Renewables Are Overrated, We Need Cheap Oil – Interview with Gail Tverberg

This article originally appeared at Oilprice.com.

What does our world’s energy future look like? Does renewable energy feature as much in the energy production mix as many hope it will? Will natural gas and fracking help reduce our dependence upon oil and how will the world economy and trade fare as supplies of cheap oil continue to dwindle?

To help us take a look at this future scenario we had a chance to chat with Gail Tverberg – a well-known commentator on energy issues and author of the popular blog, Our Finite World

In the interview Gail talks about:

•    Why natural gas is not the energy savior we were hoping for
•    Why renewable energy will not live up to the hype
•    Why we shouldn’t write off nuclear energy
•    Why oil prices could fall in the future
•    Why our energy future looks fairly bleak
•    Why the government should be investing less in renewable energy
•    Why constant economic growth is not a realistic goal

Gail Tverberg is an independent researcher who examines questions related to oil supply, substitutes, and their impact on the economy. Her background is as a casualty actuary, making financial projections within the insurance industry. She became interested in the question of oil shortages in 2005, and has written and spoken about the expected impact of limited oil supply since then to a variety of audiences: insurance, academic, “peak oil”, and more general audiences. Her work can be found on her website, Our Finite World.

Interview conducted by James Stafford of Oilprice.com

Oilprice.com: Do you believe that shale gas is the energy savior we have been hoping for and can deliver all that has been promised? Or have we been oversold on its potential?

Gail Tverberg: I am doubtful that shale gas will be the energy savior that we have been hoping for. There are several issues: (a) It is hard for US natural gas prices to rise to the point where shale gas extraction will truly be profitable, because of competition with coal in electricity generation. (b) While natural gas can be used for transportation, it takes time, investment, and guaranteed long-term supply for it really to happen. This will be a long, slow process, if it occurs. (c) People won’t stand for “fracking” next door, if the end result is LNG for Europe or Japan. We have otherwise “stranded” non-shale gas in Alaska that would be a better option to develop and sell abroad.

If shale gas does come into widespread use, it will take many years. The quantity will be helpful, but not huge. Furthermore, it will still be natural gas, rather than the fuel we really need, which is cheap oil.

Oilprice.com: The old dream of US energy independence has been finding its way into the headlines again as a combination of resurgent domestic oil production, improvements in vehicle fuel efficiency and the shale boom have led many experts to predict that although it is unlikely, it’s no longer the fantasy it once was. What are your thoughts on US energy independence?

Gail Tverberg: I think that the direction in years ahead will be toward reduced trade of all sorts. By definition, every country will become “more independent,” including more “energy independent”.  Whether or not current lifestyles are supportable with lower trade is another question.

Oilprice.com: Japan recently made the announcement that they aim to phase out nuclear power by 2040. What is your opinion on this decision and on nuclear energy in general? Can the world live without it?

Gail Tverberg: The decision by Japan is worrisome, because there aren’t many good replacement options available. Japan has volcanoes, so it may have an option to use geothermal as an option. Also, 2040 is far enough away that other options may become available.

Phasing out nuclear in other countries is likely to be difficult. In most countries, this will likely mean “less electricity” or “more coal.” It may also mean higher electricity cost, and lower competitiveness for manufacturers. Germany has already started the process of phasing out nuclear. It will be interesting to see how this works out.

In general, I think we should be taking a closer look at nuclear, because we have so few other low-carbon options. There is considerable dispute about the extent to which radiation from nuclear is a problem. This question needs to be examined more closely. To use nuclear long-term, we need to find ways to do it cheaply and without a huge amount of hot fuel that needs to be kept away from people indefinitely.

Oilprice.com: Renewable energy continues to be a favorite amongst many politicians – yet advances are slow and expensive. Do you see renewables making a meaningful contribution to global energy production? And if so over what time period?

Gail Tverberg: I have a hard time seeing that intermittent renewables (wind and solar photovoltaics) will play a big role in maintaining grid electricity, because of the stress they place on the grid, and the high cost of needed grid upgrades to handle them. Renewables from wood and biomass are hard to scale up, because wood supply is limited and because biomass use tends to compete with food production. Renewables from waste (left over cooking oil, for example) are not something we can count on for the long term, as people stay at home more, and dispose of less waste.

All renewables depend heavily on our fossil fuel system. For example, it takes fossil fuels to make new wind turbines and solar panels, to maintain the electrical grid, and to repair roads needed for maintaining the grid system. Biofuels depend on our fossil fuel based agricultural system.

I expect that the contribution renewables make will occur primarily during the next 10 or 20 years, and will decline over time, because of their fossil fuel dependence.

Quite a few individuals living off-grid would like to guarantee themselves long-term electricity supply through a few solar panels. This is really a separate application of renewables. It will work as long as the solar-panels work, and there are still the required peripherals (batteries, light bulbs, etc.) available—perhaps 30 years.

Oilprice.com: Are there any renewable energy technologies you are optimistic about and can see breaking away from the pack to help us extend the fossil fuel age?

Gail Tverberg: The technology that is probably best is solar thermal. It works like heating a hot water bottle in the sun. This is especially good for reducing the need to use fossil fuels to heat hot water in warm climates. But even this is not going to do a huge amount to fix our problems, especially if they are primarily financial in nature.

Oilprice.com: Renewable energy innovation has been coming under fire lately, with the Solyndra scandal and now Tesla motors are looking to be in trouble – both of whom were backed by government loan guarantees. Do you believe the government should be investing more or less in renewable energy companies?

Gail Tverberg: Less. I think we should be looking for inexpensive solutions. Anything that is high-priced starts with two strikes against it.

Also, I think if the true picture is considered, the amount of environmental benefits of renewables is very low, or perhaps negative. Their higher cost tends to make countries using them less competitive, sending production to China or other Asian countries where coal is the primary fuel. This may raise world carbon dioxide emissions.

Since 2000, world carbon dioxide emissions have increased far more than would have been expected based on prior patterns. A major cause seems to be the shift in industry to Asian countries, as countries attempted to reduce their own carbon footprint.

Oilprice.com: In a recent article you mentioned that the world economy is currently suffering from high-priced fuel syndrome. Would you be able to let our readers know a little more about this? And also if there is anything that can be done economically to help move beyond this syndrome?

Gail Tverberg: High priced fuel syndrome is primarily (but not entirely) a problem of fuel importers. It has symptoms such as the following:

•    Slow economic growth or contraction
•    People in discretionary industries laid off from work
•    High unemployment rates
•    Governments in increasingly poor financial situation
•    Declining home and property values
•    Rising food prices

Part of the problem seems to occur when fuel prices rise, and people cut back on discretionary spending. The result is layoffs. Fewer people pay taxes, and more collect unemployment benefits, causing financial problems for governments. The other part of the problem seems to be lack of competitiveness with countries (such as China and India) that use a cheaper fuel mix.

While oil is the fuel with the big price-problem in the US, high-priced natural gas contributes to the problem in Europe and Japan. High-priced renewables also contribute to the problem.

To keep costs down, we really need to consider cost first when considering alternatives to oil. Alternatives that need subsidies or mandates are likely to be a problem. Thus, in the US, natural gas right now might “work” as a substitute, but not offshore wind.

Regarding the competitiveness aspect, tariffs on international trade might help, but would reduce world output.

Oilprice.com: What is your position on peak oil? Have we already reached the peak in oil production? Or do you side with Daniel Yergin in saying we have decades more of production growth?

Gail Tverberg: I think the peak in oil production will be determined based on financial considerations. Such a peak is probably not very far away, because we are already experiencing lower economic growth and the governments of several countries are in dire financial straits.

As the oil price gets too high (or already is too high), governments of oil importing nations will be increasingly stressed by high unemployment and low revenue. Any way of fixing this problem (higher taxes, government layoffs, or reduced programs like Medicare, Social Security, and unemployment insurance) is likely to lead to lower disposable income and less “demand” for (that is, ability to pay for) products using oil.

With lower ability to pay for products using oil, the price of oil will drop. Fewer producers will be able to extract oil at this lower price, and the supply of oil will decrease.

Oilprice.com: What is your view on our energy future? Is it as bleak as some commentators point out – or is there a ray of hope for us?

Gail Tverberg: I see the future as fairly bleak. The big issue is the way high oil prices affect the economy, leading to recession, joblessness, and huge government deficits. The issue is really a lack of cheap oil.

This is an issue that can’t be expected to go away, even with new (high-priced) oil supply in the US, or with the possibility of more natural gas supply. We are right now experiencing adverse financial impacts from high oil prices, but these impacts are being disguised by artificially low interest rates and huge amounts of deficit spending.

I find it hard to see much of a ray of hope for avoiding some kind of discontinuity, because the problem seems to be already at hand. For example, I see Europe’s current financial problems and the US’s fiscal cliff as being a direct result of lower energy affordability, especially oil, in recent years.

Oilprice.com: We recently published a news piece on a broker who in a drunken stupor managed to move the oil markets. What do you believe moves oil prices – is it supply and demand or energy market traders – or a bit of both?

Gail Tverberg: I think that over the long run it is mostly supply and demand that moves prices. (Of course, demand has to be read as “affordability”. People who are paying higher taxes can afford less oil products, so “demand” less.)

There may be some short-term impact of energy market traders, but it is likely quite small as a percentage of the total.

Oilprice.com: If oil prices continue to rise do you see Americans changing their driving and energy consumption habits?

Gail Tverberg: I think some changes will take place, but they will not be as fast as many would like. New car buyers are likely to be unwilling to pay large upfront costs for fuel-saving features, because they may not own the car for very long. Getting their money’s worth will depend on getting a high resale price for the car.

People in poor financial condition are more likely to make big changes. People who lose their jobs may sell their cars, and share with others. Teenagers who don’t get jobs will not buy a car. People with low wages and long commutes will look for people to share rides with.

Oilprice.com: A short while ago Forbes ran a piece on Thorium as possibly being the biggest energy breakthrough since fire and both China and India have announced their intentions to develop thorium reactors. What are your thoughts on thorium as a possible replacement for uranium?

Gail Tverberg: From everything I have heard, it is still a long ways away—at least 15 years. If it would work, it would be great.

Oilprice.com: In another article you have linked energy to employment and recession. Are you suggesting that without growth in energy production the economy will not grow, and employment levels will not rise?

Gail Tverberg: It takes external energy to make anything that we make in today’s economy. It takes energy to operate construction equipment, or to operate a computer, or to manufacture and transport goods. Even making “services” requires energy.

