Apocalypse Soon?

That's a great graph; it demonstrates what people continue to miss.

I have a poster on the wall of my office entitled "peak oil." It looks very much like the one you posted - with a few exceptions. The biggest one is that oil production worldwide peaks in 2010; that of course was incorrect. The second was that "light tight oil" (i.e. the Bakken shale, the Eagle Ford shale etc.) was not depicted on the poster.

Why not? Because no one thought it could be economically recovered. Turns out it can. Now your graph shows a peak in 2025, and a decline right after that.

Once we get to, say, 2020, someone like you will start predicting doom and gloom again. They'll post that graph and claim that the world is about to end, that we will run out of oil and civilization as we know it will collapse. And then coal oil (or biofuels, or insert new technology here) will turn out to be economically feasible at the new, higher prices for oil. And thus production of fuel will continue, albeit at higher prices as the cheaper sources run out.

 

Log in or Sign up to hide all adverts.

Why do you have a poster entitled "peak oil" on your office wall? If you don't believe in peak oil, why are you so interested in it?

What do you do for a living?

I think that oil currently costs more than 6% of GDP. What is the highest percentage of GDP that we can afford for oil?

---Futilitist

Please Register or Log in to view the hidden image!

 

Log in or Sign up to hide all adverts.

I'm interested in a lot of things! And I do "believe" in peak oil; we will reach a point where production isn't going to increase any more. My prediction for that is around 2030. It will plateau for a few decades as ever-more ingenious methods of extraction are employed to get to the ever-smaller reserves of remaining oil, then enter a sharp decline when oil can simply not compete with cheaper forms of energy. At that point the remaining oil will be used as industrial feedstocks (plastics, solvents etc) rather than as fuel.

We have actually already hit the "cheap peak oil" point. We'll never see oil south of $50 a barrel again. But we seemed to survive that OK. Heck, it's been well over $100 a barrel and we survived that as well. Some interesting side effect of those prices:

-Massive interest in more efficient vehicles. We have sold over 2 million hybrids and sales are increasing every year, and more conventional means of increasing efficiency (better transmissions, lower rolling resistance tires) are now commonplace. As a result fuel efficiency has increased by over 20% across the US in the past five years.

-Significant interest in non-oil transportation. From zero EV's five years ago we now have 11 pure electrics and 5 pluggable hybrids being sold in the US. There are over 100,000 natural gas vehicles on the road and commercial airliners are now carrying passengers with biofuels.

Engineer, designing power electronics for a variety of purposes including alternative energy.

Probably not more than 10%.

 

Log in or Sign up to hide all adverts.

Here is a bit more breaking apocalypse news. The economy shrank in the last quarter of 2012!

http://www.cnbc.com/id/100419252

But Moody's chief economist, Mark Zandi doesn't seem too worried:

http://www.cnbc.com/id/100419774

So, the Commerce Department said the economy was shrinking, but Mark Zandi insists it is growing. Hmmm...

Tyler Durden, at Zero Hedge, had this to say:

http://www.zerohedge.com/news/2013-01-30/why-economists-get-things-wrong

[video=youtube;tePKbfC7UNk]http://www.youtube.com/watch?v=tePKbfC7UNk[/video]

Economics is often called the dismal science, though it is not a science at all.

---Futilitist

Please Register or Log in to view the hidden image!

 

Are you an economist?

 

When discussing collapse type issues perhaps it is best not to focus so much on oil. Yes oil is important perhaps it is even the vocal point but I think what needs to be established first is the how the financial system operates and to be more specific how the monetary system works. Most people are not aware of the fact that all money created is loaned into existence. As we know with loans there is always an interest component so to service this debt you need the economy to expand indefinitely. If we even apply simple mathematics of compound growth we see how even modest growth of 2-3% cannot be maintained for any long period of time. Just to give an example if we assume 3% growth rates (which is what most people think is nothing particularly high) that equates to a doubling of time of 23 years. Now if we look at basic doubling numbers we can see the following:

01 > 1
02 > 3
04 > 7
08 > 15
16 > 31
32 > 63

The first numbers on the left are numbers is the sequence of numbers being doubled while the numbers on the right are the cumulative totals. As we see every new doubling amount is greater than the total of all previous growth. Now if we take my previous calculation of 3% growth and know that the doubling time is 23 years then it means that the total amount of resources and energy consumed in that time period will be greater than all resources or energy ever consumed in all of previous history assuming there are no increases in efficiency of resource/energy use. As we see from this simple exercise even great gains in efficiency can only buy time against this exponential growth. Growth must stop at some point as total resource/energy consumption cannot continually increase however this is the rub, the world financial system can only work under a scenario of perpetual growth. Perpetual growth cannot happen due to the reason I described above and we would have to violate the first and second laws of thermodynamics to get infinite growth.

On the topic of energy it is worth making a couple of points. The energy released from burning one barrel of oil is 6.2 gigajoules of energy or 1.5 million kilocalories. That amount of energy is around the equivalent to 10 years labour. Now we have a situation where people complain that $100 a barrel oil is too much but when taken in this context we see the resource is exceedingly cheap. This just goes to show that our modern industrial society is highly dependent on cheap abundant energy. Oh and let us not forget we consume 30 billion barrels of oil a year.

