Where did all the oil go? The peak is back
An extensive new scientific analysis published in Wiley Interdisciplinary Reviews: Energy & Environment says that proved conventional oil reserves as detailed in industry sources are likely “overstated” by half.
According to standard sources like the Oil & Gas Journal, BP’s Annual Statistical Review of World Energy, and the US Energy Information Administration, the world contains 1.7 trillion barrels of proved conventional reserves.
However, according to the new study by Professor Michael Jefferson of the ESCP Europe Business School, a former chief economist at oil major Royal Dutch/Shell Group, this official figure which has helped justify massive investments in new exploration and development, is almost double the real size of world reserves.
Wiley Interdisciplinary Reviews (WIRES) is a series of high-quality peer-reviewed publications which runs authoritative reviews of the literature across relevant academic disciplines.
According to Professor Michael Jefferson, who spent nearly 20 years at Shell in various senior roles from head of planning in Europe to director of oil supply and trading, “the five major Middle East oil exporters altered the basis of their definition of ‘proved’ conventional oil reserves from a 90 percent probability down to a 50 percent probability from 1984. The result has been an apparent (but not real) increase in their ‘proved’ conventional oil reserves of some 435 billion barrels.”
Global reserves have been further inflated, he wrote in his study, by adding reserve figures from Venezuelan heavy oil and Canadian tar sands – despite the fact that they are “more difficult and costly to extract” and generally of “poorer quality” than conventional oil. This has brought up global reserve estimates by a further 440 billion barrels.
Jefferson’s conclusion is stark: “Put bluntly, the standard claim that the world has proved conventional oil reserves of nearly 1.7 trillion barrels is overstated by about 875 billion barrels. Thus, despite the fall in crude oil prices from a new peak in June, 2014, after that of July, 2008, the ‘peak oil’ issue remains with us.”
The study referred to here is: Overview A global energy assessment,
Michael Jefferson
Against the background of IIASA’s massive (their word) ‘global energy assessment’ (GEA), this paper takes a closer look at the challenges posed by population growth, energy poverty, the fossil fuels and carbon storage, renewable energy, energy efficiency, natural catastrophes, and potential climatic change to offer a somber, although arguably more realistic, overview of what the future may hold than the GEA achieved. © 2015 John Wiley & Sons, Ltd
I thought the above article worth a post of its own. After all it is a vindication of what many of us have been saying for years now. And I especially call your attention to the line: “the standard claim that the world has proved conventional oil reserves of nearly 1.7 trillion barrels is overstated by about 875 billion barrels.”
That puts conventional reserves at about 825 billion barrels. That is OPEC + Non-OPEC, that is everything, well, everything conventional. That is almost exactly the amount of reserves I have been claiming for years. I have been thrashing this straw for over a decade and it feels good to get some vindication.
Here are a couple of other peak oil articles in the news this week:
On March 29th, the Government Accountability Office (GAO), also referred to as the ‘congressional watchdog’, released a much-anticipated report called Crude Oil:Uncertainty about future oil supply makes it important to develop a strategy for addressing a peak and decline in oil production.
This report was initiated by a request, just over a year ago, from Congressman Roscoe Bartlet, a very vocal proponent of the peak oil theory in the US Congress.
The significance of this report cannot be under-stated. For the first time in North America, an independent and nonpartisan agency that works for Congress and the American people has gone on record stating that peak oil is a real and pressing concern that the government should be preparing for.
Timing of the peak all-important
Strange new economic phenomena will kick in the moment oil production peaks, turning normal national finance ministry policies on their heads
The reason there is such heated debate over when exactly peak oil is due to arrive is because, at the point of the peak, the fundamental laws of economics governing oil production, consumption, and prices, will flip over to a whole new paradigm. And because oil is very much the key commodity at the root of all economic activity in the modern industrial world, the flip-over of economic laws governing oil will deeply affect, and even potentially flip over, the fundamental economic laws governing all the world’s industrial activity.
And… I thought I would just add a couple of charts taken from the EIA’s latest <a href=”http://www.eia.gov/forecasts/steo/”>Short-Term Energy Outlook</a>.
The EIA expects shale oil and the rest of the lower 48 states to continue to decline but slow the decline next year and plateau in the last quarter of 2017 at 5.7 million barrels per day.
The saving grace, the EIA believes, will come from the Gulf of Mexico. They have GOM production reaching 1.93 million barrels per day in December of 2017. The spikes downward in August, September and October of 2017 and 2017 are obviously the EIA trying to anticipate the hurricane season. I think they are being overly cautious here. It is unlikely that disruptions of this magnitude will occour.
And, after you combine the two above charts then add in Alaska you get the above production numbers and projection.
Jean Laherrere posted me all the below: It is good to see that he is also in agreement with the above article.
Jefferson in this 2016 paper writes page 9:
put bluntly, the standard claim that the world has proved conventional oil reserves of nearly 1.7 trillion barrels is overstated by about 875 billion barrels.”
quoting his 2014 paper: 16. Jefferson M. Closing the gap between energy research andmodelling, the social sciences, and modern realities. Energy Res Soc Sci 2014, 4:42–52.
Since my graph of political current proved and 2P backdated remaining reserves in 1998 Scientific American (with 1700 missing fields) I have updated often in many paper this very important graph (the most in my opinion) because it explains the huge discrepancy between the economists relying on official data and the technicians relying on confidential data
You can see in my graph the conventional oil remaining reserves is at end 2015 about 1700 Gb for IEA and OGJ (EIA) but about 800 Gb for the backdated confidential technical sources, in line with Michael Jefferson
I am glad to see IIASA (which designed the very optimistic energy scenarios for the IPCC reports, in particular with the crazy CRP 8.5) showing more realistic assessments.
Hi Ron,
I have gone from being a peak oil doomer to being somewhat hopeful that some people and some countries have a decent shot at coming thru the coming natural resources bottleneck more or less whole, if a hell of a lot SKINNIER, with LOTS of notches taken up in the collective belt of society.
This move from the doomer camp to the cautiously hopeful camp on my part is based on fast falling birth rates in most of the world, along with the fast falling cost of renewable energy, and the resulting fast growth of the renewable energy industries.
But I have never doubted that you are dead on about the actual facts when it comes to oil in the ground.
If I am still able to drive ten years from now, I will probably be the proud owner of two old Chevy VOLTS or similar cars, and be charging one while driving the other, using my own pv system. That ought to just about take care of my PERSONAL oil consumption. 😉
There’s just no way oil can STAY cheap in the face of depletion over the middle term, meaning four or five to twenty years or more, other than that the world economy goes to hell in a hand basket. It will take that long, twenty years, at the best, for us to get away from oil, even with the best of luck on the technology and leadership fronts.
Hey OFM, I’ve been right there with you in your shifting from the “doomer” camp to the “cautiously optimistic” camp. Here is some of my reasoning.
At the end of 2007, when I first became aware of Peak Oil, there was less than 10 GW (7.8 GW) of solar PV generating capacity world wide according to data pulled from the Wikipedia page Growth of photovoltaics while at the end of 2015 worldwide PV capacity stood at 227 GW (IEA PVPS Snapshot of Global Photovoltaic Markets 2015), almost 30 times as much as the 2007 figure in just eight years!
Over the same period, according to data from the EIA’s Electric Power Monthly the contribution of PV to US electricity generation grew from 0.015% to 0.94%, more than 62 times greater! Electricity generation from wind also grew from 34.5 TWh to 190 TWh or from 0.83% to 4.67% of the total electricity generated.
Wind has become the least cost source of electricity in the world, not accounting for it’s intermittentcy with solar plus storage projected to become the lowest cost source of electricity within the next ten to fifteen years, according to Tony Seba.
In 2007 there were zero series production, highway capable, battery electric vehicles available for purchase anywhere in the world, while there are currently some 12 different models available in the state of California, out of a total of 33 plug-in (including hybrids), highway capable vehicles.
Electric Vehicle Sales Continue To Be Unstoppable In China – Up 170%
There are at least two models of 40 foot, battery operated buses available in the US, with one of them coming from a Chinese outfit that has orders for and is building thousands of theses buses, most for the Chinese market.
In summary, when I first became aware of Peak Oil the world was absolutely not ready for a permanent decline in global crude oil production but a lot has changed in the ensuing eight years. IMHO most pundits, including Ron are underestimating the rate at which the transition away from fossil fuels, towards renewable technologies is taking place. Even though the transition to electrically driven road transportation is in it’s nascent stages, the transition is definitely underway as is the transition from fossil fuel generated electricity to electricity generated from renewable sources.
As I have opined on this site before, I believe it is going to be a race between the transition away from fossil fuels and the decline of world oil production. In my best case scenario, Tony Seba’s prognosis will turn out to be right or slightly conservative and the talk will be about how the oil age did not end for the want of oil. In the worst case scenario, the doomers are right and we all go to hell in a hand basket.
That is one of the things I like about Bernie Sanders. He dares to dream and talks big on energy efficiency and the transition away from fossil fuels, in his usual style, in a revolutionary way. If he ever gets to influence US energy policy, the transition would likely accelerate.
Despite my optimism, I do not rule out a sudden collapse in production at Ghawar (a la Cantarell) that throws the world into disarray and results in the “hell in a hand basket” scenario. I’m just hoping, that does not happen.
Please excuse me, but electric cars mostly run on fossil fuels such as coal or natural gas. There is some hydro in some places and nuclear, but good luck with new nuclear fisson reactor build outs to replace declining coal and natural gas.
So don’t forget where your “clean” electricity comes from. It’s mostly from dirty fossil fuels.
Please excuse me, but electric cars mostly run on fossil fuels such as coal or natural gas.
Ok, but there is nothing stopping a transition from that to more wind and solar as as they are already cheaper than coal and gas.
correct. With transportation, as well as home heating via heat pumps, increasing electrification breaks the “hard-wired” (or piped) connection between energy source and final energy use. Electricity is an energy currency, not an energy source. Various generating sources convert their energy to the common currency – electricity – and the various energy demands tap that currency to convert the electricity to transportation, heating, cooling, light, water (via electric pumps), cooking, refrigeration, lawn mowing, etc. etc.
By electrifying as many energy uses as possible, it allows the greater community and the market to DECIDE what mix of energy sources to meet the load, including natural gas, hydro, wind, solar, geothermal, bio-mass, coal, or bicycle trainers.
Hey Fred, I’m tempted to think that “Dr.Doom” is a “drive by” poster. If he had bothered to try and understand my post or to check anything put out by Tony Seba, he should have realized that I was hinting at renewables eventually replacing FF for electricity generation in addition to a transition to electrified personal transportation.
Yes, I think the same. Dr. D is more than likely a paid drive by poster.
Cheers!
Umm, what? You think Dr. Doom is a paid astroturfer?
What possible interest group would pay for Dr. Doom’s post? I’m very watchful for such astroturfing, and in this case that accusation seems silly.
Dr. Doom’s post was just a reminder of basic factual information. There is a common DELUSION that renewables can replace fossil fuels. I’m well aware it’s taboo among environmentalists to say so, but it’s utter nonsense to claim that renewables can replace fossil fuels. Renewables can correctly be thought of as fossil fuel EXTENDERS, but not as a possible replacement.
Was the thought that anyone reminding us of this unpleasant FACT must be a paid shill for the fossil fuel lobby? If so, then I must be one, too, and I want a raise. That way lies madness.
P.s. The nuclear industry truthfully claims that renewables can not replace fossil fuels. That industry’s lie is claiming that nuclear power CAN replace fossil fuels. It can’t.
Instead, as the fossil fuels fade we will have less net energy for industrial civilization. Whether that will lead to a fast-collapse or a slow-collapse situation we can’t tell, but collapse we shall.
Bruce S.
Hmmm, with 14545 kWh per acre per day, you think that solar energy can’t replace an inefficient, limited and difficult to find resource?
The energy density of oil is about 1 kwh per acre.
No need to find sunlight, it’s there, every day. No searching the hills, the shoreline or under the deep ocean. No sun wars. It’s right there. It’s abundant and it’s source will outlast any need we have for it. Oil on the other hand is not and will be gone soon anyway.
Watcha gonna do then? What is your plan?
“energy density of oil is about 1 kwh per acre”
What does that mean? A barrel of crude has an energy density (by definition) of 37 MJ/L (where 1.0 MJ ≈ 0.28 kWh). How do you come up with oil (volume unspecified) = 1 kwh per acre?
Doug, it’s the production of oil spread across the earth’s surface to make a direct comparison to sunlight. The whole earth production of oil energy is almost nothing compared to solar energy. It’s pitifully small.
Volume = 90 million barrels per day for the whole earth production – and falling.
Sunlight is ubiquitous and highly dependable. Oil must be sought, drilled, produced, gathered, transported, refined into components, transported, sold at retail and finally put in the storage tank of a vehicle. A lot of energy and infrastructure goes into doing that, so the energy is even less, since a lot of energy had to go into those activities. Then the useful energy is about 20 percent of that. A giant, expensive system to collect a small amount of useful energy.
People complain that it’s hard to collect solar energy because it’s distributed. Oil is distributed around the world and must be collected, stored, transported, etc. before it is even converted to a useful form.
That kind of logic is illogical.
I’m well aware it’s taboo among environmentalists to say so, but it’s utter nonsense to claim that renewables can replace fossil fuels.
I contended that it is utter nonsense to claim the exact opposite or that renewables can not replace fossil fuels.
First, what the hell do environmentalist taboos assuming they exist, have anything to do with how energy can or can not be produced and used? Those are engineering problems subject to the laws of physics and chemistry.
Instead, as the fossil fuels fade we will have less net energy for industrial civilization. Whether that will lead to a fast-collapse or a slow-collapse situation we can’t tell, but collapse we shall.
Once you have gone through Tony Seba’s lecture on clean energy disruption and grasped the basics then you might want to get into a bit of a reality check on the chemistry and materials science front coupled with the global availability of lithium. Currently there are 1 billion ICE automobiles in the world.
The current global lithium reserves would allow us to build energy storage for the entire grid and produce enough for a lot more than a billion Tesla model Ss/ But if Tony is right we won’t need even a fraction of that number.
Great talk at MIT by Dr. Yi Cui, an Associate Professor in the Department of Materials Science and Engineering at Stanford University
https://goo.gl/BC59Px
Hope you enjoy chemistry lectures, He does provide some numbers and hints at some geopolitical implications near the end in the Q&A
My personal hunch is that fossil fuels will be irrelevant to the global economy in a very short time frame.
Oh BTW there are a number of red and brown marine algae that accumulate lithium in high concentrations so I’m sure we can bioengineer those organisms to help us produce lithium from sea water in case our reserves on land run out and we can’t find ways to recycle lithium from our used batteries. Though that will be a dissertation for another day!
Cheers!
Interesting how some people can casually dismiss, through technology, most any problem, while its detrimental effects are dismissed, if not ignored, with equal aplomb.
Caelan,
I don’t think you really get my synergistic points of view about what I see happening.
I’m just reporting what is already out there.
BTW, Humans already have this technology and we are already using it. The genie has been out of the bottle for a while you just have to make your three wishes wisely… remember this word ‘Lifecode’
https://goo.gl/iRf6Rk
For four billion years, what lived and died on Earth depended on two principles: natural selection and random mutation. Then humans came along and changed everything — hybridizing plants, breeding animals, altering the environment and even purposefully evolving ourselves. Juan Enriquez provides five guidelines for a future where this ability to program life rapidly accelerates. “This is the single most exciting adventure human beings have been on,” Enriquez says. “This is the single greatest superpower humans have ever had.”
So I’m pretty sure that sooner or later someone somewhere is probably going to bio engineer organisms to increase their propensity for accumulating elements such as lithium. Is that better for all life on earth than mining coal and burning it in power plants to generate electricity, I don’t know, but I think the possibility that it will happen is a number far greater than zero.
Just to keep things somewhat in perspective 3.5 billion years ago cyanobacteria started producing oxygen and changed the atmosphere destroying the habitat for anaerobic bacteria on earth.
Was that a good or a bad thing? Don’t bother trying to answer, it is a trick question. 🙂
Before I forget, Fred, one thing thought of today, and something we might sometimes forget, is that previous civilizations didn’t collapse or decline because they ran out of oil. They declined and/or collapsed for other reasons.
Cyanobacteria weren’t/aren’t conscious nor do they possess conscience. I suspect that the universe does, though– possibly the latter, too– and that it knows I am writing this.
Gartenn (Garden)
Excellent paper, Caelan. Saved.
I’ve been looking at the inequality dynamic and the boom-bust cycle in ecology as aspects of our current social crisis, and this neatly combines the two analytically. Thank you. I think this paper is very important.
It’s a common DELUSION that renewables cannot replace fossil fuels.
Renewables already *are* replacing fossil fuels. It’s not going to take very long, either. If you’d bothered to do the math, you’d see just how ludicrously much sunlight we can capture for power. The ingredients of silicon solar panels are all extremely common and are refined using electricity, which can be generated by (naturally) silicon solar panels.
This is the first true “closed fuel cycle”, something the nuclear proponents advertised and never achieved.
The problem for solar panels has always, and only, been upfront price. Fossils have been cheaper. The moment solar gets cheaper than fossils — which is happening RIGHT NOW — solar will take over world energy production, very very fast.
Please excuse me, but my two electric cars (Leaf and Volt) run on solar and wind.
12 KW of PV solar on my roof gives us net-zero energy for both house and cars.
One electric provider in Texas has so much surplus wind power that they give away free electricity after 9 PM. Perfect time to charge your electric car while you sleep.
I wish someone would pay me to do these “drive by” posts! You guys are delusional. Wind and solar PV are still minor players most places, they take fossil fuels to make and maintain, and they will go away just about when the fossil fuels that support their use goes away. Meanwhile, there are severe problems with interfacing these energy sources to the grid, because of intermitencies.
My day job is a professor and a scientist. I don’t always get to post and read all the comments, but you can ask Ron if he’s ever heard of me. I go back to The Oil Drum (TOD) days.
Look, even Chris Matenson knows the score on alternate energy. The big problem is there is no alternative to what we’re burning up right now, not at the SCALE we’re running things, like western and most eastern civilization. Google King Hubbert, for Christ’s sake. He knew we were fooked about 40+ years ago when he wrote the energy resources chapter in the classic book “Resources and Man” (1972).
We needed a fusion or even a fission nuclear build out and it simply didn’t happen. Enjoy our final days, for they are numbered. Meanwhile, I’ll be happy to take your questions.
Wind and solar PV are still minor players most places, they take fossil fuels to make and maintain, and they will go away just about when the fossil fuels that support their use goes away.
Really now?! Oh well, I guess you are right since we haven’t managed a fission reactor build out solar and wind are doomed and so are we.
Well given the state of my local coral reefs we may indeed be doomed but it certainly isn’t because fossil fuel use is going away.
BTW, I really do not understand this notion that because solar and wind are supposedly STILL minor players they will always be so. How many people were driving ICE powered automobiles in 1900? That was only 116 years ago
The big problem is there is no alternative to what we’re burning up right now, not at the SCALE we’re running things, like western and most eastern civilization.
Yeah, and so what? That only means that our current form of civilization is not sustainable, I think most people here already knew that. So we must be headed for some major changes which could include collapse of the current economic system, that could lead to massive dieoff of human populations but I very highly doubt that nothing will remain and that assuming some pockets of humanity remain that they will not be using alternatives instead of fossil fuels.
I’m a bit tired of all doom and gloom and will continue to hold out some limited hope because there are some bright spots in the world.
https://goo.gl/kxvoTq
Live conversation between UN Secretary-General Ban Ki-moon and Bertrand Piccard
Cheers!
So we must be headed for some major changes which could include collapse of the current economic system, that could lead to massive dieoff of human populations but I very highly doubt that nothing will remain and that assuming some pockets of humanity remain that they will not be using alternatives instead of fossil fuels.
I’m a bit tired of all doom and gloom and will continue to hold out some limited hope because there are some bright spots in the world.
Really Fred? You are tired of all this doom and gloom yet you hope some pockets of civilization just might survive the dieoff? Well hell, I hope so too.
Your position on this is about as doomy and gloomy as they come Fred. And you are tired of all this doom and gloom?
That is called “cognitive dissonance” Fred: the state of having inconsistent thoughts, beliefs, or attitudes, especially as relating to behavioral decisions and attitude change. 😉
I know, Ron ! I know! What do you suggest as an alternative? Suicide? I guess that is always an option, right? If I recall correctly you have a daughter what do you tell her? I have a son what should I tell him?
“Alice laughed. ‘There’s no use trying,’ she said. ‘One can’t believe impossible things.’
I daresay you haven’t had much practice,’ said the Queen. ‘When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast. There goes the shawl again!”
― Lewis Carroll
Anyways, when Bertrand Piccard and Andre Borschberg embarked on the Solar Impulse project over a decade ago how many people do you think told them that what they were planning was completely impossible. Yet somehow they are flying around the world in a solar powered airplane today.
So forgive my daily cognitive dissonance it’s still better than ODing on opiates or hanging myself… 🙂
Wanna buy my latest T Shirt?
If I recall correctly you have a daughter what do you tell her? I have a son what should I tell him?
You do not recall correctly. I have three sons, six grandchildren and four great-grandchildren. And I tell them exactly what I think. And none of them believe a goddamn word of it.
I can only quote Montaigne, ‘all I say is by way of discourse and nothing by way of advice. I should not speak so boldly, were it my duty to be believed.
“I’ll be happy to take your questions.”
Have you looked at anything put out by Tony Seba?
As someone who is scientifically inclined, I am interested in what more learned people think about his prognostications and I ask the above question with complete sincerity. I have a Google search for him which I sort by upload date to try and catch the most recent of his presentations. here is the URL for that search but, if the URL does not preserve the sort order you may have to click on “filters” and sort by upload date:
https://www.youtube.com/results?q=tony+seba&sp=CAI%253D
The most recent full presentation available as of today (April 25, 2016) is:
Clean Disruption – Why Energy & Transportation will be Obsolete by 2030 – Oslo, March 2016
An excerpt from the above full presentation that cuts to the chase, as far as this particular discussion goes is:
The Energy Storage Disruption – End Of Peakers by 2020 and Baseload by 2030
My take away from his presentations is that solar PV is going to increase exponentially and eventually overwhelm all other sources of electricity, both in terms of scale and cost. He claims that the cost/performance trajectories of solar PV technology along with the cost/performance trajectories for batteries (lithium ion) all but guarantees this outcome. He does not rule out other battery technology but, makes the observation that, any new electricity storage technology that comes along, will have to compete on this basis of the ongoing cost/performance trajectory of lithium ion.
I would welcome any well thought out criticism of Seba’s projections since, it appears to me that the longer BAU can be drawn out, the more likely it is that, his projections will turn out to be reasonably accurate. He actually is on record saying that the end of the age of oil will come about because, the alternatives will turn out to be better.
I would prefer if people comment on Seba’s projections after they have actually watched one of his presentations or read his book (Clean Disruption).
Hi Islandboy,
Seba is very convincing in his recent presentation.
I encourage skeptics who have an hour to spend, to watch the video. I plan to buy the book.
Seems too good to be true. If he is correct, peak fossil fuels will not be a problem. I think the fast trends in adopting these new technologies are unlikely to happen as quickly as Seba believes.
He is predicting about 15 years, I think 35 is more reasonable, but agree that it will happen.
It is interesting to think back 35 years (around 1980) and think about changes in technology since that time.
Probably reality will be somewhere between Seba’s forecast and my “realistic” forecast, maybe 25 years or 2041. I plan to buy a Tesla Model 3 by 2020, by that time the cost may be 30K or less.
You guys missed this new electric car in your discussion. (Just to cheer you up)
https://onedrive.live.com/?authkey=!AFDbbgX8yqCnkXY&cid=841C36C60BF92CC5&id=841C36C60BF92CC5!1342&parId=root&o=OneUp
Thanks Paulo, I’ll take my next new ride with double D’s.
Thanks Paulo,
Very funny.
The page says it’s not available.
Seems too good to be true. If he is correct, peak fossil fuels will not be a problem.
I don’t think that quickly transitioning away from fossil fuels will not cause major disruption and severe problems in many parts of the world.
I fully expect peak fossil fuels to cause some deep pain, look at Venezuela or Egypt. I certainly don’t think I’d want to be living in Saudi Arabia in five years time either but I do think things will happen at a faster rate than most expect.
I agree Fred, the market for EV’s and batteries is too huge for investors to ignore. Things will change faster than expected. This is one of the biggest business and work opportunities in modern times. It involves transportation, technology and energy production worldwide. This is not an energy problem, it’s a manufacturing problem.
Every time the price of oil rises, it will be a big boost for EV’s and the renewables that will power them.
If we have problems in the world it will mostly be in places that depend upon oil as major income that have not planned ahead.
Fred,
Yes, it will be a problem, but if Seba is correct a lack of energy may not be the problem, it will be the rapid transition, and people’s inability to foresee the coming changes. For those who depend on the fossil fuel industry for their income it would be a big problem indeed.
Too rapid a transition will be very difficult.
Hi Fred,
It was less than 10 years ago the discussion on TOD was that politicians wouldn’t talk about the crisis at hand. Today, one American political party considers climate change the number one priority man needs to address. EV’s are now just a few years from becoming the standard. Solar panels prices are dropping almost as fast as data storage. Almost 10% of the homes in Southern California now have solar panels. World governments understand the dangers of climate change and have come to agreement to roll back emissions.
Hopefully you have educated your children on the importance of minimizing our impact on the environment and controlling reproduction activities.
My projections keep putting 100% solar sometime in the 2030-2040 range. Also 100% of new cars electric, same time range. Heating takes longer because peope are dumb about replacing heating.
If I had to bet I’d bet on the beginning of that time range, more like 2032. I think solar dominance comes before electric car dominance because it’s easier to ramp up solar factories than car factories., but I could be wrong.
Hi Nathaneal,
I would think there would be some wind in that mix, it might make sense to have a little natural gas backup (2% or so) as that may be cheaper than battery storage. The plants have already been built and natural gas prices might be low if demand is low.
If you mean 100% of new power plant additions, then we agree.
Dr. D said
“The big problem is there is no alternative to what we’re burning up right now, not at the SCALE we’re running things”
I agree there is no alternative AT the scale we are running things now. Solar energy is over 20,000 times the scale we are running things now.
Only a bunch of numbheads would allow us to become dependent upon a scarce, limited, inefficient and polluting resource such as oil. Only those who can’t even do simple math could believe petroleum is the major source of energy available on earth.
See that bright thing up in the sky, that is the sun. I live in a cloudy, northern area and still get an average of 4 kWh per m2 per day. Doesn’t take much area to provide all the energy I need. Add to that the fact that electric motors are far more efficient than ICE engines and it’s an easy winner. Makes me wonder about the time and money and deadly wars humanity has wasted on oil.
Nobody is paying me to do any of my posts.
And my day job is also as a professor and scientist.
Most of my colleagues are in denial. They actually discuss 10-20-30 year plans for the university. If it’s still occupied by then, the buildings will probably be used to house the homeless, assuming the water and power are still supplied, not to mention sanitation services, and the homeless are still being cared for by whatever passes for a society here.
The problem is well recognised, but not widely discussed except on lists and blogs like this one. Hindsight is always 20-20. Think of the opportunities lost, especially to the winners of the last world war. We chose capitalism, a market economy, and allowed a population boom to fuel demand. The liquid fuels then looked limitless, but some, like King Hubbert knew otherwise. In 1956, he gave one of his first public warnings, widely ridiculed at that time by those who failed to understand the math.
Now, we have painted ourselves into a corner, continue to saw on the support limb, etc. It was a collective decision. The financial aspect of our economy will be the first to implode, then will follow all sorts of related disasters, lack of supplies, grid failures, plagues, etc. That is how the system is gamed. Google Richard Duncan. Read Gail Tverberg’s blog, “Our Finite World”. The Limits to Growth folks look increasingly accurate in their models and predictions made 40+ years ago. Mostly, we don’t have much time left to turn anything around. Check the subject of this post by Ron.
It’s nice to dream of electric cars and solar PV, wind farms all over the place, replacing our fossil fuels. To remain somewhat sane, I can also dream dreams of fusion-powered civilization and the things we could do with abundant cheap energy (once again), but we all know that we’ve already polluted the atmosphere and ocean so badly that Earth, our only home, will be a difficult place to live on in the all-to-near future. Reality bites hard.
Hi Dr Doom,
Well there are other professors and scientists who do not agree with you. That does not mean they are correct, but things have changed very fast in technology. When costs of Batteries and Solar fall to a certain point, the demand for EVs and plugin hybrids will increase quickly and energy production by solar will also increase dramatically.
Solar-powered civilization IS fusion-powered civilization.
Look, I study this stuff professionally from an investment persepective.
— The exponential growth of solar power is just a fact and it’s not going to stop until the market is saturated. Google Swanson’s Law. Solar panels provide a startlingly large amount of independence from the supply chain, and as a result, they are being installed all over the place: they provide resilience.
— Wind is folliowing the same trajectory but slower.
— Electric cars are following the same trajectory but slower.
— Batteries are following the same trajectory though slower.
— Heat pumps are following the same trajectory…
I’ve actually plotted out all these trajectories,and critically, the price points where people switch to alternatives.
— When natgas exceeds $4-$6 (not sure) people switch heating to air-source electric heat pumps. Geothermal may be adopted at lower prices for large buildings.
— When grid electricity prices exceed 14 cents/kwh, rooftop solar is installed. (Varies by region but this is close enough.) Price continues to drop.
— When grid electricity prices exceed 29 cents/kwh, solar + batteries are installed. Price of both is still dropping.
— When wholesale electricity exceeds 5 cents/kwh, utility-scale solar is installed.
— When oil prices exceed $40/bbl, it’s cheaper to operate an electric car (at typical grid electricity prices), so anyone who has the upfront cash switches. Upfront cash prices are dropping.
— Wind is being installed as fast as the NIMBYs can be overcome because it is cheaper than anything.
This is a lot of demand-destruction for fossil fuels.
Yes, we’ve already baked in a dangerous and horrible amount of global warming and ocean acidification, which will cause mass famines, as well as flooding. But we’re going to actually get off of fossil fuels and we’re going to do it fast. The laggards who still depend on fossil fuels will suffer the second most. (The greatest suffering will be those who live in countries which will be entirely flooded.)
Peak oil is like peak anthracite (which Hubbert modeled his theory on) or peak whale. We switch to an alternative. The weird thing is how long it’s taken for the alternatives to oil to become cheaper than oil… I would have expected it to happen in the 1980s… but it’s happened now.
Does anyone consider the long supply chain that is dependent on fossil fuel? How does anyone think they can get the neodymium from the ground in China? EVs? Electric Excavators? (that is if China is still capable of supplying it). How about the Indium for the microchip or the tantalum for the capacitor? How about anyone get 99.99% purity arsenic for making semiconductor that is required for the chips. How about other rare earths like cerium, dysprosium or any rare earths that are required for the magnets in wind turbines or even electric motor in EV? Who is going to make the chips, the casing, the high strength steel that is required? How are they going to mine these minerals and how it is going to be transported 5000 miles? The parts of EVs are made by companies scattered across the world and many of them are protected by patents. No one knows what is inside and replicating it is impossible. There is an EEPROM or Flash and no one knows what is inside the software.
When the supply chain is down, you cannot even get the food on your table (i.e. all supermarkets are supplied by trucks).
So, can anyone tell me how EVs will work when things go south? Who has the skills and raw materials to make the parts and assemble them ? Be it EV or wind turbines, just because of a missing high strength screw, the whole EV may not run and the whole wind turbine may just fall apart (vibration). Nothing in the EV/Wind turbine can be produced locally.
p.s. I am an engineer working in a high tech firm that is in charge of sourcing parts for the machines. At times, we have to wait for a few days (with the machine down) due to a special part that no one in the world knows how to do except for a small company in Europe and they are having difficulties producing it (as their supplier has problem supplying them some parts). We are that precarious in the supply chain when everyone depends on someone else for their end product.
Witness the breakdown of JIT in the recent Japan earthquake.
How does anyone think they can get the neodymium from the ground in China?
There was trade of rare substances thousands of years ago without the use of fossil fuels!
Kerala had established itself as a major spice trade centre from as early as 3000 B.P, which marked the beginning of Spice Trade…
I’m pretty sure we will have sailboats and camels for a long time to come…
Cheers!
camels horses and donkeys will go extinct directly after the grocery shelves go bare.
The camels and donkeys I have known run around in places so hot, dry, high, thorny and all around inhospitable that nobody dependent on grocery shelves will have the skills to get anywhere near them.
Hi CTG,
Fossil fuels will not disappear overnight. The supply will fall and prices will rise and substitutes, such as EVs, wind and solar will become more competitive. As production of these new technologies ramps up costs fall further and the transition will accelerate.
But by your logic we could never have gotten to where we now are in the first place.
Fossil fuels are not the only way to do things. We are rapidly creating an industrial base of renewable energy. Electricity can power transport (electric trains and trucks are standard technology) and presently is used to smelt metals (e.g. steel and aluminum).
“How does anyone think they can get the neodymium from the ground in China?”
How do the Germans get their lignite from the ground?
Exactly!
Using Electric Excavators! Which they’ve been using for decades!
https://en.wikipedia.org/wiki/Bucket-wheel_excavator#Lignite_mining
You may need to use Google Translate for this:
https://de.wikipedia.org/wiki/Schaufelradbagger#Verlegung_in_andere_Tagebaue
“[…] how it is going to be transported 5000 miles?”
By using electrically powered trains perhaps?
Which, sensationally, can even travel below ground!
https://en.wikipedia.org/wiki/Gotthard_Base_Tunnel
And do you know how the Swiss built that tunnel?
By using plain old explosives (in parts) and ELECTRICALLY powered tunnel boring machines (in other parts of the tunnel, depending on the rock)
And do you know how non-trans-continental transport can be done without burning fossil fuel?
Let me give you a hint: http://www.auto.de/magazin/customs/uploads/auto/2014/08/Siemens-testet-elektrische-Autobahn-Oberleitungen-f-r-emissionsfreie-Brummis-sp9w-600×400.jpg
Seriously, you call yourself an engineer and don’t know half the shit that’s been accomplished since Werner von Siemens invented modern electrical engineering?
Gerry,
Don’t you know that mechanical engineers don’t believe in electrons? If you can’t see them, they’re just “theoretical”. 🙂
Elon Musk is deliberately shortening his supply chain — he wants to source everything for Tesla from North America specifically to shorten the supply chain.
I anticipate more actions of this sort. In-sourcing, avoiding long supply chains.
Dr.Doom, you really really really need to get a clue, so I’ll explain it slowly.
1 — every single thing in the solar panel factory process, from the sand mining through the silicon refining through the cell construction through the module construction through the transportation of modules, can be run off electricity. Most of it already IS run off electricity.
2 — All electricity can be generated using solar panels.
3 — Every single thing in the battery factory process, from the cobalt mining and the lithium refining onward, can be powered using electricity. Most of it already IS powered using electricity.
4 — Electricity for use at night can be stored in batteries
5 — With the sole exception of steelmaking, everything in a wind turbine can be made using electricity. Most of it IS made using electricity.
6 — All steelmaking from recycled-steel sources can be done with electricity TOO, and the problem of steelmaking from raw iron ore using electricity is being worked on.
7 — there is so much sunlight that we have enough power to run 100 times our current industrial civilization, if we just *use it*.
Like all new technologies, solar growth is *exponential*. On average, over a long time period, solar installs double every two years. Do the projections.
Swanson’s Law tells us that each time this doubling happens — every two years — the price of solar modules drops about 20%.
At some point this growth rate will slow down, but given the huge world demand for cheap power, I think we will have replaced nearly all fossil fuels well before the growth rate slows down.