So if we have a lot less energy, today’s jobs are likely to be impacted. It is possible that we can create more half-time (and half-pay) jobs, but the result will still be that the world will be a lot poorer. We can still do jobs that don’t require external energy (such as make a basket out of reeds, or wash clothes in a stream), but our productivity will be much lower than when electricity or oil was available to leverage our production.

Oilprice.com: What is the most pressing matter that will affect the world in your opinion? food shortage, water shortage, energy shortage, climate change, etc?

Gail Tverberg: I think the immediate problem will be financial, but caused by high-priced energy.

The big concern I have is that financial problems will lead to political disruption. The natural tendency of countries with less energy supply is to break into smaller units—for example, the Soviet Union broke up into Russia and its member nations. There is now talk about whether Catalonia can become independent from the rest of Spain, and whether the Euro can hold together. If breakups become a major pattern, even spreading to the New World, it could make international trade much more difficult than today.

Financial problems could also lead to debt defaults and rapidly shifting currency relationships. These, too, could lead to a reduction in international trade.

Oilprice.com: Economic growth is what the public expects, anything less is treated as a recession, but is constant economic growth a realistic goal? Is it achievable?

Gail Tverberg: Constant economic growth is not a realistic goal. We live in a finite world. This is obvious, if a person stops to think about it. There are only a finite number of atoms in the earth. There are interrelated biological systems on earth, and humans are one part. Humans cannot become too numerous without destroying the ecosystems that we depend on.

In a finite world, it is clear that eventually extraction will become more expensive. When we first started extracting fossil fuels, we started with what was easiest (and cheapest) to obtain. As we move to more difficult locations, such as deep under water, or the Arctic, the cost becomes more expensive. It is these high costs that seem to be disturbing economies now.

It appears to me that we are now hitting some version of “Limits to Growth”. Most economists haven’t figured out the connection between the economy and the natural world, so are oblivious to our current predicament.

Oilprice.com: If the transition from fossil fuels to renewable energy is ever actually made, what do you believe will be the effect on GDP?

Gail Tverberg: I don’t see renewable energy as being sustainable on its own. If it were, we might expect a GDP level of perhaps 10% or 15% of today’s GDP.

Oilprice.com: Other than a severe reduction in the global population what solutions are available to humanity as it reaches the limits of the planet?

Gail Tverberg: Unfortunately, solutions seem few and far between.  Our biggest problem seems to be a lack of time to fix a financial problem that seems very close at hand.

A partial solution for some people may be a reduced standard of living combined with local agriculture.

Regardless of what happens, we do have quite a lot of “stuff” that humans have made that will cushion any down slope—roads, houses, clothing, and tools, for example. Many people would like a solar panel or two for their long-term use. We also have knowledge that we did not have on the upslope.

The past 10,000 years for humans has been real miracle, first with the discovery of agriculture, and later with the discovery of fossil fuels. If there is a Guiding Hand behind what is happening, there may be other miracles in store, as well.

Oilprice.com: In your opinion, who will make the better president in terms of energy policies and saving the economy, at the upcoming elections?

Gail Tverberg: The last presidential candidate that I had real enthusiasm for was Ross Perot in 1996.  He would have put the United States (and the world) on much more of an isolationist path. In retrospect, this is the one thing that would have helped put off the predicament we are in today, because it would have slowed world economic growth, and with it the extraction of resources. World population would probably be lower now, too.

In this election, I would probably slightly favor Romney, because he seems to have some grasp of the issues we are up against. As I look at the numbers, it is absolutely essential that we start cutting programs, if we are to balance the budget. As bad as fossil fuels may be, they provide our jobs, our food, light, and heat so we need to continue to extract them. We don’t seem to have very good alternatives at this time. Even what we consider renewables depend upon fossil fuels.

In the next four years, I expect we will find ourselves doing a U-turn on economic growth. I don’t think either candidate (or for that matter, any leader) will be able to handle this well. Ideally, the new leader should be looking at the issue of how to deal with a low-energy future. Do we move to local agriculture, and if so, how? If rationing is done, how should it be done? If there are not enough jobs for everyone, should we go to more part-time jobs?

Romney has been accused of flip-flopping, but in some ways, with such big changes coming, I think that what we need is someone who is willing to change his views with changing circumstances. We seem to be headed for truly uncharted territory.

Oilprice.com: Gail thank you for taking the time to speak with us. If you are interested in learning more about Gail and her work please do take a moment and visit: Our Finite World

[Audio currently unavailable]

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
This entry was posted in Energy policy, Financial Implications, Oil and Its Future and tagged , , , , , , , , . Bookmark the permalink.

137 Responses to Renewables Are Overrated, We Need Cheap Oil – Interview with Gail Tverberg

  1. Tony Weddle says:

    Please don’t advocate nuclear energy in any way whatsoever. Unless, that is, you truly believe that every society that does increase that portion of its energy will be stable for centuries.

    • Nuclear Energy is not Renewable Energy, its just an extension of the current paradigm utilizing Fossil Fuels that might extend and pretend a bit longer. The downside of this extension is that long term it further poisons the environment. I wonder often why Gail paints a Positive Spin on Nukes, when by all reasonable measures they first cannot work to resolve the energy deficit in transportation and food production, and second are clearly not sustainable and have enormous potential for further poisoning the environment.

      The more Environmentally “Friendly” renewables like Hydro, Wind and Solar PV have their own issues also of course, primarily that they cannot possibly meet the energy usage in current Industrial cultures.

      If we are to avoid Mad Max, the simple fact is that we have to REVERSE ENGINEER to a lower enegy footprint for Homo Sapiens. It can be done, though of course at nowhere near current population levels.

      Advocating for Nukes is advocating for an Extinction Level Event for not only Homo Sapiens, biut just about all organisms above the level of the Tardigrades. It is asking for an an Extinction Level Event on the level of the Permian Extinction. It is NOT a solution. The ONLY solution is to REVERSE ENGINEER to a Lower Energy Footprint for Homo Sapiens. Gail should REPUDIATE Nuclear as a solution if she wants Homo Sapiens to survive here. Anything short of complete repudiation of Nukes is a DEATH SENTENCE for Homo Sapiens and all animal life above the level of the Tardigrades.

      RE
      http://doomsteaddiner.org

      • I tried to advocate for looking at nuclear further. I agree that nuclear also requires fossil fuel, and it also requires maintaining our current system. I wish we had good solutions.

        • Neticis says:

          Consider that Thorium half life is 13 billion years, but Sun will last for another 4 billion, then Thorium in Earth’s crust will outlast Sun.
          And then “renewables” (water, wind and biomass) are only proxies for Sun’s energy.
          So actual problem is, that if something is spent by exponential growth rate (e.g. 5% a year which will double every 15 years), nothing will last long.
          Fertile nuclear materials will be our future, but we will have to learn without “continous growth”.

        • Tony Weddle says:

          We do have good solutions. Powering down and returning to simpler, sustainable lifestyles.

          • We require energy for food and many basics. A lot of the US population is living close to the edge already. It is hard to make powering down “work,” without affecting the ability of those on the edge to have the basics. Also, it results in job loss, leading to even more on the edge.

            If we (or the world) keeps growing population, the problem doesn’t really go away either. We have reduced demand in one place, only to have it re-appear elsewhere.

            • Tony Weddle says:

              But powering down will be made to work, one way or another. Powering down is inevitable so it would be best to figure out a way to power down in a managed fashion (though I have no expectation of that happening). Yes, energy is needed for food and many basics but that doesn’t mean that we need external energy sources, though some would be nice. Wishing for something doesn’t mean that it is either likely or possible. Reality checks are often required.

        • There are no good solutions, but some are worse than others and Nukes are the worst of them all. We can’t “Let Nature Take it’s Course” with Nukes, because if we do that then eventually we will have 500 Fuk-U-Shimas and entire Globe poisoned instead of mainly just Honshu and Hokkaido islands.

          We need to actively advocate for the Decommissioning of all Nuclear Reactors and the sequestering of all the spent fuel in the place it is likely to do the least damage, either in Antarctica or in a subduction zone around the Marianas Trench.

          Then in Transition to a low energy footprint society we need to ban all private automobiles and ground all airplanes and convert all shipping back to Sail. All large cities should be put on Rolling Blackouts, providing electricity for 6 hours a day to each neighborhood, enough time to keep the Refrigerators cold. All HVAC should be banned. For the rest of the time you run diode lights off your Car battery you charge up when the electricity is on. This should extend out the lifespan of remaining cheap fossil fuels long enough to hopefully move people out of unsustainable Big Cities & Suburbs and move them into decentralized small towns with local food production.

          The better solution to the energy problem is not trying to come up with new techno-solutions which inevitably have blowback, but rather going on a crash diet off the Energy Jones we have worked our way into over the last century. Not a perfect solution because it will inevitably result in a much higher death rate, but it’s a better solution then causing an Extinction Level Event of ourselves and all other living things above the level of the Tardigrades.

          RE
          http://doomsteaddiner.org

          • Leo Smith says:

            Of course the big news – the really important news from Fukushima and Chernobyl is not how many people died.

            Its really how many people, despite dire predictions, did not die, and continue stubbornly to refuse to die.

            When you have a radiation model that predicts hundreds of thousands of deaths, and the actual figure is less than 100 (chernobyl) or exactly zero (Fukushima) that is not evidence the nuclear power is dangerous, its evidence that something is seriously wrong with the model.

            These are of course the same people it seems who are predicting catastrophic climate change….

            • Jack Dingler says:

              Are you arguing that people can’t be killed by radiation?

              The issue is that people do not understand the models nor do they read the studies fully.

              These studies predict deaths over time. People incorrectly believe that they refer to instant deaths, or deaths in a very short period of time. An increase in radiation exposure, increases the risk of cancer over that person’s lifespan. It is impossible to know exactly how many people will die from these two events, but we know the number isn’t zero. You will hear people making such claims though.

              Likewise, we will never know exactly how many people have died from gunshot wounds. But we can be sure the number isn’t zero. Using Chernobyl logic, perhaps you could make that argument?

              According to peer reviewed studies, an estimated 30,000 to 60,000 people will contract cancer from the Chernobyl event and die. It’s only an estimate because there is an overlap of people who would’ve gotten cancer from other causes. The estimate simply tells us that these people died sooner than they would’ve, had the Chernobyl meltdown never happened.

            • Tony Weddle says:

              Remember, though, that hundreds of thousands of people were displaced and had their lives ruined or severely disrupted. Numbers of deaths is a difficult thing to pin down to particular causes, over decades, as are numbers of health problems but they aren’t the only measure of the impact of (inevitable) nuclear accidents.

