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By Robert Rapier on Dec 21, 2011 with 55 responses

My Book Has a Name — Power Plays: Energy Options in the Age of Peak Oil

Tags: Book, eroei, peak oil

I have gotten numerous inquiries about the book I am working on, so just wanted to provide a quick update. I have been unsure about exactly how long this process would take, but apparently it is a lot faster than I had imagined. My original thinking was that it would be out around the middle of next year, but I found out today that it is already available. People have been asking about the title, but I have been saying that it isn’t set in stone. Well, it is now: Power Plays: Energy Options in the Age of Peak Oil

Power Plays: Energy Options in the Age of Peak Oil

I don’t actually know if that cover is final; this is actually the first time I have seen it and so I don’t know if this is just a pre-publication version or if this is actually the cover.

My goal for the book is to broadly and objectively cover the topic of energy, and especially to highlight issues that may be entirely unknown to readers. I try to cover all of the hot energy topics today, look back at how we got to this point, and peer into the future. It isn’t a peak oil book per se, but I do cover the topic in a way that I don’t believe has been covered before. I also cover climate change, fossil fuels, renewables, and some common sense solutions to the problems we face (e.g., passage of the Open Fuel Standard Act). As soon as I finish organizing the material I will post a Table of Contents.

I also wanted to provide an update on the blog schedule for the rest of the year. Today or tomorrow a new video will be published. This one is a bit different from the others; it is a short presentation on the concept of Energy Return on Energy Invested (EROEI). Next week I will put up the Top 10 Energy Stories of 2011, and then I will offer predictions for 2012.

I also turned 45 today, and as I approach middle age, :) , it is a time for reflection about the state of the world and the work that remains to be done — which is why I am up writing at 4 a.m. There is still a lot to be done; I don’t think the world is adequately prepared for what I believe will be some rocky times in front of us. But I believe that I need to think about ways to more effectively engage people and bring that urgent message across that we can’t stand around idly while Rome burns.

Best holiday wishes for all readers and viewers. I hope you get to spend it with loved ones, and if you do not, then I hope you get to see them soon.

Link to Original Article: My Book Has a Name — Power Plays: Energy Options in the Age of Peak Oil

By Robert Rapier

  1. By Benny BND Cole on December 21, 2011 at 1:33 pm

    RR is the premier energy commentator in the USA.

    But, man adapts, creates, innovates–I think we are already through the Peak Oil days, and into Peak Demand and natural gas gluts. The price signal is a wondrous thing.

    Pending Venezuela, Iraq, Iran etc, we could see oil gluts too. Geologically, we have more oil than we can use–sadly, it is under the foot of monkey-thug governments, such as Russia, Saudi Arabia, Nigeria and the aforementioned. But governments can change. Maybe they will–maybe they will get worse. The price signal has just about made that issue moot—the world is moving into better alternatives, and conservation. Ford makes a luxury car that get 41 mpg. That’s now, today, not a vision. CNG cars are selling off the lot in Oklahoma for under $10k. Now, today. (cngvehicles.net)

    Advances are being made in solar and batteries. Indeed, I think the future will likely be more prosperous and cleaner than the past. Much-maligned solar could be ready for prime time in five years. PHEVs could have double the range in 10 years.

    I don’t envy RR writing a book as technologies roar past. And no one can be an expert on everything in energy, ranging as it does from lithium batteries, to new solar technologies, to natural gas, to biofuels, to oil drilling, to conservation and LEDs etc etc etc.

    I am sure RR’s book is a must-read—but stay optimistic. The best is yet to come.

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  2. By Ben on December 21, 2011 at 4:01 pm

    Ah, that one should share BND’s optimism. I dare say the road ahead may be bit bumpier than hoped for, but, yes, there are always ever-adapting economic forces working their will on gaps–real and imagined–in the marketplace of energy and everything else under the sun. Malthusians have consistently found themselves on the wrong side of history. One might assume that the hand-wringing naysayers of today will witness to their own under-estimation of the creative, entrepreneurial spirit that buoys free societies; where reward for risk takes its guidance from the price mechanism-and not, thankfully, from myopic and misguided politicians. Thank God for that!

    I look forward to reading RR’s book. He’s as honest a broker in providing relevant facts and subjecting them to objective analysis without an axe to grind as there is on today’s scene. His readers will be all the better for the investment of a few shillings and some relaxing hours spent contemplating this thoughtful Oklahoman’s handiwork.

    Happy holidays to all the fellow-travellers as we navigate these rocky shoals with the promise of open water in the days ahead–we hope:)

    Ben

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  3. By Rufus on December 21, 2011 at 4:08 pm

    Looks like a pretty heavy “Chop” to me, but we’ll see.

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  4. By Optimist on December 21, 2011 at 5:52 pm

    Just for the record, RR, how would you define the “Age of Peak Oil”? How do we know when it’s started? How do we know it’s over?

    Gotta side with Benny and Ben on this: as long as we leave it to the free market (as you always argue for when the topic is a hurricane), we’ll be OK. Of course, our politicians will be hard pressed to leave things for the free market, especially as clueless voters yell at them to do something. I suspect if anything drastic happens, we’re in for a repeat of Mr. Nixon’s disasterous performance (price controls leading to shortages). Add to that the central confusion of the Dems when it comes to energy (Gas tax holiday! Super profit tax! Release from SPR! Blame Big Oil!), and the political threat is real.

    What might save us though, is the fact that it takes a lot to qualify as drastic anymore. If oil returns to $150/bbl soon, I doubt it will qualify. But I suspect $150/bbl is enough to quietly change some behaviors. Some of it permanently.

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  5. By Rufus on December 21, 2011 at 6:16 pm

    Behavior has already changed quite a bit. Gasoline consumption is down about 4.7% from last year (to 8.7 Million Barrels/day.) Gasoline consumption was, I think, around 9.6 mbpd at this time in 2007. Also, of that 8.7 mbpd, 940,000 is ethanol (let’s just call it 0.9 mbpd.)

    So, instead of using 9.6 mbpd of gasoline we’re now using 7.8 mbpd, a change of 1.8 Million barrels/day.

    A change of 18.75%, approx.

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  6. By rrapier on December 21, 2011 at 6:25 pm

    Optimist said:

    Just for the record, RR, how would you define the “Age of Peak Oil”? How do we know when it’s started? How do we know it’s over?


     

    I present the case that the first implications are here, even if production does manage to go up a bit. As far as the timing, for all practical purposes we are at it — although we could squeeze out production for a few more years.

    As far as the policits, I have an entire chapter on that.

    RR

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  7. By rrapier on December 21, 2011 at 6:50 pm

    Here is the tentative TOC. The docx files are those already uploaded into the publisher’s system. Does it look like anything glaring is missing?

    Ch01_Overview.docx           

    Ch02_FossilFuels.docx           

    Ch03_Renewables.docx           

    Ch04_Energy_Production.docx           

    Ch05_Climate_Change.docx           

    Ch06_Peak_Oil.docx           

    Ch07_Nuclear.docx           

    Ch08_Threats.docx

    Chapter 9 – Better Energy Policies            

    Ch10_Due_Diligence.docx           

    Chapter 11 – The Race to Replace Oil

    Chapter 12 – Corn Ethanol

    Chapter 13 – The Role of Biomass

    Chapter 14 – Energy and Politics

    Chapter 15 – The Road Ahead

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  8. By paul-n on December 21, 2011 at 8:20 pm

    The only thing I would suggest is missing is a chapter dealing with demand management/reduction.

    As Rufus reminds, US oil demand is already decreasing – though mainly through forced conservation by economic recession.

    But, leaving aside the oil alternatives, which is most of the book, demand reduction – voluntary or otherwise – will be a big factor.

    In terms of demand reduction, there are things like diesels, PHEV etc – which are really alternate fuels, but we are also seeing some societal shifts.  VMT in the US is down, as is air travel etc.  Some of this is because people can;t afford to anymore, and some is because they don;t need to any more -e.g. telecommuting, cloud computing, etc.  I’d also like to see a shift to smaller/more efficient vehicles, but this is one change that doesn’t seem to really be happening.

