The energy needs of the world’s economy seem to be easy to model. Energy consumption is measured in a variety of different ways including kilowatt hours, barrels of oil equivalent, British thermal units, kilocalories and joules. Two types of energy are equivalent if they produce the same number of units of energy, right?
For example, xkcd’s modeler Randall Munroe explains the benefit of renewable energy in the video below. He tells us that based on his model, solar, if scaled up to ridiculous levels, can provide enough renewable energy for ourselves and a half-dozen of our neighbors. Wind, if scaled up to absurd levels, can provide enough renewable energy for ourselves and a dozen of our neighbors.
There is a major catch to this analysis, however. The kinds of energy produced by wind and solar are not the kinds of energy that the economy needs. Wind and solar produce intermittent electricity available only at specific times and places. What the world economy needs is a variety of different energy types that match the energy requirements of the many devices in place in the world today. This energy needs to be transported to the right place and saved for the right time of day and the right time of year. There may even be a need to store this energy from year to year, because of possible droughts.
I think of the situation as being analogous to researchers deciding that it would be helpful or more efficient if humans could change their diets to 100% grass in the next 20 years. Grass is a form of energy product, but it is not the energy product that humans normally consume. It doesn’t seem to be toxic to humans in small quantities. It seems to grow quite well. Switching to the use of grass for food would seem to be beneficial from a CO2 perspective. The fact that humans have not evolved to eat grass is similar to the fact that the manufacturing and transport sectors of today’s economy have not developed around the use of intermittent electricity from wind and solar.
Substituting Grass for Food Might “Work,” but It Would Require Whole New Systems
If we consider other species, we find that animals with four stomachs can, in fact, live quite well on a diet of grass. These animals often have teeth that grow continuously because the silica in grass tends to wear down their teeth. If we could just get around these little details, we might be able to make the change. We would probably need to grow extra stomachs and add continuously growing teeth. Other adjustments might also be needed, such as a smaller brain. This would especially be the case if a grass-only diet is inadequate to support today’s brain growth and activity.
The problem with nearly all energy analyses today is that they use narrow boundaries. They look at only a small piece of the problem–generally the cost (or “energy cost”) of the devices themselves–and assume that this is the only cost involved in a change. In fact, researchers need to recognize that whole new systems may be required, analogous to the extra stomachs and ever-growing teeth. The issue is sometimes described as the need to have “wide boundaries” in analyses.
If the xkcd analysis netted out the indirect energy costs of the system, including energy related to all of the newly required systems, the results of the analysis would likely change considerably. The combined ability of wind and solar to power both one’s own home and those of a dozen and a half neighbors would likely disappear. Way too much of the output of the renewable system would be used to make the equivalent of extra stomachs and ever-growing teeth for the system to work. The world economy might not work as in the past, either, if the equivalent of the brain needs to be smaller.
Is “Energy Used by a Dozen of Our Neighbors” a Proper Metric?
Before I continue with my analysis of what goes wrong in modeling intermittent renewable energy, let me say a few words about the way Munroe quantifies the outcome of his energy analysis. He talks about “energy consumed by a household and a dozen of its neighbors.” We often hear news items about how many households can be served by a new electricity provider or how many households have been taken offline by a storm. The metric used by Munroe is similar. But, does it tell us what we need to know in this case?
Our economy requires energy consumption by many types of users, including governments to make roads and schools, farmers to plant crops and manufacturers to make devices of all kinds. Leaving non-residential energy consumption out of the calculation doesn’t make much sense. (Actually, we are not quite certain what Munroe has included in his calculation. His wording suggests that he included only residential energy consumption.) In the US, my analysis indicates that residential users consume only about a third of total energy.1 The rest is consumed by businesses and governments.
If we want to adjust Munroe’s indications to include energy consumed by businesses and governments, we need to divide the indicated number of residential households provided with energy by about three. Thus, instead of the units being “Energy Consumed by a Dozen of Our Neighbors,” the units would be “Energy Consumed by Four of Our Neighbors, Including Associated Energy Use by Governments and Businesses.” The apparently huge benefit provided by wind and solar becomes much smaller when we divide by three, even before any other adjustments are made.
What Might the Indirect Costs of Wind and Solar Be?
There are a number of indirect costs:
(1) Transmission costs are much higher than those of other types of electricity, but they are not charged back to wind and solar in most studies.
A 2014 study by the International Energy Agency indicates that transmission costs for wind are approximately three times the cost of transmission costs for coal or nuclear. The amount of excess costs tends to increase as intermittent renewables become a larger share of the total. Some of the reason for higher transmission costs for both wind and solar are the following:
(a) Disproportionately more lines need to be built for wind and solar because transmission lines need to be scaled to the maximum output, rather than the average output. Wind output is typically available 25% to 35% of the time; solar is typically available 10% to 25% of the time.
(b) There tend to be longer distances between where renewable energy is captured and where it is consumed, compared to traditional generation.
(c) Renewable electricity is not created in a fossil fuel power plant, with the same controls over the many aspects of grid electricity. The transmission system must therefore make corrections which would not be needed for other types of electricity.
(2) With increased long distance electricity transmission, there is a need for increased maintenance of transmission lines. If this is not performed adequately, fires are likely, especially in dry, windy areas.
There is recent evidence that inadequate maintenance of transmission lines is a major fire hazard.
In California, inadequate electricity line maintenance has led to the bankruptcy of the Northern California utility PG&E. In recent weeks, PG&E has initiated two preventative cut-offs of power, one affecting as many as two million individuals.
The Texas Wildfire Mitigation Project reports, “Power lines have caused more than 4,000 wildfires in Texas in the past three and a half years.”
Venezuela has a long distance transmission line from its major hydroelectric plant to Caracas. One of the outages experienced in that country seems to be related to fires close to this transmission line.
There are things that can be done to prevent these fires, such as burying the lines underground. Even using insulated wire, instead of ordinary transmission wire, seems to help. But any solution has a cost involved. These costs need to be recognized in modeling the indirect cost of adding a huge amount of renewables.
(3) A huge investment in charging stations will be needed, if anyone other than the very wealthy are to use electric vehicles.
Clearly, the wealthy can afford electric vehicles. They generally have garages with connections to electrical power. With this arrangement, they can easily charge a vehicle that is powered by electricity when it is convenient.
The catch is that the less wealthy often do not have similar opportunities for charging electric vehicles. They also cannot afford to spend hours waiting for their vehicles to charge. They will need inexpensive rapid-charging stations, located in many, many places, if electric vehicles are to be a suitable choice. The cost of rapid-charging will likely need to include a fee for road maintenance, since this is one of the costs that today is included in fuel prices.
(4) Intermittency adds a very substantial layer of costs.
A common belief is that intermittency can be handled by rather small changes, such as time-of-day pricing, smart grids and cutting off power to a few selected industrial customers if there isn’t enough electricity to go around. This belief is more or less true if the system is basically a fossil fuel and nuclear system, with a small percentage of renewables. The situation changes as more intermittent renewables are added.
Once more than a small percentage of solar is added to the electric grid, batteries are needed to smooth out the rapid transition that occurs at the end of the day when workers are returning home and would like to eat their dinners, even though the sun has set. There are also problems with electricity from wind cutting off during storms; batteries can help smooth out these transitions.
