[ExI] Peak Oil -- Amory Lovins

Kelly Anderson kellycoinguy at gmail.com
Thu May 31 15:34:37 UTC 2012

On Thu, May 31, 2012 at 3:46 AM, Eugen Leitl <eugen at leitl.org> wrote:
> On Thu, May 31, 2012 at 03:08:42AM -0600, Kelly Anderson wrote:
>> > You're taking one guy, on his word, without knowing the details
>> > which were not subjected to peer review? Really?
>> Eugen, don't have a knee jerk reaction just because you don't like
>> what he says. Nobody gets invited to TED once, let alone twice if they
> I don't know what he says. Neither do you.

Yes, I do know what he says. I know what he is saying can and should
happen, and how to get there and what steps need to be taken to get

> That's the point.
> Before we can evaluate the claims, we need to know what
> exactly the claims are (=numbers and models) and what his
> peers say.

Strictly speaking, this isn't exactly peer reviewed science. He's more
of an economist. Economics is one of the softer sciences. He's saying
what should happen, what can happen, and what happens when we do
certain things. You would like his conclusions... he wants to get rid
of all oil use by 2050 replacing most of it with solar, and very
little nuclear.

The interesting part is how he gets there. A lot of really economical
steps to save power. He wants to build lighter cars out of carbon, for
example. He shows how building lighter cars is a virtuous cycle that
saves energy and lives. It's all good stuff Eugen. Don't assume that
you know what he's talking about until you have heard him out.

>> are not serious.
>> Read his bio:
>> http://www.ted.com/speakers/amory_lovins.html
> I've heard of the guy before, of course. Actually I skimmed the executive
> summary of his new book http://www.rmi.org/rfexecutivesummary
> and what you say doesn't seem what he says. In order to substitute
> some 30 TW in 40 years you need a substitution rate which is more
> linear than exponential, and we're some 1-2 orders of magnitute
> remote from the global substitution rate required.

I believe (again, I'm not intimately familiar with some of the
details) that he wants to make up a lot of the difference with
conservation. He also wants some biofuel, made from waste, not food.

> It can be done but it won't be done if we don't do it.
> And alsmost nobody is doing it at the moment. That is my
> beef with grand plans in general.

He has Walmart and Texas Instruments as customers. What Walmart does
really matters. When Walmart changes the lighting in all of its
stores, it makes a big difference. He got them to do that.

>> Listen to the talks. Then decide for yourself. You seem to be having a
> Sorry, I don't do video. No time for this. TED is better than most,
> but still information density too low, not enough novelty to bother.
> I've never watched a single TED video from start to finish.

So read the transcripts. I'll make it easy for you, here is the
transcript from his first talk:

The old story about climate protection is that it's costly, or it
would have been done already. So government needs to make us do
something painful to fix it. The new story about climate protection is
that it's not costly, but profitable. This was a simple sign error,
because it's cheaper to save fuel than to buy fuel, as is well known
to companies that do it all the time -- for example, Dupont, SD micro
electronics. Many other firms -- IBM -- are reducing their energy
intensity routinely six percent a year by fixing up their plants, and
they get their money back in two or three years. That's called a

Now, similarly, the old story about oil is that if we wanted to save
very much of it, it would be expensive, or we would have done it
already, because markets are essentially perfect. If, of course, that
were true, there would be no innovation, and nobody could make any
money. But the new story about oil is the government doesn't have to
force us to do painful things to get off oil -- not just
incrementally, but completely -- quite the contrary. The United
States, for example, can completely eliminate its use of oil and
rejuvenate the economy at the same time, led by business for profit,
because it's so much cheaper to save and substitute for the oil than
to keep on buying it. This process will also be catalyzed by the
military for its own reasons of combat effectiveness and preventing
conflict, particularly over oil.

This thesis is set out in a book called "Winning the Oil Endgame" that
four colleagues and I wrote and have posted for free at Oilendgame.com
-- about 170,000 downloads so far. And it was co-sponsored by the
Pentagon -- it's independent, it's peer-reviewed and all of the backup
calculations are transparently posted for your perusal. Now, a bit of
economic history, I think, may be helpful here. Around 1850, one of
the biggest U.S. industries was whaling. And whale oil lit practically
every building. But in the nine years before Drake struck oil, in
1859, at least five-sixths of that whale oil-illuminating market
disappeared, thanks to fatal competitors, chiefly oil and gas made
from coal, to which the whalers had not been paying attention. So,
very unexpectedly, they ran out of customers before they ran out of
whales. The remnant whale populations were saved by technological
innovators and profit-maximizing capitalists.