    While there could be a while book or more written about how (transport) consumption patterns are, will and might change – and that is effectively what Jeffrey Rubin did – I think it is worth consideration – if it is not in there already – as it certainly is an “energy option”.  

    Given that US uses 2x the oil per capita of Europe, there is certainly plenty of scope for demand reduction, regardless of supply options.

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  9. By Rufus on December 21, 2011 at 9:13 pm

    Actually, the vehicles purchased in Nov, this year, were 12.3% More Fuel Efficient than those bought in Oct, 2007.

    http://www.umich.edu/~umtriswt…..r-2011.png

    But, what about Diesel?

    Here’s an overlooked key, I think: Warren Buffet, The Major Stockholder in Burlington Northern, is buying Solar, and Wind Farms like they’re going out of style. Now, Warren Buffet is known as a very conservative investor. What gives?

    My theory? He knows His Railroad is going to “Electrify.”

    Europe’s going that way lickety-split. Ukraine is 50% “electrified.” We will, also. It’s the logical thing to do in the era of impending/beginning Peak Oil.

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  10. By Joseph on December 22, 2011 at 3:14 am

    As Rufus reminds, US oil demand is already decreasing – though mainly through forced conservation by economic recession.

    While the recession accelerated the reduction in oil use the downward trend was already well established. Furthermore, with the end of the war in Iraq we’ll see a huge drop off in DoD oil purchases (the single largest user in the world). Walmart is improving their transport fleet fuel efficiency by ~15% and the technology employed will transfer to the rest of the transport industry. And this decade we will see the vast majority of the global fleet of aircraft be replaced by aircraft that are 15%-25% more fuel efficient.

    It takes time for society to change but it is happening and I am optimistic about fixing the “addiction to oil”.

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  11. By rrapier on December 22, 2011 at 3:43 am

    Joseph said:

    As Rufus reminds, US oil demand is already decreasing – though mainly through forced conservation by economic recession.

    While the recession accelerated the reduction in oil use the downward trend was already well established. 


     

    Demand in the U.S. only made a real decline starting in 2008, when prices hit $147 and the recession was biting. Globally, demand fell in 2008 and 2009, but then made a huge jump in 2010 to a new record high. As India and China continue to develop, I don’t see a lot of chance that global demand is going to decline without some serious price pressure.

    RR

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  12. By Joseph on December 22, 2011 at 4:27 am

    Robert Rapier said:

     

    Demand in the U.S. only made a real decline starting in 2008, when prices hit $147 and the recession was biting. Globally, demand fell in 2008 and 2009, but then made a huge jump in 2010 to a new record high. As India and China continue to develop, I don’t see a lot of chance that global demand is going to decline without some serious price pressure.

    RR


     

    I agree. However, rising oil prices will have less of an impact on the US economy due to efficiency improvements and the adoption of alternatives. RMI has a fact filled points on how we can get off oil by 2050.

     

    http://www.rmi.org/rftransport…..ivesummary

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  13. By rrapier on December 22, 2011 at 1:08 pm

    Joseph said:

     

     

    I agree. However, rising oil prices will have less of an impact on the US economy due to efficiency improvements and the adoption of alternatives.


     

    I would argue just the opposite. Because we in the U.S. use more than 20 barrels of oil per person per year — and because a lot of that oil is imported — we will get hit much harder than the developing countries who are just now using their first one or two barrels for basics like heating their homes. Their economies can still grow (and have) while ours struggles against the headwinds.

    We will have no choice but to use less oil, but I think it’s going to be a very difficult economic stretch of terrain in front of us.

    RR

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  14. By paul-n on December 22, 2011 at 1:15 pm

    It takes time for society to change but it is happening and I am optimistic about fixing the “addiction to oil”.

    Not one of the things you describe ends the addiction to oil – they will merely reduce the dose.  Ending the addiction means getting *off* and would involve things like a serious move to electrified rail for goods and people, and a serious program of buiulding out urban transit.  Tough for the US to swallow, but that’s what ending the additcion means – you stop using it – not a 15% reduction.

     

    As long as all the transport is dependent on oil, even at more efficient consumption levels, the addiction is still there.

     

    AS for the RMI, well , do we base its credibility on Lovins’ past plans/predictions?

    Like a massive uptake of H2 fuel cells?

    The ridiculously expensive Hypercar?

     

    Anyone can come up with a 40yr plan, and they are equally meaningless.  It is the next ten that matter.  

    We need to adopt pragmatic solutions that can be implemented now, not techno-fantasies.

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  15. By rrapier on December 22, 2011 at 1:58 pm

    Paul N said:

    AS for the RMI, well , do we base its credibility on Lovins’ past plans/predictions?

    Like a massive uptake of H2 fuel cells?

    The ridiculously expensive Hypercar?

     


     

    Or look at the stuff he wrote about celulosic ethanol. He missed that by a mile, yet that was going to be a big part of the solution he described in Winning the Oil Endgame.

    RR

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  16. By savro on December 22, 2011 at 2:12 pm

    Robert Rapier said:

     

    Or look at the stuff he wrote about celulosic ethanol. He missed that by a mile, yet that was going to be a big part of the solution he described in Winning the Oil Endgame.

    RR


     

    But the chairman of the North Dakota Corn Utilization Council disagrees. In an opinion piece promoting corn ethanol, he says “I also believe we need to research all forms of alternative energy. Cellulosic ethanol is becoming more efficient to produce as different enzymes are discovered. There is also abundant wheat straw and corn stover in our area to use as stock for cellulosic ethanol.” http://www.inforum.com/event/a…..p/Opinion/

    Heck, for all the efficiencies even Rufus knows he still can’t fill ‘er up with cellulosic E85.

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  17. By paul-n on December 22, 2011 at 2:31 pm

    “I also believe we need to research all forms of alternative energy. ‘

    So we can expect his, and the corn industry’s, complete support for the open fuels standard, which encourages virtually all forms of renewable fuels?

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  18. By savro on December 22, 2011 at 2:50 pm

    Paul N said:

    “I also believe we need to research all forms of alternative energy. ‘

    So we can expect his, and the corn industry’s, complete support for the open fuels standard, which encourages virtually all forms of renewable fuels?

    Did you also notice that the only alternative he mentions is cellulosic ethanol. Hmmm… I wonder why??

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  19. By paul-n on December 22, 2011 at 3:21 pm

    Yes, the only “alternative” they want (the government to pay) to pursue is the dead end one…

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  20. By savro on December 22, 2011 at 3:39 pm

    Paul N said:

    Yes, the only “alternative” they want (the government to pay) to pursue is the dead end one…


     

    Also because the corn ethanol promoters like to point to the “promise” of cellulosic ethanol as another reason for more incentives and upping the blend limits on gasoline. If that “promise” was gone then they’d have to replace it with a new argument.

    From before the E15 decree went into effect: 

    Ethanol producers want the Environmental Protection Agency to raise from 10 percent to 15 percent the amount of ethanol blended with gasoline, saying it would increase demand for their fuel by 6 billion gallons annually. Automakers are leery of the idea, arguing it could damage some vehicles, and the EPA hasn’t said how it will respond.

     

    “In order to have a second generation of ethanol fuel, you have to have a first generation,” Bob Dinneen, CEO of the Renewable Fuels Association, told Wired.com. “I assure you that corn-based ethanol will not serve as a barrier to the success of cellulosic ethanol. But it must also be understood that while the two fuels are dependent on one another, they are also on two different tracks to success.”

    http://www.wired.com/autopia/2…..ould-be-t/
     

     

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  21. By Joseph on December 22, 2011 at 6:00 pm

    Robert Rapier said:

     

    Yes, energy efficiency of GDP is improving, but the amount of money flowing out of the country due to high oil prices has accelerated the past few years. That’s the problem. And GDP efficiency is not improving at the same rate that oil prices are increasing. I have no doubt that we will continue to use less oil, but I think it’s going to be primarily because prices are killing us.

    Do you believe the current difficulties in the economy have anything to do with $100 oil?


