Wednesday, April 21, 2010

Natural Gas Supplies Overstated

The Energy Information Agency, the statistical arm of the U.S. Energy Department, stated that it has been overstating natural gas supplies and is preparing to make substantial revisions in the methodology it uses to calculate supplies of natural gas.

 EIA spokesman Gary Long stated that the revision in the methodology used to compile the 914 report, which reports monthly gas production data, will result in "significant downward revisions" in production numbers.

The common belief is that while oil may peak, that we have a nearly-infinite supply of gas and that "peak gas" is not even a remote possibility, thus the current emphasis on converting our auto and truck fleet to gas, which is also essential as a backup for solar and wind power without which these unreliable and intermittent forms of power generation simply won't work. Nolan Hart at Zomba writes:

 "We suddenly have over a one hundred year supply of natural gas at current consumption rates and that number has been growing by about one decade more each year since 2005. New discoveries such as the Eagle Ford shale in south Texas are adding trillions more cubic feet to the natural gas inventory. So, peak oil, yes. Peak natural gas, no way"

The italics are mine. We have one hundred years of natural gas at current consumption rates. Now, if we ramp up consumption just 2% a year, then how much do we have?  How about a 5% increase, which is very likely? We can roughly figure that a 5% yearly increase in consumption will mean we will use over 50% more per year in 10 years, which obviously means that a 100-year supply will shrink to 20 year supply in about that many years. Now, how much will our consumption increase if we switch to gas for electrical power generation, and if, in ten years, at least half our fleet of 200 million cars and trucks runs on gas?

Considering our heavy dependence on gas as a feedstock for heavy industry, electrical power generation, and most of all, for the chemical fertilizers for the factory farming so despised by the environmentalists, but whose productivity is the only thing standing between our population of 305 million people and major famines, is it provident and sensible to enable the population in the notion that all we have to do is convert our vehicles to gas power, and we'll be able to continue on as we have since WW2?

At this time, natural gas is being touted as the panacea for the energy crisis, and there is a powerful political impetus to increase our gas consumption drastically, especially for generating electricity and powering our fleet of vehicles. It seems easier and more economical to many policy makers to build gas-fired plants to replace polluting coal plants,  than nuclear, which are more expensive and employ relatively novel,difficult-to-understand technologies that a significant percentage of the population fear and misunderstand.

And anything is easier than telling our car-crazy population that the Automobile Age is as good as over, and that most of us are going to have to re-arrange our lives rather drastically.

Our lives depend on the ability of our leaders to clear a path through the hype generated by the advocates for various energy source. Most of all, they, and we, need to be able to envision a future in which all our fuel sources could be in decline, including uranium; and devise approaches designed to conserve these fuels and use them as efficiently as possible, while developing technologies that utilize more plentiful fuels whose cycle can be extended for centuries, such as thorium, one of the most plentiful elements on the planet.

Sunday, April 11, 2010

'Nuff Said

Global oil production from all sources, current and projected. Notice the three peaks in 2005, 2006, and 2009. Production projected to decline by 2.2 million barrels a day from 2009. Source: Energy Information Agency. http://www.eia.doe.gov/

Friday, April 9, 2010

The Natural Order

 Somebody named Eric posted this concise summary of socialism over at Classical Values awhile back, who posted it for someone named M. Simon:




It may be why F. A. Hayek called his book on socialism The Road to Serfdom.

This surely the way modern American socialism is working out, as an increasingly impoverished population is brutally taxed at the local, state, and federal level to pay for the endless array of corporate welfare programs foisted on us by our political leaders and their cronies who are the beneficiaries, and justified as "economic development" or "help for struggling homeowners", or "decent housing for the poor", or "economic rescue" , with a few small benefits tossed to select members of the peasantry to conceal the fact that the chief beneficiaries are the powerful and connected.

We are now ruled, not by laws that protect the right of all individuals to own their lives and the fruits of their labors, but by pressure groups, whose ability to influence policy and legislation is directly related to their wealth and political contributions.

