Peak Oil — A Wish-Fulfillment Fantasy for Secular Idiots

Secularists and leftists enjoy sneering at conservative Christians who believe in the Rapture and other flavors of millenarianism. Reasonably so: it takes either a drooling idiot or somebody who has deliberately shut off most of his brain, reducing himself to an idiotically low level of critical thinking, to believe such things. The draw, of couse, is that each individual fundamentalist implicitly believes he will be among the saved — privileged to honk a great big I TOLD YOU SO! at all those sinners writhing in the lake of fire.

It is therefore more than a little amusing to notice how prone these ‘sophisticated’ critics are to their own forms of idiotic millenarianism.

Anybody remember Paul “Population Bomb” Ehrlich? This is the guy who predicted that megadeaths from global famine would be the defining feature of the 1970s. Or Jeremy Rifkin, the guy who told us all in 1986 that the Frostban bacterium engineered to protect plants against cold snaps would mess up the Earth’s climate? Or the brigade of self-panickers (Carl Sagan was briefly one of them) who warned us all back around 1980 that an impending Ice Age was about to destroy civilization? Or, hey — how about the ozone hole; remember when we were all going to die of UV-B-induced skin cancer?

It’s easy to laugh at those particular doom-mongers now; there has been plenty of time for their predictions to fail. But we have plenty of apocalypse merchants peddling equally silly scenarios, on equally thin evidence and bogus reasoning, today. And the same ‘sophisticated’ secularists who lapped up Paul Ehrlich’s nonsense are swaying to the Gospel shout of global warming and “peak oil” — just as self-hypnotized, and just as stone-stupid, as an Ozark Mountains cracker at a tent-revival meeting.

Rather than getting to gloat over sinners writhing in a lake of fire, the draw is getting to feel superior to capitalists and Republicans and Americans; they will all surely Get Theirs and starve in their SUVs when the Collapse Comes, while virtuous tree-hugging Birkenstock-wearers, being in a state of grace with Gaia, will retire to renewable-energy-powered communes and build scale models of Swedish socialism out of macrame supplies or something.

The hilarious part is how self-congratulatory the secularist millennarians are about their own superiority over the religious ones, when in fact the secondary gain from these two kinds of delusional system is identical.

I could write a book on the amount of fraud and bullshit in the global-warming-panic industry — but I have other things to do this month. so let’s look at an even more recent manifestation of secular millenarianism — the peak-oil collapse scenario.

Witness, brothers and sisters, witness. The oil, it’s going to run out. Peak production of the world’s oilfields has either passed or is about to pass; from here on out it’s rising oil prices forever. Now we wave our hands and pronounce that the energy-guzzling capitalist West (and especially Amerikka) is so addicted to cheap oil that its decadent empire will collapse, collapse I tell you. Barely concealed gloating follows.

There are so many mutually-reinforcing idiocies here that it’s hard to know where to start. As I was thinking of writing about this, one of my commenters pointed out that above $32 per barrel it becomes economical to build Fischer-Tropf plants and make your oil out of coal. This is old tech; the Germans did it during WWI. At slightly higher price points, MHD generators to burn garbage start to look good.

These are instances of a more general phenomenon: markets adapt to price shifts! To wreck an economy with oil-price rises, they’d have to spike so fast and so far that you somehow couldn’t run the cement trucks to build the Fischer-Tropf plants. Not gonna happen.

In fact, the long-term trend will be that the amount of oil invested per constant-dollar value of goods produced in the U.S. economy drops faster than the price of oil rises. This is a safe prediction not because manufacturers have all bought into Green ideology but because they want to make money. This means that they have a market incentive to use their inputs (including oil) a efficiently as possible, and to substitute less expensive inputs for more expensive ones. It’s called capitalism, and it works.

(And, by the way, the cheapest input of all is information. Buckminster Fuller pointed out forty years ago that as technologies mature, the products tend to get smaller and lighter and less energy-intensive and smarter. Your cellphone today weighs less than it used to, and costs less oil to produces than it used to, because its design is smarter. Information has replaced mass. This trend will continue and accelerate.)

The peak-oil collapse scenario is not credible for five minutes to anybody who understands market economics. But the sort of people who believe it are blinded by their own prejudices; fundamentally they think market economics is an invention of the Devil. They need to believe in the collapse, because they need to believe that the wickedness of Americans and capitalists and Republicans will be punished.

99 thoughts on “Peak Oil — A Wish-Fulfillment Fantasy for Secular Idiots

  1. I could be wrong here, but I think Jay Hanson understands market economics about as well as anyone — and he has found it to be full of its own “mutually reinforcing idiocies”:

    http://www.dieoff.org/page241.htm

    “It’s called capitalism, and it works.” Boy, does it ever!:

    “In 1884, one of the wealthiest men of his time, Henry B. Payne, wanted to become the next United States senator from Ohio. Payne’s son Oliver, the treasurer of Standard Oil, did his best to help. Just before the election for Ohio’s seat, son Oliver “sat at a desk in a Columbus hotel with a stack of bills in front of him, paying for the votes of the state legislators,” who then elected U.S. senators.”

    http://www.dieoff.org/page168.htm

    (In a tangentially related bit of irony, Ohio is the state that the President of Diebold said he would “deliver for the President” in the 2004 elections before the state Republican leadership. Among the worst voting-machine security issues, and the worst discrepancies between votes and exit-poll results, are districts associated with Diebold voting machines. Coincidence? Simple mistake? Or deliberate election fixing? You Make The Call.)

    Bottom line, you don’t even need to look for a Devil, Eric; just something that you have repeatedly declared your vehement opposition to all this time: coercion, tyranny, and fraud. It’s so pernicious, it’s literally Machiavellian: Machiavelli was one of the first to suggest a political system wherein practical self-interest was the primary driver of action instead of appealing to religion to suppress human passions. (And you thought the KGB influence in modern thought was bad!!) There really isn’t anything going on in the “market economy” that can’t be explained by the simple principle of a power elite seeking to secure and expand its power base — a very anti-libertarian force at work if ever there was one — and you and I are ostensibly on the same libertarian page here. The difference is that there’s a pernicious Lakoffian framework of mutually supporting lies and half-truths that make the virtuous self-correcting “free-market economy” something tempting, but ultimately dangerous on a spherical planet with finite limited resources, to believe in, which many libertarians do believe in (and yes, this is a Murkan thing; libertarianism as originally established in Europe is a predominantly socialist movement). Given your manifestly *Machiavellian* cheerleading of the current junta-in-power and your “objectively pro-racist” holding forth on IQ, said Lakoffian framework may well have dire secondary effects as well.

    (And no, I’m not exactly fond of euro-socialism either; where you and I definitely agree is that the Europeans have had the means and opportunity to get their shit in their sock, and they traded it for the tribalism and manifest power-grubbing that has characterised their culture for centuries.)

    You also overlook a fundamental difference between fundamentalist doomsaying and peak-oil doomsaying: the fact that in the peak oil scenario, the righteous Birkenstock-wearers’ schadenfreude will be considerably dampened by the fact that they will be facing the exact same hardscrabble conditions as anyone else and will have to move, en masse, out of the winter-kill zone, dodge bombs and nuclear fallout and virulent biological weapons from the inevitable military conflict over dwindling resources and so on. The difference is that one group has the nous to *survive* in such a wrecked world, and the other is so dependent on an energy rich economy that they’d simply starve and wither away when the energy does. Depending on how addicted they are to the energy-rich society of whiteman technoplastic prowess, the Stupids may actually get the better end of the deal in death. Jay Hanson isn’t so much a macrame-peddling hippie as he is a Boy Scout — “Be prepared!”

  2. Jeff, are you joking? Because that reads like satire.

    You seem to have gone out of your way to use big words, complicated arguments, obscure references and lots of “square quotes” to obscure your disagreement. In all that convoluted mess, your argument seems to be this:

    “We live on a planet with finite resources, and as a result a free market does not work.”

    You’re missing the point. As Eric said, “Information has replaced mass.” This means that the problem of finite resources will become less and less important as time and knowledge advances.

    Eric,

    Excellent post, it’s nice to see you back blogging. If you have not yet seen Varifrank’s take on doom and gloom pushers, I heartily recommend it. It nicely compliments your own.

  3. > Jeff Read Says:
    > There really isn’t anything going on in the “market economy” that can’t
    > be explained by the simple principle of a power elite seeking to secure
    > and expand its power base — a very anti-libertarian force at work if ever
    > there was one — and you and I are ostensibly on the same libertarian
    > page here.

    In economic terms, a government is a monopoly. Monopolies don’t work. This is one reason why I’m a peaceful anarchist (a.k.a. libertarian). The government that governs best is that which governs least.

    Monopolies are only stable when the monopoly can exercise coersion across it’s entire market, effectively becoming a form of government.

    Otherwise, the free market works great. A variety of options tend to appear to solve any given problem, buyers can pick and choose what solution suits them best, and if one supplier fails, there is always another to fall back on. Redundancy is inefficient but stable.
    Add freedom and it Just Works (TM).

  4. re: Jeff Read’s comments.
    The left loves to re-write history along with the rest of reality…. But, what history is Jeff referring to when he claims, “…libertarianism as originally established in Europe is a predominantly socialist movement”? We know that “libertarianism” was originally called “liberalism” and that we now need to call ourselves “classical liberals” or “libertarians” because the socialists both admired the cachet of classical liberalism and simultaneously hated the actual positions we held. So, in their inimitable manner, stole the name and attached it to its antithesis. Ahhh…well….

  5. Interesting post, Eric.

    I must say (as a believer), I too am amused or tired by the various brands of millennarians who claim to know the future perfectly.

    The similarity of attitude between millennial predictions and the Peak Oil Crisis predictions is surprising, but fits the situation you describe. Most of the time, the prophets predict a future in which cataclysmic events will eclipse any human agency in determining the course of the future.

    The fix they think should happen is either hopelessly ill-fitted to the problem, or impossibly expensive to implement on the necessary scale. (Or it involves billions of people going through a personal religious changes based on warnings from the fringe of Christian thought, using obscure Scripture passages of dubious meaning….but few millennarians even bother preaching to the condemned, which makes me wonder why they bother preaching at all.)

    Thanks for bringing this up, Eris.

  6. In my opinion, market economics, while not perfect is at least self-correcting. But do we have a free market? Subsidies to big business could tilt the equation. For examples the senior drug subsidy really accrues to Big Pharma, that would have to charge affortable prices without it. The government acts like a bidder with really deep pockets. Subsidies to big farms encourage wasteful use of fuel.

    But usually big crises are preceded by small ones. Catastrophe theory says there are likely to be more little catastrophies than big ones. The next earthquake in California is not likely to be the big one. The next flu is not likely to be the pandemic. If a major fuel crisis we’re imminent we should be seeing warnings. We have higher fuel costs but thats about it.

    I think we need to consider each scenario on its merits regardless of the track record of media prognosticators. Not panic but prepare. How many white swans does it take to prrove there are no black swans?

  7. It is a good decision now to buy a diesel car: canola (rapeseed) oil (biodiesel) is heavily subsidized here in the EU. Maybe it will so in the US and then the upkeep cost of cars drops to half.

  8. great to see some clear thinking on these issues.

    It’s my understanding that ‘shale oil’ recovery becomes commercially feasible at ~$25-30/barrel.
    http://www.rand.org/news/press.05/08.31.html

    *BTW Greenpeace is trying to sue this industry out of existence – even lower impact in situ processes.

    IIRC FT processes were developed circa 1918-20′s and were used in WWII, not WWI. These can utilize a variety of carbon dense feedstocks, not just coal.

    Jeff states…
    There really isn’t anything going on in the “market economy” that can’t be explained by the simple principle of a power elite seeking to secure and expand its power base — a very anti-libertarian force at work if ever there was one — and you and I are ostensibly on the same libertarian page here.
    ______________________

    try explaining adverse selection and liquidity risk in securities markets.

  9. The number of poor assumptions Jeff Read works under are so large as to be dizzying. Not to mention the number of conspiracies he invokes. Does Occam’s Razor ever work for people like this?

    I even visited page one of that ridiculous “dieoff.org” page and right on page 1 they’ve got a dumb chart on it suggesting that agricultural output has remained steady while the population’s gone up–which is the exact opposite of the truth. What’s been going on for at least the last few centuries, and has been accelerating at an exponential rate over the last few generations by visionaries like Norman Borlaug, is something very akin to Moore’s Law: as the world population has gone up, the number of acres of land and the number of people required to work the land in order to feed the population has gone down–and that’s in absoltue, not relative, terms.

    I’ve been hearing about numerous half-baked “great die off” theories my entire life. It was going to happen in the 1980s, in the 1990s, in the Naughties (that’s my term for the first decade of the 21st century), and so on. Alcohol-based fuels, which current gas engines run on, now output considerably more energy than they expend to produce, and as genetic engineering gets better we’re able to steadily improve that. Same for biodiesel. We’ve also got enough coal and natural gas to last for generations even at greatly increased consumption levels. Solar power gets better all the time, too. All of that’s not even counting biodiesel.

    We are not “dependent” upon petroleum. We LIKE petroleum because it’s the cheapest and most convenient to use–at the moment.

    The snake-oil salesemen of civilizational collapse all usually have one thing in common: their predictions are almost always that doom will be upon us within ten years. And when ten years have elapsed, they know most of us will have conveniently forgotten their predictions.

  10. ESR wrote: 

    how about the ozone hole; remember when we were all going to die of UV-B-induced skin cancer?

    Eric, that’s not true.  The claim was that we would have serious damage from excessive UV if we did not do anything about ozone-depleting chemicals.  But we did do something; the Montreal Protocol slashed production and emission of the worst chemicals, and we have seen a stabilization of stratospheric chlorine levels and IIRC the beginnings of a decrease in tropospheric CFC’s.  There are still some nasty effects from the antarctic ozone holes, but fortunately they don’t reach very far north.

    In short, the skeptics were wrong.  Fortunately the corrective action worked.

    Just because the cure works does not mean that the disease is imaginary.  So it is with peak oil.  Sure, there are the usual doomsayers… but we also have the denialists at the very top of the United States government and policy which allows no dissent.  Meanwhile, Kuwait’s biggest field has peaked and it is a near-certainty that Ghawar (Saudi Arabia’s biggest field, accounting for nearly half its output) is close behind.

    As Ghawar goes, so goes the world.

    Left alone, market forces could fix this problem.  The problem is that market forces are being opposed and frustrated by policy decisions and entrenched interests.  Who has the most to lose from a substitution which causes the world price of crude to drop and slashes the value of the remaining reserves?  The oil companies, of course.  They own the current administration, and this accounts for many of the dysfunctional and actively counterproductive policies of the last 4 years.

