Check out the plans by the following car manufacturers to produce electric cars in the near future.
AMP
AUDI
BMW
CADILLAC
CODA
DOK-ING
FIAT
FISKER
FORD
HONDA
INFINITI
MERCEDES-BENZ
MITSUBISHI
PORSCHE
SMART ELECTRIC DRIVE
TESLA
TOYOTA
From National Radio:
What has singer Paul Simon got to do with the credit crunch and peak oil?
Finance and energy analyst and blogger at TheAutomaticEarth.org, Nicole Foss named her blog in honour of the boy in the bubble. She says we are in our own bubble of denial about how the credit crunch threatens our modern way of life, and why we need to start preparing now.
Listen to the audio interview with Nicole Foss
Feb 012012
According to an article signed by 16 scientists in the WSJ, global warming isn’t something to worry about. In fact, some go as far as to say global warming is a ‘hoax’:
So is global warming a hoax or were the 16 scientists paid shills? Here’s a Q&A on global warming provided by the Australian Academy of Science. The data certainly looks like things are heating up.
According to NASA, 2011 was the 9th hottest year since 1880.
According to Elizabeth Grossman of Yale University, acidification of the oceans has already begun and suggests that CO2 levels are rising.
Now, I haven’t studied the phenomenon intently so I am the farthest thing from an expert on global warming. But for an issue of such colossal and potentially catastrophic proportions I really do wish people would get off their dogmatic perch and consider all sides of the argument.
Jan 252012
A couple choice quotes from a dire New York Times article:
…the fate of this one fish reflects a bigger picture: decades of unchecked global fishing pushed by geopolitical rivalry, greed, corruption, mismanagement and public indifference. Daniel Pauly, an eminent University of British Columbia oceanographer, sees jack mackerel in the southern Pacific as an alarming indicator.
“This is the last of the buffaloes,” he said. “When they’re gone, everything will be gone.”
…it’s all about capitalism:
The first priority, he said, should be saving fish, not the fishing industry. “The Lafayette raised the game to an incredible level, and Holland is very much involved,” he said. “There are way too many boats, just simply way too many boats.”
Good luck.
Jan 172012
Over the next 20-30 years, it is quite possible that our cities resemble those of our ancestors. Urban farming could become a necessity if food shortages grow from energy scarcity.
No, this isn’t a commentary on variations in diet…
- Observe how European countries emit far less than Canada or the US. This is because Europe wasn’t built for the automobile.
- Also observe how the biggest per capita polluters are the countries closest to the largest oil reserves. Unsustainable luxuries in a harsh environment (e.g. air conditioned indoor ski hills) don’t help.
Guest post by Gail Tverberg of Our Finite World
In the United States, we have been working on scaling up wind energy but not getting very far. In 2010, wind energy supplied only 2.3% of electricity purchased.
Figure 1. Wind energy (dark green) is barely visible in a graph of US energy consumption by source. Based on EIA data.
Such slow progress seems strange for a product that seems to have such great promise. It can reduce CO2 emissions. It doesn’t require fuel. It is at least partly US made. The popular view is that it could eventually replace gasoline, but that view is very optimistic because electricity is very different from gasoline, and because of the scalability issue.
In this post, I discuss a few of the obstacles facing wind energy in the United States, and their implications for the expansion of wind energy.
Obstacle 1: Wind energy is dependent on large subsidies.
According to the EIA’s report, Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010, wind energy received subsidies of $4.986 billion from the federal government for Fiscal Year 2010. This amount is equal to approximately half the cost of new wind power installed during that period. State and local subsidies would be in addition. (The US Wind Energy Association shows that 6034 megawatts of new capacity was installed between October 1, 2009 and September 30, 2010, so the subsidy per megawatt was $826,318. This compares to an average cost per megawatt of about $1.4 million, excluding construction and connection costs.)
The wind energy’s largest subsidy, the Production Tax Credit, is set to expire on December 31, 2012, unless Congress acts to extend it, so there is now a big rush to get orders filled before that date. A study by Navigant Consulting forecasts a large drop in wind investment, if the Production Tax Credit is not extended (Figure 2).
Figure 2. Annual Investment in Wind Energy in $ Billion, according to Navigant Consulting.
Needless to say, the US Federal Government is not flush with money for subsidies, so there is the possibility that subsidies will not be renewed or will be cut back.
Obstacle 2: Wind energy is of a lower quality than electricity produced by fossil fuels and by nuclear energy.