The situation is even more extreme with coal. A short ton of coal releases 18.8 million BTUs of energy which is around 3 times the amount of oil. The price of a short ton of oil is priced around $65 dollar in the US and likely it is even cheaper in other regions. As we see from the other example the energy released from this short ton of coal would require the 30 years of labour. Now with these simple facts established we can divide energy into three areas. There is labour energy, liquid (transportation) energy and electrical energy. Due to the huge price discrepancies we can see that the industrial revolution was basically a big exercise in arbitrage between expensive labour energy to cheaper fossil fuel energy. All technology has really done is allowed us to utilise the cheap fossil fuel energy in more applications. However without the fuel and energy source being so cheap the economics of automation would make no sense. I think this is the key point people need to understand and people have totally missed (economists included); it is not technology that is the driver of economic growth, it is energy. Technology is just the means that allows us to utilise this cheap energy and this extra energy is the chief reason for greater worker productivity.

Cheap energy drives all economic activities and it is so powerful that energy can even overcome resource scarcity to some extent. For example if the ore quality declines mining costs can still decrease if energy costs decline as more energy can be used (at minimal cost) to extract the resource. This is how many economies could achieve lower extraction costs despite the quality of resource declining. This abundance of energy has largely masked the amount of resource depletion going on. Once energy costs rise due to new energy sources yielding less net energy or lower EROEI then we will see costs across the board rising.

It will be prudent to learn more about the first law of thermodynamics that states energy cannot be created or destroyed. This means to extract any given energy source some energy must be used to extract the resource. As sources of coal/oil decline the amount of energy needed to get a given of energy increases resulting in the process yielding less net energy. Net energy is the most important thing in this equation as it is this energy that is used for economic activities. The discussion about total oil production ignores this point and people only focus on gross energy, we need to really know about the amount of net energy these new resources yield.

The second law of thermodynamics relates that any given action is never 100% efficient and will result in energy losses but more important is the point of entropy. All structures have a tendency to go from order to disorder and for this process to be stopped or even reversed requires the input of energy. As a result the more ordered a structured is the more energy it requires to be constructed and not only that but more energy is required to maintain that structure. For example constructing a car is a very energy intensive process and typically the construction phase of a car consumes 10-20% of its total energy consumption in its life time. Computers on the other hand which are even more ordered and have lower entropy require 10 times the amount of energy to construct on a weight to weight bases and I hear for the processor the energy costs are even higher in the order of 300 times more than a car on weight to weight basis. Maintenance costs will also be elevated to a similar degree due to the laws of entropy. This is another issue of seeing further technology as a solution as more technology requires more energy in the initial build up phase and then requires greater maintenance costs on top of that.

The real core problem we face is a behavioural problem. Humans have a tendency to consume resources at a greater and greater rate until we get some sort of resource collapse. All technology does is allows us to extract resources and energy more effectively but there will come a time when we cannot expand our rate of resource extraction. And when that time happens we will face some sort of resource collapse. We must learn and understand that we cannot increase our rates of consumption indefinitely and resource consumption needs to level off (and perhaps even decline a little bit as there are signs we are in overshoot). To advocate such things means to work towards a world of 0% economic growth which is basically an anathema to all our modern institutions which are built under the assumptions of continued growth. Oh and let us not forget the rate of consumption does not just come from population growth but also per capita consumption. As people become more prosperous they consume more resources so arguments pertaining to stabilising populations being the solution do not cut it if the amount of resources consumed by each person rises due to greater prosperity. This is a real dilemma, a predicament (not a problem which has a solution).

 

No.

---Futilitist

Please Register or Log in to view the hidden image!

 

And you also say:

So why wasn't this thread started in the Business & Economics section?

 

Some good points. Some comments:

It is certainly true that we cannot continue to grow in terms of energy/resource needs forever. The goal (IMO) should to be to stabilize our energy and resource needs so they can be met with existing supplies of energy - whether that energy is oil based, coal based, nuclear or even solar.

However an ECONOMY can grow forever, because the markers used to indicate growth (i.e. money) is itself not a fixed quantity. If money inflates (i.e. loses value) at the same rate that money is added to the economy, then there is no net growth in wealth. (Whether or not this is a good way to run an economy is a separate discussion.)

Also agreed that the "figure of merit" for any energy source is the EROEI. Oil used to be around 100 (1 unit of energy needed to recover 100 units of oil energy.) New oil discoveries have an EROEI of around 8. Shale oil is around 5.

At those EROEI's other sources of energy start to get cheaper. Nuclear is around 10, wind is around 18, solar is around 6. Thus they will become more competitive as time goes on (since the price of sunlight/wind is unlikely to change, and the price of the systems to harvest them will invariably decline.)

Well, the _useful_ energy from a barrel of oil is around 2 gigajoules but your point is still valid; oil packs a lot of energy into a small space. This is primarily due to the atmosphere supplying both the oxidizer for combustion (oxygen) and providing a place to put the wastes (CO2, HC, water etc.)