    The California Air Resources Board could have jump-started a shift away from oil as part and parcel of a well-crafted policy in 1990.  However, instead of promoting plug-in hybrids and shifting demand by degrees, they demanded all-or-nothing conversion… and they wound up with nothing.  Was this just the product of leftist ideologues demanding that science advance according to policy, or was the over-reaching deliberately crafted by oil interests to guarantee failure?  Nobody’s talking, but it sounds like something Karl Rove would do.

    The problem with moving away from oil is that the effort takes decades, while the markets can’t start to move until the problem has produced substantial price pressures.  The USA has had some chickenshit policy efforts, like ethanol (which is actually a farm program which does next to nothing for oil independence); these are going to be proven remarkably useless in the next few years.  Our policies since the Reagan administration have been aimed at paying off constituencies rather than accomplishing useful ends; the markets have been correspondingly aimed at hoovering up tax subsidies rather than substituting for the shrinking oil resource.  Changing that course is going to be a huge effort all by itself.

    So, we’re almost certainly not going to see Western civilization collapse from this (though we may see several more Zimbabwes before we’re through).  Farming appears to be sustainable on its own outputs, to list just one refutation of dieoff proponents.  But people are already going bankrupt, and there’s bound to be a huge amount of pain because we’ve failed to deal with this problem soon enough.  And energy isn’t the only issue; we’ve got to have other strengths to switch over.&nbs; Would we still have the wherewithal to carry out a conversion after e.g. the default of FNMA?

    We need to be proactive.  Policy matters, and bad policy literally kills.

  11. If you start by declaring that economics is 100% crap, then everything you say from then on is going to be 100% crap. That’s exactly what dieoff.org does, and that’s exactly what they get.
    -russ

  12. ’sophisticated’ critics…idiotic millenarianism…self-panickers…equally silly scenarios…self-hypnotized…stone-stupid…delusional…mutually-reinforcing idiocies…etc.

    Splendid. I knew you had it in you.

    tree-hugging Birkenstock-wearers…

    A *little* cliched there.

    The hilarious part is how self-congratulatory the secularist millennarians are about their own superiority over the religious ones, when in fact the secondary gain from these two kinds of delusional system is identical.

    You think they haven’t noticed the parallels? But this thing you call self-congratulation is just attempting to get out of the way of the collapse, if it comes – basically all most peakers want is to be in a position to feed themselves and stay warm if things do in fact go to hell, despite the enthusiastic calculations of excitable Pollyannas yelling “Everything’s FINE, you bunch of liberal pantywaists!” Why such an unexceptionable desire should grate upon you to the extent of inspiring venom like the above is a bit of a mystery. I’m sure a similar impulse in nutbar Montanan off-the-grid survivalists with large gun collections would barely raise an eyebrow. But I guess they preach in places where no one’s listening.

    The peak-oil collapse scenario is not credible for five minutes to anybody who understands market economics.

    Not credible to anyone who thinks market economics encodes truths about human nature so ironclad that it might as well be physical law, certainly.

    But the sort of people who believe it are blinded by their own prejudices;

    Unlike those who oppose them, who haven’t got any prejudices at *all*.

    fundamentally they think market economics is an invention of the Devil.

    Some of them think capitalism expands until it reaches its limits, one of which could be peak oil. And all that space stuff has a long, long lead time.

    They need to believe in the collapse, because they need to believe that the wickedness of Americans and capitalists and Republicans will be punished.

    A bit like you with the French, innit. A lot of these people *are* Americans (and Republicans, eg Roscoe Bartlett), despite your attempts to paint them all as unpatriotic hippy bunnyhuggers deserving to have a new McCarthyism visited upon them for giving aid and comfort to beardies. It’s true enough that there would be a certain tidiness in contemplating the full hubris-nemesis cycle, and watching Cheney eat a few of his words would bring a warm glow. But I can wait for my schadenfreude, unlike some.

  13. karrde:

    “Thanks for bringing this up, Eris.”

    LOL! A fortuitous typo, especially for a traditional Christian. Hail Eris!

  14. Don’t worry, capitalism will save us from depleted energy supplies! Ignoring the fact that the capitalist system currently prevents any serious public discussion about the problem.

    Our current economies depend utterly on reliable supplies of cheap energy, currently oil. To be able to depend less on oil at a rate faster than it increases in price assumes we have another source of reliable cheap energy waiting in the wings. Another source of reliable cheap energy that would work with the current distribution infrastructure.

    The belief that Fischer-Tropsch plants could replace oil and would somehow be sustainable is frankly delusional. And before any efforts to use other energy sources will begin, hundreds of thousands of people will die in wars in misguided attempts to protect the current ones. More will die at home in the lengthy compulsory transition.

    And no mention of natural gas, the price of which has quadrupled in America since 2002 and is still going up. All this and we continue our relentless suburban sprawl.

    Eric, with the crisis I see we’re heading for, I’m actually beginning to understand your point of view regarding armed self defence.

  15. It is a good decision now to buy a diesel car: canola (rapeseed) oil (biodiesel) is heavily subsidized here in the EU. Maybe it will so in the US and then the upkeep cost of cars will be applied indirectly, via higher taxes, slower growth and general malaise.

  16. triticale:

    Slower (or suddenly very negative) growth and general malaise are characteristic of the peak-oil endgame. The Euros are just biting the bullet ahead of us. No wonder they act so smug :)

  17. You made a reference to global warming in your post. Global warming may well be a fraud, but libertarians seem to dodge every externality as a matter of faith, simply because it is rather inconvenient to their platform. The numbers may vary, but the costs of consuming finite resources, such as the earth’s ability to suck up pollutants or fish stocks, have to reflect the burdens that others must bear. But libertarians seem to shy away from emissions trading merely because the government must get involved. In reality, government is enforcing property rights in these certificates much as it enforces property rights to land. Obviously, commercial fish populations or disposal capacities can’t be parcelled out like a plot of land. This would be a way libertarians could appease the doomsayers and still stay true to their free-market ideals.

  18. I here register my extreme skepticism that the “Montreal Protocol” or any actions by man made any difference to the extent of ozone in the upper atmosphere, a “problem” that never existed. Well, those are always the easiest kind to fix, aren’t they, and the most pleasant if you’re part of the power structure whose power is enhanced by the “cure”? Oh, yes and what was the mechanism whereby chlorofluorocarbons actually got up to the stratosphere, again? Anybody actually figure that out? Must be hiding in the same database where they’re keeping the proof that the HIV causes any diseases. But I look forward to the imminent declaration that HIV/AIDS has been “cured” by some extremely expensive drug or vaccine. When the truth is no one ever died from HIV.

  19. I look at this behavior and think: There they are, those tree-hugging types, smugly chiding the herds of “sheepeople” for mindlessly consuming natural resources. Do they not realize that after the collapse their renewable-energy-powered communes will become the focus of the starving herds of consumers? That desperate and starving common folk will remain respectful to their forward thinking efforts is, of course, well documented throughout history – NOT.

    The Followers of Fluff need to believe in a collapse because the math involved with thinking otherwise is too hard.

  20. ESR wrote:

    how about the ozone hole; remember when we were all going to die of UV-B-induced skin cancer?

    And Engineer Poet responded:
    /* Eric, that’s not true. The claim was that we would have serious damage from excessive UV if we did not do anything about ozone-depleting chemicals. But we did do something; the Montreal Protocol slashed production and emission of the worst chemicals, and we have seen a stabilization of stratospheric chlorine levels and IIRC the beginnings of a decrease in tropospheric CFC’s. There are still some nasty effects from the antarctic ozone holes, but fortunately they don’t reach very far north.
    */

    I remember hearing that the CFCs already in the atmosphere would be active for centuries. Aparently that was over-hyped.

    /* Just because the cure works does not mean that the disease is imaginary. So it is with peak oil. Sure, there are the usual doomsayers… but we also have the denialists at the very top of the United States government and policy which allows no dissent. Meanwhile, Kuwait’s biggest field has peaked and it is a near-certainty that Ghawar (Saudi Arabia’s biggest field, accounting for nearly half its output) is close behind.
    */

    I think you may have missed the point of the post. Let’s assume that peak oil exists (and I’m not convinced), is it truly “peak oil” or “peak, cheap, oil”? When an oil well goes dry 40% of the oil is still in the ground. We just haven’t figured out how to get it. Somebody, some where, spends all day trying to get that 40%. When he gets it, all the dry oil wells from the beginning of time will be a new source of oil.

    And, as Eric pointed out, coal oil can be used instead. IN the ’80s, the US government published a HOWTO regarding using wood as fuel (basically you heat the wood up to get the gases that burn, then send those gases into a carburetor engine). The conversion is 20 pounds of wood per gallon of gasoline. Can you run a sportscar with it? No. But you can run a generator or tractor with it.

    Then there’s bioodiesel and ethanol. Unfortunately it takes more energy to grow the crops then you can get from the biodiesel and ethanol, but that’s with *today’s* technology.

    /* Left alone, market forces could fix this problem. The problem is that market forces are being opposed and frustrated by policy decisions and entrenched interests. … The California Air Resources Board could have jump-started a shift away from oil as part and parcel of a well-crafted policy in 1990. However, instead of promoting plug-in hybrids and shifting demand by degrees, they demanded all-or-nothing conversion… and they wound up with nothing.
    */

    Well, they wound up with hydrogen cars that were leased to the public. They also wound up with hybrid cars *even* *though* they opposed hybrid cars.

    Moral: market forces can work around government action as well as government inaction.

    We both agree that there are solutions out there I somebody cares enough to look. It appears we disagree on why somebody would look. I believe that as long as it’s possible to become filthy rich solving these problems, people will spend 24 hours a day trying to figure out the sticking points. Othe people believe the government must spend money on it, even though those same people will immediately point to the government as an example of large-scale ignorance. Either way, we aren’t yet past the point of no return.

  21. Engineer-Poet Says-
    “As Ghawar goes, so goes the world.”

    Two words- Oil shale.

    http://energy.senate.gov/public/index.cfm?FuseAction=Hearings.Testimony&Hearing_ID=1445&Witness_ID=4139

    ~$65/bbl, and claim that scaling will reduce it to below $20, and produces at a 3.5 to 1 energy ratio.

    Two more words: “tar sands” ….or is it, “oil sands”?.

    http://www.techcentralstation.com/103105C.html

    They’re producing over a quarter million barrels/day today at ~$15/bbl and production is increasing every year. Right now, their output is more than 15% of Canada’s domestic consumptioin.

    The only down side is that Hugo (I hate effin Yankees) Chavez is sitting on even more of the stuff than the Canucks.

    There will oil enough to handle our transition to plug-in hybrids, or hydrogen fuel cells, or… Mr Fusion flux-capacitor drives.

  22. Max Lybbert:

    It’s peak oil. The reason why is because after about half the oil is extracted from a reserve, it becomes more expensive (energy-wise) to extract the remainder than the energy you get out of the oil. Therefore the oil that remains in that reserve doesn’t make energy-economic sense to use as an energy source (although other petrochemical uses, such as plastics, are still feasible but they will become far more expensive).

    M. King Hubbert predicted the peak for the United States at around 1970 — it actually peaked in 1971. Hence our current dependence on foreign oil. When the world peak comes, there will be no more readily available petroleum that we can use as an energy source — and petroleum powers a lot of things, not just cars. We will have to switch to something like Fischer-Tropsch plants; while they are a useful and interesting stopgap solution, they do not solve the broader problem of runaway consumption of nonrenewable resources (which will worsen when PRC enters the fray as a serious oil consumer); and they are significant polluters and greenhouse gas emitters. (Yes, Virginia, anthropogenic global warming is real.)

  23. Man, it would really be depressing if the alternatives were limited to (a) Eric Raymond, leaping up and down with his fingers in his ears, screaming “THE POWER OF THE MARKET! THE POWER OF THE MARKET!”, and (b) Jay Hanson, misunderstanding the laws of thermodynamics.

    I think it’s a warning sign when nonphysicists appropriate the laws of thermodynamics. I’ve seen it in creationism, and now in scare-tactic economics.

    You know, past threats haven’t been avoided because the Magical Market took care of it, and past threats haven’t been avoided because they never existed in the first place. (Well, some of them didn’t exist in the first place, but not all of them were imaginary.) They were avoided because evidence was weighed, strategies were devised, and the threats were *dealt with*.

    Imagine that.

  24. (Yes, Virginia, anthropogenic global warming is real.)

    That explains why the polar ice caps on Mars are shrinking while that of the Antarctic isn’t. It also explains why temperature records for urban sites show a cumulative increase but rural ones do not.

  25. No, Jeff.

    The Hubbert Peak only exists (as “a peak”) for an individual field or homogenous area of oilfields.

    There is no “The world Oil Peak”, as the world is not homogenous in terms of oil-field exploitation, let alone discovery. The world’s production as a whole is the sum of the outputs of every subset, and while each subset will naturally have a peak in production, there’s no reason at all to beleive that the overall set will look like a bell-shaped Hubbert Peak model. (Especially when one takes into account the non-oil-well sources of petroleum products.)

    There is no “runaway” consumption of oil.

    “Renewable” is, to put things in the plainest language, bullshit for our purposes; oil is used because it’s cheap, not because it has to last forever. Wood was not renewable, nor was whale oil, but both were useful, and both were eclipsed by better energy sources (coal and petroleum).

    Since we both understand how to make petroleum from coal and tar sands right now and have great leads on other ways to get energy for cheap (fission, probably fusion someday, algae-produced biodiesels, etc.), ESR is right. There’s no global collapse coming, at least not from Oil Peaks.

  26. Global warming is real, but it’s not anthropogenic. It comes from the sun’s cyclic activity. It would be great if we could perfect technologies that could improve general climates and the weather, though. The problem is that CO2 has too small an effect on climate to be a useful climate control parameter.

    Peak oil is on the same level as Ehrlich’s failed predictions, and the Club of Rome’s pathetic attempt to be relevant in the past century. The catastrophe du jour for the intellectually challenged. They only wish humans would die off.

  27. Max Lybbert writes:

    I remember hearing that the CFCs already in the atmosphere would be active for centuries. Aparently that was over-hyped.

    They are still active, just not as much.  The levels appear not to be growing any longer, and may be declining slightly.  We appear to be releasing them more slowly than they are broken down and removed from the atmosphere, so (all else being equal, which it may not be) ozone depletion should be reduced over time.

