Someone wrote asking the following question:
Dear Gail,
I have been reading quite a bit about peak oil recently. I get the impression (not based on data) that at some point there will be a quite steep decline in oil production/supply, and therefore we will see dramatic changes in how the world runs. However, when I look at oil depletion rates and oil production declines based on the Hubbert Curve, it seems to suggest a rather smooth decline.
How is that some people expect a serious energy crunch in about two or three years, then?
Many thanks!
Sam
Dear Sam,
This is basically the difference between (1) assuming that the only issue is geological decline in oil supply, and the economy and everything else can go on as usual and assuming (2) the real issue is Liebig’s Law of the Minimum, and declining EROEI, as oil supplies decline. As a result, the economy is very much affected.
Figure 1. Image from Hubbert's 1956 paper, Nuclear Energy and the Fossil Fuels
If we believed as Hubbert, that there would be an almost infinite supply of cheap nuclear energy to take over even before fossil fuel supplies ran low, then it might be possible for geology to be the major issue, because the extra energy from nuclear could be used to keep society going, as in the past. But we know now that this really has not come to pass. In fact, with the Fukushima accident, nuclear generation of electricity is likely to start back-tracking, adding to our energy problems.
In order to forecast the future, one really needs to look at a model such as used in Limits to Growth (probably with more variables than Limits to Growth–Limits to Growth didn’t consider the fact that a lot of capital is borrowed capital, and this would be affected early on, by a reduction in the level of economic growth). In this way, one can apply Liebig’s Law of the Minimum better, but still not perfectly. If one considers declining EROEI and Liebig’s Law of the Minimum, the decline is likely sharp.
Figure 2. Figure from Hubbert's 1956 paper, Nuclear Energy and the Fossil Fuels.
In Hubbert’s 1956 paper, Nuclear Energy and the Fossil Fuels, Hubbert shows how he would expect the greater use of nuclear to play out, as well as the role of solar energy. By solar energy, Hubbert would seem to mean solar, wind, tidal, wood, biofuels, and other energy we get on a day-to-day basis, indirectly from the sun. His figure seems to suggest that solar energy would basically act as a fossil fuel extender, and would not last beyond the time fossil fuels last. The primary source of energy would be nuclear.
In Hubbert’s 1962 paper, Energy Resources – A Report to the Committee on Natural Resources, Hubbert writes about the possibility of having so much cheap energy that is it possible to essentially reverse combustion–combine lots of energy, plus carbon dioxide and water, to produce new types of fuel plus water. If we could do this, we could solve much of the world’s problems–fix our high CO2 levels and produce lots of fuel for our current vehicles, even without fossil fuels. Limits to Growth would come at a much higher level than without huge almost-free energy resources.
Figure 3. Updated version of figure shown in Figure 2, from Hubbert's 1976 speech, Exponential Growth as a Transient Phenomenon of Human History
In an updated version of Figure 2, shown as Figure 3 (this time from his 1976 speech, Exponential Growth as a Transient Phenomenon in Human History), Hubbert adds captions along the y-axis showing amounts. He indicates three possible steady state economies–one at a world population of about 15 billion, on at a world population of about 7 billion, and one with a very low world population, similar to that before fossil fuels began. In order for high populations to be possible, we would have to have some source of energy, other than fossil fuels, to keep energy levels high.
To me, the fact that we are not on track for Hubbert’s Scenarios I or II is what is concerning. If Scenarios I or II don’t happen, Hubbert shows a different steady state economy is also possible–that of Scenario III. This would not be nearly as good. This is the scenario I write about in my post, There is No Steady State Economy (except at a very basic level).
There seem to be quite a few people who still believe that a steady state at quite a high level is possible, but at this point, we have not developed energy sources that are more than fossil fuel “extenders”–they depend on fossil fuels for their production and maintenance. Once fossil fuels become too expensive (low EROEI) for us to use, it looks as though we will need to go back to using pretty much the solar resources as they are provided to us. If this happens, standards of livings and population are likely to drop, as Hubbert showed in Scenario III.
There are still many details to be worked out–for example how deep is the downslope, and are there mitigations that can be done, like putting together a new world financial system, that is more resilient.
I hope these thoughts are helpful. The fact that this is a very concerning situation keeps people from writing about these issues.