     

    At its peak price the amount flowing out was annualized at $700-billion… our biggest “trade deficit”. I even believe that was the number that was used in the “Pickens Plan”.

     

    Industry has moved faster than consumers  in reducing oil consumption for obvious reasons. However, as oil prices remain high drivers will continue to alter habits to reduce gasoline consumption (driving patterns coupled with improving vehicle fuel efficiency, hybrid/electric and alt fuels) will over time approximate industries’ use reduction rate. And the higher the gasoline price, the faster the change.

     

    Obviously, much can be done to accelerate the consumption rate reduction, and several points have already been brought up in various replies.

     

    Certainly $100 oil has an obvious impact on the economy but it isn’t a prime factor that caused the current difficulties.

     

    Robert Rapier said:

    The tend to gloss over technical challenges. That’s why they were so bullish on cellulosic ethanol; they simply assumed technology would solve the problems.

    Certainly they were wrong in terms of timing (in expectecing the problems to be solved faster than they are). However, it doesn’t make sense to dismiss them because of that one item when there are many valid points that they make in “Reinventing Fire”.
     

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  22. By Joseph on December 22, 2011 at 4:19 pm

    Robert Rapier said:

    I would argue just the opposite. Because we in the U.S. use more than 20 barrels of oil per person per year — and because a lot of that oil is imported — we will get hit much harder than the developing countries who are just now using their first one or two barrels for basics like heating their homes. Their economies can still grow (and have) while ours struggles against the headwinds.


     

    However, if you look at our oil conusumption per unit of GDP it has gone down consistently and will continue to drop year on year. So rising oil prices are offset by this.

     

    Robert Rapier said:

     

    We will have no choice but to use less oil, but I think it’s going to be a very difficult economic stretch of terrain in front of us.


     

    We are indeed using less oil and will continue to use less oil. The difficult economic stretch in front of us, however, is not due to oil prices.

     

     

    Paul N said:

    Not one of the things you describe ends the addiction to oil – they will merely reduce the dose.  Ending the addiction means getting *off* and would involve things like a serious move to electrified rail for goods and people, and a serious program of buiulding out urban transit.  Tough for the US to swallow, but that’s what ending the additcion means – you stop using it – not a 15% reduction.

     

    As long as all the transport is dependent on oil, even at more efficient consumption levels, the addiction is still there.

    Getting *off* oil is not an overnight process but it will happen. As I said, it will take time.

     

    Paul N said:

    AS for the RMI, well , do we base its credibility on Lovins’ past plans/predictions?

    Like a massive uptake of H2 fuel cells?

    The ridiculously expensive Hypercar?

     

    Anyone can come up with a 40yr plan, and they are equally meaningless.  It is the next ten that matter.  

    We need to adopt pragmatic solutions that can be implemented now, not techno-fantasies.


     

    You are dismissive of RMI without grounds. They were not wedded to fuel cells (which may still prove to be an alternative one day) and were early advocates of hybrid and electric cars. The Hypercar was not ridiculously expensive and, moreover, CFRP and other lighter materials are increasingly making inroads in car manufacturing.

     

    And RMI’s plan is pragmatic and with no “techno fanatasies.”

     

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  23. By rrapier on December 22, 2011 at 4:46 pm

    Joseph said:

    Robert Rapier said:

    I would argue just the opposite. Because we in the U.S. use more than 20 barrels of oil per person per year — and because a lot of that oil is imported — we will get hit much harder than the developing countries who are just now using their first one or two barrels for basics like heating their homes. Their economies can still grow (and have) while ours struggles against the headwinds.


     

    However, if you look at our oil conusumption per unit of GDP it has gone down consistently and will continue to drop year on year. So rising oil prices are offset by this.

     

    Robert Rapier said:

     

    We will have no choice but to use less oil, but I think it’s going to be a very difficult economic stretch of terrain in front of us.


     

    We are indeed using less oil and will continue to use less oil. The difficult economic stretch in front of us, however, is not due to oil prices.


     

    Yes, energy efficiency of GDP is improving, but the amount of money flowing out of the country due to high oil prices has accelerated the past few years. That’s the problem. And GDP efficiency is not improving at the same rate that oil prices are increasing. I have no doubt that we will continue to use less oil, but I think it’s going to be primarily because prices are killing us.

    Do you believe the current difficulties in the economy have anything to do with $100 oil?

    You are dismissive of RMI without grounds.

    The tend to gloss over technical challenges. That’s why they were so bullish on cellulosic ethanol; they simply assumed technology would solve the problems.

    RR

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  24. By Optimist on December 22, 2011 at 6:50 pm

    I present the case that the first implications are here, even if production does manage to go up a bit. As far as the timing, for all practical purposes we are at it — although we could squeeze out production for a few more years.

    My point exactly: The age of Peak Oil is here, and if you squint you may miss it. Inconvenient as $3.50 – 4.00/gal is, it is hardly the End of Civilization, contrary to the disciples in the Churck of Peak Oil.

    Ah, yes, you say, but this is just the beginning.

    Fair enough. Prices will continue to go up. But it is worth recalling that less than five years ago GM believed $3/gal would be the end of the SUV. For better or for worse, $3/gal is in the rearview mirror, and SUV sales are doing just fine. Over time we’ll adapt to $4.50/gal, $5.00/gal, $5.50/gal, etc. Without the catastrophic collapse the Church of Peak Oil is waiting for.

    As far as the policits, I have an entire chapter on that.

    I feel your head ache.

    As I’ve stated before: this is the real threat: dumbass politicians (from either side ot both) doing a Nixon.

    Does it look like anything glaring is missing?

    As Paul suggested: “Supply and Demand, A review of how the market reacted to price shocks in the past, and what we can expect in future”.

    As India and China continue to develop, I don’t see a lot of chance that global demand is going to decline without some serious price pressure.

    As the French air hostess said: “I understand ze question, but I do not see ze problem…” Free market to the rescue. Again.

    Yes, the only “alternative” they want (the government to pay) to pursue is the dead end one…

    Yip. City full of Nixons. Don’t look to Washington for solutions.

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  25. By Optimist on December 22, 2011 at 7:08 pm

    At its peak price the amount flowing out was annualized at $700-billion… our biggest “trade deficit”.

    That sounds way high. The US uses ~20 million barrel per day, or 7.3 billion barrels per year. At $100/bbl, $730 billion pays for ALL the oil used in the country.

    Yes, energy efficiency of GDP is improving, but the amount of money flowing out of the country due to high oil prices has accelerated the past few years. That’s the problem.

    Sigh! I guess we’re stuck with being the bankers of the Oil Thugs. Don’t tell Benny…

    And GDP efficiency is not improving at the same rate that oil prices are increasing.

    Sounds like a factual statement, but it’s more faith-based. Unless you can find a sound way of calculating a rate of oil price increase through the noise (variation) of the last few years.

    I have no doubt that we will continue to use less oil, but I think it’s going to be primarily because prices are killing us.

    You’re sounding like a politician with that “prices are killing us” line. Prices are hurting, mainly because we’ve become too accustomed to $1/gal. Not to worry. A long-overdue correction is already underway.

    Ending the addiction means getting *off* and would involve things like a serious move to electrified rail for goods and people, and a serious program of buiulding out urban transit.

    Paul, did you type that with a straight face? Other than bankrupting the country, what would getting *off* oil achieve?

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  26. By Cheryl on December 22, 2011 at 8:59 pm

    I hope a kindle version of your book will be available!

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  27. By rrapier on December 22, 2011 at 11:15 pm

    Joseph said:

    Robert Rapier said:

    The tend to gloss over technical challenges. That’s why they were so bullish on cellulosic ethanol; they simply assumed technology would solve the problems.

    Certainly they were wrong in terms of timing (in expectecing the problems to be solved faster than they are). However, it doesn’t make sense to dismiss them because of that one item when there are many valid points that they make in “Reinventing Fire”.


     

    I am reading Reinventing Fire now, but I am talking about “Winning the Oil Endgame.” I know a fair amount about cellulosic ethanol, and they really just glossed over a lot of the problems there that have prevented cellulosic from really taking hold. I guess my biggest complaint would be that while we both agree on exactly what the problem is, the assumptions they make are often overly optimistic.