    When an oil well goes dry 40% of the oil is still in the ground. We just haven’t figured out how to get it. Somebody, some where, spends all day trying to get that 40%. When he gets it, all the dry oil wells from the beginning of time will be a new source of oil.

    Pools of pure crude oil behave like liquids, and flow under gravity and pressure.  When all the remaining oil is droplets held in pores in rock, surrounded by water, it doesn’t.  Half of all the oil ever beneath Pennsylvania is still there, but it’s not coming out.  Pittsburgh will not see an oil boom in this century, or any century.

    And, as Eric pointed out, coal oil can be used instead. IN the ’80s, the US government published a HOWTO regarding using wood as fuel (basically you heat the wood up to get the gases that burn, then send those gases into a carburetor engine). The conversion is 20 pounds of wood per gallon of gasoline. Can you run a sportscar with it? No. But you can run a generator or tractor with it.

    Coal availability is stretched, prices are high, and the environmental impact hasn’t gotten much better (turning it into Fischer-Tropsch fuels doesn’t cut the heavy metals in the ash).  And there is nowhere near enough waste wood in the US to replace what we burn in gasoline; at 20 pounds per gallon equivalent, replacing 139 billion gallons of gasoline requires ~1.4 billion tons of wood.  We also burn about another 60 billion gallons of diesel fuel…

    There are ways around this, but they all require replacing the internal combustion engine.  You can make enormous strides when you replace a 17%-efficient Otto-cycle engine with something 3 or 4 times as good.

    Then there’s bioodiesel and ethanol.

    A bushel of corn has approximately 390,000 BTU of energy.  You can ferment and distill it to 2.66 gallons of ethanol, which has roughly 220,000 BTU of energy (minus what you spent to distill it).  Burn that ethanol in a 17%-efficient engine and you get 37,400 BTU.

    At 37,400 BTU/bushel output and 150 bu/ac, the useful energy is 5.61 million BTU (mmBTU) per acre.  At that yield, you get about 2.5 tons/ac of excess talks, leaves and cobs (stover) which is good for about 15.8 mmBTU/ton, or 39.5 mmBTU/ac.  If you can get even 25% conversion efficiency to metallic zinc and 62% conversion efficiency in a zinc-air battery (Electric Fuel is getting that today), the output at the battery terminals from the crop waste alone would be 6.12 mmBTU/ac.  You’d also get rid of all the noise and pollution from the engine; zinc-air makes no noise and has no emissions.

    Well, they wound up with hydrogen cars that were leased to the public.

    No, they wound up with BATTERY cars which were leased to the public, and which most of the manufacturers would not sell even when the alternative was crushing them (GM EV1).

    They also wound up with hybrid cars *even* *though* they opposed hybrid cars.

    You’re wrong on both counts.

    1.  Nobody, not even Toyota, has ever made a plug-in hybrid car which takes part of its power from the grid.  That would have been the first step towards oil independence, and it would have fit just fine with California’s air-pollution initiatives.  But it wasn’t done.
    2.  California never opposed hybrid cars, it just didn’t give any ZEV credit for them when it would have made a difference.

    Moral: market forces can work around government action as well as government inaction.

    Look at what was done versus what was not done, and I’ll show you a different moral:  market forces can only “work around” some regulations.  If the government requires something to be done a certain way and there is neither economic reward nor tax or regulatory incentive for other (possibly better) ways of doing the same thing, it will only get done the government’s way.

  28. bud writes:

    “As Ghawar goes, so goes the world.”

    Two words- Oil shale.

    Look at the amount of both electricity and water required to produce oil from Colorado shale.  The numbers will stagger you.  For comparison, you will find historical data for US electric generation here.

    Two more words: “tar sands” ….or is it, “oil sands”?.

    Tar-sand bitumen needs copious amounts of hydrogen to convert it to light fractions.  The hydrogen is derived from natural gas, but N. American gas is scarce and very expensive.  The alternative is to gasify some of the bitumen to make hydrogen, but this is both expensive and requires lots of water.  Guess what else is in short supply?

    If you are going to use electricity to extract fossil fuel, you may be better off just using the electricity.

  29. @Jeff read. The first sign that you are a blog troll is when your first comment contains more links and words than the original post. When (unlikely(“People ask you your opinion)) { return(“Just go read the comments in ESR’s blog. I blog there.”) }

    Oil is just so expensive to transport. First you have to transport it to the refinery. Then the finished product must be trucked to market. Coal suffers the same issue. Nuclear power doesn’t suffer nearly the same issues. When people claim they are anti-nuke I ask them what about the pollution generated in mining coal and then transporting it. I think the amount of nuclear pollution from coal mining actually exceeds the pollution from reactors. I wonder, did oil come into usage because of a “peak coal” issue? Did coal replace wood because of “peak timber” issues? Technology marches on. The stone age didn’t end because they ran out of stones.

  30. This also is just a stopgap but the last info I have says Shell found a way to cheaply extract oil by cooking deep oil shale deposits in-situ. This may help delay the worldwide peak a bit. The hope is that we will find a way to extract fuel long enough to bootstrap the Bitchun Society which hums nicely on tokamaks or pebble-bed reactors or something.

    I’m not placing any bets on that hope coming to pass, however.

  31. That’s what I was referring to.  Shell’s system uses electric heaters.  Where are they going to get all that electricity?

  32. Here’s an interesting story.

    I was just given Ursula Le Guin’s “Earthsea Quartet”, which I had never come across before. It’s fantasy but well-crafted – she’s kind of like a Terry Pratchett with literary ability. I mean I was astounded: this book has been out since 1968 and I never knew of it, although it is a work of some imagination and some skill. The book is clearly not the work of an idiot or a moral imbecile. All the greater surprise then to do a web search this morning then, find she has a website, and find an advertisement on it for something called “Poets against the War”.

    So here is someone of some intelligence and not obviously immoral, and yet she puts herself on the wrong side of the greatest challenge of the age, aligns herself with Islamic Fundamentalism and international terrorism, and bleats because the West is actually trying to tackle those problems.

    I am afraid this is typical of much of the American and European “intelligentsia”, and unlike Eric I doubt it is a result of anything the KGB has done. It is a truly astounding phenomenon – there is no other word for it.

  33. And here I thought many of the people talking about Peak Oil wanted to increase the use of alternative energy. We’ve made a start on this, but if the price of oil increased futher tomorrow it would cause great suffering. It already poses a problem for many people in terms of winter heating costs, and current prices have nothing to do with Peak Oil! Don’t you think it would help if we invested heavily in alternative energy now, rather than after we start hurting? I know I’d feel better if we started to replace oil-rich fertilizers now.

    Damian, you don’t sound like an idiot. Yet you see Iraq as a useful attempt to address international terrorism — not only that, you find it astounding that anyone could disagree with you. Do you really believe you have objective proof for you opinions? How do you explain W’s attempt to paint the war as an act of liberation, de-emphasizing the earlier argument from U.S. interests?

  34. Jeff Read – I have yet to read any denial that we can pull coal out of the ground and turn it into diesel fuel @ $32/barrel. If you don’t deny that, you’ve essentially given substantively that peak oil theory is a fraud and are just dancing around trying to avoid the inevitable.

    Engineer-Poet – The oil companies’ marketing departments have been rebranding these behemoths as energy companies for quite some time. The new energy companies of Shell, BP, et al all have subunits devoted to all the major alternative energy candidates. Some are small efforts but Shell’s pulling tar sand oil out of Canada’s Alberta deposits, not some no-name startup. The oil majors are, in short, positioned well to continue their dominance after an energy transition. They make no profit by dumping huge amounts of money into the world-wide political system to delay a transition as they profit no matter which side wins.

    adrian10 – You also are not dealing with the engineering reality that we can create, @ $32/barrel equivalent, diesel fuel at a rate that will satisfy our energy needs for approximately 250 years out of purely domestic sources. You may not like the extra pollution that will come because of this conversion. Heck, I probably won’t like it either. However, it won’t be the death of civilization to have a bit of extra pollution.

    bud – You’re right about oil shale. When we run out of $32/barrel coal conversion, we’ll have $65/barrel oil shale conversion. After coal, oil shale is the next natural price ceiling given no technology improvement over the next 2.5 centuries. Of course, holding technology improvement to zero over the course of one century is absurd, let alone two.

    Sigivald – I disagree with you that renewable energy is “bullshit”. I think that orbital solar has a bright future ahead for it if we can get a space elevator up and drop lift costs to $200/kg. We do have to be realistic about renewable energy. Most of its current forms simply don’t scale well and peak out at tiny contributions to current power needs.

  35. Damian, you don’t sound like an idiot. Yet you see Iraq as a useful attempt to address international terrorism — not only that, you find it astounding that anyone could disagree with you.

    There was a funny thing happened to some people on 9/11 – it was a real road-to-Damascus experience, scales fell from their eyes, the whole bit. Kind of a secular conversion. They just knew that this was the “greatest challenge of the age”, and anyone who thought otherwise was a dupe or worse, etc. Christopher Hitchens, who I think gave us the useful and precise term “Islamofascism”, is one such. There doesn’t really seem to be much prospect of debate with them unless you accept their core propositions.

  36. adrian10 – You also are not dealing with the engineering reality that we can create, @ $32/barrel equivalent, diesel fuel at a rate that will satisfy our energy needs for approximately 250 years out of purely domestic sources.

    I hear people *saying* it – but I don’t see any companies stepping up to build Fischer-Tropsch plants an any scale. This *could* be because they expect the price to drop below $32 for extended periods. But at ~$55 I’d expect some kind of speculative activity, unless there were other issues. I think that 250 years figure is for coal at current rates of use and assumes no growth, too. Start converting loads of it into oil and it’ll drop pretty fast.

  37. Adrian, Fischer-Tropsch has been put into use worldwide since WWII — most notably in South Africa during its isolation because of apartheid. FT, like other unconventional oil sources, has a much higher energy-in-to-energy-out ratio than drilling holes in the ground as you well know. With that in mind, I’m thinking the oil companies feel the U.S. market may be better served by the Bush-Cheney method of oil extraction, i.e., at gunpoint from oil-rich but militarily weak Arabic states. :)

  38. TM Lutas:  SE Michigan just had a tornado warning tonight (in NOVEMBER!).  The entire Gulf coast may have become uninsurable as of this year.  We may already have had more pollution than we can afford.  We should be looking at dumping CO2 underground, especially where it can do us some good.

    Adrian:  Rentech is turning a fertilizer plant into a coal-fuelled polygeneration plant AND building a Fischer-Tropsch fuels plant in Mississippi.

    F-T diesel fuel at $65/bbl is roughly $10.60 per million BTU; converted to work at 45% efficiency, it’s about 8¢/kWh.  Electricity from e.g. wind power is about 4.5¢/kWh, and getting cheaper as turbines get better.  The problem is getting electricity from the grid to the wheels, but there are a number of different ways of doing that (zinc-air cells, electrified rails for dual-mode trucks).  The wind-power potential of the lower 48 states of the US is about 1.2 terawatts, far greater than the sum of average electric consumption and power delivered to wheels from petroleum.  Other stuff isn’t standing still.

    The alternatives are the future, folks.  That’s where our research and investment should be going.

  39. Adrian: Rentech is turning a fertilizer plant into a coal-fuelled polygeneration plant AND building a Fischer-Tropsch fuels plant in Mississippi.

    Yeah, I vaguely remember that from the Yahoo energyresources group. 5200 tonnes a day isn’t much on a national scale, though, and they’re saying 3 1/2 years to fully convert to coal feedstock (and ghod knows where natgas prices could have one by then – notice they say “when and if complete”). But I wouldn’t be surprised if they weren’t being closely watched by a few other utility corps to see how they get on.

    electrified rails for dual-mode trucks

    On *highways*?

  40. Grendelkhan:

    “They were avoided because evidence was weighed, strategies were devised, and the threats were *dealt with*.”

    Sure. That’s how markets work.

  41. Adrian: Look at the RUF for a reasonable dual-mode system. Because it’s a fully-automated system, “trucking” will consist of loading a container in the warehouse, and pushing a button. The store will have its own exit from the RUF guideway and the container will glide automagically into the back of the store.
    -russ

  42. The RUF requires a tunnel through the middle of a passenger vehicle, and for that reason alone I believe the concept is DOA.

    Trucks on rails are much easier.  Look at the Blade Runner concept.  Every abandoned rail line could become a truckway (saving a lot of fuel due to lower rolling resistance), and new rail could be laid in freeway medians to get freight off the pavement.  Once the trucks are aligned left-right within a couple of inches and riding on a nice steel ground conductor, supplying power from overhead wires is a solved problem.

  43. Eric, don’t be ridiculous. Did it occur to you that many people are strongly warning about the vanishing oil supply because they advocate a switch to alternative energy sources – energy sources which the increased predominance of would, if anything, be more beneficial to the American economy and require less dependence on unstable, undemocratic regimes abroad?

    But no, clearly the real cause must be a desire to see that same American economy fail, those damn hippies.

    One gets the distinct impression that the true purpose of 95% of your posts are not particularly to advocate ideas, but to hurl yet more feces at a left-wing straw man.

  44. Jeff Read – You’re still avoiding the heart of the original assertion (by me and put up top by ESR). The only reason we’re not using Fischer-Tropsch today is that the smart money thinks that this price spike will dissipate and drop oil prices below $32 a barrel. There is no other reason not to build these plants.

    If and when several major fields peak, we’ll know quickly. At worst, the oil tankers will simply not be called in to haul away as much. Such things are observed by insiders and the smart money will know that it’s time to start building those plants. They will do so and make a killing by putting politically reliable supply on an energy market @ $80-$120 a barrel. Of course all that profit will eventually go away because new entrants will arbitrage it down to near nothing. The smart money won’t care because they’ll have made a killing.

    Product substitution is a real possibility. It is a reality that peak oil theorists are simply in denial over. Face the real world!

    Engineer-Poet – You’re going far afield. Peak oil is about how civilization is going to collapse because oil will peak quickly and we’re going to end up in “Mad Max” fights trying to keep civilization going. Compared to civilizational collapse in the space of a decade, global warming’s simply not important.

    Global warming as a debate, is worth having if we’re not going to shortly lose civilization due to peak oil. We need to slay that dragon first.

    JT – If alternative energy sources would increase US predominance in the world and improve our economy, they would be commercially viable today. What are the missing pieces to these alternative energy sources adoption? If it’s a continuing government subsidy, you’re barking up the wrong tree.

