    pyranablade

    Status Member (Offline)

    Joined: Nov 08 2010

    Posts: 211

    I agree Chris

    The Mainstream Media is putting out a very different narrative, a very different "universe of information" than what we are about here at the PP site. So I completely agree that Chris and all the other contributors need to keep hammering away. Better to err on the side of repetition, since as somebody already said, we do have guests and new people coming on the site.

    Taking action, of course is all-important, but without the reminders of how things really are that we get here, it is so easy to become complacent. I need to remind my self sometimes why there is a for sale sign in front of my house. (It is there so I can have a hobby farm and be more self-sufficient ASAP.) The internet has its weaknesses, lots of the "What Should I Do" kinds of things are probably better learned face-to-face with people you know in real life. But I'm part of PP because I need to stay informed

    btw, Mother Jones has been covering the NoDAPL  situation in N. Dakota: http://www.motherjones.com/politics/2016/10/dapl-protest-photos-dakota-access-pipeline-arrests

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  • Fri, Oct 28, 2016 - 4:05pm

    #37
    treebeard

    treebeard

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    Joined: Apr 18 2010

    Posts: 551

    Beautifully articulated

    We need much more of this:

    I don't exactly know how to go about creating that yet, but it has to be along the lines of moving away from the extractive and isolationist institutions, systems and cultural practices of old (described so well in Why Nations Fail) and towards new institutions, systems and practices that are regenerative and relational.

    We are out of relationship with mother earth and each other.  There's no other way for me to view the way the protectors are being treated in North Dakota right now.   It's disrespectful in the extreme, violent, and only separated from how Columbus treated the Hispaniola by slight degrees.  

    By coming back into relationship we will find greater purpose, joy and meaning.

    Modern life is, let's face it, really meaningless.  If there were some higher meaning in acquiring stuff, power, privilege and money then rich people would be the happiest people ever alive.  But they are not, and quite often the exact opposite.  So that cultural meme is not just wrong, but really wrong.

    So what to do?  We begin by living our own lives with greater meaning, health, connection, and joy.  And people will see that and some will be curious and want to join in.  Either we do that enough to create a critical mass in time, or we don't.

    There is so much to explore there, that is meaningful and important.  I would have loved to hear that posed to Gail.  Thanks for your response.

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  • Fri, Oct 28, 2016 - 4:06pm

    Reply to #36

    Chris Martenson

    Status Platinum Member (Offline)

    Joined: Jun 07 2007

    Posts: 4703

    I've been giving more attention to Standing Rock too

    [quote=pyranablade]

    btw, Mother Jones has been covering the NoDAPL  situation in N. Dakota: http://www.motherjones.com/politics/2016/10/dapl-protest-photos-dakota-access-pipeline-arrests

    [/quote]

    My FaceBook feed is alive with Standing Rock right now: https://www.facebook.com/chris.martenson.1

    I've been Tweeting, etc.

    This is one of the most significant movements of our times.

    Question:  If one were to suddenly decide to say "no" to continued corporate exploitation of the earth and its inhabitants, what would that actually look like?

    Answer:  Standing Rock.

    So don't let it be said "nobody is doing anything."  People are doing something.  The correction question is "what are you doing?"

    Question:  What would an over-the-top and wildly inappropriate use of tactics and subtle messaging look like if used against a nation's own peaceful protestors?

    Answer:  this.

     

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  • Fri, Oct 28, 2016 - 4:28pm

    #38
    Uncletommy

    Uncletommy

    Status Bronze Member (Offline)

    Joined: May 03 2014

    Posts: 524

    Try this.

    Where I live, I turn down the thermostat to 15 C. at night (we live north of the fiftieth parallel ) and crawl under my wool comforter, sleep like a baby because I don't hear the furnace come on during the night. We don't flush the toilet after every "piddle", don't shower every morning, make a trip to the store every couple of weeks(rural living), walk to the neighbors for a coffee occasionally and compost every scrap of waste produce we generate which ends up around the tomatoes or raspberries. We turn off the light when we leave a room, eat well, but in not in excess (my BMI is 24.2) and try to enjoy each others company and watch the Boob tube about 4 hours a week. 

    I live in one of the richest countries in the world and waste more energy in a day than most Indian's use in a week. Improvements are made by increments and if we all did a bit, we may all avoid the pickle we face.

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  • Fri, Oct 28, 2016 - 4:45pm

    #39
    treebeard

    treebeard

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    Posts: 551

    Sorry

    For playing a bit of devils advocate to pull this out in the open, but it is important in the extreme to me.  It pulls together the disparate cultural, economic, political changes that will a critical part of our transformation to a sustainable society.  Putting meat on those bones is something that we can build together to truly create a world that we can hand to our children.  The critical act of analysis "what is" is no substitute for creative act of manifesting a world worth inheriting.  The fields are ripe, but the workers few.

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  • Fri, Oct 28, 2016 - 6:58pm

    #40

    sand_puppy

    Status Platinum Member (Offline)

    Joined: Apr 13 2011

    Posts: 1938

    Two daughters

    Two daughters had just flown in on urgent flights, one from Boston and one from San Francisco.  They gathered their mother up in their rental car and brought her directly from the airport to the hospital for an “intervention” with the medical team caring for her.  Both daughters were highly intelligent professional women who cared deeply for their mother. 

    It was Saturday and the oncology, primary care, endocrinology and radiation therapy centers were not open.  So naturally, they brought her to the only open medical department–the ER.

    They explained that “things just were just not getting done.”  Her care was “slipping through the cracks.”  They concluded that there mother was “not being assertive enough,” and as a result, just was “not getting the care she needed.”  They were not going to put up with this any longer and were here to insist that she was treated effectively and promptly.

    I left the patient room and returned to the doctor’s work-area to look through her chart and piece together the background.  She had a malignancy.  It was first found to be metastatic 6 months earlier and 10 days ago she presented with a headache leading to the discovery of metastases in skull, ribs and spine.  A whole body survey scan found mets in multiple organs –all progressing.  Both the primary and “rescue” chemo protocols had failed.   Her appetite was gone, she was weakening.  She was in the final weeks of life.