Best regards,
Gail Tverberg (also known as “Gail the Actuary”)
The dynamics of collapse are not that hard to understand:
– We have a large complex society drawing down finite stocks of energy and resources.
– The rate at which we are drawing down is growing, because of both larger population and growing affluence in existing population.
– The cost of drawing down is also growing as the quality of the stocks is decreasing and the difficulty of extraction is increasing.
Eventually the costs become so great that society can no longer support a high level of consumption and experiences a collapse. This is the base case scenario presented in the Limits To Growth report, and is also loosely related to the reasoning behind Tainter’s theory of diminishing marginal returns.
Think of it this way:
Keeping in mind that costs are far more than just economic, but also higher energy and environmental costs, then it’s easy to see that at some point you are spending more for the buckets and shovels than what you can possibly get out in treasure, and you have to stop digging.
In other words, collapse can be sudden because our rates of growth are exponential, and the rate at which costs are growing are also exponential.
Think of it this way:
It has taken industrial civilization a couple of centuries to get to a glass half full, but our rate of drawdown is now so great that in the next couple of decades we will have rapidly slurped up that last giant sip. Even worse, if by some miracle we somehow managed to find another completely full milkshake and doubled the straws one more time, the whole thing would be gone in just one sip!
Now put it all together: The more we double our drawdown, the faster it gets twice as expensive. Finally, it gets so costly that it all comes to a very sudden and painful stop.
Why painful? Because the people who drink the most milkshake and spend the most buried treasure have convinced themselves, and almost everyone else, that they can somehow magically keep going faster and faster and never stop.
Or, put another way:
Cheers,
Jerry
Hi Jerry,
Good summary! Your thumbnail analysis should be obvious to anyone with more than a grade-school education in math and science – but it is not. I used to fuss about the reasons for this lack of understanding. Now, I feel like it is getting much more personal – what may actually impact my family (especially our 3 grandchildren) in the next couple of decades?
listening to the Tea Party rhetoric that dominates our local and national news is most sobering. On one hand, I’m sure their behaviour represents some primordial reaction to world events from which they feel threatened but yet don’t understand. On the other hand, many people with leadership skills are simply pandering to this fear instead of promoting rationality. It’s getting much harder to be optimistic.
You mention “painful”. I think this is now the real issue. Although a specie that traveled to the moon could easily deal with Limits to Growth, it is becoming more obvious that mankind is too mentally crippled with delusions to understand the real planetary problems, set beneficial goals, and implement effective solutions. It seems pretty inevitable that we will revisit Easter Island.
I continue to take a watch and wait position – but, still not sure how act when the show starts. At my age, dying is not a big deal (but being miserable is). The bigger question is how to advise children and grandchildren? Lately, I’ve pretty much gone silent about all this.
“Watch and wait” will get a family nowhere. While survival may not be possible for all of those who make heroic efforts to become self-sufficient, the odds will certainly be better than doing nothing.
Those who have a reasonable chance of surviving the collapse of energy supply/industrial civilization will be living where they can grow their own food and have the tools and knowledge to do so. A few solar panels may also allow a few “luxurious” amenities, such as lights and refrigeration, for as long as they and the batteries they charge last, but they are not essential.
I would (and do) stockpile tools, improve soil fertility and carefully consider what I should spend money on before it becomes worthless. Our children will have a tough time adapting to this new world, but young grandchildren will not think much of it if we can keep them warm and fed. Good luck!
““Watch and wait” will get a family nowhere.”
Totally agree!
But the opposite, “Do everything now!” is equally unrealistic; I think this is the main reason people don’t do something, because of the impression that the problem is too big.
Just about anyone can plant a garden, even apartment dwellers. Most can plant food trees, even suburbanites.
Another possibility for anyone: go volunteer on a nearby organic farm. Even if you can’t afford land, you can gain skills. Most such farms will feed you in exchange for your labour. If you make yourself indispensable, that farm may even be willing to take you in if things get really bad.
So, one more time: “Watch and wait” is deadly. Do something — anything — to prepare for the future NOW!
