What I'm Reading - Windup Girl

If you are reading this blog you have already figured out that I am a peak oil advocate.  I'm not a fanatic, you understand, but I have come to the conclusion that we are going to reach a point of diminishing returns with our hydrocarbon supply very soon and we are going to have to learn to live on much less of everything than we have now.  I have talked about this before.  I am not going to hammer on it right now.

I've just read a book, however, that has jostled my pat little peak oil view a little.  The Windup Girl by Paolo Bacigalupi is a science fiction book.  It is the first book that I have read that takes a serious, new look at society's possibilities after the loss of hydrocarbon energy.  It takes place after the Industrial Expansion, even after the inevitable contraction, in a world where industry has still found a way to survive.  Methane from recycling is there, in a limited supply, and electrical power for small devices is generated using springs, hand cranks and the like (think treadle-computers).  Even a few pre-contraction tools of destruction are still laying around to be used by those in power when needed.  It is a unfamiliar and frightening world he puts together but it is believable.

Mr. Bacigalupi is not predicting, he is conjecturing. Like all good Sci-fi authors should be doing.  The genius of this particular piece of work is that he has arrived at a place that I had never been able to get to in my contemplations of the peak oil problem.  When I think about the problems that society would face following  a loss of hydrocarbon energy, I always end up assuming the end of industry, and most of the population, because of the extreme dependence that industry (including food production) has on hydrocarbon power.  My vision has always been sort of a return to pre-hydrocarbon times circa 1700.  Not Mr. Bacigalupi.  He has conjured up a society every bit as technical and power hungry as our own but based on bio-engineered beasts of burden, laborers and foodstuffs.  It is going to take me awhile to digest all of this new insight.  It might end up changing the way I think about the future.  In the mean time it was an amazing read. 

In Gulf, It Was Unclear Who Was in Charge of Oil Rig

 

New government and BP documents, interviews with experts and testimony by witnesses provide the clearest indication to date that a hodgepodge of oversight agencies granted exceptions to rules, allowed risks to accumulate and made a disaster more likely on the rig, particularly with a mix of different companies operating on the Deepwater whose interests were not always in sync.

In Gulf, It Was Unclear Who Was in Charge of Oil Rig - NYTimes.com

I haven't said anything about the oil spill yet. I couldn't really decide how I felt about it. I was shocked of course. I was saddened. I was mad. But most of all I was scared.

I have accepted the reality of hydrocarbon depletion for a long time now. I don't think I have, however, fully accepted the consequences of that until now. I know that there is no way BP would have been drilling in this incredibly risky environment, a mile below the surface of the Gulf of Mexico, unless we were running out of easy places to find oil. This behavior, and others like it, is a direct result of our impending hydrocarbon depletion. But suddenly, I have come to the realization that there is a face to that risky behavior. The end of the oil age is going to be ugly.

The bottom line, of course, is that we must have our oil at any cost. We, the industrialized world in general and the United States in particular, have become so enamored of the joys that hydrocarbon consumption can bring to our lives that we will no longer tender any thoughts of an alternate approach. That is not hard to understand since we are so populous now (thanks to all that oil BTW) that we would only be able to support a fraction of our present consumption without it. So we will continue to drill. We will drill until we have nowhere else to drill and you and I will pay whatever it costs to see that it happens.

Now we know, all of a sudden, what that means. It means things like giant oil spills. Look for more of these kinds of things to happen. Look for them to happen in spite of the increased regulation and additional fortunes spent on keeping it from happening. This is where we are. The rest of the oil is out there hiding somewhere. And we are going to find it. No matter how ugly it gets.

Peak Oil: The End Of the Oil Age is Near, Deutsche Bank Says

[Link: Environmental Capital - WSJ] "Deutsche Bank expects the electric car to become a truly “disruptive technology” which takes off around the world, sending demand for gasoline into an “inexorable and accelerating decline.”

Five years ago I bought a new car. I had just retired and I wanted to have a car I could depend on in my retirement years. I told my wife that this could possible be the last gasoline powered car we would ever own. Our next car could very well be electric. At the time, we got a good chuckle out of that.