There are also longer-term problems. Major storms can disrupt electricity for several days, at any time of the year. For this reason, if a system is to run on renewables alone, it would be desirable to have battery backup for at least three days. In the short video below, Bill Gates expresses dismay at the idea of trying to provide a three-day battery backup for the quantity of electricity used by the city of Tokyo.
We do not at this point have nearly enough batteries to provide a three-day battery backup for the world’s electricity supply. If the world economy is to run on renewables, electricity consumption would need to rise from today’s level, making it even more difficult to store a three-day supply.
A much more difficult problem than three-day storage of electricity is the need for seasonal storage, if renewable energy is to be used to any significant extent. Figure 1 shows the seasonal pattern of energy consumption in the United States.
Figure 1. US energy consumption by month of year, based on data of the US Energy Information Administration. “All Other” is total energy, less electricity and transportation energy. It includes natural gas used for home heating. It also includes oil products used for farming, as well as fossil fuels of all kinds used for industrial purposes.
In contrast with this pattern, the production of solar energy tends to peak in June; it falls to a low level in December to February. Hydroelectric power tends to peak in spring, but its quantity is often quite variable from year to year. Wind power is quite variable, both from year to year and month to month.
Our economy cannot handle many starts and stops of electricity supply. For example, temperatures need to stay high for melting metals. Elevators should not stop between floors when the electricity stops. Refrigeration needs to continue when fresh meat is being kept cold.
There are two approaches that can be used to work around seasonal energy problems:
- Greatly overbuild the renewables-based energy system, to provide enough electricity when total energy is most needed, which tends to be in winter.
- Add a huge amount of storage, such as battery storage, to store electricity for months or even years, to mitigate the intermittency.
Either of these approaches is extremely high cost. These costs are like adding extra stomachs to the human system. They have not been included in any model to date, as far as I know. The cost of one of these approaches needs to be included in any model analyzing the costs and benefits of renewables, if there is any intention of using renewables as more than a tiny share of total energy consumption.
Figure 2 illustrates the high energy cost that can occur by adding substantial battery backup to an electrical system. In this example, the “net energy” that the system provides is essentially eliminated by the battery backup. In this analysis, Energy Return on Energy Invested (EROEI) compares energy output to energy input. It is one of many metrics used to estimate whether a device is providing adequate energy output to justify the front-end energy inputs.
Figure 2. Graham Palmer’s chart of Dynamic Energy Returned on Energy Invested from “Energy in Australia.”
The example in Figure 2 is based on the electricity usage pattern in Melbourne, Australia, which has a relatively mild climate. The example uses a combination of solar panels, batteries and diesel backup generation. Solar panels and backup batteries provide electricity for the 95% of annual electricity usage that is easiest to cover with these devices; diesel generation is used for the remaining 5%.
The Figure 2 example could be adjusted to be “renewable only” by adding significantly more batteries, a large number of solar panels, or some combination of these. These additional batteries and solar panels would be very lightly used, bringing the EROEI of the system down to an even lower level.
To date, a major reason that the electricity system has been able to avoid the costs of overbuilding or of adding major battery backup is the small share they represent of electricity production. In 2018, wind amounted to 5% of world electricity; solar amounted to 2%. As percentages of world energy supply, they represented 2% and 1% respectively.
A second reason that the electricity system has been able to avoid addressing the intermittency issue is because backup electricity providers (coal, natural gas, and nuclear) have been forced to provide backup services without adequate compensation for the value of services that they are providing. The way that this happens is by giving wind and solar the subsidy of “going first.” This practice creates a problem because backup providers have substantial fixed costs, and they often are not being adequately compensated for these fixed costs.
If there is any plan to cease using fossil fuels, all of these backup electricity providers, including nuclear, will disappear. (Nuclear also depends on fossil fuels.) Renewables will need to stand on their own. This is when the intermittency problem will become overwhelming. Fossil fuels can be stored relatively inexpensively; electricity storage costs are huge. They include both the cost of the storage system and the loss of energy that takes place when storage is used.
In fact, the underfunding issue associated with allowing intermittent renewables to go first is already becoming an overwhelming problem in a few places. Ohio has recently chosen to provide subsidies to coal and nuclear providers as a way of working around this issue. Ohio is also reducing funding for renewables.
(5) The cost of recycling wind turbines, solar panels, and batteries needs to be reflected in cost estimates.
A common assumption in energy analyses seems to be that somehow, at the end of the design lifetime of wind turbines, solar panels and batteries, all of these devices will somehow disappear at no cost. If recycling is done, the assumption is made that the cost of recycling will be less than the value of the materials made available from the recycling.
We are discovering now that recycling isn’t free. Very often, the energy cost of recycling materials is greater than the energy used in mining them fresh. This problem needs to be considered in analyzing the real cost of renewables.
(6) Renewables don’t directly substitute for many of the devices/processes we have today. This could lead to a major step-down in how the economy operates and a much longer transition.
There is a long list of things that renewables don’t substitute for. Today, we cannot make wind turbines, solar panels, or today’s hydroelectric dams without fossil fuels. This, by itself, makes it clear that the fossil fuel system will need to be maintained for at least the next twenty years.
There are many other things that we cannot make with renewables alone. Steel, fertilizer, cement and plastics are some examples that Bill Gates mentions in his video above. Asphalt and many of today’s drugs are other examples of goods that cannot be made with renewables alone. We would need to change how we live without these goods. We could not pave roads (except with stone) or build many of today’s buildings with renewables alone.
It seems likely that manufacturers would try to substitute wood for fossil fuels, but the quantity of wood available would be far too low for this purpose. The world would encounter deforestation issues within a few years.
(7) It is likely that the transition to renewables will take 50 or more years. During this time, wind and solar will act more like add-ons to the fossil fuel system than they will act like substitutes for it. This also increases costs.
In order for the fossil fuel industries to continue, a large share of their costs will need to continue. The people working in fossil fuel industries need to be paid year around, not just when electrical utilities need backup electrical power. Fossil fuels will need pipelines, refineries and trained people. Companies using fossil fuels will need to pay their debts related to existing facilities. If natural gas is used as backup for renewables, it will need reservoirs to hold natural gas for winter, besides pipelines. Even if natural gas usage is reduced by, say, 90%, its costs are likely to fall by a much smaller percentage, say 30%, because a large share of costs are fixed.
One reason that a very long transition will be needed is because there is not even a path to transition away from fossil fuels in many cases. If a change is to be made, inventions to facilitate these changes are a prerequisite. Then these inventions need to be tested in actual situations. Next, new factories are needed to make the new devices. It is likely that some way will be needed to pay existing owners for the loss of value of their existing fossil fuel powered devices; if not, there are likely to be huge debt defaults. It is only after all of these steps have taken place that the transition can actually take place.
These indirect costs lead to a huge question mark regarding whether it even makes sense to encourage the widespread use of wind and solar. Renewables can reduce CO2 emissions if they really substitute for fossil fuels in making electricity. If they are mostly high cost add-ons to the system, there is a real question: Does it even make sense to mandate a transition to wind and solar?
Do Wind and Solar Really Offer a Longer-Term Future than Fossil Fuels?