    The family’s story (conceptualization) was that the mother was sick and that “good medical care” would restore her to health.  They concluded (from afar) that the medial system was uncaring and negligent and required the intensity of their physical presence to demand an awakening from its indifference and get “this cancer problem resolved.”  But their story was not accurate.

    Sometimes the situation is that a person is dying and that there is no effective treatment.

    Their task was to find a new narrative, in synch with reality, to make the next stage of life as meaningful and full of caring as possible.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

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  • Fri, Oct 28, 2016 - 7:25pm

    #41

    pyranablade

    Status Member (Offline)

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    Posts: 211

    Another person I'd like

    to see interviewed again is Nate  – also from the Oil Drum.

     

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  • Fri, Oct 28, 2016 - 11:12pm

    #42
    aggrivated

    aggrivated

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    Joined: Sep 22 2010

    Posts: 441

    Communicating collapse with clarity

    In a 2009 paper published at http://www.mdpi.com/journal/energies Charles Hall, Balough and Murphy state that their research shows an “extended EROI” of 3 to 1 as being the minimum necessary to support any transportation fuel. 3:1 gets the oil based fuel to be delived to the service needed (hauling freight, heating a house & so on.) It does not include environmental degradation, military support, or even the human labor costs of getting the fuel.With this number there is also no surplus for art, education, health care and similar “non productive” pursuits of civilization. They did not weigh in on agriculture but did say that any alternative energy source with an EROI of less than 10:1 was being susidized by fossil fuel. The paper is “What is the Minimum EROI that a Sustainable Society Must Have?”

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  • Sat, Oct 29, 2016 - 12:12am

    #43

    kelvinator

    Status Bronze Member (Offline)

    Joined: Dec 25 2008

    Posts: 181

    As Treebeard Suggests, Vision About What's Next is Key

    I'm on the steering committee of our local 350 activist group trying to address climate change.  A couple of days ago, someone in the group told me about an online gathering starting to work on formulating new economics that move beyond the current fraud-based, planet assaulting system.  I just saw one of the people in the video linked below, climate activist Bill McKibben.  He spoke at an event I helped conceive and arrange locally last Friday.   He's a low key guy, but a phenomenal, historic figure, as far as I'm concerned.  

    I'm sure that some PP members would have different approaches to their ideal future than the elements this particular group is forming up, linked below.  Great!  Let's hear them!   I was glad to hear Arthur's thoughts about the Committee of Humans and out-of-the-box thinking.  I wrote a response that was then somehow lost in the new bot detection system, and had to move on to other work.

    The point is, I'm glad that I'm finally seeing more talk about what the world could look like beyond the great dysfunction we all see happening.  In politics, I've been feeling troubled by the fact that, here in the US, I have to pull for a deeply corrupt Establishment reign to continue, just so a dangerously self-absorbed, uninformed, divisive and fatally flawed human being won't be put in charge of one of the most powerful countries in the world.  No real choice.  Better to do my basic civic duty for the passing, old world, but work and look far beyond…

    It's possible to be over-fascinated by the spectacular, end-over-end car crash underway (I know I often am).   Better to keep our eyes on the prize…

    http://thenextsystem.org/

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  • Sat, Oct 29, 2016 - 12:34am

    #44
    robie robinson

    robie robinson

    Status Gold Member (Offline)

    Joined: Aug 25 2009

    Posts: 879

    Cultivated the relationship

    With my fall garden. Kelsey pulled the cultivator while Quin whinnied from separation anxiety. Mom was grateful for meaningful work with me, away from her 500lb. 3mos old daughters demands.

    we still need a miller and a tanner/harness maker.

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  • Sat, Oct 29, 2016 - 6:47am

    #45

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Hill's Group and Louis Arnoux

    I've been thinking about the Hill's Group and SRSRocco's interview with Louis Arnoux. I'm having a bit of cognitive dissonance. Their theory is that oil only has so much energy per unit. The more that is required to produce the final product, the less that is available to the end consumer. (So far, so good.) They've gone further and calculated what the theoretical consumer value of petroleum is at any time. Here's where I have my cognitive dissonance. The gasoline I buy today has about the same energy value as the gasoline I bought 10, 20, 30 years ago. Why is it worth less? I just can't wrap my mind around that concept.

    I would think that enterprises that have a mix of wells/processors that aren't profitable would just go out of business. As a result, there would be less supply on the market and prices would go up accordingly. Today, there appears to be plenty of petroleum on the market. Is it because all the producers who can't make a profit at these prices are still able to get funding so they can continue?

    As Stan said, it is complicated. Saudi Arabia/Russia didn't want to lose market share so they kept pumping to drive prices down and bankrupt the shale oil producers. I agree that happened, but thermodynamics can't be cheated. If the energy didn't come from oil, it came from somewhere else – electricity, coal, natural gas, etc.

    At some point, each well will progress to the point that it isn't worth pumping – unless other energy sources like wind or solar are used to lift the oil to the surface. (Even then, at some point it won't be worth pumping.) As individual wells drop out of production, the amount of energy available to the end consumer will also drop. Without expanding energy supplies, our economy can't grow. Our expansionist economy doesn't work well in reverse, but that is where we're headed.

    It is seductive to think that real world results will follow a calculable mathematical construct that predicts exactly when failure arrives. The authors have made simplifying assumptions and treat the entire industry as a single "average" system. There are too many moving parts and individual interests to rely too heavily on their simplified analysis.

    If oil prices can't rebound above $100/barrel without causing recession, I'll put more stock in their theoretical approach. Meanwhile, we're still heading toward the same lower energy future. We just don't know exactly when.

    Grover

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  • Sat, Oct 29, 2016 - 3:40pm

    #46

    Quercus bicolor

    Status Bronze Member (Offline)

    Joined: Mar 19 2008

    Posts: 195

    More on Hills Group

    I must say I'm a bit suspicious of their numbers.  Maybe the justifications are contained in the $69 report, but I think their exaggerating just how little net energy is available now and will be in the next 5-10 years.  I would think we'd be further along the collapse curve if they were correct.  Maybe they're right and we're getting by right now by neglecting/consuming infrastructure/capital?  I'd love to see a careful analysis of current oil EROEI to confirm exactly where we're at right now.