Wind blows when it chooses, which is often not when it is needed most. In theory, this problem could be resolved with robust long-distance transmission of electricity and with adequate electrical storage, but in the US, these are not available. This means that even in locations where wind energy makes up a relatively large share of the fuel mix, other types of generations must be available to supply almost the full level of demand, if the wind is not blowing.
As a result, the role of wind energy is fairly limited. What wind energy does is permit electricity generating plants, particularly those fueled by natural gas, to use less fuel. Consequently, the price of wind energy tends to compete with the price of fuel, rather than with the wholesale price of electricity.
Figure 3. Comparison of prices of wind generated electricity with electricity generated by other means, showing that wind energy prices tend to be considerably lower, because of its lower quality. From US Department of Energy report, “Annual Report on U. S. Wind Power Installation, Cost, and Performance Trends: 2007.”
Consequently, without mandated feed-in tariffs, the sales price of wind-generated electricity tends to fall below the wholesale price of other types of electricity (Figure 3). This lower price for wind generated electricity helps explain some of the need for subsidies.
A related issue is the confusion caused by a comparison of the “levelized cost of wind” with the levelized cost of other types of generation, such as is shown in Figure 4 by the US Energy Information Administration.
Figure 4. EIA’s exhibit showing Estimated Levelized Cost of New Electricity Generation Resources, from Annual Energy Outlook 2011.
Because of the lower quality of wind, Figure 4 represents an “apples to oranges” comparison, if one makes the standard comparison of amounts in the last column. Instead, since wind energy only replaces fuel, what needs to be compared is
- “Total System Levelized Cost” for wind relative to
- “Variable O&M (including fuel)” for other sources of production
In Figure 4, the Total System Levelized Cost of Wind is 97.0, and of Wind-Offshore is 243.2. These might be compared with the Variable O&M (including fuel) of coal (Advanced coal is 25.7) or of natural gas (Conventional Combined Cycle is 45.6), for example. On this basis, wind energy comes out badly, and is one reason it requires such high subsides.
Another related issue is that differences in fuel quality can lead to misleading EROEI indications. At least some petroleum is used in manufacturing, transporting, installing, and maintaining wind turbines, but the energy that is provided as an output is mostly replacing natural gas, and perhaps some coal. Coal and natural gas are much cheaper (and more abundant) than oil, so even a small input/output substitution in this direction can quickly hurt the economics of the process.
Obstacle 3: Natural gas is now very cheap in the US, and there is a huge amount of natural gas generating capacity already built.
Since wind energy tends to compete with the cost of fossil fuels used to produce electricity (mostly natural gas and coal in the US), a low price of natural gas is a problem because even greater subsidies will be required for wind energy to be competitive.
Furthermore, natural gas generating capacity is no issue. The current natural gas average gas capacity factor is 28%, suggesting that US natural gas generation could be tripled, without requiring an increase in generating capacity. This excess generating capacity was built partly because natural gas is good for load balancing (and electricity prices tend to be high to meet temporary demand spikes), and partly to meet an expected rise in electricity demand that never materialized because of recession in recent years.
Obstacle 4: In the US, we do not have an electrical grid that can provide very much long distance transport of electricity, and there are several reasons why changing this situation is very difficult.
Growth in wind energy requires very good long distance transmission capability, partly because wind resources are often located a long way from prospective users, and partly because the variable nature of wind can be “evened out” if wind energy is shared over a large area. Unfortunately, the US electrical system has grown up under a system where each locality has been expected to generate its own electricity. Under such a system, electrical transmission from city to city was originally designed to handle only occasional emergencies, and thus is very limited.
The way the US electric transmission system was set up produces many anomalies. Electrical rates vary greatly from state to state. We needlessly burn large amounts of oil transporting coal to where it will be burned for electricity, rather than burning it near where the coal is mined, and then transporting the electric power over transmission lines. Nuclear-fueled power plants are sometimes located near large cities.
The problem is very difficult to fix for many reasons. Any improvement in electric transmission would tend to even out electricity rates, but this would be to the detriment of customers who currently have low electric rates. To the extent that new transmission costs more, and these higher costs are charged back in electric rates, such a change could result in higher electricity costs for more than half of the population–something most politicians would find unacceptable.
If better transmission were readily available and free, no one would want to build a power plant in their back yard, making it even harder to site new power plants than it is now.
Another issue is that a good mechanism for paying for the installation and maintenance of new long distance transmission lines has not been established. Under current procedures, a determination must be made as to which electric generating companies will benefit from new transmission lines, and the costs allocated among the beneficiaries. The government in the past has not funded long distance electrical transmission. No one really “owns” the long distance lines.