          • I think we really need to understand what we have already gotten ourselves into with the huge amount of nuclear we have around already. I think the question of what radiation does to people and other animals needs to be looked at further. There seem to be two positions that are very apart on the matter. We need to understand exactly what we are up against. Is it as bad as everyone fears, or is it much less bad?

            There is a second question of whether we build more (and if so, what kind). Given how far along we are in the collapse cycle, it may very well be that building more (and even decommissioning what we have) is beyond what we can handle. But it seems like we need to understand the situation better.

            • Jack Dingler says:

              There are feelings that people have, based on what they want to believe, and then there is factual documented research. I’ll go with the actual studies and scientific knowledge.

              The folks that think high levels of radiation is perfectly safe, are welcome to collect and eat shellfish in the precinct of Fukashima. I won’t do it.

            • Tony Weddle says:

              But, Gail, it doesn’t really matter “how far along we are in the collapse cycle”. “it may very well be that building more (and even decommissioning what we have) is beyond what we can handle” It’s not a case of what we can handle now, it’s a case of not knowing what society in future will be able to handle. That will always be an unknown but the likelihood of collapse being too far along for plants to be shut down and decommissioned is quite high, given the building, operating and decommissioning periods. I’m fairly certain that plants around now are going to cause a big problem for future generations, never mind adding more to them.

    • The issue with nuclear isn’t always increasing. In a lot of cases it is staying the same. The question becomes: which is the best of our bad options? Also, will we even be consulted on the matter? Perhaps nature will take its course, regardless of what we try, because we cannot keep up the complexity to maintain current systems.

      • Tony Weddle says:

        As you say, we cannot continue with our current level of complexity. Nuclear reactors, including their operation and decommissioning are very complex. The comment about the proportion of nuclear possibly staying the same is missing the point. If the absolute quantity of nuclear installations goes up, there is an increased likelihood of serious problems during their lifetimes, including the period when the encompassing society remains relatively stable.

        Please don’t advocate nukes in future. Let’s not choose any bad options. A good option, as mentioned elsewhere is to power down. We’re going to have to do it at some point; it is far better to plan for it now and to start moving that way now, than leaving it until nature forces us that way.

    • Mel Tisdale says:

      Have a look at thorium reactors (LFTR). I am very anti some nuclear weapons (MIRV delivery with small CEPs for obvious reasons) and certainly see that some nuclear weapons can be used by terrorists. It is almost impossible to make a nuclear weapon with a thorium reactor and even if one were made, its radiation would scream: “Here I am!” Another safety feature is that they automatically shut down in an emergency. Had the reactors at Fukushima been LFTRs, the tsunami would have been a none event from a nuclear reactor perspective. As for the 15 year figure regarding their development, according to Kirk Sorensen, an expert on LFTRs, a concerted effort to develop them would only take about four years, if I remember correctly. (He talks about it in a video, but I cannot readily find the exact quote at this moment.)

      We need to fight climate change and nuclear is by far the most sensible way to go. All we need is the Greens to care about the long-term and stop their knee-jerk reactions to all things nuclear, regardless of what it means to following generations. Until we can guarantee that there will never be long periods of calm wind conditions and the sun will shine through the night, then, without nuclear power generation, renewables will require fossil fuel backup and a major revision to the electricity grid in order to cope with their intermittency of supply. And the size of that back-up will have to match the full demand minus any battery backup. What a waste of money!

      • Tony Weddle says:

        So, are you saying that LTFRs are intrinsically totally safe, even in a collapsing society?

        • Leo Smith says:

          Maybe reactors are the way to NOT have a collapsing society.
          People seem top want to return to a mediaeval society. I wish them joy of it.

          • Jack Dingler says:

            It requires 50 nuclear reactors to make up for 2% of the oil the US consumes. The number goes higher if you include all fossil fuels.

            So simply to make up that 2% in supply that isn’t growing, we need to put into production 50 nuclear power plants each year. Assuming a ten year construction plan, that’s 5,000 in various stages of construction at the same time. This would require most of the materials and fossil fuels than is currently allocated to construction projects all over the nation. To do this, we’d have to end all industries that don’t contribute to building more plants. No more movies, road construction, houses, etc, cars etc…

            If we stay static on nukes, we face a declining economy, an a fundamental economic inability to decommission and maintain the plants. We’ll have to accept that eventually they will all melt down and make the USA uninhabitable. Or was you previous argument that meltdowns don’t endanger lives?

            People have feelings that nukes can save us. Every time I start looking at the numbers, it looks like we hit cold hard walls that make it impossible without some unknown magic solution, like a self contained Mr. Fusion ala ‘Back to the Future’.

          • Tony Weddle says:

            I’m not sure what you’re saying here but there really is no way to stop a society collapsing, unless it is collectively willing to recognise unsustainable behaviour and manage the change to sustainable behaviour. The chances of that happening are slim to none, so I think it best not to pepper societies, that will inevitably collapse, with (more) nuclear reactors.

  2. robert wilson says:

    Googling radiation hormesis, I find the first of many entries to be a reasonable survey from Wikipedia. T. D. Luckey is referenced in the external links. He actually wrote two relevant books on the subject
    http://en.wikipedia.org/wiki/Radiation_hormesis#Humans

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  4. Tony Weddle says:

    The question about a peak in oil production was a missed opportunity to mention that it is only the high priced and low EROEI stuff that is managing to keep all liquids production barely growing. Conventional oil production (plus condensate) is on a bumpy plateau and regular crude is still well below its peak. High prices (or a range that is well above prices in 2005) are mandatory for growing (for a little longer) all liquids production.

    I’m surprised about the remark on miracles. Agriculture wasn’t a miracle and took root only slowly. The discovery of fossil fuels wasn’t a miracle but inevitable, given how fossil fuels are made, how they accumulate and the geology of the earth.

    • Perhaps some of us see more miracles than others.

      • Tony Weddle says:

        But miracles are happenings that defy nature; that can’t be explained by natural means. The things you mentioned definitely were not miracles.

        Have you read Kunstler’s lates book, Too Much Magic? We really must place no hope in magic or miracles to get us out of, or through, this mess.

  5. yt75 says:

    What a title !
    And then this :
    “He would have put the United States (and the world) on much more of an isolationist path. ”
    Really quite funny when Gail’s main argument against promoting efficiency policies in the US is that it would leave more oil for the others.
    I guess I better stop reading this blog ..

    • There are a lot of ironies “out there”. I don’t try to please everyone, just report what I see.

      Efficiency is good, in terms of allowing whatever supply we have to “go further,” so in that sense should be supported. Everyone wants to reduce costs, so that is another continuing push toward efficiency. Exactly what the outcome of increased efficiency is, depends on the situation.

      There are really two separate cases:

      1. Oil – World oil supply is constrained (won’t go up by much, regardless of what demand is), and we are trading it internationally. While it is really kind of you or me to reduce our demand, it really doesn’t affect world oil consumption. It does get the supply that is available shared more equitably. It also may help to reduce import costs for a country, if it actually results in lower use (rather than same amount of use divided among more people, who can now afford it).

      2. Coal and natural gas. Here supply can still be ramped up, if demand is greater. The question with increased efficiency is whether it increases or reduces demand. Historically, it has increased demand, because with increased efficiency, more people can afford the product, sending total demand up, and thus total production up.

      • Don Stewart says:

        Couple of very good counterbalances to the notion that ‘energy and production are everything’ have appeared in the last couple of days.

        First, I have already alluded to Dmitry Orlov’s praise of Kropotkin and his work on anarchy as the ideal social and political arrangement: Article is free. This is the middle of three articles Dmitry is writing:
        http://cluborlov.blogspot.com/

        Second, Charles Hugh Smith weighs in on Chris Martenson’s blog Peak Prosperity with a piece entitled Finding Authentic Happiness. You can read part 1 for free, but part 2 will cost you a membership fee. A short quote from Part 2:

        where having an abundance of money (“prosperity and wealth”) is seen as the one essential key to happiness and fulfillment

        Charles gives the most comprehensive and coherent discussion I have seen of what the human potential is and how it is frustrated by our modern social and political system. If you read extensively in Charles blog Of Two Minds, or in his book Resistance, Revolution, Liberation you will see all the ideas in this post.

        If we put Orlov and Smith together, then we come out with the notion that Total Integrated Solutions aren’t likely to work even in terms of giving us more money, and that having more money (and energy) isn’t likely to solve our problems as human beings.

        This is, to me, the fundamental disconnect. I think we are about to experience a period of declining energy. But is that a catastrophe? Or is it just something we need to deal with?

        Smith wrote an article several weeks ago asking ‘Are You Sick of Buying Stuff’. He related how he lives in a working class neighborhood where the houses have one car garages, Yet he is the only house on the block who can actually get his car into his garage. How you look at that observation will tell other people a great deal about your fundamental view of the world.

        Don Stewart

        • I can indeed relate to the garage thing. I just tidied up mine so that I could in fact get my car inside the garage and noticed then that there were 2 cars parked in front of most houses where I live (we only have 1 car), often occupying common guest spaces as well. I guess they were having the same problem of “too much stuff around”. :)

          When I was selling my previous flat, the bank had sent a photographer to shoot it outside and inside for the ads. He had a good line I still remember: “You should make sure that you have space in a cupboard or storage room for every thing you buy, if you have to rotate stuff, then you have to get rid of some stuff.” – Naturally he was thinking about that for a housing ad photo they really want to show the rooms and not your stuff, and that having enough storage capacity for your stuff made it easier to hide it away. We have since tried to move towards a more minimalistic interior, and my old CD collection is stored in boxes in the attic as well (although there are other reasons for that too which I assume others can relate to). As a good consumer I have been through some serious collecting habits, which seems hard to get rid off. :)

          People just collect so much junk – but I’d prefer that they didnt throw it away in the rate they do, but rather kept more of the stuff around longer before “upgrading”. I recently found two 17″ LCD screens on a electronics return heap, both works brilliantly – and I think my use of them will mean more to the world than the recycling of the materials for now.

      • There are indeed many ironies. Free trade (a partner of growth) has ironically made China one of the most polluted places on earth, amplified American’s consumerism and spread consumerism all over the world. Note, that I am not talking about clean water, a safe, modest comfortable home, indigeneous nutritious food for my brothers and sisters in Swaziland (or other places) which can happen through capitalism (or other systems one might suggest), but the cellphones, cigarettes, video games, etc., and gigatons of packaging that come with consumerism. I actually remember the opposite of WTO (on its current campus in Geneva), and a world that was not particuraraly consumerist in America in the 60’s, or in Europe in the 70’s, certainly by comparison to today. So maybe NAFTA and WTO might look a little gloriously wonderful in retrospect.