At the end of the xkcd video shown above, Munroe makes the observation that wind and solar are available indefinitely, but fossil fuel supplies are quite limited.
I agree with Munroe that fossil fuel supplies are quite limited. This occurs because energy prices do not rise high enough for us to extract very much of them. The prices of finished products made with fossil fuels need to be low enough for customers to be able to afford them. If this is not the case, purchases of discretionary goods (for example cars and smart phones) will fall. Since cars and smart phones are made with commodities, including fossil fuels, the lower “demand” for these finished goods will lead to falling prices of commodities, including oil. In fact, we seem to have experienced falling oil prices most of the time since 2008.
Figure 3. Inflation adjusted weekly average Brent Oil price, based on EIA oil spot prices and US CPI-urban inflation.
It is hard to see why renewables would last any longer than fossil fuels. If their unsubsidized cost is any higher than fossil fuels, this would be one strike against them. They are also very dependent on fossil fuels for making spare parts and for repairing transmission lines.
It is interesting that climate change modelers seem to be convinced that very high amounts of fossil fuels can be extracted in the future. The question of how much fossil fuels can really be extracted is another modeling issue that needs to be examined closely. The amount of future extraction seems to be highly dependent on how well the current economic system holds together, including the extent of globalization. Without globalization, fossil fuel extraction seems likely to decline quickly.
Do We Have Too Much Faith in Models?
The idea of using renewables certainly sounds appealing, but the name is deceiving. Most renewables, except for wood and dung, aren’t very renewable. In fact, they depend on fossil fuels.
The whole issue of whether wind and solar are worthwhile needs to be carefully analyzed. The usual hallmark of an energy product that is of substantial benefit to the economy is that its production tends to be very profitable. With these high profits, governments can tax the owners heavily. Thus, the profits can be used to aid the rest of the economy. This is one of the physical manifestations of the “net energy” that the energy product provides.
If wind and solar were really providing substantial net energy, they would not need subsidies, not even the subsidy of going first. They would be casting off profits to benefit the rest of the economy. Perhaps renewables aren’t as beneficial as many people think they are. Perhaps researchers have put too much faith in distorted models.
Note:
[1] This is my estimate, based on EIA and BP data. With respect to electricity, EIA data shows that in the US, residential users consume about 38% of the total. With respect to fuels that are not used for transportation and not used for electricity, US residential users consume about 19% of these fuels. Combining these two categories, US households use about 31% of non-transportation fuels.
With respect to transportation fuels, the closest approximation we can get is by looking at petroleum use, divided between gasoline and other products. According to BP data, on a worldwide basis, 26% of petroleum is burned as gasoline. In the United States, about 46% of petroleum consumption is burned as gasoline. Of course, some of this gasoline usage is for non-residential use. For example, cars used by police and sales representatives are typically powered by gasoline, as are small trucks used by businesses.
Furthermore, the US is a major importer of manufactured goods from China and other parts of the world. The embodied energy in these imported goods never gets into US energy consumption statistics. In theory, we should add a little energy consumption by foreign manufacturers to supplement total reported US energy consumption.
The selection of “about a third” is based on these considerations.
This came up on Drudge today, thought you guys would appreciate it: “Money manager: We are all screwed” https://www.marketwatch.com/story/qe-on-steroids-could-lead-to-a-depression-warns-money-manager-who-compares-the-us-to-a-banana-republic-2019-10-28
(looming super-recession, “everything bubble,” QE as panic among central bankers)
It is disturbing, but it looks like a popping debt bubble is ahead.
Warsaw, Poland, after 30 years of freedom: https://zapodaj.net/images/bc49bd27dc041.jpg
https://zapodaj.net/images/f4d4e5858c66b.jpg (new cluster is developing)
Forgive me, but I am ina very piss poor mood, and needless to say, quite cynical a the moment. If I’m not mistaken, hasn’t Poland kind of been caught at the crossroads of conflict between the Eastern and Western block countries for the past century and been put through the proverbial meatgrinder?
Seems like in the event of a resource war between East and West,….well, all those pretty buildings might go the way of some other ghost cities…
Yep, the frontiers of Poland have been very spongy there over the centuries..
However, it is true Poland is one of the few net beneficiaries of past ~30yrs. Others not so much, Czecho-slovakia self destructed from developed industrialized country into mere cheap assembly line protectorate, Hungary kept more or less its level or perhaps slightly improved, the Baltics depopulated and crashed their economies, and the Balkans well perhaps slightly improved in some metrics (Romania, Bulgaria).. Overall if you strip the new level of debt, which placates daily consumption, all these countries deteriorated in real living standard (housing, healthcare, ..). It was basically hostile market takeover (cheap ~skilled labor and dividend repatriation) by the West, which helped prolong the BAU.
To a remarkable degree, just as the Third Reich intended to use the Slav regions, integrated – on an inferior level – into the German economy, with some groups being more highly favoured than others. Only this time without the mass murder.
Poland gets nearly half of its energy from coal. In fact, most of that coal is produced in Poland. That is what allows Poland to do well economically. However, its coal production is now falling, probably because of low coal prices and mined-out-mines. The low prices are a worldwide problem, pushing down economies everywhere. So Poland may hit road blocks, too.
Yes, but the core thing with CEErs is their close proximity to German Reich proper. On several levels. Short distance via highway, rail, Danube river or Baltic sea, airports. Also their existing energy infrastructure allowed for Germany (and France/rest of EU to lesser degree) moving and build up more of their sub assembly plants. So the relatively cheap energy in situ actually sustains some of these economies not the other way around. Obviously, in general situation of very low global energy prices could eventually drop demand for these exported goods.
I found this link in judith currys blog
https://www.instituteforenergyresearch.org/renewable/the-physical-impossibility-of-renewable-energy-meeting-the-paris-accord-goals/
In the report there is an interesting chapter with the title «Moore’s Law Misapplied…»:
Faced with all the realities outlined above regarding green technologies, new energy economy enthusiasts nevertheless believe that true breakthroughs are yet to come and are even inevitable. That’s because, so it is claimed, energy tech will follow the same trajectory as that seen in recent decades with computing and communications. The world will yet see the equivalent of an Amazon or “Apple of clean energy.”70
This idea is seductive because of the astounding advances in silicon technologies that so few forecasters anticipated decades ago. It is an idea that renders moot any cautions that wind/solar/batteries are too expensive today—such caution is seen as foolish and shortsighted, analogous to asserting, circa 1980, that the average citizen would never be able to afford a computer. Or saying, in 1984 (the year that the world’s first cell phone was released), that a billion people would own a cell phone, when it cost $9,000 (in today’s dollars). It was a two-pound “brick” with a 30-minute talk time.
Today’s smartphones are not only far cheaper; they are far more powerful than a room-size IBM mainframe from 30 years ago. That transformation arose from engineers inexorably shrinking the size and energy appetite of transistors, and consequently increasing their number per chip roughly twofold every two years—the “Moore’s Law” trend, named for Intel cofounder Gordon Moore.
The compound effect of that kind of progress has indeed caused a revolution. Over the past 60 years, Moore’s Law has seen the efficiency of how logic engines use energy improve by over a billionfold.71 But a similar transformation in how energy is produced or stored isn’t just unlikely; it can’t happen with the physics we know today.