    RR

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  28. By Joseph on December 22, 2011 at 11:39 pm

    Optimist said:

     

    That sounds way high. The US uses ~20 million barrel per day, or 7.3 billion barrels per year. At $100/bbl, $730 billion pays for ALL the oil used in the country.


     

    I am not disputing your calculation. However I was not talking about current prices. What I posted was what was reported by various media when oil reached its peak price in July/08 (they may have picked up that figure from Pickens’ Plan). Even McCain used the $700-billion figure during the presidential race… “We have to stop sending $700 billion a year to countries that don’t like us very much.”

     

     

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  29. By paul-n on December 23, 2011 at 2:10 pm

    Joseph wrote;

    What I posted was what was reported by various media when oil reached its peak price in July/08 (they may have picked up that figure from Pickens’ Plan). Even McCain used the $700-billion figure during the presidential race… “We have to stop sending $700 billion a year to countries that don’t like us very much.”

    Joseph, if you are going to post on this blog, you need to know one of RR’s base rules – “start with the data”.  Just because a number was bandied about by the media, doesn;t make it true.  And being used in a political campaign means it is downright suspicious.

    So where did $700bn come from?  It was the peak oil price, of $147/bbl x oil imports of 13mbd.  Now, that price was hit for a few days in 2008, and so for a few days there was the daily equivalent of $700bn.  

    The annual average price of oil for 2008 was actually $91.48, so for that year, it comes to about $434bn.  And given that $50bn of that went to Canada, the amount that went to countries that “don;t like the US very much” was actually about $385bn – just over half of what McCain was claiming.

    So please, don’t take the media’s word, do some checking for yourself – the information is only a few clicks away

    [source]

     

    @ Optimist – how do you remove the noise with oil prices?  Just use the annual average – it is a far better indicator of long term trends.

    Even though oil hit $147/barrel in 08 and is just 2/3 of that today, the annual average price for this year is likely to be higher than that of 2008.

    Better still, we can use the inflation adjusted price.

     

    [source]

    We have to be careful of one detail – these prices are for WTI, and until a year ago, this matched overseas prices like Brent, Saudi, Tapis, Urals etc.   But this year, it is at quite a discount, so in calculating amounts spent on oil imports, the Brent price is needed for all imports other than from Canada.  

     

    Ending the addiction means getting *off* and would involve things like a serious move to electrified rail for goods and people, and a serious program of building out urban transit.

    Paul, did you type that with a straight face? Other than bankrupting the country, what would getting *off* oil achieve?

    Absolutely I typed that with a straight face.  Ending the addiction means ending being *dependent* on oil.  Joseph gave examples of using less, which is fine, but a car that gets 50pmg – is still totally dependent on oil.  So, the addiction is still there, just at a lower dose.

    I am saying if we want to end the addiction, we have to get off oil.

    Now, whether that is possible, or desirable, or, as you point out, affordable, is a different question entirely.

    So lets not confuse the issue with poor terminology.

    “Ending the addiction to oil” means not using it, or not needing to use it.

    “Ending the addiction to oil imports ” means reducing use enough that we can feed the remaining addiction through domestic (+cdn) production.

    That is quite a different statement, and has completely different implications.

    And, in my opinion, is quite achievable.  

    Getting off oil altogether, is not practical, for a variety of reasons.  So people like Joseph, and politicians, should not throw out misleading statements like that.  They make great sound bites, but only serve to muddy the waters of the debate – though that may sometimes be the intention.

     

    [link]      
  30. By rrapier on December 23, 2011 at 2:29 pm

    Optimist said:

    And GDP efficiency is not improving at the same rate that oil prices are increasing.

    Sounds like a factual statement, but it’s more faith-based. Unless you can find a sound way of calculating a rate of oil price increase through the noise (variation) of the last few years.


     

    I missed this earlier. Actually, it is easy to calculate and I did so in the book. I looked at GDP changes over the past 10 and 20 years versus the changes in the global average price of oil. The change in oil price is much greater than the improvements in GDP efficiency, and worse we have outsourced GDP to countries that are far less efficient at producing it.

    RR

    [link]      
  31. By Joseph on December 23, 2011 at 4:49 pm

    Paul N said:

    It was the peak oil price, of $147/bbl x oil imports of 13mbd.  Now, that price was hit for a few days in 2008, and so for a few days there was the daily equivalent of $700bn.  


     

    Paul, I guess you missed it but that is what I posted… but in a lot fewer words. 

     

    Paul N said:

    Getting off oil altogether, is not practical, for a variety of reasons.  So people like Joseph, and politicians, should not throw out misleading statements like that.  They make great sound bites, but only serve to muddy the waters of the debate – though that may sometimes be the intention.

     


     

    It is not a misleading statement and is not muddying the waters of the debate. The timing is difficult to predict but one only has to look at the rate of GNR advances to realize that it is inevitable.

    [link]      
  32. By paul-n on December 23, 2011 at 7:37 pm

    It is not a misleading statement and is not muddying the waters of the debate. The timing is difficult to predict but one only has to look at the rate of GNR advances to realize that it is inevitable.

    It is a very misleading statement.   Are you (or anyone else)  proposing to get the US to zero oil consumption?  Because, that is what “ending the addiction” means.

    You referenced things like the 54mpg CAFE standard, but that still means every car is using oil = still addicted.  

    Now you are saying that it is inevitable that we will have cars (and everything else) using zero oil?

    So what is exactly is your (or anyone else’s) plan to get there?  

    I am yet to see a single, credible plan that tries for zero oil consumption, so I would say that putting out the suggestion  for that, without the ability or intention of achieving it, is indeed muddying the waters.

    Much better to put out a plan that is achievable, and has intention to be achieved.

    Or, more simply, say what you mean, and mean what you say – something our politicians seem to have forgotten.

     

    [link]      
  33. By Joseph on December 23, 2011 at 9:41 pm

    Paul N said:

    It is a very misleading statement.   Are you (or anyone else)  proposing to get the US to zero oil consumption?  Because, that is what “ending the addiction” means.

    It isn’t a misleading statement. Getting us to zero petroleum consumption is indeed what is being stated by many people.

     

    Paul N said:

    You referenced things like the 54mpg CAFE standard, but that still means every car is using oil = still addicted.

    I referenced no such thing. Please check before you post and make incorrect attributions/statements. Second time now that you’ve done that.

     

    Paul N said:

    So what is exactly is your (or anyone else’s) plan to get there? 

    Given that the time frame that has been referenced is 40 years out, at the rate of progress in GNR it is foolish to say “exactly” what technologies will be in use by 2050. However, as I said previously, one only has to look at the rate of progress in GNR to realize that it will be absolutely feasible to be off petroleum by 2050.

    [link]      
  34. By paul-n on December 24, 2011 at 2:58 am

    Getting us to zero petroleum consumption is indeed what is being stated by many people.

    It is what is being stated by Lovins and the RMI, but I’d be happy to see links to all the other people that are stating that.

     

    at the rate of progress in GNR

    What is GNR?

     

    You referenced things like the 54mpg CAFE standard, but that still means every car is using oil = still addicted.

    I referenced no such thing. Please check before you post and make incorrect attributions/statements.

    Ok, I stand corrected, you didn;t reference the CAFE standard – though when you say “rising oil prices will have little effect on the US economy because of efficiency improvements”, and autos use half the oil at present, I assume you mean, in part, improvements in auto efficiency.  However, this may not be just because of CAFE, so fair enough.

     

    Given that the time frame that has been referenced is 40 years out, at the rate of progress in GNR it is foolish to say “exactly” what technologies will be in use by 2050.

    True, yet this is exactly what the RMI’s plan is is doing – it is based upon  numerous specific technologies being developed and deployed.  Not only that, it even makes price predictions for 40yrs hence – from the RMI plan;

    By 2050, “Revolutionary” and electrified autos may cost little or no more to buy than conventional ones

    If it takes until 2050 before they achieve price parity, let alone become significantly cheaper, then they won’t eclipse conventional ones for at least another decade after that.