 And while the wealthier members of the population may contribute most of the federal tax revenues, the break that poorer taxpayers receive on their federal income taxes, which are progressive, are more than offset at the local level by viciously regressive property taxes, and sales taxes, which affect poorer taxpayers disproportionately

Wednesday, April 7, 2010

Stone Walls of Denial

Blame the speculators.

Since oil reached the $70/barrel mark and continued north while gasoline approached $3/gallon, the public wailing has begun, and hundreds of websites lobbying for congressional action to limit speculation have sprung up, demanding action to limit the price of oil.

The Democrats ,who are suffering badly in the polls as a result of their heroic attempts to rewrite the law of supply and demand as it applies to overpriced housing and overextended borrowers, will almost surely take the bait and embark on another adventure in misconceived economic engineering, and pass laws to limit commodities speculation, specifically speculation in oil futures. If there's anything Obama and his fellow Dems don't need just before the 2010 elections, it's four-dollar-a-gallon gasoline, so look for a lot of frantic posturing and blatant pandering, in the form of legislation aimed at commodities speculation.

And if the commodities speculation is "regulated", expect spot shortages and long lines at the stations, because the law of supply and demand never rests. Speculators do not control prices, they merely respond to situations as they set up. If indeed there is an ample supply of a commodity and prices really are inflated artificially, the "bubble" will burst, for you can make just as much money shorting as you can on the long side of the trade. Why are the speculators not shorting oil? Could there be a fundamental reason for the steady rise in liquid fuel prices, such as the decline of almost every major oil field in the world, coupled with rising demand from developing nations?

The fact is that we have likely reached the absolute peak of global production, and have probably crossed it; and are now on the "bumpy plateau" , the period in which oil production is flat-lining before the descent down the other side of the slope. This period is bound to be defined by increasing volatility in prices as upward-arcing prices due to declining supplies and increasing global demand,which will quash economic activity, producing demand destruction, which results in temporarily lower prices, until the economy starts to recover, and then the cycle will repeat.

This is very, very bad news, and there is really no way to mediate the situation except to reduce our demand, and drastically. That's the "free market" solution to rising energy prices and declining production: just use less. Much less. And make whatever adjustments in your life you have to make to do that. That might mean moving closer to work, swapping your house for an apartment, moving back to the city or near a rail stop, taking the bus or train to work, or even having only one television set on at a time. It will mean, most likely, consuming less of absolutely everything. Most of all, it will mean radically reordering our built environment to enable far lower energy use, and that will take money and time we no longer have. We've wasted our time and money doing the opposite of what we need to do to mitigate the situation and make life with a fair degree of technical amenity possible as supplies dwindle, thanks to 65 years of disastrous public policy designed to promote sprawl development, auto dependency,destruction of our cities and waste of resources in the name of 'growth'.This country has simply built into its structures and systems an inflexible demand for copious amounts of cheap fuel, so much that with the best efforts at conservation in the world, most people in the U.S. simply cannot make a living or procure the necessities of life- heat, food,water, clothing- without consuming massive amounts of fossil fuels.

While Americans have wallowed in complacency and a sense of entitlement, China has for years past been busily locking in future oil production to fuel the rise of its middle class and their aspirations to the American suburban lifestyle. India, also, has a burgeoning middle class, and these two developing super-powers have been hard at work building power generation facilities, and inking contracts for future supplies of oil and other essential minerals.

And far from leveling with the citizenry regarding our prospects for continuing the Post WW2 lifestyle with its waste and excessive dependence on motors, the current administration has erected more walls of denial, and added a couple of trillion dollars to our mountain of public debt to pretend that we can continue as we have for the past 60 years. Instead of deregulating the railroads, eliminating subsidies to private airlines, and curtailing highway construction, we are devising new subsidies for auto and air transportation, suburban subdivision building, and consumer debt, while starving the systems and industries we will need as fuel supplies become ever more constrained. Enabling the citizens in their ignorance and denial by capping oil prices will not help us in making the necessary adjustments and sacrifices we will all have to make to survive the massive economic shift taking place. Manipulating the market by regulation in order to pander to the public's desire to continue obsolete lifestyles and wasteful consumption may help you win the mid-term elections, but it will only incentivize the very behaviors we need to curtail to make a successful adjustment to new necessities.