In the world of people, cars, planes, and large-scale industrial systems, increasing speed or carrying capacity causes hardware to expand, not shrink. The energy needed to move a ton of people, heat a ton of steel or silicon, or grow a ton of food is determined by properties of nature whose boundaries are set by laws of gravity, inertia, friction, mass, and thermodynamics.
If combustion engines, for example, could achieve the kind of scaling efficiency that computers have since 1971—the year the first widely used integrated circuit was introduced by Intel—a car engine would generate a thousandfold more horsepower and shrink to the size of an ant.72 With such an engine, a car could actually fly, very fast.
If photovoltaics scaled by Moore’s Law, a single postage-stamp-size solar array would power the Empire State Building. If batteries scaled by Moore’s Law, a battery the size of a book, costing three cents, could power an A380 to Asia.
But only in the world of comic books does the physics of propulsion or energy production work like that. In our universe, power scales the other way.
An ant-size engine—which has been built—produces roughly 100,000 times less power than a Prius. An ant- size solar PV array (also feasible) produces a thousand- fold less energy than an ant’s biological muscles. The energy equivalent of the aviation fuel actually used by an aircraft flying to Asia would take $60 million worth of Tesla-type batteries weighing five times more than hat aircraft.
The challenge in storing and processing information using the smallest possible amount of energy is distinct from the challenge of producing energy, or of moving or reshaping physical objects. The two domains entail different laws of physics.
The world of logic is rooted in simply knowing and storing the fact of the binary state of a switch—i.e., whether it is on or off. Logic engines don’t produce physical action but are designed to manipulate the idea of the numbers zero and one. Unlike engines that carry people, logic engines can use software to do things such as compress information through clever mathematics and thus reduce energy use. No comparable compression options exist in the world of humans and hardware.
Of course, wind turbines, solar cells, and batteries will continue to improve significantly in cost and perfor- mance; so will drilling rigs and combustion turbines (a subject taken up next). And, of course, Silicon Valley information technology will bring important, even dramatic, efficiency gains in the production and management of energy and physical goods (a prospect also taken up below). But the outcomes won’t be as miraculous as the invention of the integrated circuit, or the discovery of petroleum or nuclear fission.
Far out question: Why do we have to move stuff? What if we only moved the information and reconstituted the stuff? Theoretically if I understand the rough outline, the minimum energy lost would be that of information – that is smart talk and my knowledge of that subject is now exhausted.
Dennis L.
“Far out”
I have written about this:
“Ed had remembered his train watching days fondly as the holiday train passed through the tunnels early that afternoon.
“When nanotechnology fabricators [3] started producing products locally, rail freight traffic dwindled everywhere. It had fallen much further when almost all of the population withdrew from the physical world.
“Now freight trains carried only food–the one thing the fabricators simply would not produce–and not a lot of that since there were only about 5.5 million physical state people left in all of North America.”
We have to move stuff because people need to eat and have water to drink. Power plants need fuel. Factories need raw materials. Teleconferences won’t work.
I agree that this article is very good. It explains exactly the mistake people are making. They don’t see that the Laws of Physics don’t allow you to substitute away from energy for moving stuff, the way it is possible to compress ones and zeros.
The article is from the Institute for Energy Research. They are a Not for Profit, which many people consider “bad” because they do not believe the “Green” nonsense that floats around through the internet and is endorsed by nearly everyone. I generally believe IER’s views.
They have an article up that touches on the fires in California. https://www.instituteforenergyresearch.org/the-grid/california-and-new-york-having-problems-delivering-energy/
This is one paragraph from its California description:
The article also covers New York. Its conclusion is as follows:
Conclusion
I appreciated this part.
Politician waves a magic wand and the problem goes away. Until that nasty cold day in Feb shows up, the needed energy isn’t available. Because the utility was not allowed to build the needed infrastructure.
T2M
More shocking news.
https://www.zerohedge.com/political/californias-blackouts-are-part-far-bigger-problem
Another utility, poorly run, another opportunity for some.
Berkshire sits on 125B cash, most likely they would write a check, PGE bonds would instantly increase in value due to the strength of Berkshire so with increasing bond prices the purchase price of PG&E would be even more of a bargain as the value of the company immediately increases.
Part, not all, of the reason for wealth disparity is the willingness of some to defer gratification. With electricity going on and off it is very possible some of the subtleties of valuation will be over looked.
Even for professionals other than accountants, the value of a good understanding of NPV can not be overstated.
This should be interesting,
Dennis L.
Get Berkshire Hathaway to come in and fix the situation! I would hope Berkshire would have the good sense not to take this on.
There are a lot of fixes that are needed. A new WSJ article seems to point to transmission from California’s aging hydroelectric plants ultimately being behind some of the transmission problems. Hard to keep up transmission lines up when it goes back almost a century. How PG&E’s Aging Equipment Puts California at Risk
Gail, Classical Economics taught us about a “sinking fund”. This is money set aside to replace equipment as it deteriorated. If the calculations were sound, and in those days they largely were, the fund became enough to replace the equipment.
But our Modern Monetary Theory has no use for such things, because they stand in the way of our desire to rob the future. Jared Diamond (“Collapse”) has a long section on how mining companies in Montana signed leases that required them to clean up after themselves, and finessed this agreement by simply declaring bankruptcy when the mines were exhausted and much of the environment made toxic. PG&E, it seems, followed the same path.
G K Chesterton once defended tradition as a means to give people a voice even though they happened to be dead. I think we need a legal system that similarly gives a voice to the unborn. To cut down a tree is to steal from anyone who in later years would sit in the shade of that tree. And in the seventeenth and eighteenth centuries, prudent landowners would plant saplings they would never see grow to maturity, as a gift to those yet unborn.
We were not always thus: once, not so long ago, we knew better, and lived better. O tempora! O mores!
I have read about sinking funds. I expect that the time they disappeared was about 1981, when we had peak interest rates, and people decided that competition was the way of the future. No more “utility pricing.” Wait to replace necessary parts of infrastructure until the last minute possible, and borrow to fund your purchase. Instead of borrowing being bad, it was viewed as “leverage,” which was a newfound way of using other people’s money to make more money for yourself. Leverage was suddenly something to be desired. Lots of “leveraged buyouts,” to suck money out of companies that might otherwise have been OK.
Many trees die in less than a century: but to pollard a tree can extend its productive life for many centuries.
So some cutting can be very beneficial, and no-cut policies can be very harmful to woodland management.
One shouldn’t be sentimental about cutting per se.
I have 220 yr-old hawthorns which responded well to regenerative pruning, and may go to 450 years all things being equal (which they won’t be I imagine as climate changes) but I’m cutting down the similarly-aged blackthorn, and replanting, as it is now non-productive with old age and I need sloes for my gin!
It will make excellent firewood, and then ashes for the garden.
If GFC2 does me in, as it may, the birds can have the berries – if they too survive the great changes now underway……..
Gail,
There was a time when the condition of railroads was terrible, failures were frequent, etc. Walk to a BN freight yard now, look at the roadway, the signal system, it is all in excellent condition by appearances. It has been done and along way the Santa Fe was absorbed into BN as well as I believe the Southern. There is a shortage of real projects in which to invest and some projects have natural moats. There is no realistic way to reconstruct long distance railroads, there is no way to reconstruct electrical systems from scratch. It has a moat, here maybe the moat is to protect it from well intended interests who have ideas that do not work.
