Trains Rock! Trucks suck: 4x less efficient. Shift freight from truck to rail

A proposed National System of Interstate and Defense RAILROADS, as an infrastructure project for the next fifty years

by J. William Vigrass

To the National Surface Transportation Policy and Revenue Study Commission, USDOT Bldg., L’Enfant Plaza, 400 7th St. N.W. Conference Room 4200, Washington, DC,   February 6th, 2007.

NOTE: This is a shortened version of the original text

Background: The scope of the Commission’s mandate is to provide policy direction for infrastructure for the next fifty years. This paper will expand upon the thoughts set forth in my December 7th, 2006 paper and will be confined to the railroad mode because all other modes have numerous advocates for government investment in highways, waterways and airways, all of which are owned by the public sector. All are used by private sector operators which have not invested any of their own capital in the infrastructure provided by government. They pay fuel and other taxes as operating expenses, and said taxes cover but a portion of the government’s investment and maintenance costs. Only the railroad infrastructure is privately owned, maintained and financed. Even though railroad property is devoted entirely to the public interest, the owning companies nonetheless pay real estate taxes on their properties. In urban areas these taxes can be substantial. Railroad freight rates must cover all operating, maintenance and ownership costs, something that competing modes have never had to do.

When railroad companies invest in improvements to their physical plant with internally generated funds, they must be assured of an internal rate of return equal to or better than the cost of borrowing money in the private market. In contrast, when the Corps of Engineers makes improvements to the inland waterways system, the barge operators do not put up any investment dollars. When the FHWA and state DOT’s improve highways, the trucking industry does not have to directly contribute to the investment. This unbalanced situation has led to underinvestment in railroad plant with consequent congestion is many locations. Railroads presently have great difficulty adding new train services and have made it clear that they are unable or unwilling to add timetable slots for additional passenger train services unless the public sector makes capacity available.

At the same time an expanding economy has put pressure on freight railroads to add more service and some new services such as long distance run through trains. The nation’s highways are congested in many places, and the expanding economy has added to the pressure for widening existing Interstates and building new Interstates where they do not now exist. Tests done under the auspices of the American Association of State Highway and Transportation Officials (AASHTO) have proven that highway damage is geometrically related to heavy loads. There is good reason to divert heavy loads off highways onto railroads since the latter are engineered to handle heavy loads. With several good reasons to add more railroad service, why has not more been done? The answer is, very simply, the railroads cannot afford to make the necessary investments. Their margin of profit is held down by truck competition for the most part. Common carrier truck rates are held down by the ubiquitous owner-driver who often works for bare wages, fuel, a contribution to maintenance and little or nothing for depreciation.

The trucking industry is using an Interstate and Defense Highway System designed and built since 1956, and incorporating improvements in design from time to time. It is largely an up to date highway system. The enormous capital invested in the Interstate and federal aid highway systems has been generated by motor fuel and other motor vehicle related taxes borne by the entire motoring public. Past studies have found that trucking does not cover about 30% of costs related to truck operation. This allows the trucking industry to offer rates less than their true economic costs. Every time taxes on trucks or trucking have been increased, the industry has lobbied intensely and successfully for increased length and weight limits which in turn allowed rates to remain lower than they otherwise would have been. This has attracted more freight to highways which in turn caused more wear and tear and congestion.

It is recommended that the Congress not approve any more increases in the size or gross weight of motor trucks in interstate commerce.

Trucking uses up to date highways

Railroads use Nineteenth Century Alignments. In contrast, nearly all the US railroad network was designed and built in the 19th Century. Grading was done by manpower, horses and scrapers. Heavy excavation was done by manual drilling (sledgehammers on the drill that someone was holding) and black powder. Such engineering achievements as the Horseshoe Curve, Tehachapi Loop, the Central Pacific (UP) over Donner Pass were all great achievements of that era, but they are circuitous compared to competing Interstate highways. No matter how fast railroad freight trains may run, they must go further than a truck in most cases. Curvature imposes permanent speed restrictions. Histories of those early projects often include drawings of proposed realignments that could not be carried out by the privately owned railroads. Major tunnels had been proposed but not built. Many sharp curves remain although realignments had been planned.

In Europe many kilometers of new high speed railways have been and are being built. Several Base Tunnels are being built for railway use under the Alps and other mountainous barriers. These are:
1. Lötschberg base tunnel – portals at Frutigen and Raron  in Switzerland.  21.6 miles in length. 2. Gotthard base tunnel – portals at Erstfeld and Biasca  35.6 miles in length. Scheduled to open 2015-2017. They are running into geological problems. 3. Combination bridge/tunnels connecting Sweden to Denmark provide an all rail connection between Scandinavia and Europe. 4. In project planning Mt. Cenis (France-Italy and Brenner (Innsbruck), Austria and maybe Bolzano/Bozen, Italy  5. Proposed tunnel connecting Spain and Morocco under the Straits of Gibraltar to connect the railway system of North Africa with that of Europe.

The Channel Tunnel (31 miles long) is well known in the US. Less known in the US is the Japanese Seikan tunnel between the main island of Honshu and the north island of Hokkaido. It is longer and deeper than the Channel Tunnel, and passes through far more difficult geology. It runs between Honshu and Hokkaido, cost $7 billion and is 33 miles long.

The US has no railroad tunnels that compare with Europe’s.

In all such cases, the railroads are owned by the public sector and such projects have national and/or European Union support.  While European railroads offer much more frequent passenger train service than is found in the US, they carry a tiny percentage of freight ton-miles and are far less efficient than American freight railroads. Yet with the superiority of American freight railroading, the companies cannot justify or afford the huge investment that would be needed to provide a 21st Century alignment. They need help!

The present US railroad system is the most efficient hauler of overland freight in the world in terms of ton-mile costs. It is also the result of drastic downsizing that followed deregulation. The present system is carrying double or triple the number of ton miles that had been carried on a much larger network prior to deregulation. About one third the track miles are carrying two to three times the traffic. While efficient, this leaves little room for growth. It is also difficult for freight railroads to maintain their track when there is only one track on a given alignment. Trains must be delayed or rerouted over circuitous routes to allow track to be taken out of service for maintenance or replacement. This is not desirable but it is necessary.

One may conclude that the present railroad system consists largely of 19th Century engineering, has greatly reduced track miles and route miles than existed in the 1950’s, yet is carrying twice the traffic. Expanding capacity to be able to handle increased freight traffic as well as increased passenger train traffic appear to be highly desirable national objectives. Excess capacity is desirable to handle an expanding economy as well as peak loads. Private companies cannot invest in excess capacity (unless they have large profit margins, which the railroads do not.) Redundancy is highly desirable to handle dislocations caused by natural disasters such as Hurricane Katrina or terrorist attacks that have not yet been experienced.

In Germany there are 2 between strategic points so that the military would always have an alternative route in case of invasion. The US railroad system was not designed with such strategic objectives in mind. The mainland US was never threatened, but now this is a distinct possibility. The loss of a key bridge or tunnel here or there could cause great havoc to the US economy, as there are now fewer alternative routes than there were in the 1950’s. Some of the alternatives might be restored or new ones created.

One may conclude that the basic US railroad network is a product of 19th Century engineering with no thought to redundancy that may be needed to cope with natural or terrorist activity or even routine maintenance or reconstruction. It is also circuitous compared to the Interstate Highway System and thereby not as competitive as it might be. This all indicates that it probably is an impediment to economic growth of the US rather than a lubricant for economic growth.

What then should be done?

It is proposed to create a National System of Interstate and Defense Railroads that would be multi-tracked, grade separated and suitable for competitive speeds. This would mean 75 mph for freight trains and 110 or 125 mph for passenger trains. A combination of tax credits and direct grants would be needed since some strategic investments desired for passenger train use might not be needed or wanted by freight railroads. Those improvements would be provided by grants, and such grants would consist of federal and non-federal shares. Multi-track means at least double tracked, and where combined passenger/freight traffic requires, three or even four tracks.

Heavy Haul Routes Needed. This is not to ignore the need for separate heavy haul routes that would be (and are) designed for 25 – 40 mph. It is recognized that such routes being capable of handling 15,000 to 25,000 ton coal or other heavy trains are needed. Energy needed increases with the square of the speed such that it requires four times the energy to move a train at 80 mph as at 40 mph. The railroad companies have been relatively successful in generating internal capital for such investments in heavy haul routes. It is desired to keep such traffic off high speed freight/passenger routes to avoid delays to fast trains. It may be desirable to have separate heavy haul tracks alongside fast freight/passenger tracks where both share the same corridor as exist on portions of the UP and BNSF. For purposes of this paper, it will be assumed that the railroad companies can continue to fund improvements for heavy haul traffic from their own resources. Exceptional needs might be handled on a case by case application for government aid.

A Program to Create a National System of Interstate and Defense RAILROADS.

A number of steps would be needed to approach, identify and quantify needs. This is not something that can be done by a few papers such as this in which small numbers of man hours have been committed. A major research and planning effort will be needed. This might be done under the auspices of the Transportation Research Board with funding from USDOT.

A Proposed Research Program to Develop a National System of Interstate and Defense Railroads.

Identify where rights of way for double or multiple track remain. Determine when and if restoration would be desirable.

Identify abandoned rights of way that exist (more or less intact). Determine which ones could be rebuilt for modern use. Rank them in order of probable need. Establish a list of rights of way to be purchased and preserved for future rail use. This use might be freight railroad, intercity and/or commuter passenger railroad or rail transit in urban-suburban areas. Funding for purchase and preservation of such rights of way should be the first item to be implemented under the proposed program.

Existing rights of way must be preserved especially in urban areas before they are disposed of to developers or other non-rail use. (Underlining added for emphasis.)

Identify where railroads are essential for defense. It is established that railroads are the most efficient way to move an armored division. There are other areas where railroads have been used effectively.

A major shift of freight and passengers from highway to railroad should be an objective to reduce domestic use of petroleum based fuels. No technological development would be needed.
Input from local planning agencies will be desired but oversight by a steering committee appears to be desirable and necessary because many planners have not had academic training or experience in evaluating what railroad rights of way might be used for. They might want a hiking trail on what might be a strategic interstate freight corridor.

A nationwide survey is needed to determine where such by-passes are desired. The survey would include identification of existing abandoned or underused alignments that could be incorporated.
Costs and benefits from such by-passes should be identified and quantified. They could be strategic redundant routes.

Financing of such a National System of Railroads will be a major and continuous undertaking. In the recent past, TRB and USDOT/FHWA have sponsored meetings/seminars/symposia on the subject of innovative financing of transportation projects. There is no need for duplication. Rather, research toward financing the National System of Interstate and Defense Railroads should build upon work already done. This new research effort will be separate from but in parallel with research to define and quantify the proposed system.
Win/Win: A key point to be kept in mind is that financing must be acceptable to all parties to any agreement to improve the national railroad system. With win/win in mind, it is suggested that improvements funded by the public sector be owned by a public entity and leased to the railroads so that the improvements should not be subject real estate taxes.
Some assumptions here may be in order, but they should be confirmed before work begins.
1. Whatever is proposed must be acceptable to the freight railroads that own nearly all the national railroad system. It must be a win/win combination that benefits the owning railroads as well as public sector needs.
2. Tax credits as proposed by the Association of American Railroads may well be a primary source of capital funds from the private sector. It is suggested that a basic percentage be established for all railroad infrastructure, primarily heavy haul routes, and that a somewhat higher percentage be allowed for multi-tracked lines handling passenger trains operated by public entities or on behalf of public entities.
3. For very large projects (which would be common) having very long pay off periods, precedent of the Alameda Corridor might be followed. A public entity would be owner, and would issue long term bonds to fund the project. Using railroad(s) would pay a fee (a toll) per car, per ton, per ton-mile or whatever logically fits the project for the use of it. If such fees would not cover interest and amortization, public financing of the balance might be used, covered by a port authority or whatever the owning agency might be assuming it has cash flow from other sources.
Multi-purpose corridors might be established, especially in urban areas, in which a corridor might include separate freight and passenger railroad tracks along with fiber optic cable, electric power lines, water or other pipe lines, and perhaps truck-only roads. Fees from all users would be applied to bond issues. If forecast revenues were found insufficient, direct grants from relevant public agencies might be sought. The nature of each project would guide choices of funding. It is likely that funding will be project specific, although similar projects might well employ similar funding methods. Innovative, new, financing methods should be an objective of research.

Legislation at the federal and state levels will be needed to implement the proposed National System of Interstate and Defense Railroads. It would be the objective of a final research task to draft such proposed legislation for review by representative staff of relevant legislative bodies.

The above program is ambitious and will require much investment over a period of years. It need not be done all at once. Much of it is already in place and needs only improvement.