There are still some annoying problems: airplanes need high energy density; steelmaking needs carbon; concrete needs to be replaced with Novacem or Ferrock to avoid CO2 emissions; but these are quite minor compared to the burning of fossil fuels in general.
I’ll be happy to take your questions.
“steelmaking needs carbon”
This is not essential, only conviniet, you provide energy and reduction agent with the same stuff. However, it can be substituted.
Fossil fuel for planes is more tricky or expensive.
The important point is that electric motors are roughly 99% efficient, with batteries about 90% efficient. Gasoline and diesel engines are less than *20%* efficient.
Using electric power to operate a car uses less than 1/5 as much energy as using gasoline directly. In fact, if the electric power were entirely generated by *coal*, it swould still generate less CO2 emissions than a gasoline car, because the electric motor is so much more efficient.
In fact, solar and wind are taking over the electric market with exponential growth, so your car will not run on coal in a few years.
Hi Nathanael,
It was my understanding that EV’s energy use was more in the 1/3 to 1/4 range compared to gasoline or diesel. But you could be correct.
More important, I think this is a fact that those who think solar or renewables can’t replace oil don’t understand.
An efficient small ICE car (40 mpg) uses 0.9 kwh/mile. Electric cars use 0.3 kwh/mile (some less). Both figures can be improved, in fact the technology to bring EV’s to 0.2 kwh/mile or less already exists and that is without going to ultra-light bodies. That means that the ICE wastes about 78 percent of it’s energy use compared to an EV.
An average ICE car uses 1.5 kwh/mile.
Where does the energy go? https://www.fueleconomy.gov/feg/atv.shtml
No water pump, alternator, fan to run is a big advantage in lower parasitic losses in EV’s. The ability to recover braking energy is another area of efficiency gain. No need for a radiator up front allows lower wind resistance.
My experience with both Nissan Leaf and Chevy Volt is 4+ miles/kwh, or 140 miles/gallon equivalent vs. gasoline. This is mostly in-town driving, but with quite a few hills.
the problem with private cars is not solely with their fuel source. It is with the huge resources required including asphalt from, guess what? Oil, with the waste of 10 x the land which could be used for growing food or preserving green space, with the iron, steel, glass and huge amounts of materials for private cars. Then there are all the ancillary costs of the 30,000 Auto addiction deaths, the hundreds of thousands of injuries, the need to pay for traffic cops, traffic courts, ambulances and ER rooms for the casualties of Auto Addiction. There is the vast waste of materials for the “Geography of Nowhere” of Auto addicted sprawl described so well by James Kunstler. There is the rampant obesity caused by driving instead of walking. One researcher found a 90% correlation between hours spent driving and obesity.
(NOTE: this is not saying that 90% of obesity is directly due to Auto Addiction but that Auto Addiction is correlated 90% with increases in obesity)
Auto Addiction is not sustainable even if it were possible to provide the fuel from solar electricity nor is it desirable as a way to live.
On the other hand, I am hopeful because by simply running and restoring public transit over Auto Addiction as was done from 1942-45 the USA could easily reduce its oil usage and greenhouse emissions by 10% a year.
Asphalt prices are actually rising already. I expct asphalt to go away. It’ll be replaced with concrete, but concrete is a CO2 emissions problem too. We need to commercialize Ferrock and Novacem…
Nathanael,
So many ways to tackle this.
What is the price difference between an equivalent area of concrete vs. asphalt?
What is the relative cost to “pave” concrete vs. asphalt?
For future expansions which is more costly to adjust?
I don’t know much. I really don’t. I am always learning, and will be learning to the day I die.
Why do we use concrete for projects like bridges , and asphalt for roadways? Why, when it comes to cost analysis, maintenance, and potential modifications, do engineers universally settle on concrete for a bridge, but find re-paving asphalt a more effective solution for roadways?
I do not have the answer.
If you can produce an answer that leaves the world’s engineers flabbergasted you will be a billionaire. If you provide a legitimate answer, and it is not patented I will become a billionaire, so be careful!
I guess we could use wooden roads for EVs made from wood and cow horns.
1 million barrel per day drop in 6 months – wow
Is there any study available how much extra electricity in the grid would be required to switch from fossil fuel to electric cars?
3000 to 4000 TWh annually worldwide needed for full conversion to EV use of 1 billion vehicles. That is compared to a current (2012) worldwide use of electricity of 20,900 TWh.
That’s about right, but probably a bit high. I did a US calculation and came up with an increase in electricity usage of 10% — not sure why the world number would come out to 15%, maybe they have more “cars per electric socket” than the US does.
Maybe the US uses a relatively higher amount of electricity than other countries so the percentage change would be lower.
daniel,
It is quite easy to calculate:
1 barrel equals 1500 kWh oil equivalent
1 mill barrels eaquals 1.5 billion kWh
As electricity consumption in the US stands around 10 billion kWh per day, a replacement of 1 mill barrels of gasoline per day (out of roughly 9 mill bbl/) means an increase of 15 % of electricity consumption.
If all of the gasoline consumption would be replaced by electric cars, this would be roughly a doubling of electricity consumption.
Electric cars would require much less electricity consumption as the oil equivalent, yet the conversion factor for natgas to electricity is at a maximum of 50%.
An electric car gets 3-5 miles/KWh from the batteries. (my Nissan leaf, real world
figures). The most efficient diesels get about 1.5 miles/KWh. (My car, 1.2l engine) The latest designs of combined cycle gas turbine power station are over 60% efficient. There are transmission and battery charging losses. The higher mileage figures for the electric are partly thermodynamics, partly aerodynamics, partly regenerative braking and partly driving style to maximise range . The latter will decline as electric car ranges increase and drivers lose range anxiety and start racing the lights again.
USA VMT is 3 * 10e12 miles per year so full electric conversion would require about
10e12 / 365 ~= 3 billion KWh (excluding heavy trucks and buses, etc). a 30% increase, not a doubling.
Ralph,
Did you also consider that electric cars have up to ten times less milage during the winter? In addition, the average car has much more weight than the average electric car. Then there are also transmission losses and you have to calculate electricity generated from the utility.
I guess doubling electricity demand is still a good estimate.
As most electricity is generated by 60% with fossil fuels at a conversion factor of 50%, it is probably better to use natgas or NGL for cars rather than produce more electricity. To use electric cars in a grand scale would make sense only if the complete electric supply is in wind and solar and hydro pumping storage. Yet this may take a few decades and requires enormous capital.
No Heinrich,
A doubling is not a good estimate at all.
10 times worse mileage in winter, I am doubtful that is a good estimate, sounds like someone from a warm climate driving in winter with the heat on maximum.
The ice gets about 20% of the energy to the wheels, the EV about 90%.
If we use natural gas to produce electricity and get 50% efficiency and 8% is list in transmission and distribution and another 8% charging losses. then we have 0.5*.92*.92*.9=38% of the energy goes to the wheels. We still get twice as much energy to the Wheels in an EV as we do using natural gas to power an ice where efficiency would be no greater than 20% gas tank to wheels. We would also need to build out a lot of infrastructure for natural gas or propane fueling.
Dennis,
another 8% charging losses
We have to convert from AC to DC using a charger. Let’s assume that it is 95% efficient.
But not all energy from changer is stored in the battery. We need to consider leakage of energy during conversion of electrical energy into chemical energy first and then back converting chemical energy into electricity. Battery also have some ohmic resistance, so part of the energy is converted to heat. I do not have real figures by I think a typical loss here is 10 to 15%.
Depending on the chosen drive train technology, the DC power is converted to frequency-modulated AC or to voltage-adjusted DC, before motors can provide motion for the wheels. There are losses here too.
Also high efficiency of electrical motor is possible only when it directly rotates the wheels. If there is a mechanical component in between like a differential it is less.
By multiplying the efficiency numbers one obtains for the maximum possible efficiency of EV car. It is much less then claimed.
http://www.plugincars.com/belgians-measure-ev-efficiency-129078.html
Heinrich, you’re wrong because electric cars are so much more efficient (90%) than gasoline cars (about 20%).
Calculating based on actual real-world mileage rates of the Tesla Model S, replacing all gasoline consumption in the US with EVs would add about 1 billion kwh/day. About 10% of US electrical demand. A bit less actually.
Not 90%. More like 60% See
http://peakoilbarrel.com/peak-oil-back/#comment-568106
Hi Likbez,
One would have to do the same analysis for the ICEV. The engine itself has about a 20% efficiency, the electric motor is about 90% efficient. The power for lights and other systems have to be provided by either vehicle.
Air conditioning will be no better for the ICEV than the EV, lights will be the same, the only advantage would be in heating and that can be reduced with heated seats and dressing warmly in winter.
Bottom line, the ICE engine has 20% efficiency, the power to the wheels is considerably less, about 15%. So the comparison is 60% for a well designed EV to at best 19% for a well designed ICE (non hybrid) so a factor of 3 better for the EV. Also note that if we are going to include charging, distribution, and transmission losses as well as thermal losses at the power plant, then we might need to include the energy used to refine the oil and then distribute it and pump it from underground tanks. These lines quickly become very blurry. The simplest analysis starts at the tank or battery and looks at how energy is converted to power at the wheels.
Or we could look at oil from refinery gate to energy produced at the wheel and compare that to natural gas at the electric power station gate and how much of that gets converted to energy at the wheel in an EV.
See
https://matter2energy.wordpress.com/2013/02/22/wells-to-wheels-electric-car-efficiency/
Bottom line in a Well to wheels comparison the EV is at least twice as efficient as an ICEV.
I think that is the wrong question to be asking. The answer might actually be very little if any at all. EVs might end up working as a battery storage system for the grid.
http://www.scientificamerican.com/article/how-to-sell-power-from-electric-cars-back-to-the-grid/
…”[The cars] essentially act as batteries for the grid,” he said. During periods of low demand, the batteries charge on low-cost electricity, and they can later sell that power back to the grid when prices rise during periods of high demand, making a profit, he said.
The grid benefits from the arrangement as well. It is cheaper than cycling on and off thermal power plants and can be deployed more quickly, said Michael Kormos, senior vice president of operations at PJM.
Do we need a functioning ‘economy’ and/or ‘government’ to make EV’s viable? What kind of economy/government is it, and is it actually functioning? If so, how is it functioning and can renewables support it and EV’s? If so, how soon and for how long? Lastly, do people want or need EV’s? What if they don’t? What if, for the most part, people are unhappy in this so-called economy/with this so-called government? Are EV’s and PV’s going to solve this?
Lastly, do people want or need EV’s? What if they don’t?
EVs will probably not be individually owned, more likely they will be driverless and shared.
People do need transportation and the model of how they get it is definitely changing.
Governments and economies are changing as well.
Fair enough… Well, we may see things shake out increasingly faster as time moves forward.
And the lot of us here all seem to have front-row seats; positions on-stage and/or back-stage passes.
Caelan,
The Chevy Volt has the highest customer satisfaction rating of any GM vehicle ever produced. Suffice to say, once people experience what EVs have to offer they do indeed say they need them.
There’s a reason that Tesla has 400,000 reservations for its Model 3.
A Prius is a sacrifice to feel “green”. An EV is an upgrade from an ICE, but so happens to also be “green”.
Then why the quotes around ‘green’?
Manufactured needs; need-creation; propaganda; public-opinion-shaping; cooked-/misleading-/obscured-statistics-leveraging?
You can have a 400 000-sized population, or, alternatively, a ~ 7 000 000 000-sized population undermine its very survival, and you can call it collapse or decline, or Tesla pre-orders.
The lunatic claims about lithium shortages appear to be spread by FUDsters and oil promoters.
The fact is that there are ludicrously large lithium deposits and they’re extraordinarily cheap to produce even with current technology. Whic is improving every year.
Tesla receives no government subsidies.
Would I rather people took public transportation? Absolutely. But the priority is to get rid of those gasoline cars. There are three electric bus manufacturers in the US, selling very well because the electric buses are cheaper to operate than diesel buses.
I am interested in lithium mining.
Could you post some facts and or links about it relative to mass production of battery powered vehicles and homes?
How is it mined? Where are the deposits located? What is the cost range per unit to mine it in various locales? That kind of info.
Hi Shallow,
I’ve had hands on experience with lithium exploration (not development). Most reserves are in Bolivia (70% of the world’s reserves), plus Chile and Argentina. Apart from local government participation, German and Chinese companies are the big players at least in the South American plays. These are all brines in salt basins where lithium is concentrated by evaporation. There are significant reserves in Australia as well. I could write a book on the subject but recommend Google for through studies by numerous writers.
Check out my post and video link
http://peakoilbarrel.com/peak-oil-back/#comment-567651
BTW Major Lithium deposits are in Chile, Argentina, China and Australia but there are smaller ones in quite a few other places.
http://www.statista.com/statistics/268790/countries-with-the-largest-lithium-reserves-worldwide/
Doug and Fred. Thanks for the info.
Lithium doesn’t just jump out of the ground on its own and climb into batteries and then into EV’s, as much as some seem to make it appear with their cavalier commentary.
EV’s, among a massive number of assorted techoindustrial vomit, require a vast layered global infrastructure of crony-capitalist plutarchic industrial processes; individual, community and environmental demands, destructions and ‘externalities’; roadways, and wage and tax slaves, and so on.
I bet that the addition to the ff grid will be zero or negative as EV’s start to take over. Reasons abound in the present trends toward lower cost of wind and solar, and for example, to EV owners realizing, like I and many others did, that the additional cost of PV to run them is quite acceptable, so the purchase is not just EV, but (EV + PV), meaning zero or negative additional load on grid.
I am puzzled by this bunch’s resistance to the inevitably of EV replacing ICE. Looks like mighty simple arithmetic to me.
Of course I have the advantage of so many hours fixing trivial but incapacitating illnesses in ICE’s, while the electric motors just went on and on for generations, ignored.
And now the PV driving the electric motor just goes on and on, too, equally ignored.
The great thing about PV is that the horizontal surface area of a car is about equal to the amount of PV needed to move an EV the average miles per day in the US. So if we put PV on top of the EV’s themselves, they could produce enough power on average to run themselves if left out in the sunlight.
It will be more complex than that, where some will supply the grid and others will use power from home or grid supply. But on average the EV may need little or no power from the grid. People like me would be suppliers to the grid or to my house from their EV’s since I drive well below the average miles per day.
In other parts of the world, cars are not used as much and will have little impact on grids or actually be suppliers of energy.
Making cars lighter and more efficient while keeping the top surface area large will be key design factors. Improvements in battery design and PV will make EV’s the prime mover worldwide.
The overall market for EV’s and the related battery systems is so huge that it is a no brainer for companies to jump into the market. The first company to do a “Volkswagon Bug” or “Toyota Corolla” type will be the first to make massive inroads. Remember what happened when the cheap, low power imports started coming to this country?
The autonomous driving and all the high end tech is just a distraction at this point. The big market is in a low priced electric that will get 400 miles on a charge, something practical.
Agree with all that. I wonder why some Chinese company hasn’t started selling that low priced EV already. My leaf is good and serves us just fine, but way too fancy and heavy for my tastes.
I was the first guy at NACA in Cleveland to come in with a crazy little bug-looking car after my junky studebaker got shot out from under me.
My buddies joked that it was a roller skate, not a car, but in a few years, they were as common in the parking lot as fleas on a dog.
Some of the kids who’ve worked on this Dutch electric car “Stella Lux” with PV panels on it ought to be out of school, looking for jobs – so start a company, hire them, and out-Elon Elon…
http://www.solarteameindhoven.nl
For technical reasons, Tesla doesn’t think it’s worth putting solar panels on the car roof, and recommends putting them on the *garage* or *carport* roof instead. This is typically enough to power the car.
Hi Wimbi,
For many of us, we agree with the inevitability of EVs and plugin hybrids replacing ICEV, it is a question of the rate of change.
What do you think of Tony Seba’s predictions? All new vehicles sold will be EVs or plugin hybrids by 2025, according to Seba and fossil fuels will be obsolete by 2030.
I agree with him that both of these will be true at some point, but 2035 for all new vehicles sold being at least partially electric (min 50 mile range) and 2050 for fossil fuels being obsolete for transportation and electric power (99% worldwide electricity production by non-fossil fuels) seems more reasonable imo.
Dennis, my projections are based on how fast Tesla can ramp up.
I’m figuring they introduce the pickup truck in 2020, and by 2022 every market segment has an electric variant. There are about 7.8 million new cars sold in the US each year. Tesla is currently set up to produce about 250K for the US in 2018 (250K for overseas). They know they have to increase that, so figure that they multiply it by 4 over the next 2 years, and produce 1 million by ~2020. There will be at least 3 competitors working hard on competing with them withi the US by then, so call it 4 million for the industry as a whole in 2020. Double in the next two years and that’s the new car market.
It’ll be hard to reach a price point to replace the bottom half of the ICE market, but I think that there will be a combination of fewer people buying cars (already happening) and people buying *used* electric cars which will displace that.
I figure by 2022 the majority of new cars are pure electric. I think Tony Seba’s estimates are too *conservative*.
I think used cars will take longer, though. Some fools will buy new ICE cars in 2022 and some will still be on the road in 2032. And then there’s fossil fuels for airplanes… so they won’t be fully obsolete. Still, eliminating car & truck & bus usage is a big deal.
My thinking is simple. “Tis the gift to be simple, tis the gift to be free–“.
It’a based on my wife’s remark, re her leaf ” this is the best car I have ever had, and I would not think of going back to a gas car”.
So, flash forward a few years. A customer comes into the chevy dealer and asks for an EV. Dealer says he’s out of EV’s. Customer walks out and buys one from Honda right next door.
Dealer goes to his convention and hears the same story from all the other dealers. They gripe to chevy that they need more EV’s. Chevy cranks up makng them, after all, one car is mighty like another car on an assembly line. And if there is a demand for batteries, there will be batteries. From wherever. After all, money is to be made.
So, bottom line, I go with Seba. Reason – people really LIKE EV’s. Simple.
It’s enough demand we can’t cover it with natural gas. This is why those long term fiction stories from the IPCC assume the world has extra humongous coal reserves.
Even if we could nature gas is no panacea either. http://thinkprogress.org/climate/2016/02/17/3750240/methane-leaks-erase-climate-fracked-gas/
Think progress doesn’t exactly contain quality information. I’m in the oil and gas industry, and most of their points are bullshit.
I know the work of the Cornell profs who did the first set of studies, backued up by the Harvard studies, and they’re entirely right about the methane leaks.
From what I can tell, a lot of it has to do with the frackers being “wild west” operations who don’t do their well casings right and make no effort to prevent leakage. Another part has to do with terrible irresponsibility by the utilities, who don’t fix leaks.
Your position in the industry prevents you from seeing reality. The fracking companies are mostly in business to scam the conventional oil & gas guys.
Neither Cornell nor Harvard impress me when it comes to this topic. One reason why they are wrong is precisely because they know so little about it.
I can see you are a greenhorn, so let me explain where I come from: the gas industry is way way more extensive and heterogeneous than discussed or measured by your “Cornel perfessors”. To understand the issue you would have to understand the balance for all large producers.
This means one has to range from say Trinidad and Tobago to the USA Gulf of Mexico to Pennsylvania to Canada to Western Siberia to Australia to Algeria to Afghanistan and on and on.
Once you understand the system layout, and where the potential leak points, then you would have to measure representative points, estimate losses, and figure out a means to reduce such losses.
I have actually done it, in several countries, for diverse reasons. The answer is highly variable, the cost to reduce losses depends on the site details, etc. These Cornell perfessors are like Neanderthals trying to understand a nuclear sub. They don’t even know where to look, where the worst emission points are, and of course they don’t have the foggiest idea of how to fix it.
Here’s one approach.
US 2014 Light duty vehicle, short wheel-base Vehicle Miles Traveled – 2,072,071 million miles (Source US DOT BTS)
Worst case EV power consumption 340 Wh/mile (Tesla Model S)
So if all VMT for the US in 2014 were traveled in EVs with the consumption of a Tesla Model S, the total electricity required would be:
2,072,071 x 1,000,000 x 340 = 704,504,140,000,000 Wh = 704.5 TWh
Total Generation at Utility Scale Facilities in the US for 2014 – 4,093,606 GWh (Source EIA EPM)
Increase required on top of 2014 total generation to power all Light Vehicle VMT in 2014 if traveled by EVs nwith the consumption of a Tesla Model S:
704.5 x 100 ÷ 4,093.606 = 17.2%
So, according to the above calculations, if all VMT by light vehicles in the US in 2014, had been using EVs with the power consumption of a Tesla Model S it would have required the production of 17% more electricity. This assumes that there is no reduction in electricity use to refine the needed motor fuels from crude oil.
Have I made any glaring errors?
IB – Numbers look good. +1.002:)
And the magic of PHEV’s like the Volt is that you can get up to 90% of that electricity/gasoline substitution with batteries sized for just 53 miles of range and home 115 volt charging, so long as the EV part of the car is paired with a backup ICE engine. You don’t need a 200+ mile EV with a complex new fast-charging network, etc. etc.
Volt sales are quietly growing and growing, especially with the new generation version with more space, more comfort, more range, more gas MPG, and lower price. People and sales staff finally understand the concept, no “flammable Volt” political rhetoric.
HVAC,
I can back you up here.
I’ve had my Volt a little over a year.
I’ve done ~11,000 miles and used 12.5 gallons of gas.
I basically drove 10,000 miles on 1 tank of gas., and most of that was due to a single road trip.
I also charge for free at work, so my fuel costs are exceptionally close to $0.00.
Looks good but are we not overlooking the FF input to make the EV mining lithium to manufacture batteries raw materials for tyres etc also maintaining roads and the like.
Hi Lights out,
Recycled Steel can be made with an electric arc furnace, a lot of mining equipment can also be electric, rail transport can be electrified. Ships will probably require fossil fuels or biofuel, though they could be nuclear powered or possibly wind powered. There may continue to be some need for fossil fuels, but if wind and solar continue their 20% growth rate as fossil fuels rise in price due to peak fossil fuels, the electricity produced with fossil fuels will quickly diminish.
Tony Seba points out if the cost curve for solar continues on its present trajectory (20% reduction in costs each year), that the price of rooftop solar electricity will fall below transmission costs, the falling cost of battery storage (15% /year reduced cost) will make backup electricity storage reasonably priced. The grid would be used to move power from sunny areas to cloudy areas and to lower latitudes in winter, when days are relatively short.
The combination of Wind, Solar, hydro, and nuclear power widely dispersed, along with EVs and self driving cars will make fossil fuels obsolete as a source of energy. Tony Seba believes this will happen by 2030, my guess is 2050.
Dennis, one thing that ships are good at doing efficiently is carrying weight. I wonder if anyone has done the calculations as to how much battery storage a ship would need to cross the Pacific. Additional power could be had from those spinning wind column generators devised for ships, or decks covered with PV. Battery weight would not be much of a problem on ship since they need ballast anyway.
I also wonder if this would be a good use for hydrogen fuel cell technology.
For example, a large Panamax ship must carry about 12,500 tons of ballast.
The Panamax freighter uses 729,600 kWh per day traveling at 20 knots. That is 7.6 GWh across the Pacific. Considering the engine used is about 30 percent efficient, that would be 2.28 GWhr actual.
If the battery/motor system is 85% efficient overall then 2.85 GWh of storage would be needed. Round that up to 3 GWh. That would be 25,000 tons of lithium batteries or 78,000 tons of lead-acid batteries. That is more than the ballast needed.
A Panamax can carry 60,000 to 80,000 tons of freight, so that would reduce the amount of freight by 12,000 tons or 65,500 tons depending on the batteries.
Obviously there is a need to improve battery energy density by at least a factor of 2 to make the crossing practical.
More efficient ship designs would also assist in moving to electric ships.
The new grapheme batteries might just be the answer.
A ship can use a lot less energy simply by going slower.
Hi Techsan,
I agree. Also a hybrid biodiesel battery powered ship is a possibility, or wind/electric hybrid.
That only works if there is no time factor involved. It’s a measure used when demand is low or fuel costs very high.
If you halve the speed, you need to double the amount of ships to achieve the same rate of tonnage or volume transport. Probably use more energy overall, since bigger ships are more efficient at carrying cargo.
Better to change hull design and use weather info to reduce energy use.
That’s a bit incorrect. A ship’s fuel consumption isn’t a linear function of distance covered.
I have prepared dynamic models for ice capable ships navigating to and from the Russian Arctic to a transfer point on the Kola Peninsula. Fuel consumption in open water can be optimized by the hull shape and the design speed.
I worked a bit with ship parameters, including the fact that a high horsepower ship designed to move through ice has spare to move at high speed. Also changed cases, assumed a ship to ship transfer from ice capable to a simple ice strengthened Baltic class, in conclusion, the ship design can be changed to optimum depending on fuel cost. In our case the optimum was 12 knots in the Barents, open water, which is a rather slow speed.
The battery/motor system is more like 92% efficient. Nothing you can do about the inefficiency of the turbine.
So, OK, a battery ship would carry somewhat less tonnage due to the batteries. But technically speaking they’re entirely practical (carrying 60000 – 12500 = 47500 tons is perfectly respectable) and it’s just a matter of price.
Government action could switch us to battery ships with minimal increase in shipping prices.
Makes more sense to use biofuel and wood chips.
Well, 340 Wh/mile is a bit high, but your calculation is pretty good apart from that.
“Electrical consumption of Tesla Model S 2014 variant
In early March 2016, a report by stuff.tv emerged that VICOM Ltd, a subsidiary of ComfortDelgro Corporation Limited and Singapore’s Land Transport Authority authorised inspection centre, ran a test on a used 2014 Tesla Model S. The test was performed under the United Nations Economic Commission for Europe (UNECE) R101 standards. The results from VICOM states that the car was consuming 444 watt hour per kilometre (Wh/km). However, a check on the U.S Environmental Protection Agency (EPA) states that the 2014 Tesla Model S consumes about 38 kilowatts hour per 100 miles.[420] This is equivalent to 236.12 (Wh/km), a marginally large electrical consumption difference for a 2 year old car. As of 5 March, no explanation was made as to why the results varied so much.” ~ Wikipedia
” If you’d bothered to do the math, you’d see just how ludicrously much sunlight we can capture for power.” ~ Nathanael
“The simple answer is that the 1% creating 50% of the all global greenhouse gas emissions must use a radically less amount of everything. Of course this reality is far less exciting than the dream of a consumerist green utopia. Impressing this green utopia as delusional upon the masses is even more difficult when collectively, your target audience has been spoon-fed entitlement, narcissism and privilege, since birth. The necessity to radically and drastically cut back all forms of consumption (which by default reduces demand for energy) flies in the face of a global economy intermarried and dependent upon infinite growth. Under the industrialized capitalist economy – no solutions outside of market solutions will be pursued or campaigned upon. Thus society… is fed a lie – which is voraciously consumed. The path to ‘sustainability’ is to follow the oligarchs yellow brick road to the ‘new’ economy— paved in foundation dollars. The necessity for a radical contraction of consumption by the privileged is replaced with ‘solutions’ comprised of more infrastructures, more technology, ‘green’ consumption, more mining, more burning of fossil fuels, more growth—all of which will benefit (only in the short-term) the same 1% who have created and continue to accelerate the nightmare. Ask us for the moon. Even for Mars. But don’t ask us to change.” Cory Morningstar
Sorry Caelan but, you are being lazy and just cutting and pasting stuff you see on your screen without doing any fact checking. Here’s why I say that. The last two sentences of your first quote reads “However, a check on the U.S Environmental Protection Agency (EPA) states that the 2014 Tesla Model S consumes about 38 kilowatts hour per 100 miles.[420] This is equivalent to 236.12 (Wh/km), a marginally large electrical consumption difference for a 2 year old car. As of 5 March, no explanation was made as to why the results varied so much.”.
So, I started thinking about how to work back from 236.12 Wh/km to 38 kWh/100 miles and after a few seconds realized that it was much simpler to work the other way. Here goes.
38 kWh per 100 miles = 38 ÷ 100 = 0.38 kWh /mile = 380 Wh/mile
(note that this is higher than the 340 Wh/mile figure I used in my calculation further up, a figure which Nathaniel, a real Model S owner thinks is”a bit high”)
Next let’s convert Wh/mile to Wh/km. 1 mile = 1.6 km so:
380 Wh/mile = 380 x 1.6 = 608 Wh/km
edit: giving this some further thought, I checked what the actual miles to km conversion figure is (1.60934) and presto! If you divide 380 by 1.60934 you get 236.12! So, apparently, whoever came up with that number, used division when they should have used multiplication. I think most technically inclined readers here would agree that, when your results don’t look right, check your calculations and more importantly, check your logic!
IMO this (error in logic) reduces the whole passage quoted to a bunch of meaningless verbiage. Would you care to explain why the Singapore test’s result of 444 Wh/km (277 Wh/mile) are so much lower than the EPA figures?
Another aspect that raised a red flag for me was the disclosure that the car was a “used” car. What does that have to do with anything? The efficiency of an electric motor does not change with age. As a matter of fact, an the efficiency of an ICE does not change appreciably until it is in need of an major overhaul. It appears that the passage is trying to ascribe a discrepancy in the numbers to the age of the car when the discrepancy is due to somebody’s incompetence with some fairly simple arithmetic.
There is some good stuff on Wikipedia but, there is obviously some bullshit.
While I appreciate your concern for environmental degradation, quoting bullshit doesn’t help your case.
islandboy, while I have to head out and have limited time at the moment, Tesla mentions the issue on its site, so, presumably it ‘agrees’, so to speak, with the numbers, if not necessarily the methods by which they were derived, hence:
Edit: Well, if you think you have caught it, unless Tesla already did, perhaps you might wish to add an entry to Tesla’s page on Wikipedia and/or send Tesla an email. Seems no one is catching it, as it is being copied around.
That’s complexity, by the way, and we are mired in it.
Looks good. For Germany I have the following numbers:
electrcicity generation 600 TWh/a
fossil energy for transport 600 Twh/a
If we replace 4 units fossil energy with 1 unit electricity this gives an increase of around 150 TWh/a for the electricity demand. At the moment we see a demand reduction fro electrcity of 3-5 TWh/a, therefore, the net change would even be much smaller.
Some estimates can be found here:
Electric vehicles: The impact on oil and electricity
http://blogs.platts.com/2016/04/21/electric-vehicles-impact-oil-electricity/
Potential impact of EVs on global electricity demand: 4 scenarios
Ron,
Excellent post. Nice to see you writing again. I don’t know if anyone follows Tad Patzek’s work at his blog Lifeitself, but he recently did two posts on the peak of U.S. Shale Oil & Gas production. Here are two of his charts on the Bakken & Eagle Ford. I think Tad nails it here as did Jean Laherrere.
steve
Interesting. It seems to make sense to look at the N. America production graphs as a unified one, since Canada, Mexico and USA are such a closely integrated market.
Most of the production and consumption stays within this zone, and the reserves, depletion, capex of all three are intimately relevant to the others.
For example- “In 2013, 71 per cent of Canadian crude production was exported to the U.S. and two per cent was exported to overseas markets.”
Here is Tad’s Bakken chart.
steve
Steve, I share my view on Bakken with Mr. Patzek. I have posted my take on it here for over two years now. Most of the time it went unrecognised. You can review it here in the last graph of this Ronpost: http://peakoilbarrel.com/bakken-december-data-big-decline/
Kudos to Ron for his careful and diligent analysis of production trends and reserves accounting over the years.
With regard to “Timing of peak all-important,” it is well understood that standard economics will be in disarray (as we have already witnessed). The major contributor to economic turmoil will be perception. Markets are heavily influenced by the psychology of the participants, and as peak oil portends the end of economic expansion, the realization of this will be profound. We may continue on “extend and pretend” policies for a while, but the SHTF really comes into play with the common realization that growth is over. No one will want to hold, or issue debt that won’t be repaid. Nor will policies of loaning money into existence be justifiable. When the music stops, the chairs remaining will be few and far between.
as peak oil portends the end of economic expansion, the realization of this will be profound.
Not necessary so. I think that this century still might be OK in a sense that we will probably experience economic booms and busts like we used to have. They might be more local and might happen just in different countries then the USA and Western Europe. Permanent stagnation in the USA is a fact and with current dysfunctional and captured by financial oligarchy political system is very difficult to change. The necessary distance between the state and capital (or between state managers and capitalists) that such classics as Smith, Marx and Schumpeter from their different political perspectives all regarded is being essential for the health of the political system, was destroyed. In particular, the neoliberal regime adoption of primacy of the profit-maximizing impulses of financial capital was extremely negative as it created the short-termism and lack of strategic vision we are now suffering from (and which EIA aptly demonstrates in its forecasts) :
And redistribution of oil as a scarce resource is definitely possible. Note that Iraq and Libya were recently re-colonized. Attempts to partition and colonize Russia were also in place but failed (actually during Yeltsin presidency Russia was the colony of the West).
A lot of oil consumption in Western societies, especially in the USA, now is for vanity purposes. This needs to be cut. Military need to be put on the severe diet and neoconservatives need be purged from Washington, DC. That alone might postpone the day of reckoning .
There is still opportunity to switch the natural gas for a large part of transportation. Which would last longer then oil and give us probably another 50 years or more to adapt. Also consumption of oil for private transportation in the USA can be reduced by 30% or more by just adopting EU model of gasoline pricing and taxes on cars.
So a lot can be done in the area of oil conservation. Currently there is no political will to go in this direction, but that might change with the return of oil prices to over $100 range, which might happen much sooner that most people here expect.
Some kind of backlash of regular industries against the dominance of financial capital also are possible (http://www.amazon.com/Descent-Ken-MacLeod/dp/1841499420):
Well the last time we experienced an economic collapse from an oil shock everyone just blamed it on the housing market and banks.
Oil shocks essentially just break whatever the weakest link in an economy is. In 2008 it was housing. In 2018 or 2020 maybe it’ll be European Debt, or Chinese industrial loans.
Whatever it is I feel as though oil will not be blamed as the culprit even though it will be what caused the economic crisis.
Look at 2008. Oil prices continuously breaking into ever greater record highs, the Saudi’s stating that they won’t raise production because the market is saturated and no more production is needed (a huge tell that they simply couldn’t produce more oil). Two months after oil topped out at $147 the entire global banking system was beginning to shut down.
Yet ask any random person on the street if high oil prices were a major factor in the global financial crisis, and they’ll look at you like you’re an idiot to think the crap you pump at a gas station could possibly cause a global economic collapse.
I remember this period and inflation was spiking due to the rising oil prices. I can remember visiting a supermarket and being shocked at how fast food prices were rising, they were putting a squeeze on many on low incomes. Same thing with petrol, suddenly the regular commute seemed to cost so much more.
It will be interesting to see what happens when the true terminal decline starts. Peak oil is likely to be brutal to BAU.
Here’s a question (as I’m looking to buy a new property), if peak oil were about to happen would you rather:
A) Live in a small city (40,000) on a regular section 600m2 with a 3km commute (2 mile).
OR
B) Live in a semi rural environment with a 10,000m2 section but a 15-20km (9-12 mile) commute.
I’m trying to weigh up the advantages of owning land for food growing vs transit costs. I’m leaning toward semi-rural as I like open spaces and am a keen gardener. I just hope this won’t come back to bite me with rising transport costs. Any advice would be appreciated.
C) Buy a bike, a good pair of shoes, smartphone and Chevron stock
I commute 6 miles on an electric assist bicycle. Cost per mile too small to measure. (approx 0.1c / mile). Travel time about the same as driving (40 minutes to the office door).
I have also bought a Leaf for when the commute range increases, or my ageing leg muscle range decreases.