  45. JT: how about honesty and accountability in government as “missing pieces”?

    As O’Lielly says, the fix is in!!!

    http://www.huffingtonpost.com/brad-friedman/mainstream-media-to-ameri_b_10094.html
    http://www.washingtonpost.com/wp-dyn/content/article/2005/11/15/AR2005111501842.html?nav=rss_email/components

    Something to chew on, while you consider what else besides adoption of Eurosocialist governance stands between us and freedom from petroleum dependency…

  46. TM Lutas writes:

    Engineer-Poet – You’re going far afield. Peak oil is about how civilization is going to collapse because oil will peak quickly and we’re going to end up in “Mad Max” fights trying to keep civilization going.

    No it isn’t.  That’s what some apocalyptophiliacs think it’s about, but it really means that we need to start doing things differently.  Pity we didn’t stick with the program through the Reagan administration, because we’d be there by now and this would be a non-event.

    Heck, if the damned one-party government hadn’t killed the PNGV (you remember the PNGV, don’t you?) in 2001 we’d have 80-MPG full-size cars hitting the market about now.  These oil prices would be non-events and Detroit would be in great shape.  Great timing they had, eh?  (That was one example of policy makers being smarter than the market; the policy makers aren’t at the mercy of quarterly profit statements.)

    Compared to civilizational collapse in the space of a decade, global warming’s simply not important.

    Global warming as a debate, is worth having if we’re not going to shortly lose civilization due to peak oil.

    The solutions are mostly the same.  This should surprise no one, because they are both caused by the same problem.

  47. The only reason we’re not using Fischer-Tropsch today is that the smart money thinks that this price spike will dissipate and drop oil prices below $32 a barrel. There is no other reason not to build these plants.

    Er – how about the fact that they’re pretty expensive? Your $32 seems to assume the plants are built and paid for. See here for what might happen if they’re not.

    Product substitution is a real possibility. It is a reality that peak oil theorists are simply in denial over. Face the real world!

    IE “Accept the basis for our hilariously optimistic calculations”. Once it starts to happen on a large scale we’ll be convinced – really, peak oil is the sort of thing that anyone would be happy to be wrong about. But until then I’m afraid it’s all just airy promises and market-fundamentalist rhetoric.

    If alternative energy sources would increase US predominance in the world and improve our economy, they would be commercially viable today.

    You want to *increase* US predominance? You *will* be popular. But it isn’t really a commercial concern – corps want to make money, and if that helps their bottom line they’ll go for it.

  48. (That was one example of policy makers being smarter than the market; the policy makers aren’t at the mercy of quarterly profit statements.)

    But they ARE at the mercy of lobbyists with campaign money and constituents who want pork.

  49. Peak Oil theory rests in two assumptions, both of them debatable:

    1) Oil is a finite resource. This will, at some point, limit the amount of oil we can extract -> peak. Whether this peak will be forced on us by the limited amount of resurce (causing a crisis), or whether we will voluntarily switch to another energy source (thus feeling no pain), is another matter: a peak will happen nevertheless.

    2) The market will not be able to recognize scarcity of oil with enough time to switch to another energy source

    As mentioned, both are debatable. The first assumption is more or less universally accepted (abiotic-oil supporters excluded).

    The second assumption is much more controversial. There are a lot of issues involved: state of technology, time needed for a mass transition from one energy source to another, available data needed to recognize, political motivation to prevent or delay a transition, private and government interests keeping data hidden from public scrutiny, etc.

    To believe that the market will be able to correctly process all this information, and correctly decide when time has come for a major investment in new energy sources, is just that, a matter of believe. I am not saying that it is impossible that things turn out to be this positive; I am suggesting that, in the same way that the world has experienced previous miscalculations in which the actors have not been able to predict the outbreak of big crisis, it is certainly possible that we miss the time window by, lets say, ten years, and this would have terrible consequences.

  50. I’m late, but to be honest:

    /* [me]: Well, they wound up with hydrogen cars that were leased to the public.

    [Engineer Poet]: No, they wound up with BATTERY cars which were leased to the public, and which most of the manufacturers would not sell even when the alternative was crushing them (GM EV1).
    */

    Correct. I don’t know why I said “hydrogen” other than I lived in California at the time, and I relly liked the hydrogen idea. But, you’re right, they were electric cars that had to get power from the grid. That made them “ZEVs in name, but not necessariily in truth” (as the emissions from the power plant weren’t included in the math).

    /* [me]: They also wound up with hybrid cars *even* *though* they opposed hybrid cars.

    [engineer-poet]: You’re wrong on both counts.

    1. Nobody, not even Toyota, has ever made a plug-in hybrid car which takes part of its power from the grid. That would have been the first step towards oil independence, and it would have fit just fine with California’s air-pollution initiatives. But it wasn’t done.
    2. California never opposed hybrid cars, it just didn’t give any ZEV credit for them when it would have made a difference.
    */

    I’ll concede that nobody made a plug-in hybrid car. I don’t know why that makes me wrong in saying that California ended up with hybrid cars.

    I’ll also concede that California did not actively try to kill hybrids. However, I do recall the Assembly being more willing to get rid of the ZEV rule than to change it to “Low Emmission Vehicles” (eg. permit hybrids in the category), or do anything in between. I’m not sure why I should trust the Assembly’s judgement on the matter.

  51. Engineer-Poet:

    Left alone, market forces could fix this problem. The problem is that market forces are being opposed and frustrated by policy decisions and entrenched interests.

    That’s the guts of it.

    The “free market” will be blamed because almost no one has a clue
    what that really means, what it truly is.

    I expect, because of these freakin’ policy decisions, that we’ll see
    much higher prices simply because of lack of refining capacity and
    some day run out of that with plenty of oil left in the ground.

  52. I don’t think things like global warming and the ozone hole can be dismissed as myths.
    There IS an ozone hole over Antarctica. It’s still there, and UV levels in Antarctica are STILL higher than in most of the rest of the world. But when you start talking about atmospheric physics, you run into ‘equilibrium states’. Naturally, a certain amount of ozone forms, and a certain amount gets taken out every year. But if you increase rate of destruction, the system strikes a new chemical equilibrium… where ozone is in shorter supply, but still being produced. This is what happened historically. By largely cutting off CFC production, we halted the rate of increase of the rate of ozone destruction, containing the problem to Antarctica.
    There ARE very sound climatological reasons to believe that human actions can cause a noticeable uptick in global temperatures. This is something to watch out for, and it’s not something you can afford to ignore. This is why a number of low-lying islands in the Indian and Pacific oceans are making provisions to evacuate the entire island if sea level rises start hitting them. They can’t afford to risk having a sea level go up by a few meters- because the next major storm might then swamp the whole island. Similarly, we in the West cannot afford to completely ignore the question of carbon emissions… even if the answer is not some kind of crackdown on burning anything at all (as with Kyoto).

    And I’m sorry to say, I can’t agree that market forces will resolve EVERYTHING. Believe it or not, I think they’ll be enough to cope with the oil crisis, between synthetic oil, shale oil, and technological advance. But there are a lot of problems where the SHORT-TERM costs of doing something do not accurately reflect that LONG-TERM damage caused by doing it. Or where the cost of doing it is amortized over such a long time, I don’t notice it.
    For example, if I own a patch of forest, I have a choice. I can clear cut, or stick to sustainable yield. If I clear cut the entire stand of timber, I might make a million dollars. And if trees worth logging take twenty years to grow, then sustainable yield will probably earn me 40-50,000 dollars a year, indefinitely.
    If I don’t expect to keep making money off the plot for well over twenty years, it is in my economic market interests to clear-cut, even though that makes the land less valuable. Once I clear it, I can sell it to someone else, use the proceeds to buy more land, and repeat. This business model can be sustained for decades. Realistic economic planning based on market does not emphasize indefinite-term ‘wise use’, because no economic entity can realistically plan for the indefinite term. And when an indefinite-term problem arises like “Some day, the oil will run out”, or “if this kind of logging goes on for 100 years, we won’t have any trees left”, market forces are not well suited to coping with the problem.

  53. I’ll concede that nobody made a plug-in hybrid car. I don’t know why that makes me wrong in saying that California ended up with hybrid cars.

    Because you implicitly mis-stated the claim to which you were responding.

    There are a number of bridge technologies to get away from fossil fuel in general, and petroleum in particular.  The conventional hybrid isn’t one of them.

  54. Jeff Read – You’re still dancing away to avoid the question. $32 cost of production, no scaling problems, at a certain point, there will be substitution and that will be the limit of the crisis. The peak oil theorists all act as if that substitution will not happen. That’s fantasy. Join the real world.

    Engineer-Poet – I filled up @ $2.03 a gallon last night. Are you saying that it’s really smart to invest huge amounts of government directed resources to an engineering program that would only be of use in occasional price spikes? A lot of the gain in mileage comes at the expense of higher fatalities in road accidents due to materials substitution. Do we send a DoT employee to the funerals to exclaim that Dad died in the service of his country’s quest for oil independence? Artificial distortions imposed by government fiat cost, both in opportunity and all too often in lives. I don’t accept that the US has such superior bureaucrats that they’re the only country in the world that can competently out think the market.

    adrian10 – Your linked article assumes a non-peak oil world. If you are engineering limited from increasing supply, you’ll go after any alternative supply source you can get to move the supply curve to the right and capture the extra profit. That’s why if the field peaks are staggered along gradually, we’ll have a gradual price rise and the plants will come in without disruption. The only interesting scenario in peak oil is in sudden, sharp drops in several major oil fields that are hidden and announced simultaneously by OPEC. That’s when the “civilization is ending” types will have a field day. But even then, you’ll get very different behavior with energy majors (or new entrants) building those plants quickly and pulling that new supply on line as fast as they can because the profit will be fantastic.

    jomama – It’s our job to explain market forces better.

    Eric Voorhies – I think that the same people who are far sighted enough to see the benefits of sustainably logging a tree stand v. clear cutting can act on their foresightedness via private action or government. The chances of shortsightedness are, as has been repeatedly proven in the real world, much greater in the government variant to solving the problem.

    Govt. v free market is a choice of methods for smart people to shape the economic system to do the right thing. Government action usually is suboptimal, including for long-term development projects.

  55. Eric: Your second paragraph in the post two above this is a point widely missed, ignored or put down as “hippy nonsense”. The short term gains may indeed outweigh the short term costs, but the long term solutions to fixing problems caused by such practices may be quite high. I do think that market forces will resolve everything, I just think we have an overly simplistic (often deliberately that way to satisfy a particular agenda) model.

  56. TM Lutas writes:

    Engineer-Poet – I filled up @ $2.03 a gallon last night. Are you saying that it’s really smart to invest huge amounts of government directed resources to an engineering program that would only be of use in occasional price spikes?

    The only reason you’re able to do that is because of massive imports of gasoline from Europe under IEA emergency agreements.  Those imports are about to come to an end, and the price situation is going to look more like diesel.  Looked at diesel prices lately?  They only recently came down below $3.00/gallon where I live.

    World oil prices are on a steady upward trend of about $14/bbl/year.  Let me see if I can include the picture or if it gets editted out (damn LACK OF PREVIEW):

    Fischer-Tropsch fuels aren’t the answer either.  Coal prices are already at record highs, and people just don’t want to mine coal.  Then there’s the climate-change issue, the heavy-metals issue….

    Powering an electric vehicle with solar panels on your own roof is just a matter of cost, and the cost is coming down nearly as fast as oil is going up.  Once you’ve done it there’s nothing more to buy, no noise, no emissions.

    A lot of the gain in mileage comes at the expense of higher fatalities in road accidents due to materials substitution.

    How do you square this claim with the on-going reduction in road fatalities over time?

    If you need a heavy vehicle to be safe and want to cut petroleum use too, the no-brainer solution is to build a car with lots of lead-acid batteries in it.  There’s your weight.  The batteries can be charged from anything that makes electricity:  splitting atoms, blowing wind, hydro turbines large or small.  You get much better throughput from coal and oil, too; a combined-cycle gas turbine can be around 55% efficient and coal-fired IGCC is around 40%.  I’ve seen claims that the average vehicle is 15.9% efficient, and if you feed it from a F-T plant at 60% efficiency you’re down to about 9.5%.

    On top of this, you can clean up any kind of central plant far more easily and effectively than a million exhaust pipes.  The electric solution is enormously better than coal liquefaction on all the merits except “it’s exactly like what we have now”.

  57. Engineer-Poet – At a steady $14/bbl/year trend, we’ll eventually hit a tipping point where the long money is going to start investing in those plants because they think they’ll be able to get a decent rate of return for the risk. That should break the trend and ease us down to a more sustainable pattern.

    If we can’t find people who are willing to mine here, there’s coal miners all over the world who would be glad for new pits to work out of. I suspect that there’s plenty of people who are willing to do the work if the jobs show up, including lots of people with experience who have retrained into other declining industries. Coal prices aren’t high due to a lack of coal. They’re made artificially high because of regulation limiting pollution. Coal, when burnt, is very dirty. I’m not so sure that F-T plants would be that dirty.

    When I decried the loss of weight in vehicles, I should have been more precise. Pulling out steel and substituting plastic or aluminum reduced crash protection and was a quick and simple way to comply with government mandates. Increased safety has been part of the automobile industry for a long time. This has led to constant improvements independent of other factors. When you combine the two, the increased safety innovations have tended to win out but the safety reducing fuel efficiency mandates have made the improvement curve less steep. That translates into less lives lost year on year but more lives lost than if the fuel efficiency mandates hadn’t been put in. Sticking weight in the center of the vehicle isn’t going to help much in a crash. The frame will still be skimpy. In the end, there’s still extra funerals.

    I think you’re misstating your efficiency numbers. The crude oil refining process has an efficiency number. That’s the proper comparison to the F-T plant efficiency number.

    Electric is not better on all counts. Liquid, or even gaseous fuels are much better than electricity when it comes to storage.

  58. /* [me]: I’ll concede that nobody made a plug-in hybrid car. I don’t know why that makes me wrong in saying that California ended up with hybrid cars.

    [Engineer-Poet]: Because you implicitly mis-stated the claim to which you were responding.

    There are a number of bridge technologies to get away from fossil fuel in general, and petroleum in particular. The conventional hybrid isn’t one of them.
    */

    OK. Thanks for re-grounding me.

    However, my underlying premise is that the market will take care of it by offering lots of money to whoever solves the problem. California tried offering money to make ZEVs, but the market offered more for the creation of hybrids. We ended up with the hybrids.

    Is this a fix? Well, it’s an efficiency upgrade. However, just like any other fix, it will have to be adjusted in the future. Guess who’ll make those adjustments. I’ll put my money on the guys trying to become rich by solving “impossible problems.”