Thanks Bicycle Dave,
There is a good post over at Energy Bulletin today:
Money, simplicity, and embracing new paradigms: Quaker tuition follow-up
http://www.energybulletin.net/stories/2011-04-07/money-simplicity-and-embracing-new-paradigms-quaker-tuition-follow
In a nutshell, the author advocates not wasting ones time fighting the existing order, and instead creating new “spaces” more to ones liking.
That idea appeals to me, and I recall reading somewhere that unemployed men in the last great depression had much the same response, informally banding together to build shelters, collect food, and so forth.
It reminded me that some people can be pretty resourceful, or at least adaptable when they have to, so like you I try not to worry about it too much. Better yet, be thankful that we’re not one of those billions of poor hungry bastards living in mud huts who are already on a first name basis with the four horsemen.
Cheers,
Jerry
Jerry,
You have a good way of explaining things.
Gail
Thanks Gail! Coming from you that means a lot to me.
Cheers,
Jerry
Weaseldog wrote: “If our energy supply declines, then so does the power of money to get things done.”
This is worth repeating. I get so tired of “Invisible Hand” worshippers who say, “When the price of oil gets high enough, alternatives will be developed.”
At its best, money should be a symbol for energy. But at its worst, people pretend it’s a substitute for energy. This just won’t work.
If you want to see what the future of money holds, look to the ’70’s and multiply by a hundred. Expect co-incident inflation and deflation (as we’re seeing now, with food and housing), with things that are more closely linked to energy inflating, while those that are closely related to the consumption of energy deflating.
If you have a yacht, a big, thirsty vehicle, or a huge, inefficient house, cash it in and buy good productive farmland!
Good luck finding a buyer for your house. At more or less any price.
Depending on where you live, that’s a good point.
If your local market is so depressed, then you need to do something different. If life gives you lemons, make lemonade!
Say you’re underwater on your mortgage on a suburban lot. How about tearing up your sod and making it into a Permaculture garden? If nothing else, it should increase your resale value as food prices increase.
The idea of a robust financial system during the decline, misses an important point about the value of energy to our economic system.
Everything we do, is bound be the quantity of energy available to us. Our entire economy is bound by the limits of the energy available to it.
The function of money in this sense, is to redistribute energy, and the products of prior energy consumption. Everything we do, and make and move, requires that we consume energy. Money is simply a mechanism we use to decide how that energy gets consumed and by whom.
If our energy supply declines, then so does the power of money to get things done. he value of money declines with it. A robust financial system cannot exist when energy is in decline. It just isn’t possible. It doesn’t matter what you base it on.
Gold was once a good store of value, because the quantity of work needed to produce it was pretty constant and tracked well with the fact that the energy incoming to civilization was fairly constant. That relationship is much different in a decline environment.
As to the question that led to this article…
Even Colin Campbell in 2001 told me in response to a similar question that he was only concerned with the geological modeling of the curve. He told me that he didn’t understand economic well, but understand the geology, and so he was sticking to that aspect. Later he did published reports on his projections of how different economic scenarios might play out.
So in that framework, we should be looking at these plots as best case scenarios. It’s how things will turn out if everything goes really smoothly. That of course is impossible.
I would appreciate knowing more about the economics of geothermal energy, which seems to be frequently omitted from the list of alternatives/extenders. The binary (double loop) system http://en.wikipedia.org/wiki/Binary_cycle_power_plant seems cleaner than the water-to-steam-to-atmosphere system, but also seems to need government subsidies for initial capitalization. How much fossil fuel would maintenance require? Thanks!
The bigger the temperature differential the more bang for the buck here, unfortunately, “bang” maybe what you get for creating the differential:
http://www.telegraph.co.uk/news/worldnews/europe/switzerland/6820811/Geologist-stands-trial-for-triggering-earthquakes-in-Switzerland.html
I knew a professor who had a weekend business in Albany NY area who ran an airconditioning business for commercial organizations. During the summer be dug deep holes at the site, and using all the recycled copper pipe which
he installed in the holes. He had a vintage 1950’s snow making machine on a truck body, and in January when the temperature was 0 degrees F, he would make 2-3 feet of slush, which froze solid while he graded papers, and then would add another 2-3 feet of slush until he had a 15 foot deep plug of ice which he covered in a tarp. In july and august when the business needed
airconditioning they ran a glycol/water mix through the loop.
