[extropy-chat] Debate on Peak Oil

Mon Apr 25 04:24:29 UTC 2005

Peter Huber had a speech and Q&A session on C-SPAN today hosted by the
Harvard Club in NYC. It was a very good speech and he gave compelling
reasons for what he has to say.

I knew Peter Huber when he was an analyst for the Bonneville Power
Administration, back in the early 1990's. He mentored me in my
development of my energy conservation simulator that I used in
marketing my exit sign retrofit kit. He is extremely smart, and as an
engineer is incredibly unimpressed by the typical bureaucrats desire to
keep information secret or to spin information for a desired political
goal.

I imagine he wrote this book after being exasperated with the immense
amount of political bullshit that passes for science in the world of
energy and environmental policy.

Peter is not a stranger to 'green' energy, nor is he hostile to them.
He just knows the facts: that they simply cannot compete with fossil
fuels or the new nuclear energy. As great as solar is getting at
reaching $0.25/kwh, that still isn't 12 cents or even 4 cents. The new
pebble bed reactor technologies are competing head to head with fossil
fuels, and in a capital rich economy, can even outcompete fossil fuels
by a significant margin if one factors all costs as a closed cycle.

This is why China is building more pebble bed reactors now than
everybody else put together, and plans on making the technology a major
part of its energy infrastructure. If the US doesn't do the same, we
are going to be left behind. Right now China has 18 of the 25 most
polluted cities and is the smoggiest nation on the planet. The state
has realized the growing costs of this level of pollution upon the
health of the nation. Right now the air pollution helps because it
kills off some Chinese before they can reach retirement, but doesn't
contribute much toward attenuating the reproductive rate. They know
they have to stop burning the dirtiest coal in the world. 

By 2020, China will have 10% of the number of cars that the US has. By
2050 they will be the number one makers and operators of cars in the
world. Assuming no Singularity by then, and no nuclear war with the US,
Chinese authors will start writing tomes about the end of history and
the evolutionary superiority of Chinese culture....

The Chinese are assuming Global Warming is real, and that even if Peak
Oil isn't real in a physical sense, as Peter Huber argues, that it is
real in a regulatory sense (as Peter states is the real case) in that
as environmental protection becomes a global priority, states will
legislate and regulate oil reserves out of production, despite their
clear existence and our capacity to tap them ever more affordably. 

As we see Jeb Bush and Ahnuld the Gubernator both banning oil
exploration off their coasts, it is the state that creating the Peak
Oil experience. One reason for this is that high oil prices from short
supplies increases oil tax revinues for governments that are
increasingly short of revinues from other areas due either to tax cuts
or poor economic performance (despite that poor performance being
caused by overregulation, high oil costs, or excessive taxes).

--- Hal Finney <hal at finney.org> wrote:

> The Los Angeles Times has a debate today between Peter Huber, author
> of
> "The Bottomless Well: The Twilight of Fuel, the Virtue of Waste and
> Why
> We Will Never Run Out of Energy," and Paul Roberts, author of "The
> End
> of Oil: On the Edge of a Perilous New World," on the topic of Peak
> Oil.
> This link will probably only work for a few days:
>
http://www.latimes.com/news/opinion/commentary/la-op-edebate24apr24,0,7963584.story?coll=la-news-comment-opinions
> 
> The debate unfortunately quickly departs from the topic of whether we
> will see a near-term peak in oil production and what its impact might
> be.
> Instead the authors fall back to arguing about the need for a carbon
> tax and the role of nuclear energy.  The main value for me was the
> pointer to Huber's book, which I hadn't heard about.  It sounds like
> a useful source of contrarian commentary.
> 
> I did read one other Peak Oil book, "Out of Gas" by David Goodstein,
> who was my physics professor when I was in college in the 1970s, and
> again my son's instructor three years ago.  Unfortunately this very
> thin
> volume was a disappointment.  Much of the content was a recap of the
> scientific discovery of conservation of energy and the meaning of
> entropy.
> The information specific to Peak Oil was basically what you can
> easily
> find online.
> 
> The best factual backgrounder on the Peak Oil situation I've found
> is <http://www.hilltoplancers.org/stories/hirsch0502.pdf>, a Feb 2005
> report by a government think tank.  One weakness is that it is
> America
> centric and doesn't have much information about the rest of the
> world.
> But for America, the report notes that in 1973 the U.S. used 35 quads
> (quadrillion BTUs) of oil; then after the "energy crisis" usage
> declined
> to 30 quads by 1983.  Since then it has grown and has reached 39
> quads
> in 2003.  Personally, I think it is amazing that oil usage has grown
> so
> little in the U.S., from 35 to 39 quads in 30 years of overall strong
> economic growth.
> 
> In most sectors of the economy, oil usage has become much more
> efficient
> in the past few decades, and consumption has remained the same or
> even
> decreased.  The one glaring exception is transportation.  Almost half
> of
> oil goes for gasoline, and an additional 20% for diesel fuel.  This
> is
> where the U.S. has been unable to economize effectively, and this is
> where the economy would first feel the pinch as oil prices rise due
> to
> a production peak.
> 
> Anyone who has driven in the U.S. recently will be aware that the
> current fleet of vehicles is not optimized for low fuel consumption.
> The good news is that tremendous efficiency improvements are possible
> even just given current technology.  The bad news is that this takes
> time
> and is expensive.  Under normal circumstances, half the cars on the
> road
> will be replaced by consumers in the next 10-15 years at a cost of
> 1.3
> trillion dollars.  If gas prices continue to rise this will probably
> accelerate, but the costs are likely to be even greater.
> 
> One other concept which has come out of my reading is an acronym used
> by Peak Oil supporters, EROEI: energy return over energy invested.
> It is mostly used to disparage alternative sources of energy like
> ethanol, solar panels or tar sands.  The idea is that for many of
> these
> alternatives, you have to put in a great deal of energy to produce a
> unit
> of energy out.  That makes them look artificially inexpensive today
> (or
> at least last year) with generally low energy prices, giving a
> too-low
> estimate of break-even pricing.  With oil becoming more expensive,
> these
> alternatives will also be more expensive to produce and the
> break-even
> cost will climb.
> 
> Saudi oil is said to have an EROEI ratio of about 30: spending the
> power
> of 1 barrel of oil produces 30 barrels.  But many of these
> alternative
> fuels have EROEI ratios of more like 2-5 and some are even less than
> 1,
> depending on the production methods.  This is a problem with
> government
> attempts to jump-start alternative fuels; the subsidies and market
> stimulation may make it profitable to exploit low-EROEI,
> energy-wasting
> methods of production.  The result is an alternative fuels industry
> that
> is unsustainable when energy prices rise.  The subsidies can actually
> be
> counter-productive by encouraging work on wasteful production methods
> instead of technologies that will be efficient even when energy
> becomes
> expensive.
> 
> Hal
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> 

Mike Lorrey
Vice-Chair, 2nd District, Libertarian Party of NH
"Necessity is the plea for every infringement of human freedom.
It is the argument of tyrants; it is the creed of slaves."
                                      -William Pitt (1759-1806) 
Blog: http://intlib.blogspot.com

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