      • yt75 says:

        I have no problem with “ironies” plural or singular (and in fact had no problem with the title as such).
        But first, you two statements above are contradictory, in 2) you refer to Jeasons “paradox” (or rebound effect), this works irrespective of oil or coal or gas, and irrespective of pre or post peak for any of these, it just says that efficiency increases the value provided by a given amount of input fuel, so that in the end it can be used more, or a higher price is bearable.

        In 1) you would suggest that if a country is putting taxes on fossile fuels for its citizens usage, it would be out of an altruistic sentiment toward other countries : not the case at all, a pure selfish (as usual) political decision, aimed at accelerating the adpation of its infrastructure in a very general sense (private vehicles included). This “leaving more oil to the others argument” really makes no sense at all, the point being that at a given time the country still pays the same price as any other on the market, except that it needs less per gdp unit so that overall it still has a higher gdp than if it didn’t put taxes. And you could add that this push to efficiency will also probably have had an influence on the products it does, making them more competitiv on the market.

        But overall I see our time as special in the sense that you can always have two “state of mind”(or more than before) :
        1) The thing is going to collapse anyway, let’s move to a doomstead quick with guns and ammos, so as to be part of the remaining ones
        2) Let’s have a talk about how the economy could adapt to the decreasing availibility of cheap energy in the form of fossile fuels.

        And about Ross Perot and the US becoming more isolationist, sorry but this really sounds a bit naive in not realizing what is the current “business model” of the US (or even the “west” in general). Besides this would require a very serious push in efficiency in the US.

        Regarding policies toward efficiency or alternative production in general, they can probably be broadly classified as follows :
        a) Regulations : incandescent light bulbs forbidden for instance, or a given mpg mandatory for a given segment of vehicle, speed limits, mandatory insulation level, etc
        b) Subsidies : You decide that something is a good “solution” and then you subsidize it. Typical exemple corn ethanol, or feed in tarrifs for PV or wind. Although not the case in principle, subsidies are usually more on alternative production than efficiency investment side (except for common infrstructure)
        c) Volume based taxes on inputs: You don’t have to say anything about the “solutions”, you just favor any of them be it on the conservation/efficiency side or alternative production side.

        And even if the word “tax” is kind of taboo in the US especially these days, I think volume based taxes on fossile fuels happen to be the more in line with a “free enterprise” spirit, are the easiest and less complex with less administrative overhead, and the less prone to errors on what makes sense to do and less prone to various cheatings.

        Plus you could say they impact the poor more than the rich, but that would be forgetting that :
        1) subsidies have to come from somewhere
        2) it is more the rich than the poor that benefit from subsidies, it isn’t a poor family in an appartment project that will put PV on its roof or buy a volt

        • Jack Dingler says:

          Jevon’s Paradox is not contradictory to the notion that if you use less, it will just make more available for others to use. If you make your processes more efficient, you’ll use less for a given quantity of product, freeing up resources for other uses or users, and they will use it.

          So you’re arguing that if a nation reduces it’s oil consumption then no other nation will buy the oil that is no longer being purchased by that nation? Would that oil clog up the pipes, sit in tanks or just get stored in tankers? Why wouldn’t someone else buy it?

          I took her argument to mean that their is an altruistic effect, not that a nation would do this to be altruistic. I don’t see how you read this the way you did.

          Gail myself and many others have written extensively on how the alternatives are heavily dependent on an oil economy to remain viable. Even if we could make a sustaining economy based on renewables, we’d have to adapt with a much lower energy usage, and an end to the notion of economic growth. This would end much of the energy consuming technology we’re accustomed to today. Our civilization will not take that road without a fight.

          I can’t see how that isn’t our future. The oil will run out, and the nuclear power plants that can’t be decommissioned in a depression economy will eventually melt down and explode. In the midst of that I expect war in the USA. It’ll be an exciting time. Much like the times experienced by other collapsing civilizations, but with a high tech twist.

          • yt75 says:

            Sorry, I can’t argue with people mixing everything up on purpose or not.

            What I am saying is that a nation taking efficiency promoting measures in a “free” (or let’s say same for everybody) market regarding the ressources, will be better than if not taking them in the future (under a non collapse hypothesis), on a pure “nation selfishness” standpoint, that is all.
            And in fact the effect of Jevons (or rebound effect same thing) could be the ability to buy more of them.
            I am also saying that volume based taxes is the best policy for that, that is all.

  6. I will not stop reading this blog. It’s just too funny and always reminds me how uneducated average finance guys like Gail, interviewers and most of the commenters here are :-).

    • arthurrobey says:

      Hi Peter,
      Are you a follower of Professor Steve Keen.http://debunkingeconomics.com/ ?
      He predicted the crisis.
      I subscribe to his website. I do hope that I am not wasting my money attending his lectures.
      As all Economics is a Left brain model making exercise therefore it is self referential.

    • Ikonoclast says:

      Perhaps you should educate us with an insightful and comprehensive reply.

    • Andrew of the Bay Area says:

      Peter, arrogance like yours is half of the reason we are’t going to solve any of our problems. How ENLIGHTENED it is to go around telling everyone else they aren’t educated? I can just see the Bishops telling Galileo he knows nothing. Why don’t YOU educate us, Peter, instead of insulting us all?

      Peter, have you ever heard the saying: “He who claims to be a wise man is surely not one at all”? I tend to think anyone who arrogantly claims as such is just a fool. Now, prove us wrong, genius in disguise!

  7. Arthur Robey says:

    Good article Gail, as always.
    Professor James Lovelock says that we evolved on a radioactive world. The potassium in our very bones is radioactive. In the nuclear synthesis of the “metals” (astronomer speak for everything heavier than helium) nature did not somehow preclude the other isotopes. All of them were produced. We got the lot. And we evolved with the lot.
    There are about a thousand nuclear transmutations per second per square meter due to that enigma of particle physics the Muon, a heavy electron.
    In August I went to the 17th Cold Fusion conference in Daejeon.
    http://coldfusionnow.org/updates-from-iccf-17/
    I progress being made fast enough? Of cause not, but it is a fresh field and there are a lot of discoveries being made.
    I have a copy of the Limits to Growth model. I have yet to guide humanity past AD2500. No matter how I tweak the inputs soil degradation gets us in the end. The population drops to zero.
    To address this issue I have formulated a new future for you. It is a light read outlining a possible alternative future.
    http://coldfusionnow.org/gallery/arthur-robey/the-breeding/

  8. Pingback: Renewables Are Overrated, We Need Cheap Oil – Interview with Gail Tverberg | Stock Market News - Business & Tech News

  9. Ikonoclast says:

    It appears Gail getting a fair bit of flack (criticism) for this interview so far. I’d like to do a point by point on it.

    1. The title over-simplifies and even caricatures Gail’s position which is considerably more complex than the title banner. I assume Gail did not write the banner. It’s not really fair criticism to snipe about the title.

    2. Central to Gail’s view is the contention that we live in a world of finite resources. This view is not open to challenge unless you want to jettison the Laws of Physics in an argument which is quintessentially about quantities of matter and energy.

    3. It is fair to say that the phrase “renewables are over-rated” is part of Gail’s views. I think that Gail is partly wrong and partly right in saying this. Specifically, Gail is totally right when it comes to biofuels. Manufactured biofuels like ethanol are a waste of resources in EROEI terms as they usually return little more than one energy unit for each energy unit used in manufacture. Biomass fuels are handy but are only a niche addition to a modern industrial civilization. For example, a sugar mill can get all its own power needs from burning bagasse (cane trash). Hydro power is good and economic but can ever only provide niche amounts of power on a world demand scale. Tidal power would seem to suffer the same limits as hydro power in terms of relatively limited numbers of useful sites.

    Let us now move on to wind and solar as renewables. In this area, in my opinion, Gail is wrong in being overly dismissive of the potential of these sources. Exploited to the full, these sources can deliver good net EROEI; about 10:1 for solar and 20:1 for wind with current technology. The use of oil derived fuel energy (gasoline, diesel) in manufacturing these units is not relevant SOLELY in an EROEI sense IF the oil derived fuel energy is already costed in the derivation of 10:1 for solar and 20:1 for wind. You will note my careful caveats and provisos in that statement.

    The oil derived fuel energy inputs ARE an issue IF that energy was not costed in the derivation of 10:1 for solar and 20:1 for wind. They are also an issue IF substitutes cannot be found for oil in transport and manufacture processes.

    Gail seems to take the position that we are SO dependent on oil (for fuel, lubrication and industrial feedstocks) that it can NEVER be substituted in ANY manner whatsoever. Gail also seems to take the position that we are SO dependent on our current high, wasteful use of oil that we can NEVER make economising adjustments (like phasing out the private automobile in favour of mass transit). Both of these parts of Gail’s views are IMO strongly SUBJECTIVE judgements on her part. There is a lot of qualitative and some quantitative evidence in favour of Gail’s view but Gail still seems to leap to a judgement on this matter too quickly, again IMO.

    There are also good chunks of qualitative and quantitative evidence to suggest that Gail might be wrong in being so doctrinaire that solar and wind can never do much for us. I would like to see Gail undertake a more thorough-going quantitative analysis of the viability of wind and solar rather than just presume it is not viable because it is subjectively difficult for her to imagine that it could be viable.

    This is the point where I am probably most critical of Gail’s position. I may be wrong in my above statement and if so I apologise. However, it does seem to me that Gail is allowing her subjectivity to somewhat rule her intellect on this issue. I might also add that I have read materials from a lot of good minds on this topic and the good minds seem to be divided on the issue of the viability of solar and wind to drive at least some sort of advanced but more modestly sized and more austere modern civilization. If the good minds are divided then it is possibly a question that lies somewhere on the boundary of the possible and the impossible.

    One reason that this issue is vital is as follows. IF solar and wind could prove viable in the above sense BUT we give succor to the position that we must use all fossil fuels or collapse entirely THEN we are ensuring a near full fossil burn and the certainty of wrecking our climate and our coastlines with sea level rise. It would actually be better (if solar and wind are say a 50/50 viability bet) to stake our all on that possibility. If we burn all fossils civilization IS entirely doomed. If we stake our all on a wind/solar economy transition we might save something. If you told an investor in a bankrupt company that Option A guarenteed 100% loses and option B gave a 50% chance of getting 50 cents in the dollar then he/she would take option B.