There are all kinds of ways to use those differentials. I do love the CARNOT cycle.
On a last note, I’ve been waiting a long time for packaged commercial solar airconditioning: http://www.usrenewableenergyinc.com/
From my understanding, the economics of garnering heat from hot rocks is dictated largely by the high cost of supplying electricity transmission infrastructure to the site, knowing that after a while the heat in the rocks becomes depleted and that source then needs to be rested for a number of years whilst heat in that rock structure gradually builds up again.
This can be very tricky, requiring a patchwork of drill sites over a large area of land, and this requiring a rather expensive electricity transmission network. It has to supply a net energy and economic return to be worth it.
Where heat is much more concentrated this may not be a problem, but in such sites, geological stability is usually the norm.
As with all energy sources, there are logistical problems extracting the potential energy that is theoretically sitting there waiting to be had.
I think there are a couple of issues involved. One is that the economics are different (better) if a plant is in a location which is right over an active volcano. Chances are that the population will be pretty low in such an area, so then one must take into account the long transmission lines needed to more highly populated areas. I know on the Big Island in Hawaii has a such a plant, and there are talks of expanding it.
If geothermal is in a more distant area, then temperatures are lower, and the heat that is used tends to dissipate over time, and the economics tend not to be as good. Also, the total amount of electricity generated tends to be low, so it does not have the economics to “scale”. Who wants to bother with a little plant, that may dissipate with time?
I don’t have good figures though. Electricity in Hawaii is mostly generated by oil (which is very expensive), so geothermal is, in comparison, cheaper.
In Hubbert’s graphs he never shows any overshoot nor any following undershoot. I expect both.
On the decline side there are four declines to keep in mind
1) world oil extraction per year
2) world net energy extraction per year
3) world net oil exports per year
4) US net oil imports per year.
Gail has talked about the first two. On the third we must consider the “land export model”. That is nations that export oil have growing population and growing level of affluence. So they use more of their own oil each year and have less available for export. On the fourth we have to consider the growing competition for export oil from the growing economies like China, India, Brazil, Russia.
From a brief look I would say
4) 2005
3) 2005
2) 2008
1) 2008
But if we add natural gas and gas liquids the world peak in energy extraction is somewhere in the next five years.
I almost get the impression that Hubbert’s number one mission in life was to “sell” the idea that fossil fuels would run low, and that there was a need to find alternatives. He packaged this idea in a way that would be less upsetting to the establishment than if he had just talked about it directly, by talking about other fuels that might be developed to take the place of fossil fuels. I don’t know that he was interested in thinking through nuances like overshoot and undershoot. He wanted to get his major view about fossil fuels through to people, without scaring people to death. So the rest of the “wrapping” may not have been thought through quite a completely as we now can do.
Hubbert’s thinking looks a little dated re the potential of nuclear power but overall he was a brilliant man and way ahead of his time. His early prediction of peak oil was simple genius; simple in principle but it took a real genius to think outside of the “mental box” of his time.
According to Adam Brandt, there were several others talking about a “bell curve” of production about the same time, or a little earlier. But Hubbert was one who got the word out, perhaps because he managed to package it with a message that people could accept–the future likely would still work out well, if we were successful at scaling up alternatives, particularly nuclear. Hubbert was definitely a brilliant thinker. He also got people to listen.
Walt Disney published a book and film series in 1957, mentioning the decline in fossil fuels, and talking about all the wonders nuclear could bring. Ugo Bardi writes about it in this post.
Perhaps I missed it, but I didn’t see one important factor favouring a steep decline: the difference between “net” and “gross” oil extraction. The classic, smooth Hubbert Curve is a measure of gross oil extraction.
On the upslope of Hubbert’s Curve, the ERoEI of oil is perhaps 100:1, so the net energy available is essentially what is extracted.
However, on the downslope of Hubbert’s Curve, all the cheap and easy oil has been used up, and we struggle to squeeze oil out of tar sands, shale, and deep offshore wells. These sources have low returns on investment. And because the cheapest and easiest of these get used first, the amount of “net” oil extracted becomes progressively less and less, despite the smoothness of the downslope of Hubbert’s Curve — it’s a “gross” curve, not a “net” one, but only the “net” amount returned is available for our use.