    Another thing that disturbs me is this image:

    which can be found here:

    https://www.theautomaticearth.com/2016/10/why-the-global-economy-will-disintegrate-rapidly/

    What is the top portion of the barrel "Unavoidable waste heat – 2nd law of thermodynamics?"  If we just count the actual fuel used by the machines that are engaged in processing, transporting the oil, etc, any waste heat is already accounted for.  To not count it, would require the near impossible task of computing the actual work done by the machines rather than just their fuel consumption.  Are they double counting or am I missing something?

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  • Sat, Oct 29, 2016 - 5:45pm

    Reply to #46

    Stan Robertson

    Status Gold Member (Offline)

    Joined: Oct 07 2008

    Posts: 516

    ERoEI doesn't mean what Hills thinks it means.

    [quote=Quercus bicolor]

    . . What is the top portion of the barrel "Unavoidable waste heat – 2nd law of thermodynamics?"  If we just count the actual fuel used by the machines that are engaged in processing, transporting the oil, etc, any waste heat is already accounted for.  To not count it, would require the near impossible task of computing the actual work done by the machines rather than just their fuel consumption.  Are they double counting or am I missing something?

    [/quote]

    Most engines that consume fossil fuels are less than 25% efficient at converting the available chemical energy into useful work. This means that about 75% of the available energy is discarded as waste heat, so the thermodynamic situation is far worse than depicted in your graphic. But since the analysis begins with this gross error, it is very misleading. If it requires, say, 3 barrels of oil recovered for each barrel of oil used in exploration, drilling, producing, refining, transportation and providing other infrastructure in order to have a sustainable economy, then for each barrel of oil produced, 2/3 of a barrel will be available for other purposes. The ratio of oil returned to oil invested is 3 to 1. But the ratio of useful work to chemical energy invested is more like 25% of the chemical energy in 2/3 of a barrel, to 100% of the energy of one barrel, which is 1 to 6. But who cares?

    When folks speak of ERoEI, they really are not talking about chemical energy and thermodynamic work, but rather the barrels of oil returned per barrel of oil invested in some aspect of producing it. The worst of viable exploration prospects have an ERoEI ratio of at least 10 through the exploration, drilling and completion process of producing a new well and estimating its recoverable reserve. By the time you add refining, transportation and other infrastructure costs in barrels of oil equivalents, this drops to about 3.5 to one. But folks in the oil business prefer to do their accounting in dollars. They have been drilling prospects in the continental U.S. for decades while being quite happy to have an ultimate 3 to 1 return on their nominal dollars invested. This is sufficient to allow small producers to survive, but it is not enough to produce the quantities of oil that our economy requires. That is the problem.

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  • Sat, Oct 29, 2016 - 10:32pm

    Reply to #46

    Quercus bicolor

    Status Bronze Member (Offline)

    Joined: Mar 19 2008

    Posts: 195

    EROEI

    You're right Stan.  Engine efficiency doesn't matter.  Just measure the fuel it uses.  Inefficient engines will use more.  Are you really saying that 10:1 oil really ends up as 3.5:1 after refining, transport and infrastructure.  That says that of the 9 barrels remaining after pumping it out of the ground, 5.5 are consumed in refining it, transporting it and building/maintaining whatever infrastructure is needed.  That would have applied even in the days of 100:1  meaning that 60 or so barrel of the 99 remaining would have been consumed by this process – leaving us at 40:1.  That really bites as EROEI decreases.  When you're at 100:1, you still end up at 40:1 after all of those steps, but at 10:1, you end up at 3.5:1, at 5:1, you end up 2:1, and at 3:1, you get to 1.2:1.  By the time you get to 2.5 to 1, you're out of business because, refining/transport/infrastructure take you to 1:1.    I don't think transport and refining use very much, so other infrastructure (and whatever is diverted from being burned into plastics, asphalt, etc.) must be most of it.

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  • Sun, Oct 30, 2016 - 3:17am

    #47
    Uncletommy

    Uncletommy

    Status Bronze Member (Offline)

    Joined: May 03 2014

    Posts: 524

    And, of course. . .

    We mustn't forget bunker sea oil. It moves 90% of the worlds goods in this over globalized world and, at 1:1, it will be the fuel of choice until wind comes back into vogue. At that point, my patented battery operated battery charger should be ready and available to any government that finds itself prepared to hurl stones at one another. Preppers. . .Unite!

    Image result for tom toles stone age war

     

     

     

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  • Sun, Oct 30, 2016 - 4:53am

    Reply to #46

    Stan Robertson

    Status Gold Member (Offline)

    Joined: Oct 07 2008

    Posts: 516

    More on ERoEI

    QB,

    What really happens is that refining, transportation and infrastructure takes about 20% of each barrel produced. If you produce a barrel of oil from wells with a 100 to 1 yield to the point of well completion, you will still have about 80% of 0.99 barrels after refining and infrastructure deductions. That is 0.792 barrels, so 100 to 1 has dropped to 1/(1-.792) = 4.8. It's worse than you thought, but 10 to 1 is not horribly worse than 100 to 1. At 10 to 1, you have 0.72 of each barrel left after all deductions and an overall effective return of 1/(1-.72) = 3.6.  At 3.5 to 1 at the wellhead, you would have 0.57 barrel left and the effective return after infrastructure deductions would drop to 2.3.  You are right that it would really begin to bite as the wells become poorer, but in actual fact a field consisting of such wells would never be drilled. As I noted previously, about the poorest prospects currently being developed return better than 10 to 1 at the wellhead.

    Stan

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  • Sun, Oct 30, 2016 - 1:28pm

    #48
    brushhog

    brushhog

    Status Member (Offline)

    Joined: Oct 06 2015

    Posts: 53

    What am I missing here??