The only partial fix I can see would be to create a separate organization to build and maintain a few new long-distance transmission lines. Wind energy and other users seeking to use these lines would be charged for the use of these lines, similar to a toll road. The likely result would be more coal fired-power plants being built near these lines, because wind usage by itself could not support these lines. Even this arrangement would likely require a change to current laws. The net effect might be more CO2, rather than less.
The cost of long distance electric transmission is likely to be fairly high–at least several cents per kWh, for wind energy transported over long distances. Over time, the price can be expected to rise as the price of oil rises. Some maintenance may become very difficult, such as that currently done by helicopters in remote locations.
Obstacle 5: A high proportion of funding for wind energy is up front.
Oil, coal, and gas all started out as fairly high EROEI investments, and much of the investment took place as the fuel was extracted. In such a situation, the investments threw off a high level of profit which could be used to fund further investment.
Fossil fuels are gradually shifting away from this model, with higher up front investment, and lower profit available to fund further investment. Wind turbines represent the extreme end of this continuum with most of the investment up front, and the return trailing many years behind.
As a result of this shift in timing, it is becoming more difficult to fund projects with huge up-front investment. In the “good old days,” we had the low price of fossil fuels which made other investments easier to afford. We also could count on a being always able to add more debt, but we are reaching limits on sustainable debt. I wrote two posts on The Link Between Peak Oil and Peak Debt (Part 1 and Part 2). More recently, I talked about how Net Savings is dropping dramatically in the US, so that non-debt sources of funding are also disappearing.
Figure 5. US Savings and Investment Ratios, based on US Bureau of Economic Analysis Data.
The net of all of this is that if we are reaching limits with respect to finite resources, it is going to be increasingly difficult to fund projects that require large up-front investment and provide a return later. We will likely have to give up some investments we really need (such as replacing worn out roads, pipelines, and school buildings) in order to ramp up investments in projects that require large front-end funding, like wind turbines.
Obstacle 6: Adding wind energy to the electric grid adds complexity which may be difficult to manage with declining resources.
The job of balancing supply with electrical demand and keeping all sources of electricity “in synch” becomes more difficult, as more variable sources of supply come on line. While it is theoretically possible to find technical solutions to these issues, it is not clear that we will in practice.
Furthermore, changes related to the Smart Grid will also add to the stress to the system, since the Smart Grid is designed to operate the grid at closer to its theoretical capacity. These enhancements add efficiency to the system, but reduce resilience.
The grid with the new enhancements will work until at some point it doesn’t work–for example, an unplanned event causes a major failure within the system, or a needed system upgrade is too expensive to afford, or a replacement part from overseas is unavailable. Hopefully, failures of this type will be temporary and local, but if resources are limited, the time may come when the high cost of maintaining the system becomes unsustainable.
Further Thoughts about Wind Energy
I have not been able to touch on move than a few issues in this post.
One of the big issues with wind is that its benefits have been oversold. If we are already having trouble with the electrical grid not being able to accept more wind energy in popular wind-generating areas when wind energy constitutes only 2.3% of total electricity supply, then wind energy is going to be difficult to scale up quickly. The issues I point out in this article suggest that the cost problem is still large, and the fixes needed to add long-distance transmission are likely to make the cost problem even worse.
Many people assume wind can do everything–replace gasoline, run our cars and trucks, and allow us to continue business as usual, without worries about CO2 or about oil depleting. We are a long way from making a dream like this happen. We would need advances in electric vehicles and trillions of dollars of investment to even partially make a dream like this happen.
Some people hope that wind energy can somehow allow business as usual to continue almost indefinitely, after oil and gas deplete, and after we decide to stop using coal. I can’t see this happening. We need fossil fuels to make wind energy, and we need fossil fuels to transport wind turbines to the locations where they are to be installed. We also need fossil fuels to repair wind turbines and to maintain transmission lines.
I expect that at some point grid problems will become overwhelming, so at least the long-distance portion of the grid will be lost. It is possible that adding more wind energy to the grid will make that date come sooner, rather than later, because of the complexity issues I mentioned. Unless the limiting factor on the life of the electric grid is the amount of coal and natural gas available, and wind energy somehow delays running out of these, I have a hard time seeing how wind energy will make the electric grid last longer.
There are so many obstacles for wind to overcome in the US that I am not sure that we should even try to push for higher wind penetration levels. The only exception might be in areas where wind energy is cheap to produce and the grid can readily accept the electricity.