Currently we are seeing electricity shut off to hopefully avoid the terrible, heart breaking and economically devastating fires in CA. Posters here have mentioned best practice distribution systems, a corporation such as Berkshire can and has invested that kind of capital. CA is one of the largest economies in the world, the electrical system is a monopoly, it is a moat. The current system appears to not work; what do they have to lose?
Regarding the equipment, equipment can be replaced, easements, site location cannot be replaced. As mentioned, and I am not an expert, the PGE bonds currently are junk, Berkshire as a holding company elevates the ratings of those bonds almost immediately, a financial profit. Who takes the loses? Entities that by law must hold securities of a certain grade. Simple question: which is more likely, a grade A bond going up or going down? Which is more likely to have a loss? If the bond goes down 20% it must go up 25% to break even. If a bond is down 80% and has underlying value such as a claim on a stream of income that needs some equity capital to maintain, assuming it goes up to 50% that is a very good deal, a grade A bond is not going up 50%. The value of PGE is not the equipment, it is the income stream.
As far as having good sense, this site continually states the issues with fiat money – it is a path to loss. Owning a utility in one of the largest economies in the world offers a chance to make a buck, owning a buck offers chance to have cash flow for expenses and almost certain lost of wealth with each passing day. The trick is to balance the two.
Dennis L.
You are right. “Owning a utility in one of the largest economies in the world offers a chance to make a buck.” True, but trying to get the utility fixed, in a part of the world where people are convinced that Greta Thunberg is right, is the question. Their electricity prices are already high; they need to be much higher rates to fix their problems. It is hard to see where all of the funding will come from to hire the armies of people needed to cut underbrush along all of the long distance transmission lines in California. I am sure that there are a lot of rusting parts of equipment that need to be replaced as well. This will be expensive as well.
” hire the armies of people needed to cut underbrush ”
Hmm. When you have more than one problem, perhaps it is worth seeing if one will fit into solving the other.
There are some 50,000 homeless in LA and a proportional number in SF.
We have to feed them anyway. Perhaps they could be put to work cutting brush. Living in a tent would probably be an improvement to living on the streets. If a small stipend isn’t enough to motivate them perhaps drugs would do it.
Keith, my thought exactly. A couple of months ago, fruit and vegetable growers in California were desperate for field hands to bring in the harvest. Now the state is desperate for simple forest management.
But try getting a welfare scrounger to do a day’s work and you are on a hiding to nothing. To repeat my earlier metaphor: first, put the lid back on the marmalade jar.
Could one trust such people with heavy brush-cutters and chain saws? One doubts it!
From abroad, one feels that the politicians in California are really not very concerned about the condition of their State, and have very little grasp of material reality.
Urban fixers and grifters would sum them up?
Generally, career politicians everywhere concentrate too much on ideological projects, and not enough on proper management – in fact, are not qualified to do so.
When i worked in the woods the prison fire fighting crews were the best. Twice the work of a fed “hotshot crew”. Very happy to be out of confinement and the superb food of a fed fire camp. They were low escape risk prisoners. Drug convictions mostly a couple pounds of weed.
“… trying to get the utility fixed, in a part of the world where people are convinced that Greta Thunberg is right, is the question. Their electricity prices are already high; they need to be much higher rates to fix their problems.”
so it’s a choice of where to spend citizen’s dollars which have flat or declining value because that value is based on the flat or declining net (surplus) energy flowing through the system…
so what’s the choice?
have less money NOW for luxuries so that their basic electricity needs will hopefully improve in the future?
humans discount the future… having stuff now will win…
it’s basically the physics behind energy systems that is trying to tell humans that they are going to have less stuff in the near future…
these electricity issues and the negative interest rate issues are two giant flashing signs alerting humans to the fact that the Great Turning is imminent…
many centuries of generally increasing prosperity are coming to an end soon… 2020 or within a few years after… and IC is turning down… an unstoppable generally decreasing prosperity is almost upon us…
this time in history will be most notable for the Great Turning of the world economy…
“A kind of toxic debt is embedded in much of the infrastructure that America built during the 20th century. For decades, corporate executives, as well as city, county, state, and federal officials, not to mention voters, have decided against doing the routine maintenance and deeper upgrades to ensure that electrical systems, roads, bridges, dams, and other infrastructure can function properly under a range of conditions.
“Kicking the can down the road like this is often seen as the profit-maximizing or politically expedient option. But it’s really borrowing against the future, without putting that debt on the books.”
https://www.theatlantic.com/technology/archive/2019/10/california-fires-and-pge-toxic-debt/600979/
Pile it nice and HIGH….as HIGH as the HEAVENS!
Cheapest Debt In a Year Prompts Flurry of Corporate Bond Sales
https://finance.yahoo.com/news/cheapest-debt-prompts-flurry-corporate-145858105.html
Elizabeth Rembert
BloombergOctober 29, 2019, 10:58 AM
Cheapest Debt In a Year Prompts Flurry of Corporate Bond Sales
(Bloomberg) — Falling funding costs helped spur companies to tap the debt capital markets Tuesday after five weeks of slumping sales that missed dealer estimates.
Danaher Corp. is leading the charge of a packed investment-grade calendar with today’s biggest sale, as eight other companies also sell debt. Issuers are looking to capitalize on some of the cheapest funding costs of the year, with spreads at their tightest level since October 2018.
Tuesday’s crowded schedule stands out in an issuance month running short of projections. Just $49 billion of high-grade bonds were sold as of the close of business on Monday, paling in comparison to initial estimates of $85 billion.
Sales started picking up on Monday when Citigroup Inc. and Hershey Co. joined other companies to sell over $9 billion. In a sign of the veracious investor appetite, order books for the sales swelled, with Hershey’s running seven times over the amount sold.
As more companies report third quarter earnings and the season comes to an end, companies are emerging from self-imposed debt issuance blackouts, raising the number of candidates able to sell debt.
DEBT is a four letter word
Thank you Gail!
This post from Consciousness of Sheep seems to me to sum up our (sad) predicament. We’ve sung this song with our kids.
https://consciousnessofsheep.co.uk/2019/10/28/an-anthem-for-the-post-industrial-age/
Hadn’t seen that site before, seems to be on the OFW wavelength:
https://consciousnessofsheep.co.uk/2019/08/02/stagnation-is-the-only-thing-keeping-the-lights-on/
I agree that his posts are very good.
Tim Watkins is British. I have never met him in person (as far I as I remember). On his resources page, he lists OurFiniteWorld.com and quite a few other sites many of us are familiar with (Steve Keen, David Korowitcz, etc.). https://consciousnessofsheep.co.uk/resources/
His blog archives go back to 2015, so I presume that is when he started.