Town or country depend on the rest of your lifestyle.
Is one of the two properties better suited for photovoltaics? Potatoes and chickens? Firewood?
9-12 miles is easily within range of a regular road bike or electric bike, especially if relatively flat. A cyclist averages about 12 mph in a city commute.
My commute is 7 miles (with some steep hills), and I do it on a regular bike and e-bike at age 68. I alternate bike commuting and electric car.
Brian- consider this.
Look at the oil price shock as not a root cause of the 2008 economic shock.
Look one level deeper. Overpopulation, or more specifically at overshoot.
Once you overshoot, then all kinds of manifestations arise that may seem unconnected, but are in fact early signs of contraction.
When you overshoot on demand for oil, it gets expensive. When you overshoot on fossil fuel consumption, the planet gets hotter. When you overshoot in your country, war can happen, inflation can go rampant. When you use excessive debt to fuel the overshoot, the financial system gets fragile. When you use debt to prolong the overshoot (now), the eventual contraction will be worse. When countries get in too much debt, they devalue the currency.
These manifestations of overshoot all will or can contribute to contraction, and the 2008 ‘episode’ was just an early taste of what contraction will look like.
I’d also recommend this paper from Michael Dittmar, who I think has commented here before, which has similar findings:
http://arxiv.org/pdf/1601.07716.pdf
and the Robelius PhD paper is good too but missed the LTO impact:
http://uu.diva-portal.org/smash/record.jsf?pid=diva2%3A169774&dswid=-8797
I think things will be worse than Jeffersons study indicates for several reasons: 1) Oil discoveries have dropped to being almost insignificant over the last 5 years, 2) there is very little reserve growth on discoveries over the last 10 years (technology is so good now at estimating the oil in place, projects are so expensive that the operators need to know exactly what they will recover before investing, and putative drilling in deep sea is too expensive), 3) the arctic is at least 25 years away or never the Atlantic and Pacific coasts are off limits, 4) the current CAPEX collapse is going to be extremely disruptive (the GoM curve above stops just at the point when production is going to collapse as there will be very few new projects being completed and the surge of projects that came online over the last 2 to 3 years will suddenly come off their short plateaus and go into 10% plus decline rates, 5) once investors see oil companies repeatedly unable to replace reserves they will pull all their money, 6) all the supergiants have been developed with extensive IOR/EOR methods and may come off plateau and collapse production at about the same time (for me this sudden high decline rate, more than the actual peak is what is going to destroy the world economy if we don’t do something – in fact a lot – beforehand).
Spot on George. The only thing I might have included in your list is Reservoir Creaming whereby horizontal production holes are put across the caps of oil pools to maintain high production rates at the expense of increasing depletion rates. This seems to have become standard practice.
Hi Doug and George,
From a statistics perspective the chances of all the supergiants coming off their plateaus at about the same time is quite an unrealistic assumption. Do you guys get a lot of straight flushes when you play poker (no wild cards)? I have played a little poker and have never seen a straight flush in real life, only in the movies.
Hi Dennis,
You are no doubt correct that the old supergiants won’t all go into terminal decline together, but it does seem reasonable to assume that most of them will peak and begin to go downhill within some particular time frame measured from first production.
Now I am going to pull some numbers out of thin air to illustrate my point, and then maybe somebody who knows more can elaborate on the significance of it.
Let us suppose that the really big oil fields mostly peak between say thirty and forty years from first production.
It is my impression as a casual observer rather than a numbers cruncher or hands on investor that just about all the really big oil fields were discovered and put into production at least that long ago.
So taken as a group, they will probably begin going into decline AS A GROUP all together over about the same time frame as they were discovered as a group.
Fields discovered and first produced in the fifties, if I am right about this, will probably mostly all go into decline together over a period of about a decade or so, by way of example.
Basically what I am trying to say is that oil fields probably have a statistically predictable life span, and that most of the really big ones are probably all roughly about the same age, in terms of being produced. Nearly all of them will probably peak with in ten to fifteen more years, since all of them are getting to be up around thirty or forty years of production history.
IIRC, it’s been a hell of a long time since somebody discovered a new super giant or giant field.
Somebody like Fernando ought to be able to take this observation and run with it.
Maybe you can run with it.
OFM
“Fields discovered and first produced in the fifties, if I am right about this, will probably mostly all go into decline together over a period of about a decade or so, by way of example.”
All of them are already in decline, as well as fields discovered in the sixties and seventies. There are a few exception – fields discovered several decades ago, but developed only recently (Manifa in Saudi Arabia, Kashagan in Kazakhstan).
AlexS, thanks!
There is something called Google, and Wikipedia (for what that is worth) has a list of the world’s biggest oilfields.
https://en.wikipedia.org/wiki/List_of_oil_fields
And as you point out most of these are in decline.
New developments (recent decade) have been smaller ones with short plateaus and high decline rates.
Thanks, Rune
As I understand, the main sources of growth in global proved oil reserves in the past 10 years were:
1) Rising oil prices, which enabled to include Venezuela’s ultra-heavy oil from the Orinoco belt and some other high-cost resources into proved reserve category;
2) New discoveries (which, as you say, are now much smaller than in previous decades);
3) Upward revisions of reserve estimate of the already developed fields due to reserves extension, new reservoir discoveries in old fields, use of improved recovery techniques or equipment, etc.;
4) Inclusion of part of LTO resources into proved reserve category.
The contribution of new discoveries was actually a secondary factor.
Rystad Energy on oil and gas discoveries:
The year 2015 was a global all-time low in terms of conventional oil and gas discoveries, says Nils-Henrik Bjurstrøm in Rystad Energy.
Rystad Energy estimates that only 9 Billion boe were discovered during 2015. This is 30% down from 2014 which was an all-time low.
For comparison, world oil production is in the order of 30+ billion barrels each year.
– As a result, only 19% of the produced conventional resources were replaced by new discovered volumes last year, says Nils-Henrik Bjurstrøm, Senior Project Manager, in Rystad Energy, to geo365.no.
Regrattably, the negative trend continues. In January 2016, only 250 million boe were discovered (in comparison, the Goliath field in the Barents Sea has reserves of approximately 200 MMbo), indicating a possibility for an even lower exploration result in 2016, says Bjurstrøm.
source: http://www.geo365.no
Note: 9 Billion boe discovered during 2015 and 250 mboe discovered in 1Q16 are oil and gas. And the discovered volumes are not immediately included in proved reserve category
So potentially going from just 9 billion BOE in 2015 to maybe 3 billion BOE in 2016.
When will the oil markets take notice of this?
Also, wonder how much of that is natural gas and condensate?
Note: XOM produces over 4 million BOEPD. In 2015 proved reserves fell 24%. First time they didn’t replace 100% of reserves since 1990s.
Yes, I understand price has something to do with that. But still?
shallow sand,
Exxon’s total liquids proved reserves actually ncreased from 13713 million barrels on December 31, 2014 to 14724 million barrels on December 31, 2015
(source: 10-k)
There was a sharp downward revision in nat gas proved reserves, reflecting lower gas prices.
from OGJ:
ExxonMobil replaced just 67% of output in 2015
02/22/2016
http://www.ogj.com/articles/2016/02/exxonmobil-replaced-just-67-of-output-in-2015.html
ExxonMobil Corp. added 1 billion boe of proved oil and gas reserves in 2015, replacing just 67% of production during the year compared with 115% over the past 10 years.
In 2014, the firm replaced 104% of its production by adding proved oil and gas reserves totaling 1.5 billion boe.
The 2015 total includes a 219% replacement ratio for crude oil and other liquids.
However, proved reserves of natural gas were reduced by 834 million boe primarily in the US, reflecting the change in gas prices. The company expects this gas to be developed and booked as proved reserves in the future.
At yearend, ExxonMobil’s proved reserves totaled 24.8 billion boe. Liquids represented 59% of proved reserves, up from 54% in 2014. ExxonMobil’s reserves life at current production rates is 16 years.
Reserves during the year were added in Abu Dhabi, Canada, Kazakhstan, and Angola. Liquid additions totaled 1.9 billion bbl.
ExxonMobil added 1.4 billion boe to its resource base through by-the-bit exploration discoveries, undeveloped resource additions, and strategic acquisitions.
The firm’s exploration activity in 2015 included the Liza oil discovery offshore Guyana (OGJ Online, May 20, 2015), and additional discoveries in Iraq, Australia, Romania, and Nigeria. Strategic unconventional resource additions were made in the Permian basin, Canada, and Argentina.
Overall, the company’s resource base totaled more than 91 billion boe at yearend 2015, taking into account field revisions, production, and asset sales. The resource base includes proved reserves, plus other discovered resources that are expected to be ultimately recovered.
Watch out with those BOE. They like to convert natural gas to oil equivalents to hide the really horrible truth. Nobody finds anything they can book.
When the price bumps $100 we may see better results, but until then I can’t see much getting booked. I do like Exxons Guayana discovery. I don’t think those Falkland fields are worth much. Maybe Uganda, and the Kara Sea?
The price won’t hit $100, and nothing will get booked.
We’re well above the point of demand destruction. The alternative to oil — the electric car — is finally in mass production. If oil is to hit $100, it has to do so before 2018 when upwards of a million cars a year which *don’t use oil* will start entering the market. After that, it just can’t happen. The decline rate of the oil fields will be matched for several years by the decline in world oil *demand*.
I expect all the oil majors to declare bankruptcy within 20 years. They will keep wasting money on “exploration”, finding expensive oil fields, while oil will remain glutted and cheap, until they go bust.
Hi Rune,
We do not have much data on all of these fields decline rates. There is probably good data for the Norwegian fields, and possibly for the Russian fields as well, aside from Prudhoe Bay, the data is harder to dig up for US L48 onshore fields. The Middle east is particularly murky.
We could envision all drilling stopping and no further development and the World decline would probably average about 7%, but that scenario is only likely with either economic collapse or a fast transition to wind, solar, hydro and nuclear, natural gas, and coal. If extraction rates from proved producing reserves remains at 2015 levels or lower and the rate of development of reserves remains at historic levels, World decline rates will remain about 1 to 2%.
Coal and natural gas will also peak so we must transition from those as well, especially coal (almost 2 times the amount of carbon emissions per unit energy).
By the way I whipped out my abacus and wrote a short post about peak oil. It’s fairly soft core , with a peak oil prediction in 2025. I went along and assumed hybrids and EVs and lighter more efficient vehicles would pick up the slack.
Hi Fernando,
Nice Work.
Note that if development proceeds at historic rates the decline after reaching 82 Mb/d in 2025 might be more than a “slow decline over 100 years”. You do not reveal what this is, but I will assume 2% per year.
You have a URR of about 3200 Gb, are you assuming about 400 Gb of extra heavy (API of 10 or less) oil, maybe 300 Gb from Canada and 100 Gb from Orinoco?
Hi Fernando,
Using my model with 3300 Gb of C+C URR (100 Gb more than yours), but roughly matching your peak in 2025 at 82 Mb/d, the decline rate does indeed remain below 2% per year until 2125.
Chart below, note extraction rate is production divided by producing reserves, estimated at about 330 Gb at the end of 2015. The Data+BP/XOM outlook is EIA data to 2014, plus an estimate for 2015 based on Jan to Oct 2015 data, the BP/XOM outlook is the average of the 2015 BP outlook and a recent XOM outlook from their annual report, NGLs were deducted and I took the average of the two scenarios to 2035, they were very similar.
I did the work by “class” so there wasn’t a single decline, but it did settle down at 2 % overall.
The extra heavy volume was 500 billion but as you know that’s highly dependent on price and politics. I assumed that oil would be at such a premium we could just go on to squeeze oil out of crappy rocks like the Western Siberian tight sands and “shales”.
As I pointed out, the idea was mostly to show some people I know that current IPCC assumptions about oil resources are too high. I’m trying to influence them to have the CMIP6 computer model runs include a case which accounts for resource limits. This sort of scares the CO2 crowd, because it limits their peak CO2 to 550 to 650 ppm, which in turn means all those economic runs they have are worthless. It leads to less gain versus what they think is the business as usual case (which of course is pretty low quality and needs to be tossed out).
My projection is that the yearly uptake of electric cars will exceed 7% starting in roughly 2018. The world decline rate of oil production will be competing with the decline rate in oil *consumption*, and I think the decline in consuption will be winning.
All the coal companies started declaring bankruptcy in the last year or two; coal for power is on its way out worldwide,thanks partly to political action against pollution, and partly because solar and wind are so cheap that it seems stupid to build coal at the same price.
I expect bankruptcy for the oil companies too. It’ll take a while for ExxonMobil to burn through its cash, but it’ll be one big spectacular bankruptcy declaration. Chevron will go bankrupt too, and so will Shell.
—-
Natgas has more complicated dynamics. In the $3-$4 price range, it’s still cheaper than alternatives, while being more expensive than production cost. Below $3, all the frackers shut down. Above $4, heating demand starts to go away, but rather slowly. Above $6, heating conversion to electric happens much faster.
I believe natgas prices itself out of the daytime electricity market at $4 — that’s roughly the point where utility-scale solar is cheaper. Art Berman predicts that natgas will get back to $4 within a year, but I don’t know if he’s right — it might take two years.
Really Dennis? From a statistics perspective? Assuming what probability distribution and correlation matrix?
Nobody is arguing that “all the supergiants” will come off their plateaus at the same time. That’s a cheap straw man argument. Plus it’s meaningless because there’s no sense of that “at the same time” means.
We don’t need all of the super giants to go into decline all at the same time — two or three going into decline within a five year period would suffice. Or just one — Gawhar — would do. I think the probability of several super giants going into decline more or less at the same time is quite possible. But since nobody knows what the probabilities are, making any statements about the probabilities is pointless.
I agree. Furthermore, I think everyone here realizes most oil comes from oilfields discovered prior to 1970 and almost all oilfields that still produce an average of over 500,000 barrels per day are 70-ish years old. So, ignoring Ghawar, Burgan and Daquing, oilfields that HAD a productive capacity exceeding one million barrels a day include Samotlor (1965), Prudhoe Bay (1968) and Cantarell (1976). That’s not a flush but it is three of a kind. ?
And all of those 1mb/d+ supergiants are alredy in decline (the most recent – Daquing)
Hi Guys,
I was responding to a comment by George Kaplan, he said:
…all the supergiants have been developed with extensive IOR/EOR methods and may come off plateau and collapse production at about the same time (for me this sudden high decline rate, more than the actual peak is what is going to destroy the world economy if we don’t do something – in fact a lot – beforehand).
So based on the excellent comments by AlexS and Rune Likvern, we know that most of the supergiant fields are already declining, but the question would be is it very likely they all begin a “collapse in production” at about the same time time.
I believe the probability is low and I interpret “about the same time” as within 5 years and “collapse in production” as a field decline of 10% or more.
It would be interesting in hearing other opinions on how likely this scenario is, I would guess it is less than 5%.
Hi Doug,
Using the Wikipedia list of giant oil fields there are 59 fields that have a URR of 5 Gb or more. The point is that the most notable “collapse” has been Cantarell, as long as the “collapse” doesn’t happen “at about the same time” in all 59 fields we are unlikely to see a steep decline in World output, as long as there is adequate demand for oil to keep oil prices at a level where it continues to be profitable to develop reserves.
If there is an economic collapse due to excessive debt, or some other reason (high oil prices maybe), then decline might be steeper, essentially this will depend on the extent of the economic downturn. That is difficult to predict.
Most supergiants have had water injection, either for pressure maintenance or in a designed water flood.
That’s what I would call secondary recovery, but I’m not too hung up on terms. Some of these giants have had what we can consider enhanced oil recovery. For example Daqing and the Prudhoe Sadlerochit.
I’m not aware of large scale EOR, or beyond water flood, being used in the Arabian peninsula, Iraq, Iran, etc.
However, it’s important to remember that, if a reservoir has been water flooded to a mature depletion phase, the enhanced recovery doesn’t lead to a much higher oil rate. These large fields require phased implementation, which means the total production rate sees a small bump and a slower decline. This means we can theoretically add reserves by approving a project, but there isn’t a significant change in rate. Smaller fields do respond better simply because the amount of drilling and equipment can be focused into a few years.
So what’s happened to Kashagan? I like to beat down on it because I stopped the company I worked for from joining that mega seismic survey the Kazakhs sold in the early 90’s. Maybe I need to remind them and ask for a bonus?
Denis – you are assuming a random distribution in how the fields operate, which is incorrect. The large fields are really of similar age and have been developed under exactly the same cost and technology environment and really quite similar political constraints. Why wouldn’t they behave the same? Whether they are in decline is less important for me than when they go into collapse (i.e the 6% + rate that Dittmar models or the 15% rate that Cantarell experienced), and the overall decline rate that Rabelius looks at is the important number. As Doug points out the horizontal drilling has been used in all of the fields to maintain production as high as possible and defer the collapse – it’s relatively easy to keep doing this economically in these really big fields onshore especially. I’d add one more point – once the OPEC countries that have cradle to grave social programs paid for by the oil are unable to meet minimum obligations then the is a high chance of social breakdown and sudden production drops of 50% and more like we have seen in Syria and Libya.
Hi George,
Every oil field is unique and most giant oil fields are already in decline as pointed out by AlexS and confirmed by Rune Likvern.
Why wouldn’t it be random? Also could you define “about the same time”? Do you mean within 3 years, 5, 15 ? My understanding is that all these giant fields did not start their decline “at about the same time”.
So predicting their “collapse” at about the same time does not make sense to me. Note that the fields were not all developed at “about the same time”, nor were they all discovered “at about the same time”, unless we consider 50 years to be our window of “about the same time.”
About half of World output is currently from giant oil fields. There are also about 1200 Gb (assuming only 200 Gb of extra heavy oil, with API Gravity of 10 or less) of 2P reserves that have yet to be developed. I will assume that as these reserves are developed the declines from smaller fields (that are not giant or supergiant fields) will be offset so that all of World decline will come from giant fields reaching “collapse” with an average collapse rate of 6.5%. We do not know the probability distribution so we should really use the maximum entropy probability distribution (see ET Jaynes), but for simplicity I will use a uniform probability distribution. Each year 2.5 Gb of World output transitions from plateau to a 6.5%/year decline starting in 2016 and ending in 2030.
Note that as currently most giant fields are already in decline, this scenario will be worse than reality where fields would transition from maybe 3% decline to 6.5% decline, or we could think of this as all fields transitioning from 3% decline to 9.5% decline.
Spreadsheet at link below:
https://drive.google.com/file/d/0B4nArV09d398V3hPOTNqWldMRHM/view?usp=sharing
Chart below. Note that this simple model is intended to show that catastrophic collapse in World C+C output is not very likely, I expect the shock model is a better representation of reality as the maximum entropy probability distribution is applied to the development process and uses a discovery model based on historic data and production data to estimate historic extraction rates from modelled producing reserves.
So what. Let this naked ape so-called economy be the shit that hits the fan. It’s less than worthless. Let the fan be a turbojet. Better still, I nominate wimbi to consult on which fan might produce the most awesome splatter the widest, furthest and hardest. wimbi? How about a turboprop? With every other blade twisted 180 degrees so that it is both pushing and pulling? So that maybe it generates chaotic vortexes as well?
Over here, there still continues the typical and overwhelming-majority one-person-per-car-driving. That’s one person driving around alone in their ‘fucken car’ to nowhere in their geography of nowhere. That’s our precious oil heritage made hundreds of millions of years ago going up in smoke to fuel such things as all those single rigged-gamed clown-suited naked apes dragging around all that metal, plastic and rubber to go to be pimped and parasitized at their rigged jobs that, for the most part, merely uphold a musical-chair elite-minority-based status-role-play game.
And some think we can do that with EV’s? How much time have we got?
So George, guys, when do you think these sinking-like-a-stone-production effects are going to really kick in and maybe even how and how hard or fast? 2018?
Cripes am I ever getting impatient.
Thank goodness, some logic in this thread. Where do these idiots think the minerals for these cars are coming from? What do you think will be powering the machines? What happens when we mine? These are simple questions.
Hi Joe,
The future will have self driving cars and people will hire a car through an “Uber like” service. Much fewer cars will be needed, for the most part cars spend about 85% of the time parked, so less parking space and less production of cars will be needed, car pools to work will be easier to arrange, so fewer cars with single riders. In more densely populated areas, light rail makes more sense, or electric busses. In suburbs and smaller cities, the EV self driving car model may be cheaper. A lot of mining can be done with electric equipment.
http://www.oemoffhighway.com/article/11224086/electrification-of-underground-mining-equipment
Hi Dennis,
I got the sense that Joe may have been, at least in part, speaking about the environmental and social costs of mining alone– never mind the lifecycle and associated costs, etc.– and calling into serious question the sanity of attempts at continuing on with that– to say nothing of essentially continuing on with a particular uneconomic and/or antisocial paradigm, such that this seems to infer, and such that you and others often seem to be suggesting here and elsewhere.
Exactly. The system is unsustainable in its entirety.
The minerals are going to be mined using battery excavators recharged from solar power.
This isn’t wishful thinking. It’s not even what I *want* to happen. This is just what’s going to happen.
Energy is going to be cheap. What will happen is that *food* will get much more expensive. We can’t convert energy into food magically — we don’t have the technology. We’ve disrupted the climate in a way which will reduce our food supply.
Honestly, do your homework, figure out what the actual disasters are going to be. Many people are looking at the wrong disasters!
Caelan, did you fail your drives test ? You sound like sour grapes.
Insofar as I sound like sour grapes to you, you sound pretty dense/thick to me.
But maybe you are simply stuck in your own can of mental grease. That’s a-okay! ^u^
To give my comment a little more topical body, I recommend, from the director of ‘Darwin’s Nightmare’, an excellent documentary film, about oil, slavery, environmental degradation and colonization in Africa, sweetly-titled;
We Come As Friends
And wrap it up with a music video (for your viewing/aural pleasure)…
Sour Times
“Damn this post was fun!”
You need to get out more often
Then let’s get out more often when and where we think it’s a good idea, like maybe out of our offices, cars, and away from our tv’s and while we’re at it, try to do things truly beneficial for ourselves and the planet. Rather than just greasing your monkey on POB.
Men who ejaculate often may have a lower risk of prostate cancer than their peers who don’t do it as frequently, a U.S. study suggests.
http://www.huffingtonpost.com/entry/ejaculation-frequency-could-have-serious-consequences-for-mens-health_us_571e557de4b0d0042da9e154
Active men don’t post- “Damn this post was fun!”
You need to see your doctor and get tested
My EV has an effective range of 80 miles and has twice the miles /KWh of the best ICE.
My Electric/Human hybrid bicycle has an effective range of 40 miles (If I was 10 years younger) and abour 25 TIMES the miles /KWh of my EV.
I’m sure an electric scooter could get a 60 miles range and 10 times the miles/KWh of my EV. We need to change our lifestyles, but peak oil in and of itself is not the end of civilization. (Climate change , and the other elements of the limits to growth will see to that instead).
All good remarks. I just don’t see any huge problem with decline of oil. In fact I see a huge NECESSITY to get off of it asap. After all, isn’t that what Paris was all about?
In my own little backyard in somewhat backward appalachia, I spend time with a local bunch thinking up non-fossil ways to get around. Nice that with an EV, any watt from anywhere will do just fine, not just wind/solar, but also things like my favorite at the moment, pyrolyzing biomass trash, running the gas thru a generator, and planting the carbon in the garden. Fun and profit.
I am slightly surprised to find that several local people have taken up exactly the same crusade, for exactly the same reason I did. Is it possible I ain’t all that unique after all?
Wimbi. Do any of your energy processes emit methane?
The gas from cooking wood has a little methane, mostly it’s H2 and CO. We burn that gas. The result, with excess air, is CO2. H2O, and NOX, which can be minimized as usual with EGR.
Of course, if you run the gas thru an evil ICE, you have all their problems. That’s why I am working on super simple steam and free piston stirling, esp. the stirling.
I do fart a lot.
wimbi, an EV is nowhere near, as you seem to indirectly suggest, a non-fossil way to get around.
Also, with regard to so-called ‘pyrolizing’, if the term is understood correctly, there are many people who are not going to get the kind of clean burning suggestive of it. Who knows if even you are.
I seem to recall going over something along this line with eric blair at The Oil Drum some years ago regarding the subject of ‘biochar’.
Soil needs living compost, and if we’re all going to get into a burn everything frenzy and on a mass scale, then we run the risk of exacerbating the very problems we are trying to ameliorate.
Incidentally, EV’s and biochar-making, like leftover restaurant cooking oil or ethanol to power cars or replace fossil oil, might look fine or promising at the outset, in particular contexts and/or in theory, until everyone and their dog start doing it and/or the contexts shift.
Yep. Biomass is actually a bottleneck and replacement of fossil fuel for driving (75% loss heat) is stupid IMHO. Biomass should be used as carbon netral feedstock for chemical industry or in some cases for providing heat at high temperatures in indsutrial processes.
An EV is, of course, a 100% non-fossil-fuel way to get around. Really. Geez, why do people make shit up?
It’s certainly not a *mining-free* way to get around, but *that is not the same thing*.
An EV is NOT a 100% non-fossil fuel way to ‘get around’ unless you want to decontextualize it, but that would seem misleading.
Thanks, Caelan.
Someone earlier brought up the problem of the delicacy of global supply chains in an era of nuclear bombs and cruise missiles, which is also valuable.
My question is: When will this thread start considering the problem of chemical feedstocks? When I ask doctor friends of mine to consider a 21st-century medical practice in the absence of plastic, they usually shrug their shoulders and say something to the effect of “a lot of people will die”. (This is ignoring agricultural chemicals, a shortage of which I think we can work around.) And, of course, a shortage of plastic for medical purposes is not the only problem here.
Having run for public office on a platform which encouraged the phase-out of plastic bags and listening to the resultant threats to my physical safety, I would not be optimistic about a simplistic re-routing of available material, either.
And I don’t want to consider “solutions” which reduce the arable land available to feed people, because the newly-starving will just pick up a gun and shoot you, reducing the efficacy of said “solution”.
Yes, I’ve been looking into the chemical feedstock issue.
I think we may end up having to mine them from landfills.
Plastics, chemicals, and lubricants all together are a tiny fraction of oil usage, barely enough to matter.
They’re a significantly larger fraction of natgas usage, unfortunately.
We can make plastics from biomass, but biomas is a limiting factor, so it’s not a good idea.
Hi George,
An excellent post !
All your six points are true (although point 5 needs clarification — you need stable oil price and diminishing reserves for this to happen; otherwise speculative forces will drive stock prices up in anticipation of higher oil prices).
So the main efforts now should be in oil conservation area and to start those we heed high (as in over $100 per barrel) oil price. And I think it is coming.
The main effects of this situation in the oil markets will be the spectacular bankruptcies of all the major oil companies.
Industries are already shifting away from oil as fast as possible. Don’t be the last.
This is the most significant article I have read on oil, ever. Thanks
I have no idea why the GAO report would be in this week’s news. It’s an excellent analysis, mind you, but it was published almost a decade ago. The article in the Republic of East Vancouver cites a release date on March 29th which is correct: March 29, 2007.
The GAO article (82 pgs) is here:
http://www.gao.gov/products/GAO-07-283
Hi all,
I use Jean Laherrere’s estimate for 2P reserves in 2010 in my models. His 2012 estimate for total cumulative C+C output plus 2P reserves, plus future discoveries was 2200 Gb of C+C less XH oil.
A Hubbert linearization of C+C less XH (oil sands in Canada and Venezuela) gives about 2500 Gb, and this type of estimate has grown over time (1800 Gb in 1998, 2000 Gb in 2004, 2200 Gb in 2013, and 2500 Gb today). The USGS estimates 3100 Gb for C+C less extra heavy, I use the average of their estimate and the HL estimate. Reserve estimates tend to increase over time, in the US the increase in 2P reserve estimates was 63% from 1980 to 2005.
Also in Jean Laherrere’s opinion it is 2P reserves that are more important rather than “proved” reserves. The best estimate is the F50 estimate.
Seriously Dennis. You think that because reserve estimates have grown in the past that that trend must continue? Isn’t that the infinite growth fallacy restated in different terms?
Hi Silicon Valley Observer,
The US fields are some of the oldest most extensively developed fields in the World, where the best technology has been applied. The fact that after 120 years (1860 to 1980) reserve growth over a 25 year period was still 63% is surprising. For the rest of the World where on average the oil fields were developed much later, I would expect the reserve growth may indeed be as great. Also note that I am not assuming infinite growth and I am in fact assuming a much lower yearly growth rate in reserves. My model assumes the 63% growth in World reserves happens over a period of 170 years rather than 25 years, and it assumes the URR is finite for C+C less extra heavy oil at 2800 Gb for my medium scenario.
If demand for oil falls as the World moves to alternative forms of transportation, reserve growth will cease, because the oil may no longer be needed.
I believe reserves growth was driven by an increase in oil prices. The size of “proven reserves” at $20/bbl is much smaller than at $100/bbl.
The fact that oil prices were capable of going way up, permanently, in the late 1970s without causing everyone to switch to alternatives — this is the oddity, historically. I speculate that is what cause the massive reserve growth. Oil written off as uneconomic — and so not listed as reserves originally — became economic with the higher prices.
In fact, I believe oil companies are still listing “proved reserves” on their books which cannot be economically extracted at $100/bbl. This is just a way of inflating reported reserves. Much of the reserves currently listed will never be drilled, thank goodness.
Hi Rick,
Yes you are correct, that is an old report.
http://www.resilience.org/stories/2007-03-29/coverage-gao-peak-oil-report
This post serves to show that one do not have to be a professional expert to analyze oil. All the data is there for those who takes the time to do it. Anyone can crunch the numbers. It is no secret, those who are wrong… want to be.
This is a comment from one of those that invested in oil (individual wells, small cap and large cap Oil Cos.)
The cheap money made for easy development of oil projects that were not very profitable. As WTI price fell, many of these companies have had to face the music. Sandridge Energy, once worth $7 per share, now worth $0.10 per share and 3 billion $$ of shareholders equity wiped out as Sandridge prepares for bankruptcy.
Other companies that have drilled have found small amount of oil, but at $30 to $40 per barrel they would produce at a loss and the wells are abandoned. Look what has happened to Bakken formation, 85% of drillers out of business and many bankrupt. Other companies that could not borrow money but have drilling prospects that are economical just can’t raise any money through private offerings. So they have given up, even when the prospect may be profitable at $40 per barrel and us shareholders take another loss.
End result is a long downturn in US and world oil production. Many of us that invested heavily in oil are saying never again.
“Sandridge Energy, once worth $7 per share, now worth $0.10 per share and 3 billion $$ of shareholders equity wiped out as Sandridge prepares for bankruptcy.”
Admittedly, long term charts are hard to come by when a company goes from the NYSE to the OTC Bulletin Board, but Sandridge once traded as high as $65.
I bailed out of 80 years of my family’s oil-stock investments in 2008. It was the right time.
The future is solar. It’s hard to see *which* solar companies will survive, bu the industry as a whole is guaranteed to boom.
Given that proved reserves are largely a function of price it is inevitable that reserves would significantly drop as price dropped. The only reasons proved reserves have grown over the last ten years when very few new discoveries have been made has been refined drilling techniques (fracking) and high prices.
Andrew, although proven reserves are reserves that must be “economically recoverable” and that would change somewhat if the price of oil changes drastically, you will find that no oil company or nation changes their reserves up or down with the price of oil. It is assumed that what is economically recoverable will average out as the oil price moves up and down over the years.
So no, proven reserves are not largely a function of the price of oil as you put it. Proven reserves should decline as the oil is extracted and only about one fourth of the extracted oil is replaced with new discoveries. But neither nations nor oil companies change their stated proven reserves in response to the changes in the price of oil.
Publically traded oil companies are obliged to change the value of their proven reserves up or down according to the price of oil however, but not the amount in barrels.
Ron: SEC rules do require reserve changes as oil prices change. This is reflected in the standard measure forms. However, we can change opex and do have other considerations….for example, when prices drop we cover the required reserve drop with performance increases (if we can back it up). It’s all done in a back office ceremony we do while wearing black robes and golden masks. So I can’t discuss it any more.
Well, looking at this chart I think it would be difficult to make the argument that proven reserves are largely a function of the price of oil.
Crude Oil Proved Reserves (Billion Barrels),
Ron. Reserves calculated per SEC guidelines definitely are affected by oil prices, although as Fernando seems to imply, especially when there has been such a large crash in price, some magic is performed.
As for OPEC reserves, I have no clue how those are arrived at, same as I seriously doubt Kuwait is producing almost 3 million BOPD from less than 2,000 oil wells, especially as the major field, Burgan, had first production 70 years ago.
I would note your chart ends in 2014. The average oil price in 2014 was about $95 WTI.
As Warren Buffet is fond of saying, it’s only when the tide goes out that you find out who’s been swimming naked. It should be obvious to anyone that countries with static reserve numbers are not being truthful. But there is a willingness among analysts and news providers to accept the published numbers. What else can they do? They can’t make up their own numbers or rely on guesses from gadfly oil watchers. When production from these coutries starts going into steady decline, the truth will be known.
Venezuela Orinoco Belt accounted for 68% of the increase in the
world proved oil reserves between 2005-14, according to BP’s estimate.
This is entirely due to higher oil prices.
Interestingly, according to BP’s estimate, Canada’ oil reserves actually declined in the past 10 years.
World proved oil reserves (billion barrels)
source: BP Statistical Review of World Energy 2015
Venezuela’s oil reserves increased due to bullshit. The bulk of those reserves were estimated using an arbitrary 20 % recovery factor, which can’t be achieved under their current tax regime and existing technology and costs. The consultants who signed those figures should be put on a plank and pushed overboard.
The recovery factor under the current regime is closer to 5 %. We also have a serious issue which many consultants don’t grasp: the oil sands in some sectors aren’t able to hold a SAGD steam chamber in place, plus we are seeing a lot of water influx via what will become steam thief zones.
I have some tricks I think I can use (spent years modeling different alternatives and paying for lab work). But I can’t disclose it.
Hi Ron,
Using EIA data and subtracting Canadian oil sands and Orinoco Belt reserves from the World total, I was able to get a “conventional” reserve estimate (excluding only extra heavy oil). I further refined this by assuming that Russian and OPEC “proved” reserves are actually 2P reserves and inflated the non Russian non OPEC reserves by 60% to estimate 2P reserves for the World. I did this only from 1990 to 2014 to avoid the OPEC reserve “increases” in the 1980 to 1990 period, I believe OPEC nations started calling 2P reserves “proved reserves” over this period, because in a few year period OPEC reserves increased by about 60% (1987-1990).
The correlation between the trailing 3 year average real oil price (2005$) and World 2P reserves is fairly good over the 1990 to 2014 period and even better from 1995 to 2014.
If we plot World 2P reserves (excluding extra heavy oil reserves) on the vertical axis against the trailing 3 year average real oil price in 2005$ on the horizontal axis, the R squared is about 94% for 1995 to 2014 data.
Ron, those EIA reserves aren’t estimated using SEC rules. To be honest, I think SEC rules are outdated and suck anyway. But they do include oil price because there’s a requirement to meet economic limits.
I’m not gong into the trade secrets we use to soften impact, but as you can imagine if economic limit is one parameter, then it has to be reworked. This is why the drop in costs we see when the industry goes belly up is such a key item.
Ron: when oil prices hit new highs, the oil producers *add* lots of reported reserves — stuff which was *never* considered economical to extract before, so they couldn’t report it.
When oil prices drop again, they never *remove* those reserves from the list. The rule seems to be “if it was ever profitably extractable at some point in the past, we list it”.
The result of this is that reserves are massively overstated. Much of the reserves reported are not economical at current or future prices and will never be drilled (thank goodness).