The following graph (originally taken from The Oil Drum) really opened my eyes as to the steepness of the decline. It shows the net curve imposed on the gross curve. Perhaps Gail can include it, as there seems to be no way to put graphics in comments.
http://www.theoildrum.com/files/Net%20Hubbert_6.png
(You can also see the article in which this graphic appeared.)
That is one part of the issue too–on a world-wide basis, net energy (net of the energy used to produce the energy) declines much more quickly than gross energy, especially at peak, and afterward. Furthermore, the fact that the difference between gross energy and net energy is growing rapidly later in the life cycle, means that increasingly large amounts of capital need to be reinvested to keep the process going. The inability to produce enough capital is probably the real issue that causes the whole system to collapse–it is not possible to generate enough capital, with the low amount of net energy coming through the system, and the large investment needed with low EROEI.
This post probably errs in the direction of having too little explanation in it, but I was struggling with getting bogged down in details vs trying to give an idea of the big picture.
According to L. F. Buz Ivanhoe:
“Hubbert wrote virtually nothing about details of the “decline side” of his Hubbert Curve, except to mention that the ultimate shape of the decline side would depend upon the facts and not on any assumptions or formulae. The decline side does not have to be symmetrical to the ascending side of the curve – it is just easier to draw it as such, but no rules apply. The ascending curve depends on the skill/luck of the explorationists while the descending side may fall off more rapidly due to the public’s acquired taste for petroleum products – or more slowly due to government controls to reduce consumption.”
See Hubbert Center Newsletter #97-1
Even Limits to Growth disclaims saying much about the shape of the decline curve. The book says (on page 142):
Later on, on the same page the book says
So once collapse begins, the authors of Limits to Growth say that they cannot predict the precise downward trajectory.
Hubbert shows a graph of US oil production, with the right side “plumper” than the left, recognizing improvements recovery practices. (I made a copy of the figure–labeled Figure 21, but can’t identify which paper it is from, now–oops, sorry.) This is reasonable for US oil production, when the peak comes well before the world peak in production.
The problem when we get near or past a peak in world oil production is that then we have outside forces that start affecting production–lower overall EROEI affecting the ability of economies to function, and less capital available for reinvestment because of the lower overall EROEI. Hubbert doesn’t have to model these, because he postulates some other energy source coming along and replacing fossil fuels. But if we have to live with overall EROEI declines and declining capital availability, then reinvestment won’t be able to keep up with the galloping need for more capital investment because of lower EROEI, and the downslope on is likely to be much steeper. A financial collapse could make the drop in capital investment even worse.
Hi my view is that as long as the financial system crash within this 5-10years and do not coincide with the fast descent, a new world financial system, that is more resilient will emerge likely to be related to a gold based system initiated by the Asians. Do not underestimate the resilience of the Chinese who have suffered through countless dynasties whereby they have achieved greatness followed by long period of dark ages which will eventually lead to another great empire.
I would suspect that a population in between II and III possible around 2 billion might also be possible depending on how serious any climate changes will affect the food production and whether any other mitigation are present.
If we could establish a steady state economy with 7 billion people, that time would be now, and I don’t see it. On the one hand we are still adding another 80 million people to the world each year; on the other hand as I write the Brent spot price for crude is nearly $122/barrel.
Though Earth is providing a great life for a few, and a very good life for a few hundred million right now, the bottom billion or so are living lives of abject poverty with little hope of improvement.
Barring some unforeseen but very potent new energy sources, it seems to me that nothing approaching a steady state economy for 7 billion is possible, let alone for more than that, though it may be possible to sustain the lifestyles of the rich and famous for a while yet, which seems to be the major policy of this and many other nations.
Despite the UN’s projection of 9.2 billion humans by 2050, that figure seems unlikely in a world in which the end of cheap oil is becoming a fact. I have long advocated using humane ways to control population growth. Earth will not be so kind. It still looks to me like one of the ways that we’ve squandered scarce fossil fuel resources has been in pushing the world population to a point where it cannot be sustained. We could have used those resources differently but our economic system, one dependent on constant growth, won out over other systems. No economic system considered during the last 200 years, however, has ever been tested in an environment without cheap fossil fuels, so we can be sure that the next 40 years will be much different than the last 40.