This is a link to the song itself:
Peak oil in action?
https://www.zerohedge.com/markets/pges-rolling-blackouts-could-leave-18-million-californians-without-power
It is easy to blame people, hard sometimes to deal with the reality of facts. If the cost of fossil fuels which is now above the price our infrastructure was designed for starts to lead to various indirect issues, perhaps CA makes sense. Maintaining the infrastructure and running daily life became ever more difficult, maintenance was deferred, now considerable economic damage is occurring; starting a business is never easy, restarting one is a challenge as fixed costs never cease. Is this an example where the costs of oil for example are too low to produce more and too high to maintain the current sunk costs? If this is the case, many assets have not been adequately depreciated and while on the books they have value, they no longer produce free cashflow. Maybe another way of looking at it is the economic multiplier of economic activity is lower than it has been historically, The homeless once got some benefit from an economic multiplier of say five, if it is now four a layer of society is left out.
Dennis L.
I found this audio recording on WSJ and copied the link. Perhaps it will work.
https://www.wsj.com/podcasts/the-journal/in-the-dark-and-on-fire-in-california/116DDBB0-62FA-4BF3-8BF0-04AE6BBAF974
If it doesn’t work, try searching on, “In the Dark and on Fire in California.”
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We SHALL be SAVED by Technology….because we are Super Clever People!
The Oil Age Is Coming to a Close
Noah Smith
BloombergOctober 29, 2019, 9:30 AM EDT
Bloomberg Opinion) — The oil industry faces an uncertain future. The world is rapidly waking up to the severity and immediacy of the threat from climate change. At the same time, electric vehicles are getting cheap enough to compete with internal-combustion engines. Bloomberg New Energy Finance expects electrics to begin taking over in about a decade:
Meanwhile, concerns over groundwater pollution are leading to growing calls for a ban on hydraulic fracturing, the main source of increased U.S. production during the past decade.
This doesn’t mean the petroleum industry will die. Plastics, most of which are derived from oil, will continue to be important for a huge variety of consumer and industrial applications. And aircraft and ships will take longer to shift from oil-based fuels. But it does mean that consumption will shrink. Where a decade ago people talked fearfully of oil supplies running out, now some are predicting that demand for the black stuff will peak in just a few years:
Reduced demand for crude will send prices plunging, cutting into profits at oil extractors and refiners. Share prices of oil majors have drifted lower in recent years:
But the pain felt by these titans, and by smaller producers, will only be the beginning. Those companies lie at the center of a vast network of suppliers and oil-services companies, which all will feel the sting of reduced demand. And regions that depend heavily on oil-related industries will see their economies suffer
And the best part…..
Governments at the local, state and federal levels should work to prevent this unhappy future. People in decaying oil towns can be given vouchers to help them to move, perhaps to a nearby thriving college town. The government can offer financial incentives for companies to employ laid-off oil workers, perhaps in growing fields like solar energy. Former oil workers could even get vouchers to pay for them to go back to school.
The march of technology means oil’s days are numbered. And for the good of the planet, that transition has to happen as fast as possible. But it doesn’t mean the people who gave their lives to getting energy out of the ground should have to suffer.
https://finance.yahoo.com/news/oil-age-coming-close-133022323.html
But one fine point is missing… regardless…Life is Unfair….
RIP Hank died 2016….thanks for the memories..hope your dreaming good now..
https://m.youtube.com/watch?v=n3SsXaYVlUo
BNEF = green energy propaganda rag.
This guy lost me at “the immediacy of climate change”. I’m sure he thinks the planet will boil by 2030.
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Perhaps for the first time there seems to be significant sale on (serious) electric car ever.
VW’s electric Golf is now EUR6.5k off, so now it goes for ~25.5k, because there will be no further e-Golfs on the incoming Golf 8gen (2020) platform as VW is pushing new separate family-dedicated platform for EVs called “ID”. That makes this Golf a bargain vs. Tesla (yes different league: 2-3x the price and performance or others VW/Audi upscale, Daimler, Jag, ..) but also its more direct rivals vs. Hyundai/Kia or lesser quality-specs Nissan-Renault offerings..
It’s not much OFW/Surplus dynamic related, they are likely just trying to get rid off older parts in warehouses. Or perhaps it is related afteral, because up to this point all things EV were (pre)selling like hotcakes, long waiting lists etc.. So a clear out sale for some reason..
Need the cash flow?
Unfortunately, my lengthy detail answer got deleted..
I guess it’s more related to large fleet customer abruptly canceling order.
Another possibility is that VW Group must move some vehicles in order to satisfy gov emission mandate etc.
Anyway, it’s a very good deal for this price today.
People waiting for other mid segment EVs will have to wait beyond 2020s and pay north of ~35k, or even way more for Teslas and other “luxurious” brands..
I don’t think I deleted it.
Some kind of error about not saving the post popped up..
I’m not blaming you personally obviously..
A TEN YEAR PLAN….Now that’s what I’m talking about! These guys just don’t when to STOP!
BAU FULL THROTTLE BABY….
And I was worried about my retirement…Those with little FAITH…Silly me…So Sorry…
Conoco Ramps Up Cash to Be Antithesis of Shale Sector
(Bloomberg) — ConocoPhillips posted higher-than-expected third-quarter earnings as the world’s largest independent oil producer generated almost $1 billion of free cash flow despite lower crude prices.
The Houston-based company followed BP Plc on Tuesday in surpassing analysts’ projections, partly due to its U.S. shale production, which rose 21 percent from a year earlier.
Chief Executive Officer Ryan Lance is preparing to unveil a 10-year strategic plan to investors next month. Conoco, which was forced into a painful dividend cut during the 2014-2016 oil price crash, is trying to position itself as a steady cash generator, the antithesis of the struggling U.S. shale industry, by focusing on returns to investors over production growth.
“This quarter extends our successful track record of performance since we reset our value proposition in 2016,” Lance said in a statement.
Profit excluding one-time items was 82 cents a share, higher than all of the analysts’ estimates compiled by Bloomberg, its eighth earnings beat in nine quarters. That shows the company can keep generating “robust” free cash flow, analysts at Tudor, Pickering, Holt & Co. said in a note.
Conoco gets a high proportion of its oil from assets in Alaska, Asia and the Middle East that have production that’s declining relatively slowly. But it’s also focused on growing its shale output, especially in the Eagle Ford and Permian Basin, albeit at a slower pace that pure-play rivals. Unconventional production rose 21 percent to 379,000 barrels a day compared with a year earlier
https://finance.yahoo.com/news/conocophillips-profit-beats-estimates-shale-111512098.html
The funny thing is I think they will pull it off!…there will be a host of collateral and friendly damage of SHTole countries and so called “allies”, but this is Business….there is Ethics and there is Business Ethics.
https://m.youtube.com/watch?v=RIJIXMX2zw8
I am sure that shale is not playing a very big role in recent Conoco results. To the extent it is, it is mostly based on an estimate.
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Hello. I have a naive question I wish to submit :
We assume (consider, believe, think, understand) that money is a token for net energy, or that money is a promise for a future good or service (as energy is what it takes to transform natural resources in goods or services), whether it is bread I intend to buy tomorrow or a car I intend to buy in a couple of years.
So, in this assumption, doesn’t it make sense that we have now negative interest rates, for tomorrow there will be less net energy available ?
bingo
if tomorrow means the coming decades–10 20 years then yes there will be a lot less net energy available because we can only obtain raw energy by utilising energy, —drill rigs, mines and so on.