Something to watch:
“Crude power: The oil game uncovered”
http://www.aljazeera.com/programmes/countingthecost/2016/04/crude-power-oil-game-uncovered-160424061941330.html
Compare with Pepe Escobar views at http://www.informationclearinghouse.info/article44510.htm
From your article:
“As the source close to Riyadh advances, “the real nuclear option for the Saudis would be to cooperate with Russia in a new alliance to cut back oil production 20% for all of OPEC, in the process raising the oil price to $200.00 a barrel to make up for lost revenue, forced on them by the United States.” This is what the West fear like the plague. And this is what the perennial vassal, the House of Saud, will never have the balls to pull off. ”
He sounds like he works for Pravda.
Greenbub,
He sounds like he works for Pravda.
That’s silly. He is definitely a leftee, but, in case you do not know, Pravda no longer exists.
And that does not disqualifies him any more then Bloomberg shilling for Saudi and all other disingenuous “low oil price forever” MSM. We should be able to filter out outright propaganda, aren’t we?
I am more interested in new facts that he reports and which might well be true, like
So, if true, it looks like somebody played young gambler prince card again to prevent/slow down the process of normalization of oil prices.
That makes it more difficult to deny that the collapse of oil prices was not, at least in part, an engineered event.
Are they shilling if it’s true?
“Crude oil dropped 1.3 percent to $43.18 a barrel in New York. Saudi Arabian Oil Co. will complete an expansion of its Shaybah oilfield by the end of May, allowing the world’s largest exporter to maintain total capacity at 12 million barrels a day, according to two people with knowledge of the plan. Iran has increased output by 1 million barrels a day since sanctions were lifted in January, Shana reported, citing Oil Minister Bijan Namdar Zanganeh.”
Why do you call it “normalization” of oil prices?
I carefully went through the price of *substitutes*. Oil prices above roughly $40/bbl can’t be sustained once electric cars hit the market because electric cars are cheaper.
“Crude power: The oil game uncovered” Uber Chaos? , also linked from there: History from anther view> Series on the Seven Sisters
http://www.aljazeera.com/programmes/specialseries/2013/04/201344105231487582.html
This is the sort of news I’ve been expecting for quite a while. You’ve returned from a short absence with quite a splash, Ron!
I wonder if it will make any great impact in the MSM – cornucopians of various flavours will present arguments to push a) its invalidity and b) the accelerating electrical revolution, I do not doubt. It all makes for excellent reading. A big thank you.
Yeah, the accelerating electrical revolution is definitely happening. And we do have a cornucopia of solar power.
(We’re still going to face mass starvation thanks to global warming disrupting the land and ocean food chains. So I’m not exactly a cornucopian. But energy ain’t gonna be the problem. We can’t eat electricity.)
Jean Laherrere’s graph is particularly interesting.
Anyone familiar with Hubbert’s full statistical analysis knows that the peak of proved reserves roughly corresponds to the same point in time when the production curve crosses the discovery curve (also backdated), which is roughly the halfway point between the peaks of the discovery and production curves.
Jean Laherrere’s graph confirms that inflection point happened around 1980, roughly 20 years after the peak in discoveries. This puts a 40 year lag between the peak in discoveries and the peak in production, the latter being scheduled for about the year 2000.
All of which is perfectly consistent with Hubbert’s 1972 Congressional analysis of global discoveries and production which he put at about 2 trillion bbl URR and a production peak of about 40 Gb per year in 1995 or thereabouts.
What happened, you may ask, to the production peak? The years 1995 and 2000 have come and gone. Simple, the global geopolitics of oil. The Arab oil embargo and Iranian revolution of the 70’s but a huge crimp in the global production curve and pushed a significant portion of the area under the curve into the future by a decade or two.
http://peakoilbarrel.com/wp-content/uploads/2015/02/Laherrere-1.jpg
In Jean Laherrere’s world discoveries and production graph above you can clearly see the inflection point in 1980, before which the world was clearly on the “ideal” Hubbert curve that would have reached 40 Gb per year in 2000. After 1980 the reality of the geopolitics of oil and energy set in and constrained global production which visibly flattened out the curve.
Something which Hubbert himself fully acknowledged could happen, both in his analysis and in subsequent interviews.
We are now at the peak of that much broader and flatter curve (which has been frequently mis-characterized as an “undulating plateau”) with conventional global annual production well below 40 Gb and looking very much like it is finally on its way down. This despite the giant pump and dump scheme otherwise known as the “shale revolution”.
Nice analysis. Thanks.
Remember that production and consumption have to roughly match (accounting for availability of storage).
The drop in production is being *led* by a drop in consumption. That drop in consumption will be accelerating as electric cars are mass produced in the next few years.
It would seem that maybe one of Dennis’ earlier projections may be correct.
http://peakoilbarrel.com/oil-shock-model-dispersive-discovery-simplified/
Hi Silicon Valley Observer,
That post used on Jean Laherrere’s estimate of 2200 Gb for C+C less extra heavy oil.
That estimate is too low, based on a Hubbert linearization (HL) it should be at least 2500 Gb, I take the average of the HL and USGS (3100 Gb) estimate for C+C less extra heavy (XH) oil for a medium scenario with a C+C less XH URR of 2800 Gb.
https://pubs.er.usgs.gov/publication/sir20155091
http://pubs.usgs.gov/fs/2012/3042/
and Using EIA 2011 conventional oil reserve estimate of 1284 Gb and cumulative production of 1157 Gb through Dec 2011 with the 0.565 Gb estimate of undiscovered conventional oil and 665 Gb of reserve growth we get 3100 Gb. Note that non-OPEC proven reserves (290 Gb) were multiplied by 1.4 to get an estimate of non-OPEC 2P reserves (406 Gb).
HL for World C+C less XH shown below. Horizontal axis is cumulative output in Gb and vertical axis is annual production divided by cumulative production.
“Strange new economic phenomena will kick in the moment oil production peaks, turning normal national finance ministry policies on their heads”
Yeah, the China Supernova is certainly “normal” alright. Therefore, by that definition peak conventional oil already has occured.
Supernova: a [financial ponzi] star that suddenly increases greatly in brightness because of a catastrophic explosion [Peak Oil] that ejects most of its mass.
For those of you who believe we can manufacture our way out of future problems (isn’t that what the transition to electric vehicles is?) please watch Manufactured Landscapes (it’s on hulu). Since the U.S. offshored all its manufacturing we’ve forgotten what what destruction accompanies everything that is made. It’s not in our back yard anymore. Even if we have the oil to feed the machine, will we be able to live on the planet we are creating?
Peak oil is only one of the crises we will face in the future — over population and climate change being the other two biggies. Any one of them is enough to do us in and I don’t see technology saving us from all three. I only wish I were as well prepared as OFM.
Luckily, Elon Musk is working on each of those!
He’s a co-founder of Solar City which is currently building the largest PV factory in the world in Buffalo, NY.
His company Tesla is building the world’s largest building by foot print to not just build batteries, but to build more batteries, in that one factory, than the current entire global supply (and the process will be entirely powered by PV).
He plans on shipping people to Mars with SpaceX. In the meantime he’s already brought the cost of space flight per kg down by 70%… and he hasn’t even started re-launching rockets yet, which will get the cost down another 100x.
We’re likely still totally screwed because we waited so damn long to start, but there is at least one insanely productive person working on all of these things at once.
Believe, if you can. To some extent I envy that.
“Believe, if you can. To some extent I envy that.”
There is a lot to be said for with believing there is hope, in any situation. There’s this thing we refer to as “morale”, and without it………….
Personally I believe that most of our kind will meet a hard end before this century is out, due to our being deep into overshoot.
And as far as the survivors go, business as usual , life as we know it today, will mostly be a dim memory, but some who make it thru the bottleneck won’t have to revert all the way back to a muscle powered economic system.
Compared to most people, I AM well positioned.
But the odds are that none of my skills or resources will matter very much, because the odds are probably at twenty to one that old age will get me before the shit is well and truly in the fan, here in the Land o’ the Free.
As far as this country, the USA, goes there is an excellent possibility that if we can avoid WWIII, etc, this country will continue to have a functioning grid, working water and sewer systems, and stores with food in them.
Life in this country MAY still be reasonably dignified and safe, assuming we are lucky with our leadership.
If we want to see Grandma, we will just have to make sure she lives nearby.
Chicken drumsticks will be the new ribeye.
Jobs dependent on cheap energy and other cheap resources will disappear by the millions, and the people who hold them will have to be supported on welfare, some permanently, some until they can learn to support themselves in the new economy.
But most of them aren’t doing anything really useful now anyway. We might as well be supporting dog groomers on welfare, in terms of what they actually contribute to the economy.The dogs don’t know the difference and even if they did they would prefer to be left alone rather than dressed in ribbons.
Such people will be more useful to society as newly minted carpenters helpers, learning to install new windows and doors and insulated siding.
Some jobs will come back. We will quit throwing away good boots that need new soles.
Personal servant will be a hot new field.
I am ACCEPTING applications from all hot young blossoms who are interested the position ” live in companion to dirty old man”, lol.
Finding one who won’t poison me to get early possession worries me somewhat. 🙁
I would love a thread devoted to all our personal views of where we will be in the year 2030. I think we would see quite a range of opinions. But, as always OFM, your view makes sense. I think you are one of the few posters on here who is connected to the real world outside the metro areas. I come from that world and still have contact with it and see the rot and decay of once proud communities. In my view, it’s a portal into the future.
Silicon Valley Observer,
“I would love a thread devoted to all our personal views of where we will be in the year 2030”
That’s a really good idea. There’s so many aspects to consider here, and everyone here is so knowledgeable and generally reasonable that, at the very least, I feel I’d walk away having learned very much.
It would serve to keep these inevitable “what happens next” type discussions in a non-oil/gas thread as well, which worked very well last time.
Dennis? Ron? How does everyone feel about this?
2030. Interesting question.
— Burning oil for power is basically banned worldwide, with exceptions for limited niche areas such as chemical feedstocks and airplanes.
— Same with coal.
— World governments are working on replacing natgas.
— Food prices have gone way up and are a much larger portion of everyone’s budget.
— There are major famine and refugee crises worldwide.
— However, the Middle East has settled down; having ended leaded gasoline in 2008, they start becoming more peaceful around 2026.
— Solar panels are everywhere, and I mean everywhere.
— Every industrial process and all heating and cooling and all of transportation is transitioning to electric, with the exception of airplanes. The process of electrifying the railways and ships is in progress though not finished; cars are almost entirely electric already.
— There’s been at least one more nasty nuclear disaster poisoning a large area.
— All the major oil and gas companies have declared bankruptcy.
— Several major world governments have been overthrown by upset citizens — with the support of army members, a lot like the way the USSR collapsed.
SVO,
That comment was a bit tongue-in-cheek.
I thought it would be a good way of comparing the scale of our problems – (overpopulation, climate change, and our financial and economic systems need for never ending exponential growth) – to the amount of effort we’re putting into tackling those problems. When you have to continuously refer to 1 person’s efforts out of 7.3 billion it does not bode well for the perspective that we are anywhere near turning this ship around.
Referring to colonizing Mars as a solution to overpopulation was suppose to be a reveal of intense sarcasm, but, then again, as ridiculous as that is, I hear far less informed opinions from the average person on a daily basis. I suppose I shouldn’t be surprised it was taken seriously.
We’re infinitely more prepared than we were in 2008, but we’re also still infinitely far away from proclaiming “Mission Accomplished”.
Understood. But are we infinitely more prepared today? When I drive down the highway and see brand new SUVs and large pickups I have to wonder. No, I think we as a society is not anywhere close to being better prepared than we were ten years ago. Silicon Valley and maybe a few other places might be small exceptions, but not really.
Today compared to 10 years ago, that new pickup truck is make out of aluminum. EV’s are available at your local dealership and we know that at $80 per barrel oil can flood the marketplace for years. Tomorrow you will be able to buy an EV with 200 mile range at an affordable price.
Change is staring you in the face
Hi XT5,
I agree there has been a lot of change, but disagree on $80/b flooding the market for “years”, first it was $100/b or more that caused the excess supply, and second $80/b might allow enough supply to meet market demand, this will depend both on economic growth and how quickly the cost of EVs falls. Tony Seba believes that by 2022 a 200 mile range EV will sell for about 33k, which is the same as the current US market average light vehicle. If he is correct, oil demand may fall pretty quickly and your $80/b estimate may indeed be enough to flood the market relative to demand for oil.
I am seen as very optimistic by many people who read this blog, but I think Tony Seba may be too optimistic, I expect a 30k EV that has about 200 miles of range around 2030 (no subsidies). By 2035, they may be down to 25k in 2015$.
The Tesla Model 3 (an EV with over 200 miles range) will start at $35,000 before subsidies. It will be released in 2017 and has ~400,000 paid reservations.
The Chevy Bolt will be released THIS YEAR, and also has over 200 miles of range with just above a $35,000 price.
This is all happening far faster than many here may be aware of.
The primary issue is that producing millions of these EVs will take many, many more years.
Brian is correct. Furthermore, Tesla was already specifically gearing its factory to produce 500,000 cars a year. After getting 400,000 paid reservations, they are changing production planning to *increase* that.
Every other carmaker was planning much lower volumes, but the reaction to the Model 3 reservagtions means that they are going to try to produce competitive volumes ASAP. They will be albe to do so circa 2019-2020.
Hi Dennis,
I lowered the number to 80 for basically two reasons.
First, I think our economy is becoming energy efficient at a 2% plus rate per year. The price of EV’s isn’t going to make any difference. The manufactures have to increase fuel economy by about 40% by 2025. I expect efficiency to pretty much offset growth.
Second, there are a couple of big OPEC members who would like to increase production. Also, $80 would put the US shale back in play with another 2 mbd on the market in reasonable time.
We now know how large of surplus $100 has given us.
Hi XT5,
Can you define “for years”. Let’s assume oil intensity (Oil used per unit of real GDP produced worldwide) falls by 2% per year (I think this may be optimistic, but let’s go with it.)
Let’s also assume World real GDP grows by 2.5% per year on average.
In that case we have a problem unless we assume peak oil will never arrive.
I think the most realistic scenario is either flat output at about 80 Mb/d until 2025, or possibly a small rise in output of 2 Mb/d over the next 10 years (about 0.25%/year increase in output on average over 10 years).
So the 0.5% rise in demand will not be met by a 0.25% rise in output over the next 10 years and after that output falls (gradually).
I agree the transition will happen, but oil prices will be higher than $80/b after 2018, and the transition may not be as smooth and easy as some would like to believe. Not impossible, or even unlikely, just difficult for the economy to adjust to the rapid changes needed.
“Can you define “for years”. ”
I would like to define my statement “for years” to mean 5. Just to many variables trying to project much further. But it wouldn’t surprise me if the price maintained a 70 to 80 range 5 to 10 years from now.
I think most the posters here under estimate conservation and efficiency in the economy. I agree with you and don’t think the world has peaked yet, but gains from this point moving forward are going to be small. I believe the lack of demand is going to be the reason behind peak, not the inability of production and the Saudi’s realized this a year and half ago.
Hi XT5,
Well note that my preferred scenario is relatively flat output from here forward.
If oil intensity decreases by only 2%, then World GDP growth will also be limited to 2%, and in that case prices might remain under $80/b for 5 years, I think in about 3 years higher prices will be needed just to maintain current output, if not then growth will need to slow or oil intensity will need to increase faster than 2%/year. It may be higher oil prices that help to accomplish this, I think we will see $100/b by 2020 and after 5 years, maybe demand for oil might fall as EVs ramp up and then oil prices would return to $80/b or lower, possibly by 2030. We might then see both demand and supply decline together at some equilibrium price close to the production costs of the lowest cost producers (Middle East and Russia).
Hi Dennis,
You may very well be right. I don’t think our views are that much different and I find myself agreeing with most of your posts in general. I think the tech part of the economy can grow without an increase in oil production or an increase in costs. Which would lead to an increase in quality of life without showing up in GDP.
Example- flat screen TV’s, they get better and bigger. But, don’t really cost any more than 50 years ago.
Cheers
Hi XT5,
There is no need for GDP growth in the OECD, but the developed World needs to grow its GDP. Basically we need to continue the 1.4% real GDP per capita growth of the past 45 years. As population peaks in 2050 (hopefully) due to a Worldwide demographic transition, growth can slow to 1.4% and then start to approach zero as population declines, when population decline reaches 1.4%, overall real GDP growth can become zero (assuming the 1.4% real GDP growth per capita is maintained, this could approach zero as needs become satisfied and products improve. I am thinking 200 years in the future, if all goes well.
Dennis, I’m predicting the exact opposite — I’m with XT5. I think the demand destruction from the arrival of electric cars (which are cheaper to operate than gas cars even at $30/bbl) will cause oil consumption, and as a result oil production, to *drop* every year starting in 2018, leading to extremely *low* prices. But very little oil production is profitable at such low prices since we already used the cheap oil back in the 1950s…
I think this will cause the bankruptcies of the major oil companies.
The disruption in the world economy will be massive. Millions will be laid off.
Gas stations will also close, making it harder and harder for those stuck with a gas car to find fuel. The situation will be very disruptive.
Oil wells will be shut down as the price stays low. This will combine with the end of fracking to raise natgas prices above the threshhold; solar will replace natgas in electricity production during the day, and people will start trying to replace their natgas heating with electric. Again, very disruptive. Those stuck with natgas will be paying lots of money and getting poorer.
Nathanael, you lost me right after you wrote “I’m with XT5.”
The survivors of the population crash will be living on 100% renewable energy.
When the old grandparents talk about gasoline, their grandchildren will look at them incredulously as if they were insane.
How much will he charge for sending Nicolás Maduro to Mars with a one way ticket?
Hi Silicon Valley Observer,
World population may peak in 2050 (if the low fertility UN scenario proves accurate), I agree this is a problem, but it may be solved with voluntary free education, especially for girls. Generally, educated women have fewer children.
http://newint.org/blog/2014/07/08/education-women-fertility/
http://www.earth-policy.org/data_highlights/2011/highlights13
There’s a point when it becomes obvious how futile it is to refute things that are obviously not going to happen. Voluntary free education, especially for girls? In those countries where population growth is the highest, poverty is growing, government’s are stretched thin and, frankly, don’t give a shit about educating girls?
We are well into overshoot. Any additional population just puts us further down that road.
Hi SVO,
In India, improved education of women in the early 1970s resulted in voluntary fertility declines in the Indian state of Kerala. Kerala had a population density three times the average Indian state, but the state government invested in universal education and provided greater access to family planning and, by 1989, the fertility rates there had fallen to the second lowest in the country.
– See more at: http://newint.org/blog/2014/07/08/education-women-fertility/#sthash.ONiBfp2T.dpuf
Why do you think this cannot happen in other nations? Better policies can result in better outcomes.
As I mentioned before, for the World total fertility ratios(TFR) were cut in half from 5 births per woman to 2.5 births per woman in from 1965 to 2010.
There are only a handful of very high TFR nations, a focused effort on improving economic outcomes through better policy and better education for all children, and better access to modern birth control would bring many benefits in those nations.
There is no reason it cannot be done.
Re overstated reserves and reference to Husseini in Jean Laherrere’s reserve graph above
I handed over to then Australian Prime Minister Rudd a graph from Husseini showing that reserves have been inflated by 300 Gb resources
16/4/2010
Community Cabinet Meeting with Prime Minister Rudd
http://crudeoilpeak.info/community-cabinet-meeting-in-epping-with-pm-kevin-rudd
There is speculation that Saudi Arabia wants to kill US shale oil by producing more oil than necessary. Well, if Saudi Arabia really had 260 Gb of cheap oil then why are they not producing those 12 mb/d +, planned many years ago,
http://www.crudeoilpeak.com/wp-content/uploads/2011/04/Saleri_Company_Plans_2007_CERA_Week.jpg
to speed up the agonizingly slow demise of US shale oil?
Not able to reply here often.
1. Re above speculating on supergiants dying at the same time — no reason they would not, in fact it’s more likely than not because you can drill and produce at any rate you want right up to EMPTY. But that won’t be wanted, and it likely won’t be wanted all at once by all of them. It’s not a global resource. It’s a national resource and it will be used to inflict damage on enemies, with denial an obvious universal strategy.
2. Previous thread said Alaska was flowing condensate — defined as liquid like kerosene. Don’t think so. Kerosene is middle distillate.
3. No one has any idea what global reserves total.
PXD is the first LTO company to report earnings, after the bell today.
Estimate is a loss of ($.73) per share. And they are among the best.
EOG is projected to have a similar loss.
BP reporting tomorrow – expected to show operating loss.
Pxd numbers are out now obviously and the presentation looks very rosy. What are your opinions on it?
shallow sand,
PXD loss stands at 408 mill (four times higher than last year) for Q1 before a tax benefit of 141 mill. Actual loss after tax is 267 mill or 1.65 per share. Most of the loss comes from depreciation and impairments.
Although assets are over 17 bn, assets after depreciation (7bn) grew barely over last year. In my opinion herein lies the fallacy of PXD as it is treated like an internet company (future growth and higher asset base, albeit huge current losses), yet it does not grow its asset base despite a free cash flow of USD – 10 per share. To me this is a money evaporating machine par excellence.
The only hope is that oil prices might recover very swiftly and PXD can benefit from the upswing. Yet this hope might evaporate as well over the course of the year as OPEC can live for quite a long time with oil at USD 45 per barrel.
http://oilpro.com/post/24017/no-urgency-to-freeze-production-45bbl-indonesia-opec-governor-say
From Bloomberg today – Saudi Prince values Aramco over 2-trillion:
http://www.bloomberg.com/news/articles/2016-04-25/saudi-prince-says-aramco-valuation-seen-at-above-2-trillion
Is this thing really going to go forward? If it does, it will have to be some kind of private offering since I don’t think they will meet the disclosure requirements of major stock exchanges. KSA is building a great cover story — that they are selling part of of Aramco as a way of getting off their dependency on oil. Give me a break. If they could continue to rely on oil to supply their needs they would. I think it’s an attempt to sell the pig while the lipstick is still fresh. In fact, the urgency with which they are moving forward with this makes me suspect that the insiders see trouble ahead and want to cash in before it hits. Am I jaded?
What will they do with the money if they do sell? Probably the same the Chinese are doing — buy up American companies and farm land. The U.S.A. is the prettiest girl at the dance when it comes to getting money out of other countries and she is more than willing to accommodate wealthy suitors.
As I said in this post http://peakoilbarrel.com/opec-update-4/#comment-567140
only a small part of Aramco will be sold, Aramco itself will remain a 100%-state owned parent holding company, its publicly traded subsidiaries will be listed on the local exchange.
So don’t expect a western audit of KSA’s oil reserves.
from Reuters:
Less than 5 percent of Saudi Aramco to be sold
Mon Apr 25, 2016
http://www.reuters.com/article/us-saudi-plan-aramco-idUSKCN0XM16M
Saudi Arabia plans to sell less than 5 percent of its state oil company Saudi Aramco [SDABO.UL] through an initial public offering (IPO), Deputy Crown Prince Mohammed bin Salman said on Monday.
He said in a television interview he expected Aramco, the world’s biggest energy company, to be valued at more than $2 trillion and that he wanted it to be transformed into a holding company with an elected board.
Subsidiaries of the company would also be sold by IPO, as part of a privatization drive and to bring more transparency to the oil giant, Prince Mohammed said.
………………………
“Less than 5 percent from the parent company … we are trying to separate it and make Aramco a holding company,” Prince Mohammed said.
The listing of Aramco would be on the Saudi stock market, he said, adding that one idea being studied was to set up a fund in the U.S. market which would buy shares in Aramco to help bring liquidity.
It is not clear which of Aramco’s ventures might be involved in a sale but the range of candidates is wide. Aramco and its subsidiaries own or have an equity interest in more than 5 million barrels per day of refining capacity.
So don’t expect a western audit of KSA’s oil reserves.
Not only reserves. There are other skeletons in the closet.
In no way information how revenue of Aramco are distributed can became public, courtesy of young reckless prince who wants to be Margaret Thatcher of Saudi Arabia and privatize Aramco (there is not much more in KAS then Aramco in any case).
There are 7000 other princes, with their well-being possibly affected, and that spells trouble for his intentions. They probably have other ideas on how to proceed.
Silicon Valley Observer: I believe that Saudi Arabia’s princes, or at least some of them, see the handwriting on the wall and they are attempting to sell Aramco while there are still suckers who will buy it.
They may already be too late.
But they definitely are trying to liquidate the oil interests so that they can put their wealth elsewhere.
The place most doomer types go wrong in their thinking is in failing to consider that the day the shit will hit the fan hard and fast is very likely still some time off. My personal guess is that business as usual, life as we know it today, will continue in most well developed countries for at least another ten to twenty years, barring outright hot war and that sort of disruption.
If Dennis is right, and I hope he is, we have another few years when oil production is still on a plateau, while renewable tech is still moving fast, in terms of both capabilities and deployment.
If the decline in oil production is relatively flat and gentle once we come off the plateau, then by then electrified automobiles and light trucks, higher energy efficiency standards right across the board, and changing lifestyles will enable us to live with the decline for a few more years.
Technology really can work miracles sometimes, for instance in organizing the flow of traffic on a rail road, so that trains can be made up and broken down quickly and efficiently, and car loads get where they need to be in a timely fashion.
And while it seems so unlikely NOW, people WILL take control of local town and city governments from the entrenched interests that control local politics today, and rewrite local zoning regulations so as to make it possible to live without driving EVERYWHERE.
The very hottest local real estate market I ever experienced PERSONALLY was the gentrification of the old FAN DISTRICT in Richmond, Va. It was made possible in large part by the fact that there were plenty of old businesses in that neighborhood in times past, and so it was much EASIER to reopen them than it would have been otherwise. The people who moved in worked together to get enough political clout to make it possible to convert large old townhouses into TWO or THREE or FOUR apartments, and old stores and offices into restaurants and bars, etc.
Property values shot up by a factor of twenty five to fifty over a period of less than twenty years, and are still going up. Yankees move there to get away from yankee winters while still enjoying the walking city lifestyle.
Eventually we will start BUILDING new communities this way.
The price of one nice new car, a top of the line Chevrolet, added to the cost of building new, is enough to make a new house pretty close to a zero net energy house. Ten years from now, with the tech and techniques getting to be better known, and cheaper, it will probably be ENOUGH.
I don’t usually defend rich people, but every TESLA S and X on the road means a tiny bit cheaper gasoline for people like me.
The place most doomer types go wrong in their thinking is in failing to consider that the day the shit will hit the fan hard and fast is very likely still some time off. My personal guess is that business as usual, life as we know it today, will continue in most well developed countries for at least another ten to twenty years, barring outright hot war and that sort of disruption.
Ten to twenty years? Are you kidding me? I know of no one who expects the collapse in the next ten years and damn few thinks it will be within the next twenty years. I have stated, on many occasions, that I expect it to happen within the next fifty years.
And you call me a doomer type? What the hell does that make you?
Edit: Of course the slow collapse has already started. Venezuela for instance, and Somalia, and the environment has already started to collapse. But I am speaking of the big collapse, when globalization collapses and the big die-off begins. That is at least two decades away…. I think. Of course I could be wrong.
Hi Ron,
There are some that seem to think that oil output will “collapse” in the near term (10% decline or more within the next 5 years) and that things will get bad very fast.
If I thought that scenario was a likely outcome, I would be very concerned. There are many long term problems that need to be addressed, I think based on the progress in the World’s Total Fertility level from 1965 to 2010, where the average level fell from 5 to 2.5 births per woman, that the UN’s low fertility scenario is the most probable scenario and that population will peak by 2050 and be back to under 7 billion by 2100 and will continue to decrease from there. That may not be enough by itself, but coupled with better environmental policy, it may help to avoid the long term collapse you foresee. Transition to solar and wind will also help, along with EVs.
It has taken just 100 years for the world’s population to quadruple from 1.65 billion to today’s nearly 7 billion. A (perhaps the) key factor for this is that life expectancy is rising as birth rates are falling; since 1950, worldwide average life expectancy at birth has increased from 45.4 to 68.2 year: therein lies the problem (dare I say it?). Educating women isn’t really going to solve anything. In any case, our planet cannot handle 7 billion people much less 8, 9 or 10, so let’s stop pretending lower fertility rates are a meaningful panacea. Apologies if this is an off oil topic rant.
Hi Doug,
No not a panacea, it is a pretty simple concept, when the total fertility ratio falls to 2.1 births per woman population or lower population peaks and declines. Do you think that will make things worse or better?
The lower TFR goes, the faster population declines. Both my family and my wife’s have a total of 11 children, so an average TFR of 5.5. In the next generation there are only 6 grandchildren, so in a single generation the TFR has fallen to 0.54 births per woman. Clearly the sample is too small to have any meaning, but mathematically a drop in the World TFR from 2.5 (2010 level) to 1.25 in 2055 (same rate of decrease as 1965 to 2010) will lead to dramatically lower population by 2150, possibly about 4 to 5 billion. Not a panacea, just a step in the proper direction.
My point is that while birthrates aren’t up, longevity is. For example, it’s claimed by 2050, the 60+ population will rise from 10.7% to 22% of people on the planet. Studies indicate increase in life expectancy leads to a significant increase in population and birth rates do not decline sufficiently to compensate for the increase in life expectancy.
Hi Doug,
Yes life expectency has increased. The model accounts for increased life expectancy and assumes the World average will level off at an average of 90. You do see the logic that under reasonable assumptions (such as life expectancy does not increase to infinity) that any TFR less than 2 will result in an eventual fall in population. There are many nations in the World where this is already true.
Except for the last few months of their lives, old folks don’t NECESSARILY consume a whole lot of resources, compared to younger folks.
They already have houses, appliances, cars, grown up children, etc.
And they do DIE. I hear about a boomer funeral among my acquaintances every month, more funerals than births. In the more prosperous countries, they usually leave behind substantial REAL assets such as houses, which will last for generations. The birth rate in my family has fallen to the extent that no more new houses, roads, cars, hospitals, schools, etc will be needed within another twenty years. Only obsolete or worn out stuff will have to be replaced.
If we shut immigration down to a trickle here in the USA, we will be to the point we don’t need a whole lot of NEW heavy infrastructure within a couple of generations. Western Europe will get there a lot sooner than we will.
And as far as the undeveloped world goes…….. well, it sounds pretty mean, but the undeveloped world is most likely to stay undeveloped for the most part, and for the most part it will not be able to project power any farther than across the nearest national border.
Countries such as Pakistan, Egypt, etc, are getting started too late in the fossil fuel game to ever catch up in my opinion.
We rich westerners will have our hands full dealing with the depletion of fossil fuels.
We MIGHT manage the transition to renewables without everything falling apart.
Hi Mac,
“… old folks don’t NECESSARILY consume a whole lot of resources, compared to younger folks.”
Well, yes and no. A lot of older people (like me) “consume” an enormous percentage of medical resources which has to be a major drain on society’s wealth. In my experience many people never see a doctor before 60 then start spending half their time commuting to various health service providers: eyes, ears, scans, hip and knee replacements, etc. Not to mention pharmaceuticals.
Hi Doug,
Yes most health care spending is on older people. Hey it gives the younger people employment in the health care industry 🙂
As population peaks and declines there will be more and more of a burden on society to provide healthcare as a larger proportion of the population will be over 60, society will just have to adjust over time.
Studies indicate increase in life expectancy leads to a significant increase in population and birth rates do not decline sufficiently to compensate for the increase in life expectancy.
Yes, but as times get tough suicide rates tend to increase, my hunch is that they will increase even further…
http://www.usnews.com/news/newsgram/articles/2014/10/08/us-suicides-hit-highest-rate-in-25-years
Out of all the top ten causes of death, which remained the same from 2011 the 2012, suicide was the only one that increased. Cancer, chronic lower respiratory disease, stroke, diabetes, influenza and kidney disease all dropped. The death rates for unintentional injuries remained the same.
This shows that Americans are getting more efficient at managing health conditions, but maybe “we’re not able to manage mental health as well, resulting in devastating results,” Solveig Cunningham, an Emory University researcher, told the AP, referencing the suicide rate.
Dennis,
Population stabilization is one mechanism. But there are another two factors that might be considered:
1. My impression is that collapsing oil production will influence consumption either via price mechanism, or via dropping standard of living for the majority of population (which happens now in the USA rather quickly), or rationing, or both. For example, the amount of gasoline used in the USA for private transportation can probably be cut in half without major pain. The same can be done for air transportation — flying to Mexico or Europe on vacation might became luxury again like it was before.
2. Also natural gas can prolong the decline for another 50 years or more and it can be used as a substitute for oil in private transportation. It is actually sad that it is now used to replace coal for electricity generation, better technologies of burning coal can be utilized. Actually coal can be used for production of gasoline too like Germany did during WWII.
So it might well be a century ahead for this civilization without outright collapse.
The aim is for Total fertility rates to fall to 1.5 or so and then population will decrease fairly quickly (150 years to get from 8B to under 2B). We really need to get population down to under 2 billion, maybe even to 1 Billion. With more equitable wealth distribution Worldwide and good education and access to birth control (both should be voluntary and provided at no cost by local governments) lower Total Fertility ratios can be achieved. The average life expectancy is unlikely to rise above 90 years before 2200.
Hi Ron,
Please accept my apology.I didn’t mean to lump you in with the people who think things will go to hell in a hand basket any year now.
There are plenty of that type around though.
My personal estimation of the big picture is that a substantial portion of the world is already past any real hope of achieving peace and prosperity within the next half century. Collapse is already real in a lot of places. It may well become the reality in a number of other places within the next two decades.
And while I think the odds are against it, I do believe that if the cards fall wrong, life could get to be very tough indeed within the next two or three decades even here in the USA.
When I wrote “will continue in most well developed countries for at least another ten to twenty years, barring outright hot war and that sort of disruption ” I was thinking about places such as Pakistan, Egypt, India,China, and the many countries in Africa that might go either way in terms of prosperity and stability.
You have indeed made it clear on several occasions that you think collapse is a good way off in human terms. Fifty years is a long time to naked apes.
Most of the time, when we talk about exponential growth, we focus either on the good, such as exponential growth in renewable energy, or the bad, such as the exponential growth in population world wide. When we focus on the bad, the spotlight is almost always on increasing population versus depleting natural resources.
I don’t have proper terminology to explain it, but I think maybe there can be such a thing as exponential growth in plain old bad luck on the grand scale.
Any given problem can get out of hand. Diverting enough resources to deal with it can result in that two other problems formerly under control morphing into two new emergencies.
If this process repeats two or three times, by then all our attention will be focused on putting out fires, rather than making sure the electricity and water still work a year down the road.
Maybe then the wrong politicians win high office, and nothing much gets done about long term problems so as to pay off the people who put them in office in the short term. Maybe the powers that be go to war to divert our attention from other problems.
I am posting next to nothing HERE about the current political scene , since you recently expressed your displeasure at my doing so, but my heart felt belief is that HRC and the Trump Chump are big money bau politicians.
I am supporting Sanders more because he is not in any body’s vest pocket peeking out than for any other PARTICULAR reason.
I promise not to backslide into politics again for at least a week and hold it down to a sentence or two.
You expect the China Super Ponzi to go on for another 50 years?
or that if it blows up there will still be a managed descent in the world because its just another crisis that will come and go?
And that broke governments can still bail anyone out?
C’mon, man, if you believe “within 50 years” then you have absolutely no conviction in the terminal resulting effects of Peak oil because I thought the China Super Ponzi was the main effect of Peak Oil that started already in the 70’s.
“I know of no one who expects the collapse in the next ten years and damn few thinks it will be within the next twenty years.”
