Sharon Astyk on stages of Collapse

Posted on March 21, 2012 by

Astyk, Sharon. 19 Mar 2012. Commentary: Collapse? Really? ASPO Peak Oil Review.

1. People get really mad at their government.

This usually leads to some measure of civil unrest, and often changes of government, some of which are meaningful and some of which are not. Sometimes this is good, sometimes this is bad — it also, as we know, can lead to the government or others scapegoating someone or other, which is really bad. Generally the better outcomes occur when the government seems to respond to the people, and also, when the government gets out of the people’s way and also lets them respond to events.

2. Crime rates go up and services like police protection are less available or privatized

One universal feature of collapsed societies is that they are more violent. But that doesn’t tend to mean warlords killing everyone in their path — it tends to mean more street violence, robbery, rape and murder, sometimes along with for-profit kidnapping. It tends to mean that people are vulnerable, and afraid, and often can’t trust the authorities — it could be rather like being African-American in many poor urban neighborhoods, or it could be like living in Baghdad. Generally speaking, you don’t want your kids to go out very much, you tend to avoid going out yourself and safety becomes a serious issue.

3. Everyone gets poorer fast.

When societies collapse, the percentage of people who are poor goes way up — in Argentina, for example, the 2001 collapse virtually wiped out the middle class and pushed poverty levels up from lows around 20% to nearly 57%. This, I think, is the one universal likely outcome, and of course, one that is happening now.

4. The cost and attainability of food becomes an issue.

Accounts from Argentina, which was previously both stable and affluent, suggest that many desired foods, particularly imports, are often unavailable, and more importantly, widespread economic impacts make it harder to buy food. This, and a lack of medical care, impacts people’s health, and depression and drug and alcohol use begin to rise.

5. Services and utilities are widely disrupted.

Sometimes the disruption comes, as is common among the US poor, because people can’t afford to pay the bill — thousands of US households, for example, will have their utilities cut off on April 1, just as soon as it is legal (most utilities can’t cut off a household in the winter). But people also endure service interruptions because of aging infrastructure and social disruption. You are much more likely to spend time with no power, have no trash pickup, run out of gas and have the delivery trucks not come through….

6. People are pushed together

Whether they are herded into ghettos or lose their housing, extended families, biological and otherwise, come to rely on each other. So do communities and neighbors — when someone has food, you share; when someone needs a place to stay, you let them in. A culture of sharing emerges, and it is extremely useful to have stuff to share.

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Bunker Fuel supplies declining

Posted on March 21, 2012 by

I had always assumed large container ships would be the last to go in the oil age since hauling cargo in them is more efficient than even trains, but it looks like that isn’t as true any more.

Ships use the nasty, gunky bottom-of-the-barrel oil, also used in boilers, thermal plants, and furnaces, typically less expensive by about 50 to 60 cents than gasoline or diesel.  But now modern refineries have found ways to upgrade low quality residuals into more valuable products.

So production of this fuel is falling, resulting in shortages that are approaching crisis proportions. The new large refineries just opening in India do not expect to export any residual fuels. Korea used to be the largest supplier in Asia; now it produces next to nothing. The problem seems most acute in Japan where the demand for residual fuel to make electricity skyrocketed as Japanese nuclear reactors were shut down. Japan increased imports by 19 percent in January and it is expected that demand from power plants will grow by 7 percent this year. With demand for the fuel growing in Asia and “everyone destroying the capability to make it,” prices have risen 25 percent so far this year in Singapore – more than the 17 percent increase in crude.

Container ships, which usually sail on fixed schedules, are hurting the worst because with so much over capacity, they cannot pass the costs on to customers.

With no solution to this problem in sight, it seems inevitable that shipping delays and higher transportation costs are in the wind. The problem of higher costs for residual fuel oil will also impact many places in the underdeveloped world that are dependent on the fuel to generate their electric power.

Source: March 19, 2012. Bunker Fuel. ASPO Peak Oil Review.

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2001 James A Baker III Institute & Council on Foreign Relations Action Plan

Posted on March 21, 2012 by

Our government has known for a long time that an energy crisis was approaching.

Action Plan

2001 Strategic Energy Policy Challenges for the 21st Century

Report of an Independent Task Force
Sponsored by the James A. Baker III Institute for Public Policy of Rice University and the Council on Foreign Relations
Edward L. Morse, Chair and Amy Myers Jaffe, Project Director

The Task Force recommends a two-part action plan. The first stage consists of immediate actions to establish appropriate mechanisms to manage potential supply disruptions and to buffer the economy against harm from price volatility. The second part, consisting of longer-term actions, tackles the causes of recent shortfalls and emergencies. These initiatives establish a framework for developing new supplies and ample capacities along various linked global energy supply chains, while preserving and enhancing the human habitat.

Immediate Actions

There are few options available to government to expand supply in the short run or to reduce short-term demand. Consequently, immediate actions should consider all possible means of de-bottlenecking supplies and reducing obstacles to delivery of supplies, both domestically and internationally. In addition, the short-term actions must establish permanent machinery for integrating energy policy with economic, environmental, national security, and foreign policies. To the degree that new supplies alleviate energy shortfalls in periods of peak demand, they will provide protection to consumers against price spikes.

Virtually all actions available to remove obstacles along the supply chain in the very short term involve tradeoffs with other policy objectives, including environmental, national security, and foreign policy concerns. Therefore, tradeoffs must be carefully weighed. Any supply-side relief also eliminates the only current mechanism for controlling demand: higher prices. Proper policy must consider measures that will prevent the public from keeping U.S. energy security perpetually beyond reach. For the immediate and short term, two sorts of policies need to be considered:

  • Those that quickly alleviate supply bottlenecks and damp demand.
  • Those that need to be adopted in a timely manner in order to have a desirable impact in the longer term, given the long lead times required in order to mobilize capital or new technologies.

Key elements of this plan are designed to:

    • safeguard supply in times of accident or disruption to ensure orderly markets.
    • ease and eventually eliminate constraints in the energy infrastructure.
    • promote diversity of clean, fairly priced, abundant supply sources.
    • enhance energy efficiency and curb unbridled growth of energy consumption.
    • ensure fair competition and market solutions.
    • promote restructuring of formal institutions and informal arrangements for managing international energy relations.

Steps:

1.         Deter and manage international supply shortfalls

a.         Develop a diplomatic program ensuring GCC allies remain prepared and willing to maintain stable prices for global economic growth and also to fill any unexpected supply shortfalls in times of turmoil in the oil markets, whether created by accident or by adverse political actions on the part of any producing nation.

b.         Prepare for contingencies and gain agreement on coordination in the IEA in efforts to deal with any removal of oil by adversary nations from international markets.

c.         Minimize public conflicts with OPEC and other independent oil-exporting countries but emphasize importance of market factors in setting prices.

d.         While moving to defuse tensions in the Arab-Israeli conflict through conflict resolution and negotiations, maintain energy and political issues in U.S.-Middle East relations on separate tracks.

e.         Review policies toward Iraq to lower anti-Americanism in the Middle East and elsewhere; set the groundwork to eventually ease Iraqi oil-field investment restrictions.