    4. Financial problems at the level of national finances are only symptoms of (a) real limits or (b) real stupidity. This is a Boolean “or” not an “xor” or “exclusive or”. In other words I am saying that financial problems at the level of national finances are symptoms of (a) real limits or (b) real stupidity or (c) both. Only real limits will cause a sovereign nation with a sovereign currency real problems unless the polity is propagandised and/or ill-educated in economics. Unfortunately, the polities of the USA and Australia are propagandised and ill-educated. But we are still in better positions than the countries of West Europe because our countries still use a sovereign currency rather than an effectively foreign currency like the Euro.

    To Greece, for example, the Euro is effectively a foreign currency and using a foreign currency puts national fiscal and monetary policy in a straight jacket. This is especially damaging when the single currency area is not an optimal currency area (having big differences in economic performance in different regions) and is also not a federation. In a federation, like the USA or Australia, horizontal fiscal imbalance can be dealt with by Federal Govt transfers to the poorer states in the Federation.

    Government debt is never a problem for a country which issues its own sovereign currency. Such a goverment can always inflate the debt away or renege on debts. Such a government does not even need to borrow if it does not wish. The essential reason for issuing government bonds is to set an interest rate policy. Australia discovered this when its Federal Govt reached debt free status in the late 1990s. After considering the abolition of Govt bonds it decided to keep them for the necessary purpose of setting interest rates.

    A government can deficit spend (spend more than it raises in taxes by “printing money”) and can do this indefinitely without the danger of excess inflation WHILE the economy is still under capacity. That is while the economy has under-utilised plant and under-utilised labour i.e. unemployment. This is exactly the position of the USA currently which is deficit spending on a large scale and yet is not experiencing significant inflation precisely because of capacity under-utilisation in the economy. This is standard Keynesian counter-cyclical policy. Keynes was right. Friedman was wrong, The empirical facts prove this over and over.

    Once an economy reaches full capacity utilisation of plant and labour (full employment) then printing excess money can cause inflation and even hyper-inflation if taken to extremes. Wise governments respond to full capacity booms that overheat by then running a surplus to take the heat of the economy. Once again, this is standard Keynesian counter-cyclical policy. In all this, a sovereign Government NEVER has to borrow, NEVER has to sell bonds (or buy them back) unless it wants to do this to set interest rates. It can always run surpluses and deficits in a counter-cyclical policy and create fiat money out nowhere as required. As the economy grows the government must create fiat money out of nowhere or else the volume of money circulating would soon be deficient and deflation would occur. So while we still have a growth economy, all the above holds true.

    Thus it is not correct to worry about government debt with a mature, extensive economy and a sovereign currency. In cases, government debt is a complete non-issue. In fact, running a surplus is often a worse sin. When a government runs a surplus and generates an aggregate demand shortage due to currency shortage there a two possibilities. One is deflation. The second is private debt money. The huge and ultimately unsustainable debt booms in the US and Australia were caused by federal govt running surpluses or at least inadequate deficits. So in short, federal government debt in a sovereign currency does not matter a fig. Private debt does matter.

    5. A more isolationist, or at least less globally interferring international policy, by the USA would be good both for the USA and for the rest of the world. When the USA attempts to impose a Pax Americana on the whole world it over-extends itself (particularly by military over-reach) and creates inordinate materiel costs and unconscionable human costs for itself and the rest of the world. The US should retrench partially to become “merely” a great Pacific power, an equal NATO partner and a more limited partner of Israel rather than attempting to remain the world hegemon. The USA needs to return to the consensus diplomacy of Bush Snr. who was very successful in seeking and getting multiple allies to prosecute Gulf War 1. The Bush Snr. administration also had limited and very clear war objectives so that the exit criteria were clear.

    • Jack Dingler says:

      I don’t think anyone doubts that in theory, we could make better use of our resources.

      The disagreement comes about when we start taking about humans implementing these policies on a world scale. I believe that human history provides overwhelming proof that humans can’t do this in a rational manner. We aren’t even capable of agreeing that there is a problem, on a scale that is large enough to get anything done.

    • 3. I think the EROEI calculations for wind and solar PV are misleading, rather than helpful. The calculation looks at far too small a piece of the total picture. Charlie Hall is more and more of this view also, from what I can see. He is working on a book with Pedro Prieto on why solar PV is not working well in Spain. If we really had a way of integrating intermittent renewables into the grid, in a reasonable way, that would be one thing–but we don’t. I think it is likely that the attempt to add intermittent renewables will reduce the lifespan of the electric grid, because it will make it harder to keep stable total flow. Thus, the effort may prove to be counterproductive besides expensive.

      4. Whether or not governmental debt is directly a problem, I think that unstable currency relationships, (so you can’t sign a contract now, with a reasonable likelihood of knowing costs when goods are completed) and the inability to pay in the future will greatly reduce trade with countries with debt problems. Who will be willing to accept ever more IOUs from a country, if it is clear that these IOUs can never be paid?

      • Ikonoclast says:

        Gail you say: “I think the EROEI calculations for wind and solar PV are misleading, rather than helpful. The calculation looks at far too small a piece of the total picture.”

        3. I agree that we need a comprehensive calculation of all energy inputs to wind and solar PV. This would comprise the total amount of energy consumed (including wasted energy) in the processes of manufacuring, transporting, installing, supporting and decomissioning wind and solar PV. No doubt a full life cycle calculation is devilishly difficult. Are you aware if anyone has completed such a comprehensive study and calculation?

        The difficulty of these calculations is the reason why I would support a complete non-subsidy approach to all energy in the absence of global warming dangers. However, global warming dangers are becoming present and this changes the picture. We cannot rely on market forces alone, at least not while negative externalities are ignored. Therefore we need a complete energy auditing of our entire economy and dirigist (government directed) approach. If the US government implemented a proper (properly calculated) carbon tax, it could protect its interests by placing a similar carbon tariff on all imported goods where it deemed that the exporting country did not impose an adequate carbon price on its own manufactures.

        4. Your reply to my government debt analysis gives food for thought too. The analysis I provided is probably Keynesian with an MMT (Modern Monetary Theory) flavour. In my opinion it is a valid theory but like all valid theories, carefully considered, it has limiting conditions at least for global application. The limiting conditions include but are not limited to the conditions of there being (globally) sovereign government actors, fiat currency in each government zone, floating exchange rates and no gunboat or expeditionary army diplomacy. The Euro Zone violates these conditions in that the single currency area does not equal a single sovereign government area. China violates these conditions in not properly floating its currency. The USA violates these conditions by using expeditionary army “diplomacy”. Whether a small country (say Zimbabwe or Tuvalu) violates these conditions is inconsequential for the global system.

      • I suspect that I 90% agree with you on the grid issues, but I think ultimately the commercial grid tie connections measured in megawatts are the worse way to do this. I would have much preferred moving the PV onto the buildings for local use with some excess feeder into the grid (aka grid tie) specifically where the generation through PV was directly used to its use in the time domain as well. Consider schools 9 months out of the year, they operate during the day, they generate during the day. Our 45,000 person town’s “townhall” uses 70% of its energy during the day when the people are there, i couldn’t even persuade that a 200kw roof installation displacing retail pricing, was better than 5MW in some field being bought wholesale. The whole grid connection metaphor is a problem in my mind.

    • “1. The title over-simplifies and even caricatures Gail’s position which is considerably more complex than the title banner. I assume Gail did not write the banner. It’s not really fair criticism to snipe about the title.”-IK

      The title does NOT “over-simplify” Gail’s position as she presents it in the articles she writes for the MSM. She consistently WHITEWASHES the issues because she wants to get her stuff PUBLISHED on MSM outlets, so she doesn’t want to appear like a “Crackpot” or “Doomer”. She pulls her punches in her articles because she is afraid people “can’t handle the TRUTH”, and because if she does write the unexpurgated truth then she won’t get Published ont he pages of Biz Insider, OilPrice.com etc. She has explicitly admitted this every time I take her to task for this sort of waffling.

      In the Commentary here you can ferret out Gail’s REAL viewpoint, but she certainly doesn’t write it in her articles. There she writes an “acceptable” story line which tends to obfuscate the truth overall because it presents half truths all the time.

      RE
      http://doomsteaddiner.org

    • Bill Ferree says:

      Bravo Iconoclast! You’ve accurately hit so many really important targets. Gail’s biggest (I would say fatal in this discussion) error is to assert that oil is needed in the process of building a non-fossil energy economy. Energy is consumed in the building and installation, and a tiny amount may be needed for maintenance, but none of it has to come from oil or any other fossil (or fissile) fuel.

      • Bill James says:

        HI Bill
        We have one of two choices:
        1. implement solar powered infrastructure.
        2. die in vast numbers.

        But the conversion will take lots of energy; about 4 million barrels of oil per day for about 10 years.

        US oil imports jumped by 4mb/d after the 1973 Oil Embargo. Energy to make the transition will have to come from somewhere. It can come from renewables, but not at the start. At least 4 mb/d of additional consumption will be required to run the equipment to deploy renewables. Perhaps a significant amount can come from natural gas, nukes and coal. About 5 years into the transition, 50% of the spike can come from renewables. ddRererenewablesrenewables. Perhaps

      • Jack Dingler says:

        What energy source would we start with today, if not fossil fuels?

        What would power the smelters and furnaces?

      • Unless it is possible to hugely, hugely ramp up renewables, what we lose without fossil fuels are

        1. Refined metals. Perhaps we can recycle a bit, but we lose the purity of refined metals.

        2. Glass in reasonable quantity.

        3. Enough energy to maintain roads.

        I would argue that these shortages would be enough to put an end to any renewably industrialized world, before a person even looks at the issue of fuel for vehicles. We couldn’t make/repair computers. We couldn’t make “renewables”. We would have a hard time making replacement light bulbs.

        • Bill James says:

          Efficiency improvements following the 1973 Oil Embargo caused oil consumption to jump 4 mb/d for most of a decade. We will need a similar burst of energy to re-tool to renewables. Nukes, coal, oil and natural gas will have to provide that energy. We have the tools we have. To re-tool requires we use the energy source our current tools use.

          Here is an article with graphs on this. http://seekingalpha.com/instablog/184086-bill-james/732001-life-requires-energy-buy-energy-assets

        • Andrew of the Bay Area says:

          How about polymers that house the freaking solar units? How about the mining of rare earths in remote locations and the transport of them to the manufacturing plant? I mean one can just go on and on and on….