Well Ron, than I guess you have never read Gail Tverberg. I’ve been calling for collapse in the next couple of years for almost 7 years now. Sooner or later I’m bound to get it right.
Our Finite World, breeding ground for doomers and nonsense economics
Sounds about right, timeline wise.
Economics need not be involved. We’ve exposed the metric of economics to be something created at a whim — that is, Quantitative Ease. Why would economics matter when the metric has no underpinning?
The cause will be what it should be. The US, with 4ish% of global population consumes 24% of global oil output, and rightly, other countries will not accept this the day the very first order isn’t filled.
Not a fan of the word “collapse” because no one ever defines mechanism. But the mechanism of doom is human behavior and its instinctive need to dominate. There will be no fair sharing and there will be no allocation by an imaginary metric.
Ron, I do expect collapse in the next ten years. I do so because collapse has already set in in a lot of countries and regions. I am not talking about ‘going back to the Stone Age’ yet. But look at the USSR post 1991. They have not recovered yet, and they won’t. Look at Greece post 2008. They will not recover. Look at Somalia, Lybia, Sudan, Iraq, Syria, Venezuela, parts of Mexico. Look at a tremendous amount of smal towns in the rural parts of the USA. Look at Detroit. Please look at Detroit! It has collapsed. There is no other word for the devastation in Detroit but collapse! Look at the international finance industry: negative interest rates everywhere. Who would have thought that 10 years ago? Millions of middle class people lost their savings in the so called Financial Crisis. Pension funds are going broke everywhere where they exist. The nature of money itself is being challenged in this no-growth environment.
The expectations about the future of billions of people have already proven to be wrong. The proverbial ‘shtf’ when they realise. That’s a matter of time. But it won’t take 10 years.
Ron Patterson said:
“Ten to twenty years? Are you kidding me? I know of no one who expects the collapse in the next ten years and damn few thinks it will be within the next twenty years. I have stated, on many occasions, that I expect it to happen within the next fifty years.”
You can’t think of anyone who expects a collapse sooner than the next 10 years? What about that Futilitist fellow who used to post here? He seemed like an uber doomer to me.
Yes, the collapse has begun. That is some nations are failed states and others soon will be, like Venezuela. But it will be at least two decades before it gets so critical that globalization and the entire world collapses.
I believe that collapse will be pushed along by food riots secondary to food prices. There is a correlation between oil price, food price, food riots, ‘the Arab spring’ aka collapse of MENA regimes.
https://gailtheactuary.files.wordpress.com/2011/08/food-price-index-vs-brent-oil-price-june-2011.png
http://blogs.spectator.co.uk/2012/08/food-prices-and-predicting-riots/
The collapse of Egypt is not far away and that will result in another several million people heading for Europe. All these events will create conflict that will also push collapse along. Collapse is a process that creeps up on you. If it happens slow enough you hardly notice. If its rapid we tend to perceive it more clearly.
As peak oil and climate change cause increases in food costs much of the world will face upheaval. Unregulated mass migration will continue to increase. Keep your eye on nations as they transition from oil exporter to importer, especially those with few other resources. Indonesia had jungle to clear and oil palm to plant. Many of the major oil fields are located in areas with few other resources.
Oh shit! I may have been wrong. The collapse may happen a lot sooner than I expected.
Seriously, I do expect business as usual to last for another two decades. However that is just a wild ass guess. There is just no way of knowing when the “trigger” will happen. And by trigger I mean the thing that trips us over the edge. Any black swan event anywhere in the world could be that trigger.
Predicting the future is a fools game. None of us know what will happen in the future. I have made my prognostications based on the rate things have happened in the past. But there is no guarantee that this slow pace of gradual destruction will continue. The pace of the destruction of the environment has been gradually increasing.
Now I have made no secret of my hope to be safely dead when the shit hits the fan. And I think it is a pretty good bet that that will be the case as I will be 78 in two months. But my son, after working for ARAMCO for 23 years, is retiring next year. I hope he can enjoy his retirement for a few years before the world collapses around him. I hope, I hope, I hope.
Venezuela is just a case of lead poisoning. Look up the Lead Crime Link and the work of Rick Nevin. Same is true of most of the Middle East.
Somalia was not in great shape to start with, post-colonialism — it’s not really much of a collapse, certainly less of one than the Second Congo War. That is not a new story.
The big die-off happens specifically when we start having worldwide *food shortages* caused by global warming. For the timing on that, ask the chemists — the ocean food chain is most at risk.
Ron, having read the article I would like to post the points I found most important (aside from the issue of inflated reserves). From the article:
Prospects are made worse, of course, by projected human population increases to some 9 billion by 2050,and possibly in excess of 12 billion by 2100. The pressures of such numbers on natural resources—food, potable water, minerals, and metals (and not least energy-related resources)—will be huge. Not only are the aspirations of those existing in energy poverty likely to go unfulfilled in many cases, the lifestyles of many of those who are better off materially are also likely to be severely challenged.
There is strong vocal support for a shift from the fossil fuels to renewable forms of energy, and to increasing the efficiency of energy production and use. The fact that around 80% of the World’s current energy supply comes from fossil fuels, and some 90% of the World’s transportation is fueled by oil products, fails to deter extravagant claims about what is realistically achievable within the coming decades.
Perhaps of even greater concern for a GEA are the consequences of intermittency arising from growing dependence upon wind and (in many parts of the World) solar PV—the need for back-up from more dependable sources of energy and the enormous need for storage. The issue of intermittency is regularly downplayed or evaded by many in the wind energy sector, and there is a frequent tendency to exaggerate or ignore capacity factors achieved.
There are further reasons to be wary. One is the fact that we humans, like most creatures, seek out the most convenient and closest resources to exploit first.But, as these resources are exploited so the marginal returns on their production decline.
A suitable starting point is the prospect of 9 billion people on Earth by 2050, and perhaps over 12 billion by 2100. The total numbers, and the pressures of migration, are likely to enhance the likelihood of local, regional, and possibly global conflict. The depletion, degradation, or exhaustion of many critical resources may well provide the basis for conflict.
The World in the 21st Century is faced with huge challenges that go far beyond , but importantly include, energy challenges on the supply, access, and use sides.So severe are these challenges, mainly arising from the demands of a rapidly increasing human population on the Earth’s limited resources, that the future existence of large numbers of people may be threatened with extinction.
SVO,
Forget about listening to the lawyer, accountant, doctor, even scientist types: none of them will admit that this “economic system” is a ponzi. Meanwhile, they retire in their tropical enclaves with the windows barred and security systems in place.
There are only two options left on the table: either realize the Global Economy is a Giant Ponzi Scheme BEFORE or AFTER it collapses. So far the CRAZIES are firmly committed to the latter.
Ponzi Borrowing: Repaying lenders with borrowed money
Bernanke Ponzi: Repaying lenders with printed money
Kamikaze Ponzi: Buying stock market ETF’s with printed money
Euro Ponzi: Paying people to “borrow” printed money
And now we learn the Bank of Japan has increased its “wealth” by printing money to acquire its own fake “wealth” of the past 30 years.
http://www.nasdaq.com/article/boj-is-a-top-10-shareholder-of-90-of-japans-stock-market-cm610733
Today’s Idiocracy actually believes that monetary expansion creates “wealth”, and therefore the only question is how to apportion the newly printed fake wealth.
I guess the trickle-down-economy scam isn’t working out to well…and somebody needs to scapegoated: the Oil industry.
http://www.bloombergview.com/articles/2016-04-25/the-poverty-of-the-wealth-effect
Don’t kid yourself, SVO…the fake doomers around here are firmly committed to TOTAL PONZI even if that means throwing the oil industry under the bus.
“Bank of Japan has increased its “wealth” by printing money to acquire its own fake “wealth” of the past 30 years.”
PW, you clearly don’t understand economics and need a course in macro econ 101. Central banks lower interest rates to stimulate economic activity. “Printing Money” doesn’t create wealth directly, but encourages investment in economic activity. Like building the largest battery factory in the world or making housing more affordable to increase construction. Increasing the money supply can be done without causing inflation if commodities like labor and resources(oil) are in abundance. Applying your day to day micro economics doesn’t work in the same manor as the macro economic of governments. Money is not wealth for a government, but resources and educated labor are. Money is only a means of exchange of assets.
Xt5, I understand your point but there’s a bigger issue which is that economics 101 is falling apart. According to basic macro the low interest rates of the play eight years should have our economy doing back flips and unemployment should be at 3%. But it isn’t. And that’s the point. The models created in the fifties and sixties just aren’t working. Something has changed. And that is why the fed is flailing about trying to look like they know what they are doing. And they don’t.
Hi Silicon Valley Observer,
When the economy is doing poorly, low interest rates by themselves don’t do much. Those that are doing well would be able to buy what they want even if interest rates were at “normal levels”, those who are doing poorly don’t have access to credit at low interest rates. This is a big part of what Keynes taught us, but many current economists think monetary policy is the only instrument that should be used. In a low interest environment (with real interest rates either zero or less than zero), monetary policy is not very effective, fiscal policy is what is needed, either government spending or tax cuts. Democrats don’t like the idea of tax cuts because they fear Republicans will want them to be permanent, and Republicans don’t like more government spending because they fear Democrats will never want to reduce the government spending. So we do nothing except let the Fed try to manage things.
“When the economy is doing poorly, low interest rates by themselves don’t do much. ”
That’s exactly the opposite of what Econ 101 teaches. Low interest rates are exactly what’s supposed to bring a poor economy out of the doldrums. The fact that it doesn’t work anymore, not here, not in Japan, not in Europe, is the clearest sign that the rules are changing.
Also, low interest rates are NOT part of monetary policy, it’s part of FISCAL policy along with tax cuts (which also don’t work anymore). Monkeying with the money supply is MONETARY policy. Monetarists claim that Fiscal policy doesn’t work — the only thing the government needs to do is maintain a stable money supply and let interest rates fluctuate to regulate economic activity.
And there is no consensus among economists about which should be used. The battle lines between monetarists and fiscalists has been going on since the 1950s, if not longer.
But the key point is that none of it is working anymore. Tax rates have been cut, interest rates have been lowered, money supply has been managed. But the economy is not responding the way to rules say it should.
I’m with Dennis on this. Macro economics teaches us that both monetary and fiscal policies are needed to stimulate the economy. Republicans have refused to use fiscal policies by using the fear of debt to obstruct progressive economic stimulus. Republican debt fear is also used to lower consumer sentiment to reduce economic growth. They have even gone so far as to shut down the government.
What has changed since the 50’s is that the Republicans now hold the economy hostage for political again.
Republicans have refused to use fiscal policies by using the fear of debt to obstruct progressive economic stimulus.
This is not just republicans. This is neoliberals. And a lot of them are (formally) Democrats since Clinton sold Dems to Wall Street and got his 30 millions a year “pension” for this.
Hi Silicon Valley Observer,
Not all of economics is taught in Econ 101. Often things are simplified at the introductory level.
The idea that lower interest rates will tend to boost the economy is true at normal times. When the economy experiences a severe economic crisis, businesses don’t think investments are worth the risk and even negative real rates of interest will not entice them to expand their operations.
This was covered by Keynes in The General Theory of Employment, Interest, and Money published in 1936.
Unfortunately many economists have never read the book and generally most students do not read this book in introductory macroeconomics.
Hi Silicon Valley Observer,
Interest rates are influenced by monetary policy. They can be thought of as the price of credit which is determined by demand for liquidity (money or credit) and supply of liquidity. The central bank has a big influence on the supply of money. A “tight” money supply raise interest rates, and a “loose” monetary policy will reduce interest rates at any given level of demand for liquidity (which is determined in part by economic activity as well as by consumer and business preferences for credit).
https://en.wikipedia.org/wiki/Fiscal_policy
Interest rates are considered a part of Monetary policy, which is distinct from Monetarism which is a school of thought within economics.
https://en.wikipedia.org/wiki/Monetarism
Silicon Valley Observer: the problem is that the money is not going to the right people.
You can lower interest rates all you want. People who aren’t “creditworthy” still can’t get any money.
If we ACTUALLY printed money — *and we handed it to poor people up to their eyballs in debt* — the economy would start roaring again right away.
But currently all the tax cuts are for the rich. And all the low interest rates are for the rich. And so on. And the rich, well, if they get extra money, *they do not spend it*, with the exception of Elon Musk.
It’s all about distribution of wealth. If you want the economy thriving, the 99% need cash to spend. Think of all the peopl who would love to buy an electric car *but can’t afford one*. Or who woudl love to buy solar panels *but can’t afford them*. Move the money to those people and the economy booms. Keep the momey tied up in the 1% and the economy stagnates.
There’s no moral statement involved here. This is just economic fact. The term for it is “declining propensity to spend” as people get richer.
HI SVO
If we were to have to build NEW fossil fuel capacity, ABOVE AND BEYOND what already exists or will have to be built ANYWAY, to maintain the fossil fuel based economy, THEN a successful transition to renewables would be twice as difficult.
BUT in actuality, for the next few decades, the renewable energy industries are going to be mostly producing energy to SUPPLEMENT the existing fossil fuel supplied energy.
It is true that building a thousand megawatt wind farm produces only about thirty five percent of the energy produced by a thousand megawatt coal or nuclear plant, and that it is intermittent production on top of that.
But adding a megawatt of wind and solar power to the existing grid means that we will not have to ADD a full megawatt of new fossil fuel capacity. As more inter tied long distance power lines are constructed, a megawatt of renewable power will probably be enough to offset half a megawatt of new fossil fuel capacity, because except for nukes, the existing fossil fuel generating infrastructure actually operates at not much over fifty percent of capacity.
But the real utility, in terms of fossil fuel supplies, of renewable energy is that renewable energy will enable us to EXTEND the life of our depleting fossil fuel endowment at pretty close to one to one.
Every kilowatt hour that flows into the grid from a wind or solar farm saves pretty close to enough coal oil or gas to generate a kilowatt hour.
I own a thirty five mpg compact car specifically because it saves me enough on gasoline to justify the total cost of ownership, compared to the additional cost of driving my old ten mpg pickup truck ALL THE TIME. When gasoline hit four bucks and I put tags back on that car, I was able to immediately reduce my gasoline consumption by around forty percent, since a lot of trips in the truck were “dead head” with an empty cargo box.
I personally don’t put much stock in the arguments about the COST of building wind and solar farms, because if we don’t spend the money and use the materials for THAT purpose, we will use that money and material to build more airports and freeways, or shopping malls,etc.
And for what it is worth, I do firmly believe that there will be a very sharp spike in the price of oil, one that will last a long time and maybe forever, within the next few years, certainly less than a decade. When it comes, pure electric or plug in hybrid electric cars will sell like ice water in hell.
And once the first ten or twenty million of them are on the road, electricians will be busy tying the chargers for them into homeowners and businesses electrical service so juice can flow BOTH ways. After that , the need for more fossil fuel peaking plants will start to fall off quite a bit.
Yes, renewables will help ease the slide and we can all find ways to economize. It all comes down to how fast oil production declines. Although I contend that there is a point at which no amount of renewables will be able to fill the gap; that oil is such a unique resource and our society has been so specifically built to rely on it, that there will come a time where the center will not hold and things just fall apart. What is that point? My conservative guess is 20% below current world production. If the world has to get by with 20% less oil, it can’t continue to operate in anything close to BAU. Frankly, I think a 10% decline would be sufficient, especially if it happened in a short enough time span — say five years. That’s just 2% a year for five years.
I have often predicted that our species as a whole is headed for some damned tough times, and that I expect people to die slow and hard by the tens and hundreds of millions when the shit hits the fan.
Now to go back to a simple farmers analogy, I could have a thousand cows all in one large pasture, enclosed by a fence no cow could ever break thru. If there comes a very hard winter, and I can’t feed those cows, all of them might die.
But in actuality,all the cows in the world are not in one pasture, they are scattered out. Some farmers in the event of a weather catastrophe will lose every last one, some will lose a few or none.
People are scattered too, and we are NOT all going to run critically short of essential resources at the same time. If two hundred million people starve in one year in India, because the monsoons fail catastrophically, and the world cant or wont donate or sell enough food on credit, that does not necessarily mean ANY BODY at all starves in the USA.
Some countries are superbly situated to pull thru collapse compared to most other countries. The USA, Canada , Russia, etc, have the resources and the military power ( Canada because we yankees are next door does not NEED much in the way of a deterrent ) to survive.
We yankees may have to get by thirty or forty years from now with one quarter of the oil per capita we do today.
We may have to get by with one quarter of the natural gas, aluminum ore, Sky Daddy knows what else will be in VERY short supply.
But suppose we actually DO close our borders except to a few really deserving people, and folks such as doctors and engineers maybe, which I believe is sure to happen.
Suppose we quit playing cop to the world, and go back to the classic Monroe Doctrine, maybe chopping it off at the knees and worrying mostly only about a FORTRESS NORTH AMERICA and a few critical allies that supply us with certain minerals, such as lithium maybe, or rare earths, although rare earths are not actually rare, and we can dig our own.
How many wind and solar farms could we build every year by diverting say say just one quarter of what we spend on the military to renewables?
And hey, the average car on the road in this country gets only about twenty five miles per gallon. I can’t see any reason at all that the average car in the USA can’t get a hundred mpg in 2066. It might be a fore and aft two seater with a lawn mower sized diesel engine and governed to forty five mph max, but it would still be a car,and it would still get you to work and to the supermarket.Actually it might not need any diesel at all, so long as you don’t go over a hundred miles or so. Batteries half the size and capacity of the one in a new VOLT would run such a car over a hundred miles easily. Half the weight, a quarter of the aerodynamic energy losses. That’s TODAY”S battery.
We PROBABLY have a fairly decent shot at pulling thru more or less whole in countries such as the USA, meaning countries with lots of land, lots of resources, lots of military power, reasonably well educated people and reasonably functional government. Countries that DO NOT ALREADY have an over population problem.
BUT DON’T GET CAUGHT IN EGYPT. Or Pakistan, or India, or China, or even the UK if you can avoid it. The UK is already badly over populated in relation to the country’s natural resources.
I for one am willing to believe that even though times will be VERY tough almost everywhere, most women will be literate in twenty more years, and that most people will have dinky little tv sets, and radios, and internet access of some sort. Birth control will get cheaper every year.
HENCE,
It’s not out of the question that the birth rate world wide will fall to such a low level that the population will peak and decline a LOT sooner than expected. I actually expect birth rates to CONTINUE to fall almost everywhere faster than the optimistic low growth UN scenario. The question in my mind is not if , but how fast , and how low birth rates will go.
Both carrots and sticks will be used liberally to control population growth in a lot of countries.
I could spin the pessimistic arguments just as easily as I have this optimistic pov.
The whole damned world may go to hell before this century is out.
Yogi sez predicting is hard.
The worst place to be caught would be the Pacific island nations which will literally disappear under the waves. Don’t be there. Don’t be in Bangladesh, either, for the same reason (very sad, that was my grandfather’s home). Don’t be in the fried deserts of Saudi Arabia where you may not be able to cool yourself in the shade.
Hi Silicon Valley Observer,
Quite a lot of oil is used to power personal transportation. The costs of Lithium ion batteries have been falling at 15% per year, with more and more companies pursuing research and development on battery technology this may continue for a few more years driving down the cost of EVs. When a mainstream EV reaches 25k in 2015$ (200 mile range and no subsidy), demand for oil will fall dramatically, Tony Seba believes this will happen by 2025, I think 2040 is more reasonable, but think we may be at $35k by 2030 with no subsidy and very few new ICE vehicles will be sold when we reach that point. By 2040 there will be very few light motor vehicles that are not EVs or plugin hybrids.
“Tony Seba believes this will happen by 2025, I think 2040 is more reasonable, but think we may be at $35k by 2030 with no subsidy and very few new ICE vehicles will be sold when we reach that point.”
Hello? The Chevrolet Bolt should start hitting dealerships sometime in the fall of this year at a price of $35k. Even if that includes the Federal $7.5k rebate, that rebate is only good for the first 200,000 units from a given manufacturer so, it won’t last long. The Tesla Model ≡ is scheduled for first deliveries in the last quarter of next year (2017) at a base price of $35k. Tesla surpassed 100,000 units shipped in December 2015 and shipped over 50,000 for 2015 so, if the combined Model S (sedan) and Model X (crossover) hit their target of 70,000 units for 2016, Tesla should hit their cap by the beginning of the second half of 2017 and therefore under the current rules, there will be no Federal tax credit for the Model ≡.
Under the circumstances, please explain why you ” think we may be at $35k by 2030 with no subsidy”.
Hi Islandboy,
First when I look at the price of a car I consider the average selling price, which is usually 5k higher than the base model which very few people purchase. The Bolt price is likely to be 42.5k without subsidy, as far as I know none have been sold so “news release” prices I do not count.
On the Tesla 3, I doubt it will be released in the 3rd quarter of 2017, more likely to be late 2018.
Will the price of the model 3 fall as fast as Tony Seba believes?
I don’t think so. I believe the price for the Model 3 was chosen in anticipation of future decreases in battery prices and as those prices do fall the price will need to remain at 35K to recoup the losses from the first couple of years of production. Also if the car is very successful high demand for lithium may cause the price to rise so that the cost curve may become flat.
So with no subsidy we will already be at $35k for the base model in 2018, but my guess is that a well equipped model will be $40k with no subsidy and this will gradually fall to $35k by 2030.
Also keep in mind that I think of the average American car as something the size of a Toyota Camry or Honda Accord. So I am thinking of some future “Model 4” that is between the 3 and the S.
To my eye the Model 3 looks to be about the size of a Honda Civic, which is fine with me, but many Americans want something a bit larger (mid size rather than compact).
I am thinking here of matching the average 33k car in Seba’s video, which would be a high end Camry or Accord. The Model 3 is very nice, but smaller than that.
Hi Islandboy,
Seba assumes battery costs decrease at 16% per year and that the cost of the EV is 3 times the cost of the battery. Let’s assume that is correct for a Tesla Model S, and also put the average cost of that car (average sales price) at $100k. It is by no means clear that the 2/3 cost of the car that is not due to the battery will fall at the same rate as the battery cost. So Seba’s predictions may be too optimistic. If battery cost falls from 30k to 17k from 2015 to 2018, the 35k Model 3 might be possible in 2018, but it will be 40k nicely equipped.
Anyway, on further reading, Tesla is claiming $190/ kWh cost and a 55 kWh battery in the Model 3, or about $10,500 for the battery pack, presently, so a 35k car might be doable, the battery costs are expected to drop to $125/kWh by 2022, which would drop a 55 kWh battery pack to $6800. A car engine is probably only about $1500 of the wholesale cost of a car (maybe less), so at that point it would only be $5000 more for the EV vs an ICEV. Note that using Tony Seba’s assumption of a 16%/year decrease in battery cost, would drop this battery pack to only $3700 in 2022.
It will be very interesting to see how quickly costs fall.
Lots of research backs up what Seba is saying on batteries.
Tesla Model 3 will be $35K with no subsidy. They’re promising late 2017, but my expectation is that that will be low-production. Volume production should be in early 2018, though. I don’t think the base price will fall for a few years, but I also don’t think that that MATTERS. With subsidy, Model 3 starts at 27500 while the subsidies last!
A lot of people will pay a bit extra to get an electric car. It’s nicer than a gasoline car, and of course has lower “fuel” costs (something like $600/year for a typical driver even at current prices). I think this means that Model 3 really does attract the entire top half of the market, even if it’s $35K and the average car is $33K.
Tesla already has a larger car model (two actually — S and X). I believe after the high-volume production of Model 3 really gets going, the price of the S and X will drop.
More importantly, the competition from Model 3 will force other carmarkers to undercut it on price. They’ll have to introduce sub-$35K cars in 2019 or maybe 2020.
Meanwhile the total number of people owning cars continues to drop. And I think people will start buying used electric cars in preference to new ICE cars. The used electric car market will eat away at the cheap new ICE car market.
Hi Silicon Valley Observer,
A Google search on
The Electric Vehicle Disruption – End Of Oil by 2030
will get you to a 12 minute Tony Seba You tube video about the EV.
Chart from presentation below:
Our society has been built to rely on oil, but there’s no particular reason for that. Sure, it’s particularly useful for airplanes, so maybe we stop using airplanes. It’s nice for chemical feedstock, but a really tiny percentage of it is used for that — if we stopped burning it we’d have plenty of very cheap oil for chemical feedstock.
Our society is also remarkably focused around electricity. Perhaps you underestimate this. Electricity is *everywhere*. It will not be difficult to convert everything to electricity. And we have one damn great way to generate electricity — solar panels. And we have batteries, too.
I don’t know whether you can call the electrification revolution “business as usual”. In some ways it is — but in smaller ways, it’s one hell of a change. Every major coal company will go bankrupt. Every major oil and gas company will go bankrupt. Entire banks will go bankrupt due to excessive investment in fossil fuels. Pension funds will collapse. Everyone in the oil and gas industry will be out of work (go into geothermal, guys). Governments will collapse. Some regions will win big; other regions will lose all their wealth and be depopulated.
And I’m not even talking about global warming, which will cause real disasters.
Precision Drilling reports Q1 loss, revenue down, five contracts cancelled
The company says it has been hit by a total of nine contract cancellations since the start of the downturn, which began in late 2014.
Probably won’t be able to stop the plane from crashing into the mountain.
Depletion kicks in 875 billion barrels in one fell swoop, just can’t be good.
Time for a few words of encouragement, there is more oil. There is life after oil.
825 billion, one billion consumed every ten days, 8250 days of oil.
20 years is 7300 days. 950 days, 730 days, 220 days.
22 years 7 months 10 days of oil.
Without a doubt, we are doomed, there is no hope.
Don’t really have to panic until you reach the 10 days left to go mark, by then, it’s too late. har
ND rig count at 26 with QEP having one listed as stacking.
Burlington Resources (ConocoPhillips subsidiary) has no rigs listed.
aes 4 rig is drilling two of the 26.
EOG is projected to lose over $0.5 billion in the 90 day period from 1/1-3/31/16.
COP is projected to lose over $1.3 billion in the same 90 day period.
MRO is projected to lose almost $0.4 billion in the same 90 day period.
Huge losses in Q1.
Sounds like they fracked a bunch of shale and upon well-completion, red ink flowed out. Maybe they can market it as colorant for red-dyed diesel:)
2016-4-25 Today is the Day: Planning for a Future without Oil ? .. OK
http://www.bloomberg.com/news/articles/2016-04-16/saudi-arabia-to-launch-plan-for-the-future-april-25-prince-says
More proof the world is transforming to EVs and lower amounts of burning fossil fuel
Please, spare us the “I’m here to save you” routine and tell the world what autonomous EV’s actually are:
A Military Wet Dream: Road based Drones for the 1%ers.
Ponzi, thou art a troll, or else ignorant of reality.
It was only yesterday, from an old mans point of view, that I first saw a cell phone, and it cost its proud owner over three thousand bucks to own and use it a couple of years. I bought a brand new one at Mallwart a couple of months ago for twenty bucks. The local farm hands who work, some of the poor people who would if they could, and a hell of a lot of bums have FREE cell phones and FREE service right here in this backwoods bum hole of the USA. It IS true that the freebies work only 200 minutes a month though.
Ten years ago, there was a million dollar prize for anybody who could get an autonomous car to go a few miles ONCE on a deserted road without crashing. Today, they are running on the roads in heavy traffic, and having far fewer accidents than human drivers.
The key to self driving cars is the program ( a whopper of a big one, no question. ) which controls the car, everything else is off the shelf now, and getting cheaper by the month.
And here is the key fact about computer programs. The FIRST copy, the original, might cost a billion bucks, but the SECOND copy costs only the space needed to store it, plus a couple of keystrokes.
Self driving cars will be a common sight in ten more years.
I actually expect it won’t quite work that way. The hard part about self-driving cars is all the weird little corner cases — elk at the side of the road, whiteout conditions, etc. And people are deathly afraid of “robot cars” killing them, irrational though it may be — you can’t get people to approve self-driving trains with grade crossings, even though the tech has been perfected since the 1970s and the driver adds no value.
I think instead we will see more and more “driver assist” features. The cars will refuse to run into things — if youu try, they will brake. Or refuse to swerve when you turn the wheel towards a pedestrian. They’ll refuse to tailgate. The cruise constrol will make sure you don’t speed. But when it gets weird out there, the car will still rely on the driver to deal with the sighting of elk (and slow way down in case the elk decides to jump out).
THIS, people will accept. So the cars won’t be driverless, but the driver will have less and less and less ability to cause mayhem.
How in the world is that article proof of anything related to EVs?
The age of oil as a transportation fuel is headed for decline. Are you still using your flip phone ?
I don’t know which non-sequitur to address first. That a decline in the age of oil = proof that the world is transforming to EV? That the fact that I don’t use a flip phone phone means … what?
I live in ground zero for EVs. The Tesla factory is twenty minutes from my home. There is no place more EV-friendly than Silicon Valley. Even so, EVs are relatively few and far between. The few people know who have an EV also has an ICE vehicle. The EV is of an eco status symbol pure and simple.
Now let’s talk about reality. About people in my home town area in upstate New York where unemployment and underemployment are reampant, where cold winters would put huge stress on EV batteries (think heaters), where people struggle to put food on the table much less spend the money needed to buy an EV.
Now lets talk about people in cities like NYC (where I moved from) and other high density areas that would seem perfect locations for EVs. Except there aren’t places to plug in on the street and most people don’t have garages. Where the hell do they get the juice? And there’s plenty of public transportation anyway.
So who do EVs help? Pretty much they help relatively well-off people in suburban locations where they have a garage to charge the car in overnight. In other words, EVs are aimed straight at keeping affluent suburbia running in a BAU manner. But even in suburbia most people can’t afford (or don’t see the point in buying) an EV as an extra vehicle — and even at 200 mile range it’s still an extra vehicle. People do need to travel more than 200 miles at times.
The cost of an EV at $35K plus would buy an awful lot of gas even at much higher prices.
This wet dream about mass usage of EV is pretty annoying. The elementary thing: the capacity of the grid to charge them is not taken into account. There are OK if and only if when there are only few of them in a given neighborhood. As soon as they get critical mass they kill the grid. Those naïve soils who are salivating about EV can’t even calculate how much energy in kilowatt hours contains a regular 15 gallon gas tank and how similar amount of energy (let’s say half) can be transferred to charging stations via electrical grid taking into account the density of population. If put against the wall they start mumbling something about solar charging stations for each house, etc. For which you need space and considerable additional investment and they do not work well in winter in many regions and never work in bad weather.
They are probably OK for top 1% or 10%. Tesla cars are a nice prestige symbol. And in a sense might be a better deal then to spend comparable amount of money on Mercedes (although less safe). That’s it.
All this talk about advantages of Leaf is incompetent to the extent it is disgusting to read. Leaf is technological dead end as battery does not scale and will not without some technological break through; as such it can’t in reality compete with Prius and similar hybrids as a passenger car even in case of very short commutes as there always a few cases during a year when a short commute become a long commute (problems with trains, etc). It can complete only as a fashionable gadget for enthusiasts, who are ready to live with its shortcomings (and in winter it is a bad, inferior car by all parameters; while in extremely hot days in summer it is a dangerous car due to lithium battery used).
Hybrids from all technological parameters eat pure EV for lunch. There is nothing even to speak about in engineering terms here, but again and again some enthusiasts try to push EV into our throats. Unless clear engineering advantages over hybrids can be demonstrated this proselytizing of another stupid techocult probably should be stopped.
Very well said Likbez. If you really want to have a an impact on gasoline use nationwide, hybrids and PHEVs are the only way. Pure EVs just won’t scale due to grid and climate considerations. And it’s also possible for ICE powered vehicles to come close to hybrids in MPG but at a much lower cost. A PHEV runs in electric mode for most trips but still has unlimited range eliminating the need for a second car and all the environmental damage and expense an extra vehicle imposes.
But if you live in California, you might still want an EV so you can use the POV lanes. That’s a compelling reason.
Hi likbiz,
My great grand father would probably have said about the same things you just said, when he saw his first automobile. My grandfather didn’t get a ride in a car until he was grown up, but he owned one, and a tractor, ten or fifteen years after that.
The grid will eventually have to be beefed up to charge electric vehicles by the tens of millions, but for now it surprises the hell out of most folks to realize that except at ELECTRICAL RUSH HOURS, the grid is like most freeways. LIGHTLY USED, with TONS of spare capacity.
The rush hours for the grid are mostly the same ones CARS are on the road, so charging them will mostly be using the spare capacity available more hours of the day , and the week , and the year, than otherwise.
Has it EVER occurred to people like you that electric utilities are salivating, DROOLING, at the prospect of selling MORE kilowatt hours? Scaling up the grid is an OPPORTUNITY, not a problem, from their pov.
The only times grid capacity will come into play for the next ten or fifteen years will be on extremely hot or extremely cold days, or when a major power plant goes down.
Charging stations WILL pop up like mushrooms as more electrics are sold. I expect most major malls, hospitals, universities, manufacturing plants, etc to have some charging stations in place for their early adapter customers and employees well within ten years.
Is the owner of a restaurant with parking lot going to pass up a profitable opportunity ? A few charging stations along one side of his parking lot will bring in both inside customers and direct revenue. He will be able to sell kilowatt hours for more than he PAYS for them, and ring them up right at the register on their way out.
Landlords who own apartment buildings with parking slots for their tenants will find it profitable to install charging stations, only a few at first, but more as time passes. Charging stations will be a feather in the cap when it comes to attracting high income younger tenants.
The average commuter who lives twenty miles or less from work probably has an emergency that results in his having to drive farther than a new Leaf will go, and still get him home, maybe once in five years. There will be cabs, and rental cars, and friends with conventional cars around.
I can remember personally when stubborn old country guys tried to get out of buying electric ranges for their wives by complaining that the power would go off and they wouldn’t get any breakfast.
Next year Mr Commuter can treat himself to a two hundred mile Chevy electric, and it will almost for sure cost him less to own and drive it for ten years than it would to own a conventional car.
Look , this IS a peak oil site. Do YOU believe oil is always going to be plentiful and cheap?
Here is a counter argument.
It deals with Grid issue brought up:
http://energytransitionshow.com/episode-15-the-outlook-for-electric-vehicles/
Hi Likbez,
The EV uses energy at about 90% efficiency compared to about 20% for the ICE. So we only need 11% of the energy contained in that half tank of gas to charge the EV.
Most of the EVs would be charged late at night when demand on the grid is quite low, so your concerns are unlikely to be a problem. In fact with demand management and programming of the charger, people could find out what time has the lowest rates electricity rate and program their car to charge at that time.
People could rent a car for longer trips or use a plugin hybrid, but soon the cost of the EV will fall below that of the plugin hybrid as battery costs fall.
Most households already have two cars, many will choose one EV and one plugin hybrid or hybrid in the future.
For road trips the future is Tesla’s Superchargers and similar. A few road warriors want to drive 8 hours without stopping, but most of us stop every 4 hours to eat anyway.
” The elementary thing: the capacity of the grid to charge them is not taken into account.”
Please see my comment further up where I did a rough calculation of how much additional electricity would have been required if all VMT by the US light vehicle fleet in 2014, were traveled in vehicles with the power consumption of a Tesla Model S, one of the least, if not the least efficient EVs available. My calculation came to 17%. If a more efficient EV is used (290 vs. 340 Wh per mile) that figure comes down to 14.5%.