Restoration of double track where rights of way exist could be an early development.  Elimination of such bottlenecks would be a natural inclusion in the proposed National System. Identification of defense needs is the subject of still another panel that will be fit into the National System.
Task 0: A preliminary first task will be to estimate the funds and time needed to undertake the research outlined above. A source of such funds must then be identified and found. Some money or services in kind might come from the railroad industry itself, as a key beneficiary and would also give them seats on any steering committee. Much must come from the public sector, most likely USDOT through its FRA, FHWA or other appropriate agency. An independent research organization would manage the effort, and this would logically be the Transportation Research Board which already has much experience in some of the proposed tasks. Tasks would be advertised and awarded to research foundations or consultants in the usual manner. This effort might take up to three years and might cost on the order of $3 to $5 million. Output would be a conceptual engineering type of result defining a National System of Interstate and Defense Railroads and putting tasks in prioritized order for implementation.
A sense of urgency is needed to create a National System that will reduce the nation’s dependence upon imported petroleum for its basic interstate transportation needs. The world’s petroleum supply is being used up at an ever increasing rate, and many of its sources are in insecure areas. President Bush’s state of the union message January 23rd, 2007 included an objective of greatly reducing the US’s consumption of petroleum for surface transportation purposes. The proposed electrified railroad system would contribute to this objective in a big way. Freight railroads are one of the larger users of diesel fuel, much of which must be consumed on main lines which are most conducive to electrification. It has been estimated that railroads consume about six percent of the nation’s consumption of petroleum. Railroads are the only interstate mode that is suitable for electrification using existing technology. We should save petroleum for uses in which there is no readily apparent alternative such as aviation.
If we don’t get started promptly, we will regret it in the not too distant future. The future is approaching rapidly. It is recommended that the research proposed above be authorized and funded at the earliest opportunity. It took fifty years to build the Interstate and Defense Highway System as defined in 1956 legislation and amended from time to time. The railroad system envisaged would take approximately the same length of time.
An improved railroad system will benefit the economy.

The time to begin is now!

Scott R. Spencer, Concept of the proposed National System of Interstate and Defense Railroads.
Pier Clifford, References to base tunnels in Europe.
Larry DeYoung, vice president, Western New York & Pennsylvania Railroad, a short line, who reminded me that existing railroads were built with 19th Century engineering.
Thanks to Jack Snyder and my other numerous e-mail friends/correspondents/consultants/academics/researchers, for their suggestions to electrify major routes and numerous other ideas offered by several persons too numerous to cite.
Transportation Research Board, numerous reports on finance and funding.
Special thanks to Jim Wrinn, editor, TRAINS magazine, Kalmbach Publishing Co., Waukesha, WI for use of their four maps in the appendix.
If the United States is to continue its role as the world’s leading economy, it must have a 21st Century System of Interstate and Defense Railroads.

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Gail Tverberg: Eight Pieces of Our Oil Price Predicament

Eight Pieces of Our Oil Price Predicament

October 22, 2014, by Gail Tverberg

A person might think that oil prices would be fairly stable. Prices would set themselves at a level that would be high enough for the majority of producers, so that in total producers would provide enough–but not too much–oil for the world economy. The prices would be fairly affordable for consumers. And economies around the world would grow robustly with these oil supplies, plus other energy supplies. Unfortunately, it doesn’t seem to work that way recently. Let me explain at least a few of the issues involved.

1. Oil prices are set by our networked economy.

As I have explained previously, we have a networked economy that is made up of businesses, governments, and consumers. It has grown up over time. It includes such things as laws and our international trade system. It continually re-optimizes itself, given the changing rules that we give it. In some ways, it is similar to the interconnected network that a person can build with a child’s toy.

Figure 1. Dome constructed using Leonardo Sticks

Thus, these oil prices are not something that individuals consciously set.

Instead, oil prices reflect a balance between available supply and the amount purchasers can afford to pay, assuming such a balance actually exists. If such a balance doesn’t exist, the lack of such a balance has the possibility of tearing apart the system.

If the compromise oil price is too high for consumers, it will cause the economy to contract, leading to economic recession, because consumers will be forced to cut back on discretionary expenditures in order to afford oil products. This will lead to layoffs in discretionary sectors. See my post Ten Reasons Why High Oil Prices are a Problem.

If the compromise price is too low for producers, a disproportionate share of oil producers will stop producing oil. This decline in production will not happen immediately; instead it will happen over a period of years. Without enough oil, many consumers will not be able to commute to work, businesses won’t be able to transport goods, farmers won’t be able to produce food, and governments won’t be able to repair roads. The danger is that some kind of discontinuity will occur–riots, overthrown governments, or even collapse.

2. We think of inadequate supply being the number one problem with oil, and at times it may be. But at other times inadequate demand (really “inadequate affordability”) may be the number one issue. 

Back in the 2005 to 2008 period, as oil prices were increasing rapidly, supply was the major issue. With higher prices came the possibility of higher supply.

As we are seeing now, low prices can be a problem too. Low prices come from lack of affordability. For example, if many young people are without jobs, we can expect that the number of cars bought by young people and the number of miles driven by young people will be down. If countries are entering into recession, the buying of oil is likely to be down, because fewer goods are being manufactured and fewer services are being rendered.

In many ways, low prices caused by un-affordability are more dangerous than high prices. Low prices can lead to collapses of oil exporters. The Soviet Union was an oil exporter that collapsed when oil prices were down. High prices for oil usually come with economic growth (at least initially). We associate many good things with economic growth–plentiful jobs, rising home prices, and solvent banks.

3. Too much oil in too short a time can be disruptive.

US oil supply (broadly defined, including ethanol, LNG, etc.) increased by 1.2 million barrels per day in 2013, and is forecast by the EIA to increase by close to 1.5 million barrels a day in 2014. If the issue at hand were short supply, this big increase would be welcomed. But worldwide, oil consumption is forecast to increase by only 700,000 barrels per day in 2014, according to the IEA.

Dumping more oil onto the world market than it needs is likely to contribute to falling prices. (It is the excess quantity that leads to lower world oil prices; the drop in price doesn’t say anything at all about the cost of production of oil the additional oil.) There is no sign of a recent US slowdown in production either.  Figure 2 shows a chart of crude oil production from the EIA website.

Figure 2. US weekly crude oil production through October 10, as graphed by the US Energy Information Administration.

4. The balance between supply and demand is being affected by many issues, simultaneously. 

One big issue on the demand (or affordability) side of the balance is the question of whether the growth of the world economy is slowing. Long term, we would expect diminishing returns (and thus higher cost of oil extraction) to push the world economy toward slower economic growth, as it takes more resources to produce a barrel of oil, leaving fewer resources for other purposes. The effect is providing a long-term downward push on the price on demand, and thus on price.

In the short term, though, governments can make oil products more affordable by ramping up debt availability. Conversely, the lack of debt availability can be expected to bring prices down. The big drop in oil prices in 2008 (Figure 3) seems to be at least partly debt-related. See my article, Oil Supply Limits and the Continuing Financial Crisis. Oil prices were brought back up to a more normal level by ramping up debt–increased governmental debt in the US, increased debt of many kinds in China, and Quantitative Easing, starting for the US in November 2008.

Figure 3. Oil price based on EIA data with oval pointing out the drop in oil prices, with a drop in credit outstanding.

In recent months, oil prices have been falling. This drop in oil prices seems to coincide with a number of cutbacks in debt. The recent drop in oil prices took place after the United States began scaling back its monthly buying of securities under Quantitative Easing. Also, China’s debt level seems to be slowing. Furthermore, the growth in the US budget deficit has also slowed. See my recent post, WSJ Gets it Wrong on “Why Peak Oil Predictions Haven’t Come True”.

Another issue affecting the demand side is changes in taxes and in subsidies. A change toward more taxes such as carbon taxes, or even more taxes in general, such as the Japan’s recent increase in sales tax, tends to reduce demand, and thus give a push toward lower world oil prices. (Of course, in the area with the carbon tax, the oil price with the tax is likely to be higher, but the oil price elsewhere around the world will tend to decrease to compensate.)

Many governments of emerging market countries give subsidies to oil products. As these subsidies are lessened (for example in India and in Brazil) the effect is to raise local prices, thus reducing local oil demand. The effect on world oil prices is to lower them slightly, because of the lower demand from the countries with the reduced subsidies.

The items mentioned above all relate to demand. There are several items that affect the supply side of the balance between supply and demand.

With respect to supply, we think first of the “normal” decline in oil supply that takes place as oil fields become exhausted. New fields can be brought on line, but usually at higher cost (because of diminishing returns). The higher cost of extraction gives a long-term upward push on prices, whether or not customers can afford these prices. This conflict between higher extraction costs and affordability is the fundamental conflict we face.

It is also the reason that a lot of folks are expecting (erroneously, in my view) a long-term rise in oil prices.

Businesses of course see the decline in oil from existing fields, and add new production where they can. Examples include United States shale operations, Canadian oil sands, and Iraq. This new production tends to be expensive production, when all costs are included. For example, Carbon Tracker estimates that most new oil sands projects require a price of $95 barrel to be sanctioned. Iraq needs to build out its infrastructure and secure peace in its country to greatly ramp up production. These indirect costs lead to a high per-barrel cost of oil for Iraq, even if direct costs are not high.

In the supply-demand balance, there is also the issue of oil supply that is temporarily off line, that operators would like to get back on line. Libya is one obvious example. Its production was as much as 1.8 million barrels a day in 2010. Libya is now producing 800,000 barrels a day, but was producing only 215,000 barrels a day in April. The rapid addition of Libya’s oil to the market adds to pricing disruption. Iran is another country with production it would like to get back on line.

5. Even what seems like low oil prices today (say, $85 for Brent, $80 for WTI) may not be enough to fix the world’s economic growth problems.

High oil prices are terrible for economies of oil importing countries. How much lower do they really need to be to fix the problem? Past history suggests that prices may need to be below the $40 to $50 barrel range for a reasonable level of job growth to again occur in countries that use a lot of oil in their energy mix, such as the United States, Europe, and Japan.

Figure 4. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

Thus, it appears that we can have oil prices that do a lot of damage to oil producers (say $80 to $85 per barrel), without really fixing the world’s low wage and low economic growth problem. This does not bode well for fixing our problem with prices that are too low for oil producers, but still too high for customers.

6. Saudi Arabia, and in fact nearly all oil exporters, need today’s level of exports plus high prices, to maintain their economies.

We tend to think of oil price problems from the point of view of importers of oil. In fact, oil exporters tend to be even more affected by changes in oil markets, because their economies are so oil-centered. Oil exporters need both an adequate quantity of oil exports and adequate prices for their exports. The reason adequate prices are needed is because most of the sales price of oil that is not required for investment in oil production is taken by the government as taxes. These taxes are used for a variety of purposes, including food subsidies and new desalination plants.

A couple of recent examples of countries with collapsing oil exports are Egypt and Syria. (In Figures 5 and 6, exports are the difference between production and consumption.)

Figure 5. Egypt's oil production and consumption, based on BP's 2013 Statistical Review of World Energy data.

Figure 6. Syria's oil production and consumption, based on data of the US Energy Information Administration.

Saudi Arabia has had flat exports in recent years (green line in Figure 7). Saudi Arabia’s situation is better than, say, Egypt’s situation (Figure 5), but its consumption continues to rise. It needs to keep adding production of natural gas liquids, just to stay even.

Figure 7. Saudi oil production, consumption and exports based on EIA data.

As indicated previously, Saudi Arabia and other exporting countries depend on tax revenues to balance their budgets. Figure 8 shows one estimate of required oil prices for OPEC countries to balance their budgets in 2104, assuming that the quantity of exported oil is pretty much unchanged from 2013.

Figure 8. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from APICORP.

Based on Figure 8, Qatar and Kuwait are the only OPEC countries that would find $80 or $85 barrel oil acceptable, assuming the quantity of exports remains unchanged. If the quantity of exports drops, prices would need to be even higher.

Saudi Arabia has set aside funds that it can tap temporarily, so that it can withstand a lower oil price. Thus, it has the ability to withstand low prices for a year or two, if need be. Its recent price-cutting may be an attempt to “shake out” producers who have less-deep pockets when it comes to weathering low prices for a time. Almost any oil producer elsewhere in the world might be in that category.

7. The world really needs all existing oil production, plus more, if the world economy is to grow.

It takes oil to transport goods, and it takes oil to operate agricultural and construction equipment. Admittedly, we can cut back world production oil production with lower price, but this gets us into “a heap of trouble”. We will suddenly find ourselves less able to do the things that make the economy function. Governments will stop fixing roads. Services we take for granted, like long distance flights, will disappear.

A lot of people have a fantasy view of a world economy operating on a much smaller quantity of fossil fuels. Unfortunately, there is no way we can get there by way of a rapid drop in oil prices. In order for such a change to take place, we would have to actually figure out some kind of transition by which we could operate the world economy on a lot less fossil fuel. Meeting this goal is still a very long ways away. Many people have convinced themselves that high oil prices will help make this transition possible, but I don’t see this as happening. High prices for any kind of fuel can be expected to lead to economic contraction. If transition costs are high as well, this will make the situation worse.

The easiest way to reduce consumption of oil is by laying off workers, because making and transporting goods requires oil, and because commuting usually requires oil. As a result, the biggest effect of a cutback on oil production is likely to be huge job layoffs, far worse than in the Great Recession.

8. The cutback in oil supply due to low prices is likely to occur in unexpected ways.

When oil prices drop, most production will continue as usual for a time because wells that have already been put in place tend to produce oil for a time, with little added investment.