And it's funny -- it feels a bit like this now for oil. We've been
spending the last few decades accumulating a very powerful backlog of
technologies for saving and substituting for oil, and no one had
bothered to add them up before. So when we did, we found some very
surprising things. Now, there are two big reasons to be concerned
about oil. Both national competitiveness and national security are at
risk. On the competitiveness front, we all know that Toyota has more
market cap than the big three put together. And serious competition
from Europe, from Korea, and next is China, which will soon be a major
net exporter of cars. How long do you think it will take before you
can drive home your new wally-badged Shanghai automotive
super-efficient car? Maybe a decade, according to my friends in
Detroit. China has an energy policy based on radical energy efficiency
and leap-frog technology. They're not going to export your uncle's

And after that comes India. The point here is, these cars are going to
be made super efficient. The question is, who will make them? Will we
in the United States continue to import efficient cars to replace
foreign oil, or will we make efficient cars and import neither the oil
nor the cars? That seems to make more sense. The more we keep on using
the oil, particularly the imported oil, the more we face a very
obvious array of problems. Our analysis assumes that they all cost
nothing, but nothing is not the right number. It could well be enough
to double the oil price, for example. And one of the worst of these is
what it does to our standing in the world if other countries think
that everything we do is about oil, if we have to treat countries that
have oil differently than countries that don't have oil.

And our military get quite unhappy with having to stand guard on
pipelines in Far-off-istan when what they actually signed up for was
to protect American citizens. They don't like fighting over oil, they
don't like being in the sands and they don't like where the oil money
goes and what sort of instability it creates. Now, in order to avoid
these problems, whatever you think they're worth, it's actually not
that complicated. We can save half the oil by using it more
efficiently, at a cost of 12 dollars per saved barrel. And then we can
replace the other half with a combination of advanced bio-fuels and
safe natural gas. And that costs on average under 18 dollars a barrel.
And compared with the official forecast, that oil will cost 26 dollars
a barrel in 2025, which is half of what we've been paying lately,

that will save 70 billion dollars a year, starting quite soon. Now, in
order to do this we need to invest about 180 billion dollars: half of
it to retool the car, truck and plane industries; half of it to build
the advanced bio-fuel industry. In the process, we will gain about a
million good jobs, mainly rural. And protect another million jobs now
at risk, mainly in auto-making. And we'll also get returns over 150
billion dollars a year. So that's a very handsome return. It's
financeable in the private capital market. But if you want it for the
reasons I just mentioned, to happen sooner and with higher confidence,
then -- and also to expand choice and manage risk -- then you might
like some light-handed public policies that support rather than
distorting or opposing the business logic. And these policies work
fine without taxes, subsidies or mandates. They make a little net
money for the treasury.

They have a broad trans-ideological appeal, and because we want them
actually to happen, we figured out ways to do them that do not require
much, if any, federal legislation, and can, indeed, be done
administratively or at a state level. Just to illustrate what to do
about the nub of the problem, namely, light vehicles, here are four
ultra-light carbon-composite concept cars with low drag, and all but
the one at the upper left have hybrid drive. You can sort of have it
all with these things. For example, this Opel two-seater does 155
miles an hour at 94 miles a gallon. This muscle car from Toyota: 408
horsepower in an ultra-light that does zero to 60 in well under four
seconds, and still gets 32 miles a gallon. I'll say more later about

And in the upper left, a pioneering effort 14 years ago by GM -- 84
miles a gallon without even using a hybrid, in a four-seater. Well,
saving that fuel, 69 percent of the fuel in light vehicles costs about
57 cents per saved gallon. But it's even a better deal for heavy
trucks, where you save a similar amount at 25 cents a gallon, with
better aerodynamics and tires and engines, and so on, and taking out
weight so you can put it into payload. So you can double efficiency
with a 60 percent internal rate of return. Then you can go even
further, almost tripling efficiency with some operational
improvements, double the big haulers' margins. And we intend to use
those numbers to create demand pull, and flip the market.