    I never get these articles about the price of oil not being able to go high enough to sustain supply. People waste so much money on non-essentials. I'd bet the average person spends about 50% of his income on nonessentials like a new Iphone, movies, cable tv, extra/unnecessarily expensive vehicles, dining out, vacations, fashions, starbucks, drinking, gym memberships, etc,etc Oil is an essential. Modern society NEEDS oil to survive. Theres plenty of room for much higher prices. Given the choice between a new iphone and being able to get to work, what are most people going to choose? People arent going to pay the cable bill instead of buying enough fuel to get to the drug store to get their medications. Look at all the people on the road driving high end vehicles, or big SUV's, and etc. All of those people can afford MUCH higher gas prices. Check some stats of the number of vehicles on the rd in the past 10-20 years, its increasing exponentially as the populations increases. That means demand is rising.

    There is so much superfluous spending going on, whole industries would have to completely collapse before we could legitimately say that society can not afford higher fuel prices. I think gas to $10 per gallon is completely doable. It doesnt mean that this is desirable, or GOOD for the economy. It means that we COULD pay that much or more if we absolutely had to, though most of us would probably have to make some lifestyle changes.

    As long as Applebees, Starbucks, and Disneyland keep packing people in, I dont see a society incapable of supporting higher prices for necessities like oil.

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  • Sun, Oct 30, 2016 - 3:10pm

    Reply to #46

    Quercus bicolor

    Status Bronze Member (Offline)

    Joined: Mar 19 2008

    Posts: 195

    Let's Try Again

    Let's try again Stan with your new info and 10:1 oil.  We'll ignore the 1 barrel needed to be input into the system and instead require 1 barrel be set aside to extract the next 10 barrels:

     

    • 10 barrels at the well head.
    • 2 consumed by refining and transporting and infrastructure – 8 remaining.
    • invest 1 barrel to get the next 10 out – 7 remaining.
    • That leaves us with 3 barrels invested to get 10 or 3.33 to 1.

    You got 3.6 which is close enough for me.

    At 3.5, I get 3.5 in, 0.7 lost to refining, 1 invested in the next 3.5, giving us 3.5/1.7=2.06:1 – still fairly close to  your value. 

    There's also the issue of some grades taking more or less energy to refine than others.  As well as varying transportation costs due to varying distances and available transport options.

    What that says is that 100:1 was really 4.8 to 1 and 10:1 is actually 3.33:1, meaning that in the old days we had 3.8 units available for society with each unit invested in the oil industry and now we have 2.33, or about 58% of what we had.  When we hit 3.5:1 (all tar sands, we'll have 1.06 units for society or about 28% or what we had.  Maybe that is the perspective we need to have.  I'm guessing though that the 20% refining/transport value is too low for tar sands. For example, at 25%, refining/transport, 3.5:1 is 3.5/1.875 = 1.87:1, at 30%, it is 3.5/2.05 = 1.7:1.  Do you know the actual value?

    It's also important to note that little issues like where to draw the boundary for energy invested is more important at low EROEI. 

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  • Sun, Oct 30, 2016 - 7:43pm

    Reply to #46

    Stan Robertson

    Status Gold Member (Offline)

    Joined: Oct 07 2008

    Posts: 516

    QB is correct

    QB,

    Your calculations are the more realistic. Mine differed essentially because I left it as optional whether or not one took a net barrel of oil and later used part of it to obtain another. It is more realistic to assume, as you did, that the game always continues; that on average, a certain fraction of each barrel produced will be spent in drilling another well.

    People refer to a "fracking revolution" in oil and gas production, but the real revolution has been horizontal drilling technology. Fracking has been around since the '50s and was essential long before horizontal drilling began. Widespread horizontal drilling has only occurred in the U.S. so far and is less than two decades old, but it has made huge reserves available at 10 to 1 yields from shales and tight sands. This will eventually spread to the rest of the world and should postpone oil doomsday for a good while; hopefully a few decades.

    As Brushhog noted above, we can surely tolerate much higher prices if necessary. We should eventually be able to reach a somewhat stable situation in which the price per barrel of oil allows drilling of 10:1 prospects to continue for a long time. Right now, contrary to Gail's assessment, I think that about $70 per barrel oil would permit about 3 to 1 return on dollars invested in 10 to 1 oil yield wells. That won't save the companies that were barely viable drilling for $100 oil and a lot of their wells will never pay out now, but many others would survive and both the oil supply and the economy would be just fine. Recall the years '79-'85 when oil was about $100 (2016 dollars) per barrel. After the oil shock recessions ended in '82 we had four years of high economic growth rates even before the oil price crash in late '85. The market was oversupplied with oil at $100 then, just as it has been more recently.

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  • Sun, Oct 30, 2016 - 9:58pm

    #49
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    Revisit the Crash Course

    I went back today and reheard chapters 19 and 20 to remind myself of the basics. We are trying to update the status from where the Crash Course leaves off.  I would love to see Chris and Adam do addendum updates as interstitial chapters, but that may not be possible.  Either way, the big takeaways from these chapters is how little net energy we have left, especially if we deduct how much we use globally for food.

    Third World nations that still use old agriculture will be much better off when the net oil squeeze happens. The article on Sun Drop Farms tomato greenhouses was hopeful since they use electricity and not oil to grow.  That doesn't solve the problem, just shifts the energy sourcing slightly away from oil and buys a little time.

    Anyway, chapters 19 and 20 were a good refresh.

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  • Sun, Oct 30, 2016 - 10:08pm

    #50
    Uncletommy

    Uncletommy

    Status Bronze Member (Offline)

    Joined: May 03 2014

    Posts: 524

    Let's not get carried away, folks.