2.         Remove bottlenecks and other obstacles to energy supply, both domestically and internationally.

  1. Streamline procedures for waiving product specifications.
  2. Establish procedures to grant Jones Act waivers without adversely affecting U.S. ship owners or U.S. labor.
  3. Enact legislation for federal primacy over state regulations especially with respect to

product specifications and pipeline right of way.

  1. Enact legislation to facilitate regional solutions to energy challenges.
  2. Investigate whether any changes in U.S. policy would rapidly facilitate higher Caspian Basin oil exports.

3.         Take a fresh approach to building and maintaining national strategic and commercial crude oil and petroleum product inventories.

a.         Review the size and financing of the SPR.

b.         Establish professional criteria for managing the SPR.

c.         Establish clear policy for use of the SPR.

d.         Review tax, accounting, and other factors affecting industry’s incentives to hold petroleum product and natural gas inventories with the intent of enhancing inventories before seasonal demand, and neutralizing any adverse impact of current rules.

e.         Encourage states to review minimum inventory for fuel switching where feasible and also fiscal incentives to industry to build inventories in advance of seasonal demand increases.

4.         Develop mechanisms for a new national approach to energy policy.

a.         Create an appropriate interagency process to articulate and promote energy security policy and integrate energy policy with overall economic, environmental, and foreign policy.

b.         Review and streamline the allocation of authorities within the federal government, especially in areas of land management and energy.

c.         Convene a national energy security summit to help develop a national consensus on energy policy objectives and means.

d.         Develop a strategic communications plan on energy security policy in order to educate the public on the difficulties of achieving short-term, unilateral solutions to the nation’s energy dilemmas.

Long-Term Policy Initiatives

1.         Review international approaches to build, maintain, and use strategic and commercial crude oil and petroleum product inventories.

A.        Enhance and modernize IEA strategic stockpile policies in light of the changed international market, taking into account situations that technically fall short of a supply disruption as well as different regulatory authorities among IEA members.

B.         Encourage key non-IEA countries (e.g., China, India, Brazil) countries to develop strategic stocks.

C.         Review IEA membership, taking into account the desirability of creating a new class of associated members who could be encouraged to hold minimum stocks and also benefit from direct participation in other IEA activities.

2.         Accelerate demand-management efforts at home and internationally.

A.        Take a proactive government position on demand management.

B.         Use federal procurement authority to promote use of alternative fuels and develop programs to introduce new efficiency technologies into federal buildings and nascent transportation technologies into government vehicle fleets.

C.         Use federal procurement authority to achieve other demand management goals.

D.        Review and establish new and stricter CAFE mileage standards, especially for light trucks.

E.         Actively promote the development of energy-efficient technologies, including fuel-efficient engine and vehicle technologies.

3.         Maximize efforts to develop every clean source of domestic fuel supply.

A.        Oil and natural gas

1.         Accelerate completion of the U.S. oil and natural gas reserve inventory, as mandated by Congress, paying special attention to restrictions on resource development. Such an inventory needs to be completed soon and well before any plan is adopted to develop particular domestic resources.

2.         Undertake an accelerated and complete review of tax and fiscal policy as they impact U.S. oil and gas development, taking into account the competitive position of the U.S. fiscal regime internationally, in order to attract more capital to the sector.

B.         Power (Electricity)

1.         Create an appropriate, comprehensive statutory framework for electricity restructuring and for reestablishing a capacity cushion for the nation’s power supplies. A new framework needs to overcome the adverse impacts of today’s highly fragmented regime, which has reduced the reliability of power grid and impeded investment in new generation and transmission capacity.

2.         Work expeditiously to improve the statutory framework for approvals of the siting of power generation plants, and transmission and distribution infrastructure.

3.         Evaluate the need for incentives to stimulate the introduction of new technologies into the power marketplace, including distributed generation and co-generation.

4.         Work with state regulators and regional authorities to let companies offer long-term contracts for electric power, and to encourage them to hedge price risks.

5.         Encourage the development of regional power capacity cushions.

6.         Recognize that many of the polices required to meet increased demand are power-source specific.

7.         Assure that regulations protect open access to electricity generated by new nontraditional fuel sources.

C.         Natural Gas

1.         Apply strong leadership to develop a coherent, comprehensive strategy promoting efficient development and use of the nation’s natural gas resources.

2.         Endorse the construction of natural gas pipelines from the Arctic to the lower forty-eight states and work bilaterally with Canada and the U.S. state of Alaska to address important issues that need to be resolved.

3.         Assure regulatory authorities work together to bring about natural gas market efficiencies, including the provision of open access to markets by producers and to supply by end-users, and that allow delivery costs to be determined transparently by market forces so that commodity values are transparent to both producers and consumers.

4.         Invest in—or stimulate and encourage private sector investment in—research and development of technologies that focus on safe and cost-effective ultra-deep water production, smaller drilling footprints, and increased production from non-conventional sources, including methane hydrates.

5.         Encourage natural gas exploration and production through a series of technology-targeted tax incentives that also encourage use of advanced, environmentally sensitive technologies, and that provide counter-cyclical support for exploration and production.

6.         Initiate a mitigation forum process to evaluate infrastructure needs and reduce delays in new pipeline and storage facility siting.

7.         Consider providing incentives to state and local governments that agree to expedite natural gas infrastructure siting.

8.         Invest in—or stimulate and encourage private-sector investment in—technologies ensuring pipeline infrastructure integrity, reliability, flexibility, and safety.

9.         Foster development of advanced storage technologies to increase regional storage capacity and serve peak power and distributed-generation markets.

10.       Evaluate the potential of imported Liquefied Natural Gas (LNG) as a major additional source of base load as well as incremental supply, and in the process accelerate environmental reviews required for siting as well as accommodate the commercial logistics and other user needs associated with facilities built or operated by LNG suppliers.

D.        Coal: Given the nation’s abundance in coal resources it is critical to foster the development of clean coal technologies to promote coal use in power generation, while mitigating the impacts of coal combustion to meet local, regional, and global environmental challenges

E.         Nuclear

1.         Support the Nuclear Regulatory Commission to extend plant life where possible

2.         Constructively work with stakeholders to resolve nuclear power plant spent fuel (and high-levels defense waste) disposition within the next few years, since this is critical to preserving viable nuclear options for the nation.

3.         Work to improve the investment climate for new nuclear power plant construction through NRC streamlining of licensing procedures and by resolving uncertainties surrounding electricity deregulation and restructuring.

4.         Work with Congress to sustain the front-end domestic nuclear fuel cycle through the next half-decade.

5.         Work with Japan and allies in Western Europe to shape a future nuclear fuel cycle that would garner shared support.

6.         Work with the education system to reinvigorate training in nuclear science and technology.

4.         Augment diplomatic initiatives to spur non-OPEC production increases.

A.        Expand Oil and Gas Forum programs.

B.         Investigate ways to facilitate increased investment in Mexico’s oil and gas sectors.

C.         Encourage reforms in Russia’s energy sector.

D.        Improve access to information and transparency on comparative oil and gas fiscal/commercial regimes.

5.         Initiate diplomatic efforts to encourage the reopening of countries that have nationalized and monopolized their upstream sectors.