Note that this replacing all light duty vehicles with EVs. If the transition plays out over a decade or so, the utilities will have more than ample time to change their generating capacity. It should also be noted that with the push to more efficient lighting, a few percent of the required additional electricity can come from reduced consumption for lighting. How much? According to a page from the FAQ section of the EIA’s web site, “The U.S. Energy Information Administration (EIA) estimates that in 2014, about 412 billion kilowatthours (kWh) of electricity were used for lighting by the residential sector and the commercial sector in the United States. This was about 15% of the total electricity consumed by both of these sectors and about 11% of total U.S. electricity consumption.” A LED light-bulb uses about one fifth of the power of an incandescent bulb of equivalent brightness so it will be interesting to see what happens to electricity consumption as the US transitions away from the use of incandescents to LEDs and CFLs.
Finally, while the chances of Bernie Sanders winning the democratic nomination appear to be growing slimmer with each passing primary, if some scandal were to break or some other eventuality were to make Hillary Clinton unelectable, the massive energy efficiency program promised by the Sanders campaign could free up grid capacity for EVs by a significant amount. Of course Sanders does not have to be in the Whitehouse for this to happen. Somebody else might think it is a good idea.
Also, do you realize that you are furthering the displacement of human workers with technology? Is that something we should look forward to?
Absolutely it will displace human workers! So do you think we should plan for that eventuality or should we just sit back and watch what happens?
Plan??? What are you going to plan?
What you have to do is to DEMAND mandatory social monetary credit for every citizen, every family, every month for the rest of their life for ALL TECHNOLOGICAL INNOVATIONS since Archimedes times that 99% did not get. Society already earned it, made it, built it so there is nothing to plan, just demand what is already yours.
“Basic income is having a moment.
The governments of Finland, Ontario, and Utrecht are all launching tests of the policy proposal, under which everyone in a given country would get a set amount of money every year, no strings attached. The charity GiveDirectly is set to give basic incomes to 6,000 people in Kenya, and the tech industry powerhouse Y Combinator is funding an experiment evaluating the idea.
Andy Stern — the former head of the major union SEIU, and a close confidant of the Obama administration — argues at length for basic income in a forthcoming book, Raising the Floor. Nobel prize winnig economists like Christopher Pissarides and Joseph Stiglitz have gotten on board recently as well. Bernie Sanders even expressed sympathy for the idea, although he stopped short of endorsing it. And on June 5th, basic income will face its biggest test to date when Switzerland votes on whether to adopt it as a national policy.” ~ Dylan Matthews
Welfare for everybody! ^u’
(A bribe, a passifier, a hedge against impending increasing joblessness and anti-establishment social unrest?)
Yes, Ves, what is the point of technology? Ethically, it is not to make life better for an elite minority while wrecking the rest of the planet in the process.
To call something Bribe is to do something not mindful in return 🙂 Social credit you don’t have to do anything in return. Welfare is just another term for beer money, meaning pocket change. Social credit is 3k per person/month (plus paid annual yoga/meditation retreat for everybody).
Plus debt jubilee, plus public banking.
“what is the point of technology? ”
If technology further enslave us it has no point.
Likbez, my Tesla Model S is:
(1) my only car, for a family of two (we don’t have a commute, though)
(2) the car I drove through an ICE STORM from New York to Michigan *with major power outages the entire way*
(3) the nicest car I have ever driven.
As for hybrids, In engineering terms, would you rather maintain:
(a) a battery and motor, or
(b) a battery, motor, generator, and catalytic converter
In your own time.
Hi Silicon Valley Observer,
Many people already spend about 35k when they buy a new car, the average sales price of a new light motor vehicle in the US is 33k.
So let’s say you by a new car and drive it 15k per year for 10 years.
Let’s assume $3/gallon for the average price of fuel over those 10 years and average fuel economy of 30 MPG. That is $15,000 sent on gasoline (5000 gallons) over the life of the car.
The Tesla Model S gets about 3.5 miles per kWhr, lets assume some charging losses so I will reduce this to 90% of that to 3.1 Miles per kWhr, and use US average electricity cost of 12 cents per kWhr and that would be $5806 in electricity costs over the life of the car. So that would be $9200 savings (not accounting for discount rate). Also oil prices are likely to rise faster than Electricity rates so savings may be greater and maintenance cost of an EV is likely to be lower than for an ICE.
In a city people will use Uber and in the suburb a combination of EV and plugin hybrid and in more rural areas a plugin hybrid or hybrid. Rail will begin to dominate long haul shipping and short haul can be done with EV powered trucks or plugin hybrids once oil prices increase due falling supply.
Seba expects that fewer people will own cars in the future as self driving vehicles become the norm.
Silicon Valley Observer, I live in upstate NY and drive a Tesla Model S. They’re more and more common around here. Really. We need a service center though, people don’t want to buy them when the service center is so far away.
They’re great for road trips, thank you Supercharger network.
Yep, still the flip phone.
Smart Phones are personal tracking devices, and data miming instruments.
and I’m a former Apple Employee.
Despite prices rising significantly since last february, the number of active drilling rigs in Bakken keeps falling.
Why have CRL still got five rigs running when they are not planning to complete any wells this year?
How sad is this pathetic creature called The Welfare State when Professor Michael Jefferson has to trot out the stupid ‘We should be doing Thorium’ nonsense again. None of these guys from the universities really gets it, do they?
That the high EROEI of fossils combined with the easily exploitable specific chemical forms it presented enabled what you see outside. Simply throwing up nuclear reactors (fission or fusion) won’t create instant wealth like we obtained from fossils. They already tried all sorts of dumb ideas (nuclear cars/airplanes, nuclear industrial parks for aluminum production, etc) and it all failed in the 60’s. And they still trot out this mindless garbage nonstop.
The only ideas these “educated” people have are either Thorium or that Science is totally powered by serendipity. Mass breeding will save the Earth! We need not 8 billion students but 80 billion to power “Science”.
Onward Peoples Republic until the Aquifers are depleted!
Saudi unveils far-reaching plan to move away from oil
Riyadh (AFP) – Saudi Arabia said Monday it would create the world’s largest sovereign investment fund and sell shares in state energy giant Aramco under a vast plan unveiled to transform its oil-dependent economy.
“We will not rest until our nation is a leader in providing opportunities for all through education and training, and high quality services such as employment initiatives, health, housing and entertainment,” Mohammed wrote in an 84-page booklet outlining the plan.
If it works, Saudi Arabia “can live without oil by 2020”.
To me it sounds like Crown Prince Mohammed bin Salman is preparing his citizens for the day of reckoning. Why is bringing up this topic right now — probably because Saudi oil production is peaking right now. And whatever “transforming the economy away from oil” entails, the Saudi population won’t like it.
You nailed it.
Well if KSA were going to sell wall-to-wall carpet for all these decades, maybe they can start selling the vacuum cleaners for it… and continue to put disaster capitalism to work for the kings and princes…
“Here at Your Kingdom of Saudi Arabia™, we have just the right kind of nice soft sand for your sea-level-rise beach-replenishment projects. We also offer special discounts for all our low-lying island archipelago customers. Let us help you fill the holes that you dig yourselves out of. Wallahi, let it be YKSA.”
LMAO!
I love this part:
“We will not rest until our nation is a leader in providing opportunities for all through education and training*, and high quality services such as employment initiatives**, health, housing and entertainment***,”
* except for women and shiites
** for imported Indian and Pakistanis who live in slave-like conditions
*** And DON’T forget the entertainment! Maybe they could introduce NASCAR.
LOL
My wife, teaching a course in mathematical physics in a Swedish university, tossed a pair of Saudi students out of her class (permanently) owing to their utter disrespect: constant disruptive and insulting comments. In the end the Saudi embassy tried to intervene but the university stood firm. The incident might have adversely affected Swedish-Saudi relations for awhile but the sad fact remains: respect for women by Saudis doesn’t exist; even a modicum of courtesy for a female teacher is an impossible concept for them.
And whatever “transforming the economy away from oil” entails, the Saudi population won’t like it.
Methinks his royal highness is just telling his people to “Go pound sand!” 🙂
This is not the behavior of one who is comfortable with the prospects of their enterprise. Methinks they have starred into the abyss (future) and seen the collapse of Ghawar starring back at them!
You’re correct that Saudi oil production is peaking right now, but the question is: is this peak strictly *production side*, or is it *demand side* — are the Saudis looking at Tesla Motors, and the general reduction in oil intensity in the economy, and saying “Oh, crap, in 4 years nobody is going to want to buy our oil”?
I think it’s the latter.
Shape of things to come?
Alberta’s Abandoned Wells Quadrupled in Last 12 Months. Who Will Clean Them Up?
By Samantha Power, Desmog.ca • Friday, April 22, 2016 – 12:14
Yep. Dammit. More unfunded enivronmental cleanup liabilities.
The 8 A.M. Call
Paul Krugman APRIL 25, 2016
“You could say that shale oil is the new subprime.”
People here have been saying that for a long time. Krugman should read this site once in a while.
From Economist’s View: Strongin, Kamin and Hamilton
Causes and consequences of the oil price decline of 2014-2015 (Video)
AWS,
Thanks, the comments by Strongin were very interesting.
He thinks the World supply curve has become much flatter so that the Oil supply curve will limit the oil price in the near term to about $60/b and that the oil demand curve will determine the Quantity produced.
This contrasts sharply with the recent historical experience from about 2002 where the supply curve was very steep and determined the Quantity produced with the oil demand curve mostly determining the price of oil.
His expectation is that this will lead to less oil price volatility, with prices stuck at about 50 to 70 dollars per barrel for a couple of years at least. He also thinks that in the highest marginal productivity areas of the LTO plays that breakeven has fallen to about $50/b.
This is not the breakeven price for the entire play, just for the most productive areas of the play,
“the so-called sweet spots”.
Interesting stuff.
It would seem based on rig counts that the Bakken may be close to running out of room in the sweet spots (rig count of 26), Eagle Ford has a horizontal oil rig count of around 35 so things are almost as bad there. The Permian Basin in Texas still has around 100 horizontal rigs running, so there may still be some room for growth there, or they may at least be able to maintain a plateau in output for a while.
There, Dennis; that didn’t hurt so bad, did it?
Hi Mike,
Absolutely no clue what you are talking about.
Simply reporting on what the guy said. I doubt his supply curve is correct.
Anyone can put a line on a chart, whether the supply available at $60/b is enough to offset declining output and meet increased demand is the question.
It may through mid 2017, after that I doubt supply will be adequate to keep prices at $60/b or less. I expect oil prices will reach at least $80/b before July 2018.
Dennis, you correctly the state the absolute fallacy in predicting the future, then continue to do so, even to the point of stating categorically that the price of oil will be $ 80.49 before June 29th, 2o18 (Can I count on that, please?). You are absolutely correct, anybody can stick a line on a chart. Based on previous comments you believe declining supply will most assuredly lead to higher prices, followed by 65,000 more shale wells and/or a happy future for hydrocarbons and model fits.
After a half century of actually producing oil, I want you to try and get your arms around the fact that likely will not happen. You are ignoring Likvern’s economic analyses of shale oil that implies, at least to me, that it is going to take well over 100 dollar oil prices, forever, for the shale industry to pay back it’s indebtedness and manage new debt. You are ignoring Peter’s work that proves that of 31,000 shale wells drilled in America to date, the average liquids production is only 114,000 BO per well (amazingly poor) and that well quality, even in sweet spots, is going down. You are ignoring extenuating circumstances that may make the HZ frac’ing model so costly it is already dead on it’s feet.
If I had modeled my life starting 60 years ago I would have thrown that model in the garbage 55 years ago. Bold predictions about our energy future rub me the wrong way, sorry. I was hopeful that your response to AWS’ link was a recognition that oil prices might not get back to 80 dollars, that 50 dollars was a good number only in sweet spots (which it is absolutely not a good number!) and that sweet spots are getting saturated and wells drilled in the future in flank areas will be even less profitable. My bad.
Your Oily Friend,
Mike
To illustrate what Mike is talking about, here are the prices quoted to us on each 2/11, starting with 2016. I cherry picked the date, as 2/11 was the lowest price quoted to us since 2002.
2/11/16 $21.00
2/11/15 $43.50
2/11/14 $94.75
2/11/13 $91.00
2/11/12 $92.25
2/11/11 $79.00
2/11/10 $68.50
2/11/09 $29.00
2/11/08 $86.75
2/11/07 $53.25
2/11/06 $56.25
2/11/05 $41.75
2/11/04 $31.75
2/11/03 $33.25
Then, Dennis, go look at the volatility for each of those years. For example, yesterday, just 10 weeks after 2/11/16, we were quoted $39.50.
In 2008, we were quoted $140.50 one day in July, $28.25 one day in December.
You just do not realize the volatility until you have skin in the game.
Clearly, LTO took off from 2011-14. Look at the oil price then.
PXD is considered now to be the cream of the crop of LTO. Yet, they lost a record amount of $$ in Q1, 2016, have lost money going back several quarters, and would have lost more than double, but for hedging, which I admit they are among the best at (hedging).
I wish the oil price would make a steady accent to $85, or whatever figure, and it is ok to make projections, but the reality is that oil prices are extremely volatile, and it does not look like that will change anytime soon.
Mike, Statistical models of physical processes work quite well, thank you. It’s when the game theory aspects of human behavior come in that the predictions become more challenging. That’s not to say that we can’t continue to work the earth science angle to add quantitative information.
Howdy, Mr. Scope:
“It’s when the game theory aspects of human behavior come in that the predictions become more challenging.” No kiddin.’ With regards to future hydrocarbon extraction, and predicting that, you must kindly explain that statement to me, thank you.
I believe Strongin is exactly right (apart from the specific price prediction).
The production-side aspect of peak-oil — impossible to find new cheap”gushers” — causes the flattened supply curve.
The availability of alternatives (like electric cars) causes the steeper demand curve.
Just to add it all together.
I actually anticipate oil prices creeping up until roughly Q1 of 2018 and then starting to get hammered downward by demand destruction.
I think at $50-$70/bbl the demand for oil will crash quite spectacularly, since the savings from switching to electric are humungous. As demand drops and quantity drops,supply will be forced to drop, the price will go back down to $40-$50/bbl and the LTOs will all go bankrupt.
The next step involves the bankruptcy of the oil majors.
OFM: I don’t usually defend rich people, but every TESLA S and X on the road means a tiny bit cheaper gasoline for people like me.
The proportion of non-gas cars in the US actually fell last year. The reason consumption of gas might fall is that the gas cars sold have better mpg.
Great graph, thanks. My only complaint is that Hybrid and Diesel should be included in the circle on the left since they both rely primarily on oil for power.
Also, I would like to see a graph that showed the mix of cars owned by families. In other words how many families with an EV vehicles also have one or more gas/diesel vehicles. My guess would be almost all of them.
By the way, one reason California has more EVs per capita than any other state is that EVs get to use the HOV lane without having a passenger. Yep, the desire to use renewable energy or environmental consciousness plays a role, but nothing beats getting into that diamond lane in the morning.
The percentage of electric and plug in hybrid electric cars on the road is to the best of my knowledge steadily increasing, measured over any period of more than a year, and WILL be increasing at a rather rapid clip as time passes.
You anti electric guys DO REALIZE that oil comes out of holes in the ground don’t you? That it NEVER rains oil on this planet?This IS a peak oil site. 😉
Yes, cars DO get better mileage these days. Loonie commie liberal tree hugging whale loving greenies got to be numerous enough some years ago that they had the political clout to get fuel economy standards written into the federal law of the land.
They are getting to be more numerous year after year, as old farts like me die and the young folks who are feeling the burn move into positions of power. They will use their political power to accelerate the transition to electrified automobiles,and there is nothing much anybody can do to stop them. At best, the Koch brother types can slow down the transition, that’s all.
If you fellows really think the oil fired internal combustion engine is the motive power source of the future, how do you explain the fact that virtually every major auto manufacturer in the world is working overtime, frantically, on electric vehicle design?
The short answer is that they see the handwriting on the wall, when it comes to their customers being able to buy diesel and gasoline , without worry, anytime , indefinitely, at a reasonable price.
There’s a day coming when gasoline and diesel will be stringently rationed.The odds are high that most people who read this comment will live to see that day. Only a fool could believe otherwise.
One more hot little oil war might it about, any year now. If not, depletion WILL.
The grid will almost for sure be up and running smoothly that day. That day the scales will fall off the eyes of guys like you, and you will look into buying an electric car.
OFM, boy do I hate those anti-electric guys, too. Wait, you mean me? HA!
I’m not anti electric. Just anti pie-in-the-sky. The assertion that less oil means other solutions will necessarily appear to take it’s place in time and for enough people has no logical basis.
One of the reasons I moved to Silicon Valley is because it is one of the few places in this country where solar and wind has a chance of making a difference. Won’t help folks in Minooka, but I’m in it for myself! LOL!
“The assertion that less oil means other solutions will necessarily appear to take it’s place in time and for enough people has no logical basis.”
This is perfectly true, but on the other hand it absolutely IS NOT PROOF that other solutions will not appear in time to take the place of oil- at least to a substantial extent in some places. Oil is already being displaced to a significant extent in some places.
Now as it happens, Silicon Valley actually IS home base for the electric car industry, with a couple of the richest and most dominant companies in the world burning the midnight oil to put the ice passenger car out to pasture, and fix it so small town cops will never be able to write another crooked speeding ticket, because the car will be driving itself, lol.
http://www.newsweek.com/uber-lyft-ford-and-google-assemble-fight-self-driving-cars-452807
Apple is right in there of course.
from the article – “Uber and Lyft are reportedly exploring partnering with car manufacturers to build a fleet of self-driving cars for taxi services. Volvo and Ford have begun testing their self-driving cars in China and Michigan, respectively, according to reports.”
Detroit-based GM owns a good chunk of Lyft. And they are on-track to test autonomous cars on their Michigan campus. With Ford also testing, there soon there could be more self-driving cars in rust-belt MI than silicon-rich CA. People are enamored with Apple, Google, Tesla, but the US is a big country with bright people everywhere. When you make stuff out of iron, it helps to be near the mines.
A little OT, but OFM, you might enjoy this article on Mary Barra, GM CEO. She’s not a doomer.
“With her technical knowledge of a car’s inner workings, she has an engineer’s dogged belief in the human power to fix things. “If we can be candid and transparent, there’s nothing we can’t solve,” she says.”
and
“Let’s kick the s— out of option B.”
http://www.wsj.com/articles/a-day-in-the-life-of-gm-ceo-mary-barra-1461601044
OFM – one more thing – I know you’re thinking of Tesla, but the staff at a place called D-HAM in Michigan may take exception to calling Silicon Valley “the home base of the EV world”
http://media.gm.com/media/us/en/gm/company_info/facilities/assembly/dham.html. They build:
Chevy Volt (current rate 30K units/year – over 100,000 Volts made there since 2010).
Cadi ELR (2K units/year)
Malibu (the 2016 strong-hybrid Malibu using the Gen 2 Volt drive train is scheduled to start rolling off the line any day now) could be 10-20K units/year.
And the 200 mile Bolt EV is in pre-production at the nearby Orion MI plant – expected initial production rate 30K per year by 2017, with room to ramp up from there.
LG Chem’s Holland MI battery plant is making most of the batteries for these vehicles. Not giga-sexy, just mega-productive.
And home base for all the EV engineering at the Warren MI Technical center – a cozy nook of 19,000 engineers and designers. The place where soft-spoken hockey-loving people with bad hair cuts and pocket protectors create driving future, beating Tesla to the punch for the every-man 200-mile EV.
So within a year, 60-70K EV’s, PHEV’s and strong hybrids will be shipping out of Michigan, with Michigan-made batteries, and if the market is there, they could easily triple production without even blinking. EV Home base? EV’s are cars. Detroit is awake now regarding EV’s and Michigan is the Silicon Valley of cars. Guess where home base really is.
Nothing against GM, but Tesla’s going to be putting out 500K EVs per year in roughly 2018. GM had better up their game!
SVO – I grew up in Fremont and went to San Jose State. I know Silicon Valley. Wind ain’t much there. Altamont Pass and the Delta near Antioch. That’s about it, unless you want to hang them off the Golden Gate Bridge. Solar is OK – but coastal fog and morning overcast during peak load summer months means you gotta get inland to maximize during peak load time. The Central Valley is a lot better.
The frozen mid-west is the US Mecca for wind. Look at a national wind power map. With enough HV distribution to spread around the power, Minooka will do just fine in the RE world to come. And Minookans don’t have to pay $800K for a 2 bedroom flat, so they can superinsulate their house, buy their heat pumps, EV’s etc. and have tons of cash to spare.
I live in Monterey County, CA in a very sunny local. Except that I get hillside shade in the afternoons which would make PV much less cost effective. And here is my electric rates from PG&E-
Tier 1- 18 cents/kWh
Tier 2- 25 cents/kWh
Tier 3- 28 cents/kWh
Ouch is right, and we do hit the tier 3 usage every month.
This is despite it just being my wife and I at home, and having new appliances, and some LED’s.
We do both have home offices from which we work.
Anyway- EV car would be very expensive for us to charge. Makes gas look cheap.
Hi Hickory,
Even with the Hillside Shade, I would think at those rates that PV would reduce your electricity bill. Have you looked into those 3rd party companies that put the panels on your roof (they own them not you), I can see why there is a fair amount of solar in California.
At 30 cents per kilowatt hour an EV “fuel cost” is similar to gasoline at $3/gallon.
Note that over 150,000 miles in a car with 30 MPG fuel economy you would spend about $15,000 on gas at $3/gallon, this is the same as the cost of a 5 kW PV system at average installation costs, which produces about 7300 kW-hrs in an average year and is more than enough to power the average EV for 15,000 miles per year.
Not sure how much the shade would be a problem, you would need your property evaluated.
All true Dennis, but I didn’t mention the other problems of roof orientation, the additional shade from the big specimen Himalayan Cedar, and the property setbacks, all of which severely constrain our options.
What I am very interested in, but doesn’t yet exist here, is a local PV coop where I could by purchase a 10 kw direct share. We have plenty of great local locations for such, and I would put down $30k in a moment on that.
Here is one example of such-
http://www.easycleanenergy.com/
Here in Calif- the state and PG & E are still working on policy to set up these kind of ventures-
http://www.pge.com/en/myhome/saveenergymoney/solar/choice/developers/index.page
btw- a college friend of mine was co-founder of a company that developed a suite of PV panel installation gadgets, that got purchased by Solarcity for $158M 2 years ago.
Was that Zep Solar?
In Sonoma, one can get reduced rates if you have a EV.
I have a similar rate structure to you.
Get solar. Even with shade in the afternoon it pays off where you are in Monterey.
OFM,
University of Michigan keeps track of the average fuel economy of vehicles purchased:
http://www.umich.edu/~umtriswt/EDI_sales-weighted-mpg.html
Fuel economy has increased from 20.8 mpg in 2008 to 25.3 mpg today, or 21.6% in 7 years.
That’s pretty darn good! The one caveat is that the fuel economy of vehicles purchased has flatlined for 2 years now. With oil prices set to rebound strongly in 2016-2017, and affordable EVs in the pipeline it will be interesting to see how this trend changes.
It’s important to note that the University of Michigan uses the EPA’s CAFE rating, which has a Tesla Model S between a 90-100 mpg rating (depends on if you have dual motor, performance package, battery size, etc), so due to the nature of the data the average fuel economy for vehicles purchased will never go above ~120 even if not a single vehicle on the road burns oil.
https://www.fueleconomy.gov/feg/bymodel/2015_Tesla_Model_S.shtml
The Club of Rome Revisited – report prepared for the UK House of Commons special interest group – just out. ABSOLUTELY ESSENTIAL READING……….
http://limits2growth.org.uk/wp-content/uploads/2016/04/Jackson-and-Webster-2016-Limits-Revisited.pdf
More background here:
https://medium.com/insurge-intelligence/parliamentary-group-warns-that-global-fossil-fuels-could-peak-in-less-than-10-years-f0400914ed96#.cfqtx7gra
“The first shipment to leave Libya — 650,000 barrels of crude on Monday — was loaded at the Marsa al-Hariga port near the Egyptian border and is now sailing toward Malta, said a spokesman for the east’s oil company.”
http://www.marketwatch.com/story/rogue-libyan-region-loads-first-shipment-of-oil-despite-objections-2016-04-25
Global economy tanks due to high oil prices but the solution to a sluggish economy is high oil prices. Does anyone believe that there is a goldilocks price range that satisfies all factions?
Second point;
So for the history of humanity it has been a constant move to add larger quantities of cheaper, easier to produce, more convenient to use energy sources but now all of a sudden industrial civilization is supposedly going to continue on by “transitioning” to a highly complex, expensive, inconvenient, toxic, sporadic, resource dependent “renewable energy”?
Hi Jef,
As the cost of renewable energy falls below that of fossil fuel, the answer will be yes.
Do you think fossil fuels are non-toxic?
The goldilocks price is probably about $65/b to $85/b. Though this will move higher over time unless we move to EVs and plugin hybrids a such a fast rate that demand for oil falls faster than the fall in the supply of oil. I doubt that will be the case, but I am often wrong.
The cost of “renewables” is directly tied to the cost of FFs.
Obviously FFs are toxic, so are “renewables”.
At $65 to 85 the real economy will choke but who needs the real economy anymore?
Dennis – You live in a fantasy world where you get to ignore reality, dismiss all predicaments with a wave of the hand, and claim the everything will work out fine.
Hi Jef,
The World real GDP grew at about 2.34% per year from 2004 to 2015, based on IMF estimates of real GDP growth at market exchange rates. Over this period average crude oil real prices were $79.05/b (2015$) based on EIA data.
This is not a fantasy it is real world data.
I would expect at an average oil price of $75/b(2015$), the World economy would do ok. From 2010 to 2014 average annual oil prices were above $80/b in 2015$(average oil price was $96.90/b in 2015$), and World real GDP growth was 2.55%/year over that 5 year period.
Note that the World real GDP growth rate from 1986 to 2015 at market exchange rates was 2.77%/year based on IMF data.
http://www.imf.org/external/pubs/ft/weo/2015/02/weodata/index.aspx
Real GDP growth has slowed because the population growth rate has slowed (which is a good thing). The growth in Real GDP per capita has been pretty steady since 1970 at 1.4%/year on average, based on World Bank data from FRED.
https://research.stlouisfed.org/fred2/series/NYGDPPCAPKDWLD
What drugs are you on? The cost of solar panels has absolutely nothing to do with the cost of fossil fuels. And silicon solar panels are nontoxic.
“So for the history of humanity it has been a constant move to add larger quantities of cheaper, easier to produce, more convenient to use energy sources but now all of a sudden industrial civilization is supposedly going to continue on by “transitioning” to a highly complex, expensive, inconvenient, toxic, sporadic, resource dependent “renewable energy”?”
If you refuse to consider the possibility that such a transition is possible, you will never have any trouble convincing yourself it is not.
I sort of doubt a well to do businessman in say 1650 would have been willing to invest in a whaling ship based on the argument that whale oil would soon be cheaper than candles made out of beeswax.
Folks who actually know something about the question of a transition to renewables understand that it is a job as bigger than any ever attempted in history, and we understand that we might never manage a successful transition on a society wide or world wide basis.
But we also understand that the transition is going to be spread out over three, four, five or more generations, and that during those generations, we will NECESSARILY learn to live on a hell of a lot less energy per capita than we do today in rich countries, and still live comfortable, dignified lives.
Nobody who has ever actually taken the time to study the problem thinks it will be EASY. A lot of people who know a lot think it can’t be done.
But a lot of people who know a lot are changing their minds from one year to the next, and deciding it CAN be done. I am one of them.
A mutual friend recently encountered a lawyer we know, walking to work, and stopped to say hello.This lawyer bought a house within ten minutes walking distance of both his office and the local ( small town ) courthouse, and told our friend the time he formerly spent commuting is enough to make the payment on his new house, if he puts it to use as BILLABLE HOURS.
He DID also say, to be fair, that the tipping point in making the decision to walk to work was his doctor telling him to start getting more exercise or die before his time. 😉
Times change.
If I stay healthy, five years from now I will be using a quarter or less as much oil for personal purposes as I do today,because by then I will own a second hand Volt or maybe a second hand LEAF.
The USA gave up on “industrial civilization” a long time ago.
“Renewables”: Just more of spending of other peoples money. Debt Bomb and Non-performing loans.
Case in point, people don’t talk much about furnaces around here, do they?
Furnaces vs Semiconductors
K12 “Education” system: Elementary Algebra->Abstract Algebra. Fine. But its a dead end street of Quantum Mechanics (leading to Digital computers) that are not very useful in modeling large industrial scale chemical systems (Real Chemical based industry) So they go into Financial Engineering instead to further delude themselves or fantasize with the Electron Economy (EV’s, solar) that cannot deliver anything of significance without massive non-performing loans.
Furnaces aren’t kewl. And they are dirty. Financial Engineering with computers (aka Ripoffs) are kewl.
When you ask the “Renewables” Cons where the Process Heat is going to come from in their Electron Fantasy World, all you get in response is crickets. Their Entire House of Cards Economy falls apart.
An Idiocracy that prefers a Money Printing Banana Republic and childish electronic gizmos…and cannot even keep the lights on because we run massive deficits. Instead of being the last ones clinging onto the life giver called Fossil Fuels right to the bitter end, they want to exit the building first and commit suicide. The Hand Waving PseudoIntellectuals sitting behind computers are headed for the dumpster.
Hi Ponziworld,
Yes process heat will be needed, but very little is provided by oil, it is mostly coal and natural gas. A lot of coal and natural gas is currently used to produce electricity and much of that (99%) can be replaced with wind and solar power backed up with natural gas and batteries and with most of the intermittency handled by widely dispersed generating sites and a highly interconnected grid.
The peak oil problem is mostly a question of transportation, reduction of coal and natural gas in generating electricity will leave plenty for process heat, as supply of coal and natural gas falls and prices rise, better process heat technologies that rely more on electricity will be developed in order to reduce costs.
For example see
http://energy.gov/sites/prod/files/2015/02/f19/QTR%20Ch8%20-%20Process%20Heating%20TA%20Feb-13-2015.pdf
Jef,
Does anyone believe that there is a goldilocks price range that satisfies all factions?
Good question.
My impression is that goldilocks price range for oil now is $80-160. One argument in favor of this range is that it will allow more or less smooth transition of the US passenger car fleet to more economic models. It will also stimulate switch of public transit transport and short range trucks to natural gas. That also will provide stimulus for funding new technologies that might help to increase fuel economy for example truck start blusters using pneumatics, better aerodynamics, you name it. $5-a-gallon gasoline in the United States can do wonder with fuel economy in the USA. And $7-a-gallon gasoline means total switch to hybrids in passenger car sector and death of the current US infatuation with SUVs as personal transportation to work. It also might help to cure a lot of stupid things that the global economy currently is suffering from like an Atlantic salmon caught off the coast of Norway, then moves from that country to Germany, then to China for filleting, and finally to a supermarket in North America. With $10 per gallon gasoline small North America cities will be revitalized as commuting long distances by car to metropolitan centers becomes unaffordable for all but the wealthy. Large suburban shopping centers will also wither. That might revive smaller shops in the USA and spells trouble for Wal-Mart and Amazon.
But it is impossible to satisfy all factions. The USA neoliberal elite (which now dominated both Democratic and Republican Parties — which as a result is, in effect, a single party exactly like it was in the USSR, but with a nice brainwashing twist that convinces lemmings that there are still two parties and provides a nice, extremely impressive spectacle when two preselected by the elite candidates compete for the POTUS position; the trick that communists for some reason did not use) needs to be dragged kicking and screaming to this range.
The US political system is dysfunctional and fully captured by neoliberals. That means that kicking the can down the road in economics requires low oil prices.
So the US neoliberal elite will fight tooth and nail any substantial oil price increase from the current level, as this threaten neoliberal economic model and neoliberal globalization more then anything else. With oil around $100 shipping a 40-foot container from Shanghai to the U.S. costs around $8,000, compared to $3,000 if oil is in the $30-40 range. This increased shipping cost is the equivalent of a 9 percent tariff on all global trade, according to Canadian investment bank, CIBC World Markets.
That also spells deep troubles for China, so Chinese neoliberal elite is united with the USA neoliberal elite in pushing oil prices down. In an ironic demonstration of the power of globalization, China’s troubles from high oil prices will be felt worldwide.
This reaction of neoliberal elite is one of the main reasons why the current oil price slump is so deep and so prolonged. It is like injection of steroids into ailing neoliberal economic organism. The Last Hurrah of neoliberal globalization, if you wish. Saudis at the end of the day are vassals of the USA and if the US elite really cared about the US shale industry and conventional oil producers, oil price would never dropped below $70-$60.
See for example:
http://www.usnews.com/opinion/articles/2009/05/29/high-oil-prices-will-fracture-the-world-and-end-globalization
Yo, Libkez,
“The US political system is dysfunctional and fully captured by neoliberals. That means that kicking the can down the road in economics requires low oil prices.”
Huh? You think that conservatives offer any solutions? Give me a break. There is no political solution.
You think that conservatives offer any solutions? Give me a break.
It’s very difficult to find conservatives in the USA those days. I know only a faction around The American Conservative magazine (Patrick J. Buchanan faction). They are pretty much powerless, politically.
Everybody else among politicians including majority of Republican and Democratic parties are neoliberals. You probably need a more presize definition of neoliberalism then you are currently using:
Dude, the reason they are powerless is because they are a joke and most people realize it.
See also Washington consensus (which is another name for neoliberalism, along with “market fundamentalism”):
https://en.wikipedia.org/wiki/Washington_Consensus
http://www.who.int/trade/glossary/story094/en/
A more jingoistic part of neoliberals are called neoconservatives (Hillary is one of them)
industrial civilization is supposedly going to continue on by “transitioning” to a highly complex, expensive, inconvenient, toxic, sporadic, resource dependent “renewable energy”?
Ok. Let’s take em’ one by one:
highly complex – You mean that, Windmills, Hydroelectric facilities, Concentrating Solar Thermal and even PV are more complex than fracking, deepwater offshore drilling, Oil sands processing, combined cycle gas turbine or nuclear reactors? If you mean they are highly complex compared to a simple vertical onshore oil well, I”l grant you that. If not then they are no more complex than what they are transitioning away from.
expensive – The acquisition costs of what we are supposed to be transitioning from are trending in the wrong direction (up) while the costs of what we are supposed to be transitioning to are trending in the right direction (down). Expensive is relative and that is a moving target.
inconvenient – please elaborate. I think the Exxon Valdez, Macondo Blowout, the recent California gas leak, the various pipe line leaks and rail accidents have produced varying levels of inconvenience for the folks affected. I would imagine that, the inconvenience of great plains farmers having to work around the wind turbines that they’ve provided leases for, pales in comparison to the earnings from those leases. I take that you think man made Global Warming is a hoax and that the changing climate will not inconvenience anybody. I would also guess that you don’t think the health issues associated with the emissions from the burning of fossil fuels are an inconvenience worth mentioning.
toxic – See above. Again, you need to elaborate on how renewables are toxic. I’ve actually been inside the tower of a wind turbine (2009) and have yet to discern any effects from that exposure. I’ve also suffered a fair amount of exposure to solar PV panels and inverters. Maybe thats what has affected by ability to grasp (your) reality. On the other hand, (2009 again) I visited a hydroelectric facility and nuclear facility in France. The security around the nuclear plant was in stark contrast to the absence of security around the hydroelectric dam.
sporadic – In my neck of the woods, the sun rises predictably at about the same time everyday and sets in a similar fashion, with the length of the day varying gradually as the seasons change. It is sometimes obscured by clouds which are somewhat predictable so it doesn’t quite fit the definition of sporadic: occurring at irregular intervals or only in a few places; scattered or isolated. Large wind turbines tend to be sited where the winds are reasonably predictable and reliable in order to maximize the ROI for their investors, again not particularly sporadic.
resource dependent – This one “takes the cake” since, everybody knows that, it you don;t need any resources to extract fossil fuels. In addition, everybody knows that it will only take a few million years for the carbon cycle to return the carbon present in fossil fuels, to a form similar to the fuels that we have burned (over a couple of centuries) so that we may burn it again!