    My calculator works just as well as Stan's and Quercus' does, but I'm afraid we might be missing the point and are focusing too close to our navels. Price will be determined on availability. That means F.O.B my fuel tank. "Tar" sands is something I know about, from first hand experience, and it ain't about barrels in and barrels out. It's about BTU's in and BTU's out. The bottom of the barrel is # 6 bunker sea crud (oops, I mean crude). When everything is said and done to a barrel of oil, you are left with about 1.6 gallons of #6  out of a 42 gallon barrel. The "tar sands" are exactly that; glorified crud that needs to be thinned out with Natural gas condensate if you ever hope to move it anywhere. And, thanks to the engineers at Suncor and Syncrude, they're showing a return even at $20 a barrel

    . Since Alberta has an abundance of natural gas, that is the "go to fuel" to process this thick shit if you want to be in the business. And, I won't even start talking about the fresh/brackish water requirements and the energy it uses in the process.  I won't belabor the point, but have a gander at the following article for some clarification of the theoretical verses the practical. As the light stuff gets harder to find, you are left with "the bottom of the barrel", so enjoy the ride, no matter what the price. Fortunately for me, my kids and grandkids will be working on the solutions. Have another look at my #61 post and see if the cartoon addresses to situation

    https://insideclimatenews.org/news/20130219/oil-sands-mining-tar-sands-alberta-canada-energy-return-on-investment-eroi-natural-gas-in-situ-dilbit-bitumen

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  • Mon, Oct 31, 2016 - 8:04am

    #51

    Grover

    Status Gold Member (Offline)

    Joined: Feb 15 2011

    Posts: 691

    Doesn't Add Up

    Pssst! Hey buddy, want to invest in energy??? Invest 1 unit and get 3 units in return.

    Sounds too good to be true. Would you buy this deal from anyone selling it? If it were true, why would they be selling it to you or me? Assuming it is true, how much would you invest? Why wouldn't you borrow all you could right now to get a guaranteed monster return?

    Perhaps it isn't true. Perhaps they are only looking at specific energy inputs and ignoring all the other costs. Can't these costs be exchanged for oil cost equivalents using the current price per unit of oil – currently about $50/barrel? After all, shouldn't labor hours and equipment rental costs that are required to extract the oil be included? What about access roads? What about land leases and governmental royalties/taxes/permits? What about the odds of drilling a dry well? Shouldn't all of those costs also be factored in the investment? If the investment is only based on ERoEI, what difference does it make whether the price is $2/per barrel or $200/per barrel?

    Obviously, there is more involved than just ERoEI. The hucksters who are selling the story conveniently ignore all the other costs. So why do we continue to buy the story? Are we that addicted to narratives (and oil?)

    Grover

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  • Mon, Oct 31, 2016 - 2:05pm

    Reply to #46

    Chris Martenson

    Status Platinum Member (Offline)

    Joined: Jun 07 2007

    Posts: 4703

    Thermodynamic Analysis

    [quote=Quercus bicolor]

    Let's try again Stan with your new info and 10:1 oil.  We'll ignore the 1 barrel needed to be input into the system and instead require 1 barrel be set aside to extract the next 10 barrels:

    • 10 barrels at the well head.
    • 2 consumed by refining and transporting and infrastructure – 8 remaining.
    • invest 1 barrel to get the next 10 out – 7 remaining.
    • That leaves us with 3 barrels invested to get 10 or 3.33 to 1.

    You got 3.6 which is close enough for me.

    At 3.5, I get 3.5 in, 0.7 lost to refining, 1 invested in the next 3.5, giving us 3.5/1.7=2.06:1 – still fairly close to  your value. 

    There's also the issue of some grades taking more or less energy to refine than others.  As well as varying transportation costs due to varying distances and available transport options.

    What that says is that 100:1 was really 4.8 to 1 and 10:1 is actually 3.33:1, meaning that in the old days we had 3.8 units available for society with each unit invested in the oil industry and now we have 2.33, or about 58% of what we had.  

    [/quote]

    You're on the right track here but I'll disagree with the part where Stan and yourself have taken a mostly fixed cost and made it a variable cost.

    • 2 consumed by refining and transporting and infrastructure – 8 remaining.

    This is a fixed cost, not a variable cost.  Just because you pulled a 1:100 barrel out of the ground, or a 1:10 barrel, nothing at all changes in terms of how much energy is then required to move and refine it.  

    That part is fixed.  A rail line takes X units of energy to build and maintain and a refinery takes Y units to operate.

    So it's convenient, but inaccurate, to try and fix that amount of energy in proportion to the barrels coming out of the ground.

    For the sake of simplicity, let's just say that having a rail transport line cots us a million barrels and building a refinery cost us a million barrels.  Thus, the first 2 million barrels out of the ground are what was required to transport and have a refinery.  Period.  No more and no less.  Whether we get a billion barrels out of the ground or just two million, is important, and it matters in other ways if those were low of high net energy barrels, but it doesn't change the costs of moving those barrels to a build refinery.

     Those investments are fixed.

    However, the actual refining costs us some energy and that is variable.  Each barrel will 'cost' us the same amount to refine in terms of energy, but that amount is a very small proportion of each barrel.  Nowhere near 20%

    Under this sort of analysis the 100:1 barrels deliver a lot more energy to society than the 10:1 barrels because the fixed costs are, well, fixed.  This is the nature of any fixed cost industrial investment.  You pay greater the unit throughput the less the fixed costs 'costs' you per unit.

    So the two variables you have to know about once the fixed costs are in play are (1) your profitability and (2) to your unit output.

    That is (1) the net energy and (2) the number of barrels produced.

    So a 100:1 field producing a billion barrels is a whole different beast from a 10:1 field producing 100 million barrels, assuming the fixed costs are the same.

    In this story, the fixed costs are the myriad roads, bridges, pipelines, trucks, drill bits, experienced drill operators, and all the million other bits of software, hardware and human experience that have to be in place for oil to be produced.  

    I honestly think a super detailed study would be required to even have a vague grasp of that but we know that prior and existing levels of energy output from oil production have been and continue to be sufficient to pay this fixed cost.

    I am almost 100% certain that the thermodynamic approach that's been linked to by the Hills Group is wrong.  There's just no possible way that the collective oil industry is about to hit the 1:1 mark.  

    You might be able to convince me that the tar sands are perilously close, or this or that specific deepwater project, but Saudi Arabia is producing oil from 1000 foot deep wells that are up to 60 years old, (and still producing thousands of barrels per day each!).   Those wells are clearly very, very far into the favorable net energy green zone and there's no possible way they will be shut down because some new wells are no longer as favorable.