6.         Review sanctions policies, to identify ways to reduce the negative impact on energy supplies while accomplishing the objectives for which the sanctions were imposed.

7.         Develop a credible international stance on global warming and other environmental issues.

A.        Conduct a thorough review of the Kyoto Accords and recommend ways for the United States to revive international discussions on climate change and also execute bilateral agreements to promote environmental safeguards.

B.         Investigate new ways to promote efficiency and clean energy technologies, including clean coal, expanded natural gas use, and automobile mileage and emission standards, for use in large consuming countries in Latin America and Asia, especially China and India.

C.         Develop a strategy to coordinate with the European Union and the Association of Southeast Asian Nations (ASEAN) on refined petroleum product specifications through multilateral dialogue and bilateral agreements.

8.         Support efforts to develop and disseminate accurate and timely and information about the fundamentals of energy market supply and demand. The administration should recognize that transparency is an important element in maintaining orderly markets generally and in times of emergency or unexpected disruption in particular, and thus should provide a higher budget for the Department of Energy’s Energy Information Agency.

9.         Lay the foundation for new global energy institutions

A.        Embrace the spirit of the “producer-consumer” dialogue, but not the framework with which it has been associated.

B.         With U.S. leadership, foster broad international cooperation on a host of issues including (1) sharing information on oil market trends and the basics of evolving environmental standards on petroleum products and emissions; (2) promoting mechanisms for attracting investment capital; and (3) coordinating information on investments in refinery upgrading and in new demand, which would define the requirements for new grassroots plants.

C.         Build global energy institutions in three ways:

1.         Consider using the European Energy Charter as the basis of an energy institution that the United States should want to adopt on a global basis.

2.         Build on overlapping interests and relations between the world’s largest oil exporter (Saudi Arabia) and the largest energy-consuming country (the United States).

3.         Explore a mechanism promoting a North American or Western Hemispheric energy agreement.

D.        Form the core of a future multilateral agreement through bilateral or regional arrangements based on improving markets, ensuring energy security, and guaranteeing investments and trade on a mutual, reciprocal, and nondiscriminatory basis

Additional Views

On Environmental Considerations, Coordinated Energy and Environmental Policy, Federal and State Jurisdictions, and Enhanced Demand-Side Measures

Energy policy is a derivative policy—deriving from our security, economic, and environmental goals. These are often in conflict. It is therefore difficult to chart an energy policy path that is both coherent and on which consensus can be achieved. Although supportive of many conclusions in the report, we are generally more sanguine than the report regarding the ability of the market, especially under current prices, to bring forth necessary increases in supply for oil and gas. We would place primary emphasis on attending to those infrastructure and volatility issues that are principally governmental in origin and solution. We would also like to emphasize the need for government action in certain areas. These include:

  • The need to focus international discussions on atmospheric concentrations of greenhouse gases.
  • The development of a coordinated energy and environmental policy that includes specific attention to carbon dioxide and incentives for voluntary early action activities. Unless carbon dioxide is addressed, and addressed in a way that is credible with major domestic constituencies and with others internationally, the environmental regime will remain unstable, increasing investment uncertainty and hence raising energy costs—all this quite apart from one’s judgments about environmental impacts.
  • A legislative rebalancing of the boundaries between federal and state jurisdictions to increase federal and regional influence over environmentally based standards and within the electric power sector. The purpose of such a move would be to establish and enforce a consistent and efficient transmission and reliability regime applicable to all industry participants.
  • Efforts to enhance efficiency. Efficiency has a critical role in balancing supply and demand. An analysis by the President’s Committee of Advisors on Science and Technology has shown that from 1970 to 2000, improvements in the overall efficiency in the U.S. energy system (measured as real GNP divided by primary energy supplied) saved two and one-half times more energy than the growth of all sources of supply combined.
  • Increased federal support of research and development related to energy and environmental technologies on both the demand and supply sides in order to sustain a stable economic environment for energy, to accommodate economic growth, and to meet environmental objectives. Technology has been critical to energy development in the past and will continue to be so in the future.
  • Enhanced demand-side measures, including incentives for the accelerated introduction of technology. More effective strategies for the deployment of existing technologies can in particular make a significant difference. In electric power markets, regulation must make demand sensitive to the cost of power if those markets are to work properly. In other markets, the report calls for regulatory intervention to achieve demand restraint, presumably on the unstated assumption that Americans will not tolerate the use of taxes even though, we note, taxes would often be a more efficient instrument of control.

Finally, we caution against using the “crisis” label, which in the past has been the source of much energy policy mischief. Apart from the very serious problems in the California and Western electricity markets, which largely derive from policy, current energy markets are not in “crisis,” and precipitous action should not undermine thoughtful resolution of our conflicting energy, economic, environmental, and security concerns. Apart from the very serious problems in the California and Western electricity markets, most policy made, current energy markets are not in “crisis” and precipitous action should not undermine thoughtful resolution of our conflicting energy, economic, environmental, and security concerns.

Graham Allison

Joseph C. Bell

Charles B. Curtis

On Nuclear Energy

Nuclear power is an indigenous source of energy—invented and developed in America. It is unique in having the capacity to provide enough energy to last our nation—and the world—for at least a millennium. And it can do so without emitting greenhouse gases. Nuclear energy should not be considered as an option, but as a necessity to supply electricity for the nation now and in the future. The Energy Information Administration has predicted that between now and 2020, the United States will need 300,000 megawatts of additional generating capacity, or the equivalent of three hundred large new plants of any type. A minimum of one hundred fifty of these plants should be nuclear.

Michel T. Halbouty

On Efficiency

Between 1973 and 1986, the U.S. economy’s energy intensity (energy consumption per dollar of GDP) declined by 35 percent; since then, the rate of decline slowed dramatically, amounting to only about 15 percent over the period. That slowdown raises total national energy costs by about $100 billion per year. Technologies are in hand to once again accelerate energy efficiency and associated environmental gains significantly. To realize this in a timely way requires that integrated fiscal, regulatory, and technology policies be implemented by the administration and Congress. In addition, the government should use its own procurement activities far more aggressively to develop a reasonable domestic market for new clean and efficient technologies and alternative fuels. It should also work with the private sector and international financial institutions to advance associated deployment in developing countries. Such actions, in creating stable markets adequate to permit private development of alternative technologies and infrastructure, can be an important element of energy security policy and reduce upside price volatility. They fall into the category of “public good” actions addressing market shortcomings. Opportunities are clearly available in both the transportation and electricity sectors. Such demand-side initiatives can have a substantially greater impact than supply-side initiatives on the overall supply/demand balance over the next several years. However, the importance of stability to the success of such initiatives requires a pragmatic joint administration-congressional commitment.

On Diplomacy

In regard to dealing with oil-producing nations during periods of oil price volatility, the report properly emphasizes the importance of quiet diplomatic discussion and a bedrock principle of reliance on market forces. However, the administration, confronted with non-market behavior, also needs to retain the flexibility to use all diplomatic tools of engagement, including appropriate use of public statements. For example, such diplomatic engagement during the last year saw significant production increases while holding in place key international support for use of the SPR to address inventory shortfalls and associated price volatility.