  59. TM Lutas:

    The “long money” is going to favor Bush-Cheney over Fischer-Tropsch. It’s much easier to grease the palms of a few politicians into going into wars of conquest and resource-appropriation, than it is to make the very high initial *energy* investment necessary to get Fischer-Tropsch plants going, and the energy returns of the Bush-Cheney method will be much higher and come much faster.

    You keep banging on about $32 a barrel, failing to grasp that currently, petroleum costs about $10 a barrel to extract; it’s only *sold* at $50/$60/bbl. The reality is that Fischer-Tropsch has a higher energy cost, higher pollution output, and lower energy return than drilling and our energy-greedy economy will not survive if it has to rely on Fischer-Tropsch, especially if Big Oil maintains its current pricing structure.

    I believe you when you say the market is self-correcting; however in a dopamine-addicted, mentally ill society, it doesn’t always correct in a way that you might like or a way that brings greater benefit to all. Increased conflict and bloodshed over dwindling resources, even greater pollution, and the eventual self-destruction of the market, taking entire populations with it, due to energy starvation do not sound like pleasant corrections.

  60. Jeff Read – You think that F-T is something that Bush and Cheney would oppose? What have you been smoking? Who do you think will be running those plants, the Sierra Club? The energy companies are not going to let new entrants into their markets if they can avoid it.

    There is always a low cost provider. They don’t matter for pricing. What matters is what’s the price to provide the last barrel of oil (or oil equivalent in the case of F-T) that the world needs at that moment. KSA pulls oil out of the ground for well under $10/bbl. They can’t supply everything so it’s the higher cost producers like Russia or Canada whose prices determine the base oil supply prices. Then the political and other risks get factored in and you get your actual market price.

    Peak oil (which is why F-T matters at all) is only destructive if there’s no supply overhang waiting at a livable price. There is a huge supply overhang in the form of US and other countries’ coal fields that can be converted to diesel via F-T. Thus peak oil theory may be interesting to market insiders or those who wish to invest in F-T but it’s not a big deal for the rest of us. There will not be any energy starvation this century or the next because F-T will provide sufficient energy. I expect us to come up with something better than F-T long before we run out of coal. Heck, I expect that we’ll end up with space elevator launched orbital solar replacing F-T before F-T’s first century as a major factor in energy production, much less its 2nd.

    Look back a hundred years from today and you’ll see how fast and far we’ve come technologically. We’ll likely make a similar leap. F-T, if it’s needed at all (I’m not sure peak oil will happen prior to a substitute coming on line) will fill the gap just fine.

  61. Anybody remember Paul “Population Bomb” Ehrlich? This is the guy who predicted that megadeaths from global famine would be the defining feature of the 1970s.
    er? – from the standpoint of many people in the world the global famine is already happening. I know you Americans don’t get out much, but at least you could try to watch another TV channel than Fox?
    The ‘market economics will save us all’ belief seems to be just as much an article of faith for you as any of the ideas of others you try to mock. Seems like wishful thinking to me. The Chinese seem to have taken notice of Paul Erlich – they are acting with foresight and will outcompete you in the markets very soon. When you are broke because you have to pay the money you owe them you may find that market economics generates losers as well as winners.
    Those who refuse to think ahead will rush headlong to their downfall. Part of thinking ahead is to visualise worst case scenarios and plan accordingly. The threat to biodiversity upon which our life on earth depends is not one easily repaired by market economics. I think you find the lead-in times for the creation of new species to replace the millions being lost are even longer than the ‘space stuff’ previously mentioned (unless of course you are a Young Earth Creationist, or you think we can pay the ‘Intelligent Designer’ to do the job over again)
    If you prefer to put your hands to you ears, close your eyes and sing ‘la la la – I’m not listening’ that’s up to you. Perhaps when you run out of countries to invade, wildlife refuges to plunder, and you can’t afford to pay what the Chinese can for the good old black stuff you’ll look around and wonder what happened to you?

  62. It seems to me that no one is addressing the REAL problem: it’s not that the USA and EU ride SUVs etc. but the rest of the world also wants to do that, and when they are asked to take the environment into consideration, they say “YOU didn’t do that for a centrury – now it’s our turn to ignore that for a century!”. And from a bizarre “justice” sense they are right, but technically not: Earth cannot tolerate that. Imagine when one billion Chinese will switch from bikes to cars – how will the environment cope with THAT?… I have seen how communists in the Soviet Union totally disrespect the environment – so China seems to be a big threat…

  63. In reply to TM Lutas and Caleb:
    My problem with the assumption that “market forces will take care of it” goes like this. Market forces operate only on what things ARE, and on what a canny businessman will EXPECT them to be. There are very few market forces that reward long-term stewardship of forests. Or of maintaining a strategic oil reserve.
    And there are a number of cases where ‘free-market’ style decisions, made by each individual, lead to a disaster. For instance, the vaccine for a serious disease has a one in 100,000 chance of killing my child. That disease is virtually extinct, because everyone the child will meet has been vaccinated. So it makes sense for me to skip the vaccine for Junior, to protect him from that slim risk. But when enough people do this kind of market-sensible free riding, the ‘herd immunity’ of the overall population breaks down… and we get a new epidemic. BUT VACCINATION DOES NOT BECOME A MARKET-SENSIBLE STRATEGY UNTIL THE EPIDEMIC IS ALREADY LOOSE.
    Likewise in the forestry example. There are a lot of cases where market forces don’t kick in and start mitigating the problem until things have already reached a state that an objective observer would call a disaster. The primary duties of government are to (a) keep people from breaking the free society, both in economic and political terms; and (b) to make allowances for specific areas where free market forces will simply NOT help until the situation is already a catastrophe. For instance, if the government invested in building Fischer-Tropsch plants NOW, it might greatly improve our oil situation ten years from now. Whereas if we wait for market forces to come into play, those plants may not come on line for twenty years… by which point the price of oil and gas will have gotten high enough to seriously cripple the US economy.

  64. When you are broke because you have to pay the money you owe them you may find that market economics generates losers as well as winners.

    I believe the thing being proposed at the moment is either devaluation or letting inflation run for a bit (effectively the same thing).

  65. Here’s a new datapoint for everybody:
    http://www.techcentralstation.com/112105D.html

    Apparently, S. Africa’s isolation has yielded ~$25/bbl equivalent F-T technology. The company with that technology, SASOL has just been listed on the NYSE. If peak oil does hit, the consequences just dropped by ~$7 bbl equivalent. What’s even more fun is that the S African technology may very well be cleaner than present fuels.

    Dean Morrison – There is currently a world surplus in agricultural commodities and has been for decades. That means that anyplace there is a shortage of food and starving people it’s because they’ve been prevented from earning money sufficient to buy food or people with guns have prevented willing sellers from delivering food. Each circumstance is tragedy but it’s fundamentally a political tragedy. Political famines will never go away as long as men are not angels but political famines say nothing about resource depletion or economics.

    The PRC must either buy US goods, services, or assets eventually. I’m betting on assets being a large chunk of the mix. So Rockefeller Center will be sold to some nice chinese gentlemen as it was sold to some nice japanese gentlemen two decades ago. They’ll either invest wisely, as the british have long done or they’ll invest poorly as the japanese did in two decades ago. The republic will survive it. It may even thrive off of it. What will not happen unless there is serious miscalculation is a mass call on US government paper. In a week, we could print a $1T note and hand it over in a nice ceremony. We’d then likely have to largely exit from the credit markets and cut our budgets radically but we’d survive. The PRC government likely would not.

    Eric Voorhies – There are all sorts of market participants. Some, like the Catholic Church, have no problem looking at things in multi-century chunks of time. Others are more immediate in their time focus. There is no evidence that I’m aware of that the politicians are any more foresighted than the economic actors and quite a bit of evidence that it’s the other way around.

    Your point on vaccination is just wrong. Vaccination is something of an insurance policy. People aren’t calling their life insurance brokers as the plane loses power. They’ve made sensible arrangements ahead of time, at worst as they wait in the airport.

    You must remember that the same shortsighted people populate both the economic and the political system. In a free market system, you can have a lower proportion of foresighted people populating that system and still get foresighted behavior than in a democratic political system where you have to win votes to implement foresighted behavior.

    adrian10 – It’s quite likely that the PRC will wisely draw down its dollar investments through the purchase of assets. Inflation/devaluation would have to be quite severe for that to work with the amount of currency that the PRC possesses.

  66. Its true market forces are largely centered towards the next quarter. Individual investors are the meat and potatoes of the market forces, who are served by mutual funds by leaps and bounds more than individual equity ownership. Mutual funds enhance the quarter-centric financial outlook further than the individual corporations already did. Its the rare special investor, like Warren Buffet, who will challenge the nearsightedness of the markets in order to profit. That doesn’t mean that the market will be caught unaware, and perhaps the opposite. If companies are hyper trend aware then chance are they will be following the ticks as they inch ever upwards. In any case the oil companies themselves will clearly know before anybody else does and will try to put practices in place to profit from a trend change away from an oil that can no longer be afforded. If oil is nearing its peak we should be seeing a cost of oil that largely reflects inflation only and should be at an inflation adjusted low, even after the Saudi production controls. The cost of oil should rise only prodigiously after the peak has occured. Am I mistaken in that common sense?

    As far as millenarianism is concerned it will only increase as we become aware of ourselves not only as a market that functions on aggregate social behavior but as a component of an ecosystem as well. The ecocsystem aspect of our evolution is still very formative and will undoubtedly be filled with many panics and under-over calculations. However its very difficult for me to imagine a science of humanity as eco-participants that will not conclude with the erection of various paranoid watchtowers. In the medical fields this paranoia is productive in issuing warnings about antibiotics abuses mutating stronger viruses, forecasting the proliferation of AIDS, bird flu, and many other epidemics, and reminding the public about the results of chemical, nuclear, or biological weapons. The market has lent a less direct influence on these warnings as academic survival interest has.

    However, the peak oil warning seems to cross a line to directly attack Adam Smith’s invisible hand. I suppose this is given currency by the frustration that we have seen with the pillaging of individual investors by the finance industry during the most recent boom. If many people where taken by, say the phony analyst reports that are made to attract/keep investment banking business, or the hidden dilutive costs of employee stock options of technology companies they invested in, if they have received numerous “class action participation” mailings for each of their portfolio holdings, then they would most certainly feel as though the market is not necessarily free and fair. Of course now more than ever there is skepticism about the oil companies with their high reaches into the current administration interfaced with the ties it has to suppliers funding extremists, and even the recent accusations of price gouging following Katrina that has attracted Congress, after suffering the pangs of oil prices in our individual lives. With this polluted sense of confidence in the oil industry, and the market at large, it is the perfect soil to plant seeds of doubt about the usual invisible hand. This is another market action but it relies on government regulators to correct. The finance industry, where the invisible hand is the most tangible, is heavily regulated precisely because it has to be fair in order to function as a litmus of our social health, that is if the capitalist system is to maintain its identity as the best system for continued human survival. The invisible hand is ephemeral in that it flickers with the fairness of the economy. When you can touch it, it moves capital, when you can’t, capital remains undistributed and resists natural order.

    Right now we have some doubt. Thats just who we are right now. I think peak oil is an exaggeration but we are talking about a very dark part of our market and I would remain a little aware of this fact before I announced my immunity from anxiety about its state of affairs in general.

  67. We are doing something about the oil issue. We invaded Iraq to stabalize the region and stop the shock effect from turning of the middle East Spigot all at once (note we gave up on Somalia, so it wasn’t he genocide of the Kurds that made us do it).

    While anti libertarian, this view is consistent with my view that there are people in the world who I don’t want to have a nuclear bomb even if they claim they just want to blow up their back yard, like OSL, Saddam Hussein, the Iranians, the North Kroeans.

    Having your hand on the oil spigot is like having your hand on the jugular vein of western civilization. Consider:

    “There are more than 4,000 different petrochemical products, but those which are considered as basic products include ethylene, propylene, butadiene, benzene, ammonia and methanol. The main groups of petrochemical end-products are plastics, synthetic fibres, synthetic rubbers, detergents and chemical fertilisers.”

    http://www.opec.org/library/FAQs/CrudeOil/q4.htm

    So let’s not discount the effort to rework those massive, established economies.

    Meanwhile, it is a shame that Bush’s efforts to reinvigorate Nuclear energy seem to be going nowhere.

  68. Meanwhile, it is a shame that Bush’s efforts to reinvigorate Nuclear energy seem to be going nowhere.

    Can’t do stuff like that overnight, long lead times, if quicker than your average space elevator. Think nimbyism might be a problem though, there are a lot of people with substantial real estate assets around who aren’t going to see nooks as the value-enhancing bonus we enlightened types know them to be.

  69. http://www.techcentralstation.com/112105D.html
    “It is possible that even with lower oil prices (anything above $25 per barrel, say South African experts) the technology may still be exportable and of high value since Sasol is coy about how much the process actually costs.”

    Call me skeptical, but I smell an attempt to talk up their share price.

    So Rockefeller Center will be sold to some nice chinese gentlemen as it was sold to some nice japanese gentlemen two decades ago. They’ll either invest wisely, as the british have long done or they’ll invest poorly as the japanese did in two decades ago.

    The Unocal experience must have been so satisfying. “OK guys, you can have anything you want as long as it’s not useful.”

  70. I think that you’d appreciate the fact that even reasonable people find themselves having to inflate their claims to completely unreasonable levels to get any attention in this moron-driven media society.

    Do you think that you could make an attempt at avoiding this yourself?
    (hint: it won’t be easy)

  71. adrian10 – It’s hard to say whether Sasol’s production price is actually $25/bbl equivalent or some other number. As a highly experienced F-T operator with decades of experience, it’s likely that they’re doing better than $32 in any case.

    If you think that was the only PRC purchase lately, you haven’t been paying attention. The PRC has started buying up assets (like IBM’s ThinkPad division) for some time now. They touched a nerve with Unocal but are continuing to shop elsewhere in the US for assets. That’s why I’m so confident that they’re going to invest here for the long haul. They already are.

    RvnPhnx – It’d be nice if you referenced the person you’re addressing. Who are you talking to?

  72. Do you think that you could make an attempt at avoiding this yourself?

    Do you think that you could make an attempt at being specific enough about which of my claims you’re referring to to make a discussion possible?

    (hint: it won’t be easy)

    Not with your help, evidently.

  73. Max Lybbert:

    However, my underlying premise is that the market will take care of it by offering lots of money to whoever solves the problem.