In the airplane business, it's again a similar story where the first
20 percent fuel saving is free, as Boeing is now demonstrating in its
new Dreamliner. But then the next generation of planes saves about
half. Again, much cheaper than buying the fuel. And if you go over the
next 15 years or so to a blended-wing body, kind of a flying wing with
internal engines, then you get about a factor three efficiency
improvement at comparable or lower cost. Let me focus a minute on the
light vehicles, the cars and light trucks, because we all know the
most about those; probably everybody here drives one. And yet we may
not realize that in a standard sedan, of all the fuel energy you feed
into the car, seven-eighths never gets to the wheels; it's lost first
in the engine, idling at zero miles a gallon, the power train and

So then of the energy that does get to the wheels, only an eighth of
it, half of that, goes to heat the tires on the road, or to heat the
air the car pushes aside. And only this little bit, only six percent
actually ends up accelerating the car and then heating the brakes when
you stop. In fact, since 95 percent of the weight you're moving is the
car not the driver, less than one percent of the fuel energy ends up
moving the driver. This is not very gratifying after more than a
century of devoted engineering effort.



Moreover, three-fourths of the fuel use is caused by the weight of the
car. And it's obvious from the diagram that every unit of energy you
save at the wheels is going to avoid wasting another seven units of
energy getting that energy to the wheels. So there's huge leverage for
making the car a lot lighter. And the reason this has not been very
seriously examined before is there was a common assumption in the
industry that -- well, then it might not be safe if you got whacked by
a heavy car, and it would cost a lot more to make, because the only
way we know how to make cars much lighter was to use expensive light
metals like aluminum and magnesium. But these objections are now
vanishing through advances in materials.

For example, we use a lot of carbon-fiber composites in sporting
goods. And it turns out that these are quite remarkable for safety.
Here's a handmade McLaren SLR carbon car that got t-boned by a Golf.
The Golf was totaled. The McLaren just popped off and scratched the
side panel. They'll pop it back on and fix the scratch later. But if
this McLaren were to run into a wall at 65 miles an hour, the entire
crash energy would be absorbed by a couple of woven carbon-fiber
composite cones, weighing a total of 15 pounds, hidden in the front
end. Because these materials could actually absorb six to 12 times as
much energy per pound as steel, and do so a lot more smoothly.

And this means we've just cracked the conundrum of safety and weight.
We could make cars bigger, which is protective, but make them light.
Whereas if we made them heavy, they'd be both hostile and inefficient.
And when you make them light in the right way, that can be simpler and
cheaper to make. You can end up saving money, and lives, and oil, all
at the same time. I showed here two years ago a little bit about a
design of your basic, uncompromised, quintupled-efficiency
suburban-assault vehicle -- (Laughter) -- and this is a complete
virtual design that is production-costed manufacturable.

And the process needed to make it is actually coming toward the market
quite nicely. We figured out a kind of a digital inkjet printer for
this very stiff, strong, carbon-composite material, and then ways to
thermoform it, because it's a combination of carbon and nylon, into
whatever complex shapes you want, like the one just shown at the auto
show by one of the tier-one suppliers. And the manufacturing you can
do this way gets radically simplified. Because the auto body has only,
say, 14 parts, instead of 100, 150. Each one is formed by one fairly
cheap die set, instead of four expensive ones for stamping steel. Each
of the parts can be easily lifted with no hoist. They snap together
like a kid's toy. So you got rid of the body shop.

And if you want, you can lay color in the mold, and get rid of the
paint shop. Those are the two hardest and costliest parts of making a
car. So you end up with at least two-fifths lower capital intensity
than the leanest plant in the industry, which GM has in Lansing. The
plant also gets smaller. Now, when you go through a similar analysis
for every way we use oil, including buildings, industry, feedstocks
and so on, you find that of the 28 million barrels a day the
government says we will need in 2025, well, about eight of that can be
removed by efficiency by then, with another seven still being saved as
the vehicle stocks turn over, at an average cost of only 12 bucks a
barrel, instead of 26 for buying the oil. And then another six can be
made robustly, competitively, from cellulosic ethanol and a little
bio-diesel, without interfering at all with the water or land needs of
crop production.