          Solar is a FRAUD. It always has been and it remains as such. I’m going to put a windmill on my ranch…I’ll trust what the “ignorant” farmers and ranchers did 100 years ago over what some technocrat, arrogant know-it-all with financial interest in some solar fraud company says. FOLLOW THE MONEY.

  10. Doug W. says:

    For me the real tragedy of the current campaign is that neither candidate is really addressing the central issue of our time. I guess you can hardly blame them after Jimmy Carter’s experience. Carter was in the Navy under Rickover, who really understood the limits of fossil fuels back in the 1950’s. Future generations are going to judge us harshly for not doing more before now. It does seem that serious conservation measures would buy us some time. Going back to the 55 mph speed limit would be an obvious one. What other conservation measures do you think would help? How long do you think it will be before we have gas rationing? I think we can keep the lights on for a good long time, Transportation fuels seem to be the biggest problem.

    • Unfortunately, I don’t see oil conservation measures by one country as doing much of anything. They leave more oil on the market for another country without those conservation measures to buy, and help reinforce that country’s need for oil–for instance, China’s oil use.

      As long as we are working against a finite limit, it still will be reached at some point. Thus, at best the only thing that Jimmy Carter or Admiral Rickover could have down would be put off reaching the limit by the world as a whole using less oil.

      To put off reaching this limit, it would be necessary to keep world oil demand from rising (or ideally, have it fall). A more isolationist policy would have put the world on that track, since it would have slowed down innovation and synergy that comes with having access to all kinds of materials from around the world. Advocating no more than two children, in the US and elsewhere and putting major funding into birth control, and outreach on birth control to the world, would have been helpful. There are other things that might help too, like the 55 mph speed limit, but only if the world as a whole followed it. One country following it allows more oil to go elsewhere, and doesn’t solve the world problem.

      • “Advocating no more than two children, in the US and elsewhere and putting major funding into birth control, and outreach on birth control to the world, would have been helpful. “-Gail

        All this would have accomplished is to turn the entire world into the Demographic Mirror of China with it’s One-Child Policy. You get an Aging Population with fewer working age people to support them. You can’t limit population merely by decreasing the Birth Rate. You have to increase the Death Rate also. Of course, this is not generally a popular policy for any party to have on their Platform on the Homefront. LOL. Of course, as long as it is the OTHER GUY dieing, it’s more popular so war mongers like Robama and Obamney get elected all the time.

        Far as Ross Perot is concerned, all his policies would have done if they were followed through with (which they never would have been once he got elected since he would have been under the same pressure every other POTUS has been from the Banking Cartel) would have been to throw the world into the depression we are going into now 20 years sooner.

        RE
        http://doomsteaddiner.org

        • Don Stewart says:

          Dear Reverse Engineer
          I think you are missing certain essential ingredients. Old people do not become useless–except in an industrial economy. The argument that we need ever expanding populations to take care of the old people is just wrong.

          Consider, for example, Gene Logsdon’s story about chickens:
          http://www.energybulletin.net/stories/2012-10-11/hens-are-changing-meaning-%E2%80%9Cprofit%E2%80%9D
          First thing to note–Gene is around 80 and still farming. Second thing to note, as times get tough, the home economy makes more sense. In fact, if energy is expensive, then the industrial economy cannot compete with the home economy. And if the industrial economy is required to pay compensation for the pollution they create, the pendulum swings even more in the direction of the home economy.

          The growth of the home economy and the shrinkage of the industrial economy has many implications. It is really bad news for the financial sector as that sector shrinks. And there are fewer paying jobs, so repaying debts becomes problematic. Bad debt can end either in a Steve Keen style jubilee or bitter class warfare (as we see in Greece) or possibly total collapse. But suppose we can somehow muster up the political courage to deal with the debt problem. Then mightn’t the world be a more attractive place to live in with chickens in the back yard? And chickens are a perfect pastime for old people. My 85 year old mother in law kept chickens until the city finally forced her to get rid of them. Maybe this time we will get rid of the cities rather than the chickens.

          Don Stewart

          • Gene and your MIL notwithstanding, you have a lot more octogenarians in Nursing Homes than you do pushing plows behind a team of oxen, or even herding chickens. Where did your MIL get the Chicken Feed? Did she grow it herself?

            You don’t see many Octogenarians out in the Rice Paddies of China or Japan either, despite the fact they have a rapidly aging population. So it’s rather unlikely you will see this here either.

            RE

            • Don Stewart says:

              Like Gene Logsdon, my Grandmother In Law fed her chickens kitchen scraps plus what they could forage in the back yard plus any weeds and such she picked up on daily walks around the neighborhood.

              The point isn’t that octogenarians do heavy manual labor–it’s that there is a lot of household economy work which doesn’t require heavy manual labor which can be done by octogenarians. I am a septuagenarian, and I do the same physical work at the farm as people 50 years younger than me. I’m not as strong, but I have many more years of experience and know more tricks.

              It’s only in industrial economies that anyone would have the luxury to think that old people were useless.

              Don Stewart

          • Maybe this time we will get rid of the cities rather than the chickens.

            L. O. L.

          • A septuagenarian in good physical condition in today’s world likely can do similar tasks to other Homo Sapiens 20 years Junior, however in the all Ag non-Industrial economy few people live to be 75 in the first place. The last time we ran All-Ag in 1750, the average life expectancy was around 38, although this reflects the high child mortality rate. If you did make it through childhood, you probably had a 50-50 shot at making it to age 50. :) 70 is probably 2 or 3 standard deviations off that Bell Curve, so the chances to get that old are likely less than 5% of the population.

            The Silent Generation of Old Folks around in large numbers now is probably the last of this we will see as we Reverse Engineer our way back to a lower energy footprint society. As the medical interventions begin to disappear, so will these folks. Only the few in extremely good health (like yourself obviously) will survive very long here.

            RE
            http://doomsteaddiner.org

            • Jack Dingler says:

              That assumes our medical knowledge reverts to a 1750 level. I’m not so certain that will be the case, if we don’t become extinct.

              I agree that more people will die from diseases that are currently preventable or treatable, but simply the knowledge of what causes disease will make a large difference. In 1750, people believed that demons or vapors caused diseases, as they drank unprocessed water from the rivers and lakes, and shared fleas with rats.

            • Don Stewart says:

              Reverse Engineer
              The signers of the Declaration of Independence lived to be around 75 (I forget the exact number). The average person who becomes elgible for Medicare today has three distinct chronic diseases. Modern medicine keeps them alive until they are 85, but it doesn’t make them healthy. Modern lifestyles make them unhealthy. We now understand much more about health and genes and all that stuff. We know that the way one lives one’s life turns genes on and off. We know that the way one lives one’s life places markers (methylation and demythylation) on genes which can be inherited by one’s children. We have a pretty good understanding of the lifestyle which is required to turn on the right genes at the right time and to keep the methylation markers where they need to be. We know that changing lifestyle can reverse the methylation markers in a matter of weeks. We know, for example, that diabetes can be essentially reversed in 10 days. The healthy lifestyle is not what the vast majority of people are living. As one scientist at North Carolina State recently said, ‘the modern diet is so bad that any change at all leads to health improvements’. His point was that a ‘paleo’ diet may lead to better health without actually being what our paleo ancestors really ate–but that an understanding of the diet that is actually most health promoting for humans requires quite a lot more discrimination.

              Objective studies (such as the Cochrane studies in Scandanavia) consistently show that medical intervention in chronic disease does little to no good. At best, it keeps sick people alive. Only Lifestyle can reverse chronic diseases.

              The current knowledge of diet indicates that green leaves, beans, onions, mushrooms, berries, and seeds are the key to immunity from disease (both infectious and chronic). The professor at NCSU pointed out that we are designed to eat fungally covered green tropical leaves. Unfortunately, our agricultural production system is skewed in an entirely different direction–and so we get the sad case of the very sick new Medicare recipient and the runaway Medicare costs in the US (with the rest of the world following in our footsteps).

              As I have stated many times (and have no desire to repeat it all again), I see gardening and garden farming as the solution to the dietary part of the lifestyle equation. While I am not a food supply expert, I expect that a declining population more thinly scattered on the land will make it a lot easier to achieve health goals in the future.

              In any event, if debt were to suddenly disappear, and everyone got rid of their chronic diseases by living the right way, I see no reason why a declining population would be a problem. A person with no chronic diseases tends to have one final decline which lasts less than six months. So your horror stories about nursing homes are mostly self-inflicted. (I never rule out bad luck).

              In short, we need neither industrial agriculture, industrial food, nor industrial chronic disease medicine. If state of the art gardening methods are used, we don’t need very much in the way of external energy. Ponder, for a moment, that there are two ways to fix nitrogen. The first requires temperatures of 600C and great pressure to combine atmospheric nitrogen and hydrogen to form ammonia.

              The second method requires free living bacteria in soil or water or else bacteria in symbiotic association with plants. The second method occurs at the microscopic scale and relies on enzymes. Most nitrogen in the soil is fixed by bacteria. But essentially all of the external energy is required to produce it by the first, sledgehammer, method. All the elegant second method requires is human understanding and cooperation and husbandry.

              We can increase nitrogen fixation by bacteria with intelligent gardening, but we can’t produce unlimited amounts of nitrogen using the first method with vast amounts of, say, too cheap to meter nuclear power. My choice, obviously, is to use Mother Nature’s methods which have been working for around 3.5 billion years.

              Don Stewart

            • You make some good points there. Getting agriculture right would help a lot, as would getting diet right. We could get rid of a whole lot of “health care,” without much loss, except to the incomes of the doctors and drug companies.

              I haven’t been eating the standard diet for many years. I probably don’t have it quite right, but I am healthier than most.