     

    And then there are the RMI’s optimistic projections for biofuels;

     

     

    There are currently no biofuels – other than corn/sugar ethanol – that are competitive with oil at anything under $100/bbl

    Just consider the assumptions that go into this, and their predictions on cellulosic ethanol;

    • they assume that pyrolysis oil can be converted to be used as a fuel, even though no one has successfully run ICE’s off pyrolysis oil or derivatives (other than by gasification)
    • they assume that FT of biomass can be done for aas little as $62/ton, even though no successful commercial scale biomass F-T plant has ever been built, and the best funded attempt – which RR was involved in, has failed.  
    • They use yields of 250L/ton of gasoline for these processes, even though no on has ever achieved that
    • They assume yields of 100gal of cellulosic ethanol per ton, even though no one has ever even achieved half of that, and not at commercial scale.
    • They also talk about algae, even though no one has successfully made algae fuels at commercial scale, desppite efforts dating back to the 70′s

     

    The plan talks about cars using the ultra light and very expensive carbon fibre materials – by referencing a car with lots of aluminium!  The x-prize winning car made no use of CFRP, it used plain aluminium as it is far cheaper, uses almost no oil in its production, and is completely recyclable – unlike CFRP.

    As RR says, the RMI just “assumes” that all these problems will be solved, eventually.  The same can and has been said for fusion too, and we are still waiting.

    So their plan says “we can get to zero oil IF all these technologies that allow us to replace oil, actually get commercialised”

    Look at the record – Fuels cells invented in 1849, still not commercial, cellulosic ethanol around since 1900, still not commercial, algae, 40 yrs, still not commercial (for fuel), F-T around since the 30′s – only commercial with coal, and even then at way higher than their cost estimates.

    This isn’t a plan – as it can’t be implemented with what we have today.  It represents a “what if” scenario, and a very optimistic one at that, but we have no shortage of those being presented.  

    We need plans that can actually be implemented with what we have – by 2050 it will be far too late.

    [link]      
  35. By Joseph on December 24, 2011 at 6:50 am

    Paul N said:

    What is GNR?

    GNR stands for Genetics, Nanotechnology and Robotics (AI).

     

    Paul N said:

    True, yet this is exactly what the RMI’s plan is is doing – it is based
    upon  numerous specific technologies being developed and deployed.

    2050 is a long ways out and obviously they went with what was known instead of trying to predict solutions that could be developed in 20 or 30 years given the rate of accelerating technolgical progress.

     

    Paul N said:

    There are currently no biofuels – other than corn/sugar ethanol – that are competitive with oil at anything under $100/bbl

    We are not talking about today… or tomorrow but a one to two decades out. There is really no point to bring up what wasn’t feasible in the past and say it isn’t going to be feasible in the future… especially since we have entered an age of accelerating enabling technologies (GNR), on the one hand, and significantly increasing pertoleum costs on the other. Always looking in the rear mirror would not have given us the tar sands, ultra-deep water oil production, fracking, etc, which were all at one time technologically/economically not feasible.

     

    Paul N said:

    The plan talks about cars using the ultra light and very expensive
    carbon fibre materials – by referencing a car with lots of aluminium!
     The x-prize winning car made no use of CFRP, it used plain aluminium as
    it is far cheaper, uses almost no oil in its production, and is
    completely recyclable – unlike CFRP.

    Following your logic Boeing would be building the 787 and Airbus the A350 out of steel  “as
    it is far cheaper, uses almost no oil in its production, and is
    completely recyclable – unlike CFRP.”

    Not only is CFRP not “very expensive” but the price drops as volume production increases. GM and Teijen have just set up a CFRP joint venture to develop auto parts to reduce car weight by 20% (according to the WSJ). And Boeing has a process to completely recycle CFRP. And this is only the first generation of CFRP. Toray, another leader in the industry, already has a roadmap for 2nd and 3rd generation CFRP that by 2020 will increase material strength and manufacturability while lowering costs.

     

    Paul N said:

    If it takes until 2050 before they achieve price parity, let alone
    become significantly cheaper, then they won’t eclipse conventional ones
    for at least another decade after that.

    The above does not make sense. Why should a hybrid with two drive trains (a battery pack/electric motor and a gas motor) be “significantly cheaper“… especially when the running costs of the hybrid will be “significantly cheaper“.  In any case, the pure electric will be cheaper – to purchase and to operate. My own opinion is that they are being conservative and that by 2050 even hybrids will be cheaper because of scale.

     

    Paul N said:

    We need plans that can actually be implemented with what we have – by 2050 it will be far too late.

    You can’t just throw a switch… especially with political gridlock, lobbys and special interests. However, that said, I think that RMI is being conservative with the 2050 date and we’ll be off petroleum sooner.

     

    [link]      
  36. By rrapier on December 24, 2011 at 1:41 pm

    Paul N said:

    at the rate of progress in GNR

    What is GNR?

     


     

    I assumed everyone in the civilized world knew that GNR means Guns-n-Roses.

    RR

    [link]      
  37. By paul-n on December 24, 2011 at 2:48 pm

    That’s what I was thinking too – but they haven’t advanced much lately.

     

    Merry Christmas RR & Sam – thanks for another good year of the best energy blog out there.

    I will have a celebratory glass or two of (barley sourced) ethanol for you.

    Cheers,

     

    Paul

     

    [link]      
  38. By moiety on December 24, 2011 at 3:11 pm

    Robert Rapier said:

    Paul N said:

    at the rate of progress in GNR

    What is GNR?

     


     

    I assumed everyone in the civilized world knew that GNR means Guns-n-Roses.

    RR


     

    Maybe not in China; it did take them along time to sort that one out.

     

    Having said that I am a fan of nanotech having worked in that field (by many definitions) for 5 years now.

    [link]      
  39. By rrapier on December 24, 2011 at 3:17 pm

    Joseph said:

    Paul N said:

    There are currently no biofuels – other than corn/sugar ethanol – that are competitive with oil at anything under $100/bbl

    We are not talking about today… or tomorrow but a one to two decades out. There is really no point to bring up what wasn’t feasible in the past and say it isn’t going to be feasible in the future… especially since we have entered an age of accelerating enabling technologies (GNR), on the one hand, and significantly increasing pertoleum costs on the other.


     

    That all depends on the reason that it isn’t feasible. There are some things that I can guarantee will not be feasible due to fundamental limits of chemistry and physics. Technology can improve, but it won’t violate the laws of science.

    Always looking in the rear mirror would not have given us the tar
    sands, ultra-deep water oil production, fracking, etc, which were all at
    one time technologically/economically not feasible.

    But that is not remotely the image of the future that was being promoted by RMI. So the lesson here may be that the future will look nothing like RMI projects.

    RR

    [link]      
  40. By Joseph on December 24, 2011 at 4:51 pm

    Robert Rapier said:

    I assumed everyone in the civilized world knew that GNR means Guns-n-Roses.

    Funny… but that just may be why the more popular acronym now being used is NBIC… Nanotechnology, Biotechnology, Information technology and Cognitive science.

    Robert Rapier said:

    That all depends on the reason that it isn’t feasible. There are some things that I can guarantee will not be feasible due to fundamental limits of chemistry and physics. Technology can improve, but it won’t violate the laws of science.

    I am not at all implying that any fundamental limits of chemistry and physics will be broken. And, yes, it does indeed “depend on the reason that it isn’t feasible. However, we are getting to the point of being able to inexpensively decode DNA and manipulate building blocks at the molecular level at rates that were once thought not possible. Rising yields and decreasing costs coupled with rising petroleum prices will make different energy projects viable along the cost curve that are not currently economically feasible.

    Robert Rapier said:

    But that is not remotely the image of the future that was being promoted by RMI. So the lesson here may be that the future will look nothing like RMI projects.

    To say that the future will look nothing remmotely like what RMI projects is rather a bit extreme when much of what RMI “projects” is already taking place at different levels of scale and progress. If anything, we could reach much of what is “projected” sooner. So, in that case, yes, you could say that the future might look like nothing the RMI projects.

    Just want to let you know that I have been a “fan” of your blog for many years.