We have to spend money drilling, mining. Money is an energy token, so the more we have to spend getting hold of it, the less there is available to use on other things—our ‘life luxuries’.
The down slope is relentless.
Eventually we must reach the point where there is effectively no spare energy at all to support of expected lifestyle.
It won’t be a ‘sudden end’ rather a situation where living gets harder and harder, while the denial of the inevitable gets more and more volatile.
Effectively that is what we are seeing right now. Oilwars in the middle east, or homeless on the streets is effectively the same thing—a shortage of cheap surplus energy.
The superwealthy are grabbing what they can while they still can, under the delusion that cash can be substituted for energy
Their ‘expected lifestyle’ will crash just like anybody else’s.
I would say that, if we expect to have less net (surplus) energy in the future, we have to destroy money. I see 3 ways to do so, increasingly more “efficient” :
. First way, slowly, and in a few quantity : negative interest rates. It’s soft, almost unseen, rather discrete.
. Second way, faster and more massively : asset bubble explosions : stocks, real estate, …
. Third way : debt cancelations : this would be, I guess, the final abdication, leaving no more denial.
as energy depletes, money will destroy itself because governments will keep printing it as a form of denial
eg Zimbabwe was a net energy producer
then stupid politicians destroyed that source of energy production, (farms) as a consequence the value of the $zim evaporated.
They kept printing money blindly, in the belief that it had value and would buy stuff
a failure to understand energy economics
Norman, the dudes who ran the farms were white and the dudes who destroyed the farms were black, which in progressive circles makes your comment race-ist!!
Fortunately, we are a bunch of fossils on this site so we get your drift and we won’t be calling for your deplatforming just yet. 🙂
Tim, I am forced by reality to state that white guys are different (on average) from black guys. The white guys (and the Chinese even more) have been selected for business traits as Gregory Clark worked out. This says nothing about a particular person, but groups who have been subjected to brutal selection are different from other groups.
It’s like the tame Russian foxes. Nobody thinks they are the same as wild foxes.
I think so, especially in the countries with negative interest rates: most of Europe, Japan and maybe a few others. Interest rates are still positive in the US.
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“They’ve been keeping the U.S. economy afloat for over 12 months, according to analysts. However, the U.S. consumer may not be able to maintain the burden much longer.
“Non-housing debt in the U.S. has experienced 20 consecutive quarters of increase, and is at the same level as its last peak, in the third quarter of 2008. For most analysts, the consumer slowdown is simply a matter of time. “
https://www.bloomberg.com/news/videos/2019-10-28/are-u-s-consumers-running-out-of-steam-video
“The U.S. has been in “an industrial recession for over a year now,” according to Bradley Jacobs, CEO of XPO Logistics, one of the largest global transportation and warehouse companies in the world.”
https://www.cnbc.com/2019/10/28/weve-been-in-an-industrial-recession-for-over-a-year-says-xpo-logistics-ceo.html
A consumer debt slowdown marked the big drop in oil prices in mid-2008. If consumer debt growth slows again, it is likely to have a similar impact on energy prices.
“Recent weakness in Mexican exports suggests the economy likely contracted in the third quarter, central bank board member Jonathan Heath said on Monday.”
https://uk.reuters.com/article/us-mexico-economy/mexican-trade-data-points-to-contraction-in-economy-central-banker-says-idUKKBN1X71U1
“Pemex recorded a loss of 87.85 billion pesos (US $4.6 billion) in the third quarter… Chief financial officer Alberto Velázquez said in a call with investors that the company’s third-quarter loss can be mainly attributed to two external factors: lower prices for Mexican crude and a stronger US dollar.”
https://mexiconewsdaily.com/news/pemex-records-88-billion-peso-loss-in-third-quarter/
“The cartel just waged all-out war against the [Mexican] government and they won.
“These narcos literally shut down an entire city of 800,000 people and forced the government to surrender to them.
“This is history unfolding in Mexico.”
https://medium.com/navigating-life/what-the-fuck-just-happened-in-mexico-b98eff2b340c
Hint:
Culiacan has been dicy from the 1960’s on.
I just moved a while back from Mexico to the States.
Well, I dare say it’s going to get a good deal dicier.
Being a post-peak oil producer with a population growing at 1.24% p/a and a national debt-load that has nearly doubled in the past ten years does not inspire one with hope for Mexico’s future, even before you factor in the rampant corruption and worsening narco-violence.
The Mexicans have been pretty clever at hedging against low oil prices though:
“For more than a decade, Mexico’s government has paid for a hedge in a bid to guarantee its revenues for the coming year from oil exports by state oil company Pemex. The series of highly anticipated oil trades is seen as the world’s top sovereign derivatives trade.”
https://www.reuters.com/article/us-mexico-oil-hedge-exclusive/exclusive-mexico-moves-to-launch-worlds-largest-oil-hedge-program-sources-idUSKCN1VQ2E1
If you connect this story of a government that has lost control in Mexico with a government that has lost control in Syria an interesting picture develops.
The US is “securing” Syria’s oil. Might Mexican oil need securing. Or Venezuela? Nigeria?
If the US remains in Syria might they broaden that approach?
like most other people, the don thinks oil=wealth
whereas using oil=wealth
there is a subtle difference, he doesn’t know that
Of course, stronger US dollar means that oil is less affordable outside the US. This is a major reason for the lower price.
After 20 years of trying, offshore wind turbines provide 0.3% of world energy, but are they worth it? The closer we get to collapse, the more outlandishly ridiculous headlines will get. This claim is made by the same guy warning us about peak oil by 2011, back in 2007.
– Offshore wind turbines wear out nearly twice as fast as onshore wind turbines. They only last 12 – 15 years compared to 25 years on land. This is because wind turbine blades actually move much faster (80 km/hr) than they appear to, and offshore ones are pelted by micro-particles, sleet and rain at high speeds. These particles puncture the petrochemical blades with ever growing holes, and their petrochemical finish flakes off into the sea for the little fishies to eat.
– All wind turbines generally produce 90% of the stated power rating only 25% of the time. When you compare how much energy they actually produce compared to their power rating, you find that in their first year of operation, offshore wind turbines produce 25% of their rated power, and in just 15 years, they produce 11% of their rated power. To close a 400 megawatt fossil plant requires 4,000 megawatts of solar/wind power. A 10:1 ratio.
– Not only do the blades literally dissolve into the sea, but the stress factors on newer larger turbines is debilitatingly enormous. They break down faster and more often. Renewable energy takes 1,000 X more space per watt than conventional energy. Offshore wind turbines use 1,000 X more copper than onshore turbines.
– https://www.telegraph.co.uk/news/earth/energy/windpower/9770837/Wind-farm-turbines-wear-sooner-than-expected-says-study.html
This article is from 2012 so some more up to date info should be available.