On Critical Infrastructure Protection

Protecting our energy infrastructure from being disabled is an energy security concern of increasing importance. Heightened vulnerability to physical and/or cyber disruption stems from increased infrastructure interdependence, increased risk of cascading failures, and increased reliance on information technologies and telecommunications in the energy infrastructure. An appropriate response demands new forms of cooperation between the private sector, local governments, and the federal government, including robust and timely exchange of sensitive information on both sides. The critical infrastructure protection initiative of the last few years needs substantial upgrading in order to better coordinate with infrastructure interdependencies, provide realistic evolving vulnerability assessments, develop technologies to protect control systems, develop and deploy integrated multi-sensor detection systems to warn of system disruption, and lower institutional barriers to the associated public-private coordination activities. A significant increase in Federal research and development funding for energy infrastructure protection is needed.

Ernest J. Moniz

Melanie A. Kenderdine

On Tax Incentives, Demand Efficiency, the SPR, and Reserve Capacity

Based on the serious energy supply problems facing the United States and in view of past national energy policy initiatives (starting in the Nixon administration), the greatest emphasis has always been focused on increasing supply of traditional fuels. Also overlooked is the fact that the tax code has been extraordinarily favorable to the exploration, production, and development of oil, natural gas, and coal, and that the federal government has subsidized the development of nuclear power far more than it has solar, wind, and other clean alternatives.

It is also obvious that there is little need to provide any tax or other incentive to the oil and gas industry. The major companies are reporting record profits and prices are at very high levels. Consumers—especially low- and moderate-income consumers—are suffering from the high cost of natural gas and other heating fuels. Furthermore, many low-income households are facing utility cutoffs because of the sharp increase in heating costs. These problems require immediate solution—from sharply increasing low-income heating assistance and weatherization programs to prohibiting shut-offs.

While the report does recommend demand-side energy efficiency initiatives, I believe that such initiatives can go much further. Tax incentives for building energy-efficient homes and buildings, installing energy-efficient equipment, and purchasing energy-efficient appliances would create a vigorous market for energy-efficient products. On-the-shelf energy-efficient technologies are available. Expanding U.S. production of energy-efficient technologies will also enhance our domestic economy and provide new opportunities for exports.

While I support the report’s recommendations regarding the building of the SPR, it is also important to define clearly when it should be used. Essentially, rapid increases in price are a sign of market failure. An emergency situation calling for use of the SPR could be defined as a percentage increase in price within a specified period of time—say, 25 percent over ten or fifteen days.

It is also critical to determine a requirement for companies that refine and import petroleum to hold a certain level of stock. As the report correctly points out, deregulation and reliance on the market does not ensure supply security. Previously, companies deemed it to be in their economic self-interest to hold inventory. Now, companies seek to hold as little inventory as possible in order to lower costs. This strategy of just-in-time inventory management has been very costly to consumers and the economy, and requires intervention by the federal government. While some may argue that we should rely on market forces to determine appropriate inventory levels, experience has confirmed that market forces are not working. Requiring all companies to hold a minimum level of inventory will provide at least some cushion of supply during periods of disruption.

A similar strategy ought to be applied to suppliers of natural gas, propane, and electricity. Deregulation of the electric utility market has left utility customers at the mercy of independent electricity generators who, unlike regulated utilities, have no incentive or requirement to build reserve capacity. The lack of reserve capacity, like the low levels of oil inventories, is a growing threat to consumers and the economy.

Ed Rothschild

On Demand Restraint.

The “energy crisis’ described in the report results in large part from the unconstrained growth of energy consumption. The United States is unique among the industrialized countries in that it does not use fiscal measures to limit growth in energy use. This policy must change to control growth of energy use and maintain environmental quality. The most efficient mechanism would be broad-based taxes on energy. In addition, the United States should consider imposing higher taxes on vehicles to encourage the expedited introduction of more efficient energy-using technology. These taxes should be introduced in a revenue-neutral fashion. In addition, regions such as California, which face energy disruptions due to infrastructure constraints, should consider replacing regressive sales taxes with taxes on energy designed to offset the infrastructure constraint.

On the Use of Strategic Stocks

The authors of the report are to be congratulated for their extensive discussion of the role of inventories. Industrialized countries must recognize that the increasingly competitive structure of the global economy prevents firms in the energy sector from holding reserve capacity (whether in the form of inventories or reserve generation capacity). Energy prices will be more volatile as a consequence. Governments must develop measures to compensate for this structural change if they wish to moderate the increase in the effect of price volatility. Such incentives can include more frequent use of governmentally owned inventories or the provisions of tax incentives to firms to build reserves. In planning such measures, governments should recognize that mandated stocks or imposition of reserve requirements by regulation generally are not effective. It must be understood that the cost of any measure designed to mitigate price volatility will be borne either by the taxpayer or the consumer. Efforts should be made to achieve the maximum reduction in volatility at a minimum cost.

Philip K. Verleger, Jr.

Dissenting Views

On Caspian Energy Export Routes

Which export routes for Caspian energy are most appropriate depends primarily on which transit countries offer favorable conditions by facilitating construction of pipelines and charging reasonable transit fees. The actual pipeline construction cost is only one component—and not necessarily a large one—of any commercial decision about which route to use. The record of Russia and most especially Iran is one of long delays and unreasonable demands. At this stage, the Baku-Ceyhan project is more advanced than any other oil pipeline project not yet under construction. In these circumstances, it is inappropriate to assume, as the report does, that promoting Baku-Ceyhan is at odds with a commercial approach toward Caspian energy.

Patrick Clawson

David L. Goldwyn

On Alternative Energy Sources, Minimum Petroleum Inventory Standards, an Organization of Petroleum Importing Countries, Nuclear Energy

U.S. energy policy should be guided by a stronger commitment to developing alternative energy sources and protecting vulnerable households and businesses from price shocks resulting from hikes in the costs of heating oil, gasoline, and diesel fuel.

Mandating minimum standards for petroleum inventories in the United States and creating an Organization of Petroleum Importing Countries (OPIC) to stand up to the Organization of Petroleum Exporting Countries are measures that should be taken to more aggressively protect our oil-dependent economy.

The establishment of federal minimum inventory standards for domestic wholesalers would buffer consumers from skyrocketing prices associated with inadequate inventories at times of high demand. In New England, for example, home heating oil prices went up $1 a gallon in the winter of 2000, when a severe cold snap combined with low inventories to send fuel costs through the roof. Similar supply shortages have resulted in soaring gasoline prices in the Midwest during the summer’s peak demand months.

An OPIC to offset the clout of OPEC would use the threat of sanctions to keep the cartel from illegally manipulating production quotas to their advantage and our detriment. Moreover, OPIC would negotiate an end to radical price fluctuations that hurt producing and consuming nations alike by supporting a floor price for crude oil in exchange for OPEC backing of a ceiling price. A floor price of $20 a barrel would ensure adequate revenues to producing states, which depend on such dividends for their political, economic, and social stability. A ceiling price of $25 a barrel would guard against price shocks while encouraging the development of alternative energy sources in consuming nations.

U.S. policy guided by the goals of expanding nuclear capacity and exploiting domestic sources of oil and gas will not succeed in the long run. Energy independence is critical. This cannot be achieved by more drilling within U.S. borders. The only method is to increase our dependence on effective and affordable renewable energy sources in addition to creating a stable pricing environment for all our energy needs.