Since the world is finite, there is a good chance that at some point we are going to have to get along with less electricity as well as less oil. Instead of focusing on delaying the inevitable, perhaps we should start thinking about preparing people for simpler lives that use less energy of all types. Such an approach might solve multiple problems at once–too much CO2, too little oil, and too little capital to tackle all the problems that need to be tackled at once.
2 Degrees: Ocean Life in Danger (Note: without contrails from air traffic, the world would already be about 2 degrees warmer)
3 Degrees: Heat Wave Deaths
4 Degrees: Great Cities Wash Away
5 Degrees: Civilization Collapses
6 Degrees: Mass Extinction
2012. Super Rich keep spending billions to control Washington
2012. Super Rich solidifies absolute power over our political system
2013. Global population bubble exploding, rapidly wasting resources
2014. Pentagon’s global commodity wars accelerate toward 2020 peak
2015. Gilded Age globalization explodes America’s Global Empire
2016. Reaganomics capitalism self-destructs, crashes, bank bankruptcies
2017. Class war and revolution: Rich class loses big, surrenders
2018. The Fed and Wall Street banks collapse, Glass-Steagall reinstated
2019. Global commodity wars spread, killing millions, wasting trillions
2020. America’s first woman president, patriarchal dominance is dead
Dec 182011
This is a must read essay by Guy McPherson from Nature Bats Last:
Is terminating the industrial economy a moral act?
People often accuse me of inappropriate behavior because I think terminating the industrial economy is a good idea. Interestingly, few of these people seem concerned about the morality of the big banks as they devise ways to profit from contraction of the industrial economy. Indeed, politicians routinely try to distance themselves from the few informed individuals who have a clue where we’re headed.
But back to me — my favorite subject, after all — and the accusations of inappropriate behavior I attract, like snakes to the eggs of ground-nesting birds.
“People will die,” they cry, while purposely and studiously ignoring the millions of people and other animals killed every day by the industrial economy. They act as if the industrial economy is propped up by a solid foundation of love and world peace. It’s all rainbows and butterflies, that good old industrial economy.
And, as should be obvious to every adult, nobody gets out alive: birth is lethal.
Dec 182011
Dec 032011
Guest post by Guy McPherson of Nature Bats Last
American essayist Norman Cousins wrote: “Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.”
Personally, I’ve never been content sitting still, surviving for survival’s sake. Evidence is found in the roller coaster of my academic career, which was marked by significant change every few years. My scholarship, teaching, and service were characterized by unpredictable, nonlinear, seemingly chaotic swings from one topic to another. The adventure of new experiences always trumped the security of the bricks-on-a-pile approach revered in the ivory tower. A primary point I made in every course I taught: It’s always more difficult to do the right thing than to do the wrong thing. In fact, you can usually tell the right direction simply by the difficulty of the choices you face.
For working outside the mainstream in a dysfunctional system, I paid in expected ways, including financial. But I benefited in ways I could not expect and cannot fully describe. A rich life comes from taking risks, and the risks range from physical to emotional. I’ve had a rich life.
Most recently, I’ve thrown my heart, soul, and every last dime into the mud hut. I suspect it’s the consummate lifeboat, and it illustrates how improperly talented but thoughtful people, working together, can develop a durable set of living arrangements. And in the desert, no less. If we can make it work here, I suspect it can work just about any habitable place on this blue dot.
The response from the masses: I’m insane. I suppose this should have been expected from a culture characterized by sheer insanity. As with nearly everybody in this culture, I was born into captivity (hat tip to my friend Tim Bennett for the perfect descriptor). I spent most of my life in the zoo that is contemporary culture, drinking and feeding at the troughs of indulgence and denial and playing with toys that substitute for reality (albeit poorly). To a great extent, I’m still in the zoo, still immersed in the culture of make believe.
I’m attempting to pursue, and encourage, agrarian anarchy in this small valley. We’re at the edge of empire, but we’re still part of the American Empire. David Graeber explains the general idea in his analysis of the Occupy movement:
The easiest way to explain anarchism is to say that it is a political movement that aims to bring about a genuinely free society — that is, one where humans only enter those kinds of relations with one another that would not have to be enforced by the constant threat of violence. History has shown that vast inequalities of wealth, institutions like slavery, debt peonage or wage labour, can only exist if backed up by armies, prisons, and police. Anarchists wish to see human relations that would not have to be backed up by armies, prisons and police. Anarchism envisions a society based on equality and solidarity, which could exist solely on the free consent of participants.