    That's, frankly, a silly idea.  

    And the shale plays are favorable as well.  Not as favorable, but still worth doing.  I am less clear if we'd be able to run the entire US culture and society on those alone, but we won't have to run that experiment until and unless global oil trades are compromised and shut down.

    But even then my bet would be that after some adjustments, the bulk of society would continue to function reasonably well.  Sure, a lot of things like casual driving long distances would cease, but life would go on.

    So when people say "oil goes to a price people are unwilling to pay" I cringe a little because we'd pay a lot more for oil if that's what it cost because the work it performs is just amazing.

    A more accurate and supportable statement would be "the global credit markets will buckle under a much higher oil price and would probably cease to expand which would then create a major financial accident as the debt markets can either expand or collapse."

    So it's not even that 'the economy' cannot afford a higher oil price, it certainly can.  No problem.  What's at stake with a higher oil price, especially a sudden one, is a shock to the existing pile of debt and its continued expansion.

    Now that will cause a host of problems and more than a few predicaments, but that has more to do with the fact that we've built a really crappy monetary system for ourselves and less to do with a sudden decrease in the thermodynamic output of oil.

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  • Mon, Oct 31, 2016 - 4:53pm

    Reply to #46

    Stan Robertson

    Status Gold Member (Offline)

    Joined: Oct 07 2008

    Posts: 516

    Economic analysis

    Chris,

    You are correct that refining does not impose a 20% cost per barrel, but it is also not a negligible cost. It averages about 12% for the mix of feed stocks, fuels and heating oils that presently account for most U.S. oil consumption. The rest of the 20% was just a rough estimate of the present level of fixed and infrastructure costs. The proportions of fixed and variable costs would be very different if we were considering oil from tar sands.

    I agree with you completely where you wrote "I honestly think a super detailed study would be required to even have a vague grasp of that but we know that prior and existing levels of energy output from oil production have been and continue to be sufficient to pay this fixed cost." That detailed analysis is a continuing process that has largely been reduced to economics. As long as producers can earn sufficient return on their investments, they will continue to drill and produce. Refiners and transporters will continue to provide finished products to purchasers as long as they can do so profitably. And as long as purchasers obtain the required financial returns on their purchases they will continue to buy the refined end products.

    But that is not the end of the story. The chain could be profitable from top to bottom, but would not be stable unless there was a reasonable balance between supply and demand. The short term balance was cratered in 2014  by shale oil production, but it should soon recover at a price the public will happily pay – unless destabilized again by a major reduction of supply due to some event such as war in the middle east. The long term balance will eventually be disrupted when it is apparent that 3 to 1 dollar returns on drilling will not produce enough oil supply. Drilling will remain profitable, but the credit markets will probably buckle under the Red Queen effect when most of the old 100 to 1 oil is gone.

    Stan

     

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  • Mon, Oct 31, 2016 - 5:39pm

    Reply to #46

    Jim H

    Status Diamond Member (Offline)

    Joined: Jun 08 2009

    Posts: 1798

    Thanks for the perspective Chris

    Chris said, 

    A more accurate and supportable statement would be "the global credit markets will buckle under a much higher oil price and would probably cease to expand which would then create a major financial accident as the debt markets can either expand or collapse."

    So it's not even that 'the economy' cannot afford a higher oil price, it certainly can.  No problem.  What's at stake with a higher oil price, especially a sudden one, is a shock to the existing pile of debt and its continued expansion.

    Now that will cause a host of problems and more than a few predicaments, but that has more to do with the fact that we've built a really crappy monetary system for ourselves and less to do with a sudden decrease in the thermodynamic output of oil.

    This is very insightful..   This holistic understanding of how the parts of the machine, the feedback loops so to speak, work in concert.  Really interesting perspective on our oil/energy predicament vs. our money predicament.

    The fact is, we can't handle contraction because our money system can't handle contraction – no other reason really.  The money system wags the dog here..  serious re-invention is needed. 

    My own thought experiments have led to this possible patch:

    1)  Get rid of central banks

    2)  Allow for markets to price, "money"

    3)  When a loan is made, in order that the system does not become dynamically imbalanced as a result of the need to pay interest on top of the principle… create the principle at the same time but put it into a pool of money that will be distributed as some form of helicopter money in equal amounts to ALL families, all people dependent on the system.. this way;

           a.  the money exists in the system to pay all liabilities, principle + interest. Deflation won't go away but it won't be as much of a problem either.    

           b.  Inflationary tendencies if they exist tend to benefit regular people – seigniorage democratized. 

     

     

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  • Mon, Oct 31, 2016 - 6:36pm

    #52
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    while on the subject of money and oil

    Our economy is struggling to expand because the production of oil is flat. One of the costs of doing business that has been reduced is the cost of money. This 4-5% cut at most over the last 20 years.   If the interest rate is raised in the face of flat oil production then the added cost of doing business would have to be balanced with cuts in other areas. I don't think this would come from added efficiencies since most of those require more complexity which in turn requires more energy to support it.  

    I agree with Jim H that we should let the market price money, but I wonder if it would change much at all. The big issue as I see it is the reverse leverage pressure on the banks as the economy shrinks and the foundation of our money supply shrinks with it.  Any printing at that point is more money thrown at less. That is inflation.

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  • Tue, Nov 01, 2016 - 1:27am

    Reply to #46

    Quercus bicolor

    Status Bronze Member (Offline)

    Joined: Mar 19 2008

    Posts: 195

    refining

    OK Chris and Stan,

    I'm trying to answer the question "What is the final net benefit to society (in barrels delivered to the non-energy sector of the economy vs barrels used by the energy sector) now?  What was it when oil at the wellhead was 100:1?  What is is likely to be in the next 10-20 years?"  A few questions that might get us closer to that answer.