We must aggressively pursue promising alternative sources of energy to heat our homes, run our vehicles, and power our businesses. At the same time, we must take a tougher line toward the oil industry domestically to protect the most vulnerable, and use our clout internationally with oil producers to end the price shocks caused by their manipulation of oil markets.

Joseph P. Kennedy II

 

Posted in Think Tanks, What to do | Comments Off on 2001 James A Baker III Institute & Council on Foreign Relations Action Plan

Invasive species unchecked by climate

Posted on March 5, 2012 by

Philip Hulme of the Bio-Protection Research Centre, Lincoln University, New Zealand writes in the 3 Feb 2012 issue of Science:

Climate change is likely to devastate native species and biodiversity.

But ironically, invasive alien species — which are a threat to biodiversity, human health, and food crops — are not likely to have trouble keeping up with the fast changes from global warming.

This is because invasive species on both land and water spread 20 to 30 times faster than climate change, and the rates are even higher for plant and animal pathogens.  And it’s partly our doing from increasing human trade, transport, and travel.

so at the same time native creatures are under threat from climate change, they’ll also be assaulted by alien invasive pests, pathogens, and weeds that can disperse even faster.

Posted in Biodiversity Loss, Extinction | Comments Off on Invasive species unchecked by climate

$150 oil: Instability, terrorism and economic disruption. U.S. Senate hearing 2009

Posted on March 4, 2012 by

Senate 111-105. July 16, 2009. $150 oil: Instability, terrorism and economic disruption. U.S. Senate hearing. 42 pages.

Excerpts:

Senator Richard G. Lugar, Indiana.  Energy security is a critical factor affecting nearly all of today’s foreign policy challenges. The American public increasingly understands that greater energy independence is a national security necessity, and that energy security should be a top diplomatic priority of our Government.

In today’s hearing, we’ll focus on key oil and gas producing areas of the Middle East, Africa, and the greater Caspian region, where political developments have major consequences for global prices and markets. A global economic downturn has reduced energy demand, bringing price relief to consumers and greater flexibility to markets, for the moment.

But predictably, the recession has also led to falling investment in the energy sector. The International Energy Agency projects that global investment in oil and natural gas production will fall by $100 billion in this year. Just last week, OPEC announced sharp reductions in production investment. These cuts come at a time when more investment is needed to counteract high oilfield decline rates.

When major economies start to recover, energy demand will rebound, causing markets to tighten and prices to rise. Under such conditions, markets will be highly susceptible to vulnerabilities that can produce severe supply shocks. Three vulnerabilities stand out as areas of concern for energy diplomacy. First, instability and conflict may disrupt energy flows and undermine needed investment. Second, governments may make supply and investment decisions based upon politics, and not economics. And finally, terrorist activity may threaten major energy infrastructure.

In the near term, if we fail to address these vulnerabilities, the prospects for economic recovery could be seriously imperiled. An oil price shock that hits just as the recovery is beginning and demand for energy is increasing would likely generate inflation, undermine market confidence, and increase the risk of conflict. Over the longer term, even if we hope for a conversion from a fossil- fuel-dominated economy to one that depends much more on renewable resources, failure to maintain consistent supplies of oil and natural gas in the interim could be debilitating to our economy and to our national security.

Senator John F. Kerry, Massachusetts, Chairman.  There is a striking overlap between the world’s sources of energy and the world’s sources of instability. And we need to take careful note of that. Iran, Iraq, Sudan, Russia, the Caucasus, Nigeria, Venezuela, are all on the front lines of our energy supply challenge, but also on the fault lines of our geopolitics. Too often, our foreign policy debate has failed to reflect the importance, the connectedness, if you will, of this issue. Look back to President Carter: Back in the 1970s, he tried valiantly to make this connection clear to our country and set us on a path, but regrettably, we diverted from that path and have done so frequently.

The volatility itself is a major problem in its own right. Last year, we almost reached $150 per barrel. By the beginning of this year the price had plummeted to less than $35 a barrel. Since January, we’ve seen prices double. These dramatic swings are, frankly, devastating to the economy, and make it very difficult to conduct business planning, investment, and so forth.

Many see a solution: Manage the demand. Globally, we can reduce demand by up to 11 million barrels by 2020, at little or no cost, through higher energy efficiency, natural gas substitution, and the removal of subsidies internationally. That is more than the entire output of Saudi Arabia in 2008.

The bad news is, supply risks are simultaneously growing. In Nigeria, the militant group MEND has been, regrettably, successful in taking oil infrastructure offline, cutting oil flows nearly in half, and leaving exports significantly below the government’s target. These conflicts are not easy to solve.

Underinvestment is another risk to supplies, straining the ability of Russia and other countries to bring new capacity online.

Phillip Carter III, principal deputy assistant secretary, Bureau of African Affairs, Department of State.

In many countries, only a small percentage of the population has benefited from natural resource revenues. Few governments have developed plans for the prudent and well-intentioned use of oil or mineral profits. Rampant economic instability undermines peace and security efforts. Moreover, undiversified and single-export economies have resulted in a ‘’Dutch disease’’ effect that has stunted economic growth and breadth across other sectors, most notably agriculture. Energy security, although important, is but one component in a broad range of issues-such as health, human rights, governance, democracy, and the environment-encompassing United States-African relations. But, in the end, the key to energy security in Africa is good governance.

As a net importer of oil, the United States relies on a diversified and extensive list of suppliers to import the approximate 12 million barrels per day to meet our current consumption needs. Two of the top 10 oil suppliers to the United States, Nigeria and Angola, are located in sub-Saharan Africa. Nigeria is our fifth-largest oil supplier, with around 661,000 barrels per day to the United States, and Angola is our 7th, with around 582,000 barrels per day. United States companies operate extensively in these countries, as well as in Cameroon, Chad, Equatorial Guinea, and Gabon. Because there are direct shipping lines between Africa’s west coast and the United States, West African states are strategically positioned to supply oil to the United States. Yet, in spite of their geographic advantage, these countries still face many challenges.

Nigeria, in particular, must address Niger Delta militant activity, the shut-in of available oil, oil bunkering, gas flaring, and gas-sector expansion, and the environmental impact of the energy sector.

The attacks in the Niger Delta are best described as routinely criminal. They do not represent the political vision of people striving for greater political rights and development for the region. Their frequency and potency demonstrate the challenges for the Nigerian Government’s ability to provide a secure environment for the people of the Niger Delta. The criminal acts are costly to the Nigerian people through stolen oil, lost opportunity, and infrastructure destruction. Nigeria has the capacity to produce over 3 million barrels per day. However, recent anecdotal reports suggest that it’s producing less than half of that. Poor governance and endemic corruption have also denied the vast majority of Nigerians hope for a better economic future. Despite its GDP of $220 billion, 92% of Nigerians live on less than $2 a day. These economic challenges exacerbate Nigeria’s already weak governance and security institutions. In addition to the criminal attacks on oil structures, and kidnapping in certain areas of the country, Nigeria also suffers economically from lost opportunities in gas, as a result of frequent gas flaring, which is also a detriment to the environment.