There is a huge amount of gas to be saved, about half the projected
gas at about an eighth of its price. And here are some no-brainer
substitutions of it, with lots left over. So much, in fact, that after
you've handled the domestic oil forecast from areas already approved,
you have only this little bit left, and let's see how we can meet
that, because there's a pretty flexible menu of ways. We could, of
course, buy more efficiency. Maybe you ought to buy efficiency at 26
bucks instead of 12. Or wait to capture the second half of it. Or we
could, of course, just get this little bit by continuing to import
some Canadian and Mexican oil, or the ethanol the Brazilians would
love to sell us. But they'll sell it to Japan and China instead,
because we have tariff barriers to protect our corn farmers, and they

Or we could use the saved gas directly to cover all of this balance,
or if we used it as hydrogen, which is more profitable and efficient,
we'd get rid of the domestic oil too. And that doesn't even count, for
example, that available land in the Dakotas can cost effectively make
enough wind power to run every highway vehicle in the country. So we
have lots of options. And the choice of menu and timing is quite
flexible. Now, to make this happen quicker and with higher confidence,
there is a few ways government could help. For example, fee-bates, a
combination of a fee and a rebate in any size class of vehicle you
want, can increase the price of inefficient vehicles and
correspondingly pay you a rebate for efficient vehicles. You're not
paid to change size class. You are paid to pick efficiency within a
size class, in a way equivalent to looking at all fourteen years of
life-cycle fuel savings rather than just the first two or three.

This expands choice rapidly in the market, and actually makes more
money for automakers as well. I'd like to deal with the lack of
affordable personal mobility in this country by making it very cheaply
possible for low-income families to get efficient, reliable, warranted
new cars that they could otherwise never get. And for each car so
financed, scrap almost one clunker, preferably the dirtiest ones. This
creates a new million-car-a-year market for Detroit from customers
they weren't going to get otherwise, because they weren't creditworthy
and could never afford a new car. And Detroit will make money on every
unit. It turns out that if, say, African-American and white households
had the same car ownership, it would cut employment disparity about in
half by providing better access to job opportunities. So this is a
huge social win, too.

Governments buy hundreds of thousands of cars a year. There are smart
ways to buy them and to aggregate that purchasing power to bring very
efficient vehicles into the market faster. And we could even do an X
Prize-style golden carrot that's worth stretching further for. For
example, a billion-dollar prize for the first U.S. automaker to sell
200,000 really advanced vehicles, like some you saw earlier. Then the
legacy airlines can't afford to buy the efficient new planes they
desperately need to cut their fuel bills, but if you felt
philosophically you wanted to do anything about that, there are ways
to finance it.

And at the same time to scrap inefficient old planes, so that if they
were otherwise to come back in the air, they would waste more oil, and
block the uptake of efficient, new planes. Those part inefficient
planes are worth more to society dead than alive. We ought to take
them out back and shoot them, and put bounty hunters after them. Then
there's an important military role. That in creating the move to
high-volume, low-cost commercial production of these kinds of
materials, or for that matter, ultra-light steels that are a good
backup technology, the military can do the trick it did in turning
DARPAnet into the Internet. Just turn it over to the private sector,
and we have an Internet.

The same for GPS. The same for the modern semi-conductor industry.
That is, military science and technology that they need can create the
advanced materials-industrial cluster that transforms its civilian
economy and gets the country off oil, which would be a huge
contribution to eliminating conflict over oil and advancing national
and global security. Then we need to retool the car industry and do
retraining, and shift the convergence of the energy and ag-value
chains to shift faster from hydrocarbons to carbohydrates, and get out
of our own way in other ways. And make the transition to more
efficient vehicles go faster.

But here's how the whole thing fits together. Instead of official
forecasts of oil use and oil imports going forever up, they can turn
down with the 12 dollars a barrel efficiency, down steeply by adding
the supply-side substitutions at 18 bucks, all implemented at slower
rates than we've done before when we paid attention. And if we start
adding tranches of hydrogen in there, we are rapidly off imports and
completely off oil in the 2040s.

And the one thing I'd like to point out here is that we've done this
before. In this eight-year period, 1977 to 85, when we last paid
attention, the economy grew 27 percent, oil use fell 17 percent, oil
imports fell 50 percent, oil imports from the Persian Gulf fell 87
percent. They would have been gone if we'd kept that up one more year.
Well, that was with very old technologies and delivery methods.

We could rerun that play a lot better now. And yet what we proved then
is the U.S. has more market power than OPEC. Ours is on the demand
side. We are the Saudi Arabia of "nega-barrels." (Laughter) We can use
less oil faster than they can conveniently sell less oil.