          •  The signers of the Declaration of Independence lived to be around 75

            The Founding Fathers are hardly a randomly selected portion of the population.  They were the Elite Pigmen of their era, the .01%, Aristocrat Landowners, Slave Owners, Merchants and Banksters.
            In any event, all the good heathy food in the world won’t keep you healthy without clean water, and once the sewage treatment plants in the Big Cities begin failing there won’t be much of that to be had there.  Nor will there be in the rural areas either as more people move out and overtax the aquifers in those neighborhoods.  There will be significantly fewer berries and tomatoes growing as these aquifers get pumped to low to draw any water from and rainfall ecreases in drought stricken areas.
            Finally, in the 18th Century you will recall it was about non-stop Warfare here and in Eurotrashland, and no matter how good your diet it doesn’t make you anymore resistant to Bullets or Arrows.  The Resource Wars have already begun in MENA and are moving now into Europe as well with Secessionary movements in Spain and the UK also.  I’m currently working on an article about this for the Diner.  These movements and the Civil Wars they trigger will work there way over here in due time, and so sorry no matter how good condition you are in at 70 you aren’t likely to last long on the Battlefield.
            The pastoral picture you paint of Elderly Gentleman Gardeners peacefull tilling their raised bed permaculture gardens is a nice fantasy, but one highly unlikely to play itself out on any kind of social scale.  Too many people in competition for too few resources for that to occur.  Anyhow, count yourself as lucky to have born at precisely the correct moment in history to enjoy the benefits of the Age of Oil and finally Buy Your Ticket to the Great just when the bill comes due.
            RE
            Doomstead Diner

            • It is good that Don thinks positively, and has good ideas. We need to keep thinking about the possibility of positive ways of approaching problems.

              At the same time, I’m afraid there is some truth to what you are saying too. It will be hard to have enough of the basics (not to mention what people are used to) for 7 billion people. Without enough, people are likely to fight over what is available.

      • yt75 says:

        Conservation by one country is only about time and country selfishness, but true that the US prefers the generosity of waging wars, and promoting consumerist puritan total economic suicide.
        There is an image aspect, as well …

  11. while gas rationing is a certainty, it is a phrase we should not toss around lightly, without stopping to realise just what that means.
    Rationing means ‘exemption’ but who is to be exempted? are those involved in government still to be allowed to fly to washington or wherever? Politicians invariably inflate their own importance
    Fire, police, ambulances obviously need gas too—nurses? Doctors? It would be an interesting exercise to find out just how many workers would not be able to get to work at all without personal transport.
    who is important, who is not. Food trucking? Are fresh vegetables to be trucked 2000 miles? or do we manage without them
    rationed fuel becomes a precious commodity with a value above its price. That makes theft and black markets a certainty, and conflict will follow.
    Rationing will crash the transport infrastructure, When that happens the road structure will follow because it’s held together by oil.
    That also means the nation itself is held together by oil. Without oil, the nation will inevitably fragment along cultural, geographic and ethnic lines because there will be no means to hold it together.

    • Jack Dingler says:

      We have rationing now. We ration according to price and ability to pay. This system will continue to lock increasing numbers of people out.

    • I agree that rationing would essentially be impossible to do, because every supply chain is impossibly long. We need roads to be repaired; we need repairmen to be able to get to work; we need a police force to operate. It would be impossible to pick out a few as not being worthy of getting fuel.

      The issue of fuel use being tied to jobs is an important one as well. When we cut out fuel use, we tend to cut out jobs.

      There are a huge number of people who believe that as long as there is a little rationing, we can get along with less oil.

      • That’s been my point about geographically large nations ultimately being held together by oil
        The USA became a single entity with the railways, then the car followed, when the oil goes, or isn’t really available in quantity, so the nation will collapse into autonomous groups

  12. Don Stewart says:

    Regarding criticisms. It seems to me that any broad ranging interview is inevitably going to mix up two related but different issues:
    1. Given current realities, how do I thrive in the world?
    2. Given current realities, how do I preserve those external markers that I (falsely) believe are essential for me to thrive in the world?

    For example, Dmitry Orlov’s current excellent essay on Kropotkin and anarchism show that small, anarchic organizations are the most productive and best facilitators of human well-being. But any politician is likely to focus on saving the gigantic organizations such as the TBTF banks and the global Agricultural and Medical/Pharmaceutical companies. The gigantic organizations have far less to do with thriving than the structure of the family and the home economy. But the latter are anarchic and thus resistant to government control and they cannot be satisfactorily financialized.

    For example, Thomas Merton answered the first question my moving to Gethsemani and living there quietly for decades. Virtually ignoring the second question. Merton would have been bewildered by an interviewer from a television business channel–what did all that have to do with thriving?

    While we modern people tend to spend 95 percent of our time worrying about the second question, we still realize deep down that the first question is the really important one. And so interviews tend not to reveal anything very deep. So there is a financial crash…is that really important? If so, why? The more you take layers off that onion the less sane you will appear to the interviewer. And then the inevitable assertion…but that won’t feed 9 billion and then 12 billion people. And if you know just a tiny bit about biology, you ask ‘so where is the problem? perhaps Earth will regain its balance’. Which is guaranteed to close down the interview except among the lunatic fringe.

    Zen masters used to whack their students with a stick to encourage them to wake up. Maybe if there is a Guiding Hand, that Hand has a big stick and is about to whack us.

    Don Stewart

    • Merton is a great example. I suspect a number of my Amish neighbors would also be somewhat discontinuous from the normal American markers. Some of these former markers are already “in play”. How many people are no longer paying their mortgage but living in the property, how many people have moved in with someone else, etc.? How many people are interested in counter-consumer-culture markers from the use of free stuff mailing lists, to not buying anything new this year, or my taste for cheese by trading a 2000lb bale of organic hay for organic unpasteurized milk, to give to someone to make me the cheese?

  13. Jack Dingler says:

    Gail, I have a challenge for you. It’s an exercise I’ve done in the past and I think it would be an easy project for you.

    Determine how many nuclear power plants would be needed to replace fossil fuels, and how many we would have to build each year to return to 2-3% growth.

  14. Jack Dingler says:

    The big issues I have with nuclear power plants is that their costs are largely hidden by secret subsidy programs. Their proposed construction costs are typically 10% of actual. Yet the proposed costs are the ones commonly used to justify how cheap they are.

    Comanche Peak is the plant in my region that I’m most familiar with and it was subject to these overruns. It was going to provide energy too cheap to meter. After it was brought on line, the citizens of Fort Worth saw their utility bills double because of all of the ‘unexpected’ cost overruns. The Federal government forgave most of the loans and the went down to 20% over the pre-nuke costs.

    Decommissioning is a huge issue. The costs are far higher than advertised. The practice of keeping costs down, by never disposing of the waste, certainly adds to the costs of decommissioning. My own back of the envelope costs, based on the few plants that have been decommissioned and the hazy estimates of the costs, put the price of decommissioning the current plants, into the $trillions.

    I believe this is why plants aren’t decommissioned when they pass their safe lifetime of operation. Instead, the regs are constantly loosened so that the plants can operate within regulatory guidelines. They just move the goalposts.

    We have a cluster of plants all built over a short period of time, that are going to need decommissioning as a group. There is no way we can afford this in a declining economy. It’s more likely that we’ll be diverting most of our resources to another war, and this will drive the price of materials and labor for decommissioning higher. So we won’t do it.

    I believe that this data, leads to only one conclusion. These plants will not be decommissioned until after they fail.

  15. And again, “What’s wrong with conservation?” Just stop using so much. Get rid of the giant pickups. Turn off the lights. If you drive downtown Houston at night, the place is ablaze. And for what? Everyone is at home in bed. Americans are just stupid. In Quito, if there is not enough hydroelectric power to meet demand, they just power down sectors of the city in a rolling coordinated brown out- and voila- no need for nuclear power. Just stupid and greedy. Mybe it is better to have population approach zero if this is the best we can do.

  16. Don Stewart says:

    Gail
    You object to my ‘homesteader’ solution because there are ‘many obstacles’. I agree with that. But the only way we will ever make any progress is if we recognize the enemy and the potential solutions.

    Here is an excerpt from Karl North’s scenarios for Ithaca, New York and surrounding territory:

    The present degree of external private control of local economies is backed by government policy at all levels and is a major obstacle to adaptation to the needs of the energy descent. Therefore, an even better scenario that goes beyond emergency economic planning at a national level might be a national program to gradually devolve centralized economic control over the production of necessities to local communities, which would even give them the potential to experience economic democracy if they are so inclined. But these scenarios might be too much to expect from the vested interests that control much of state and federal policy making.

    And here is a description of the current regulations governing agricultural production in Durham, North Carolina (which is one of the hippest places you might ever visit):
    1. No farming in allowed in the city limits.
    2. No one can grow food and sell it on site (e.g., from their front porch) without a special use permit. Permit costs 1700 dollars and requires a 3 month waiting period.
    3. Community gardens are not allowed to sell on-site under any circumstances. Thus, an outstanding community farm which trains young people to be extraordinarily productive cannot allow them to set up a farm stand on the property.
    4. Farmers’ markets require a temporary use permit at an annual cost of 50 dollars. All the products sold must be grown within the county or make ‘predominate use of locally grown food’ Except that the downtown Durham farmers’ market operates under a special use permit.

    Not mentioned in this article, but true, is that children can be busted for making cookies in the kitchen and selling them from the front porch. It is strictly illegal to sell ‘processed food’ unless the processing was done in a commercial kitchen–which rents for 100 dollars per hour or so.

    So just ‘turning the problems over to local communities’ isn’t the solution that North thinks it is. Local communities are quite capable of frustrating the efforts of honest people to feed themselves. One advantage to the Federal Reserve purchasing land and keeping it as federal property is that very simple rules could be adopted which would ensure that legitimate public policy goals are met (e.g., carbon sequestration and soil building in general and prevention of soil erosion) while freeing people to do what they need to do.

    Of course, there is no guarantee that the Secretary From Monsanto won’t write the rules to make it impossible for anyone to operate unless they have 5 million dollars and hundreds of acres.

    But we will never get anywhere unless we identify the enemy and recognize the solution–which is knowledge, good will, and the benign anarchy of individuals and small groups doing and learning.

    Don Stewart

    • Don,

      I agree that the current system is frustrating. In fact, I think it has grown up in tandem with our fossil fuel use. The idea is that the government is supposed to protect us from any kind of problem that might arise. So there are all kinds of laws that have been put into effect, making certain than no one does things in ways that aren’t in line with the way commercial enterprises do things. I know Sharon Astyk has complained about this problem, too.

      I don’t know how to get past it. You suggest some ways, and they may work.

      As current government doesn’t work, we are going to need to go “backward” in some respects, and this is one of them.

      • Andrew of the Bay Area says:

        My solution is doing whatever the hell I want (regarding raising and selling food) and shooting at anybody that tries to stop me. In Northern California it’s pretty much been the locals vs. the corrupt State of California and the Federal Government for a long time now (they even tried to leave both in the 40s and form the State of Jefferson).

        My answer is this is how its going to go down: we throw out the old laws, peacefully if possible, but violently if needs be. I can already see it happening in the absurdly high property taxes on rural residents in States like California. People aren’t going to let the State tax them to death and then seize their property when it goes into default. Nope. We are going to march to the County Seat and hang everyone in government in a public square so the lesson lasts generations. Then they can enforce the absurd laws benefiting government workers and pensions when they are DEAD.