    [link]      
  41. By moiety on December 24, 2011 at 5:05 pm

    Joseph said:

     

    However, we are getting to the point of being able to inexpensively decode DNA and manipulate building blocks at the molecular level at rates that were once thought not possible. 


     

    Indeed. I would ask you to put that theory to Derek Lowe*. I have to say that my limited experience in pharma and biotech certainly does not agree with your sentiment. It was thought that cracking the human genome woulds lead to an enormous amounts of drug leads. This has not happened and indeed, companies like Lily have given up on their genome projects.

     

    * http://pipeline.corante.com/

     

    [link]      
  42. By rrapier on December 24, 2011 at 8:26 pm

    Joseph said:

    Robert Rapier said:

    But that is not remotely the image of the future that was being promoted by RMI. So the lesson here may be that the future will look nothing like RMI projects.

    To say that the future will look nothing remmotely like what RMI projects is rather a bit extreme when much of what RMI “projects” is already taking place at different levels of scale and progress. If anything, we could reach much of what is “projected” sooner. So, in that case, yes, you could say that the future might look like nothing the RMI projects.

    Just want to let you know that I have been a “fan” of your blog for many years.


     

    Let’s just say that in many ways, the future has been the opposite of what Lovins has predicted for years. We are turning to ever dirtier source of fuel like the tar sands, which should not be necessary if their version of the future was materializing. Sure, there will be aspects that they got right, but I think the big picture is that we are going to be a lot more dependent on fossil fuels for a lot longer than Lovins and company imagine.

    By the way, Lovins co-author on Winning the Oil Endgame, Kyle Datta, lives in Hawaii and is a frequent visitor to our offices. We have had a lot of debates around these issues.

    RR

    [link]      
  43. By Joseph on December 26, 2011 at 3:20 am

    Robert Rapier said:

    By the way, Lovins co-author on Winning the Oil Endgame, Kyle Datta, lives in Hawaii and is a frequent visitor to our offices. We have had a lot of debates around these issues.

    I hope that you had a great xmas in tropical Hawaii! That’s neat that you are having debates with Kyle Datta… sure would be interesting to listen in.

     

    Robert Rapier said:

     

    Let’s just say that in many ways, the future has been the opposite of what Lovins has predicted for years.

    Other than the timimg of progress in bio-fuels I would say that it is quite the opposite. You reference WTOEG, which was written almost 6 years ago, and look at what has developed:

    - Lighter, more efficient conventional vehicles, hybrids, plug-in hybrids and pure electrics;

    - More efficient trucks such as the ones that have been entering Walmart’s fleet and hybrid delivery vehicles;

    - More efficient airliners such as the 787, 737MAX, A350, A320NEO, CSeries, MRJ, etc.

    - More efficient buildings (LEEDS standards, retrofits such as Empire State Building, etc);

    - DoD funding bio-fuel research and testing;

    -etc,

    Regarding bio-fuels, much has changed since WTOEG was written six years ago and even more will change at a faster rate over the next decade. Afterall, the  corn genome was only fully decoded 2 years ago and the complicated sugarcane genome is not fully sequenced.

    Robert Rapier said:

    We are turning to ever dirtier source of fuel like the tar sands, which should not be necessary if their version of the future was materializing.

    I honestly don’t know how that conclusion can be drawn when…

    - Tar sands oil is a simple substitution for oil from less friendly regimes.

    - We’ve been in the tar sands now for a long time… over 30 years and ~1-million bbl/day was already being produced when WTOEG was written 6 years ago.

    - Of course oil companies are going to continue developing the tar ands… where else in the world are they going to get low/no risk reserves and production outside of the US? And with the biggest oil consumer next door where else would they like to sell it to.

    - It is an absolutely huge source of tax revenue (direct and indirect) for the Alberta and Canadian governments. When Canada’s PM recently met with Obama he said use it or lose it with regards to Keystone XL approval. Canda is going to develop the tar sands even without the US as the biggest “customer” if it comes down to it.

    - With all the politics, lobbys, special interests, etc. in this country how can it even be imagined that there is going to be any substantial turnaround in only a few years… espcially when WTOEG has a 2040 year horizon for getting off imported oil! Affecting change in this country is harder than trying to turn around a VLCC! (pun inteneded).

    And, as outlined in my previous response above, a “version” of the future is already starting to unfold… and we still have 38 years yet to go before hitting the horizon.

     

    Robert Rapier said:

    Sure, there will be aspects that they got right, but I think the big picture is that we are going to be a lot more dependent on fossil fuels for a lot longer than Lovins and company imagine.

    Big picture… the only way that we will still be dependent on petroleum for a lot longer than 2050 (let alone a lot more dependent) is if the majority of the nation remains either unpatriotic, ignorant of the economic and strategic harm that dependence on oil is causing the country, or simply selfish. I have faith that the next generation will do the right stuff.

     

    [link]      
  44. By rrapier on December 26, 2011 at 11:58 am

    Joseph said:

    Robert Rapier said:

    We are turning to ever dirtier source of fuel like the tar sands, which should not be necessary if their version of the future was materializing.

    I honestly don’t know how that conclusion can be drawn when…

    - Tar sands oil is a simple substitution for oil from less friendly regimes.

     


     

    Ah, but it isn’t simple substitution because overall demand continues to grow. These dirtier and lower EROEI energy sources are growing precisely because the big picture stuff that Lovins talked about in Endgame is not materializing on schedule. Sure, vehicles are becoming more efficient, etc. And I will go out on the same limb Lovins went out on and say that these trends will continue. I don’t need much of a crystal ball to see that, as it is mostly a continuation of trends that have been going on for years. But they aren’t adding up to the bottom line that Lovins predicted, and that’s my point. It isn’t enough to say “vehicles are becoming more efficient.” The point is “Are they doing so at a rate that is actually reducing coal and oil consumption?” No.

    Robert Bryce took a look at at a lot of the things that Lovins has been claiming for years, and the results have been pretty far off the mark. After all, he didn’t just start staying some of these things when Endgame was written; he has been making these claims for years. In biofuels — the area with which I am most familiar — he has been way off the mark.

    RR

    [link]      
  45. By Joseph on December 27, 2011 at 3:24 am

     

    Robert Rapier said:

    Ah, but
    it isn’t simple substitution because overall demand continues to grow.

     It would
    appear that the data doesn’t back that up:

     

    Total US
    Crude Oil Imports (thousands of barrels/year)

    2005 -
    3,695,971

    2006 -
    3,693,081

    2007 -
    3,661,404

    2008 -
    3,580,694

    2009 -
    3,289,675

    2010 -
    3,362,856

     

    Imports: Persian Gulf (thousands of barrels/year)

    2005 -
    805,653

    2006 -
    788,432

    2007 -
    771,943

    2008 -
    856,329

    2009 -
    604,622

    2010 -
    618,470

     

    Imports: Venezuela
    (thousands of barrels/year)

    2005 -
    452,914

    2006 -
    417,001

    2007 -
    419,180

    2008 -
    380,419

    2009 -
    347,285

    2010 -
    332,926

     

    Imports: Canada
    (thousands of barrels/year)

    2005 -
    596,183

    2006 -
    657,834

    2007 -
    689,209

    2008 -
    715,982

    2009 -
    709,106

    2010 -
    719,175

     

     Robert Rapier said:

    These
    dirtier and lower EROEI energy sources are growing precisely because the big
    picture stuff that Lovins talked about in Endgame is not materializing on
    schedule.

    I
    don’t particularly like Lovins for a variety of reasons, and I hold a few views
    180 degrees to his. So I don’t want this to get into a defence of
    Lovins. However… as the
    data indicates, it is indeed import substitution that is fueling the tar sand
    imports. In fact, the argument can even be quantified that the Keystone XL is not
    really for “energy security” but to help supply refineries with a
    “friendly, secure supply” of crude for export processing. Current
    refined exports are approaching 2-million barrels/day… which is getting close to
    double the tar sands production.