Well, it looks like Deutsche Bank has come to the same conclusion. Predicting the end of the oil age, they say the electric car will replace the internal combustion engine powered car that has come to symbolize the material age that we are living in. The Peak Oilers (myself included) have been saying that the oil age is eminent for some time now but they have been assuming the oil supply will begin to dwindle and we will be forced to give up our addiction whether we like it or not. I think Deutsche Bank is underestimating how many other ways we will find to use the oil if we don't use it in our cars but the point is still made. Whether we run out or just don't want to use it any longer doesn't really matter I guess. we are approaching the end of the petro-road and we should be getting ready for whatever lies beyond.

Peak Oil: Global Oil Production’s Peaked, Analyst Says

[Link: WSJ]

"non-OPEC oil production apparently peaked in the first quarter of 2007, and given precipitous falls in oil output from Russia to Mexico, there’s not much hope for a recovery. OPEC production—and thus global output—peaked a little later, in the first quarter of 2008."

We are growing complacent about the resource situation, particularly oil. The disastrous economic situation and resultant collapse of oil prices has led us to believe that there is no longer an oil supply problem. It was all just another speculative investment bubble you see. But Peak Oil doesn't work that way. We aren't using as much oil as we did but we are still using a lot of oil. All we have done is take the pressure off of the suppliers and when demand firms up again we are right back in the thick of it.
This article from the Wall Street Journal says we have already slipped over the peak and when recovery comes we will be already on the downward slope. Trying to grow with a shrinking energy supply. It isn't going to be pretty.

The Green Issue

[New York Times By MICHAEL POLLAN] "There are so many stories we can tell ourselves to justify doing nothing, but perhaps the most insidious is that, whatever we do manage to do, it will be too little too late. Climate change is upon us, and it has arrived well ahead of schedule. Scientists’ projections that seemed dire a decade ago turn out to have been unduly optimistic: the warming and the melting is occurring much faster than the models predicted. Now truly terrifying feedback loops threaten to boost the rate of change exponentially, as the shift from white ice to blue water in the Arctic absorbs more sunlight and warming soils everywhere become more biologically active, causing them to release their vast stores of carbon into the air. Have you looked into the eyes of a climate scientist recently? They look really scared."

Why bother? This is very interesting and thoughtful article. The author touches on many of the frustrations that all of us who are concerned about the state of our world grapple with every day. His points are good but I think he still hasn't been able, himself, to let go of the ideas that are driving his "cheap energy mind." I believe that there is a very clear and logical reason to bother. We should let go of the consumptive and manipulative aspects of our lives, made possible by cheap oil, simply because they are not real. We have been living on a one time bequest of cheap energy that is not, and has never been, a part of our real human existance. In the long term there is no oil. A couple of hundred years from now there won't be anybody alive who lives the lifestyle he is pleading for us to abandon. In a thousand years they won't even remember we ever did. So I say why not just get on with it. The best thing we can do for the environment is quit using oil stupidly...now. We can save whats left for a few thousand years worth of critical uses like medical and plastics for solar equipment. To use oil for transportation, electrical energy production, asphalt roads and fertilizer is insane. Then, when we have done that, whatever life we end up living will be closer to real for the first time in a couple of hundred years.

Mideast's own oil consumption helping to drive prices up

McClatchy Washington Bureau | 04/18/2008 | "Middle Eastern oil-producing nations are behind today's record high oil prices, but not for the reason you might think. Taken together, oil-rich nations represent a bloc of fast-growing economies that are now sucking up new energy supplies almost as fast as they're coming to market."

This goes along with what I was saying in the last post. For now the oil producers are just deciding to use their share of the bounty. When the other shoe drops, and they decide they need to also save some for the kids, its over folks.

The rise of the new energy world order

Asia Times Online :: Asian news and current affairs: "The combination of rising demand, the emergence of powerful new energy consumers, and the contraction of the global energy supply is demolishing the energy-abundant world we are familiar with and creating in its place a new world order. Think of it as rising powers/shrinking planet."

I am waiting for the other shoe to hit the floor. At some point the producers that are left will say, "Hey, I am going to need this stuff in the future. Why should I sell it to anybody?" At that point the U. S., who is only producing one third of it oil requirement, will be in big time trouble.

Did Katrina Hide the Real Peak in World Oil Production?