    1. Stan says refining consumes about 12% now.  How much does it consume when the input is tar sands upgraded with NGL?  How much did it consume of the old 100:1 oil?
    2. What is the relative ratio of infrastructure construction and maintenance costs (in terms of energy) relative to total oil processed by that infrastructure over it's lifetime? Now?  When oill was 100:1?  in the future?

    I don't know the answers to these questions.  Any guesses by those who can make more of an educated guess than me?

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  • Tue, Nov 01, 2016 - 12:42pm

    #53
    Uncletommy

    Uncletommy

    Status Bronze Member (Offline)

    Joined: May 03 2014

    Posts: 524

    great question, Quercus.

     "What is the final net benefit to society (in barrels delivered to the non-energy sector of the economy vs barrels used by the energy sector) now? 

    How important is it to you to drive to work in your Lexus everyday? This whole discussion is pretty much revolving around transportation and until we stop moving an average 150 lbs. of flesh in a 2000+ lbs. machine on miles of asphalt, the answer becomes insignificant.The US and their western allies are in the middle east because that's where the light crude is. The rich will continue to exercise their advantage in this regard to the detriment of others until everyone is forced to use their feet.

    Your question entails just too many variables to adequately answer such an amorphous question.The question I would ask is, "what is the best use of these resources for the benefit of all of mankind rather than for the convenience of a select few?" The PP website is founded on this premise and continued discussions on the details, while very enlightening, fail to do service to mankind in a practical way.

    Now, having said that, if you want continue the quest in understanding, visit:

    http://pubs.usgs.gov/fs/fs070-03/fs070-03.html 

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  • Tue, Nov 01, 2016 - 1:04pm

    Reply to #53

    Quercus bicolor

    Status Bronze Member (Offline)

    Joined: Mar 19 2008

    Posts: 195

    Your question is good too Uncletommy

    I agree that your's is a good question to ask too.  For those of us who are forging a way to live when the oil is no longer available, it is one of the most important questions.  Others will look to us when the time comes.

    However, the majority of the privileged few will likely keep transporting their flesh on that asphalt until something stops them.  That something is likely to be disruptive enough that we all want to know when it's coming.  The answer to my question plays at least some role in determining when and perhaps how that disruption will occur.

    Thanks for the link.  I'll follow it when I have some time over the next few days.

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  • Tue, Nov 01, 2016 - 9:54pm

    Reply to #53
    brushhog

    brushhog

    Status Member (Offline)

    Joined: Oct 06 2015

    Posts: 53

    Uncletommy wrote:.The

    [quote=Uncletommy]

    .The question I would ask is, "what is the best use of these resources for the benefit of all of mankind rather than for the convenience of a select few?" The PP website is founded on this premise and continued discussions on the details, while very enlightening, fail to do service to mankind in a practical way.

    [/quote]

    Which opens up the next question…'who amongst us is able to determine what is "best for mankind"?' Over and over history has shown us that those who claim to know what is best for the 'collective', 'common good' have inevitably led their unfortunate people down the road of disaster.

    As Hayek put it …'The curious task of economics is to demonstrate to men how little they know about what they imagine they can design'.

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  • Wed, Nov 02, 2016 - 1:00am

    Reply to #40

    LogansRun

    Status Silver Member (Offline)

    Joined: Mar 18 2009

    Posts: 304

    Interesting....thanks for

    Interesting….thanks for sharing.

    Reality sucks!  If I could make up my own reality I sure as hell woul…wouldn't you?

     

    [quote=sand_puppy]

    Two daughters had just flown in on urgent flights, one from Boston and one from San Francisco.  They gathered their mother up in their rental car and brought her directly from the airport to the hospital for an “intervention” with the medical team caring for her.  Both daughters were highly intelligent professional women who cared deeply for their mother. 

    It was Saturday and the oncology, primary care, endocrinology and radiation therapy centers were not open.  So naturally, they brought her to the only open medical department–the ER.

    They explained that “things just were just not getting done.”  Her care was “slipping through the cracks.”  They concluded that there mother was “not being assertive enough,” and as a result, just was “not getting the care she needed.”  They were not going to put up with this any longer and were here to insist that she was treated effectively and promptly.

    I left the patient room and returned to the doctor’s work-area to look through her chart and piece together the background.  She had a malignancy.  It was first found to be metastatic 6 months earlier and 10 days ago she presented with a headache leading to the discovery of metastases in skull, ribs and spine.  A whole body survey scan found mets in multiple organs –all progressing.  Both the primary and “rescue” chemo protocols had failed.   Her appetite was gone, she was weakening.  She was in the final weeks of life.

    The family’s story (conceptualization) was that the mother was sick and that “good medical care” would restore her to health.  They concluded (from afar) that the medial system was uncaring and negligent and required the intensity of their physical presence to demand an awakening from its indifference and get “this cancer problem resolved.”  But their story was not accurate.

    Sometimes the situation is that a person is dying and that there is no effective treatment.

    Their task was to find a new narrative, in synch with reality, to make the next stage of life as meaningful and full of caring as possible.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    [/quote]

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  • Sat, Nov 05, 2016 - 7:35am

    #54

    kelvinator

    Status Bronze Member (Offline)

    Joined: Dec 25 2008

    Posts: 181

    I Like McKibben's Take Better as a Right Approach

    Here’s that local event that I’m proud to have helped design, publicize and pack the house for with our terrific, all volunteer 350 team as a venue for the historic, but low key climate campaigner against fossil fuels, Bill McKibben. If you haven’t heard Bill speak – and I never had in person – have a listen. He's why the house was packed – a great guy – you can skip to 13m 15s to hear him speak (I guess vimeo doesn't embed, so you have to copy the link):

     
    I don't accept Gail's view that renewable and sustainable energy can't eventually workably take over in combination with huge changes to the economy, including great conservation of overall energy use.  Sure, maybe the most pessimistic views will turn out to be true, but actually maybe not.  As far as I'm concerned, no one anywhere knows what's possible or not possible if people actually got off their asses, put in some hope and sweat equity and tried to change the world.  If people actually cared enough to get off their asses, unite, and demand an end to corruption, it would happen so fast your head would spin.  Most of the time, people can't be bothered, but either figure they've got their own little slice of the pie, so why worry, or they've let themselves be convinced they can do nothing but either endure or tear the place down. Organizing people power to fight wealth and corruption is some how seen as…what?  You tell me.  But I'll tell you one thing.  Trump is definitely not it.