Sunday, April 4, 2010

Will Reducing the Cost of Solar Panels Make Solar Competitive With Fossil and Nuclear Power Generation?

Plastics could slash the cost of solar panels dramatically, says Dr. Yueh-Lin Loo, an Associate Professor of Chemical Engineering at Princeton University. Dr. Loo and her team have developed a new technique for producing electricity-conducting plastics that could replace the extremely rare and costly Indium Tin Oxide that is currently used in solar panels, to conduct electricity.

"Conductive polymers [plastics] have been around for a long time, but processing them to make something useful degraded their ability to conduct electricity," said Yueh-Lin Loo, an associate professor of chemical engineering, who led the Princeton team. "We have figured out how to avoid this trade-off. We can shape the plastics into a useful form while maintaining high conductivity."

 There is no question that this development could make solar power much more viable and economical, and the best benefit of all is that it could make production of solar panels possible without the use of a rare and expensive material  But will it make it competitive with the highly concentrated energy available only from fossil fuels and nuclear?

That's doubtful, because the improvement in conductivity and efficiency, even by a major increment, will not solve the major problem with solar, which is its dependence on diffuse and intermittent energy. Intermittent energy is not only unreliable in itself, but the major limitation is in the transmission of power generated from a large number of small sources that generate intermittently.Stoneleigh, a major contributor to The Oil Drum and The Automatic Earth, describes the difficulty and vastly multiplied complexity of transmitting power generated in small amounts by large numbers of widely dispersed generators in her post on The Automatic Earth, Renewable Energy: Not in Your Lifetime:










 "Complexity", of course, means much more money and a complete overhaul and massive expansion of our electrical grid, far beyond what would be needed to supply three or four times as much power from conventional large power plants in order to power our transportation by electricity. It would mean, given our current population distribution, at least 8 times the grid capacity we now possess, not the three or four times current capacity that will be necessary to power all our transportation by electricity. Just meeting the needs of a comprehensive rail system is beyond the current capacity of our frayed grid.

The same limitations would apply to wind generation, another diffuse and intermittent source of energy. What this all means is that solar and wind, even were the costs of the components reduced substantially, will still be extremely expensive and unreliable means of generation, and will still rely upon fossil fuels for backup. They will vastly complicate the transmission requirements and in doing so, cause the costs to ramp up steeply.

And they ultimately rest on a fossil fuel platform, as James Howard Kunstler has pointed out, not only for backup, but for the ingredients in the manufacture and transportation of their components, as does the the nuclear power industry... and fossil fuels of all types- oil, coal, and gas- are depleting, and if we expect to retain any of the benefits of technology going forward, we are going to have to make the most efficient use of our remaining fossil fuel resources possible. In doing so, we will be up against frantic global competition for remaining reserves, escalating costs, and "receding horizons", for as the cost of fossil fuels escalate, so will the cost of building more power generation and upgrading the grid. It will take all the ingenuity of all of our best minds in combination with stringent conservation and the utmost economy in the management and deployment of our resources, to retain a minimal level of comfort and technological amenity in the decades ahead.

In such a context, should we pursue the least efficient forms of energy, those with the lowest EROEI, while spurning the most powerful and concentrated forms, namely nuclear, which is the most concentrated, powerful form of energy available? Can we afford to pursue wind and solar, while turning our backs on the most powerful technology ever devised, that could extend the fuel cycle for millinia while providing ample, cheap electricity for every community in the country? For, for every incremental improvement in "renewable", diffuse, intermittent forms of energy, there is a greater breakthrough in nuclear. We now have available to us many new and proven nuclear technologies that are not only extremely safe and leave almost no "waste", but which will reduce the costs of electricity to below that of coal and gas, two materials prone to rapid depletion.

Unfortunately, the decision as to which form of power generation we will commit investment rests in the hands of politicians and bureaucrats, not the "market", and several hundred million American lives depend upon those decisions. Let's hope our leaders choose wisely.