Graeber’s description offers a worthy ideal for civil society. Serious pursuit of this ideal would go a long way toward allowing us to regain our humanity. Whether is goes far enough depends on the human. I’m wondering if living on the edge is good enough for me, whether instead I should leap from the edge into the abyss.
There is another challenge, perhaps as great and certainly as important as the one I’ve undertaken here at the mud hut: making it work on the road, thus engendering full expression of the human animal. Imagine a minimalist approach to the road and to the wilds surrounding the road. Imagine the exhilaration of abandoning a lifeboat to swim in frigid, shark-filled waters. Imagine the wonder of full immersion into the world, surrounded by every element of the human condition and every element of nature.
Ultimately, barring our own near-term extinction, full immersion into the world is exactly where we’re headed. I could show the way, as I’ve shown the way by exiting empire. And although I suspect the number of followers would be similarly disappointing, I would be taking this step for myself, not for others, as is the case now.
Nature calls. She calls all of us, though most of us have managed to plug our ears to her siren song. For a few, though, the temptation is supreme from the ultimate temptress. She’s kind, playful, passionate, courageous, strong, and whimsical. Can I pursue her? Can I capture her spirit, as she has captured my heart? Can I find the human animal within me before I breathe my last breath? Nature, as always, is amorally indifferent to my (therefore unrequited) love. But touching her and, more importantly, having her touch me, seems a one-way street: Once ensconced in her embrace, there’s no going back.
At this point in the age of industry, perhaps any attempt to venture into the wild is pure fantasy. Culture certainly suggests as much, while indicating that a step away from my current living arrangements is one large step on the short path to a bygone era. Bygone for a reason, says culture: There’s no going back to nature. That’s just crazy talk.
Last month, commenting on my new love, I wrote, “Nature provides all I need, and all I’ve ever needed.” If I believe myself, shouldn’t I attempt to prove it? Or, to put the scientific spin on it, shouldn’t I attempt to disprove it?
Can I find my way into a world that is brave and new and as old as humanity? More importantly, should I?
Taking this step will almost certainly shorten my life. As I’ve pointed out many times in this space, (1) birth is lethal and (2) some things are worth dying for. Whereas I’ve no intention of becoming yet another starry-eyed Messiah destined for a violent farewell, neither am I interested in a sedate, risk-free life. Like most people, I’m trying to find the line Cousins inferred, the line between living outside — in the world — and dying inside. And, of course, doing the right thing, regardless of the inherent risks and challenges.
Guest post by Gail Tverberg of Our Finite World
In a recent post, I discovered something rather alarming–the fact that in the last decade (2000 to 2010) both world energy consumption and the CO2 emissions from this energy consumption were rising as fast as GDP for the world as a whole. This relationship is especially strange, because prior to 2000, it appeared as though decoupling was taking place: GDP was growing more rapidly than energy use and CO2 emissions. And even after 2000, many countries continued to report decoupling.
I decided to sift through individual country results, to see if I could see a pattern emerging behind these changing results. When I did this, I found three major groupings of countries:
1. Southeast Asia, excluding Japan, Australia, and New Zealand. This group has been rapidly industrializing. In total, the group’s energy consumption has grown as rapidly as GDP in the last decade, and CO2 emissions have grown faster than GDP. This group includes China, India, Korea, Viet Nam, and a long list of other countries in Southeast Asia, including nearby islands.
2. Middle Eastern Countries. This group showed energy use growing more rapidly than GDP, suggesting that it was taking more energy to extract oil and to pacify its population, over time. I included all countries in this group that BP includes in its Middle Eastern grouping, even though Israel (and perhaps some other countries) do not fit the pattern well.
3. Rest of the World. This group is the only group showing a favorable trend in energy growth relative to GDP growth, even in the last decade, although the pace of improvement has slowed. Two reasons for this favorable trend seem to be (a) continued growth of services, such as financial service, healthcare, and education, which use relatively little energy and (b) outsourcing of a major portion of heavy industry to Southeast Asia.
When we look at CO2 emissions broken out into these three categories, the shift over time is quite surprising:
Figure 1. Carbon dioxide emissions by the three major areas described (Southeast Asia, Middle East, Remainder), based on BP Statistical Data
The vast majority of the CO2 increase since 1980 has taken place in the Southeast Asia and the Middle Eastern areas!
The energy intensity of GDP (that is, the amount of energy consumed per trillion dollars of real GDP) has shown very different patterns for the three groups of countries:
Figure 2. Energy Intensity of GDP by Area, based on BP Statistical Data regarding Energy Consumption in Barrels of Oil Equivalent, and USDA Economic Research Data regarding real GDP.