This is true but as geometries get smaller, per-part cost prices go down. (This is because you can fit far more devices on one wafer when you are using a 32 nm process as opposed to a 1 micron process - and making the wafer has traditionally been the 'hard part' in semiconductor manufacturing.) This is a good example of continuing to advance while _decreasing_ overall energy requirements.

Agreed.

 

I think EROEI is very important, but it is not the only thing to consider. Nuclear, wind, and solar are all sources of electrical power, yet what we face is a liquid fuels crisis. If electric power is to take over transportation from oil products, we will need to upgrade the grid considerably, as well as change the entire transportation fleet. If the cost of these projects were factored in, I think the EROEI calculations for these alternatives would be much lower.

A reduction in per part cost does not necessarily lead to decreased overall energy use. If per part costs for processors go down but overall computer sales go up, then overall energy use could increase. That is Jevons paradox.

---Futilitist

Please Register or Log in to view the hidden image!

And speaking of paradoxes, this thread has now received 102,042 views!

 

Will a moderator please restore my proper posting permissions?

This thread is now up to 102,221 views. I would have posted this update by editing the number in my previous post, but I my ability to edit has been switched off. I started a thread in site feedback to address this, but after a week, they still haven't switched it back on or even explained it.

Will a moderator or an administrator please restore my posting permissions? Thank you.

---Futilitist

Please Register or Log in to view the hidden image!

 

I beg to differ. By the measure of life style per unit effort as amended by technological advance, our parents had it a lot easier than we do. The difference is pretty well hidden by said technological advance but it is less and less common to have a solid middle class family on one parent's work.

If we want that time back, we should strongly consider building Liquid Fluoride Thorium Reactors (LFTRs) in order to return to the high EROEI condition.

 

The question is not if this entire civilization will fall, the question is when will this entire civilization fall, it's just a matter of time, I suggest you watch documentary "Surviving progress".

 

It's never happened before. We've had thriving civilizations using sail and animal power. Even the big collapses of empires (the Roman civilization for example) merely gave birth to new cities/countries/forms of government. Apocalyptic predictions are fun but are best relegated to Hollywood blockbusters.

 

billvon's 4 reasons we are not about to have a collapse:

1. It has never happened before.

So? That doesn't mean it isn't going to happen now. There is a lot of good evidence that collapse is imminent. #1 above doesn't address this at all.

2. We've had thriving civilizations using sail and animal power.

We have never had thriving civilizations using sail and animal power whose populations exceeded 7,000,000,000. Be serious.

3. Even the big collapses of empires (the Roman civilization for example) merely gave birth to new cities/countries/forms of government.

Rome suffered a long term decline, not a rapid collapse. The Mayan collapse lead to the die off of about 95% of the population over a very short period of time, as well as the total loss of their culture.

Besides, why is this supposed to make anyone feel any better? The good news is that, while you and your loved ones may soon die in agony, 5% of the species will survive? Whew, that's a relief. For a minute there I was starting to worry.

4. Apocalyptic predictions are fun but are best relegated to Hollywood blockbusters.

That is because so many people, like you, refuse to face reality. So we have to watch zombie movies and disaster films instead.

---Futilitist

Please Register or Log in to view the hidden image!

 

More Bad News

Hey guys,

Here is some recent news that doesn't look too good:

http://www.zerohedge.com/news/2013-02-11/chart-day-households-foodstamps-rise-new-record

We are supposed to be having a recovery, yet the number of people on food stamps has just hit a new record high. Hmmm...

Also, here is a good analysis from an economist, interviewed on The Economist. I think this guy offers a really good explanation, from a monetary perspective, of why we are facing a near term collapse.

[video=youtube;QgQxbPTBISU]http://www.youtube.com/watch?v=QgQxbPTBISU[/video]

And I thought this article had some very interesting information, particularly this section about student loans:

http://www.theburningplatform.com/?p=48126

The student loan bubble serves two major purposes. It creates economic activity and injects liquidity and capital into the economy. And it also takes people off the unemployment roles, since they are now considered full time students. In the third quarter of last year, the delinquency rates on student loans jumped drastically, indicating that the college loan bubble is reaching a saturation point, and thus is bursting. This is very bad news because, since the housing bubble burst, the Fed immediately began inflating the student loan bubble to help keep us stumbling along. We have run out of bubbles. This could be a major leading indicator of collapse.

---Futilitist

Please Register or Log in to view the hidden image!

 

Why didn't you answer my question?

 

Because I am ignoring you.

What do you think of this social collapse thing we are about to have?

---Futilitist

Please Register or Log in to view the hidden image!

 

Right. And the next time someone depresses the top of a spray can, all the air in the world could be sucked into it. It's unlikely, though.

I am. If we could support the Roman Empire on 1/100 the energy per person, we can support the US on 1/2 the energy we have now.

Exactly.

Reality? You mean - society hasn't collapsed? We keep discovering new forms of oil? Solar and wind keep growing at a tremendous rate? Those sorts of realities?

Well, you may have to. Based on what you write you may be watching a few too many.

 

You didn't answer my question, why?