"We also look at the question of whether the impact of Hurricane Katrina may have hidden the real peak in world oil production. We find that if an adjustment is made for hurricane impacts, the peak month of production seems to be December 2005 on a crude and condensate basis, and September 2005 on an all liquids basis. The higher adjusted peaks, and greater declines since the adjusted peaks, further suggest that we may be post-peak."

[Link:The Oil Drum]

This is a very enlightening article. It points out very clearly that one can't base one's opinion about Peak Oil on one, or even a few, country's oil production numbers. The production of oil is effected by a multitude of factors, many of which are specific to only one producer, and obviously can't be viewed piecemeal. I think that the most significant insight that this article provides is the clear graphical evidence that the powerful production growth areas are not keeping up with the multitude of declining sources.

We are all peakists now - Schlesinger

[Link: David Strahan | An interview with Dr. James Schlesinger]

Wow. The big boys are coming out of the Peak Oil Closet now, aren't they. The papers and airwaves have been filled with Alan Greenspan's claim, from his new book, that Iraq was indeed about oil. Of course he is backing down in the heat of day. Now this linked interview with former US Energy Secretary Dr. James Schlesinger in which he admits that behind closed doors the oil company executives have conceded that Peak Oil is eminent. And I expect Dr. Schlesinger is not only privy to the information he is sharing but probably is sharing it with full knowledge of those he claims to be quoting. I have often wondered what form the official disclosure of Peak Oil would take. I always supposed it would be a stream of increasingly more authoritative pronouncements subtly fed to us over time until we could no longer deny their message. I would not be surprised that we are beginning to hear our "official" warning signals.

Last Light - A Peak Oil Novel

There is a new novel out called Last Light by London author Alex Scarrow. This video is a promo for the book.

The novel deals with a breakdown in society when oil supply is disrupted by terrorist activity all over the world. I haven't read the novel yet but I have corresponded with the author and I have seen reviews (see video) and it sounds like a good thriller built on a Peak Oil premise. He is not sure when the novel will be available in the United States and I don't see it on Amazon yet (one of his earlier novels is there) so if you are in the U.S. you will have to keep an eye out for it. I will update this post if I get any further news.

OPEC countries ignore West's agenda

"Washington apparently didn't note the recent statement of Saudi oil executive Sadad Al-Husseini: 'There has been a paradigm shift in the energy world whereby oil producers are no longer inclined to rapidly exhaust their resource for the sake of accelerating the misuse of a precious and finite commodity."

[Link: St. Cloud Times Opinion:]

It is hard to fault the logic of the Saudis on this one. If there were a hint of logic in the human race, that would be what we would all be trying to accomplish. Oil has been so undervalued these last 100 years. By using oil for heating and transportation we are going to use all of this precious resource up in the next couple of decades even though both of those uses could be done in other, granted less convenient, ways. In the meantime critical uses such as advanced medicines that are derived from hydrocarbons will be withheld from future generations.

I doubt if OPEC will be able to hold on to that goal when the U. S. starts running short of gasoline. Mr. Bush or those that will follow in his footsteps would never be able to let that happen. We are far too committed to this valuable commodity. We are determined to go down driving.

Accumulating risks' to world energy supply

The world is not running out of crude oil and natural gas but there are "accumulating risks" to securing global supplies through 2030, a high-level board of U.S. oil company executives found in a report obtained by Reuters on Thursday.

Those risks include "political hurdles, infrastructure requirements and availability of trained work force," according to the study by the U.S. National Petroleum Council, conducted at the behest of U.S. Energy Secretary Sam Bodman.

[Link: Reuters]

I have seen a lot of these kind of articles lately. Basically they follow a line of logic as follows. We don't really have an oil supply problem. There is plenty of oil out there. Enough to last us for a long time. The only problem is that we are having some difficulty getting to it, or there are political problems barring access to the oil, or there is insufficient funds to provide adequate levels of development of new reserves, or there is a shortage of critically skilled workers to work the fields, or that inadequate technological innovations are being applied to the existing fields, or..... Doesn't it strike you that maybe that is, in fact, exactly what peak oil looks like. When the easy oil is disappearing there are probably uncounted ways that are going to make the rest of the oil hard to get at. Peak oil chroniclers often state that we won't be able to know whether we have reached peak oil until long after the event has actually occurred. The reason for that must at least partly be due to the fact that many of the early manifestations of peak oil just look like another bad day at the office.