When oil production does stop, it won’t necessarily be from high-cost production, because relative to current market prices, a very large share of production is high-cost. What will tend to happen is that production that has already been “started” will continue, but production that is still “in the pipeline” will wither away. This means that the drop in production may be delayed for as much as a year or even two. When it does happen, it may be severe.

It is not clear exactly how oil from shale formations will fare. Producers have leased quite a bit of land, and in some cases have done imaging studies on the land. Thus, these producers have quite a bit of land available on which a share of the costs has been prepaid. Because of this prepaid nature of costs, some shale production may be able to continue, even if prices are too low to justify new investments in shale development. The question then will be whether on a going-forward basis, the operations are profitable enough to continue.

Prices for new oil development have been too low for many oil producers for many months. The cutback in investment for new production has already started taking place, as described in my post, Beginning of the End? Oil Companies Cut Back on Spending. It is quite possible that we are now reaching “peak oil,” but from a different direction than most had expected–from a situation where oil prices are too low for producers, rather than being (vastly) too high for consumers.

The lack of investment that is already occurring is buried deeply within the financial statements of individual companies, so most people are not aware of it. Dividends remain high to confuse the situation. By the time oil supply starts dropping, the situation may be badly out of hand and largely unfixable because of damage to the economy.

One big problem is that our networked economy (Figure 1) is quite inflexible. It doesn’t shrink well. Even a small amount of shrinkage looks like a major recession. If there is significant shrinkage, there is danger of collapse. We haven’t set up a new type of economy that uses less oil. We also don’t have an easy way of going backward to a prior economy, such as one that uses horses for transport. It looks like we are headed for “interesting times”.


Posted in Flow Rate, Gail Tverberg | Leave a comment

Large agribusiness gets corporate welfare via illegal ethanol subsidies

What more proof is needed that the Energy Returned on Energy Invested of ethanol is negative?  They’re losing money and getting corporate welfare to keep the scam going, meanwhile destroying prime topsoil, poisoning the land with pesticides, and eutrophying the Gulf of Mexico (see Peak Soil for details).

This is only part of the article, see the rest here.

Updated: Bioenergy Program for Advanced Biofuels Fact Sheet. June 2014. Taxpayers for common sense.

Large Corn Biofuels Facilities Receiving Taxpayer Funding

The highest payments per project, by far, were awarded to large agribusinesses operating corn and soy biofuels facilities.

This is despite the fact that corn ethanol facilities are not even eligible for funding through this program or defined as an advanced biofuel in any current federal legislation.

Regardless, USDA is still funneling money to this mature industry, in addition to soy biodiesel facilities.

From 2009 to 2014, 21 corn ethanol facilities and three corn oil biodiesel facilities received $60 million in federal subsidies, an average of $2.5 million per project. See Table 2 for more information. The corn ethanol industry has already received more than its fair share of federal subsidies over the past 30 years, including energy and commodity subsidies in the farm bill, production tax credits, import tariffs, taxpayer-backed loans, and infrastructure support. In addition, corn ethanol production is mandated through the federal Renewable Fuel Standard (RFS); more specifically, the RFS mandate requires that 15 billion gallons of corn ethanol be used in U.S. motor gasoline by 2015.

Even though the Bioenergy Program for Advanced Biofuels was intended to spur production of advanced biofuels, as the program’s title suggests, its funding stream reveals a different story. Instead of assisting small, rural residents or small businesses obtain financing to help second-generation biofuels derived from non-food feedstocks get off the ground, the program is instead funneling taxpayer dollars to large, profitable, and well-known agribusinesses. Government funding is also spent on mature biofuels industries like corn ethanol and soy biodiesel, which have enjoyed taxpayer backing for more than 30 years. Now more than ever, taxpayers should not be forced to fund corporate welfare and mature technologies, so the BPAB program must not be renewed in the next farm bill and spending should be reined in until then.

Table 2:  Corn Biofuels Facilities Receiving Advanced Biofuels Payments, 2009-14

Facility Name (* notes the facility produces biodiesel) State Feedstock Total Payments
White Energy Inc TX corn/milo $10,442,369
Arkalon Ethanol LLC KS corn/milo $9,935,595
Western Plains Energy KS corn/milo $8,302,242
Kansas Ethanol LLC KS corn/milo $5,914,342
Pinal Energy LLC AZ corn $4,651,731
Prairie Horizon Agri-Energy LLC KS corn/milo $4,428,160
Levelland/Hockley Co. Ethanol (now Diamond Ethanol) TX corn/milo $3,308,326
Abengoa Bioenergy Corp. MO corn/milo $3,108,385
Bonanza Bioenergy LLC KS corn/milo $3,082,023
Chief Ethanol Fuel Inc NE corn/milo $2,308,795
Reeve Agri Energy Inc KS corn/milo $1,723,906
Nesika Energy LLC KS corn $771,812
Central Indiana Ethanol LLC IN corn $482,973
Corn Plus LP MN corn $311,081
Walsh Bio Fuels, LLC* WI corn $267,030
Trenton Agri Products LLC KS corn/milo $231,620
Nugen Energy LLC SD corn $98,591
East Kansas Agri-Energy LLC KS corn $58,834
Cornhusker Energy Lexington, LLC NE corn $14,871
Chippewa Valley Ethanol Coop MN corn $14,597
Best Biodiesel Cashton, LLC* WI corn/soy $10,487
Kappa Ethanol, LLC NE corn $8,693
Maple River Energy, LLC* IA corn/soy $7,845
TOTAL $59,618,433

Large Agribusinesses Receiving Subsidies for Biodiesel Production

Table 3 identifies several large agribusinesses receiving more than $1 million of taxpayer subsidies for biodiesel production. Biodiesel can be produced from corn oil, as noted above, or other feedstocks such as soy or other types of vegetable oil, animal fats, recycled cooking oil, etc. Notable companies receiving taxpayer support from 2009-2013 include the Renewable Energy Group, Louis Dreyfus, Ag Processing, Archer Daniels Midland, MN Soybean Processors, and Cargill Inc. Similar to the generous taxpayer supports corn ethanol has received over the past 30 years, biodiesel companies have also benefited from a $1 per gallon production tax credit for several years, on top of several other federal incentives.

Table 3:  Biodiesel Facilities Receiving Advanced Biofuels Payments, 2009-14

Facility Name State Feedstock Total Payment
Lake Erie Biofuels, LLC Dba Hero Bx PA multi $16,842,034
Renewable Energy Group, Inc. IA canola $15,308,992
Louis Dreyfus Agricultural Industries IN soy $12,468,872
High Plains Bioenergy, LLC OK animal fats $11,915,721
AG Processing Inc NE soy $11,221,637
Mid-America Biofuels, LLC MO soy $10,530,741
Paseo Cargill Energy, LLC MO soy $9,690,338
Archer Daniels Midland Company IL, ND canola $7,744,279
Deerfield Energy LLC MO multi $6,846,753
MN Soybean Processors MN soy $5,914,635
Owensboro Grain Company, LLC. KY soy $5,668,413
Cargill Inc. MN soy $5,562,689
Smarter Fuel, Inc. PA cooking oil $5,202,080
Incobrasa Industries, Ltd. IL soy $4,897,378
FutureFuels Chemical Company AR animal fats/soy $4,661,016
Imperium Grays Harbor LLC WA canola $3,849,794
Rbf Port Neches, LLC. TX multi $3,710,752
E Biofuels LLC IN animal fats/cooking oil $3,440,667
Western Iowa Energy IA multi $3,020,233
American Biodiesel, Inc CA multi $2,741,786
Crimson Renewable Energy LP CA multi $2,703,216
Western Dubuque Biodiesel, LLC IA canola $2,569,989
Sequential‐Pacific Biodiesel OR cooking oil $2,516,531
Jatrodiesel, Inc. OH multi $2,144,479
Midwest Biodiesel Product, LLC. IL soy $2,011,805
Green Earth Fuels Of Houston, LLC. TX multi $1,924,678
Environmental Energy Recycling Corp. PA cooking oil $1,758,853
Scott Petroleum Corporation MS multi $1,726,854
Imperial Western Products, Inc. CA animal fats/veg oil $1,654,933
Iowa Renewable Energy, LLC IA animal fats/veg oil $1,441,303

Other Feedstocks Receiving Taxpayer Subsidies

As Table 1 illustrated, projects receiving the last few million dollars of BPAB payments converted either woody biomass, sorghum, or seed waste into biofuels or used anaerobic digesters or landfill gas to power bioenergy facilities. On average, these payments were three to ten times smaller than the average checks sent to corn ethanol facilities. The remaining projects were filed in the unknown category since too little detail was provided by USDA to determine which types of feedstocks are used in the facilities.

For more information, contact Taxpayers for Common Sense at 202-546-8500.

Posted in Biofuels, EROEI Energy Returned on Energy Invested | Tagged , , , , , | Leave a comment

Ivanpah Biggest solar power plant ever – $2.2 billion for only 100 MW

The $2.2 billion dollar Ivanpah Solar power plant generates 100 MW of power when you take the 25% capacity into account (not 400 MW).  That’s enough power for 25,000 to 50,000 homes (not 140,000 as claimed).  There are 116,700,000 households in the USA (2010 census).  So we’d need 2,334 to 4,668 more $2.2 billion Ivanpahs for residential power alone.  That would cost $5 to $10 trillion dollars.

Huge US solar plant lags in early production

Nov 17, 2014 by Michael R. Blood at

The largest solar power plant of its type in the world—once promoted as a turning point in green energy—isn’t producing as much energy as planned.

The plant is producing about half of its expected annual output for 2014, according to calculations by the California Energy Commission.  Ivanpah sprawls over 5 miles of desert near the California-Nevada border.

How Efficient will the Ivanpah Solar Power Tower Really Be?    Reliability and Efficiency


The $2.2 billion dollar Ivanpah Solar Electric Generating System (ISEGS) generates 400 megawatts (MW) of electricity during the sunniest part of the day, and uses natural gas to generate up to five percent of its capacity.  Without energy storage, the annual capacity factor of any solar technology is generally limited to about 25 percent of maximum according to the Renewable Energy Research Laboratory. ISEGS will not use storage technology.


Solar technologies in general remain too costly for grid-connected applications without heavy government subsidies (from Department of Energy).

A Combined Cycle Gas Turbine power plant today costs roughly $1,100/kW – $1,500/kW to build, one of the cheapest power plant options. The price of natural gas electricity costs 3.9 to 4.4 cents/kWh, according to Pure Energy Systems Wiki. The market cost for coal is around 2-3 cents/kwh. The levelized cost of coal is around 4-5.8 cents/kwh. Nuclear generation costs 11.1 to 14.5 cents/kWh.

Parabolic trough solar thermal costs for electricity run from 15 to 18 cents/kWh.

Costs for solar thermal plants: the Nevada One plant completed in 2007 was built for roughly $3,600/kW of capacity. (Source

Add in the Transmission Costs

For remote solar plants like the Ivanpah project, built hundreds of miles from cities, the cost of upgrading and building new power lines needs to be factored in.

The costs of single-circuit alternating current transmission lines for 1989: for a 230 kilovolt line – $150,000 to 375,000 per mile, for a 500 kV line – $400,000 to 800,000 per mile. (Source: Electric Power Research Institute, Technical Assessment Guide: Electric Supply, 1989, Vol. 1, Revision 6, Golden, CO, November 1989, p. B-4)

This cost is passed onto ratepayers, a Southern California Edison representative told us. The Eldorado-Ivanpah Transmission line upgrade alone would make the rates of SCE go up about 5 to 10 cents per power bill per customer. Each additional project that would require an upgrade would also add to the power bills.

We disagree with the statement, “[ISEGS] would not create significant adverse effects on fossil fuel energy supplies or resources, would not require additional sources of energy supply, and would not consume fossil fuel energy in a wasteful or inefficient manner” (page 7.2-1). Fossil fuel would have to be burned elsewhere on the grid as baseload, mostly as coal, as solar energy is intermittent. The Ivanpah solar plant will not run during the night, during cloudy days, and on cold winter mornings the small on-site natural gas burners will have to run to heat the system up.

Efficiency in a power plant is a measure of the how much electricity is generated from a unit of energy put into the system (such as coal, natural gas, or photons). In a thermal power plant water is boiled to produce steam, the heat-energy of which is used to turn turbines. But much heat is lost in the process. Some typical efficiency values (From: Eike Roth, Why thermal power plants have a relatively low efficiency,; and Romero-Alvarez and Zarza 2007).

Coal – 45-48% efficiency, Natural gas – 58%, Nuclear – 35%, Hydro – 85%

Solar thermal – Central receiver (like ISEGS design): 12% annual net, 16% peak

Solar thermal – Parabolic trough: 14% annual net, 21.5% peak

Photovoltaic silicon – 15%

Trying to figure an efficiency calculation to use to compare the Ivanpah solar project future efficiency, CEC uses a proxy from existing natural gas power plants. They say, “As a proxy, we will use an average efficiency based on several recent baseload combined cycle power plant projects in the Energy Commission siting process. Baseload combined cycles were chosen because their intended dispatch most nearly mirrors the intended dispatch of solar plants, that is, operate at full load in a position high on the dispatch authority’s loading order” (page 7.2-15). The average of four natural gas combined cycle 565-696 MW power plants: 53.7% LHV (Lower Heating Value*). This does not seem to compare well with real-world measured efficiencies at existing central receiver solar thermal projects (above), but CEC ignores real-world numbers.