     

     Robert Rapier said:

    Sure,
    vehicles are becoming more efficient, etc. And I will go out on the same limb
    Lovins went out on and say that these trends will continue. I don’t need much
    of a crystal ball to see that, as it is mostly a continuation of trends that
    have been going on for years. But they aren’t adding up to the bottom line that
    Lovins predicted, and that’s my point. It isn’t enough to say “vehicles
    are becoming more efficient.” The point is “Are they doing so at a
    rate that is actually reducing coal and oil consumption?” No. 

    Just because Lovins’ timing is off doesn’t mean that one can simply throw the
    baby out with the bath water. For example, it isn’t his fault that the 787 production was plagued by mismanagement resulting in several years of delay (as was the A380) which pushed back the development dates for other fuel efficient airliners. So, one has to look at the underlying trends in NBIC, not to mention society and public policy, and see how they will develop over the next 4 decades. I listed
    earlier some of the areas where we are just now (with 38 years still to go) starting to see the deployment of fuel efficient technology that will accelerate
    the rate of reduction in fuel consumption.

     

    Moreover, one can’t
    expect an entrenched infrastructure with entrenched political interests to turn
    around overnight. Saying that the possibility that we can be off
    imported oil by 2040, and all petroleum by 2050, is impossible is similar to the detractors
    of the human genome project that said it was never going to get done because
    the “timing was way off” half way through. Yet, in the end, it was completed on
    time.

     

    Robert Rapier said:

    Robert
    Bryce took a look at at a lot of the things that Lovins has been claiming for
    years, and the results have been pretty far off the mark.

    As mentioned, I am not
    in any way disputing that Lovins has been off the mark on biofuels. But that is
    not the point. The point is that we still have 38 years to the horizon with many options and approaches underway, and several other that are possible.

     

    BTW,
    Robert Bryce, who is basically a shill for the fossil fuel industry, wrote that
    article in 2007… we are now heading into 2012.  much has changed. But, I have to say, he certainly validates the
    last sentence in my previous post with these remarks…

    … American drivers love the concept of energy independence and hate the fact
    that the U.S.
    buys foreign oil. But when it comes time to strap on their seatbelts, they
    aren’t as interested in efficiency as they are in the comfort, size, and
    convenience offered by larger vehicles.

    Americans just like big. They like big vehicles, big houses, and Big Macs…

    [link]      
  46. By rrapier on December 27, 2011 at 12:12 pm

    Joseph said:

     

    Robert Rapier said:

    Ah, but it isn’t simple substitution because overall demand continues to grow.

     It would appear that the data doesn’t back that up:


     

    I am talking about global demand here. Demand has certainly fallen in developed countries, as their high level of oil dependence has put a strain on them at these oil prices. The economy isn’t exactly humming along with oil at $100. But globally, oil demand is higher so the oil sands aren’t merely substituting for oil. They are adding to overall supplies — which was my point.

     

    Moreover, one can’t expect an entrenched infrastructure with entrenched political interests to turn around overnight. Saying that the possibility that we can be off imported oil by 2040, and all petroleum by 2050, is impossible is similar to the detractors of the human genome project that said it was never going to get done because the “timing was way off” half way through. Yet, in the end, it was completed on time.

    And on the other side of the coin, we still have the common cold. Cancer and heart disease still kill people. So the point is that technology does not always advance quickly enough to keep us out of trouble. That’s my point here — not that we can’t be off of imported oil; just that I think it’s going to be a painful process and not one that took place because we just got more and more efficient. I think the visions we have are that you think we won’t need oil, and I think we won’t be able to afford it.

    RR

     

    [link]      
  47. By Joseph on December 27, 2011 at 4:18 pm

     

    Robert Rapier said:

    I am talking about global demand here.

    But we have been discussing American oil consumption and petroleum independence. Throwing global into the discussion is a red herring.

     

    Robert Rapier said:

    They are adding to overall supplies — which was my point.

    Which has nothing to do with the whole thrust of this discussion which is American petroleum independence by 2040 leading to getting off petroleum by 2050.

     

    Robert Rapier said:

    And on the other side of the coin, we still have the common cold. Cancer and heart disease still kill people. So the point is that technology does not always advance quickly enough to keep us out of trouble.

    A false analogy. We do have the technology to keep us out of trouble… laziness, ignorance, selfishness and special interests have prevented us from using them.

     

    Robert Rapier said:

    That’s my point here — not that we can’t be off of imported oil; just that I think it’s going to be a painful process and not one that took place because we just got more and more efficient. I think the visions we have are that you think we won’t need oil, and I think we won’t be able to afford it.

    That is a good that you believe that we can be off imported oil. Now you just have to look at the big picture to realize that not only can we easily afford it by 2040… but that we will economically be further ahead. You really need to better understand the impact of accelerating NBIC is, and will, be having. The vast majority of people look at progress on a linear scale which trips them up.

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  48. By Optimist on December 27, 2011 at 5:31 pm

    I present the case that the first implications are here, even if production does manage to go up a bit. As far as the timing, for all practical purposes we are at it — although we could squeeze out production for a few more years.

    OK, so you’d sum it up by saying: Peak Oil means oil prices go up, but production flatlines. One should be able to look at the data and be able to demonstrate that form this date oil production was much slower to respond to oil prices than before, and put a data on it, right? I still think noise and lag time may confuse the analysis, but it would be interesting to see the result.

    Things are futher complicated by feedback effects: as mentioned many times before on this blog, the 2008 price spike appears to have been the result of three successive years of increasing demand and essentially no increase in supply. It took the market quite a while to notice. When it did, the result was pretty severe.

    I missed this earlier. Actually, it is easy to calculate and I did so in the book. I looked at GDP changes over the past 10 and 20 years versus the changes in the global average price of oil. The change in oil price is much greater than the improvements in GDP efficiency, and worse we have outsourced GDP to countries that are far less efficient at producing it.

    OK, fair enough. But notice that the 2008 spike was followed by a drop to $30/bbl. As long as it is widely believed that it is just a matter of time before price return to $30/bbl, GDP efficiency will not grow by much. That is the effect of all that noise.

    As for the outsourcing: think of it as a project to teach a man to fish, as opposed to giving him a fish every day. Those countries can only afford low GDP efficiency because oil is (still) relatively cheap. $150/bbl will do impressive things to their GDP efficiencies, as it would to ours.

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  49. By Optimist on December 27, 2011 at 5:42 pm

    I am not disputing your calculation. However I was not talking about current prices. What I posted was what was reported by various media when oil reached its peak price in July/08 (they may have picked up that figure from Pickens’ Plan). Even McCain used the $700-billion figure during the presidential race… “We have to stop sending $700 billion a year to countries that don’t like us very much.”

    What? It’s the truth because a politician said so? We really are screwed, aren’t we?

    @ Optimist – how do you remove the noise with oil prices?  Just use the annual average – it is a far better indicator of long term trends.

    The only problem with that is that 365 days is a bit of an arbitrary period. Perhaps a moving average over a suitable period would be better suited to the job. But again, even then the spike of 2008 will tend to distort the analysis, and make it hard to get to meaningful conclusions.

    Even though oil hit $147/barrel in 08 and is just 2/3 of that today, the annual average price for this year is likely to be higher than that of 2008.

    Be interesting to see if it is. It is obviously close enough to support your point. And this time without all the crazy hysteria.

    GNR stands for Genetics, Nanotechnology and Robotics (AI).

    Here’s my prediction: out of those three, only nanotech will contribute anything significant to renewable fuels, mainly because it might help making modular designs feasible. Genetics will do great things for pharmaceuticals, good things for food and nada for fuel. Robotics might help to keep the pipes clean. And maybe prevent another massive leak in the Gulf.

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  50. By rrapier on December 27, 2011 at 5:52 pm

    Joseph said:

     

    Robert Rapier said:

    They are adding to overall supplies — which was my point.

    Which has nothing to do with the whole thrust of this discussion which is American petroleum independence by 2040 leading to getting off petroleum by 2050.

     


     

    That part of the discussion was about oil sands substituting for other oil. Oil is a global commodity. My point is that since global demand is growing, it isn’t actually substituting. It is simply adding to global supplies.