Global warming exaggerated, insufficient oil, natural gas and coal | EnergyBulletin.net | Peak Oil News Clearinghouse

Climate change and global warming has become part of our everyday life, and central to this debate is the emissions of carbon dioxide (CO2). The fossil fuels that we use contain carbon and hydrocarbons, and in the combustion of these fuels, carbon dioxide is released along with energy.

In the present climate debate, however, the amount of available fossil fuels does not appear to be an issue. The problem, as usually perceived, is that we will use excessive amounts in the years ahead. It is not even on the map that the amount of fossil fuels required in order to bring about the feared climate changes may in fact not be available.

[Link: Kjell Aleklett - Original article translation from EnergyBulletin.net | Peak Oil News Clearinghouse]

Now here is a classic good news/bad news situation. The shorter version: we may not be destroyed by climate change because we may not have enough fossil fuels to do full damage to the climate. It looks like a race to the bottom doesn't it. Will we destroy our climate or our civilization first. Of course, that is a simplification. If he is right, we will be fighting what climate change there is with a much reduced tool kit so it will be a mix of both.

This should not be a surprise, because climate change and fossil fuel usage are joined at the hip. The climate is a function of how much carbon is in the atmosphere. By returning all of the carbon that was locked up in the earths crust to the atmosphere we have fiddled with that carbon balance. We are getting exactly what we bargained for. Take your pick, livable climate or 100 years of free and easy energy.

GAO Report on Oil Supply

[Link = GAO Report(pdf)]

This is a link to the recently released report from the United States Government Accountability Office titled "CRUDE OIL - Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production." I have not read through it yet and there is a lot of commentary out there to sort through so I will not add my comments at this time. After I have absorbed all of the discussion, I will post my thoughts. I will say one thing. This appears to be a real escalation of visibility for the peak oil problem in the United States. As the report states, the United States must be concerned because the United States is the most vulnerable to oil disruptions.

Toyota picks Mississippi for new plant

Toyota Motor Corp.'s Highlander sport utility vehicle should start rolling off the assembly line at a new, $1.3 billion plant in northeast Mississippi by 2010, company and state officials said Tuesday.
Toyota disclosed the site for its eighth vehicle assembly plant in North America, saying it will be built on a 1,700-acre site at Blue Springs, about 10 miles northwest of Tupelo. It also considered sites in neighboring states Arkansas and Tennessee.
The Mississippi plant will manufacture 150,000 Highlanders a year. It also will create 2,000 badly needed jobs in an area with an economy that has slowed because of losses in furniture

[Link: Houston Chronicle]

So Toyota expects surging SUV demand in the U.S. by 2010. I guess I would have to question that projection. There are always many ways to look at the future of course. If you are a big auto manufacture, however, they must all be through rose-colored glasses. There aren't many good post-peak oil scenarios out there for auto manufacturers.

In depth - Study sees harmful hunt for extra oil

A report from Wood Mackenzie, the Edinburgh-based consultancy, calculates that the world holds 3,600bn barrels of unconventional oil and gas that need a lot of energy to extract.

So far only 8 per cent of that has begun to be developed, because the world has relied on easier sources of oil and gas.

Only 15 per cent of the 3,600bn is heavy and extra-heavy oil, with the rest being even more challenging.

[Link: FT.com]

The concept of ERoEI (Energy Return on Energy Invested) is thrown around a lot in discussions of energy depletion and Peak Oil. Most of us think of it as a measure of the difficulty of obtaining the oil but its real importance might be its relationship to reserves. Think about it for a second. If a barrel of very difficult to extract oil has an ERoEI of 1.0 (ie it takes the energy equivalent of a barrel of oil to extract it) it really doesn't exist. There is no reason to go after it. In other words you can't really count that barrel as part of our energy reserves if we count the barrel we will use to get it out. Taking that a little further, we really should degrade all reserve estimates by the ratio of ERoEI of the oil in reserve. If oil is twice as hard to get out, it should only count as half as much oil when we add up our reserves. I am going to have to think about this some more but if I am right the world's oil reserves have just gone down a lot.

Running out of oil may not be the issue at all

Watson said other above-ground risks include higher costs of finding oil that could chill production and the lack of enough engineers and other professionals to replace the industry's aging work force.

"Above-ground peak oil will trump below-ground peak oil every time," Watson said.