Using this proxy, CEC concludes that the Land Use Efficiency for ISEGS would be 238 MWh/acre-year (solar only, subtracting the natural gas burned for morning warm-up and cloud cover).

But why is CEC comparing ISEGS to a baseload plant, which is supposed to produce energy at a constant rate? Examples of baseload plants include nuclear and coal-fired plants. Baseload plants typically run at all times of the year, and all night. Clouds do not turn them off. They also have dispatchability, able to ramp up or down to generate power any time. Peaks or spikes in customer power demand are handled by smaller and more responsive types of power plants called peaking power plants. Peaking plants are typically powered with natural gas turbines. Baseload power plants do not change production to match power consumption demands since it is more economical to operate them at constant production levels. Natural gas is used in base load, intermediate cycle, and peaking units. In California, more than three-quarters of natural gas generation comes from combined cycle gas turbines (CCGT) operated as baseload and intermediate cycle units.

Solar thermal power is not dispatchable.

A load-following power plant gradually ramps up and down its power output to respond to scheduled changes in power demand over the course of a day. Gas, pulverized coal, and hydroelectric generators are commonly used to follow the load. “Solar photovoltaic or CSP [concentrated solar thermal, like ISEGS] without storage can approximately follow the load on sunny days, when peak demand is around mid-day” (From Solar Southwest Initiative).

The ISEGS solar thermal power plants should be compared to a load-following plant, not baseload. But not being dispatchable on command, it compares poorly. We have witnessed the summer monsoon season in Ivanpah Valley shade much of the area with tall thunderheads every afternoon for weeks.

Baseload vs. Peak

Based on reports filed by the nation’s utilities with the Federal Energy Regulatory Commission, about 75% of electricity consumption is baseload and about 25% is intermediate or peak load. Demand is full-time, but wind and solar are part-time.   In the absence of electricity storage, there is no such thing as wind/solar by itself — there is only 30% wind/solar combined with 70% natural gas, or 30% wind/solar combined with 70% coal.

Real World Capacity

Utility-scale renewable energy companies like to say how many thousands of houses their power plants will supply, and the newspapers slavishly print these numbers. But they neglect to tell us about capacity factors. The stated wattage, or ‘nameplate capacity,’ is when the sun is shining full-on on a cloudless day. It does not take into account night, short winter days with low sun angle, cloudy and rain days, windy days when the facility will be shuttered, or maintenance (if not done at night). Every generating plant has a capacity factor (the net capacity factor of a power plant is the ratio of the actual output of a power plant over a period of time and its output if it had operated at full nameplate capacity the entire time).

Typical capacity factors:

  • Thermal solar “Without energy storage, the annual capacity factor of any solar technology is generally limited to about 25 percent” – Sandia National Laboratories.
  • Thermal solar power tower 25%- Abengoa Solar’s large power tower PS10 in Spain, from their brochure pdf.
  • Thermal solar parabolic trough ca. 15% average (from Solar Millennium Andasol 1-3 parabolic trough plants in Spain, access date = 2009-05-14). They reported 28% capacity only in peak times.
  • Photovoltaic solar in Massachusetts 12-15% (from Renewable Energy Research Laboratory: “Wind Power: Capacity Factor, Intermittency, and what happens when the wind doesn’t blow?”>>PDF). Arizona 19% (from Carnegie Mellon Electricity Industry Center Working Paper CEIC-08-04, The Spectrum of Power from Utility-Scale Wind Farms and Solar Photovoltaic Arrays, by Jay Apt and Aimee Curtright).
  • Nuclear 60% to over 100%, U.S. average 92%. Worldwide average varied between about 81% to 87% between 1995 and 2005 (from Renewable Energy Research Laboratory cited above; “15 Years of Progress” PDF, World Association of Nuclear Operators, 2006, Retrieved 2008-10-20.).
  • Baseload coal 70-90% (from Renewable Energy Research Laboratory cited above).
  • Combined cycle natural gas about 60% (from Renewable Energy Research Laboratory cited above). “Load-following” natural gas plants are turned on only when needed during the higher-demand parts of the day and year, so may have a capacity factor of 42%. When demand for power drops to minimum levels, they are turned off because Baseload power plants designed to run all the time, are already running all the time to provide this minimum demand. Most baseload power plants are coal or nuclear plants.
  • Geothermal worldwide average 73%, demonstrated 90% (from Fridleifsson, Ingvar B.; Bertani, Ruggero; Huenges, Ernst; Lund, John W.; Ragnarsson, Arni; Rybach, Ladislaus (2008-02-11). O. Hohmeyer and T. Trittin. ed (pdf). The possible role and contribution of geothermal energy to the mitigation of climate change. Luebeck, Germany. pp. 59-80. Retrieved 2009-04-06).

Concentrating solar power needs a sharp sun image to be efficient. It is best done in deserts where there are no clouds or haze. Dust haze scatters light, and image efficiency plummets. Windstorms blow dust off Ivanpah playa frequently, and could lower efficiency for ISEGS. Cloud cover will force the plant to be turned off during winter and summer storms.

Will high winds whipping through the desert rip 20-foot wide heliostats off their bases like sails?

But what surprises us most is the location of the proposal directly below a large rain catchment basin on the slopes of Clark Mountain. Did the engineers in the city understand desert alluvial deposition processes, or surficial geology and hydrology?

Researchers measured “normal” rain runoff on a fan below the Providence Mountains, just 60 km south of Ivanpah Valley in Mojave National Preserve, from 2003 to 2006. They found that several winter and summer rainstorms delivered more than 10 mm per day of rain, enough to initiate runoff, and some intense summer storms were greater than 60 mm per hour. These redistributed sand, gravel, and organic debris. High-intensity summer rainfall could last an hour, often exceeding the infiltration rates of the soil (Miller et al. 2009).

This was just over three years. Over the 50-year proposed lifespan of the ISEGS larger storms will occur, possibly as damaging as the flood that hit Furnace Creek in Death Valley National Park, and Surprise Canyon in the Panamint Mountains, California.

This is an active sloping alluvial fan, not a stable flatland, seemingly not appropriate for a delicate heliostat array. In describing the engineering of a collector field, Romero-Alvarez and Zarza (2007:21-53) state: “Because of the large area of land required, complex algorithms are used to optimize the annual energy produced by unit of land, and heliostats mst be packed as close as possible so the receiver can be small and concentration high. However, the heliostats are individual tracking reflective Fresnel segments subject to complex performance factors, which must be optimized over the hours of daylight in the year, by minimizing the cosine effect, shadowing and blocking, and receiver [light] spillage.”

Tracking control mechanisms continuously move the heliostats so that they focus solar radiation on the tower receiver. “During cloud passages and transients the control system must defocus the field and react to prevent damage to the receiver and tower structure” (ibid: 21-52).

What if sediments from alluvial runoff tilt several heliostats in the field? Will operators be able to find and correct all heliostat deviations? How long will the plant be shut off while inspections are done after each storm and repairs are made? How much of a tilt would cause tower damage as reflected sun beams are aimed in the wrong direction?

An exacting science: Hot sunbeams reflected by heliostats onto the central receiver tower, solar influx on the receiver can get to 1000 degrees Celsius (ibid:21-51).

In an investment cost breakdown of building a central receiver solar thermal power plant the heliostat field is the single most expensive part of the project, 40% of total capital costs. The power block comes next, at 32% of total (ibid:21-53).

Yet, “Staff believes there are no special concerns with power plant functional reliability due to flooding (page 7.3-6).


Intermittent power: Real power output (kW) sampled with one minute resolution for a 4.6 MW solar photovoltaic array in northeastern Arizona for one week (from Carnegie Mellon Electricity Industry Center Working Paper CEIC-08-04, The Spectrum of Power from Utility-Scale Wind Farms and Solar Photovoltaic Arrays, by Jay Apt and Aimee Curtright).


Miller, David M., David R. Bedford, Debra L. Hughson, Eric V. McDonald, Sarah E. Robinson, and Kevin M. Schmidt. 2009. Mapping Mojave Desert ecosystem properties with surficial geology. In, The Mojave Desert: Ecosystem Processes and Sustainability. Edited by Robert H. Webb, Lynn F. Fenstermaker, Jill S. Heaton, Debra L. Hughson, Eric V. McDonald, and David M. Miller. University of Nevada Press: Reno and Las Vegas.

Romero-Alvarez, Manuel and Eduardo Zarza. 2007. Concentrating Solar Thermal Power. In, Frank Kreith and D. Yogi Goswami (eds.), Handbook of Energy Efficiency and Renewable Energy. CRC Press: Boca Raton, London, New York.

Posted in Solar Thermal | Tagged , , , | Leave a comment

The Scientific Consensus on Maintaining Humanity’s Life Support Systems in the 21st Century

May 21, 2013. the Scientific Consensus on Maintaining Humanity’s Life Support Systems in the 21st Century

In the one month since it was written, 520 global scientists have signed on to this statement. You can, too. There is more information, including ideas for solutions, at Stanford University’s Millenium Alliance for Humanity & the Biosphere website.

Earth is rapidly approaching a tipping point. Human impacts are causing alarming levels of harm to our planet. As scientists who study the interaction of people with the rest of the biosphere using a wide range of approaches, we agree that the evidence that humans are damaging their ecological life-support systems is overwhelming.We further agree that, based on the best scientific information available, human quality of life will suffer substantial degradation by the year 2050 if we continue on our current path.

Science unequivocally demonstrates the human impacts of key concern:

  • Climate disruption—more, faster climate change than since humans first became a species.
  • Extinctions—not since the dinosaurs went extinct have so many species and populations died out so fast, both on land and in the oceans.
  • Wholesale loss of diverse ecosystems—we have plowed, paved, or otherwise transformed more than 40% of Earth’s ice-free land, and no place on land or in the sea is free of our direct or indirect influences.
  • Pollution—environmental contaminants in the air, water and land are at record levels and increasing, seriously harming people and wildlife in unforeseen ways.
  • Human population growth and consumption patterns—seven billion people alive today will likely grow to 9.5 billion by 2050, and the pressures of heavy material consumption among the middle class and wealthy may well intensify.

By the time today’s children reach middle age, it is extremely likely that Earth’s life-support systems, critical for human prosperity and existence, will be irretrievably damaged by the magnitude, global extent, and combination of these human-caused environmental stressors, unless we take concrete, immediate actions to ensure a sustainable, high-quality future.

As members of the scientific community actively involved in assessing the biological and societal impacts of global change, we are sounding this alarm to the world. For humanity’s continued health and prosperity, we all—individuals, businesses, political leaders, religious leaders, scientists, and people in every walk of life—must work hard to solve these five global problems, starting today: 1. Climate Disruption 2. Extinctions 3. Loss of Ecosystem Diversity 4. Pollution 5. Human Population Growth and Resource Consumption.

The full statement has been signed by 520 global scientists from 44 countries. Those signatures were obtained within a month of completion of the statement, by direct email requests from the authors and their close colleagues to a targeted group of well-regarded global change scientists.   The signers include 2 Nobel Laureates, 33 members of the U.S. National Academy of Sciences,   42 members of the American Academy of Arts and Sciences, and several members of various European scientific academies.

Since about 1950, the world has been changing faster, and to a greater extent, than it has in the past 12,000 years. 

Changes, all interacting with each other, are leading humanity in dangerous directions: climate disruption, extinction of biodiversity, wholesale loss of vast ecosystems, pollution, and ever-increasing numbers of people competing for the planet’s resources. Until now, these have often been viewed as “necessary evils” for progress, or collateral damage that, while unfortunate, would not ultimately stand in the way of serving the needs of people. Several recent comprehensive reports by the scientific community, however, have now shown otherwise. Rather than simply being inconveniences, the accelerating trends of climate disruption, extinction, ecosystem loss, pollution, and human population growth in fact are threatening the life-support systems upon which we all depend for continuing the high quality of life that many people already enjoy and to which many others aspire.

The vast majority of scientists who study the interactions between people and the rest of the biosphere agree on a key conclusion: that the five interconnected dangerous trends listed above are having detrimental effects, and if continued, the already-apparent negative impacts on human quality of life will become much worse within a few decades. The multitude of sound scientific evidence to substantiate this has been summarized in many recent position papers and consensus statements (a few samples are listed on pp. 28-29), and documented in thousands of articles in the peer-reviewed scientific literature. However, the position papers and consensus statements typically focus only on a subset of the five key issues (for example, climate change, or biodiversity loss, or pollution), and access to the peer-reviewed literature is often difficult for non-scientists. As a result, policy makers faced with making critical decisions can find it cumbersome both to locate the pertinent information and to digest the thousands of pages through which it is distributed.

Here we provide a summary intended to Clearly voice the consensus of most scientists who study these issues that climate disruption, extinction, ecosystem loss, pollution, and population growth are serious threats to humanity’s well-being and societal stability; and these five major threats do not operate independently of each other.