Dr. Richard J. Schmierer, Deputy assistant secretary for Iraq, Bureau of Near Eastern Affairs, Department of State  & William Hudson, Acting deputy assistant secretary

The Middle East alone holds two-thirds of the proven world’s oil reserves and 78% of these reserves are held by OPEC members. And, as a net importer of oil, the United States reliance-and that of Europe and Japan-on petroleum imports from the Middle East and North Africa is significant, and it’s growing.

Petroleum imports from Saudi Arabia, Algeria, Iraq, and Kuwait account for some 21.6% of our overall imports. The security of the U.S. energy supply is therefore very much part of our diplomatic and economic relationship with the key suppliers in the region. Our overarching approach to engaging the region is to pursue policies which promote regional stability, particularly in the gulf region. Stability helps reduce price volatility and its wider impact on both the United States and the global economy.

Guaranteeing adequate petroleum supply is a significant theme of our energy security relationship with Saudi Arabia. The Kingdom is the world’s leading producer and exporter of total petroleum liquids, and the third-largest petroleum supplier to the U.S. market. As OPEC’s major swing producer, Saudi Arabia plays a crucial role in supplying world markets with a stable and reliable source of petroleum. The United States also continues to develop and cultivate its relationships with other key oil-producing states in the region. Kuwait, the United Arab Emirates, Qatar, and Algeria are all vital partners in the energy field. Iraq is also of growing importance in the world energy market. It has the third-largest conventional oil reserves in the world, approximately 115 billion barrels, and the tenth- largest gas reserves in the world. However, due to years of war, sanctions, and underinvestment, Iraq’s oil production remains flat.

North Africa, Algeria remains an important player in our international energy strategy. It is the world’s third-largest producer of natural gas, and the ninth-largest producer of oil.

There is the important issue of physical energy infrastructure security. In response to the attempted attack, in 2006, on one of the world’s largest oil facilities, Abqaiq, in Saudi Arabia, we are partnering with Saudi authorities in the field of critical infrastructure protection. We have established a dedicated inte-ragency office in Riyadh to implement projects related to United States/Saudi critical infrastructure cooperation.

Richard L. Morningstar, Special envoy for Eurasian Energy, Department of State.  United States oil companies actually are probably the most active and the most successful, so far, as Libya is trying to revitalize its oil sector.  The Chinese are also active, but our companies have really taken the lion’s share, so far, of bidding on plots of-for oil production. China is having an increasing and heavy influence in Central Asia, with Turkmenistan as a case in point. China is building a pipeline, at its own cost, from Turkmenistan through to China, to transport gas. China has agreed to provide a $3 billion loan for exploration at a major project site in Turkmenistan.

The good news is that it’s good for China to get more gas. It’s cleaner energy. And if they can import a lot of gas from that area that’ll provide cleaner energy, it might free up supplies in other areas. The bad-news is that … gas that goes to China will compete with gas that could go westward.

It is hard for us to compete with China in some of these countries. It’s easy for Turkmenistan to make a deal with China, when China can come in and say, ”Hey, we’re going to write a check for X amount of money, and we’re going to build a pipeline, and furthermore we’re going to lend you money so that you can explore, and we will be paid back in gas that you, ultimately, deliver to us.” You know, that’s not a hard deal to accept. And we can’t compete in that way.

Posted in U.S. Congress Energy Policy | Tagged , , | Comments Off on $150 oil: Instability, terrorism and economic disruption. U.S. Senate hearing 2009

Water Infrastructure Falling Apart Nation-wide

Posted on March 4, 2012 by

Water statistics: 2.5% of all water is fresh (drinkable), 69% of fresh water is locked up in glaciers and ice caps, in the USA 37% (of 127 trillion gallons) is used for irrigation, 1,847 gallons to produce 1 lb beef, 35.7 gallons to make 1 egg, 400 gallons/day/avg home in USA

Water used in energy production (power plants need large quantities of water): 900 gallons of water per MWh of nuclear power electricity, 585 gallons per MWh fossil fuel electricity

Calling All Plumbers

Nicholas S. Wigginton. 17 Feb 2012.Science vol 335.

Water infrastructure is in dire need of rebuilding and modernization for economic and safety. Leaking pipes result in the loss of 7 billion gallons of clean, treated drinking water every day in the United States alone. Water distribution networks are a hodgepodge of aging original pipes, replacement pipes, and pipes made from new materials; moreover, external pressures change over time. It is therefore difficult to predict when a system—let alone an individual pipe—will fail.  Water Res. 10.1016/ j.watres.2012.01.036  (2012).

A Severe Winter Breaks Budgets as Well as Pipes

Feb 16, 2014. Jesse McKinley.New York Times.

  • Syracuse has had at least 100 main breaks since the start of the year, a large number for a city of 145,000.  Mayor Stephanie A. Miner said “You don’t cut ribbons for new water mains, but that’s really what matters,” she said.
  • Detroit, the largest American municipality ever to enter bankruptcy, was already suffering from an aging, neglected infrastructure; Darryl Latimer, deputy director of the city’s Water and Sewerage Department, said that after a wave of retirements, the department’s staff, like the budget for water main repair, was not up to the job. To those burdens, this winter added persistent subzero temperatures and heavy snow, contributing to about 500 water main breaks in January, compared with about 300 a year earlier, forcing the city to hire outside crews to try to keep up.  The major break last week in Detroit, in a pipe dating to about 1890, sent water gushing through gaps in the pavement in front of a grocery store, and submerged streets in a 12-block radius to a depth of as much as two feet.
  • Baltimore. 353 water mains ruptured in January, one-third as many as in all of 2013.
  • New York. A 137-year-old main that popped in Lower Manhattan turned some of the most stylish streets in Greenwich Village into a temporary Venice.
  • Boston. A break in Boston’s Chinatown nearly swallowed a public works truck.

“Cities still do not have a lot of cash available, so this particular storm season is having a really severe impact on their budgets,” said James Brooks, a director for community development and infrastructure at the National League of Cities. “We’ve also had many years of disinvestment in things like roads, bridges, water and sewer systems, which makes them more vulnerable.”

Cold weather is tough on water systems because as the water chills, metal pipes contract. At the same time, frost and ice cause the ground to expand, adding pressure.

In addition to the direct costs to governments, harsh weather can also mean lower tax revenue by slowing economic activity.

Detroit’s water drains away from ravaged pipes

Dec 11, 2013. Corey Williams. Associated Press.

Modern technology can help track leaks but that’s an expense that Detroit, with a network of 100-year-old cast iron pipes, can’t afford.

As Detroit goes through the largest municipal bankruptcy in U.S. history, the city’s porous water system illustrates how some of its resources are still draining away even as it struggles to stabilize its finances and provide basic services.

More than 30,000 buildings stand vacant in neighborhoods hollowed out by Detroit’s long population decline, vulnerable to metal scavengers who rip out pipes, leaving the water to flow. The city’s water system has no way of tracking the leaks, and the water department doesn’t have enough workers to check every structure. Sometimes, the water can run for years.