The World energy intensity of GDP has flattened in the last decade, reflecting a combination of the impacts of the three areas. The only area that has an improving energy intensity of GDP is the Remainder group. The Southeast Asia group is roughly flat. The Middle Eastern group is shows increasing energy use, relative to GDP growth.
Based on data in this post, I come to the following tentative conclusions:
1. The industrialization of Southeast Asia has allowed importers from around the world to reduce their energy intensity of GDP, but much of the savings has been offset by greater energy use (largely coal) in Southeast Asia. On a CO2 basis, we are likely worse off, because of this transfer.
2. The Kyoto Protocol inadvertently contributed to a pattern of greater outsourcing to Southeast Asia which was already taking place, raising worldwide CO2 emissions, while it kept emissions nearly flat (and declining relative to real GDP) in the countries doing the outsourcing. Because of this unplanned outcome, it would seem to be unwise to extend the Kyoto Protocol. A different approach is needed.
3. In my view, world industrial production has self-organized in a way that assigns different roles to companies operating in the three country groups I described above, as a way to minimize manufacturing costs. Over the long term, this particular version of self-organization cannot continue. The Middle East will reach a point where its oil exports drop rapidly. Southeast Asia will reach maximums on coal production/imports and on pollution levels. The “Remainder” is already reaching limits in competing with Southeast Asia. Unemployment rates are high, manufacturing wages are low, and many workers lack the income needed to purchase additional services which might “grow” GDP.
Before leaving the breakdown into the three areas, I might mention that when one views energy consumption by area (Figure 3), changes in energy consumption for the three groups do not appear as extreme as changes in CO2 production (Figure 1).
Figure 3. Energy consumption by area, based on BP Statistical Data.
The results look even more like business as usual, when viewed on a real GDP basis (Figure 4), because GDP in the “Remainder” group is buoyed up by a large amount of GDP relating to services.
Figure 4. World real GDP by area, based on USDA Economic Research data.
Differences in Energy Use by Area
A person cannot help but be struck by the very different pattern in energy consumption by area. Southeast Asia’s energy use has grown by about 7% per year in the last decade, with coal being the primary source (Figure 5).
Figure 5. Southeast Asia’s energy consumption by fuel, based on BP Statistical Data.
Figure 5 indicates that coal use in Southeast Asia has especially grown since 2003.
The Middle East’s energy use has grown by a little more than 5% per year in the last decade. Its energy use is almost exclusively oil and natural gas (Figure 6).
Figure 6. Middle Eastern energy consumption by fuel type, based on BP statistical data.
The Remainder grouping shows energy growth of less than 1% per year in the past decade, and a very different mix of fuels, including nuclear (Figure 7).
Figure 7. Consumption of energy by type for remainder of world, based on BP Statistical Data.
How the Fuel Consumption Market “Works”
This is my view of how the market works, in practice:
Middle East. Figure 8 shows recent oil production, consumption and exports.
Figure 8. Middle Eastern oil production, consumption and exports, from Energy Export Data Browser, based on BP Statistical data.
Because the Middle East has ready access to oil, it uses it freely–to provide social programs for large populations without jobs, and to aid in increasingly energy-intensive oil extraction. At the same time, Figure 8 shows that the total amount of oil extracted has been flat to declining, so oil exports have been declining. Since GDP is based mainly on oil exports, the result is that energy consumption is rising faster than GDP, unless oil prices happen to rise very rapidly.
Southeast Asia and Remainder. These two groups have taken two very different strategies:
1. The Remainder group has sought to minimize its oil use, and the use of fossil fuels in general, for a variety of reasons–to reduce the financial cost of imports, to minimize CO2 emissions, and to ensure “energy security” if the fuels should decline in availability. Coal is especially not favored, because of its high CO2 emissions.
2. The Southeast Asia group has chosen to try to produce economic growth through the export of manufactured goods, making use of its inexpensive labor force and the availability of cheap coal. Southeast Asia’s cost advantage is especially great in energy-intensive manufacturing, because coal is relatively cheap, and new factories often use the latest technology, limiting fuel use.
When other countries buy exports from Southeast Asia, it starts a whole chain of other economic activity as well–new roads, more concrete buildings, and more workers with a high enough salary to afford cars. So the impact of outsourcing is much greater than the energy directly used in producing the goods for export.