People have basic needs for food, water, health, and a place to live, and additionally have to produce energy and other products from natural resources to maintain standards of living that each culture considers adequate. Fulfilling all of these needs for all people is not possible in the absence of a healthy, well-functioning global ecosystem. The “global ecosystem” is basically the complex ways that all life forms on Earth—including us—interact with each other and with their physical environment (water, soil, air, and so on). The total of all those myriad interactions compose the planet’s, and our, life support systems.


Humans have been an integral part of the global ecosystem since we first evolved; now we have become the dominant species in it. As such, we strongly influence how Earth’s life support systems work, in both positive and negative ways. A key challenge in the coming decades is to ensure that the negative influences do not outweigh the positive ones, which would make the world a worse place to live. Robust scientific evidence confirms that five interconnected negative trends of major concern have emerged over the past several decades:
• Disrupting the climate that we and other species depend upon.

• Triggering a mass extinction of biodiversity.

• Destroying diverse ecosystems in ways that damage our basic life support systems.

• Polluting our land, water, and air with harmful contaminants that undermine basic biological processes, impose severe health costs, and undermine our ability to deal with other problems.

• Increasing human population rapidly while relying on old patterns of production and consumption.

These five trends interact with and exacerbate each other, such that the total impact becomes worse than the simple sum of their parts. Ensuring a future for our children and grandchildren that is at least as desirable as the life we live now will require accepting that we have already inadvertently pushed the global ecosystem in dangerous directions, and that we have the knowledge and power to steer it back on course—if we act now. Waiting longer will only make it harder, if not impossible, to be successful, and will inflict substantial, escalating costs in both monetary terms and human suffering.

Background Information: Dangerous Trends in Our Life Support System

Biological extinctions cannot be reversed and therefore are a particularly destructive kind of global change. Even the most conservative analyses indicate that human-caused extinction of other species is now proceeding at rates that are 3-80 times faster than the extinction rate that prevailed before people were abundant on Earth28, and other estimates are much higher29-32. If the current rate of extinction is not slowed for species and their constituent populations, then within as little as three centuries the world would see the loss of 75% of vertebrate species (mammals, birds, reptiles, amphibians, and fish), as well as loss of many species of other kinds of animals and plants28. Earth has not seen that magnitude of extinction since an asteroid hit the planet 65 million years ago, killing the dinosaurs and many other species. Only five times in the 540 million years since complex life forms dominated Earth have mass extinctions occurred at the scale of what current extinction rates would produce; those mass extinctions killed an estimated 75%-96% of the species known to be living at the time. !

Currently, sound scientific criteria document that at least 23,000 species are threatened with extinction, including 22% of mammal species, 14% of birds, 29% of evaluated reptiles, as many as 43% of amphibians, 29% of evaluated fish, 26% of evaluated invertebrate animals, and 23% of plants33-35. Populations—groups of interacting individuals that are the building blocks of species—are dying off at an even faster rate than species. The extinction of local populations, in fact, represents the strongest pulse of contemporary biological extinction. For example, since 1970 some 30% of all vertebrate populations have died out36, and most species have experienced loss of connectivity between populations because of human-caused habitat fragmentation. Healthy species are composed of many, interconnected populations; rapid population loss, and loss of connectivity between populations, are thus early warning signs of eventual species extinction.

Ecosystem Transformation

As humans have become more abundant, we have transformed large parts of the Earth’s surface from their pre-human “natural” state into entirely different landscapes and seascapes58. Some of these transformations have been necessary to support basic human needs; others have been inadvertent and unanticipated$!! As of 2012, somewhat more than 41% of Earth’s ice-free lands (36% of total land surface) have been commandeered for farms, ranches, logging, cities, suburbs, roads, and other human constructs59-61. This equates to an average of a little less than 2 acres of transformed land for each person on Earth. Conversion for agriculture accounts for most of the landscape change, with crops covering about 12% and pastureland about 26% of ice-free land (the percentages are about 10% and 22%, respectively, for the proportion of all Earth’s land). Urban lands account for another 3%. On top of that are vast road networks that fragment habitats across some 50% of the entire land surface, dams that modify water flow in more than 60% of the world’s large rivers and in many smaller ones62, and continuing deforestation that has been proceeding at the rate of about 30,000 square kilometers (=11,000 square miles) per year for the past 16 years63. This per-year loss is roughly the equivalent of clear-cutting the entire country of Belgium or in the United States, the states of Massachusetts or Hawaii in one year.

Measuring the percentage of the oceans that have been transformed is much more challenging, but it is clear that pollution, trawling, and ship traffic and noise have caused major changes along most of the world’s coastlines64,65. For example, bottom trawling alone has been estimated to annually destroy an area of seabed equivalent to twice the area of the continental United States66. Human debris, particularly plastics, also is ubiquitous in ocean waters, even far offshore67. The human footprint extends even outside of the ecosystems that have been transformed wholesale by people. Nearly every terrestrial ecosystem in the world now integrates at least a few species that ultimately were introduced by human activities68-70, sometimes with devastating losses in ecosystem services71, and invasive species now number in the hundreds in most major marine ports72,73 and in the thousands on most continents70,74,75. All told, 83% of the entire land surface exhibits human impact defined as influenced by at least one of the following factors:
human population density greater than 1 person per square kilometer (=1 person per 0.4 square miles, or 247 acres); agricultural activity; built-up areas or settlements; being within 15 kilometers (9.3 miles) of a road or coastline; or nighttime light bright enough to be detected by satellites76,77. Adding in the effect of climate change, every place on Earth exhibits at least some human impact, even the most remote parts of the land and oceans78.



Posted in Scientists Warnings to Humanity | 2 Comments

Renewable incentives destabilize, harm electric grid

Wald, Matthew L.   7 Oct 2014. How Grid Efficiency Went South. New York times.


1) society would be better off if homeowners faced their rooftop solar panels westward, the peak time more energy is needed, but they won’t because they won’t make as much money as south-facing panels

2) coal, natural gas and especially nuclear plants keep the grid stable by selling energy around the clock.  wind and solar energy can flood the market with power and push down the prices received by coal, natural gas, and nuclear power plants (low ghg).  Nuclear power plants can’t stop running (unlike natural gas), and are going out of business because wind is incentivized – they get money for generating (too much) power, but nuclear isn’t rewarded for providing grid stability and contribution of low ghg emissions.

3) Natural gas plants can cycle up and down, so capitalists would say this is great, we’ll build even more natural gas plants.  But this brief time of fracked natural gas will go downhill fast once the peak is reached sometime between 2015 and 2020, since fracked gas wells decline 60% after the first year.  Natural gas truck fleets are far more valuable than electricity given the role trucks play in our society (When trucks stop, America Stops).

Excerpts from article:

Almost every rooftop solar panel in the United States faces south, the direction that will catch the maximum energy when the sun rises in the southeast and sets in the southwest.  This was probably a mistake.  The panels are pointed that way because under the rules that govern the electric grid, panel owners are paid by the amount of energy they make. But they are not making the most energy at the hours when it is most needed.  Solar panels thus illustrate how the rules add cost and reduce environmental effectiveness, critics say, because they are out of step with what the power grid actually needs from intermittent renewables like wind and sun, and from zero-carbon nuclear power.

With the existing price structure, “we incentivize maximum power generation,” said James Tong, the vice president for strategy and government affairs at Clean Power Finance, an investment firm. But in most parts of the country, there is plenty of electricity available from other sources in the morning and midday. Crunch time is late afternoon, when temperatures are higher and air-conditioners are working hard, and inefficient plants running on natural gas or even coal are cranked up to the maximum.

“The needs of the grid may mean that they should be pointed west,” more toward the setting sun, said Mr. Tong. That way, a bigger portion of their production would come at the hours when electricity was most needed. But their total production would be a bit lower, and that would hurt panel owners, at least under current rules.

The debate is over how to pay contributors to the grid so the system has an adequate amount of both energy and power, crucial to maintaining the stability of the system.

Solar panels and especially wind turbines produce vast amounts of energy, but on their own schedule, when the sun is shining or the wind is blowing. The more conventional installations — coal, natural gas and especially nuclear plants — earn their keep by selling energy around the clock. Put enough wind and solar units on the grid during the hours when they are running and they flood the market and push down the hourly auction price of a megawatt-hour of energy.

Sometimes the price goes to zero. Oddly, it can go even lower. When demand is very low in the middle of the night and the wind is blowing hard, there may be too much electricity on the system and grid operators will charge generators that want to add more. Nuclear plants cannot quickly modulate their output so they are, in effect, fined for production.

But wind farms still make money because they earn a tax credit for each kilowatt-hour they generate.

The problem is especially acute for nuclear reactors because their costs for fuel are roughly the same whether they are running or not. They are refueled on a fixed schedule, not when the uranium is used up. Their labor costs, mortgage costs and maintenance costs are roughly the same, too. But if the hourly price for energy is suppressed by wind and sun, suddenly the nuclear plants can’t make enough money to keep running.

Thus some have already closed and more are threatened, even though carbon dioxide limits are unlikely to be met without them.

Even relatively clean natural gas plants are hurt; they are generally on the margin, the first to shut when new solar comes on line.

“We’ve moved to a system focused on resources that provide energy when they want to.

A system that must compensate for rising and falling wind and solar generation makes the flexible plants, like those using natural gas, more valuable

The homeowner with panels on the roof may think he or she is disconnected from the system, when in fact the connection has become stronger, making the household a supplier as well as a consumer of energy, and a consumer of all the grid’s other functions, like capacity, transmission and distribution.


Posted in Alternative Energy, Natural Gas, Nuclear Power, Photovoltaic Solar | Comments Off

LNG overview

Liquefied natural gas is natural gas chilled down to -260 F which reduces its volume by about 600 times.

Back in 2004 the USA was about to import LNG because we appeared to be running low on natural gas here.  Fracking has “saved us” until 2015-2020 roughly, and with typical short-sighted thinking, we’re about to EXPORT natural gas. Doh!

To learn all the details, see the Wiki LNG, or the DOE 2005  Liquid Natural Gas. Understanding the Basic Facts.


Posted in LNG Liquified Natural Gas | Comments Off

Will Republican “Hate Talk” be the spark of violence in the future?

Will Republican “Hate Talk” be the spark of violence in the future?

by Alice Friedemann, Oct 9, 2014

As long as trucks keep delivering goods, enough food is grown and distributed, then even if times get a lot worse, I believe that the social fabric will fray but there won’t be chaos and massive social unrest.  As long as the 1 in 5 now, and 4 out of 5 in the future keep getting their food stamps, people will put up with a lot — already are.

But at some point down the oil production decline curve, there are likely to be sudden catastrophic breaks – war in the middle east, financial collapse, oil shocks, and so on.  This could lead to social unrest and violence.

I discussed earlier how it might unfold in “How will the violence play out in the USA?“, now I want to look at politics as another fault line.

Timothy Egan poked the Republicans for being a big source of our problems, in the October 9th, 2014 New York Times “Why do we re-elect them?”:

“Voters should consider exactly what Republicans believe, and what they’ve promised to do. It ranges from howl-at-the-moon crazy talk and half-truths to policies that will keep wages down and kill job growth. Let’s start with the Republican Ryan Zinke, a square-jawed former member of the Navy SEALs who is likely to be the next congressman from Montana. Earlier this year, he said, “We need to focus on the real enemy” — that is, the anti-Christ. And who should that be? Why, Hillary Clinton. O.K., he’s just one talk-radio spawn from the Big Sky state. Lock the man up in a room with Ayn Rand novels. But Mr. Zinke is not a lone loon. More than 1 in 5 Republicans last year told a pollster they believed that President Obama was the anti-Christ. It’s harmless hyperbole, you say. The 114th Congress will not take up the matter of what to do with the Beast at the end times. But they will hold crucial votes on whether one of the world’s largest users of energy — us — can curb carbon emissions enough to mitigate climate change. Here Mr. Zinke is practically a lefty in his party. He says climate change is not a hoax, which puts him at odds with 58 percent of Republicans who believe that it is. But then, he says that the matter is not “settled science.” Oy vey. One more time: 97% of climate scientists agree that warming over the last century is very likely because of human activity. It is settled, except in the science-denial party. Only 3% of Republicans in Congress have been willing to go on record to accept that consensus. Good thing gravity is not under discussion.  There is one more deep-held red state belief that could explain our national cognitive dissonance. Two-thirds of Republicans think people can be possessed by demons. We don’t need a new Congress. We need an exorcist”.

But Egan’s digs don’t begin to get at the heart of the matter. The genocide of the Tutsi’s in Rwanda arose from Hutu “Hate Talk” radio that exhorted Hutus to kill Tutsi’s.  The “Hutu Ten Commandments” called for the supremacy of Hutus in Rwanda, exclusive Hutu leadership over Rwanda’s public institutions and public life, complete segregation of Hutus from Tutsis, and complete exclusion of Tutsis from public institutions and public life.  The Commandments declared that any form of relationship between Hutus and Tutsi women was forbidden; and that any Hutu who “marries a Tutsi woman”, “befriends a Tutsi woman”, or “employs a Tutsi woman as a secretary or a concubine” was a “traitor” to the Hutu people. It denounced Tutsis as “dishonest” in business whose “only aim is the supremacy of his ethnic group”; and declared that any Hutu who did business with a Tutsi was a traitor to the Hutu people. The Commandments declared that “The Hutu should stop having mercy on the Tutsi” and referred to the Tutsis as “common Tutsi enemy” [wiki “Hutu Power”.
“The radio encouraged people to participate (in mass genocide) because it said ‘the enemy is the Tutsi’. If the radio had not declared things, people would not have gone into the attacks.”   —Rwandan Genocide perpetrator, interviewed by Straus (2007) from Propaganda and Confict: Theory and Evidence from the Rwandan Genocide by David Yanagizawa-Drott, Harvard University, August 2012

Republican’s aren’t calling on dittoheads to shoot liberals (yet)

When I started writing this I thought a comparison of right-wing Republicans and Hutu’s was going way too far.  But to my horror, it wasn’t.  I am sickened, repulsed, dismayed by what I discovered in just an hour of internet research.