Composing this post got me thinking, why the hyperbole against and vitriol for “renewable energy”. I can understand it from people like Fernando, who have depended on the status quo for their livelihood and had successful careers in the oil industry but, from my point of view, there are at least four jobs I have done in the past that don’t exist anymore and I don’t go around denigrating the technologies that made them obsolete.
islandboy,
We just don’t believe the resources will be available to continue to grow our overshot population, and make a huge energy and societal transition, and heal our biosphere, and all are necessary at about the same time to continue much in the way of BAU.
I do admire your optimism, but your dreams seem unrealistic from here. We just see things differently, and we see the odds as piled up against your dreams. I hope we are wrong, but I’m planning for the worst and hoping for something better.
Wishing you the best,
Jim
Fifty years ago my father laughed at me for dreaming about the future as I watched Star Trek every Wednesday night a 8 O’clock and he worked in aerospace building the apollo space capsule. Yet everyday I see hundreds of Mr. Spock’s walking around reading their tricorders and talking on their communication device.
Jim, my guess is that you don’t understand how your computer works that you used to write your comment, but it didn’t stop you from commenting.
All this whiz-bang technology, all those sociopoli-sci Phd’s running rampant, and yet our world is still going down the tubes and we still can’t figure out how to implement such simple concepts as human equality, democracy and freedom, or even recognize our problems that stem from their very lack when they’re staring us right in the face.
No, ‘we’ are interested in post-pubescent Musk-scented commentary, because we think a good dose of EV and PV pills will work wonders for our problems. Take this EV and call me in the morning, kiddo… on your Star Trek Fisher Price communicator toy.
“JMG: you euphemised Musk’s new idea as a brain f[art]t – I think it’s much more than that, more like a very considered strategy to ensure the survival of both his company and his reputation.
The one thing everyone ignores with the Tesla powerwall is that, like the F-35, it is a technology that is supremely good at its primary mission.
In the case of the powerwall, that mission is propping up a share price. When you fail to sell laptop batteries to all the major car companies, but you have committed to a ‘super factory’ to build those batteries, you need a new story to tell to keep the suckers investing. ‘Hey, let’s sell batteries to all those people with grid-tie photovoltaics!’
Next year, there’ll be the marinised and containerised version of the powerwall, designed to keep global shipping functioning.
The year after, the high-g version to power the latest creation of Virgin Galactic.
And so on, ad nauseum.
As for the tech aspects of this piece of cr[a]p… when you consider that they are first generation lithium laptop batteries in a fancy box, you can chuck all the predictions out the window – eg, if you want them to last more than a year, your capacity is 3kW/h not 10. If you want to kill them instantly and burn your house down, overcharge them once (easy to do with a fault in the charge controller). If you want to kill them a little more slowly, but still way too quickly, discharge them fully a few times. Etc…
…I sure wouldn’t buy anything from Tesla.” ~ Les
I’m sorry to hear about your hard times Caelan, but the grass is pretty green on my side of the tracks. To get over here. One needs to get an education and commit to a productive working lifestyle.
Have you very thought about adult education classes ? Or would you prefer I just beam you over ? But that really wouldn’t be far now would it ?
Let’s hope the so-called education you have, XT5, allows you to ethically maintain your little island of green grass.
“If you want to kill them a little more slowly, but still way too quickly, discharge them fully a few times. Etc…”
Not True.. You get NO second chances with Li Batteries. You go below 1.x Volts per cell ONCE and they are Toast. But that can’t happen in a properly designed system since the Pak is “protected.” Everything has it’s Limits, especially Electro-Chem Energy Storage. One Gamechanger is Li Chemistry Lifespans are NOT dependent on state of charge like most other Battery Chemistries. You can Leave them for years in any state of Charge. Have to say that I’m Amazed with the performance of Tesla 24V Paks from the Cars, but I would Prefer Paks of Flat Batteries. It’s going to be Interesting to see Tesla’s Giga response to the Superior and more economical Paks from the Koreans
Caelan:
Well, eliminating the use of fossil fuels is easy. It’s just a technical problem, with the application of a little market economics. Any aristocrat can do it!
Stopping tyranny and oppression is hard. That’s a social science problem.
You shouldn’t read the bogus FUD against Tesla which you just reprinted. It’s sheer nonsense. If you can afford it, get yourself solar panels and a Powerwall.
If things go south, you’ll be the one selling power to your neighbors.
XT5
I’m a long range planner, so maybe I see a different picture than you, from a different perspective.
Your insults don’t become you. Didn’t your momma teach you any manners? If you can’t write something nice, better to keep your trashy thoughts to your self, or leave.
Good luck with the cornucopia.
Jim
Hello Jim,
I’m a long range planner too. Started working at the age of 14, bought my first home at 22, paid off my second home at the beach at 44 and retired at 55. I didn’t get here by accident, it was planned.
Yes my mother taught me respect for others and my father taught me that if someone throws an elbow, be sure to throw a harder one back without a technical foul. You seem a little sensitive to me, if my comment to you offended you to the point of your response. More than 99% of the human race doesn’t understand how a computers works(including myself) but it doesn’t stop them from using them.
“We just don’t believe”
First of all, when I write a comment. I only try to speak for myself, not others. When you wrote “We” in your comment above, it was my impression that you put yourself on the doomer and the anarchist side of the fence. Which in my opinion was correct by the comment that followed mine by The Anarchist. Example-
“No, ‘we’ are interested in post-pubescent Musk-scented commentary, because we think a good dose of EV and PV pills will work wonders for our problems. Take this EV and call me in the morning, kiddo… on your Star Trek Fisher Price communicator toy.”
There have been doomers and anarchists in this world my whole life. Yet humans have continued to increase the quality of their standard of living for those who play the systems game. The anarchist here has been attacking my views now for a good 6 to 12 months. I don’t whine, I just fire back. Don’t get me wrong. The world has plenty of problems, but that’s always been the case.
I will make a point to never respond to your comments again as to not offend you.
Sorry if you got caught in the crossfire
“Anarchism is participatory… it’s based on the assumption that any authoritarian or any structure of authority and domination has to justify itself– none of them are self-justifying– whether they’re in individual relations, or international affairs or the workplace or whatever… They have a burden of proof to bear, and if they can’t bear that burden– which they usually can’t– they’re illegitimate and should be dismantled and replaced by alternative structures which are free and participatory and are not based on authoritarian systems…
Go back 150 years… beginnings of the industrial revolution… At that time, the mills were being formed around Boston. They were bringing in working people, what were called factory-girls– young women from farms. Irish workmen from Downtown Boston… had a very free and lively press at the time, which they, themselves, ran. This was before the period of commercial press-domination and the general press was much more diverse, and much more free and much more lively than it’s ever been since. Quite the peak period of freedom-of-the-press in the US and also in England. And the press is quite interesting. It was written by the participants- their assumptions are what are relevant here- they just took for granted that wage labour was virtually the same as slavery. They had no influence from European radicalism– never heard of Marx, nothing of this– it’s just the ordinary assumptions of people who think reasonably about the world… This is right around the time of the civil war. Northern workers in the American Civil War fought under that banner; that wage slavery is like chattel slavery. In fact it was even the position of the Republican Party. It was a fairly mainstream position. You’ve even got editorials in the NY Times about it, believe it or not. And they also took for granted that the industrial system is totally illegitimate. It’s just a form of feudalism to which people are driven by essentially violence or starvation, and has to be overcome. Those who work in the mills should own them is taken for granted. The feudalistic industrial system was destroying their culture… These are understandings about the nature of freedom and domination that have been lost. So it’s not pure progress. How far they’ve been lost is an interesting question. My suspicion is that they’re right below the surface. And when the issues arise– right now– working people in the counterpart of the mills will recognize the relevance and accuracy of these, basically anarchist, positions…” ~ Noam Chomsky
“All political systems that I know of, and most kings, have moved their whole nation to desert. And the things that we saw as most proud– the cities and the canals and irrigation and so on– are the things that killed their cultures. And it continues, unabated. If people don’t seize power back, and make their own gardens, and sit in their own gardens of Eden, then we’re all doomed, and the whole world ends in dust.” ~ Bill Mollison
Island Boy. Thanks for your many good comments here. I have a little anecdote FYI that cheered me up, for one.
I have been playing around, as a long-time wood stove tinkerer, with the idea of not burning wood at all, but just cooking it in a hot oven to drive off the gases and leave the carbon, so as to allow clean combustion of the products without smoke, and use any biomass whatsoever. This has turned out to be not only successful, but easy and fun. My feeling is that it should replace all present wood stoves.
I have such a cooker running pretty well right now, and am making lots of carbon, and heating my shop far more than ever before by burning the gas cooked off, which has about 2/3 the energy of the wood, leaving 1/3 as charcoal to do lots of good stuff.
The gas fuels a honda genset just fine, and I can keep up my batteries in cloudy weather- Nov-Dec around here.
But the anecdote. I was surprised to find a rust belt university prof and his heavy manufacturing buddy heard about what I was doing and showed up yesterday, admiring my pile of charcoal and the rest. Both of these people were my kinda guy, real engineers who went solar in their own living with their own hands and are happy to try new things.
So they took off with all my mass of backwoods experience on cookers, with the promise to do something with it. The manufacturer has a massive shop and can make anything, and likes what he calls “government jobs” meaning, small stuff on the side, no economic justification, just interesting.
The prof teaches courses in this sort of thing already, and is loaded with good ideas.
So, hope.
edit. Hey! what’s this “n” thing, my name is wimbi, I never said anything about changing it. Somebody change it back, please.
Hi Wimbi,
I think you just need to type your name in the “Name” box along with your e-mail address in the e-mail box and you should be all set.
How stupid of me! I looked in the name slot and there was n. How did it get there? Evil spirits, for sure.
So with this one I put my real name back, wimbi.
Now, big suspense, I try to post, holding my breath.
The EIA’s Monthly Energy Review is out. US C+C production was down 74,000 bpd in March to 9,038,000 barrels per day.
Ron,
Looks like you was right about timing of peak oil. The trend of production down is becoming more clear with each month. It might be disrupted by some noise (end of Libya civil war, etc), but still with no new major deposits discovered I do not see factors that can change it.
Hi Likbez,
Higher oil prices might change things and that chart is US only.
IEA expects non-OPEC output to fall 750 kb/d in 2016, some of this may be made up by increases in Iranian, Iraqi, and Libyan output. On an annual basis 2016 may be pretty close to average annual output in 2015 for C+C. It will be interesting to see how things play out, I still like the plateau scenario which I will define as World C+C output remaining between 79 and 81 Mb/d on average for any 12 month period from now until 2025.
Hi Dennis,
Higher oil prices might change things and that chart is US only.
I understand that the chart is US only but it is the harbinger of things to come globally. As for higher oil prices, they need to get into $70-$80 range first where high cost oil projects including US LTO became profitable to change the current trend. Before that “recovery of oil prices” does not change much for non conventional oil producers. For some (for example the USA) conventional oil producers the lower range you provided before might be OK, but most oil producing countries with national oil companies could not balance budget below $90.
IMHO prices below $70-$80 mean for non conventional producers the continuation of “survival mode” or “extend and pretend”. With the only difference that the dates of renewal of credit lines coming closer. And that magic range of prices $70-$80 probably will not be reached this year. So I would say your expectations are too optimistic.
When you cite IEA it make sense to provide some information of their track record of production forecasting accuracy during previous sharp reversals of oil prices trends. My impression is that they are way too “linear extrapolation” type of animal.
This conclusion strengthen considerably if we take into account that this is 50% propaganda agency which needs to support “low oil price forever” regime as a part of their institutional agenda. In other words this an agency that is serving G7 countries interested in low oil prices. That creates certain limits on what they can say so it is natural for them to try to downplay any possible drop in oil production. It would extremely stupid to expect from them any other behavior. So IMHO you can safely double their estimates in such cases.
Reality is pretty grim now for oil producers and you need to understand that a lot of skeletons in the closet (including financial skeletons) remain hidden. So actual situation can be much worse then we assume and another quarter of low prices by which I mean prices below which conventional oil production in the USA is unprofitable (let’s say $55) might be the straw that broke the camel’s back.
So there is a hope that neoliberals lose control over oil prices at some point.
I agree with you about wild cards like Iran and Libya. But the US is ambivalent about allowing Iran to recover oil production and there are moves directed at confiscation part of their “frozen” funds without which this is almost impossible with the current prices. But still we can expect that both of those cards be played to slow down price recovery (and ayatollahs proved to be extremely stupid, if you ask me; not much different from Wahhabis sheiks. why they did not cooperate with oil price freeze (for six months; only six months!) is beyond me. But even Iran ayatollahs arrogant stupidity can’t change general trend, which is down.
Iraq can’t meaningfully increase production right now as this is an almost bankrupt by civil war country and chances to restore peace this year are slim. Saudis and friends continue to finance Sunni insurgency. It was inertia from “good old times” that drove their production up in 2015. This is over.
Shale card was already played once (and it was played very well) but that’s it. Now “carpet drilling” trick will not be repeated again even if price reach magic level of $80: unlimited financing of shale drilling is gone for good.
My impression is that there are powerful forces that are not interested in oil price recovery and do not care about negative long term consequences of waiting so much oil instead of extending conservation technologies.
Unless those forces (of neoliberalism) are somehow suppressed I doubt that prices can recover to the level that allow expansion of production. And in oil prices world the tail still wags the dog: Wall Street still determine oil prices in a sense that it is able vastly amplify the moves via HFT.
Also oil producers also now are disorganized mob unable to protect their own interests, so I would not expect meaningful actions from OPEC unless there is a coup d’état in KSA that removes the young gambler prince who almost halved country currency reserves.
Dennis, you’re right that higher prices might change things. I believe the shift to electric cars is far enough advanced that higher prices are not happening.
Peak oil has happened. We can see it in the rear view mirror, just like we can see peak anthracite.
Now, just like all the companies which were dependent on anthracite scrambled to replace it with something else, everyone dependent on oil will be scrambling to replace it. Those that move first will be best situated.
“Exxon Mobil (XOM +0.2%) loses the AAA credit rating from Standard & Poor’s it held since the 1930s, as the ratings agency downgrades XOM to AA+ and says the company’s greatest business challenge is”
“R E P L A C I N G ITS ONGOING PRODUCTION”
http://seekingalpha.com/news/3175811-exxon-loses-aaa-credit-rating-s-and-p
Chickens…home…roost. That’s actually huge news.
Called it. I predicted back in 2008 that this would happen and sold my family’s ExxonMobil stock. I wasn’t sure exactly when it would happen and I didn’t want to sell too late.
It may take 20 years but ExxonMobil will declare bankruptcy within those 20 years. They *cannot* replace their ongoing production, not with anything economically viable. But they will continue to set fire to every dollar of profit *trying* to replace that production.
If they switched the company to a program of managed decline, not replacing ANY production and engaging in a slow liquidation, they could be highly profitable for years to come. Instead, they will resolutely throw good money after bad, burn their profits, and then flame out in a spectacular bankruptcy, comparable to the Penn Central bankruptcy.
Cosmerica Bank is looking to sell out after being stung by shale loans and increasing reserves for loan losses 11 fold, per Bloomberg.
The folks who just can’t get their heads around the idea of self driving vehicles ought to meet a couple of friends of mine, names changed slightly, to protect their privacy, not that they will ever see this.
Bill and Sue are a married couple who love over the road trucking because they actually LIKE driving, and seeing the country. They travel with three lap dogs. They drive team, and go all over the lower forty eight almost at random, wherever the dispatcher gets them a load. Between them they cost their employer WAY over a hundred thousand dollars a year in wages, workers comp, insurance premiums, and yes headaches too, although they are dependable drivers as drivers go. They still want vacations, and leave to visit sick relatives on short notice, etc.
The truck will use less fuel and carry at least a ton more cargo. Driver accomodations such as comfortable seats, a bed, air conditioning, windows, music, etc won’t be necessary.
The truck will NEVER get lost, at least not after the first few years.
Putting ONE driving computer in the truck they drive, with the appropriate sensors on the outside, will enable that truck to roll almost twenty four hours straight, stopping only for fuel, on a cross country haul. The risk of an accident will probably be cut in half. The computer will not be represented by a union, ever. The computer will never expect to collect a pension, or a performance bonus, or even a gold watch.
And within three or four more years, the software that will run on the computer will be ready. Everything else is basically already off the shelf.
And the thing about software is that while the FIRST copy may cost ten billion bucks or more, the second copy won’t cost any more than the price of the disk or thumb drive or whatever is used to store it.
Sometimes the handwriting is on the wall, it’s as simple as that.
We already know that self driving vehicles CAN be built. The question is merely one of perfecting them and getting the price of them down.
It costs at least fifty thousand bucks a year to hire a competent, reliable Class A truck driver.
We already know self driving vehicles CAN be built.
The handwriting is already on the wall.
The only thing really holding up autonomous vehicles is the software, and the software once written is essentially free after that.
You may spend a million writing and perfecting a program, but once it’s ready, a second copy, or the millionth copy, costs only a couple of cents or less for the storage medium.
Let me add a little more food for thought to your comment Mac. Most class 8 road tractors BARREL down the interstate at about 65 to 70 mph in most states. Autonomous tractors don’t need to stop for breaks, meals, sleep and could cross the country at 45 mph and reach the destination in about the same amount of time. I would estimate that kind of speed reduction could cut fuel cost by 25 to 35 percent or maybe as much as half a million barrels of diesel fuel per day in the states.
Just another technology to keep the Doomers at bay. But, I would like to see your computer program back that tractor trailer rig into a tie dock location.
Surprisingly enough, to people who aren’t into such things, the computer will be FAR better at this than a man, because the sensor “eyes” that the computer uses won’t be limited to mirrors on the cab. They will be on both sides, both ends, and front and back as well. Computers already parallel park cars perfectly.
I’m one of the world’s all time great rolling stones, given that I have never done anything longer than it took to get bored with it, unless for money, and I bore easily. I used to drive trucks, learned how as a kid on the farm, and got behind the wheel on the road with friends and coworkers back when that was the way you got your first experience. I got my CDL back in the sixties or maybe the seventies? by swearing I had 500 miles of highway experience.
Parking a tractor trailer in a tight place is not a tenth as hard as it looks. It’s a skill you learn just like you learn to shoot pool, or play a guitar, or type, or hit a golf ball. . The ONE thing you must have is good eyesight and decent depth perception so you can SEE what the mirror(s) are showing you in miniature.
Most people could learn how to do it in a couple of days, all day long practicing, with a coach, well enough to get by, but getting good takes a lot of practice.
You are dead on about the actual cost savings you mention. The savings on the driver alone will be at LEAST fifty thousand a year. Multiply that by a million trucks,and unless I miscounted zeros in my old skull, that’s fifty billion a year saved JUST on the drivers.
The programming will be written.
I had a CDL for a short time back in the early 90’s. I agree with you except on that hitting a golf ball thing.
FORE
Some thoughts:
http://thebaffler.com/salvos/of-flying-cars-and-the-declining-rate-of-profit
Since 1970, no further increase has occurred. The record for the fastest a human has ever traveled remains with the crew of Apollo 10. True, the commercial airliner Concorde, which first flew in 1969, reached a maximum speed of 1,400 mph. And the Soviet Tupolev Tu-144, which flew first, reached an even faster speed of 1,553 mph. But those speeds not only have failed to increase; they have decreased since the Tupolev Tu-144 was cancelled and the Concorde was abandoned.
The only thing really holding up autonomous vehicles is the software, and the software once written is essentially free after that.
Self driving AI vehicles use deep learning algorithms. The software is ready and it is already on the road today.
And software has bugs in it….. Ever use Windows?
I agree self driving cars are coming.
I’ll be shocked if their model can deal with every scenario.
Faster processing means your model gets things wrong faster. Big data does not mean human models are now flawless.
Is like to see what these cars do in an ice storm when roads are covered in black ice and tree branches and power lines are falling on the ground due to the weight of the ice.
Would u get on a self flying airplane with no human to take over if the planes operating system crashed? I wouldn’t.
Thanks!
“Is like to see what these cars do in an ice storm when roads are covered in black ice and tree branches and power lines are falling on the ground due to the weight of the ice.”
Oh this one is simple. The vehicle will be programed to pull over to the side of the road and wait until it is safe. Which is a lot smarter than any human who try’s to continue forward.
YourWelcome
Windows is a Virus..
Dude, Deep Learning Algorithms and Windows have about as much in common, as a team of highly skilled neurosurgeons in an operating room, and band of chimpanzees under the influence of hallucinogenic mushrooms, throwing rocks at each other out in the African bush. Their DNA being 98% identical, notwithstanding!
Please educate yourself about how deep learning algorithms work and what they are capable of doing before making foolish comments.
https://goo.gl/Z6hOfD
BTW, Things have already evolved a quite lot since that video was produced.
Well I’ve worked in the software industry for 20 years.
we were supposed to have all lost our jobs 10 years ago because computers would manage themselves.
On a daily basis I see very sophisticated software fail without human intervention.
As I said, I think self driving cars are a reality.
As I said, I think self driving cars are a reality.
Yes, but that isn’t the point, did you watch the video?
We aren’t talking about writing code!
Just watched the video. It is impressive Fred.
Having worked in software analytics for years maybe my opinion is tainted by the 100s of sales demos of the past that are super impressive in the pilot stage, but achieve mediocre results in the real world.
That being said, you make a good case here. And I will always admit that I could be wrong.
Note that the guys that did that video has started his own company selling the technology. I doubt he is going to trample on his own investment.
thanks for sharing that with me.
Dude, I don’t care how deep your learning algorithm is, when lives are on the line it’s way different than learning chinese or recognizing objects in photos. What insurance company is going to take on this risk? What politician is going to risk his or her career on allowing these things on the road? What will be the public reaction the first time a family driving in an ordinary car is killed by a self driving vehicle?
What insurance company is going to take on this risk?
I guess you missed the part about these kinds of systems already being far better than experienced medical professionals at developing diagnostics tests upon which real lives will certainly depend!
What insurance companies are going to take the risk?
How about the ones in the health care industry for starters. That much is already happening right now! Compared to that driving a car or flying an airplane is trivial.
Quite frankly I don’t think you have grasped what deep learning algorithms can do and what the implications of that might be.
They already have the potential for eliminating 80% of all service jobs globally. Think about that for a moment!
SVO, you do have a point when it comes to politicians, insurance companies, and people.
One reason I have argued on other days here in this forum that self driving vehicles won’t take over as soon as their advocates think is that politics will delay their adoption by some years.
People in general are about as dumb as fence posts, when it comes to being lead around by the nose. It will take a generation for people to accept self driving vehicles on the grand scale.
But on the other hand, insurance companies know the average cost of settling an accident claim to the dime, and it won’t take long for them to get on board, due to pressure from their customers.
If the insurance industry refuses, then the trucking industry will start the transition by self insuring. In most states, if you have assets enough to post a bond equal to the mandatory minimum insurance coverage, you can insure yourself.
There won’t BE any pain or suffering claims DIRECTLY associated with damaged self driving vehicles, damages in that respect will be limited to property damages alone.
The insurance companies will be at much less risk in terms of their human drivers hitting self driving trucks and delivery vehicles, because there won’t be anybody IN those vehicles in most cases.
The big fight from the insurance industry will come as the result of the industry understanding autonomous vehicles means a shrinking market for their product.
The fucking lawyers will be at the forefront of the fight to keep human drivers behind the wheel. At least half a dozen of them make a good part of their living out of accidents in any one stoplight county seat out in the boonies.
Lawyers invariably dominate state legislatures. I rest YOUR CASE for you in terms of lawyers and politicians. You win, hands down, short term at least.
The insurance industry probably comes out about a draw.
In the UK, EV’s are facing surprisingly high driving insurance costs.
http://www.theguardian.com/money/2016/apr/24/insure-nissan-leaf-electric-car-quote-double
It appears at least here that insurance companies don’t like the unknown. Some won’t even insure EVs at all. I can’t see them insuring self driving cars for any money, as in the UK the driver is insuring their own driving, and how do you allocate blame in a crash if there are no drivers?
Also, I can’t see self-driving cars cutting the total number of cars by much, as most people commute by car, and most work the same standard office hours, or drive between customer sites, and so would still need reliable exclusive access to a vehicle at peak demand times. I can see the total VMT rising, as people who don’t currently drive would find hiring a driverless taxi cheaper, and the cars need to drive empty between customers and Jevon’s paradox kicks in. I find I am driving (a bit) more now that I have the Leaf, because it is so easy, cheap and convenient.
Insurance companies in the USA will not have any real reason to refuse to insure self driving cars, other than being sure they set the premiums high enough.
Their liability is limited to the dollar figure specified in any given policy.
At first they might not charge ENOUGH if it turns out electric cars drivers are more prone to having accidents, or the cars are more expensive to repair.
If that happens, they will just raise the premiums on electric car policies.
Maybe the computers will one day tell us what we are doing wrong as a species, which is when ‘our’ so-called governments will step in and shut them down.
At the same time, perhaps those very governments or elites will be able to retain some of those computers to help control people more, like keep track of them better on nanotech CCTV cams, and in their governpimp-controlled self-driving cars, like to make sure they go to their wage-slave positions on time and only unlock the doors at specific times.
‘Ok, you can get out, now.’
Anyway, we need to be wary in general about how technology– computers and otherwise– affects society and what it does in the wrong hands– which might be pretty much everyone’s hands if given half the chance. And I don’t see our society any better with any kind of technology so far. So what makes us think that Artificial Intelligence will be any different in that regard? Then again, maybe it will prove to be a paradox of sorts, and even try to run the country and do a better job.
‘Trump or HAL? Cast your votes.’
Lastly, it might be possible– even already– that computers start to write their own algorithms and start learning what they’re not really supposed to learn and start doing what they are not really supposed to be doing.
It’s not really computer consciousnesses I am worried about, but them in the hands of the naked apes we call humans.
This is why self-driving cars aren’t going to happen…. not exactly.
Instead, what will happen is that “driver assist” features will be added. Lots and lots and lots and lots of them. Eventually the car will refuse to hit anyone and will refuse to drive off the road, and will refuse to speed… and will drive on its own a lot of the time, except when it says “conditions too dangerous” and pulls over to the side of the road in the ice storm, asking the human to take over.
That’s how it’s going to happen. Remmeber, commercial ariplanes mostly fly themselves, but we don’t talk about automated planes. The pilot simply switches the “autopilot” on…most of the time.
Jeez, if they could only figure out how to transport the equivalent of 200 trucks with very little manpower then we wouldn’t need incredibly complicated technology to drive trucks around on their own.
Wait, I think they’re called trains.
No one has ever suggested that we stop using trains!
But it IS hard to turn a train around in a residential cul de sac when delivering a load of lumber or furniture, lol.
Seriously, I expect that the technology of trains will evolve to the point that the engineer is only on board to watch the instruments.
Management may put the famous dog on as the OTHER on board employee to make sure the engineer doesn’t actually touch anything. 😉
My belief is that a LOT of new conventional rail, and a lot of very light rail, will be built over the coming decades, with the pace of construction picking up starting in the next ten years or so. This will enable shippers to get their goods a lot closer to the end user using far fewer trucks.
OFM, you’re going to send a self-driving truck full of lumber down my cul de sac? I want too see how THAT turns around. By the way, who the heck is going to unload the lumber? LOL!
Also, do you realize that you are furthering the displacement of human workers with technology? Is that something we should look forward to? Fortunately it will never work outside of, possibly, some long haul routes. Of course, who is going to insure those self driving trucks? I’ll believe it when I see it.
And Fred, I know nobody is suggesting we stop using trains, but they are suggesting we use a much more complex solution to the same thing. Unless, of course, you are thinking of sending these robots down my cul de sac with a load of lumber!
Well, the driver usually uses the forklift piggybacked on the rear, if it’s a big load, or does it by hand, if it’s a small mixed load.
If the forklift and or crane mounted right on the truck can’t be automated, and they likely WILL be automated, then the building supply store will send along a laborer, who will get paid a hell of a lot less than a driver, lol.
Yes, this sort of thing bothers me a lot, because I know a lot of people who NEED jobs driving trucks, etc, some of them relatives.
But that won’t stop trucks from being automated.
This has now entered the “Well, we’ll see what happens” zone. I’ve been working in computers long enough to see many a wishful vision fail to materialize. I sure wouldn’t want to be the programmer whose code suddenly causes every driverless truck in the nation to suddenly veer left at the same time! (That was a joke. I know that programmers never make mistakes and software never does things unexpectedly)
Self-driving trains were perfected in the 1970s. (Google Vancouver SkyTrain and Docklands Light Rail if you’re curious.)
The engineer exists solely because of (a) unionization, and (b) people get all weird about driverless trains and if there’s a grade crossing, they want someone to be in the cab in case of a crash, even if he can’t do anything.
This is why driverless cars aren’t going to happen per se any time soon — the way people get all weird about driverless trains happens with driverless cars too.
As a result we will instead have cars that *practically* drive themselves but with a required driver who remains legally responsible.
I’d say perhaps the real issue is the demographics, if you are in the Boomer Generation then you are just about done and out of it [the workforce] so there’s such little point in re-educating and training the old farts. On the other hand there is a much more serious issue and that is of the current 20-30 Somethings, with so many of them thanks to 0bama or liberal ideology having significant trouble finding any “real” work with healthy wages they can take home with consistency. You see lots of recent college graduates out there holding down two, three part time jobs trying to make ends meet, well maybe for a little while you can do that, but eventually you won’t be able to raise a family & wife on the low wage position. Just try to build a house for your wife & children on $10.hr.
Then at the same time you have robotics creeping into every part of our daily life [becoming omnipresent] along with the assorted robotic trucks, trains, and ships. Now you’ve also got to factor in the UAVs [unmanned aerial systems] looking to take over all sorts of jobs we now take for granted as being “manned” including firemen, GIS-mapping, surveying, security watchmen, etc. While at the same time we see all these envirocuckoos bringing up one bogus reason or another in looking to eliminate every last one of the “dirty” fossil fuel jobs which can’t be done with machines. What’s very clear here is that technology in the form of robots and automation and socialist complainers have all been unleashed without giving any thought as to how they will have severe consequences on our survival as a prosperous freedom enjoying culture.
Darn those liberals for causing all our problems? First they tell us that free trade and unrestricted capitalism will make all our lives better. Then they eliminate the banking laws that kept our financial institutions from bringing down the economy. And to cap it all they get us into a devastating war in Iraq that cost trillions and thousands of lives lost or ruined. Now its’ robots! Liberal robots taking away jobs from good conservatives.
Will it never end?
half those guys, by definition, has an IQ < 100. Real work with good pay is going to be scarce for sub 100s.
THAT, is the big difference. It wasn't always that way.
Food for thought on self-driving vehicles from the Insurance Information Institute:
A survey by IEEE, a technical professional organization dedicated to advancing technology for humanity, of more than 200 experts in the field of autonomous vehicles found that of six possible roadblocks to the mass adoption of driverless, these three were ranked as the biggest obstacles: legal liability, policymakers and consumer acceptance. Cost, infrastructure and technology were seen as less of a problem. When respondents were asked to specify the year in which some of today’s commonplace equipment will be removed from mass-produced cars, the majority said that rear view mirrors, horns and emergency brakes will be removed by 2030, and steering wheels and gas/brake pedals will follow by 2035.
http://www.iii.org/issue-update/self-driving-cars-and-insurance
And furthermore!
In California, the Association of California Insurance Companies is advocating “for changes clarifying that the autonomous vehicle’s manufacturer retain all liability for damage, losses or injuries caused by the operation of these vehicles as required by the enabling law (SB 1298),” according to Property Casualty Insurer’s Association of America. Other states have considered such proposals.
Anyone think the auto manufacturers will be lining up to take on that liability?
Nobody knows how to use the auto horn any more. Its function is to warn people on the other side before you go around a BLIND CORNER.
There is NO substitute for the horn. It’s going to remain in every car. Even self-driving cars can’t see around blind corners, and there are lots of blind corners.
Emergency brakes will never be removed. If a car crashes and the driver says “I tried to hit the emergency brake but there wasn’t one”, the car manufacturer will have full 100% liability — no manufacturer will tolerate this.
Rear view mirrors will never be removed for similar reasons.
On the other hand, they may decide to take away that pesky accelerator pedal. If the human isn’t allowed to touch the accelerator, it *does* eliminate a lot of sources of potential crashes.
Will they have a dog installed or will you have to provide your own?
NAOM
There are robot lawn mowers. I don’t have to ride along. Self-driving cars can drive to the grocery store, the groceries can be loaded into the car securely, the car can drive back to my house and into the garage with the groceries. Don’t have to ride the lawn mower to cut the lawn, I don’t have to ride along to have a Self-driving car retrieve my groceries.
If I want to go for a joy ride, I don’t need a self-driving car, I can drive myself.
Besides, self-driving cars and trucks will be prone to being wrecked and vandalized by disgruntled humans replaced by software.
The highways will be a mess. It’ll be done for fun and amusement by masses of unemployed vagrants. The broken window theory. Works every time.
Self-driving trucks and cars will be a nightmare. Hackers will have a whole new field of study. har
Today’s recommendation: Silence is Golden by the Tremoloes
*https://m.youtube.com/watch?v=n03g8nsaBro
Have a good evening.
…I don’t have to work or go to work. The robots are doing the work I used to do for me. My self-driving car can drive me to the place where I used to work, just so I can reminisce and wave to the robots doing the work I used to do.
I don’t have to open the doors or windows to my automatic door and window-opener house or even turn on anything. All I have to do is just appear or say, ‘Turn on!’, and things just happen because of robots and computers…
…But robots will replace them soon, and look and sound just like them… and do new songs and albums and live shows for the next 50 years…
“Hello, R Walter… I am your electropseudoduplicate… I taught myself a song… If you’d like to hear it, I can sing it for you…”
Today’s recommendation:
Rubber Ball
Have a good day.
Can your personal clone sue you for defamation of character (for public drunkenness, or voting for Trump for example)?
If R Walter’s robot was a reasonable facsimile of Walter, I doubt it would, but R Walter might have a better idea since he’s the template.
So you might have a better idea of what your own robot facsimile would do based on your own intimate self-knowledge. What do you think it would do?
Smoke Gets In Your Eyes
There is an increasingly anti fossil fuel movement in the US. As the Bush administration wholeheartedly supported fossil fuels, the current administration thinks obviously not so.
http://www.resilience.org/stories/2016-04-25/gov-cuomo-rejects-the-constitution-pipeline-huge-win-for-the-anti-fracking-movement
http://www.resilience.org/stories/2016-04-26/we-could-be-witnessing-the-death-of-the-fossil-fuel-industry-will-it-take-the-rest-of-the-economy-down-with-it
As we have in my view little alternative to fossil fuels, I am wondering how this will play out over the next years. Can companies increase production when even its own government does not want them to do so?
Of course they can. All this well-intentioned anti-fossil fuel stuff will dry up and blow away as soon as things get tight enough. Drill-baby-Drill, as irrational as it was, became the mantra of the day once oil prices got high. The only thing that will stop fossil fuels from being extracted is when they become uneconomic, period. And that’s a long way off.
Coming from the area of upstate NY that is clamoring for fracking, it’s all kind of sad. Cuomo is preventing them from selling their land at a time when the depressed price of NG will give them the lowest value for their land. They are desperate and will take anything they can get. Much better to wait until NG prices go up again and the value of their land will go up with it. But they don’t see it that way.