    Only some problems have market solutions; ones where the people creating the solution can’t peddle it piecemeal to the beneficiaries cannot be solved by markets.  For instance, you can’t sell emissions controls to car owners because they reap little or no financial benefit from cutting their own emissions.

    TM Lutas:  You might want to look at US energy consumption before you talk up F-T too much.  The data I have on F-T is that it is about 75% efficient, so you’ll need about 10% more coal than petroleum to make a given amount of gasoline (assuming negligible refining losses after F-T synthesis).  The US consumed about 22 quads of coal last year, compared to 40 quads of petroleum; replacing the 80% of petroleum we’re now importing (after hurricane damage) would require about 35 more quads of coal.

    That means 260% of today’s production.  It means 160% more coal trains, 160% more ash dumps, 160% more toxic metals leaching from the ash… the list goes on.

    Worse, it means a huge investment in equipment that depends on more coal consumption.  The best estimate today is that around 70% of the global warming trend is anthropogenic.  Unless research reduces this to something trivial like 10% (and what are the odds of that?), fighting the new coal interests to fix the environment will be nearly impossible.

    It makes far more sense to go electric.  Feeding the output of a 75%-efficient F-T plant through a 15.9%-efficient gasoline drivetrain yields 12% at the wheels; sending the same coal through a 45%-efficient IGCC plant and taking 5% losses in transmission, charger and batteries and 10% in the motor yields 34.7% throughput.  That’s almost 3 times as good!  Instead of 35 more quads of coal, we’d be able to replace all 17.3 quads of gasoline with just 7.9 quads of coal.  Replacing diesel would take somewhat less, depending how it was done (dimethyl ether might be more efficient to make than F-T paraffins but it requires a lot of infrastructure changes).  On top of this, any non-fossil additions to electric generation would cut coal requirements.

    Yes, we can switch the US over to coal and run the same old stuff on F-T fuels.  This doesn’t mean that it’s smart, or we should.

  74. Engineer-Poet – F-T methods *are* the refining synthesis. I think you’re double counting losses. The end product of F-T is diesel, not crude oil. I’m not “talking up” F-T so much as using it because it’s the simplest supply overhang to punt peak-oil “the world is ending” pretensions. If I would have started off with oil sand deposits, it would have been highly likely that we’d be hip deep in discussions of water availability in Alberta and British Columbia. Juggling water availability issues in a thread like this is not my cup of tea so, even though I think that the availability issues will be solved enough that we’ll never even get to F-T in the real world, F-T is useful because it’s simple and doesn’t have any show stoppers that can be practically argued. F-T will never come into large scale use so long as it is much more expensive to refine a bbl than pulling a similar bbl out of oil sands. F-T will be taken advantage of in isolated instances where stranded natural gas is available but otherwise uneconomic to extract.

    I think that hydrogen is coming. I think that both GM and Ballard (possibly others) are going to get a commercially viable motor vehicle stack based on it at the 2011 DoE target date of 2011. I think that we’re going to radically shift over to a new infrastructure. Oil will still be drilled. Coal will still be mined. Hydrogen isn’t a panacea of energy nirvana. What it is instead is a practical middleware that will massively increase practically usable supply sources that today are not exploited. This will balance the increased demand coming from the 3rd world moving to the 2nd world moving to the 1st world.

    Jeff Read – Peak oil and John Rendon are irrelevant to each other (and posting different versions of the same article time after time is just boring). Peak oil is an engineering problem. John Rendon and his competitors are political issues.

    Whether F-T is this administration’s cup of tea, they simply don’t have the power to stop it. Gov Rendel in PA is midwifing the construction of an F-T plant. Who are the players, Shell and Sasol. If you think that this administration is going to stomp on Shell’s project in order to protect Exxon, you’re bereft of the least bit of sense of how the political game is played. No, the administration is much more likely to help Gov. Pawlenty’s F-T plans to build a plant in Minnesota with Exxon as a partner. Everybody gets a piece of the pie and the checks keep flowing to the RNC.

    Shell, Exxon, BP, all the majors have exploratory arms gaining experience in hydrogen, renewables, and F-T. They know a change is coming and they expect their political friends to let them branch out their operations so that they stay on top of the energy game. So what’s the motivation for any of these companies to pay off politicians to keep themselves from moving into a new sector and dominating that one too? There is no motivation and that’s why Rendon’s an irrelevance in the peak oil discussion whether or not he’s as malevolent as you make him out to be. Somebody has to be motivated to pay his fees for him to distort public opinion. Right now, you haven’t established that anybody’s willing to do so.

  75. TM Lutas:

    I didn’t post that article at Vision Circle; Craig Nulan did and he has taken you to school in the past. Maybe if you didn’t fall asleep in class you might learn something. In a world of falling net energy you cannot separate thermodynamics and politics; as politics, like any human activity, requires energy. Peak oil means most of our energy reserves are tapped out. There are nations which have plenty of oil, and on the short list are Iran, Iraq, and Venezuela — all nations where the current administration is carrying out or considering to carry out operations, covert or overt, to overthrow the regime in power. (Venezuela is an interesting case because unlike our President, Chavez is popular with his people and was legitimately elected.) And obviously you didn’t read the article all the way through because if you did, you would catch the bit where it says the current administration is *paying Rendon’s fees* to manipulate the media and hoodwink the public concerning the war in Iraq. And no, ESR, it’s not OK if Bush or his cronies lie to justify the war; it’s fundamentally machiavellian.

    Fischer-Tropsch plants are expensive, polluting, and energy-inefficient. They get us to the goal of having petroleum but there is not much economic incentive to do so if the alternative is to use a nation’s military might to secure oil reserves in the nations that still have them. Even if the administration is supporting F-T plants, they are not the *economical* short-term solution. Saddam gassing the Kurds wasn’t the pretext for our invasion, else we would have ousted him long ago. Saddam threatening to trade his oil in euros rather than dollars is more like it because it would mean that American control over energy flow, and hence American hegemony, would be over.

    But George Bush can’t hold a press conference and say “We’re going to go to war over oil”; he’d be out on his ear. So he gets people like Rendon to carefully engineer a repackaging of the war over oil as a war to suppress an insane tyrant who threatens the lives of Americans with weapons of mass destruction. A war to preserve American lives is much more justifiable than a war to preserve American hegemony; but the action in Iraq is showing every sign of being the latter and not the former, especially considering the carefully engineered, *wag the dog* way it’s being sold to the public.

  76. Jeff Read – If Craig Nulan has “taken me to school” in the past, Google can’t seem to find it. I’m not claiming infallibility so even if the event took place, I’m not sure the relevance. I’m really trying to stay on topic here. The topic (read the title) is peak oil. All the propagandists in the world, on whatever side, and using the dirtiest, most dishonest tactics, paid for by the sleaziest methods in the world do not matter a whit about peak oil. It’s an engineering phenomenon, the moment when we start producing less and less oil because we’ve exhausted our ability to wring black gold from the surrounding stone.

    It doesn’t matter if we send the 82nd airborne to secure an oil field if the oil field is tapped dry. The most it can do is distort the market and artificially lower prices in the US. Big whoop. We’d be smuggling that cheap oil out of the US and taking the profits, end result being absolutely nothing.

    In case you haven’t noticed, it’s been the Democrats who have consistently been trying to get us to manipulate oil prices and this Republican administration who has resisted tapping the strategic petroleum reserve (SPR) in order to avoid political pain. That’s exactly opposite of the policy a real blood for oil administration would be in favor of.

    To recap: Saddam’s unit of account for oil has nothing to do with peak oil. Bush perfidy has nothing to do with peak oil. Peak oil is not influenced one whit by any political, media, or social movement outside of radical luddism which would collapse demand. If I gave in on every single one of your red herring charges and granted you were right, you’d still be wrong about peak oil because the supply overhangs of alternatives in oil sands and F-T would still be there. In the common law justice system, when the prosecution is finished presenting its case, the defense can ask the judge to look at the facts thus far in evidence, give the most favorable interpretations to the prosecution possible, and find the defendant not guilty because the case simply hasn’t been proven.

    That’s the situation we’re in right here with peak oil. Granting everything you say to be the unvarnished truth, you still failed to make your case. Nobody suppressed your free speech and you had every opportunity to prove you aren’t the deluded fantasist I thought you from the first post you made mentioning peak oil. You blew every opportunity.

  77. TM Lutas:

    The idea is that as we approach the peak, the last places on earth with abundant petroleum reserves become strategically important to control because drilling is still cheaper by far than F-T conversion, oil shale extraction, or anything of the sort. The concern is that the Bush administration is resorting to thuggery in order to control these areas (or at least to install U.S.-sympathetic governments instead of ones hostile to the U.S.) and maintain American hegemony which has high energy costs — completely ignoring the fact that energy will drop off soon and upset the plans for Pax Americana ANYWAY.

    Peak oil means one way or another we will have to make do with less energy. My concern w.r.t. peak oil isn’t really the peak itself — human beings can be incredibly frugal and resourceful when pressed — but rather the violence and chaos that will ensue as the more energy-gluttonous societies, like junkies looking for their next syringeful of smack, resort to abominable means to get their next energy (oil) fix. The war in Iraq shows all evidence of being nothing more than the beginning of this trend toward brutality.

    Maybe I’m totally wrong though. Again, Slartibartfast. I’d rather be happy than right.

  78. Jeff Read – It’s as if you’ve never heard (or just don’t understand) price arbitrage. If you make a nice 20% margin on your factory and you’re getting 50% subsidized oil (with oil being your major cost), it often makes sense to shut the factory down and sell off the oil. You make more money that way.

    Price arbitrage is why the US economy didn’t collapse entirely in 1973 and 1979, People who were not boycotted bought oil and turned around and resold it to us for a nice profit. If we were to spend our blood to get oil, arbitrage would work in the opposite direction, making a mockery of our soldiers’ sacrifice and yielding very little political advantage to an administration that would do such a thing. I’m not saying that Bush is an angel. I’m saying that he and his faction in the WH are not stupid enough to believe that it would work. Again, assuming you’re right about the venality of ChimpyMcHitlerBushCo they still wouldn’t behave as you believe they will.

    Another repeat, when you have a demand of X barrels of oil, the price of oil is based on the guy who produces the Xth barrel, not the low cost producer who produces the first and cheapest barrel. Changing the ownership of the cheapest producers doesn’t adjust the world price and arbitrage means that any attempt to subsidize domestic consumption from friendly fields will lead to massive shortages as illegal exports are used to net windfall profits for smugglers large and small.

    Yes, a reduction of low cost oil availability will cause an economic slowdown but when the world economy is surviving $60 oil just fine, $32 (or less) F-T isn’t going to cause any great economic hardship by replacing $3 KSA oil or $5 Kuwaiti crude. It’s mostly just going to shift the chips around so that different people will be hurting and different people will be profiting. That’s no systemic threat.

    The most abominable thing that the US could possibly need to do in order to bridge us to something better would be to reduce domestic pollution controls in order to accommodate F-T.I’m not even sure of that because the Greens have been so hysterical about pollution and so willing to lie to get their aims that I just don’t trust the conflicting things I’m reading about the cleanliness of F-T. As moral evil goes, that’s pretty small beer.

  79. TM Lutas:

    “I’m not saying that Bush is an angel. I’m saying that he and his faction in the WH are not stupid enough to believe that it would work.”

    We’re dealing with a “faith-based” administration which repeatedly and vehemently denies the proven anthropogenic greenhouse gas emissions which lead to global climate change. Underestimate their stupidity at your peril.

  80. Lorenzo:  Use some critical thought.  If abiotic processes were creating oil at even 8 million bbl/day (compared to the world’s 85 million bbl/day appetite), oil would be seeping out of every crack and there would be no such thing as a dry hole.

    TM Lutas writes:

    F-T methods *are* the refining synthesis.

    Can’t be.  Refinery efficiency for diesel is about 88%, while F-T synthesis efficiency is about 75% from coal, and 65% from natural gas.  The sulfur content of many fuels would poison F-T catalysts, too.  It’s patently obvious that most motor fuel never gets near an F-T process.

    F-T will never come into large scale use so long as it is much more expensive to refine a bbl than pulling a similar bbl out of oil sands.

    Hogwash.  It’s far more expensive to drill in the Gulf of Mexico than to lift a barrel in Saudi Arabia, yet we’re drilling like crazy.  Heck, we still pump East Texas strippers despite a 99% water cut.

    Maximum production from Alberta tar sands is 3-4 million bbl/day, IIRC.  (Not enough water and other stuff to support greater rates.)  As long as demand is sufficient to bid world prices above the F-T threshold, oil sands and F-T will both be used.

    Needless to say, if we can come up with a cheaper energy supply the developed world will be far better off even if the F-T owners and sand miners go out of business.

    I think that hydrogen is coming.

    Hydrogen is a boondoggle.  The only thing it makes sense for is fossil fuels, because reforming is fairly efficient and you can sequester CO2 and other pollutants.  It makes some sense for nuclear if you can get a thermochemical hydrogen system working.  It makes no sense for the things people can make themselves:  solar, wind and microhydro.  It also requires a trillion dollars of new infrastructure.

    We don’t need this.  The electrical grid is more than capable of meeting our transportation needs during the off-peak hours, and batteries are more than good enough for the job.  (There’s a spammer plugging Chinese Li-ion stuff to me daily.)  My calculation is that battery degradation is about 50¢/kWh ($1.96/AH and 1100 cycles), but another factor of two in price, and the batteries will be considerably cheaper than gasoline.

    Whether F-T is this administration’s cup of tea, they simply don’t have the power to stop it.

    Coal supplies and prices do.  The public isn’t going to stand for the lights going off because there isn’t enough to feed the powerplants and the F-T systems too.

    Coal prices have soared, just as natural gas prices are tracking oil.  All energy supplies are coupled to a greater or lesser degree, determined by consumers’ ability to switch.  My goal is to steer things toward sources which are both domestic and pollution-free, and preferably cheap.  Unlike the situation where consumers go from domestic gas to imported oil, this switching works in our favor.

  81. Jeff Read – Ok, I’ll even grant you the very debatable point that the entire Bush faction is that evil, venal, *and* stupid. Your analysis still doesn’t hold up because price arbitrage still makes grabbing oil resources futile. No matter how much you want the earth to be flat and gravity to not be a law, the universe doesn’t, and won’t, care.

    Roland – I think it’s a much better bet that the current state-owned oil companies that control so many of those fields haven’t found it all, nor are they extracting it in the best way possible. Peak oil may happen in the real world but a big unknown variable is in the quality of governance of all those countries where oil exploitation can only be done by the state. That introduces a huge element of uncertainty into any honest calculations.