I know many Republicans don’t subscribe to this nonsense, but they aren’t speaking out, there’s little national outrage or backlash from middle-of-the-road Republicans.  William F. Buckley successfully held off the wing-nuts a long time — he denounced Ayn Rand, the John Birch Society, George Wallace, racists, white supremacists (starting in the 1960s), and anti-Semites.  Where are the Republicans trying to keep this from getting out of hand now?

Bryan Fischer

Likely and declared GOP presidential candidates are lining up to win the approval of Bryan Fischer, a radio talk show host and spokesman for the American Family Association. His entire career is based on leveling venomous attacks against gays and lesbians, American Muslims, Native Americans, progressives and other individuals and groups he detests. He wants to redefine the Constitution to protect only Christians, persecute and deport all American Muslims, prohibit gays and non-Christians from holding public office and impose a system of biblical law.  While Fischer’s views are undeniably shocking, what is most disturbing is his growing influence within not only the Religious Right but also the Republican Party (People for the American Way).

Republican Ken Cuccinelli

Cuccinelli, Virginia gubernatorial candidate, compared the deportation of undocumented immigrants to pest control [FYI, the Hutus called the Tutsi’s cockroaches].

Michele Bachmann

At a campaign stop in New Hampshire during her presidential bid, Bachmann alleged that the administration was “aiding and abetting” an Islamist plot to take over America and the rest of the world, calling on people to read about the Islamic “belief system” and find out “what they truly believe” just like how “the most important thing a person could do in World War II during that conflict was to read the book that the leader of Germany wrote.”

Rick Santorum 

After losing his 2012 presidential bid, former Pennsylvania senator Rick Santorum became a Christian film producer, and he recently unveiled a new movie called “One Generation Away: The Erosion of Religious Liberty.” Santorum’s latest film depicts the U.S. in a dire state eerily similar to Nazi Germany, warning that America’s transformation into a tyrannical, Nazi state will be complete thanks to the silence of conservative Christians. You can get some of the flavor of the film from its trailer, which includes footage of Germany in the 1930s. While campaigning against for president, Santorum also told a church gathering that people should get involved in his bid to defeat Obama just as the Greatest Generation fought the spread of Nazism.

Glenn Beck

Beck is more hateful and crazy than the Hutu’s!  Below is an excerpt from People for the American Way:

Radio and TV personality Glenn Beck plays a unique and extraordinary role in our political discourse, and an increasingly messianic figure who claims that he has been divinely anointed to lead the nation back to God.  Central to Beck’s influence is the intensity of his fans’ devotion to him.  And central to the danger he poses is his willingness to stoke fear, anger, and hatred among those fans with a toxic, if lucrative, mixture of conspiracy theories and charges that America is on the verge of being destroyed by enemies from within.  In Beck’s world, those enemies include not only President Obama and Democratic congressional leaders, but also progressive advocacy organizations, unions, and even churches that promote social justice as a part of their religious mission.  What Beck preaches is that these are not merely political opponents with policy disagreements, but agents of evil whose goal is the destruction of America and who will stop at nothing – including the deaths of millions – to advance their freedom-destroying plans. Beck has also raised the stakes by claiming a divine mandate for his view of the Constitution and the U.S. government.  He has not only attacked President Obama’s politics, but has called the president’s views on the nature of salvation “evil” and “satanic.”  Beck and David Barton, the Religious Right pseudo-historian he promotes, claim that their views of limited government and the Constitution are divinely inspired. So progressives are not only un-American, they are un-Christian and anti-God.

“If we do not put God at the center of our own personal lives and the center of our country, we will not survive,” Beck said in August. “The country will be washed with blood and then someone will have to start over, and God only knows how long that takes.”

Beck’s propaganda traffics in alarmism, paranoia, racial resentment, and anti-Semitic conspiracy theories.  These would make for a combustible mix at any time.  But it’s an even more dangerous combination during a time of widespread economic hardship, when so many people are hurting and increasingly desperate.  While backing politicians who don’t believe the government has a role in addressing that pain, Beck offers explanations that can deepen the desperation.

“Times of threat bring increased aggression,” 21-year CIA veteran Jerrold Post told Politico last fall.  “And the whole country’s under threat now, with the economic difficulties and political polarization.  The need to have someone to blame is really strong in human psychology. And once you have someone to blame, especially when there’s a call to action, some see it as a time for heroic action.”

For some troubled Beck fans, that “heroic action” has meant taking up arms against the nation’s “enemies” as Beck has defined them.

Beck has suggested that the Obama administration is looking for a “Reichstag moment” that it would use to seize military power and put an end to democracy.  But that’s not the worst charge: Beck has said that the progressives – or, in his mind, communist revolutionaries – in the administration are willing to pursue their goals with genocidal violence resulting in millions of deaths.  “The revolution of 1776 was a picnic compared to what the revolutionaries of today would like to do,” he charged, “It’s not a lot of fun. Usually millions of people die.” Here’s more: “Great and powerful evil is on our doorstep…it is starting all over again…it shows you how close we came to falling into the same kind of trap that Europe did, that led to 70 million dead in China, led to 40 million dead with Stalin, 10 million dead by Hitler. We were this close. The progressive movement, it’s the same thing, we know better than you, we’re smarter than you…it’s not about freedom, don’t let them lie to you, it’s not about democracy, it is about control.”

On his June 10 show, Beck warned that “anarchists, Marxists, communists, revolutionaries, Maoists” have to “eliminate 10 percent of the U.S. population” in order to “gain control.” They couldn’t achieve such a goal when Richard Nixon was president, Beck stated, because “the family was together” and the government under Nixon “wasn’t as corrupt as it is now.” Beck added: “Now they can. Now they can.”
On a smaller scale, when speaking to a woman who called in fearful that the Obama administration will want to kill her because she’s going on disability, Beck agreed that they would.

Beck frequently charges that the left is planning to provoke violence in America to achieve its aims.  As Washington Post reporter Dana Milbank put it, “Beck has at times spoken against violence, but he more often forecasts it.”  Beck has said that progressives support “armed insurrection,” and that President Obama is “poking and prodding” the Tea Party to violence.

  • “I believe these are the most dangerous two years of our republic. Because in the end, in revolutions, the real dangerous killers show up when things start to fall apart. When the nudge moves to shove, and the shove doesn’t work, the killers show up. It happens every time. That’s why we must be united for peace, we must be united with love, we must be united with God.” [The Glenn Beck Program, 9/27/10]
  • “Violence will come. And violence will come from the left. Violence is part of the plan. Not mine, not yours.” [The Glenn Beck Program, 9/13/10]

Beck has repeatedly suggested that the biggest targets of his criticism – President Obama and philanthropist George Soros – may be planning to have him killed.  Last year he said, “[Y]ou can shoot me in the head … but there will be 10 others that line up.” Beck claimed that “the most powerful people on the planet on the left” were “not going to go away easy” because “[t]his game is for keeps. This is who controls the United States of America and its destiny.” He asked his listeners to “please keep me in your prayers, keep my staff in your prayers, for safety, for wisdom,” adding, “Just pray for protection, please.” [The Glenn Beck Program, 9/8/09]

Back in March, it was the Obama administration: “For those of you in the administration, who are coming after me … remember, you’ve broken three [of the 10 Commandments], let’s not make it four; thou shalt not kill.” [Glenn Beck, 3/23/10]

As inflammatory as all Beck’s previous charges have been, perhaps his most violence-inciting charge is that Obama and his allies are actually seeking the destruction of the Constitution and the United States itself.  In one show he portrayed the president pouring gasoline on the American people and lighting it on fire, and warned that Obama was “closing Gitmo and letting the terrorists onto the streets.” In May he suggested that Obama is “trying to destroy the country” and is pushing America toward civil war.  [The Glenn Beck Program, 5/19/10]

Okay – I can’t take it anymore, this story goes on and on and on with even more hate talk.  His books are bestsellers at still.

Rush Limbaugh

Limbaugh’s 3 hour radio program is heard 5 days a week by millions of people.

Richard Myers, at has similar worries to mine. In his Oct 07, 2012 post “How Rush Limbaugh gets away with fomenting violence and hate against liberals; the poor; minorities” he writes:

“There’s significant reason to be concerned. A blogger activist who goes by the nick of Spocko has offered the alarming example of 3 Rwandan radio personalities who were convicted of genocide for inciting the murder of about 800,000 Rwandan citizens. Free speech is fine, but hate speech can have very serious consequences. Now consider this: the 3 Rwandans had one radio station with two transmitters. Rush has more than six hundred radio stations.

Does Limbaugh foment violence? Yes, without question — but conditionally, and via dog whistle. Just last week Limbaugh asserted, “I have to say, though, folks, terrorism is the greatest threat, because we can still defeat liberals without violence. So terrorism still, of course, represents a greater threat than the Democrat Party. We can handle them without violence. So far.”  [emphasis added] Trick Question on Terrorists and Liberals, October 3, 2012

This contemptible language not only dog-whistles the need to be prepared to conduct a civil war against liberals when and if it becomes “necessary”, it simultaneously equates liberals with terrorists.

Random Limbaugh quotes found on internet searches:

“From this day forward, somebody propose it, liberals should not be allowed to buy guns. It’s just that simple. Liberals should have their speech controlled and not be allowed to buy guns. I mean if we want to get serious about this, if we want to face this head on, we’re gonna have to openly admit, liberals should not be allowed to buy guns, nor should they be allowed to use computer keyboards or typewriters, word processors or e-mails, and they should have their speech controlled. If we did those three or four things, I can’t tell you what a sane, calm, civil, fun-loving society we would have. Take guns out of the possession, out of the hands of liberals, take their typewriters and their keyboards away from ‘em, don’t let ‘em anywhere near a gun, and control their speech. You would wipe out 90% of the crime, 85 to 95% of the hate, and a hundred percent of the lies from society.”
~Rush Limbaugh, The Rush Limbaugh Show, January 2011

“Obama is a clown. You don’t have to be a scientist to know that the President doesn’t know what he’s talking about when he says fossil fuels are the energy of the past. We have more oil than we need. We’ll never run out of it. It’s all we’ve got.”
~Rush Limbaugh, saying the world has unlimited oil despite what geologists and other scientists say, March 8, 2011

Limbaugh must have gotten tired of liberals accusing him of hate talk, so he retailed with “Examples of Obama hate Speech” that proves the opposite of what he’s saying and makes Rush look like an idiot.

Ann Coulter  Quotes from wiki

When contemplating college liberals, you really regret once again that John Walker is not getting the death penalty. We need to execute people like John Walker in order to physically intimidate liberals, by making them realize that they can be killed, too. Otherwise, they will turn out to be outright traitors. Remarks at the Conservative Political Action Conference (25 February 2002)

God gave us the earth. We have dominion over the plants, the animals, the trees. God said, “Earth is yours. Take it. Rape it. It’s yours.” Making references to Dominionism and Genesis 1:28, on Hannity & Colmes (20 June 2001)

Airports scrupulously apply the same laughably ineffective airport harassment to Suzy Chapstick as to Muslim hijackers. It is preposterous to assume every passenger is a potential crazed homicidal maniac. We know who the homicidal maniacs are. They are the ones cheering and dancing right now.  We should invade their countries, kill their leaders and convert them to Christianity. We weren’t punctilious about locating and punishing only Hitler and his top officers. We carpet-bombed German cities; we killed civilians. That’s war. And this is war. This is war“, Townhall, 12 September 2001

From Slander : Liberal Lies About the American Right (2002)

Liberals hate America, they hate flag-wavers, they hate abortion opponents, they hate all religions except Islam, post 9/11. Even Islamic terrorists don’t hate America like liberals do.