The city’s five water treatment plants pump more than 600 million gallons of drinking water across Detroit’s 139 square miles each day, billing residents for the volume used.  It costs a $250,000 a day to produce that much drinking water ($400 per million gallons), and $500,000 a day for sewage treatment ($800 per million gallons).

In a city with an estimated $18 billion debt, the department has a debt of about $5.9 billion. The water department has lost more than 400 jobs in the last few years, and one study has proposed cutting half of the 1,700 positions left.  Detroit, which once had 1.8 million people, is now down to about 700,000.

 

Posted in Infrastructure & Collapse, Water Infrastructure | Comments Off on Water Infrastructure Falling Apart Nation-wide

Colder winters

Posted on February 28, 2012 by

Brahic, C. 7 Feb 2012. Melting Sea Ice could trigger colder winters.  Proceedings of the National Academy of Sciences.

Cold winters in Europe and North America may be due to declining sea ice, which warms the arctic air blowing cold dry Arctic are over the northern continents.  But it’s just one of many factors, and over the long term the opposite effect may happen.

Posted in 1) Decline, Cold weather | Comments Off on Colder winters

World oil supply debate between former Shell Oil president and Professor Patzek

Posted on February 19, 2012 by

This is a paraphrase of some of what was said.  Basically Hofmeister is drill baby drill, Patzek advises taking action in your own life to live more simply, because that’s how it will be in the future regardless — investing in things like solar hot water heaters now will pay off in comfort and energy bills later…

John Hofmeister. Former President, Shell Oil Company Author, Why We Hate the Oil Companies Member, US National Energy Security Council Founder, Citizens for Affordable Energy

Dr. Tadeusz Patzek Chair, Dept. of Petroleum & Geosystems Engineering, University of Texas at Austin Co-author, Drilling Down: The Gulf Oil Debacle and Our Energy Dilemma. Vice-President, Association for the Study of Peak Oil & Gas USA http://www.utexas.edu/opa/experts/profile.php?id=1411

Hofmeister: we have more oil than we will ever use. We have nothing else to substitute for oil. So why are we paying such high prices? I predict a more than 50% chance of $5 per gallon gas by this summer. We’re headed for $8 per gallon gasoline, because from Nixon to Obama, politicians would rather pay attention to special interests than the average American, and did nothing practical and systematic about addressing nation’s energy future in an organized way.  We’re as dependent as in 1973.  Our energy and environmental future is at risk

By 2015 there will be gas lines that we’ll pay any price for, due to India and China where economic development is the most important to them.  It’s fueled by petroleum. China knows oil will get scarcer, so they loan money to state owned petroleum countries so that they can continue to get oil. There’s not enough oil out there to meet India, China, and our demands.

We use 18 million barrels of oil per day but produce 7 million, so we’re too dependent on  foreign imports. With right technology, capital and people, we could increase production from 7 to 10 million barrels per day, convert Natural Gas (NG) into liquid fuels for autos. Also convert coal to fuel, and use biofuels. Make higher efficiency vehicles.  Now we are on the path to social disruption and political partisanship like we have never seen before.

Patzek:  What should I tell you in these 8 minutes that won’t frighten you too much but will move you to change your lifestyle?

World oil production is not up in the last 5-6 years but world demand is up, because we sold our lifestyle very successfully, so now you have more people vying for less oil.  Future oil will be different too:  more unconventional, such as deep offshore, arctic, and  tar sands.  NG liquids are propanes, ethanes, butanes, not gasoline, and need to be transformed to drive on.

USA is a grown up baby, very large, on a cold night wants to cover herself with a baby blanket, but no matter what she does, has a body part exposed to cold weather.  There are only 3 possible choices:

1) do nothing, default choice, what we’ve been doing.  We’ll continue consuming and listen to siren songs for status quo.  Those people, like Daniel Yergen, are loved by the media and public, who dDon’t listen to people like me

2) De-power.  We talk a lot about Energy, but really it’s the rate of use of Energy that matters.  We won’t run out, but we are reaching a point of lower rates of production.  In less than 20 years if China and India grow as now, they will consume ALL the exports of the world.  So we should learn to use less Energy per unit of time.  We need to use less power in our daily lives. Two-thirds of power us used to move around and live

3) Hofmeister’s choice:  we have plenty of oil, let’s produce as much as we can as quickly as we can to reduce our exposure to outside forces.  But this oil is in very difficult expensive places — deep water, the far North, or in mudstones (shales), that produce at a very low rate.  The cost of producing is very high.  So either way, the cost of oil is going up.

So we have to circle back to choice 1 do nothing, or 2, use less.  I don’t like choice 1.  In short, we have to behave like adults.  Clearly we should choose choice 2, use less.

We use 100 times more Energy than we need to survive biologically.  We should not kid ourselves that getting power at any cost is a safe choice.  China’s soil, water, and air is incredibly damaged, environmentally ruined.  China is therefore a weaker giant than people think.

Oil production is declining.  Of the 33 countries that export oil, many are not consuming much oil, but they’re consuming more and more every year. Saudis are the swing producer, but producing less and less, while meanwhile their domestic consumption is growing by leaps and bounds as their population grows.  Saudis used 18% of their oil production a few years ago, now they use 28%.  They will not be exporting in less than 20 years.

For the average citizen, the price of oil is going to go up.  Big bad oil companies will be blamed, but we are all in this game, all vying for a constantly shrinking resource. The battle will be harsher and harsher as we go on.

Hofmeister: lack of oil supply is due to failed political leadership, not a lack of oil.  8 presidents in a row produced less oil, and politics failed in Iran, Iraq, Mexico, Russia, Nigeria as well.  Failed political leadership, not a lack of oil supply and growth.  There is so much oil out there. More than 100 billion barrels in our outer continental shelf, yet 85% is off limits.  A trillion barrels in the Peonce (sp?) basin of Wyoming Utah and Colorado is untouchable. Exploration on federal lands is prohibited. Gulf of Mexico has many more years of possible production.

Patzek: arctic is being considered now as a place to drill. very freezing and remote, gulf stormy and deep.  it’s not easy.  we have vastly increased drilling but we’re bringing in less production per rig because it’s so expensive to get more oil.  yes, a failure of political leadership in world.  Only Norway is well run and doing good things for their people.

Hofmeister: we are facing impending shortages like in the 70s, when you waited in a block long line every other day. There were fist fights, gun fights.  “No gas” was a common sign.  With china coming on, it’s going to get worse. I’m in favor of alternative energy, but here and now there is no alternative but to turn on the taps, unless we want to see a true global depression.

Patzek: What John said is true, and then some.  Available exports to USA will decline by about 50% in the next 8 years.  I’m going to make a stronger statement, things will not be rosy for those on a fixed income.  Don’t wait to be told what to do. insulate yourself from these shocks.  Think about food, heating oil.  Oil is the blood of society, it permeates every nook and cranny of this economy.  Try to think about simple steps to insulate yourself from the coming shocks, they’re coming, such as solar water heaters – they’re low tech, used in most countries, even Sweden.

Hofmeister: you can’t take care of yourself, we are so linked in the economy that looking after yourself is only frustrating, because you’ll be alone.  We can not depower our society and watch China power up their society. We are a competitive and economically driven and not going to take a back seat to any other economy on earth. We are determined to lead good lives, and it’s a fixable problem, all we need is a political solution [to drill more for oil].  Think about how many live off grid — their kids are in a school on the grid, they shop at stores on the grid.