  17. Ikonoclast says:

    I agree Bruce, “stop using so much” is a valid statement. The EU uses half the oil per capita of the US. The US used 68.7 bbl/day/1,000 people and Germany used 27.7 bl/day/1,000 people in 2007 (latest statistics I could find) so that is pre-Global Financial Recession. I think we would all agree that Germany runs a successful modern industrial and consumer economy. This illutrates that the US is just a profligate waster of oil using at least twice what it needs to run a decent economy.

    I agree that our lives (and houses) are filled with junk we don’t need. My parents were not acquisitive by today’s standards but were hoarders (probably due to having lived through the Great Depression as children). The amount of possessions and junk they had accumulated over a lifetime was astonishing. With my siblings, I had to clean out their house and detached shed/garage when they had to go to an old people’s home due to alzheimer’s disease at about 85 (yes, both! so I might need to get a gun or a lethal injection to pop myself off before I get too old).

    I found it kind of sad that most of their treasured possessions turned out to be, in the final analysis, junk. A few items had sentimental value, a few more had re-sale value but the great bulk was pure junk. Half the junk was useful items worn out and the other half really never should have been purchased in the first place. Our desire for possessions mostly betrays us. Beyond those that support life and amenity on a daily basis we should jettison the rest from our lives and stop purchasing more. It would certainly extend the earth’s finite resouces much further. Here, in the West, we could probably consume a quarter what we do now in most categories and still live a very decent and reasonable life.

  18. energyhawaii says:

    Is Oil Expensive?

    Gail, as always, I find your views and analyses insightful and valuable.

    But is oil really expensive?

    Consider that a hard-working human can do about 1 kWh of muscle work in a day, and in most places that work would cost you about $80 for an 8 hour day.

    One gallon of gasoline contains about 40 kWh of energy, and, at $4/gallon, we pay about 10/kWh.

    For gasoline to be as expensive as human muscle power it would need to cost more than 800 times the current price at the pump, or about $3200/gallon.

    If the depletion of oil and other fossil fuels takes us back to the early 1800s when more than 80% of the work was done by muscle power, our energy costs are going to be a LOT higher than they are today.

    Conclusion: Fossil fuels are CHEAP!

    Best to you – keep up the great work.

    fred@soest.hawaii.edu

    • The issue with high prices oil is that our economy is built to run with lower-priced oil. It doesn’t nicely adjust to higher priced oil. For example, we need to cut back greatly on entitlement programs. We may not be able to keep roads, bridges, pipelines, and everything else repaired.

      This is true, even if fossil fuels are in some sense still a bargain.

  19. Fred K. Duennebier says:

    Is Oil Expensive?
    Gail, as always, I find your views and analyses insightful and valuable.
    But is oil really expensive?
    Consider that a hard-working human can do about 1 kWh of muscle work in a day, and in most places that work would cost you about $80 for 8 hours of work.
    One galloon of gasoline contains about 40 kWh of energy, and, at $4/gallon, we pay less than 10¢/kWh.
    For gasoline to be as expensive as human muscle power it would need to cost more than 800 times the current price at the pump, or about $3200/gallon.
    If the depletion of oil and other fossil fuels takes us back to the early 1800’s when more than 80% of the work was done by muscle power, our energy costs are going to be a LOT higher than they are today.

    Best –
    Keep up the great work!
    fred@soest.hawaii.edu

  20. Gail, you’re getting a battering. You’ll have to take it on the chin. For every 50 great posts, there has to be one howler. “Howler” is perhaps too strong a word. I do see your point, but I have to disagree firmly.
    Long term nuclear is not the way. There has to be a better way. We are a bright species. We need to think away from conventional grid systems, they are dragging us down. We know what we have to do, we just have not found it acceptable yet. We need to get CO2 levels below 350 ppm. We need to reduce our energy usage, eliminate all unnecessary waste and move to SAFE low carbon alternatives.
    Perhaps some day nuclear can be one of those, at the moment it is not. Why do we always expect our energy to be cheap or relatively free. Why do we expect to pay more for a litre of petrol than a litre of clean water? Why do we decide to bury our nuclear waste like a guilty dog, for another generation to deal with in the next millenium. We have become disconnected from our planet and our people, what it means to take a joule of energy from the earth and waste it on watching the X-factor or the Kardashians.
    What are the hidden costs of fossil fuels and nuclear on our human health and our planetary biosphere? We need to remove all subsidies for all sources of energy. We need to factor in all external costs for every joule of fuel source. From health costs to resource depletion. Thats the only way to achieve a fair balance of true cost. I think you can do it.

    • Tony Weddle says:

      “and move to SAFE low carbon alternatives. Perhaps some day nuclear can be one of those, at the moment it is not.”

      It will never be a safe alternative since it requires a stable society for centuries to enable safe operating, waste storage and decommissioning. Do you think it will ever be possible to guarantee a stable society for centuries?

      “Long term nuclear is not the way.”

      You got that right.

  21. Pingback: Verdades a Murro « Achaques e Remoques

  22. PeteTheBee says:

    I hope you don’t mind that I threw the following “debunk Gail on shale” in the comments section of oilprice.com.

    I think if you’re going to keep addressing shale energy, you should at least provide some explanation as to why your past predictions were so far afield.

    For a little primer on “Gail the Actuary”,

    “If we can reach 225,000 barrels of oil per day, the history of Bakken suggest this level would be short-lived – the peak production will probably last for a year or less – because as we shall see below, total Bakken production can be expected to decline to 50% or less of its peak rate within a few years, because of the steep decline rate of individual wells.”

    http://www.theoildrum.com/node/3868

    Here is where the Bakken is at today.

    http://www.bloomberg.com/news/2012-09-14/north-dakota-s-bakken-oil-output-passes-600-000-barrels-a-day.html

    That’s right – 600K per day. Gail said “short lived peak of 225K per day”. We’re now more almost tripled that and no sign of slowing.

    And that’s the Bakken – the Eagle Ford shale play is even hotter.

    You’d think with such miscalls in her past Gail would show a little humility and say “hey, maybe I don’t understand shale plays all that well”. But nooo, she’s still pushing her theories. Seems odd to me.

    She’s certainly a bright lady, but she’s clearly stuck on a dogma. “When the facts change, my opinions change. What do you do sir”, is a famous quote. It would be well applied to Gail.

    • Jack Dingler says:

      This comment has stuck with me overnight.

      Bakken shale is fracked, so that’s 600,000 barrels of petroleum products and water pumped in to get 600,00 barrels of petroleum out.

      That’s high energy invested petroleum in, unrefined petroleum out.
      And how much water, during the worst drought since the dust bowl?

      But oil is worth more than food. I think it’s a given that we’d gladly sacrifice all of the agriculture in the USA for continued oil production.

      This seems like a skewed priority system and I’m not convinced that in real terms, this is profitable, considering the permanent ground water destruction, the waste in pumping petroleum produced products in, and the waste of water that could’ve gone to farming and ranching. But with subsidies and investor money, it can be profitable for a few, even if it runs at a net loss.

      • PeteTheBee says:

        “Bakken shale is fracked, so that’s 600,000 barrels of petroleum products and water pumped in to get 600,00 barrels of petroleum out.”

        This is based on Dinglers law of fluid conservation?

        They don’t need 1 barrels of frack fluid to get one barrel of oil. The EROI of the Bakken is certainly up for discussion, but it’s a lot higher than 1, particularly if you include the natural gas and NGLs that are recovered.

        And the Eagle Ford is coming up better than Bakken. They’re really just beginning to look for these kids of plays – 5 years ago no-one thought they would work this well.

        “But with subsidies and investor money, it can be profitable for a few, even if it runs at a net loss.”

        The Bakken is making money for many, many people and N Dakota has a 1 billion dollar budget surplus from taxes paid. At some point you might need to recognize that fracking results in prosperity – which is way both candidates are pro-fracking, and why the USA will be fracking, heavily, for the next 20 years at least.

        So will we have 20 years of people like you saying “it’s a bubble”, and at some point will you and Gail recognize basic facts.

        Gail is clearly a smart lady but being a “fract denialist” isn’t going to serve her, as my link above points out.

        • Jack Dingler says:

          Right. It’s 2 to 4 million gallons of water per well, so it’s probably a lot more than one to one.

          Especially considering that the oil extracted is mixed with water and fracking fluids, and has to be seperated.

          You’re right it’s worse than I was making it out to be.

          • PeteTheBee says:

            not really, they produce 500K to 900K bl per well and a bl is 43 gallons, so they can easily turn a gallon of frack fluid into a gallon of oil.

            but the point is they can have water recycling rates as high as 90%, which can drive the ratio to more like 10:1.

            or they can dry frack with propane, or frack with nitrogen in the blend, and thus half as much water etc.

            but in many parts of the US water is copious and cheap … because, unlike oil, it falls from the sky. for free. and you just gather it up.

            to give some perspective, i ran some numbers one time that golf courses were using around 5 to 10 times the water that fracking was using, in the united states. and yet, nobody (well almost nobody) protests golfing.

          • PeteTheBee says:

            At any rate, I guess Gail will never concede and say “hey, shale has fooled me in the past, perhaps I should let it play out a little while longer before debunking it again”. I have no idea why, she clearly has put her name on some wacky anti-shale hysteria in the past. Perhaps she needs to go to N Dakota or Texas, take a look at the stuff going into pipelines and railcars …. maybe she doesn’t believe it’s really oil in there.

            It’s not maple syrup Gail, it’s oil. Trust me.

  23. Jack Dingler says:

    The propaganda that there were few deaths as a result of Chernobyl is a bald faced lie. It’s a lie told by people who don’t care how many people die to promote their agenda.

  24. Jack Dingler says:

    Arnie Gunderson and Marko Kaltofen on hot particles.

  25. Jack Dingler says:

    Arnie Gunderson on Ft Calhoun, Crystal River and Fukashima.

  26. Jack Dingler says:

    Arnie Gunderson on Ft Calhoun, Crystal River and Fukashima.

  27. Pingback: Drumbeat: October 12, 2012 | GREENDUMP

  28. Pingback: The Oil Drum | Drumbeat: October 12, 2012

  29. sponia says:

    I’ve just read this for the third time, in as many days. Each time i read it, I appreciate it more.
    Plain speaking is a rare commodity; common sense is almost as elusive.
    It is a breakthrough, to find them both together in one place at the same time.

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