What Economy?
The Stock Market Ponzi is the Economy.
And the Stock Market is going from hollowed out marketing shells of “companies” toward an A.I Computer full of worthless 1’s and 0’s “directing” [transferring ownership] the Global Economy. Invest in 1’s and 0’s instead of furnaces and thats what you end up with.
The Department of No Energy and No Economy (the US Government) needs a No energy system to fuel its non-existent economy.
“Renewables”: “Its getting cheaper every day forever!!!” [and it might even power Tent City!]
“Investors”: “Hooray!”
Today:
DVN up 6.61%
WNR up 1.93%
CRC up 10.55%
RDS.A up 2.18%
CVX up 1.53 %
CHK up 8.18%
Making money the old fashion way. Buying low and selling high. You snooze, you loose.
It’s what the corrupt legal structure allows you to do with money (symbolic) vis-a-vis land and resources (real) that in large part matters:
Consider the effects on reality, on the planet, of a symbolic system that is variously-decoupled (unpegged) from it, from reality, but that then subsequently, regularly and methodically over time, renders its effects from within its own symbolic dynamics and logic, upon reality.
What do you think happens?
We have enough alternatives to fossil fuels that I expect to have gotten rid of my usage within 2 years. Ist here a reason you haven’t?
“As the Bush administration wholeheartedly supported fossil fuels, the current administration thinks obviously not so.”
“Can companies increase production when even its own government does not want them to do so?”
The answer is YES. You do realize that the US almost double it oil production in 5 years during the Obama Administration at a recorder setting pace, Right ?
“The scenarios most closely reflecting the reality of our world today are…
“The American way of life is not up for negotiation.” ~ George Bush Sr.
China uses a little more than forty percent of the world’s coal.
The US uses about twelve percent of world coal production, not 23 percent.
https://en.wikipedia.org/wiki/List_of_countries_by_coal_production
906 million tonnes for the US, China consumes 3.87 billion tonnes, total is 8.1 billion tonnes per year.
Yes but China is burning that coal to make all of the “stuff” that the US buys so you could argue that the US is consuming that coal. I may even be greater than 23%.
exactly Jef. this whole globalization is just a buzzword to hide what is really trashing the mother earth by the global 1%. Pointing fingers who trash more is illusion fed to us so we can chew on it and be distracted because the real game is played between 1% versus 99% no matter where they live.
You are definitely greater than 23%, except maybe with ethanol.
Great post, thanks.
You’re welcome, SVO and thanks. It was actually a little bit of an elaboration on a previous post a few months back but which mostly just had the link.
The switch to solar power is our most likely way out of the L-type collapse, and it’s a very narrow path out.
If the switchover goes the way I *hope* it will, then the portion of the elite who want to continue Business As Usual will *be driven bankrupt* by the bankruptcies of ExxonMobil, Peabody Coal, and so on, while the ones who sounded the alarm and went into renewable energy will acquire the wealth and power necessary to make the structural changes to society.
My hope is that the capitalism-driven destruction of the fossil fuel industry will also break the back of the political power which they hold, and move the political power into the hands of people who will revitalize things, banning the practices which have led to the plastic ocean as well as stopping CO2 burning, and also redistributing wealth.
It can happen. It’s just unlikely.
Venezuela is worth a note, being a major oil producer.
http://www.nytimes.com/2016/04/27/world/americas/venezuela-panel-nicolas-maduro.html?_r=0
There is some chance the opposition will get rid of the Maduro regime peacefully. If they fail in that, then imo there will be war in the streets to get rid of him and his cronies within another year or two.
The replacement for Maduro will be worse.
Venezuela is suffering from chronic lead poisoining because they used leaded gasoline until *2007*. Lead poisoning in childhood makes people dumb and mean. The first generation to grow up without this poisoing won’t be adults until 2026. At that point Venezuela will *start* calming down and getting better.
Read Rick Nevin’s work on this. It’s very comprehensive.
What’s next, a no day week?
VENEZUELA INTRODUCES TWO-DAY WEEK TO DEAL WITH ENERGY CRISIS
“Venezuela’s government has imposed a two-day working week for public sector workers as a temporary measure to help it overcome a serious energy crisis.”
http://www.bbc.com/news/world-latin-america-36145184
If they implement a no day week how will they take their vacations?
“We are requesting international help, technical and financial aid to help revert the situation,” he said. “We are managing the situation in the best possible way while we wait for the rains to return.”
Technical help to refill the Guri dam? I’m not sure that technology exists. Once again the downside of extreme socialism is shown to be just as bad as the downside of extreme capitalism. Maybe worse.
Of course the technology exists to refill the dam and you as a farmer know of it. Calling all rain makers….
We threw the bones here in northern California last winter and it worked – Shasta dam refilled. Maybe it will work in Venezuela, too.
I consider this el nino year in California a failure. Overall state rainfall a bit below average. Sure Shasta is good, but trinity nearby is only about 2/3rds, and San Luis is only about 1/3rd (of average for date). Certainly wasn’t a gusher.
The Sierra snow-pack is about 90% of average.
They’ll work only during vacation.
Nobody is going to invest a dime in Venezuela right now, other than maybe some national governments investing a little in hope of swapping the investment in exchange for political purposes, hoping to collect some return favors.
Any other money flowing into that country for now will be charity money, pure and simple.
The Maduro puppets on the Supreme Court will stop the election recall if they possibly can.
The best thing for the country would be for Maduro and his inner circle to all just take whatever is left to loot, which can’t be much, and move to Cuba.
What’s next, a no day week?
How about a negative day week. 🙂
I’ll see you and raise you two Fred: square root of minus one days? Imagine that! 🙂
Imagine that!
LOL! Aye, aye, sir! No pun intended.
Imagine there’s no countries
It isn’t hard to do
Nothing to kill or die for
And no religion too
Imagine all the people
Living life in peace…
John Lennon
“Today we finally have confirmation after Reuters reports that the nuclear power plant was indeed infected with not one but several computer viruses. But don’t worry”
https://www.rt.com/news/341083-germany-gundremmingen-plant-virus/
Chernobyl 30 years on:
“The anniversary has garnered extra attention due to the imminent completion of a giant 1.5 billion euros ($1.7 billion) steel-clad arch that will enclose the stricken reactor site and prevent further leaks for the next 100 years. ”
http://www.reuters.com/article/us-chernobyl-anniversary-idUSKCN0XN008
Back on Topic & LTO style Meltdown – Didn’t one of the world wars cost $33 Billion?
From econ link above:
http://economistsview.typepad.com/economistsview/2016/04/causes-and-consequences-of-the-oil-price-decline-of-2014-2015-video.html
Has Devon been just “practicing” the drilling and oil production in 2015?
SS, These losses reflect reporting as per annual 2015 10K Form?
Sumitomo had historic Stop Loss / Red Ink upon exit of a West Texas project in Sept 2014.
http://www.ft.com/cms/s/0/630658d8-47ba-11e4-be7b-00144feab7de.html
Juan Cole as a great take on the Saudi plan to diversify away from oil:
http://www.juancole.com/2016/04/reinventing-saudi-arabia-after-oil-the-princes-2-trillion-gamble.html
The excruciatingly young prince, who was born in 1985, has a BA in Law from a local Saudi university and his way of speaking about the elements of the economy is not reassuring. Take his emphasis on the maritime trade routes that flow around the Arabian Peninsula. How exactly does Saudi Arabia derive a dime from them? The only tolls I can think of are collected by Egypt for passage through the Suez Canal. By far the most important container port in the region is Jebel Ali in the UAE, which dwarfs Jedda. His estimate of 30% of world trade going through these bodies of water strikes me as exaggerated. Only about 10% of world trade goes through the Suez Canal.
As for tourism in a country where alcohol is forbidden and religious police report to the police unmarried couples on dates, that seems to me a non-starter– outside the religious tourism of pilgrimage to Mecca. The annual pilgrimage brought in $16.5 bn or 3% of the Saudi GDP four years ago, but that number appears to be way down the last couple of years. Unless the prince plans to much increase the 2-3 million pilgrims annually, religious tourism will remain a relatively small part of the economy.
He also spoke about the new bridge planned from Saudi Arabia to Egypt as likely to drive trade to the kingdom and to make it a crossroads. But the road would go through the Sinai Peninsula, which is highly insecure and in the midst of an insurrection. And where do you drive to on the other side? You could maybe take fruits and vegetables by truck from Egypt to countries such as Qatar and the United Arab Emirates. Would Saudi Arabia collect tariffs on these transit goods? I can’t see how that generates all that much money. The big opportunity for overland transport would be to link Egypt to a major market like Iran (pop. 77 mn.), and via Iran, Pakistan and India. But Prince Muhammad and his circle are hardliners against Iran and unlikely to foster trade with it.
from Bloomberg:
Prince Says Saudi Arabia Not Yet Ready to Allow Women to Drive
http://www.bloomberg.com/news/articles/2016-04-26/prince-says-saudi-arabia-not-yet-ready-to-allow-women-to-drive
• Kingdom is only country in world that bans women from driving
• Women need guardian’s consent to get passport, travel overseas
Saudi Arabia isn’t ready to end the world’s only ban on women driving, Deputy Crown Prince Mohammed bin Salman said, arguing it’s not just a matter of ending strictures imposed by the kingdom’s austere form of Islam.
Allowing women to drive is “not a religious issue as much as it is an issue that relates to the community itself that either accepts it or refuses it,” said the 30-year-old prince, who has amassed unprecedented powers since his father, King Salman, ascended to the throne. “The community is not convinced about women driving” and sees negative consequences if it’s allowed, the prince said on Monday …
“We were very disappointed,” said Muneerah Sulaiman, a 26-year-old lawyer in Riyadh, after the prince’s comments on Monday. “I don’t understand the argument of people who appose it on religious grounds,” she said. “How is it OK to have a strange man drive women around, which is against Islamic teachings, but not OK to drive yourself around? It doesn’t make any sense.”
The only thing the deputy crown prince, and I use that term lightly, forgot to mention was self driving cars and how they’re going to save the kingdom from self destruction. The guy is either a mountebank or a complete idiot. Anyone who suggests they can monetize boats passing by in the distance is either delusional or a Somali pirate. Saudi Arabia just recently pulled a bunch of money out of global investments to pay bills and now they’re gonna sell assets and invest the money in global investments to make ends meet. The guy is a few sandwiches short of a picnic.
Does anybody know how the ACTUAL fleet wide fuel economy of the American car and light truck fleet has been changing for the last ten years or so? I am not asking about the NEW car average.
For sure the LAST of the older large gas hog trucks and cars dating back into the eighties will be gone soon. Almost all of the early nineties models have been scrapped already.
I searched for “average us fleet fuel economy” using Google and a whole bunch of stuff came up. Not to be disrespectful or anything but, in this case Google really is your friend!
Seriously though, the Corporate Average Fuel Economy (CAFE) is tracked very closely and a figure is available every month see:
Average U.S. mpg edges up to 25.5 in May
Thanks, this is good data but not the data I am looking for, unless I am badly mistaken.
CAFE tells us what the average is for the vehicles built that MODEL YEAR, rather than the entire fleet. There are still millions of cars on the road built back in the eighties, and ever older.
Likewise, the second link does not tell us the actual fleet average FOR ALL THE CARS on the road, unless I am misinterpreting it.
I could get an approximate answer by dividing total miles driven by total gasoline consumption, and I am hoping to find this in a chart I can copy and save,since I am almost helpless when it comes to creating charts. I managed to avoid computers except for the ones in cars until I was already an old fart and don’t want to put any time in learning to create my own charts at this stage of the game.
It could be that nobody HAS a good answer because nobody really knows how the proportion of miles driven is divided among all the cars on the road. All we know for SURE, so far as I know right now, is that older cars are driven less on average than newer ones.
I am reasonably sure the actual fleet average is improving, over time, but it could actually be stalled or decreasing due to the huge numbers of extra large vehicles being sold the last few years. If it IS improving, it is probably improving only at a glacial pace.
This problem is similar to the birth rate and population growth problem. Falling birth rates don’t have much influence for decades. It’s going to take a LONG time for tougher CAFE standards to up the actual fleet average very much.
Hi Dennis,
From our conversation today, I thought you would find this interesting
“Drilled but uncompleted wells hold reserves that can be brought on line in a short period of time, thereby defining the concept of spare capacity. It is plausible to believe that U.S. spare capacity may be close to rivaling OPEC’s current spare capacity.”
“Platts Analytics research shows that Texas alone could introduce 1.25 MMB/d of oil into the global market and can do so in a short space of time – on average just 30 days.”
http://oilprice.com/Energy/Energy-General/Why-Saudi-Arabia-Will-Not-Win-The-Oil-Price-War.html
Is winter coming back in Europe?
There is a wintry comeback in Europe (http://www.3sat.de/mediathek/?mode=play&obj=42667 at 8:00 MEZ). One meter of snow in the Alps and even snow in the valleys at the end of April. I cannot remember that this ever happened. It is also confirmed that this is the lowest temperature in recent history at the end of April even in main cities (-10 C in the Alps and even below 0 in Munich).
As this is probably a one time event, it does not fit into the current political correctness of climate change. As climate change is a fact and contributed very much to the evolution of mankind, the reason for climate change can be manifold – the axis of earth, the shape of ellipse around the sun, sun activity ….
In any way the link between climate change and the use of fossil fuels is technically impossible as the amount of CO2 is way too small (400 ppm equals just 0.04%) to have any material effect on the heat capacity of air. In my profession as chemical engineer I have calculated all my life heat capacities of gaseous mixtures and it is impossible that this small amount of CO2 can have such an impact on the atmosphere.
More and more I get the impression that the climate change narrative is used to destroy the fossil industry. As I am very much for innovation and alternatives, it is in my view the best way to create new technologies, which are really better than conventional technologies rather than blackmail older technologies.
The current alternatives (wind, solar, electric cars) to the fossil industries did – except for economies of scales – not materially improve over the last 100 years. What we would need is true innovation of alternatives. What we do not need is a shaky political story, which potentially destroys the fundamentals of our lives with dire consequences for the future.
To speak with the words of Schumpeter the challenge is ‘creative destruction’ with emphasis on the word ‘creative’.
It is not about the heat capacity of air. We already know the effect of CO2 as a greenhouse gas for quite some time. I would suggest reading: “On the Influence of Carbonic Acid in the Air upon the Temperature of the Ground” by Svante Arrhenius. Published in the Philosophical Magazine and Journal of Science Series 5, Volume 41, April 1896, pages 237-276. It shows again that being educated does not make one a climate scientist.
Entropy101,
I had a look at the article and it has been at this time (around 1900) not clear how much influence CO2 had on the warming effect on air.
….Tyndall held the opinion that the water-vapour has the greatest influence, whilst other authors,…are inclined to think that carbonic acid plays the most important part…. (on page 239).
We are now in the lucky circumstance that we have experience of 100 years of CO2 emissions.
In 1900 we had around 500 mill tons of oil equivalent fossil energy use. Today we have around 15 bn tons of oil equivalent of energy use. So, this 30 fold increase of CO2 emissions is actually met by a 30 % increase of CO2 in the air from 300 ppm to 400 ppm.
In this context it is very interesting how big the CO2 absorption capacity of the earth actually is, as the whole amount of oxygen is burned through and regenerated by CO2 assimilation every year. So, at least we do not have yet to worry running out of oxygen.
If the calculations of Arrhenius would have been correct, the temperature of the earth must have been much higher and the planet would have been already inhabitable according to what I read his results.
However, we are still here enjoying a beautiful winter in the middle of spring.
Dear Heinrich,
Back on this track again.
Late cold spells in Europe are not unknown, even in the recent past. I myself can remember 4 inches of snow in April 1966 in the South of England. This sticks out in my memory as I was playing in a junior chess tournament at the time.
http://london-weather.eu/article.105.html
In fact, England has had snow in June in more recent times:
http://www.metoffice.gov.uk/media/pdf/i/1/Snow_in_June_-_2_June_1975.pdf
This probably has more to do with changes in the jet stream bringing cold air from the Arctic than anything else.
Climate change is obvious, as is damage to the environment and resource depletion, and Governments around the civilised world are aware of all of this. In the UK we now have an all party Parliamentary group discussing the limits to growth.
http://limits2growth.org.uk/
Given that action to reduce fossil fuel use is the only way forward, and that it needs to be carried out by collective action in the least destructive manner possible, how would you go about changing people’s behaviour?
a) Emphasise climate change and environmental damage, and get the sizeable number of environmentally aware people on board at the outset, or
b) Scream ‘Oil is running out we need to ration petrol’ and risk either sending stock markets into meltdown or losing all credibility when new resources are found.
Delboy,
Thanks for your comment.
I am aware that the current cold spell is probably a one time event, yet the whole discussion about climate change must be based on facts and not on politics. Humanity can prosper based on excellent research and innovation.
Much has been achieved in communication, IT,semiconductors…. over the last decades. This has been very beneficial for humanity. However, this is not the case for chemical engineering, where a simply lack of true innovation is compensated by awful political strategies. We need more innovation and less politics and scaremongering.
If alternative energy technologies would be really technically superior, we would not need to have such a discussion. The fossil industries simply would vanish like the pony express over hundred years ago.
“If alternative energy technologies would be really technically superior, we would not need to have such a discussion. The fossil industries simply would vanish like the pony express over hundred years ago.”
Well then, let’s grab some popcorn and your choice of liquid refreshment and watch this sucker unfold! 😉
In any way the link between climate change and the use of fossil fuels is technically impossible as the amount of CO2 is way too small (400 ppm equals just 0.04%) to have any material effect on the heat capacity of air. In my profession as chemical engineer I have calculated all my life heat capacities of gaseous mixtures and it is impossible that this small amount of CO2 can have such an impact on the atmosphere.
Jeepers! do you even understand how a greenhouse works?! Or do you seriously believe that to build a greenhouse the most important consideration is the heat capacity of the glass?!
As for trace quantities of gas, as a deep sea diver, I have a very different perspective than you and I can assure you that even very minute increases in CO2,in a breathing mixture can have huge effects on your physiology… The argument that a tiny amount of a substance can’t possibly have major consequences is profoundly flawed on so many levels!
And snow in the Alps in April is weather not climate!
Fred,
Isn’t it remarkable that if we see some higher temperatures, the medias are full of stories of the end of the world, the demise of humanity…. If temperatures are at a record cold, this is just weather.
Hi Fred, Hi Heinrich
I am with YOU Fred, when it comes to the science.
I am with you Heinrich, when it comes to the way the media treats the climate issue and most other issues as well, so far as the media go.
Writers, reporters, talking heads, politicians, etc are all like cows, when they see one running, they tend to join. The name of the game is not to inform the reader, but to sell advertising to as many readers as possible.
Right now it is possible to find a lot more stories about how vaccines are dangerous and killing children than stories about how they have saved us from countless epidemics of killer contagious diseases ( that would likely have solved our overpopulation problem for us, lol).
OFM,
In this context I have just seen a report about cholesterine, which was once the main media evil for heart attacks.
However, this recent report admitted that there is little evidence of a correlation of the level of cholesterine and heart attacks when different individuals are observed as each individual had its own optimum cholesterine level.
The report also revealed that the strategy of the industry has been to sell products to healthy patients with the argument that a low level of cholesterine could prevent heart attacks.
Science is a tricky thing and it depends in many cases on the samples which are taken to gain some totally contradictionary results.
At least the farmers in Middle Europe are totally devastated as we still have temperatures far below the 50 year average and many are ruined and lost their complete harvest. They cannot understand what they hear in the media and why something totally different happens in reality.
The case for climate change through fossil fuels has lost a lot of credibility over the last three months. It is another sign how far the academic elites are from realities, the rest of us has to face every day.
Urban Oil Fields in Los Angeles…
Once the Porter Ranch thing blew up, more people are talking about this.
… and what can we replace oil with?
http://www.manufacturing.net/videos/2016/04/crude-la-californias-urban-oil-fields
http://www.renewableenergyworld.com/articles/2016/04/statoil-buys-half-of-1-4-billion-eon-german-wind-project.html?cmpid=renewablewind04282016&eid=291109020&bid=1388674
Now tell me that the people who ACTUALLY run the big oil companies don’t believe in peak oil.
And for what it is worth, I don’t think anybody MUCH has gotten to the very top of the banking and auto industries who is too ignorant to know that oil is a finite resource, or too stupid to understand the implications of peak oil for the auto industry.
Could be, OFM. On the other hand, Statoil is Norwegian and maybe they are just a little more open to the concept of Peak Oil than ‘Merican Awl Men. 🙂 I’ll take it a step further. The people at the top of the banking, oil, and pretty much every industry believe in just one thing — the number on their paycheck. If saying they don’t believe in peak oil, global warming, or the tooth fairy increases that number then they will say they don’t believe. In fact, the reason they got to the top is exactly by saying what others want to hear. Been true for every place I’ve ever worked.
I agree,you say and pretend to believe what advances the old career, but if you are actually smart enough to GET to the top, you are probably also smart enough to know the real score.
Every major car company in the world is working around the clock , without let up, on the fuel economy question, and all of them are pushing hard, with maybe one or two exceptions, on plug in hybrids, fuel cells, pure electrics, etc.
The decisions to do so were made at the very top, and that sort of people are not all that afraid of politicians. They can BUY politicians, and are used to doing so. They own most of them already, lol.
They also know their customers are going to be in the position one day within a decade or two of having to pay exorbitant prices for gasoline, and maybe do without. If they don’t have electric cars ready by that day, they are out on their ass.
The primary reason I support Sanders is that he is NOT in the vest pocket of big biz, peeking out like a little doggy.
The Doubting Thomas Michael Lynch says peak oil is a myth and a waste of energy.
http://www.theoildrum.com/node/5716
And new news about peak oil from Michael Lynch:
https://www.masterresource.org/peak-oil-fixitydepletion/no-peak-lynch/
Hey, what is this peak oil myth bidness?
I am going to buy a new self-driving car, let my dog sit in the driver’s seat, he can sit there with his head out the window, tongue hanging out and a happy face, lo and behold, dogs can drive.
The dog will probably program the self-driving car to stop at every fire hydrant and I as the passenger will be on the MTA in Bastin.
“No he never returned, no he never returned and his fate is still unlearned, he may ride forever ‘neath the streets of Bastin, he’s the man who never returned.”
All because the dog is in a never ending loop of stopping at every fire hydrant in the land. har
Here’s just one more road block on the way to self driving vehicles. Google has determined that there is no way to safely transfer control of the self driving vehicle back to the human driver. Therefore they concluded the only safe thing is to remove all human accessible controls — steering wheel, brakes, accelerator. Problem is, who then is considered the driver from a legal standpoint?
Google asked the NHTSA for their opinion and the Feds came back — Google is the driver! That’s not what Google wanted to hear. They wanted the Feds to rule that the self driving system (separate from Google which provides the brains for it) or person sitting in the left front seat is the driver — EVEN THOUGH THAT PERSON HAS NO CONTROL OF THE VEHICLE. LMAO!
This shows better than anything just how much confidence Google has in their own technology. And just one more reason why putting these things on the road faces a ton of non-technical challenges. I think it will never happen, but I could be wrong and very very surprised.
http://www.cnet.com/roadshow/news/feds-declare-that-googles-self-driving-car-is-its-own-driver/
I am going to buy a new self-driving car, let my dog sit in the driver’s seat, he can sit there with his head out the window, tongue hanging out and a happy face, lo and behold, dogs can drive.
Well, why not? Dogs can fly planes…
http://www.huffingtonpost.com/entry/dogs-might-fly-dog-flies-plane-shadow_us_56fd1e46e4b083f5c606d5fb
Two articles, one stupid, one smart.
Stupid: Opec troubles herald oil’s peak day
The oil debate and all its accompanying analysis used to be dominated by peak oil supply and the inevitable date when it would all run out. No longer. There is more oil than the world knows what to do with and as soon as the wells start running low new reserves are found or new ways of reaching them are invented. The supply of oil is controlled by politics rather than geography and the gates of production are currently wide open.
More important is peak oil demand –…
Smart: Energy Daily: A 4.5 Million B/d Shortfall In Oil By 2035
In 2008, the peak oil theory took hold and market participants drove the price of oil to $140 per barrel. In 2016, the “abundant” oil theory took hold and market participants drove the price of oil to $26. In both situations, the sentiment was over-exaggerated and led to an inevitable fall and rise in the price of oil. Peak oil was never about “running out of oil,” just like “abundant oil” isn’t about having too much oil. The concept for both needs to be taken into consideration, and a sensible logic needs to be applied to understand both arguments clearly.
For peak oil, the theory is based on the world running out of “cheap oil.” As conventional production continues to decline, the rise of shale oil production is a testament to how “expensive oil” is replacing the cheap oil.
The “abundant oil” theory is somehow based on the premise that 5% of the world’s global oil production (shale production) can keep the world supplied with oil because it’s “short-term” cycled. The same level of skepticism needs to be applied here. Shale production has kept U.S. production relatively flat in 2015, because shale companies were drilling sweet spots only while using longer laterals and more sand. Both of these techniques increase the initial production rate, but are subject to a higher decline rate and lower EUR over the lifetime of the well. You can say that the companies were greedy in the short run and stupid in the long run. This decline is now starting to show in the weekly oil inventory reports, and it will only get worse.
The first author, Pierre Heistein, is an economist according to his CV found on Google. Once again it shows just how ignorant economists can be when dealing with limitations imposed by the physical world.
The second article is pretty good. I like that the author notes “Wood Mackenzie estimates a giant shortfall by 2035.” I’d say that’s a safe bet.
Dennis or Ron, The EIA has just released the latest edition of their Electric Power Monthly and I have updated my usual graphs. Since this comment section is getting rather long in the tooth (almost 500 comments at the time of tis post), I was just wondering if I should wait until there’s a new top post or go ahead and post them now, at the end of this increasingly long thread of comments? Any new top posts any time soon?
‘All Belgians to get iodine pills’ in case of nuclear accident
Obama needs to send to all in USA since his administration stopped underground safekeeping of decades of spent fuel. https://www.yahoo.com/news/belgians-iodine-pills-case-nuclear-accident-114919526.html?ref=gs
This is a fairly long read, but it contains a lot of data that the regulars here will be glad to see, some of which has not been posted in this forum.
http://www.resilience.org/stories/2016-04-26/we-could-be-witnessing-the-death-of-the-fossil-fuel-industry-will-it-take-the-rest-of-the-economy-down-with-it
As the saying goes, debts that cannot be repaid will not be repaid. It’s 2008 all over again!
“All of this is leading investors to question the wisdom of their investments, given fears that much of the assets that the oil, gas and coal industries use to estimate their own worth could consist of resources that will never ultimately be used.”
Ha, you think? Yeah, investors might have an issue with their money disappearing. This will create a serious problem for our economy with significant pain, but not the death of the fossil fuel industry. That’s quite a long way off in my opinion.
“Jason Schenker, president and chief economist at Prestige Economics, says: “Oil prices simply aren’t going to rise fast enough to keep oil and energy companies from defaulting. Then there is a real contagion risk to financial companies and from there to the rest of the economy.”
That’s too broad a brush. Some companies will default and some will survive. The survivors will continue to produce fossil fuels and the price will eventually rise to make it worthwhile. However, I expect we will continue to see volatility that will make the energy companies be much more circumspect about their investments. Bottom line, less fossil fuels at higher prices — in my humblest of opinions.
Review of the Volt- Hope they make a eCompact Truck. A car post peak oil – Bad Idea.
http://spectrum.ieee.org/transportation/advanced-cars/2016s-top-ten-tech-cars-chevrolet-volt?bt_alias=eyJ1c2VySWQiOiAiZDZiNTY1YjItYzBiNS00MjAzLWJjMTYtZDkyMWZmZmYzOTQzIn0%3D&utm_source=TechAlert&utm_medium=Email&utm_campaign=Tech%20Alert_04-28-16
In my opinion the Volt represents the future for auto transport. You can own one car for everything. And even if you wanted a second car just for commuting, why buy an EV when the volt is in the same price range?
If I could justify it I’d buy one today. But I have a 2010 Honda Insight that doesn’t use much gas and I don’t commute. I just don’t use much gasoline. Gasoline prices would have to triple or more before it began to make sense for me to buy a Volt. But when we get back to $4 a gallon, there will be big interest.
I have to agree that a GOOD plug in hybrid such as the VOLT is probably the most practical car you can buy today if you are concerned about the availability and cost of gasoline.
But in four or five years time, it is likely that the cost of the larger battery needed for a pure electric car will fall to the point that a pure electric will give you the necessary range and be even cheaper to own and run that a Volt.
If I am still able to drive in five or six years, I think maybe I will buy a used new generation VOLT. The savings in the price of it will more than offset the extra upfront expense of buying a new pure electric.
I agree that battery technology is everything where EVs are concerned. If you are right about progress in that area, then the only remaining issue will be recharge time. Solve both of those and I agree EVs will take over. But not driverless ones! 🙂 My belief is that we will see only small marginal improvements in battery storage capability and that will ultimately limit the practicality of EVs. But I really do hope I’m wrong about that.
If something like this becomes reality I will take back everything I’ve said about the practicality of EVs.
http://news.mit.edu/2015/yolks-and-shells-improve-rechargeable-batteries-0805
Where do you mount a Tripod for the 50 cal on a Volt? No going to
sell in MENA.
“My belief is that we will see only small marginal improvements in battery storage capability”
Funny that! That is almost exactly the same thing that Tony Seba says in his presentation, except that he expects these “small marginal improvements” to be an ongoing process, that results in a fairly steady improvement in cost performance over time.
Did a quick little spreadsheet and starting from $300/Wh a 5% annual increase in cost performance leads to $242 after 5 years and $197 after 10 years. If the energy density per unit volume and weight were to increase by 3% per year, a 85kWh pack could be replaced by a 90kWh pack after 2 years and a 100kWh pack after 6 years.
That is the central point that Seba makes, in that, with exponentially improving technologies, cost performance trajectories will eventually result in the technology falling below the costs of the industry it is going to disrupt.
To illustrate the comparison between these ideas and reality, since the release of the Tesla Model S in 2012 the maximum battery capacity has gone from 85 kWh tp 90 kWh with no increase in size or weight and the range has increased to just over 300 miles, up from 260.
Get me to a 400 mile range with an 15 minute recharge and I’m in.
That would be in about 2023 (less than eight years time) if current trends continue.
”With benchmark oil prices falling below $45 since early December, Daqing has been losing money on every barrel it pumps.”
https://emergingequity.org/2016/04/27/china-struggles-as-oil-losses-climb/
Thanks for the great link Rune.
In February, China’s second-ranked producer Sinopec announced it would suspend operations at four small oilfields in eastern Shandong province due to the price slump, but bigger shutdowns do not seem to be an option for Daqing.
Jiang reportedly complained about the losses to President Xi Jinping during China’s annual legislative sessions in March but was told that further cuts and layoffs would not be approved.
“Today’s economic restructuring cannot come at the cost of workers’ well-being,” said Xi, as quoted by Heilongjiang’s official newspaper. “We must guarantee the incomes and treatment of the front-line employees,” he said.
Rock…Hard Place
First-of-its-kind rail energy storage project targets role in CAISO ancillary services market
The same electro-mechanical principle that powers the ARES system supplies the regenerative braking power in electric vehicles like a Toyota Prius or in wayside regenerative braking systems such as the one being installed on the metropolitan Philadelphia commuter rail line: When an induction motor that powers a train or car is reversed, it produces electricity.
ARES now hopes to put those principles to work in Nevada where it just won approval from the Bureau of Land Management for its first commercial project.
ARES wants to lay a nearly 5.5 mile track up an 8 degree slope, gaining about 2,000 feet top to bottom. ARES would then put up to seven 8,600-ton trains on the track with each train comprising two locomotives and four rail cars. The entire system, including substation and control systems, would occupy about 43 acres of public land near Pahrump in Clark and Nye
There was a slight decrease in oil price as EIA reported slightly higher oil storages. And then the oil price went up again without any particular news. It seems that the oil price keeps increasing these days regardless of any news. Are the oil analysts finally realising that US oil production is decreasing? While Iraq’s oil production growth seems to stagnate and Iran may get closer to a production ceiling for now(?).
There is a realization that the oil market is gradually rebalancing.
Another factor is weakening dollar
Stock market also rebalancing into energy.
Thanks gents. Wonderful site with many great commenters and comments. Do you think Iran can still increase their production a lot? It seems that Iran is almost back to production level prior to the sanctions?
According to the IEA, Iran’s oil production increased to 3.3 mb/d in March 2016, up 400 kb/d from 4Q15 average. The IEA estimates Iran’s current sustainable crude oil production capacity at 3.6 mb/d.
Iran claims that in mid-April output was 3.5 mb/d and is on track to reach 4 mb/d by March 2017.
In early 2012, prior to the latest round of sanctions, Iran was producting 3.6 mb/d, down from 4.0 mb/d in 2008.
From the IEA Oil Market Report (April 2016):
Iran continued to ramp up production following the January easing of international sanctions, with output rising by 80 kb/d to 3.3 mb/d in March. Exports of crude oil rose to 1.6 mb/d – up around 100 kb/d from February and may climb higher still in April. Before sanctions were tightened in mid-2012, Tehran was selling roughly 2.2 mb/d of crude on world markets, with Europe accounting for around 600 kb/d.
Higher exports in March were due mostly to hefty buying from India, according to preliminary data. Purchases from India surged above 500 kb/d in March from around 220 kb/d the previous month, after private refinery Reliance Industries reportedly resumed purchases.
Crude oil sales to Europe held steady in March at around 300 kb/d, according to preliminary data, with Total, Cepsa, Lukoil and Turkish Tupras steady buyers. Deliveries may increase in April with Total due to lift considerably higher volumes and Greek refiner Hellenic Petroleum due to restart imports. Although some European banks reportedly are growing more confident in financing Iranian trade, some potential customers say the National Iranian Oil Co (NIOC) has yet to demonstrate sufficient flexibility with credit terms to entice them. Iran is also continuing discussions with Egypt to resume use of the SUMED oil pipeline, which could offer an additional export route to Europe. However, Saudi Aramco’s deal with SUMED to increase flows through the pipeline may limit the opportunity for Iran to use the route.
While crude oil loadings have increased, condensates are proving to be a tough sell. Exports have slowed in part due to a shutdown at a Chinese petrochemical producer that processed substantial quantities of Iranian condensate. As a result of the slower sales, Iran has been storing ultra-light oil from Iran’s South Pars gas project at sea. Volumes stored rose by 4 million barrels in March to 46 million – the highest since August 2015. There are now 22 Iranian VLCCs engaged in storage – 50% of the National Iranian Tanker Co fleet – as well as one chartered vessel.
Iran Crude Supply (mb/d)
AlexS
Thanks. This is the graph I remember. If the trend line until 2012 is extended until 2016 it will be close to current production (eg. 3.5-3.6 mbopd). I would not be surprised if Iran’s production will stagnate soon, unless new fields have been developed. But I think Iran wanted to see sanction lifted before they started developing new fields.
Even if we assume that there is 1.7 trillion barrels of Oil, is it wise to extract it all and burn? that too in the present juncture, in the age of Global Warming ? That will be suicidal indeed.
At the same time, practically all existing Alternate energy devices, like Solar and Wind, have yearly efficiencies at 16 to 22% on installed capacity, while Hydroelectric is slightly better at 45%. Although Nuclear has over 80% efficiency, it has lot of limitations and threats.
Energy from Ocean is at its infancy, but a system conceived by me has the ability to generate billions of MWs at over 80% efficiency,(https://www.youtube.com/watch?v=i_-JPN6do2Q) all that is required is suitable financial support.