     

    Robert Rapier said:

    And on the other side of the coin, we still have the common cold. Cancer
    and heart disease still kill people. So the point is that technology
    does not always advance quickly enough to keep us out of trouble.

    A false analogy. We do have the technology to keep us out of
    trouble… laziness, ignorance, selfishness and special interests have
    prevented us from using them.

     

    Not a false analogy. You are making assumptions that we are going to solve certain problems before they become big problems. My analogy is meant to show that improving technology doesn’t always solve our problems.

     

    Robert Rapier said:


    That’s my point here — not that we can’t be off of imported oil; just
    that I think it’s going to be a painful process and not one that took
    place because we just got more and more efficient. I think the visions
    we have are that you think we won’t need oil, and I think we won’t be
    able to afford it.

    That is a good that you believe that we can be off imported oil. Now
    you just have to look at the big picture to realize that not only can we
    easily afford it by 2040… but that we will economically be further
    ahead. You really need to better understand the impact of accelerating
    NBIC is, and will, be having. The vast majority of people look at
    progress on a linear scale which trips them up.

     

    Well let me ask you this, which gets right to the heart of my point. Are we easily affording it now? Are we economically ahead relative to two or three years ago? Oil consumption is down, but it isn’t because of the vast improvements we have made in efficiency. It is because people can’t afford to buy as much oil.

    RR

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  51. By Joseph on December 28, 2011 at 4:37 am

     

     

    Robert Rapier said:

    That part of the discussion was about oil sands substituting for other
    oil. Oil is a global commodity. My point is that since global demand is
    growing, it isn’t actually substituting. It is simply adding to global
    supplies.

     

    But the discussion wasn’t because you posted…

     

    “These dirtier and lower EROEI energy sources are growing precisely
    because the big picture stuff that Lovins talked about in Endgame is not
    materializing on schedule.”

     

    … and Endgame is about getting the USA getting off oil… not the world. Furthermore, the “big picture stuff” is happening.

     

    Robert Rapier said:

    Not a false analogy. You are making assumptions that we are going to
    solve certain problems before they become big problems. My analogy is
    meant to show that improving technology doesn’t always solve our
    problems.

     

    It is a false analogy because, as I previously pointed out, we don’t need  “new” technology to get us off imported oil. There was no assumption there. We are already on a path of oil consumption reduduction. Any “new” technology would just make the horizon shorter.

    Robert Rapier said:

    Well let me ask you this, which gets right to the heart of my point. Are
    we easily affording it now? Are we economically ahead relative to two
    or three years ago?

     

    Obviously we are not economically ahead now…  but it isn’t because of oil prices. It is because we have no savings, our credit cards are maxed out, we are in mortgage and line of credit debt over our heads, and our houses are worth less than what we paid for them. So what does the past couple of years have to do with being able to economically afford getting off imported oil by 2040?

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  52. By rrapier on December 28, 2011 at 12:55 pm

    Joseph said:

    But the discussion wasn’t because you posted…

     

    “These dirtier and lower EROEI energy sources are growing precisely


    because the big picture stuff that Lovins talked about in Endgame is not


    materializing on schedule.”

     

    … and Endgame is about getting the USA getting off oil… not the world. Furthermore, the “big picture stuff” is happening.

    But it isn’t the big picture stuff that is getting the US off of oil. High oil prices have curbed demand. But since oil is a global commodity, demand has continued to grow and hence those developments that Lovins and company have gushed endlessly about simply haven’t had an impact in lower global oil demand — and thus we are developing ever dirtier supplies of oil. As I said, they aren’t materializing on schedule (i.e., quickly enough to stave off an energy crunch).

    It is a false analogy because, as I previously pointed out, we don’t need  “new” technology to get us off imported oil.

    We do if we want to continue to consume copious quantities of energy. But I agree that if we slash our energy usage, we don’t need imported oil.

    Obviously we are not economically ahead now…  but it isn’t because of oil prices. It is because we have no savings, our credit cards are maxed out, we are in mortgage and line of credit debt over our heads, and our houses are worth less than what we paid for them.

    And this has nothing to do with the fact that people are paying a lot more for energy? Their discretionary incomes have gone down as oil prices have gone up. I have to say that that would have some impact.

    So what does the past couple of years have to do with being able to economically afford getting off imported oil by 2040?

    I think the past couple offer a glimpse into the future. We will be getting off of oil, but it won’t be economical. It will be because we can’t afford to burn as much, as is the case over the past couple of years. So that’s a very different view than if we power down simply because there are economic alternatives — the Lovins model.

    RR

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  53. By Joseph on December 29, 2011 at 5:31 am

     

    Robert Rapier said:

    But it isn’t the big picture stuff that is getting the US off of oil.

    It is… for example, just look at the Finished Motor Gasoline consumption numbers (net of ethanol)… they have been in constant decline since 2004 even though GDP has increased 3.45% since then. And, as the limited examples that I posted earlier illustrate, you just have to look at what is already in motion to see that we will quite dramatically reduce consumption over the next decade.

     

    Robert Rapier said:

    But since oil is a global commodity, demand has continued to grow and
    hence those developments that Lovins and company have gushed endlessly
    about simply haven’t had an impact in lower global oil demand — and thus
    we are developing ever dirtier supplies of oil.

    Again, Endgame is about getting the US off imported oil… and the timeline is to 2040. Whether the tar sands are further exploited or not is immaterial.

     

    Robert Rapier said:

    But I agree that if we slash our energy usage, we don’t need imported
    oil.

    That is precisely what will be happening by 2040.

     

    Robert Rapier said:

    I think the past couple offer a glimpse into the future. We will be
    getting off of oil, but it won’t be economical. It will be because we
    can’t afford to burn as much, as is the case over the past couple of
    years. So that’s a very different view than if we power down simply
    because there are economic alternatives — the Lovins model.

    Ironically, “into the future”, if the Bakken and other similar plays take off, as some are
    predicting, then we could be off imported oil significantly before 2040.

     

    The last couple of years was due to irrational exhuberance, greed, and white-collar crime… it won’t happen again until the next cycle – and, hopefully, if adequate financial regs are in place it can be minimized the next time.

     

    However, what we can or can’t afford in the future is really for another discussion. As a nation, if we continue to go down the current path of gridlock, special interests, poor education, undfunded liabilities, etc, etc, etc. (the list seems endless), other issues will be far more pressing than the price of gasoline at the pump. When Foxconn is planning to use up to 1 million robots within 3 years, you know that that is really bad news for American workers.

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  54. By rrapier on December 29, 2011 at 2:21 pm

    Joseph said:

     

    Robert Rapier said:

    But it isn’t the big picture stuff that is getting the US off of oil.

    It is… for example, just look at the Finished Motor Gasoline consumption numbers (net of ethanol)… they have been in constant decline since 2004 even though GDP has increased 3.45% since then. And, as the limited examples that I posted earlier illustrate, you just have to look at what is already in motion to see that we will quite dramatically reduce consumption over the next decade.

     


     

    Consumption of conventional gasoline did not start to decline until 2008 — when oil prices had skyrocketed and the recession was biting:

    http://www.eia.gov/dnav/pet/hi….._2&f=A

    I actually looked into this in great detail a couple of years ago:

    http://www.consumerenergyrepor…..m-imports/

    My conclusion is that the drop in demand is all about high prices — not about the development of economic alternatives.

    RR

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  55. By Joseph on December 31, 2011 at 2:25 pm

     

    Robert Rapier said:

    Consumption of conventional gasoline did not start to decline until 2008
    — when oil prices had skyrocketed and the recession was biting:

    Interesting that that EIA table shows 2007 as peak consumption but if you use EIA’s Finished Motor Gasoline and back out ethanol it is 2004. In any case, looking at the “forest” and not just the “trees”, an economic case should be made that the run up to peak gasoline consumption was artificially infalted by the credit bubble that jacked up gasoline consumption in many ways. In any case, as even Tillerson stated a in 2009, gasoline is headed down and is going to continue to head down with demand dropping by 22% by 2030. So, projecting Tillerson’s reate of gas use decline, he believes that we can get off imported oil, too.

     

    Happy New Year!

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