Treason : Liberal Treachery from the Cold War to the War on Terrorism (2003)

  • The portrayal of Senator Joe McCarthy as a wild-eyed demagogue destroying innocent lives is sheer liberal hobgoblinism. Liberals weren’t cowering in fear during the McCarthy era. They were systematically undermining the nation’s ability to defend itself while waging a bellicose campaign of lies to blacken McCarthy’s name. Everything you think you know about McCarthy is a hegemonic lie. Liberals denounced McCarthy because they were afraid of getting caught, so they fought back like animals to hide their own collaboration with a regime as evil as the Nazis.
  • “McCarthyism” means pointing out positions taken by liberals that are unpopular with the American people. As former President Bush said, “Liberals do not like me talking about liberals.” The reason they sob about the dark night of fascism under McCarthy is to prevent Americans from ever noticing that liberals consistently attack their own country.
  • Liberals have a preternatural gift for striking a position on the side of treason

The Democrats complain about the Republican base being nuts … The nuts are their entire party … They’re always accusing us of repressing their speech. I say let’s do it. Let’s repress them. … Frankly, I’m not a big fan of the First Amendment. Comments at the University of Florida (21 October 2005), as quoted in “Coulter courts Gainesville” by Jessica Riffel, in The Alligator (21 October 2005)


I think the government should be spying on all Arabs, engaging in torture as a televised spectator sport, dropping daisy cutters wantonly throughout the Middle East and sending liberals to Guantanamo. Live and let spy“, Townhall, 23 December 2005

In 1960, whites were 90% of the country. The Census Bureau recently estimated that whites already account for less than two-thirds of the population and will be a minority by 2050.  One may assume the new majority will not be such compassionate overlords as the white majority has been. If this sort of drastic change were legally imposed on any group other than white Americans, it would be called genocide. Yet whites are called racists merely for mentioning the fact that current immigration law is intentionally designed to reduce their percentage in the population. “Bush’s America : Roach Motel” (6 June 2007)

Tony Perkins

President of the Family Research Council, chief sponsor of the Values Voter Summit. Now a widely recognized spokesman for social conservative causes, Perkins served two terms as a Republican legislator in the Louisiana House of Representatives before launching a failed bid for the U.S. Senate in 2002. Perkins has: Praised a Uganda bill that would have condemned gays and lesbians to death as an effort to “uphold moral conduct that protects others and in particular the most vulnerable.” Warned that LGBT rights advocates will launch a holocaust against Christians, placing those that oppose same-sex marriage into “ boxcars.” (People for the American Way).


This is more depressing than Peak Oil and Climate Change.  I can’t go on, there is endless material on the internet about Republican hate Talk.  The right-wing attempts to counter with “liberal hate talk” are hilarious and pathetic.

I still can’t figure out how the tremendous gun ownership of Americans will play out, but it looks like Republicans have more guns – anywhere from 41 to 56%, and Democrats from 23 to 31%:   2006 gallup poll: 41% percent of Republicans personally own a gun, compared with 27% of independents and 23% of Democrats.  2010 General Social Survey, said gun ownership among adults that identified as Democrats had fallen to 22%. It remained at about 50% among Republican adults. The blog fivethirtyeight reports that the 2008 exit poll asked voters if there was a gun in their house and the results were 56% of republicans and 31% of democrats had one.

I am not a Republican, obviously, but I wouldn’t say I’m a democrat either – both parties – all parties as far as I know, ignore biophysical realities.  Scientific issues are not on their platforms usually, and certainly aren’t the main issues, so the decay of infrastructure, overpopulation, and so on are ignored.  Politics causes people to filter reality by labeling ideas as liberal or conservative rather than looking to science for guidance.  Politics totally ignores most of the issues on my website — the real issues that truly matter for a reasonable future of the remaining species on the planet.


Posted in Violence, Who is to Blame? | 1 Comment

Wall Street Journal Gets it Wrong on “why peak oil predictions haven’t come true”

WSJ Gets it Wrong on “Why Peak Oil Predictions Haven’t Come True”

On Monday, September 29, the Wall Street Journal (WSJ) published a story called “Why Peak Oil Predictions Haven’t Come True.” The story is written as if there are only two possible outcomes:

  1. The Peak Oil version of what to expect from oil limits is correct, or
  2. Diminishing Returns can and are being put off by technological progress–the view of the WSJ.

It seems to me, though, that a third outcome is not only possible, but is what is actually happening.

3. Diminishing returns from oil limits are already beginning to hit, but the impacts and the expected shape of the down slope are quite different from those forecast by most Peak Oilers.

Area of Confusion

In many people’s way of thinking, the economy is separate from resources and the extraction of those resources. If we believe economists, the economy can grow indefinitely, with or without the use of resources. Clearly, with this view, the price of these resources doesn’t matter very much. If one kind of resource becomes more expensive, we can substitute other resources, once the scarce resource becomes sufficiently high-priced that the alternative makes financial sense. Incomes can rise arbitrarily high–all it takes is for each of us to pay the other higher wages. And we can fix any problem with the financial system with more money printing and more debt.

This wrong version of how our economy works has been handed down through the academic world, through our system of peer review, with each academic researcher following in the tracks of previous academic researchers. As long as new researchers follow the same wrong thinking as previous researchers, their articles will be published. Economists were especially involved in putting together this wrong world-view, but politicians helped as well. They liked the outcomes of the models the economists produced, since it made it look like the politicians, with the help of economists, were all-powerful. All the politicians needed to do was tweak the financial system, and the world economy would grow forever. There was not even a need for resources!

Peak Oilers’ Involvement 

The Peak Oilers walked into a situation with this wrong world view, and started trying to fix pieces of it. One piece that was clearly wrong as the relationship between resources and the economy.  Resources, especially energy resources, are needed to make any of the goods and services we buy. If those resources started reaching diminishing returns, it would be harder for the economy to grow. The economy might even shrink. Dr. Charles Hall, recently retired professor from SUNY-ESF, came up with one measure of diminishing returns–falling Energy Returned on Energy Invested (EROEI).

How would shrinkage occur? For this, Peak Oilers turned to the work of M. King Hubbert, who worked in an area of geology. He wrote about how supply of a resource might be expected to decline with diminishing returns.

Hubbert was not concerned about what effect diminishing returns would have on the economy–presumably because that was not his area of specialization. He avoided the issue by only modeling the special case where no economic impact could be expected–the special case where a perfect substitute could be found and be put in place, in advance of the decline caused by diminishing returns.

Figure 1. Figure from Hubbert's 1956 paper, Nuclear Energy and the Fossil Fuels.

In the example shown above, Hubbert assumes cheap nuclear would take over, before the decline in fossil fuels started. Hubbert even talked about making cheap liquid fuels using the very abundant nuclear resources, so that the system could continue as before.

In this special case, Hubbert suggested that the decline in resources might follow a symmetric curve, slowly declining in a pattern similar to its original rise in consumption, since this is the pattern that often occurs in extracting a resource in nature. Many Peak Oilers seem to believe that this pattern will happen in the more general case, where no perfect substitute is available, as well. A perfect substitute would need to be cheap, abundant, and involve essentially no cost of transition.

In the special case Hubbert modeled, Hubbert indicated that production would start to decline when approximately 50% of reserves had been exhausted. Peak Oilers often used this approach to forecast future production, and the date oil production would “peak.” As technology improved, additional oil became accessible, raising reserves. Also, as prices rose, resources that had never been economically extractible became extractible. Production continued beyond forecast peak dates, again and again.

Peak Oilers got at least part of the story right–the fact that we are in fact reaching diminishing returns with respect to oil. For this they should be commended. What they didn’t figure out is, however, is (1) how the energy-economy system really works, and (2) which pieces of the system can be expected to break first. This issue is not really the Peak Oilers fault–it is the result of starting with a very bad model of the economy and not understanding which pieces of that model needed to be fixed.

How the Economic System Really Works 

We are dealing with a networked economy, one that is self-organized over time. I would represent it as a hollow network, built up of businesses, consumers, and governments.

Figure 2. Dome constructed using Leonardo Sticks

This economic system uses energy of various kinds plus resources of many kinds to make goods and services. There are many parts to the system, including laws, taxes, and international trade. The system gradually changes and expands, with new laws replacing old ones, new customers replacing old ones, and new products replacing old ones. Growth in the number of consumers tends to lead to a need for more goods and services of all kinds.

An important part of the economy is the financial system. It connects one part of the system with another and almost magically signals when shortages are occurring, so that more of a missing product can be made, or substitutes can be developed.

Debt is part of the system as well. With increasing debt, it is possible to make use of profits that will be earned in the future, or income that will be earned in the future, to fund current investments (such as factories) and current purchases (such as cars, homes, and advanced education). This approach works fine if an economy is growing sufficiently. The additional demand created through the use of debt tends to raise the prices of commodities like oil, metals, and water, giving an economic incentive for companies to extract these items and use them in products they make.

The economy really can’t shrink to any significant extent, for several reasons:

  1. With rising population, there is a need for more goods and services. There is also a need for more jobs. A growing networked economy provides increasing numbers of both jobs and goods and services. A shrinking economy leads to lay-offs and fewer goods and services produced. It looks like recession.
  2. The networked economy automatically deletes obsolete products and re-optimizes to produce the goods needed now. For example, buggy whip manufacturers are pretty rare today. Thus, we can’t quickly go back to using horse and buggy, even if should we want to, if oil becomes scarce. There aren’t enough horses and buggies, and there aren’t enough services for cleaning up horse manure.
  3. The use of debt for financing depends on ever-rising future output. If the economy does shrink, or even stops growing as quickly as in the past, there tends to be a problem with debt defaults.
  4. If debt does start shrinking, prices of commodities like oil, gold, and even food tend to drop (similar to the situation we are seeing now). These lower prices discourage  investment in creating these commodities. Ultimately, they lead to lower production and job layoffs. If deflation occurs, debt can become very difficult to repay.

Under what conditions can the economy grow? Clearly adding more people to the economy adds to growth. This can be done by adding more babies who live to maturity. It can also be done by globalization–adding groups of people who had previously only made goods and services for each other in limited quantity. As these groups get connected to the wider economy, their older, simpler ways of doing things tend to be replaced by more productive activities (involving more technology and more use of energy) and greater international trade. Of course, at some point, the number of new people who can be connected to the global economy gets to be pretty small. Growth in the world economy lessens, simply because of lessened ability to add “underdeveloped” countries to the networked economy.

Besides adding more people, it is also possible to make individual citizens “better off” by making workers more efficient at producing goods and services. Most people think of greater productivity as happening through technological changes, but to me, it really represents a combination of technological changes, plus a combination of inexpensive resources of various kinds. This combination often includes low-cost fossil fuels; abundant, cheap water supply; fertile soil; and easy to extract metal ores. Having these available makes possible the development of new tools (like new agricultural equipment, sewing machines, and vehicles), so that workers can become more productive.

Diminishing returns are what tend to “mess up” this per capita growth. With diminishing returns, fossil fuels become more expensive to extract. Water often needs to be obtained by desalination, or by much deeper wells. Soil needs more amendments, to be as fertile as in the past. Metal ores contain less and less ore, so more extraneous material needs to be extracted with the metal, and separated out. If population grows as well, there is a need for more agricultural output per acre, leading to a need for more technologically advanced techniques. Working around diminishing returns tends to make many kinds of goods and services more expensive, relative to wages.

Rising commodity prices would not be a problem, if wages would rise at the same time as the price of goods and services. The problem, though, is that in some sense diminishing returns makes workers less efficient. This happens because of the need to work around problems (such as digging deeper wells and removing more extraneous material from ores). For many years, technological changes may offset the effects of diminishing returns, but at some point, technological gains can no longer keep up. When this happens, instead of wages rising, they tend to stagnate, or even decline. Figure 3 shows that per capita wages have tended to grow in the United States when oil was below about $40 or $50 barrel, but have tended to stagnate when prices are above that level.

Figure 3. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

What Effects Should We Be Expecting from Diminishing Returns With Respect to Oil Supply?

There are several expected effects of diminishing returns:

  1. Rising cost of extraction for oil and for other commodities subject to diminishing returns.
  2. Stagnating or falling wages of all except the most elite workers.
  3. Ultra low interest rates to try to make goods more affordable for workers stressed by stagnating wages and high prices.
  4. Rising governmental debt, in an attempt to stimulate the economy and in order to provide programs for the many workers without good-paying jobs.
  5. Increasing concern about debt defaults, as the amount of debt outstanding becomes increasingly absurd relative to wages of workers, and as all of the stimulus debt runs its course, in countries such as China.
  6. A two-way problem with the price of oil. On one side is recession, when oil prices rise to unaffordable levels. Economist James Hamilton has shown that 10 out of 11 post-World War II recession were associated with oil price spikes. He has also shown that there is good reason to expect that the Great Recession was related to the run-up in oil prices prior to 2007. I have written a related paper–Oil Supply Limits and the Continuing Financial Crisis.
  7. The second problem with the price of oil is the reverse–price of oil too low relative to the cost of extraction, because wages are not high enough to permit workers to afford the full cost of goods made with high-priced oil. This is really a problem with inadequate affordability (called inadequate demand by economists).
  8. Eventual collapse of whole system.

There have been many studies of collapses of past economies. These collapses tended to occur when the economies hit diminishing returns after a long period of growth. The problems were often similar to ones we are seeing today: stagnating wages of common workers and growing debt. There were more and more demands on governments to fix the problems of workers, but governments found it increasingly difficult to collect enough taxes for all the needed programs.

Eventually, the economic systems have tended to collapse, over a period of years. The shape of resource use in collapses was definitely not symmetric. Figure 4 shows my view of the typical shape of the collapses in non-fossil fuel economies, based on the work of Peter Turchin and Surgey Nefedof.

Figure 4. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.

In my view, the date of the drop in oil supply will be determined by what appear to on-lookers to be financial problems. One possible cause is that the oil price will be too low for producers (a condition that is occurring now). Governments will find it unpopular to raise oil prices, but at the same time, will be powerless to stop the adverse impacts the fall in price has on world oil supply.