    Synthesis of gasoline and diesel fuels from solid hydrocarbon feedstocks via F-T is going to keep us from the disappearance of airlines or of farms even if other methods don’t kick in earlier (I’m an optimist and think that they will). The doomsday stuff is just not realistic.

    Engineer-Poet – I’m sorry but all that I’ve read says that F-T generally ends up with diesel at the end of its production. There are all sorts of tweaks so that you can have other products too but I’ve yet to see anybody, pro or con who says that F-T is not the refining process. Link please.

    As for oil sands, it’s simply not true that the maximum production possible is 4Mbbl/day. That’s the maximum production at the current water usage rate and the current water availability. If you could figure out how to get more water there or use less water per barrel, the practical production rate would shift, possibly overnight.

    On hydrogen, it’s a really wonderful energy storage mechanism because it takes all sorts of stranded and impractical energy sources along with outright current waste streams and turns them into practical power. Biohydrogen has a great future ahead of it. For instance there are water treatment plant pathways. You can adjust the cleaning microbial stew to maximize hydrogen production instead of minimizing methane production and it is a great two-fer as it encourages more water treatment and assists in energy production.

    There are a large number of processes, many of which are not currently associated with energy, that can lead to hydrogen production. Collectively, they can significantly impact any peak-oil shortfalls.

    I think you’re wrong on coal prices, or at least not understanding the true picture. We’ve put an awful lot of this nation’s coal off limits by legal fiat. The coal that’s left due to this artificial scarcity may be in short supply but that’s a political, not an engineering problem.

  82. I’m sorry but all that I’ve read says that F-T generally ends up with diesel at the end of its production.

    From here:

    The slate of products generated depends on the catalysts used and reactor operating conditions.  Olefin-rich products with n in the range of 5 to 10 (naptha) can be used for making synthetic gasoline and chemicals in high-temperature F-T processes.  Paraffin-rich products with n in the range 12 to 19 (distillates) are well suited for making synthetic diesel and/or waxes in low-temperature F-t processes.  Development has emphasized making synthetic diesel because the raw distillate product is an excellent diesel fuel, whereas the raw naptha product requires substantial subsequent refining to make an acceptable gasoline.

    I suspect that the additional refining means hydrogenation of olefins to saturate them, conversion of low-octane straight-chain hydrocarbons to branched hydrocarbons, etc.

    There are all sorts of tweaks so that you can have other products too but I’ve yet to see anybody, pro or con who says that F-T is not the refining process.

    Just look at the sulfur content of standard diesel (500 ppm, up to 2000 ppm for off-road) vs. the requirement of the F-T process.  Yes, F-T is the standard conversion from syngas to hydrocarbons.  No, it’s not usually used with crude oil or the products would be very different; distillation and cracking are not gasification/F-T.

    As for oil sands, it’s simply not true that the maximum production possible is 4Mbbl/day.

    You’re assuming that it would serve them to produce it faster.  Why should they invest in more equipment just to drive down the price of their product?  Why should the province exhaust their royalty payments sooner rather than later?

    On hydrogen, it’s a really wonderful energy storage mechanism because it takes all sorts of stranded and impractical energy sources along with outright current waste streams and turns them into practical power.

    You’re mixing capture and storage issues.  Electricity already has the fungibility down pat, and the whole point of waste-to-energy plants is that they turn trash into electricity.  Sewage plants have been burning digester methane in generators for decades.  Landfill gas, too expensive to clean up and pipe elsewhere, is feeding new on-site powerplants.  New generation powered by different energy supplies hook up the same as everything else.  The distribution network for electricity can use some work, but it’s there; hydrogen has none.

    The grid does have a lack of storage, but that’s partly due to the lack of electric vehicles and general DSM.  If we converted all passenger vehicles to electricity, the average load would be in the neighborhood of 100-130 GW after losses.  200 million vehicles plugged into the grid represent a potential peak load of 330 GW at 1.65 kW each (110 V/15 A) or 1.3 TW at 6.6 kW each (220 V/30 A).  To get an idea of the scale of this as a potential DSM resource, go to the white papers at AC Propulsion and start reading up on vehicle-to-grid.

    General DSM is coming too.  The biggest peak load in much of the USA is air conditioning.  Guess what just got bite-size storage?

    The consequence of things like this is that the demand curve will flatten (taking stress off the grid) while increasing the total energy carried (improving its ROI).  The ability to take advantage of cheap but intermittent energy supplies will also increase.

    Hydrogen travels poorly (high friction losses in pipelines, but low energy density) and is a pain in the posterior to get into a vehicle.  It’s much harder to handle than electricity.

    The last thing is efficiency.  Hydrogen stinks as a means of using non-chemical energy.  If you gasify coal and shift to hydrogen, you get perhaps 70% efficiency; the typical PEM fuel cell at 60% yields 42% throughput, minus overhead for compression and whatnot.  A 40%-efficient IGCC plant charging a 95%-efficient Li-ion battery gives you 38%; advantage, hydrogen.  But if you’ve got a wind farm cranking out watts, electrolysis at 80% followed by FC at 60% gives you 48% to the battery’s 95%.  Batteries win in a rout.

    I mentioned the Chinese Li-ion supplier before.  The quoted $1.96/AH @ 3.6V nominal comes to 54¢/Wh storage; if it lasts 1100 cycles, the cost is 49.5¢/kWh.  Compare this to 45¢/kWh for a not-atypical engine burning gasoline at $3.00/gallon.  Advantage, gasoline… for now.  If they can increase the life to 10,000 cycles, the storage cost falls to 5.4¢/kWh.  10000 cycles is over 13 years at 2 cycles/day.

    Toshiba’s new nanoparticle cathode material has only 1% degradation at 1000 cycles.  Other producers make similar claims.  Peak power and charge rates have also soared.

    The Li-ion battery makes hydrogen mostly superfluous in the near term, and maybe forever.  It’s time to quit hyping it so much and work on the prospects for 2007, not 2027.

    We’ve put an awful lot of this nation’s coal off limits by legal fiat. The coal that’s left due to this artificial scarcity may be in short supply but that’s a political, not an engineering problem.

    Only insofar as the political restrictions are not due to environmental considerations.  If you start trashing the environment, you get all kinds of fallout; ask the ex-Soviet bloc about how things were, and the Chinese about how things are.

    Regardless, we’d be far smarter to build another 50 GW of polygeneration plants and 100 GW of wind and solar plants to feed a new fleet of plug-in hybrid vehicles instead of digging two and a half times as much coal to run everything via F-T.  Just comparing the downside risks, we’d be fools to undertake the extra investment just to burn that much more coal.  It’s time to go electric.

  83. Whether peak-oil is a physically valid issue or not is now beside the point as many governments of the world are showing concern for what they are calling ‘peak oil’. If more members of governments being publicly taking concern regarding peak-oil, such as the Bush advisor Matt Simmons, then it will affect us in one way or another whether it’s a real problem or just a sham/hoax.’

    Whether peak-oil is a hoax or not, we should use common sense and ask ourselves… “who stands to gain?”

    If peak oil is a hoax: Who wouldn’t want to sell a small amount of an overabundant product for a large sum of money?

    If peak oil is real: Who wouldn’t want to hold a bulk share of a rare product in which there is high demand. And while the limited supply of product may affect profit, bulk holdings absolutely equal more power, which can turn into money and more power.

    Similar to 9/11, the idea of ‘peak-oil’ and a public experiencing hardship could be used to drive a nation’s mass mentality toward accepting if not openly wanting war and brutality. Like the Nazi regime admitted during trials, the masses stand to be manipulated and controlled to the profit of a few.

    I don’t see many reasons why wealthy oil executives would not like the idea of a ‘peak-oil’, in which their product suddenly became scarce, at least in the eyes of the public.

    Conspiracy theory? Well, yes. I don’t feel anything is wrong with that. It’s better than sticking your head up your ass and thinking that no powerful person on this planet would ever come up with a scheme that would make him/her rich by making others suffer. If you don’t think conspiracies are real, take a look at the third reich, which still happens to be recent history.

  84. Engineer-Poet – I love it when the other side brings in a document which proves my own point. I’m asserting that F-T is a practical substitute process for refining. The paper you linked to above agrees with me, not with you on this fundamental point. It defines F-T as a member of the indirect liquefaction synfuels class and can be made cleanly.

    It is shown that some synfuels derived via indirect liquefaction can outperform fuels derived from crude oil with regard to both air-pollutant and greenhouse-gas emissions, but direct liquefaction-derived synfuels cannot. Deployment now of some indirect liquefaction technologies could put coal on a track consistent with later addressing severe climate and other environmental constraints without having to abandon coal for energy, but deploying direct liquefaction technologies cannot. And finally, there are much stronger supporting technological infrastructures for indirect than for direct liquefaction technologies.

    So it can be done cleanly, but does it require further refining steps? According to this paper, you can take F-T products and use them directly as fuels *or* run them through further refining processes

    One possibility is synthetic middle distillates derived via the F-T process that can either be used directly as diesel or in blends with petroleum-derived diesel. Another possibility is gasoline via the route of first making MeOH from syngas and then converting MeOH into gasoline via the Mobil process. But MeOH can also be used directly as a fuel, and other oxygenates (fuels containing some oxygen) such as DME can also be provided via ICL process technology and used directly as fuels.

    In such mixed case, it’s not proper to measure efficiency by assuming further refining. If such refining is convenient, it’ll happen. If further refining makes F-T uneconomic, the direct products will be used instead. This isn’t rocket science.

    Regarding goosing oil sands production, I think we’re on different planets. Oil sands are not going to replace Saudi Arabia anytime soon absent a catastrophic oil peak where replacing KSA oil production becomes possible because KSA production has collapsed and the task has gotten easier. In a $130/bbl environment where civilization itself is threatened, you bet that they’ll be pulling as much oil out of the ground using whatever methods are available and future depletion be damned. It’ll be “make hay while the sun shines” because at that rate, we’ll move on to something else and the oil left in the ground will be as valueless as the whale blubber on today’s whales is as an energy source and lighting feedstock.

    One thing you may not have considered is that the Alberta deposits are matched and may be exceeded by the Orinoco deposits in Venezuela which are currently not being tapped at all. I don’t think that 3-4Mbbl/day is a hard limit at all for oil sands. It’s a current limit for one of the two major deposits of the world in a field that is being researched intensively.

    Moving on to storage issues, the comparative rate of battery improvement and fuel cell improvement over the medium to recent past is a story of batteries inching along in small incremental improvements and fuel cells racing along with much faster improvements. Given that dynamic, comparing today’s fuel cells with tomorrow’s batteries doesn’t sound very useful. Fuel cell full lifecycle efficiency numbers are improving rapidly.

    Now demand side management (DSM) is important. Batteries are important too. There are use cases where batteries will continue to be better than fuel cells. What’s new is that fuel cells are starting to have more and more use cases where they’re better than batteries.

    In the end, you may be right that these advances are ones that will end up being a more cost-effective, large enough supply overhang and thus show up to save the day in the real world instead of F-T in a speculative peak-oil future. You may be right that F-T is a real world fools errand and the solution will be elsewhere.

    All this is irrelevant.

    These developments you’re advocating, being speculative, can be waved away as vaporware. WW I vintage, real-world tried and true F-T cannot. This entire thread is an exercise in shut the freak up, from my original comment in the last thread, to ESR’s promoting a new thread, to the entire comments section of the thread. For that STFU task, F-T is clearly superior, shutting off questions of scalability, technology practicality, and killing the idea that peak oil is something we should run around and be scared about, reacting in panic.

    We clearly have enough coal for centuries. It’s clearly possible to run entire countries on the stuff. The price premium is not pleasant, but it is survivable. All that means the panic breaks and the scaremongers lose their power.

    That’s what this is all about, making the scaremongers lose their power so the adrenal gland is out of the driver’s seat and is replaced by the higher faculties of the brain. In that, I think we’re fundamentally on the same side. I don’t think either of us relish panic-stricken, emotion driven, energy policy lawmaking. Am I right?

    John B. Proposterous – You’re correct, up to a point. Psychology can drive energy energy prices to a ridiculous degree. But those prices can only be driven up by purchases and panic driven excess purchases can only occur until you start running out of storage room at which point you have a mass realization that there’s a worldwide panic and the wise man will sell at the peak and not get caught with very expensive oil in his inventory. There’ll be a rush to the exit and a crash.

    The crash will occur because alongside all that panic buying (good for incumbent producers) will be new entrants (bad for incumbents). Those new entrants are already forming and there’s nothing that strikes fear into a fat and happy incumbent than a lean, nimble new competitor. Yes, a price rise is a good thing for the energy companies. Peak oil wouldn’t be because peak oil would stimulate massive new competitors who wouldn’t abide by the cozy rules of the existing club.

    Cui bono indeed.

  85. Engineer-Poet – I love it when the other side brings in a document which proves my own point. I’m asserting that F-T is a practical substitute process for refining.

    You’re arguing a point that’s not under dispute.  You can make excellent diesel fuel from waste cooking grease too.  What you can’t do is replace petroleum motor fuel with it, because there is only about 3 billion gallons/year of it vs. ~200 billion gallons of motor fuel.

    You’ve done nothing to address the substantive issues:
    1.)  That we probably cannot increase coal production from the current 1.1 billion tons/year to the 2.9 billion tons we’d need.
    2.)  Even if we could, we shouldn’t:
        a. The damage from mining would be too great.
        b. The investment would commit us.

    New mines, plants and infrastructure for fuels like DME would commit us to more decades of the noisy, polluting internal combustion engine and CO2 emissions, both of which we should instead be working to reduce as quickly as possible.  Even if the worst-case scenarios are wrong, the effects of the CO2 will be substantial and we’ll run out of minable coal soon enough.

    In a $130/bbl environment where civilization itself is threatened, you bet that they’ll be pulling as much oil out of the ground using whatever methods are available and future depletion be damned. It’ll be “make hay while the sun shines” because at that rate, we’ll move on to something else and the oil left in the ground will be as valueless as the whale blubber on today’s whales is as an energy source and lighting feedstock.

    In other words, you’re agreeing that the US consumer has two modes:  complacency and panic.  My point is that we should be doing something in between, nudging the process along.  You’re asserting that we can replace shrinking petroleum supplies with coal and think there are no other impacts.  I’m asserting that ignoring those impacts is dangerous; the cost of the loss of waterfront property from sea-level rises or the destruction of value of southwestern forests and other real estate due to warming and drought far outweighs the cost of converting sooner rather than later.