In my view, the Kyoto Protocol very much aided Southeast Asia in developing its export-oriented economy. Once CO2 goals were announced, it was clear that signatory countries would want to limit energy intensive manufacturing in their own countries. An easy way of doing this was to substitute the purchase of goods made in countries such as in Southeast Asia. The limits on carbon emissions also made it clear that Southeast Asia would experience relatively little competition for coal in the world marketplace, because countries that signed the Protocol would be limiting coal imports.
Furthermore, if Kyoto Protocol signators enacted carbon taxes, the taxes would tend to make Southeast Asian products (and services such as oil refining), even more cost-competitive than they otherwise would be, since similar manufacturing and services would face no taxes in Southeast Asia. And any oil that was saved by the Kyoto Protocol would be available on the world market at a slightly lower price, further helping Southeast Asia.
If there weren’t a world market in fossil fuels, and in goods made from fossil fuels (with no tariffs on them), the principles of the Kyoto Protocol would work very nicely. The problem is that the Kyoto Protocol doesn’t really address world market issues.
Why None of the Three Groupings Can Continue Its Current Strategy Indefinitely
Middle East. We know that because oil is a finite resource, eventually decline must occur. In fact, Figure 8 shows that oil exports may already have begun to decline in the Middle East, and this may be contributing to the unrest we have been hearing about. If exports are decreasing, it is difficult to maintain welfare programs unless oil prices rise to cover the funding gap.
It is not clear whether exports can be ramped up in the future. Saudi Arabia recently put plans on hold for a $100 billion expansion to 15 million barrels a day capacity by 2020. It also has delayed until 2014 its only other big expansion plan–a 900,000 barrel per day refinery that would allow it to use oil from the Manifa field. Given this situation, Saudi Arabia may see falling exports in the not-too-distant future.
Many have hopes for expansion of oil production by Iraq, but such expansion depends on maintaining peace in the country, which may be difficult. Furthermore, even if one country (namely Iraq) has adequate oil exports, other Middle Eastern countries may face unrest if their exports are declining, and oil prices do not rise enough to offset the impact of the decline.
Southeastern Asia. This part of the world is already encountering serious pollution problems. Air quality is notoriously bad, because of all the coal burned. A recent Science article reported that fully 90% of China’s shallow groundwater is polluted, and 37% of it is so foul it cannot be treated for use as drinking water.
While coal supplies are believed to be larger than oil supplies, they are not unlimited, and costs are already rising. Higher coal costs cause dislocations in the system. For example, costs of producing goods for export are higher, making them less competitive. Higher coal prices may also mean that domestic buyers have to cut back on other purchases, if they are to continue to purchase electricity and food that uses coal inputs.
Furthermore, Southeast Asia’s production is also dependent on the continued availability of oil exports, which cannot continue indefinitely.
So the current model of continued export growth cannot continue forever, and perhaps not for very long at all–a few years at most.
“Remainder” Countries. These countries have planned to outsource a significant share of their industrial production and purchase the products as imports. This approach only works if the population has jobs, and are rich enough to afford the imports. Increasingly, this seems not to be the case.
Another part of the strategy in “Remainder” countries is continued growth of services. This growth of services only works as long as citizens have jobs that pay enough that they can afford ever-increasing amounts of services. A recent article in the Wall Street Journal called Holding Off on Haircut to Buy a New Car points out that increasingly that is not the case. Figure 9 was attached to illustrate the issue:
Figure 9. Illustration from the Wall Street Journal, November 25, 2011
This shrinkage in growth of services would seem to explain the convergence of US GDP growth and energy use growth in the last few years as shown in Figure 10.
Figure 10. USA growth in real GDP and growth in energy consumption
A New Model
Somehow, it seems to me that we need a new model. Our current system of creating goods and services has self-organized itself around the rules we have given it. These rules would seem to include principles such as the following:
- The most important goal of a company is to maximize profits for the owners of that company.
- The employment market will take care of itself.
- Fossil fuels and machines can replace huge amounts of manual labor, very cheaply.
- There will always be as much fossil fuels as we want.
- Unlimited free trade will always be available.
- Some (but not all) countries will subscribe to principles similar to those of the Kyoto Protocol.
Now we are finding out that some of these principles aren’t really true for the long-term, or perhaps they don’t work quite as intended. It is not obvious what new principles should be substituted, however. And even if new principles are developed, it may be a long wait until the system can again self-organize itself around the new principles. So it may be a long time until a new system is created to replace our current one.
Nov 162011
“The evidence suggests we face far greater risks around climate change than believed 5-10 years ago (yet) the political environment (for action) is poorer than it has been for a long time. How do we communicate the risks, given the change in politics? How do we create civil discourse that helps us understand better the varied concerns of people on the topic?”