Falling oil prices have especially adverse effects on oil exporters, because they depend on revenues from oil to fund their programs. We are already seeing this now, with the increased warfare in the Middle East, Russia’s increased belligerence, and the problems of Venezuela. These issues will tend to reduce globalization, leading to less world growth, and a greater tendency for the world economy to shrink.

Unfortunately, there are no obvious ways of fixing our problems. High-priced substitutes for oil (that is, substitutes costing more than $40 or $50 barrel) are likely to have as adverse an impact on the economy as high-priced oil. The idea that energy prices can rise and the economy can adapt to them is based on wishful thinking.

Our networked economy cannot shrink; it tends to break instead.

Even well-intentioned attempts to reduce oil usage are likely to backfire because they tend to reduce oil prices and have other unintended effects. Furthermore, a use of oil that one person would consider frivolous (such as a vacation in Greece) represents a needed job to another person.

Should Peak Oilers Be Blamed for Missing the “Real” Oil Limits Story?

No! Peak oilers have made an important contribution, in calling the general problem of diminishing returns in oil supply to our attention. One of their big difficulties was that they started out working with a story of the economy that was very distorted. They understood how to fix parts of the story, but fixing the whole story was beyond their ability. The following chart shows a summary of some ways their views and my views differ:

Figure 5. Author's summary of some differences in views.

One of the areas that Peak Oilers tended to miss was the fact that an oil substitute needs to be a perfect substitute–that is, be available in huge quantity, cheaply, without major substitution costs–in order not to adversely affect the economy and in order to permit the slow decline rate suggested by Hubbert’s models. Otherwise, the problems with diminishing returns remain, leading to declining wages and rising costs of making goods and services.

One temptation for Peak Oilers has been to jump on the academic bandwagon, looking for substitutes for oil. As long as Peak Oilers don’t make too many demands on substitutes–only EROEI comparisons–wind and solar PV look like they have promise.

But once a person realizes that our true need is to keep a networked economy growing, it becomes clear that such “solutions” are woefully inadequate.

We need a way of overcoming diminishing returns to keep the whole system operating. In other words, we need a way to make wages rise and the price of finished goods fall relative to wages; there is no chance that wind and solar PV are going to do this for us.

We have a much more basic problem than “new renewables” can solve.

If we can’t figure out a solution, our economy is likely to reach what looks like financial collapse in the near term. Of course, the real reason is diminishing returns from oil, and from other resources as well.

Posted in Gail Tverberg | Comments Off

Almost half of Rail Freight is Energy, increasingly Crude Oil

RR crude oil carriedSource: American Association of Railroads.

46% of all tonnage hauled by freight trains is Energy:

In 2014, crude oil will likely be 650,000 carloads — 2% of all carloads, 2.2% of tonnage.  In addition 2.6% of rail tonnage was refined petroleum & coke.

In 2013, coal was 5,950,000 carloads of coal (693.8 million tons), 20.6% of all carloads, 39.5% of rail tonnage, 20% of rail revenue.

In 2012, ethanol was 306,000 carloads, 1% of all carloads, 1.5% of rail tonnage 

It’s probably more than half if you count commodities derived from petroleum.  In 2002, the last time the U.S. Dept of Transportation (RITA) published “Table 12 – U.S. Rail Total Carload and Intermodal Commodity Shipments”, 2% of rail tonnage was fertilizer, 2% plastics and rubber, and some fraction of the 1% chemical products tonnage comes from the petrochemical industry (i.e. agrochemicals, methanol, etc).  In 2002, 47% of rail tonnage was coal, coal and petroleum products, fuel oils, gasoline and aviation turbine fuel, and crude petroleum.

Alice Friedemann October 8, 2014.

Nixon, R. Oct 8, 2014. As Trains Move Oil Bonanza, Delays Mount for Other Goods and Passengers. New York Times.

An energy boom that has created a sharp increase in rail freight traffic nationwide is causing major delays for vital consumer and industrial goods, including chemicals,  coal, and grain shipments for farmers, likely to grow worse since record harvests of corn, soybeans, and wheat are expected this year.

On the long-distance routes, aging tracks and a shortage of train cars, locomotives and crews have also caused delays.

Rail accounts for 40% of all goods moved in the country as measured in ton-miles (multiply cargo weight by distance shipped). Trucks are second at 28%.

Frittelli, J., et al. May 5, 2014. U.S. Rail Transportation of Crude Oil: Background and Issues for Congress. Congressoinal Research Service.

According to rail industry officials, U.S. freight railroads are estimated to have carried 434,000 carloads of crude oil in 2013 (roughly equivalent to 300 million barrels), compared to 9,500 carloads in 2008. In 2014, 650,000 carloads of crude oil are expected to be carried. Crude imports by rail from Canada have increased more than 20-fold since 2011.

The Assoc of American RR says that “crude oil accounted for 1.6 percent of total Class I originated carloads in the first half of 2014.

Assuming, for simplicity, that each rail tank car holds about 30,000 gallons (714 barrels) of crude oil, the 229,798 carloads of crude oil originated by U.S. Class I railroads in the first half of 2014 was equivalent to 900,000 barrels per day moving by rail. According to EIA data, total U.S. domestic crude oil production in the first half of 2014 was 8.2 million barrels per day, so the rail share was around 11 percent of the total.”

The volume of crude oil carried by rail increased 423% between 2011 and 2012, and the volume moving by barge, on inland waterways as well as along intracoastal routes, increased by 53%. The volume of crude oil shipped by truck rose 38% between 2011 and 2012.

Rail transportation cost is perhaps $5 to $10 per barrel higher than pipeline costs.

Given the uncertainty about the future value of the oil and the longevity of the deposits, it is not certain that investors will undertake construction of pipelines from the Bakken fields to the East Coast. In that case, large volumes of crude could be transported by rail well into the future.

Rail has also been critical to development of Canadian oil sands. Although the vast majority of crude oil imports from Canada are delivered via existing pipeline, imports by rail are estimated to have increased from 1.6 million barrels in 2011 to 40 million barrels in 2013.

A significant fall-off in railroad coal movements has increased railroads’ capacity to transport oil over some routes. In 2013, railroads carried about 395,000 more tank cars of crude than in 2005, but about 1.3 million fewer cars of coal. To put the increase in crude traffic in perspective, crude oil represented less than 1% of total rail carloads in 2012. In the first three quarters of 2013, crude carloads increased to 1.4% of total rail car loadings. While, on a national scale, increased rail car loadings of crude oil represent a relatively small percentage of total traffic, significant increases in traffic in a specific area can cause bottlenecks that can reverberate across the entire rail network.

The STB held a hearing in April 2014 to hear complaints from non-oil shippers concerning poor rail service in the upper Midwest due to oil traffic and the severe winter weather.   The STB ordered BNSF and CP railroads to report how they intended to ensure delivery of fertilizer to farmers in spring 2014. At the hearing, BNSF (the railroad most directly serving the Bakken region) noted that its car loadings in North Dakota had more than doubled from 2009 to 2013, and that in October 2013, crude oil and agricultural car loadings surged by more than it could manage.

One hindrance to the expansion of crude-by-rail has been the lack of tank cars and loading and unloading infrastructure. Much of this investment is being made by the oil industry or by rail equipment leasing companies, not railroads. As of April 2014, manufacturers had 50,000 crude oil tank cars on order, on top of an existing fleet of 43,000. (This is in addition to 30,000 tank cars that carry ethanol and 27,000 that carry other flammable liquids.

Tank trucks operating on U.S. roadways have been an important link in moving crude oil from domestic drilling sites to pipelines and rail terminals. A typical tank truck can hold 200 to 250 barrels of crude oil. Trucks readily serve the need for gathering product, as the hydraulic fracturing method of drilling employed in tight oil production involves multiple drilling sites in an area and the location of active wells is constantly in flux. A large volume of crude oil is being transported by truck between production areas and refineries in Texas because of the close proximity of the two.

While there are about 57,000 miles of crude oil pipeline in the United States, there are nearly 140,000 miles of railroad

The U.S. Dept of Transportation, Bureau of Transportation Statistics only goes up to 2009 in Table 1-61: Crude Oil and Petroleum Products Transported in the United States by Mode

2009 Combined crude and petroleum products by ton-mile, percent carried by:  Pipelines (70.2), ships and barges (23.1), trucks (4.2), railroads (2.6)

Pick Your Poison For Crude — Pipeline, Rail, Truck Or Boat
by James Conca   April 26, 2014  Forbes

In the U.S., 70% of crude oil and petroleum products are shipped by pipeline. 23% of oil shipments are on tankers and barges over water. Trucking only accounts for 4% of shipments, and rail for a mere 3%.

Amid a North American energy boom and a lack of pipeline capacity, crude oil shipping on rail is suddenly increasing. The trains are getting bigger and towing more and more tanker cars.

With the number of refineries decreasing, and capacity concentrating in fewer places, crude usually has to be moved some distance. There are 4 ways to move it over long distances: by pipeline, by boat, by truck, or by rail.

It’s cheaper and quicker to transport by pipeline than by rail or by truck. The difference in cost is about $50 billion a year for shipping via the Keystone pipeline versus rail.

A rail tank car carries about 30,000 gallons (÷ 42 gallons/barrel = about 700 barrels). A train of 100 cars carries about 3 million gallons (70,000 barrels) and takes over 3 days to travel from Alberta to the Gulf Coast, about a million gallons per day. The Keystone will carry about 35 million gallons per day (830,000 barrels).

The Congressional Research Service estimates that transporting crude oil by pipeline is cheaper than rail, about $5/barrel versus $10 to $15/barrel ( But rail is more flexible and has 140,000 miles of track in the United States compared to 57,000 miles of crude oil pipelines. Building rail terminals to handle loading and unloading is a lot cheaper, and less of a hassle, than building and permitting pipelines.

Rail. If crude oil shipping on rail is becoming a preferred mode for oil producers in our North American energy boom, this trend is very disturbing. In 2011, crude rail capacity between southern Alberta and the northern U.S. Great Plains tripled to about 300,000 barrels per day, about a third of the Keystone XL capacity. U.S. railroads delivered 7 million barrels of crude in 2008, 46 million in 2011, 163 million in 2012, and 262 million in 2013 (almost as much as that anticipated by the Keystone XL alone). To replace the Keystone XL with rail shipments would mean another doubling of rail capacity, but that would be just another couple of years given this trend.

The Association of American Railroads points out that over 11 billion gallons of crude were shipped in 2013.

Truck. The issue with trucking is that it takes lots and lots of trucks to move billions of gallons of crude since a single tank trailer only holds about 9,000 gallons or 200 barrels, a little under a third of a rail car. Our present fleet only handles 4% of our needs, so shipping by truck instead of the Keystone XL would take another 1.5 million tanker trucks.


Crude is a nasty material, very destructive when it spills into the environment, and very toxic when it contacts humans or animals. It’s not even useful for energy, or anything else, until it’s chemically processed, or refined, into suitable products like naphtha, gasoline, heating oil, kerosene, asphaltics, mineral spirits, natural gas liquids, and a host of others.
U.S. Refinery Capacity by PADD (Petroleum Administration for Defense Districts) in 2012.

U.S. Refinery Capacity by PADD (Petroleum Administration for Defense Districts) in 2012. Source: Congressional Research Service; Energy Information Administration

Every crude oil has different properties, such as sulfur content (sweet to sour) or density (light to heavy), and requires a specific chemical processing facility to handle it (Permian Basin Oil&Gas). Different crudes produce different amounts and types of products, sometimes leading to a glut in one or more of them, like too much natural gas liquids that drops their price dramatically, or not enough heating oil that raises their price.

As an example, the second largest refinery in the United States, Marathon Oil’s GaryVille Louisiana facility, can handle over 520,000 barrels a day (bpd) of heavy sour crude from places like Mexico and Canada but can’t handle sweet domestic crude from New Mexico.

Thus the reason for the Keystone Pipeline or increased rail transport – to get heavy tar sand crude to refineries along the Gulf Coast than can handle it.

The last entirely new petroleum refinery in the United States opened in 1976 (Congressional Research Service). Since then, the number of refineries has steadily declined while refining capacity has concentrated in ever-larger facilities. 25% of U.S. capacity is found in only eleven refineries. Recently, Shell’s Baytown refinery in Texas, the largest in the nation, was expanded to 600,000 bpd. Most of the big refineries can handle heavy crude, but many smaller refineries can process only light to intermediate crude oil, most of which originates within the U.S.

33 states have refineries, and most refineries can handle tens-of-thousands to hundreds-of-thousands of barrels per day, but the largest capacity sits around the Gulf Coast and in California where the oil boom in America began. However, in the 1990s after production of sweet domestic crude had significantly declined from mid-century highs, the big companies like Exxon, Shell, CITCO and Valero spent billions upon billion of dollars to retool their refineries to handle foreign heavy crudes.

What is important to note, however, is that regardless of the long-hauling mode, most petroleum eventually gets onto a truck for the short moves.


Ship transport is possible along coastal waters and along large rivers and is the method that is used for almost all foreign imports except from Canada.


Posted in Oil & Gas, Pipeline, Railroads, Refining, Trucks | Tagged , , , , , , , , , , | Comments Off