    And why in the world people that say they like Warren and Sanders and think those two have integrity don't support them when they ask for support, don't raise their voices and say throw the other bums out, don't work with them on their strategy, I have no idea at all.  How do you get anything done if you can't work together with other people you agree with on a team and settle on a common strategy with representatives in power you like?  Where are your bright lights over in the Trump camp?  Hmmmm, I don't see them.  What about over in the Republican or Libertarian party?  If you've got them, bring them forward and let's see what they have to say for themselves.  

    If you don't have them, or you just have a bunch of nay-sayers, then what in the world are you doing out there, who is on your team, where are you going? Oh right, I forgot, the Koch Bros. the great friends of the Libertarians, such great fossil fuel humanitarians, paying climate deniers in Washington to make sure everyone knows their product isn't really throwing the planet into upheaval!  They've bought the "Don't bother me!" vote, always a winning disinterest group!  – the everything will be great if the evil government just finally goes away crowd.  It's 2016 my friends.  Look around the world.  Look at the packed populations, the mass cultures, teaming cities, the arms and explosives stacked high everywhere, nuclear material.  Do you really believe it's going to be great if governments just go away or start getting heavily nationalistic?  Do you think they will just go away?  When I look around, where they disappear, strongmen and gangs with guns control the turf.

    Bill McKibben is working hard to make sure Trump is never elected, and I'm with him, not Her, and not Chris on this one, though I'm with Chris on other things.  But this one is important, and it has to do with how much you do or don't work with others who have similar goals and integrity, it seems to me.  But for me, that's true all around, including friends of mine – including my own brother – that like Hillary too much, and didn't support Bernie.  What are they thinking?!!  I thought we were similar!   Don't they see who she is?  That's how it is these days, splits all around…And guess who it helps – the blood-suckers in the status quo.

    My question for this thread is:  Yes, and so…what's your action step?  Okay, I know, the preps.  Fine, I agree.  But what about gov't?  Are we pretty much assuming that things will just get quiet, and then life will creep slowly on in our various friendly frontier communities just like the days of the old west, except when the  armed zombie starving terrorist populations have to be fended off every now and then?  Sounds great!  But I think I'll see what else might be possible.

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  • Sat, Nov 05, 2016 - 2:02pm

    #55

    AKGrannyWGrit

    Status Bronze Member (Offline)

    Joined: Feb 06 2011

    Posts: 464

    Open Source - Partial Solution?

    I remember a story about a man who traveled to Europe and was impressed by cars that got many miles on a tank of gas.  Returning to the US he wanted to modify his vehicle to increase its mileage per tank of gas, which he discovered IS possible.  However, it's apparently illegal.  A crime so heinous he could go to jail for after market modifications of a vehicles engine in order to significantly increase fuel efficiency.

    Also, I saw on 60 minutes one time a Jay Leno interview and remember him driving an antique car powered by steam.

    It seems to me we have partial solutions out there but obtaining the information and being allowed to implement them – well we are presented with roadblocks.  Anyone know of a place to get open source info on building home-made steam engines or after market modifications.  For off road post collapse use only of course.

    AKGrannyWGrit

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  • Sat, Nov 05, 2016 - 2:49pm

    Reply to #55
    robie robinson

    robie robinson

    Status Gold Member (Offline)

    Joined: Aug 25 2009

    Posts: 879

    Granny, Hay,,,the original solar power

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  • Sat, Nov 05, 2016 - 3:16pm

    #56

    AKGrannyWGrit

    Status Bronze Member (Offline)

    Joined: Feb 06 2011

    Posts: 464

    Love It Robie

    My Grandmother told a fun story about how a friend came to visit and drove his brand spanking new car.  Well it started to rain so her friend put the car in the barn.  When the visit was over and her gentlemen caller went to leave he was horrified to see that a horse had leaned over its stall and proceeded to eat the fabric trim around the top of the new car.  Apparently solar powered hooved devices have unique personalities and are open to new dining experiences.

    100 years later and still a good story!

    Thanks Granny

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  • Sat, Nov 05, 2016 - 8:59pm

    Reply to #55
    aggrivated

    aggrivated

    Status Bronze Member (Offline)

    Joined: Sep 22 2010

    Posts: 441

    Amish buggies

    They are enjoying a smooth ride on a paved road. With those tall wheels a few ruts would be a piece of cake. In the early days of cars farmers and auto/truck owners fought over clearing snow off roads. In winter, a horse pulling a wagon with snow runners replacing the wheels could pull a heavier load than in the summer over rough roads. Eventually the farmers were shoved into modernity and the horses became pets and recreation animals.

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  • Wed, Dec 14, 2016 - 9:18pm

    #57

    stoneman

    Status Member (Offline)

    Joined: Aug 25 2010

    Posts: 5

    Microwave Fracking

    We all know the story on relying more on unconventional petroleum sources of fossil fuels and the rapidly declining EROEI not to mention the potential environmental effects on landscapes and water supplies.

    That said, I wanted to make everyone aware of a very interesting new technology that seems to be just on the horizon – microwave fracking.  http://www.arescotx.com/microwave-technology-the-new-fracking/.

     

    This seems to have the potential to vastly increase the available resources for fracking and avoids (?mostly) the use of water and thus potential water contamination. It targets oil shale (kerogen) instead of shale oil that normally can only be strip mined but does it much more environmentally responsibly.  I raise the issue so that we may all be informed of new technological developments.  I think it will be quite fascinating to see what the EROEI will be since the method uses alot of electricity. Seems like a perfect place to use solar or wind as you "store" the energy in the crude oil obtained.

    That said…I am grateful for my well insulated house, energy efficient car, solar panels and masonry heater in pursuit of resilience and the good life . Merry Christmas, Happy Hannukah and Happy Holidays to all.

     

     

     

     

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