John Reilly
Nov 142011
Guest post by Abrahm Lustgarten ProPublica, Nov. 10, 2011, 1:10 p.m.
As the country awaits results from a nationwide safety study on the natural gas drilling process of fracking, a separate government investigation into contamination in a place where residents have long complained [1] that drilling fouled their water has turned up alarming levels of underground pollution.
A pair of environmental monitoring wells drilled deep into an aquifer in Pavillion, Wyo., contain high levels of cancer-causing compounds and at least one chemical commonly used in hydraulic fracturing, according to new water test results [2] released yesterday by the Environmental Protection Agency.
The findings are consistent with water samples the EPA has collected from at least 42 homes in the area since 2008, when ProPublica began reporting [3] on foul water and health concerns in Pavillion and the agency started investigating reports of contamination there.
Last year — after warning residents not to drink [4] or cook with the water and to ventilate their homes when they showered — the EPA drilled the monitoring wells to get a more precise picture of the extent of the contamination.
The Pavillion area has been drilled extensively for natural gas over the last two decades and is home to hundreds of gas wells. Residents have alleged for nearly a decade [1] that the drilling — and hydraulic fracturing in particular — has caused their water to turn black and smell like gasoline. Some residents say they suffer neurological impairment [5], loss of smell, and nerve pain they associate with exposure to pollutants.
The gas industry — led by the Canadian company EnCana, which owns the wells in Pavillion — has denied that its activities are responsible for the contamination. EnCana has, however, supplied drinking water to residents.
The information released yesterday by the EPA was limited to raw sampling data: The agency did not interpret the findings or make any attempt to identify the source of the pollution. From the start of its investigation, the EPA has been careful to consider all possible causes of the contamination and to distance its inquiry from the controversy around hydraulic fracturing.
Still, the chemical compounds the EPA detected are consistent with those produced from drilling processes, including one — a solvent called 2-Butoxyethanol (2-BE) — widely used in the process of hydraulic fracturing. The agency said it had not found contaminants such as nitrates and fertilizers that would have signaled that agricultural activities were to blame.
The wells also contained benzene at 50 times the level that is considered safe for people, as well as phenols — another dangerous human carcinogen — acetone, toluene, naphthalene and traces of diesel fuel.
The EPA said the water samples were saturated with methane gas that matched the deep layers of natural gas being drilled for energy. The gas did not match the shallower methane that the gas industry says is naturally occurring in water, a signal that the contamination was related to drilling and was less likely to have come from drilling waste spilled above ground.
EnCana has recently agreed to sell its wells in the Pavillion area to Texas-based oil and gas company Legacy Reserves for a reported $45 million, but has pledged to continue to cooperate with the EPA’s investigation. EnCana bought many of the wells in 2004, after the first problems with groundwater contamination had been reported.
The EPA’s research in Wyoming is separate from the agency’s ongoing national study of hydraulic fracturing’s effect on water supplies, and is being funded through the Superfund cleanup program.
The EPA says it will release a lengthy draft of the Pavillion findings, including a detailed interpretation of them, later this month.
From the Associated Press:
The global output of heat-trapping carbon dioxide jumped by the biggest amount on record, the U.S. Department of Energy calculated, a sign of how feeble the world’s efforts are at slowing man-made global warming.
The new figures for 2010 mean that levels of greenhouse gases are higher than the worst case scenario outlined by climate experts just four years ago.
Yes…worse than the worst case scenario. But aren’t we all ‘doing our bit’ by using ‘green’ products, etc.? Total horse sh!t, I say. Most of the so-called green choices we make are really marketing gimmicks to make consumers feel good about themselves…while families buy biodegradable dish soap they still own two cars and drive half a mile to pick up a quart of milk. Moreover, many of the ‘green’ products out there are in-fact just as bad as the ‘non-green’ products. (E.g. the electric car simply shifts the tailpipe emissions to the smokestack of a powerplant – and I’m not even getting into the battery issues here.)
…the latest figures put global emissions higher than the worst case projections from the climate panel. Those forecast global temperatures rising between 4 and 11 degrees Fahrenheit by the end of the century with the best estimate at 7.5 degrees.
I’m no climatologist, so I don’t get into the debates over the realities of global warming. But I do know human behavior and people will follow the path of least resistance until they are faced with a real shock. By that point, it’s usually too late.
Oct 272011
Oct 232011
“I have a ball preserving food with my friends!”