Patzek: I came here after solidarity in Poland, formed by a collective action of people and we removed communism. You’d be surprised by how much people acting alone, then getting friends, family, neighbors to do likewise.   The very smart people can’t be counted on, they’ve been proven not to be so very smart.  Oil runs all societies on this planet.  The oil industry has come up with the most expensive & complex machines ever invented to mine oil for all of us. We’ve succeeded rather well, and due to improvements in technology of many kinds [long list], we’ve produced many millions of barrels of oil that would have never been produced otherwise. But there’s a dark side, for every good thing it does, it causes a negative effect. And there’s the 2nd law of thermodynamics. Every time we drill closer to drinking water and sensitive environments we risk interfering with how people live, yet desperately we want more hydrocarbons.  An everlasting tension between the two.  In fact, we’re not speaking honestly because we want to think we’re environmental, but when inconvenienced want to go ahead with drilling no matter what the environmental costs.

Hofmeister: BP is looking at drilling 12,000 feet, now deepest well is 8,500 feet, and are thinking even 35,000 feet down.  People are excited.  Dark side is must manage risk, failed in BP disaster. alt fuels: sure, NG can be compressed into methanol, coal to methanol also. flex fuel engines.  NASCAR uses methanol.  We have a huge new liquid source.  Electrify vehicles.  Hydrogen fuel cells too.

Patzek: Have to warn you, getting liquids out of coal has been known for a while, in WWII Germany did this. Very expensive experiment.  South africa during apartheid also.  A very environmentally polluting technology.  Where easy coal exists is Wyoming, but there is no water, and you need tremendous amounts of water to convert coal to a fuel.  Biofuels are similar to that.  Hydrogen has many problems.  The only alternative is to use fuels more carefully, wisely, sparingly.

Hofmeister: OPEC should be illegal due to their uncompetitive behavior, they are a cartel, we’d throw them all in jail if they behaved that way here.  We’re the victims of what we’d define as criminal behavior because they conspire to maintain a price of oil to maintain their elites and buy peace with their people by giving their people social benefits. OPEC operates in its own self-interest.  I’m in a group that wants to break the back of OPEC.  Part of that is to produce NG and make methanol.  Environmental issues are solvable.  Then OPEC will be irrelevant.  We taxpayers are paying to keep the oil lines open, we’re all paying. if straits of Hormuz closed, for a day or week or month, for any reason, there is a fateful hostility in the making [nuclear war? WW III?] that could play out there.  It will affect tomorrow’s price at the pump, so we have to worry.

Patzek:  I’ve got really bad news for you. OPEC has just relaxed quota, did away with it, since they can’t produce that amount any more.  OPEC can’t even meet their own promises.  USA MAIN suppliers are not the Middle east but canada, ecuador, trinidad, tobago, etc.  In order for us to eliminate all imports from Saudi Arabia, just inflate your car tires properly.

Hofmeister: can’t continue on the path we’re on. disruption and cost to families.  there’s a 21st e sys to be born, but won’t without a plan.  we the people need to change the governance of energy.  our current system can’t do it.  [long talk about economic history, federal reserve, etc].  E future can only be assured by an independent federal energy board to maange E and env, like the federal reserve.  auth over short, med, long term plan over 50 years so industry can go produce it. oil, gas, coal, nuclear, biofuels, hydropower, hydrogen, wind, solar, geothermal.  focus on efficiency. get rid of combustion engine.  by 2060 we could be carbon free.  we can get there, but we won’t get there with the status quo. forget political left or right. do what works.  when the energy abyss comes and you’re waiting the the gas lines, talk to the person next to you and tell them we need an independent energy agency.  There’s no single solution, but a complex potpourri.

Patzek: I am an engineer and a scientist, and I’ve spent the last 30 years thinking about the confluence of energy and the laws of physics and nature.  We would be a sperm whale weighing 40 tons 6 stories high if the energy we used went into our bodies.  We could become orcas like western Europeans or dolphins like the Chinese.  I will end with a speech of Wendell Barry (paraphrased).  A hummingbird crossing gulf of Mexico does not exceed its physical and mental capacities using it’s own energy. how can we be more like the hummingbird?  don’t work or think on a heroic scale.  Heroes often risk the lives of people they’ve never met, and cause damage. Abandon hope that more industrialization will solve the damage from previous industrialization.  we must think more about where we are, the place we are.  Learn the sources of energy. we Drive 20 miles to get a gallon of milk.  Give up notion we are too special to do our own work.  Build local places. In the end, that’s what matters.  Only then will our leaders follow us.  I don’t have as high hopes for our gov’t as others, it’s paralyzed, exists to extort money to support their existence.  we must do something on own, not wait for others to tell us. My son is getting PhD in sustainable agriculture, and told me “you talk too much”. That taught me something important.  Talk less, do more.

Posted in Tad Patzek | Comments Off on World oil supply debate between former Shell Oil president and Professor Patzek

Wildfire

Posted on February 16, 2012 by

Evans, E. July 26, 2016. Fire seasons are becoming hotter, drier and longer. Los Angeles Times.

31 July 2013. Lily Whiteman. Big Wildfires in the West: Why, How, What To Do? National Science Foundation

Posted in 1) Decline, Wildfire | Comments Off on Wildfire

Extinction can happen over hundreds of thousands of years

Posted on February 4, 2012 by

Also see this warning from phys.org: 2010-6-23. Lin Edwards. Humans will be extinct in 100 years says eminent scientist.

ScienceDaily (Feb. 3, 2012) — A painstakingly detailed investigation shows that mass extinctions need not be sudden events. The deadliest mass extinction of all took a long time to kill 90 percent of Earth’s marine life, and it killed in stages, according to a newly published report.

Thomas J. Algeo, professor of geology at the University of Cincinnati, took a high-resolution look at the geology of a Permian-Triassic boundary section on Ellesmere Island in the Canadian Arctic. Their analysis, published Feb. 3 in the Geological Society of America Bulletin, provides strong evidence that Earth’s biggest mass extinction phased in over hundreds of thousands of years.

About 252 million years ago, at the end of the Permian period, Earth almost became a lifeless planet. Around 90% of all living species disappeared, in what scientists call “The Great Dying.”

The world revealed by their research is horrific and alien: a devastated landscape, barren of vegetation and scarred by erosion from showers of acid rain, huge “dead zones” in the oceans, and runaway greenhouse warming leading to sizzling temperatures.

The evidence that Algeo and his colleagues are looking at points to massive volcanism in Siberia. A large portion of western Siberia reveals volcanic deposits up to five kilometers (three miles) thick, covering an area equivalent to the continental United States. And the lava flowed where it could most endanger life, through a large coal deposit.

“The eruption released lots of methane when it burned through the coal,” he said. “Methane is 30 times more effective as a greenhouse gas than carbon dioxide. We’re not sure how long the greenhouse effect lasted, but it seems to have been tens or hundreds of thousands of years.”

MLA University of Cincinnati (2012, February 3). Global extinction: Gradual doom is just as bad as abrupt. ScienceDaily.

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