[link: Chron.com - Houston Chronicle]

The shorter version of this article is "there is plenty of oil, we just won't be able to get at it so Peak Oil is a myth." I guess I am just dense but I don't remember anywhere that the phenomenon of oil depletion is only related to physical reserves or that it will occur without any difficulty. That is what peak oil is for Heaven's sake. It is like picking fruit on a tree. The first half of the harvest is no problem then you realize that those beauties up in the top or over the neighbors fence are going to be a lot more trouble than they are worth. That is when you leave them there and move on to the next tree. Unless, of course, there are no more trees. At that point if you want more fruit you are going to pay the price. At some point even that last branch may not be worth the effort and the birds are going to get the benefit. Those "above-ground" peak oil problems that he is complaining about are part and parcel of the peak oil problem.

Matt Simmons (Bloomberg): Peak Oil Now, Oil Perhaps to $300

Watch an interview of Matt Simmons on the Bloomberg Report. This is the interview where he predicts $300/barrel oil and declares peak oil is here.

Daniel J. Popeo: The state of our energy is dangerous

Those of us who are convinced that hydrocarbon resources are in finite supply, and that we might be challenging the limits of its availability, are often reminded of the many flaws in our logic. For instance, we are encouraged to remember the power of the market. When the price of scarce hydrocarbons gets high enough more will appear. The invisible hand of Supply and Demand will guarantee that we can produce what we need. Maybe more expensive, but there. Others implore us to take into account the force of technology. The ingenuity of man will come through as it always has. Like the market, when there is a need there will be a solution.

This author however reminds us of another way that we have misjudged our predicament. It seems that the energy is there if only our poor energy companies were not throttled by the powerful government bureaucracies and all consuming environmental organizations. In other words, we are not short of energy resources, we are merely keeping ourselves from using it. He doesn't mention that we have had a national administration in power for six years that came from the oil industry and instead of tearing down those impenetrable barriers set up by the environmental juggernauts that control our country's resources they invaded a weak middle eastern country to insure our oil interests there. He also mentioned that we have not built a refinery in 30 years. I don't think he mentioned, however, that a refinery was proposed in the western United States last year and it wasn't built because, after getting all of the environmental approvals they needed, they couldn't find anybody that would guarantee a supply of oil that could be refined.

He is obviously unwilling to accept any restraints on our use of resources that might limit his lifestyle. If he could just roll back those pesky rules and regulations he would get us all the energy we would need. That may have made some sense a couple of decades ago, but I would think that the immediate threat of Global Warming would have been a strong enough signal that, hey, maybe the environmentalists have a point here.

[Link: Daniel J. Popeo: The state of our energy is dangerous - Examiner.com]

The post-abundance era

I like that term. I think the author of this article has hit upon the right name for what we are running in to. Post-abundance pretty much says it all. Abundance is a relative term. Post-abundance won't mean that anybody can't get what they want, just that maybe there won't be quite enough for everybody.
In an earlier post I wrote about the Olduvai Theory which is the idea that the world is facing a point of reduced per capita energy availablity. My point then was that this reduction does not mean we are going to be producing less energy only that we are going to be growing our energy supply more slowly than the population increases. I am almost certain that this is already beginning to happen since we have barely been keeping even for the last two or three decades. This subtle phenomenon will have the perverse effect of reduced abundance even though we are still producing at record rates. Post-abundance economics will of course result in a global zero-sum game since, by definition when anything is in limited supply, those who continue to increase their consumption will be withholding consumption from somebody else. Again, when the population is growing faster than the availability of goods, increased production does not mean increased abundance.
As the author of the article warns, there will be many pipers to pay as this plays out in the coming decades. Wars. International and intranational strife will be the order of the day. But eventually there will be a point of convergence when everyone will realize, that's all there is, there ain't no more. Then we will be in a new state of grace. All of us. We won't have any choice. I don't know how long it will take for us to work through to this new reality. I am an old man and may only see the opening moves. But some of you out there will see it through to the end game. This isn't something that we can pass off to "future generations." The new reality will then bare its other fang. Not only do we not have enough to keep our grand, technological miracle of a world going, there will be no more easily extracted resources to rebuild a new industrial age either. That really is all there is, there really ain't no more.
[Link: The post-abundance era]