    Oil sands are not going to replace Saudi Arabia anytime soon

    For the same reason we shouldn’t even try to replace Saudi Arabia with coal:  it would take too much, and that’s doing it the hard way.  Plug-in hybrids could replace 85% of gasoline consumption with electricity relatively easily, and streamlining semi-trucks to cut the coefficient of drag in half could cut diesel consumption by about 40%.  9 mmbbl/day gasoline * .85 + 4 mmbbl/day diesel * .4 = 9.45 million barrels/day.  The KSA pumps about 10.5 mmbbl/day, and refining losses are upwards of 10%; in short, we could eliminate one KSA-worth all by ourselves with technology we have today.

    Moving on to storage issues, the comparative rate of battery improvement and fuel cell improvement over the medium to recent past is a story of batteries inching along in small incremental improvements and fuel cells racing along with much faster improvements.

    Not really; Li-ion batteries have just taken a huge leap in power/weight that fuel cells are unlikely to beat in the next 20 years.  But suppose you’re right.  We should still start going with batteries ASAP, because the vehicle systems for battery-electric powertrains are almost identical to those for fuel cell powertrains.  We can use the off-peak capacity of the electrical grid until it is obvious that we will need the infrastructure for e.g. hydrogen.  We start enjoying the benefits sooner, and if it turns out that we never need the new infrastructure we’ve avoided a premature investment.

    These developments you’re advocating, being speculative, can be waved away as vaporware. WW I vintage, real-world tried and true F-T cannot.

    Speculative?  The 5 kW/kg Li-ion cell is going into Dewalt power tools next year; it should replace NiMH in hybrids soon.  The venerable Planté cell dates from about the US civil war, and is dirt cheap.  The difference between base and peak loads on the electrical grid is established fact.  The efficiency of IGCC is documented from working plants.

    If you want to go with WWI technology as a crisis-response tactic, I suggest using gasogenes to power farm equipment this coming year.  We’ve got better stuff on the shelf for everything else, and excellent reasons to use it instead; F-T is clearly not going to proceed without heavy and justified opposition.

    This entire thread is an exercise in shut the freak up, from my original comment in the last thread, to ESR’s promoting a new thread, to the entire comments section of the thread. For that STFU task, F-T is clearly superior, shutting off questions of scalability, technology practicality, and killing the idea that peak oil is something we should run around and be scared about, reacting in panic.

    But it deals with one problem by exacerbating at least two more.  You can de-fang the panic set by co-opting all of their issues at once, and make far greater progress on things like noise and pollution.  All it requires is getting the US voter out of apathy mode and having Congress make the proper incantations.  A word from the Oval Office bully pulpit would help immensely.

    IMHO, we should not even propose something as a solution unless we are clearly ready to carry through.  This isn’t just a PR issue, it’s a strategic issue as well; if the oil producers see that we’re committed to destroying demand, not just for oil but for all liquid motor fuels, they are going to do everything they can to keep consumer sentiment from hurrying the process along (the precipitous drop in SUV sales this year has to have gotten their attention).  If we start doing it, China and India will probably start doing it just in order to be able to export to us, if not to keep from being left more vulnerable to disruptions than we are (diverting some Chinese investment from expansionism).  Europe would probably be enthused.  The geopolitical impact is so much greater.

    That’s what this is all about, making the scaremongers lose their power so the adrenal gland is out of the driver’s seat and is replaced by the higher faculties of the brain. In that, I think we’re fundamentally on the same side. I don’t think either of us relish panic-stricken, emotion driven, energy policy lawmaking. Am I right?

    You’re absolutely right, but one should be careful not to exacerbate one cause for panic (or several) while ameliorating another.  If you can give people several reasons to push for you instead of against you, why settle for just one?

  86. Engineer Poet – You can rest assured that an investment in F-T would not commit us to continuing with F-T. When a well becomes too expensive to operate we cap it. When an F-T plant becomes too expensive we close it. This isn’t theory but history. We built F-T during the last oil crisis and shut it down during the Reagan oil crash. So much for your 2b.

    As for 2a, you can’t judge whether mining will damage the environment too much unless you have the consequences of not mining laid out in front of you. In a non-peak-oil world the consequences of not mining aren’t too bad for a lot of people so there’s a shift away from coal. In a severe peak-oil scenario, the price of oil is in three digits and civilization is threatened. The senators who filibuster the bill that will allow sufficient mining are going to have to pay an awful lot for security because people are going to be angry, angrier than they were when Dan Rostenkowski almost got his car flipped with him in it. The bill will pass.

    Moving on to your first objection, you might be right. The US might not have enough coal miners left to dig that much coal. Romania has the miners, Russia has the miners, Poland has the miners. All over the world uneconomic pits have been closed. All of a sudden there will be a demand for experienced miners and high wages. H visas will be waved under miner noses and recruiters will go global to meet demand. The US might not have enough miners but the world will and that world level is going to be the important market otherwise we’re going to be exporting a great deal of that F-T fuel to take advantage of the price difference.

    Now you say a very funny thing “we’ll run out of minable coal soon enough.” If by soon enough, you mean the year 2300, a pessimist might think so but I think we can make it to 2350 on our domestic coal deposits. In either case, we’ll be replacing F-T long before then with whatever superior alternative comes out of the labs long before 2300. At that point F-T goes right back to being a backstop of potential energy supply if the next great energy alternative runs dry.

    I am saying nothing of the sort like “the US consumer has two modes: complacency and panic.” What I’m saying is that even in the worst case scenario of a steep peak-oil disaster prior to anything better coming into commercial practicality where civilization itself is threatened, there is known, proven technology that can keep civilization right on rolling for well past the rest of our lifetimes that will fill the gap.

    I do believe in research and I don’t think we’ll ever actually need F-T because I think that peak-oil, if it comes at all, will come long past the time when we’ve perfected something better, possibly even the alternative that you advocate. But even if I’m wrong, F-T will fill the gap between now and then and we shouldn’t panic over the idea of world oil production peaking.

    The problem of direct advocacy of technology that’s still in the lab is that you can easily dismiss it and there’s no real riposte to the good put downs. F-T isn’t rhetorically vulnerable to those put-downs because it’s proven technology and coal, contrary to what you say, isn’t going to run out anytime soon.

    I did a little googling regarding Li-ion (http://www.buchmann.ca/Article9-Page1.asp) and do not think that it’s practical to replace your car powerplant every two years whether you drive or not. Unless you’ve got some longevity figures that will allow that car to go 100k kilometers without a replacement, you need to put that battery back on the shelf. Just be sure to store it at >15C and @ 40% charge or it’ll degrade on the shelf even worse. The usage profile for DeWalt power tools and the family car are quite different. If you’re charging much less on the DeWalt, you can make enough extra money that you’ll buy those batteries every two years. Cars are different.

    Your solution is nice, elegant, solves more problems, but just doesn’t exist today. The adrenal gland is still in the driver’s seat. That’s not good.

  87. You can rest assured that an investment in F-T would not commit us to continuing with F-T.

    You mean, like ADM’s investments in distilleries haven’t committed us to continuing with ethanol, despite its increased evaporative emissions, greater cost and superfluousness with current engines?  No presidential candidate can make it past the Iowa caucuses unless he is pro-ethanol; that’s how bad it is already.

    Once we establish a(nother) monied interest which profits from coal-to-liquids and is threatened by any move to cut coal mining (you really don’t want those mountaintops to stay mountaintops, do you?) or restrict greenhouse-gas emissions, we’re going to have a tougher time moving in the other direction.  This is the lesson of history.  The F-T plants built 25 years ago didn’t have enough money involved to become a self-perpetuating constituency.  I’d like to keep it from happening this time, too.

    It’s coming much faster than you think.  Rentech has announced a repowered fertilizer plant in E. Dubuque which will make F-T diesel, electricity and fixed nitrogen, and another pure CTL plant in Mississippi.  Unless we move to fuel them with e.g. charcoal from crop wastes, we’re going to be in trouble very shortly.

    you can’t judge whether mining will damage the environment too much unless you have the consequences of not mining laid out in front of you.

    What do you mean, THE consequence of not mining?  The alternatives aren’t limited to mining or doing nothing.

    In a severe peak-oil scenario, the price of oil is in three digits and civilization is threatened.

    In a severe global-warming scenario, the Gulf and Atlantic coasts are uninsurable due to rising seas and hurricanes several times a year, drought kills agriculture pretty much everywhere south and west of Topeka to the Rockies, the end of the Atlantic conveyor current throws Europe into deep cold winters and civilization is threatened.

    The latter is being seen now.  The consequence is that the warm current is diverted south, around to Africa.  This may account for the increased length of the hurricane season; if so, we can expect this to continue.

    The US might not have enough coal miners left to dig that much coal.

    We can train miners and move to more productive equipment.  The problem is the mines, the spoils heaps, the ash dumps, the congested rail lines.  The lack of rail capacity has already constrained coal this year; any large expansion would run into bottlenecks everywhere, and a rail line is no good unless it is complete from end to end.

    If by soon enough, you mean the year 2300, a pessimist might think so

    No, I mean by 2100.  Divide our “250 years” of coal (at current consumption rates) by 2.6 and then add the influence of exponential growth.  1.5%/year growth brings it down to something like 50 years.

    I don’t think we can afford 50 years of the status quo, let alone increase.  We’d be fools.

    What I’m saying is that even in the worst case scenario of a steep peak-oil disaster…

    Again, we’d be fools to let it go that far.  The problem is that modern oil-recovery techniques are very good at maintaining good rates of production until they drop steeply, at 10%/year or more (this is particularly true of off-shore wells, where a minimum production level is required to justify the existence of a platform).  Natural gas falls off even faster; IIRC we can drain a gas field in a couple years.  We can eliminate much of the need for fuel using best practices in e.g. architecture, but this doesn’t help if we have an enormous (mis)investment in infrastructure based on the stuff that’s going away well inside the design lifetime of those assets.  The consequence of panicky people will be economic damage, a second misinvestment in badly-conceived systems to feed the needs of the badly-implemented infrastructure, or both  (Think this won’t happen?  It already did happen.  The previous governor of Michigan vetoed a bill to raise energy-efficiency standards for new construction, saying it should be left “to the market”.  Now the price of natural gas has doubled and those buildings are seriously under-insulated for current conditions despite being perhaps a decade old.  The consequence is the nitrate and chemical industries fleeing overseas where they can still compete for feedstock.)

    The upshot of this is that the US cannot afford to wait.  If the various scientists are all right, we’ve got a perfect storm brewing:  ME politics, competition from China and India, climate change effects destroying production in the Gulf of Mexico, and the continued slide in production most everywhere.  Even if some of these things don’t come to pass, the rest will be bad enough.  We can hit back in several ways, such as using CO2 from powerplants to simultaneously reduce US carbon emissions and recover more oil from “empty” fields.  We need to combine this with strong incentives to move away from oil and fossil fuels in general.  (Not mandates, not “cap and trade”, but strong and continuous money pressures which reward every bit of progress whether it occurs on, ahead of or behind “schedule”.)

    I did a little googling regarding Li-ion … and do not think that it’s practical to replace your car powerplant every two years whether you drive or not.

    After the events of the last year, that 2001 page is ancient history.  Nanoparticle cathodes have changed most everything about Li-ion, bringing power/weight well beyond NiMH and increasing cycle life by orders of magnitude.  The makers also claim large increases in calendar life, but specifics are hard to come by.

    If I could get rid of half of my fuel requirements using lead-acid batteries, I might still have to replace them every 2-3 years but they’d be cheap enough that I would still be ahead.  They like being stored fully charged, and some live happily for twenty years on a float charge.

    Your solution is nice, elegant, solves more problems, but just doesn’t exist today. The adrenal gland is still in the driver’s seat.

    Everything I’ve proposed is either off-the-shelf or works nicely at pilot scale.  Some advances are further out, but we can wait for them.  What we can’t afford to do is sit on our hands any longer.

  88. Engineer-Poet – Ethanol stays in the fuel chain because it has to get added to every gallon of gasoline by law (unless you want to use the even more problematic MTBE). F-T products will be just one more entrant in the fuel source bazaar. If we find a better alternative that can be produced @ $25/bbl equivalent, F-T dies in a way that ethanol does not because F-T will come in during a peak-oil crisis without subsidy and will not be enshrined in law the way ethanol is today.

    I concede that it is possible for F-T or anything else to become an uneconomic, rent-seeking monied interest surviving just on its skill in lobbying Congress and punishing dissenting lawmakers. I would fight against any sort of F-T bill that offers subsidies for F-T production. That’s not what we’re talking about though.

    Again, I’m working in a simplified world in this exercise. I’m looking at a classic scaremonger’s disaster scenario and saying that F-T is here, will bridge us through the crisis and avoid all the scaremonger’s threatened effects (ie civilization disappears). There may be other solutions. There may be cheaper solutions. The end of the oil age may come about in a completely different fashion. All that is irrelevant. What’ I’m saying is that no matter how severe the peak-oil dropoff, coal could keep civilization going without needing any innovation beyond WW I technology.

    Once that is accepted, F-T can go back on the shelf and we can start looking at making sure that F-T remains an inferior plan B forever. As long as civilizational collapse is on the table, nothing that is still even partially in the lab is an acceptable solution because the scaremonger can pooh-pooh it. LI-Ion is not commercially proven as a motor vehicle platform. The additional demand on the grid of electric vehicles may or may not require extra powerplants and transmission towers. There’s all sorts of uncertainty that can, is, and will be raised until a fully electric car can be driven on the street and it’s demonstrated that you can scale this up to the level needed.

    F-T can scale. The biggest problem available for scaremonger distortion is a potential shortage of coal miners. There are an awful lot of people who would go into mining if demand doubled or tripled and wages were good so it’s not a winning argument.

    Finally, I think we fundamentally disagree on global warming but that’s off the thread topic and I won’t go into it here. Suffice it to say that the time scales for peak-oil are very short, and the bad stuff from global warming is generally projected to be much, much further out.

  89. If you are hinting that peak oil is not a truthful concept, I just wonder…perhaps, just perhaps you are right in saying things will evolve in such a way that oil reserves won’t deplete so far, but frankly I don’t see that happening…

    I’d rather that folks started preparing for the day when fossil oil is no longer available or affordable…may be we should start looking at generating biodiesel from feedstock such as algae

    Just some thoughts

    Ec @ http://www.eit.in

  90. Eric, I used to be a Peak-Oil Denier like you. But then I realized that with enough stupid government regulation, anything is possible. (Anything bad, at least!)

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