Whatever your reason for wanting to do this, whether you're concerned
about national security or price volatility -- (Laughter) -- or jobs,
or the planet, or your grand-kids, it seems to me that this is an oil
endgame that we should all be playing to win. Please download your
copy, and thank you very much.


>> religious reaction, rather than a rational one and I think you're
> Yes, I'm religious. My cult abhors one thing: lack of rigor.
> The best kind of arguments for my persuasion are these published
> in peer-reviewed journals. Violators will be burned... naw, just
> ignored.

OK, he has a web site, and his paper was peer reviewed, and it was
paid for by the Pentagon. Is that enough for you to pay attention to
what he has to say?

>> better than that. Lovin's answers to the problems we face aren't the
>> same answers everyone else is giving. Hear him out.
> I agree with what I've read so far. I'm just not seeing it done
> on time.

I think we're right on track. Big question is whether the efficiencies
can come from a US auto industry that gets bailed out instead of being
allowed to fail. As usual, the problem is the government stepping in
and f'ing things up. If the car companies had been allowed to go out
of business, we would have hi tech startups in California now building
carbon fiber cars! But NOOOOooo the union cronies have to be upheld to
continue to build steel cars that are ruining the earth and wasting
our precious resources.

>> >> > If the Chinese and Indians figure out a way to leapfrog our technology from
>> >> > the latter 20th century, then I would agree we may have seen peak demand for
>> >> > oil.  But it isn't clear that they will do that, in which case they will
>> >> > want their personal ape-haulers and will drive the wheels off of them, just
>> >> > as we did.  The demand on oil will be astonishing.
>> >>
>> >> I don't know the basis for Lovin's claims precisely. I am pretty sure
>> >
>> > If you don't know what his claims are precisely, why are you wasting
>> > your time, and ours?
>> I know what his claims are. I just don't know the details of how he
>> arrives at the conclusions he arrives at. He did quote a Duechebank
>> report regarding peak oil demand... If you really want to know, I
>> would advise getting his book, "Reinventing Fire"... while I have not
>> read it, I have read excerpts and what he says sounds pretty rational
>> to me.
> Does anyone have an electronic version of the ebook? There are
> 13 publications by Lovins on LibGen, but his latest book isn't
> there yet.

I haven't been able to find anything yet.

>> > Amory Lovins has 331 hits on The Oil Drum. A possibly more focused
>> > search still gives 59 hits http://www.theoildrum.com/search/apachesolr_search/%22amory%20lovins%22
>> > I'm not going to read them, but perhaps you should.
>> This is pretty typical of the stuff on the oil drum comments...
>> "I'm surprised by your lack of familiarity with Lovins. He is widely
>> published, a recognized international expert on renewable energy, and
>> someone that everyone interested in peak oil solutions should pay
>> attention to.
>> Read Winning the Oil Endgame cover to cover and let us know what you think."
>> >> he was talking globally though. If we do reach peak demand prior to
>> >> peak supply, that's good for all of us! Add one to the optimism
>> >> column... hopefully.
>> Eugen... If you want to be well versed on energy policy, and I think
>> you do, then don't you owe it to yourself to read things from more
>> than one source? Lovin's approach is BIG, and bold. He wants to fix a
> I *am* reading as much as I can digest, actually. The Oil Drum is
> actually including plenty of reviews, and varied opinions. They
> might pick you apart in the comments if they don't like what you
> say, but you can publish dissenting opinions.


>> lot of large problems all together, and by solving all these big
>> problems together, rather than tackling little bits independently, he
>> arrives at a solution that really sounds plausible.
> We have plenty of solutions that are plausible. We've had such
> solutions in 1970, in fact. The trouble is that we don't execute
> these.

And with the savings in war costs alone, people are taking a second look now.

>> I would recommend you listen to the two TED talks if nothing else. I
>> have been a subscriber to his snail mail mailing list for a couple of
>> years, and get letters in the mail from his organization pretty
>> frequently. He runs a real organization, with real money and real
>> clients.
> I do not doubt that. Can he make ~10 gigamonkeys (or much less, if
> we fail) play ball? And monkeys don't want to play ball.

Monkeys like saving money, especially the ones that run big
businesses. I think the hardest part of his plan is doing anything
about individual homes. That's a tough one. But factories, long haul
trucking, cars, advanced biofuels for more efficient airplanes, those
all sound reasonable to me.


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