Thanks for pointing out the date. I can’t imagine is so much more. Here’s a 2018 link. The second graph is the last year this data was presented thusly. https://www.dieselnet.com/news/2018/11iea.php
I looked and was having a hard time finding anything newer specifically relating to the life expectancies of offshore turbines. https://emp.lbl.gov/sites/default/files/wtmr_final_for_posting_8-9-19.pdf
I did find the latest US government report on US wind turbines. These are pretty much 100% onshore turbines. One thing it says is,
I think that part of the problem with updated reports on life expectancies of wind turbines (whether onshore or offshore) is that while we think about a wind turbine having a specific life expectancy, these wind turbines are really the collection of a lot of parts, each with a different life expectancy. Some parts are less expensive and are replaced frequently. Some parts are replaced (and sometimes upgraded) at longer intervals. So, after a point, we don’t have our original wind turbine; we have one with a lot of new parts and new favorable tax credits. Thus, a single “life expectancy” isn’t wind turbines work any more. Maybe what we want to know is how long until the next tax credit is triggered.
If business as usual stops, even being unable to replace the frequently replaced small parts will be a problem. Thus, the life expectancy of wind turbines after the economic system fails is quite short. It is not much different than for any other kind of energy production.
Fantastic I’ll be continuing with this today
In the 2018 Wind Technologies Market Report I referenced previously, I found this chart regarding the operation of US wind turbines by number of years after beginning commercial operation. These turbines are on shore turbines. There is a clear drop off after 10 years, which is the point when the Production Tax Credit ends.
https://gailtheactuary.files.wordpress.com/2019/10/wind-turbines-output-indexed-to-commercial-operation-date-.png
Perhaps owners are less diligent about maintenance after that date. Of course, this doesn’t say anything about Offshore Wind Turbines.
“Perhaps owners are less diligent about maintenance after that date. Of course, this doesn’t say anything about Offshore Wind Turbines.”
Currently there is only one commercial offshore wind farm in the US.
Block Island and in Dec it will be 3 years old. I believe it took the Investment Tax Credit not the Production Tax Credit. So it will be informative. At 24.4¢/kW·h with 3.5% annual inflation adjustment would seem to make maintenance a priority.
2018 was much better than 2017. Though still not up to what was promised. Pretty close to many of the plains numbers from the report. For what little it is worth.
My spreadsheet on it. I update it monthly(around when EIA monthly data comes out), mostly. Hopefully my math is right.
http://www.mediafire.com/file/9v7yn7mb0x3c90f/Block_Island_Wind_Farm_post.xlsx/file
T2M
“At 24.4¢/kW·h ”
Wow. On land, wind power is down around 4 cents per kWh. PV is one spot in the Mideast is a bit under 1.7 cents per kWh.
Thanks Gail, your shit is awesome
Revenge of the Power Grid
The number one cause of collapse will be power grid failure. To understand why we face inevitable collapse, you need to know where we are, where we are going, and how we got here. Vaclav Smil has said that nation wide electrical grid upgrades will take trillions of dollars and decades to make themselves ready for intermittent renewable energy. We don’t have trillions of dollars and decades to effectually do this, because emissions must go down 50% in 10 years.
How Baby Boomers Broke America – May 17 2018
– Although the U.S. remains the world’s richest country, it has the third-highest poverty rate among the 35 nations in the Organisation for Economic Co-operation and Development (OECD), behind only Turkey and Israel. Nearly 1 in 5 American children lives in a household that the government classifies as “food insecure,” meaning they are without “access to enough food for active, healthy living.”
– America’s airports are an embarrassment, and a modern air-traffic control system is more than 25 years behind its original schedule. The power grid, roads and rails are crumbling, pushing the U.S. far down international rankings for infrastructure quality.
– Among the 35 OECD countries, American children rank 30th in math proficiency and 19th in science.
The “New Energy Economy”: An Exercise in Magical Thinking – March 25 2019
– After 30 years of trying, wind, solar, and batteries, provide about 2% of the world’s energy and 3% of America’s. Emissions went up 60% during that time.
Why Renewables Can’t Save the Planet – Feb 27 2019
– We are slowly building energy systems for a grid that can’t handle it.
– France shows that moving from mostly nuclear electricity to a mix of nuclear and renewables results in more carbon emissions, due to using more natural gas, and higher electricty prices, to the unreliability of solar and wind. Costs more does less.
– Oil and gas investors know this, which is why they made a political alliance with renewables companies, and why oil and gas companies have been spending millions of dollars on advertisements promoting solar, and funneling millions of dollars to said environmental groups to provide public relations cover.
Dilapidated World Power Grids Can’t Handle The Current Climate, Never Mind Renewables
U.S. Electrical Grid on the Edge of Failure – Scientific American Aug 26 2013
– Facebook can lose a few users and remain a perfectly stable network, but where the national grid is concerned simple geography dictates that it is always just a few transmission lines from collapse.
The extreme vulnerability of power grids – Nature Physics Aug 25 2013
America’s infrastructure is decaying – Business Insider Feb 5 2019
– Power interruptions could become more common if more attention isn’t given to the US energy system, according to this report.
– The majority of the transmission and distribution lines were built in the mid-20th century and have a life expectancy of about 50 years, meaning that they are already outdated.
America’s Electrical Grid Is Falling Apart – Sept 1 2017
– America’s electrical grid is a product of the 1930s, hardly viable for delivery of 21st Century energy.
The Challenges and Requirements for a New Power Grid – June 2016
– As the United States economy and society have become more reliant on the uninterrupted flow of electricity, the power grid upon which it depends for that supply has experienced deteriorating reliability. The grid loses power 285% more often today than in 1984.
List of major world power outages – Wikipedia
Revenge of the Power Grid – June 15 2019
– Climate change amplifies the frequency of heat waves, which increases electrical load, which puts greater pressure on infrastructure. At the same time, it increases the likelihood of superstorms that can cause flooding, fire, and other disasters that might disrupt nodes in the network. When utility operators designed their equipment years or decades ago, they made assumptions about load, storm surge, and other factors. Those estimates might no longer apply. Worse, planning and implementing updates to those systems is often stymied by paltry funding, strained political will, or other accidents.
South America blackout: Power grid failure leaves 40 million in dark – June 16 2019
– Argentina’s power grid is generally known for being in a state of disrepair, with substations and cables that were insufficiently upgraded as power rates remained largely frozen for years. An independent energy expert said that systemic operational and design errors played a role in the power grid’s collapse.
Why It’s So Hard to Restart Venezuela’s Power Grid – May 12 2019
– Re-energizing a dead grid, a process known as a black start, is challenging under any circumstances —a problem exacerbated by aging infrastructure.
What would happen in an apocalyptic blackout? – Oct 24 2019
– In June this year, almost all of Argentina, Uruguay and Paraguay were hit by a power outage that left nearly 40 million people without electricity. In August, almost a million people in the UK were left without power, These events, however, are minor in comparison to the kind of power outages that experts fear could be in store in the future. Growing demand on our electricity supplies from rising populations and new technologies like electric cars will face increasing instability as we shift to more renewable, but intermittent energy sources like wind and solar power.
Blackouts: a sociology of electrical power failure –
– Electricity fuels our existence. It powers water purification, waste, food, transportation and communication systems. Modern social life is impossible to imagine without it. Power generation systems are identified as critical infrastructures. They are more fragile than is commonly supposed, and the argument is made that they are getting frailer.
Editorial
My father in-law is 85 yo, he grew up when power grids were new, and built for a purpose they can’t serve today, let alone tomorrow. About 10 years ago, I told him I want to get a generator for my deep woods home, he laughed at my foolishness, and balked at the expense. Since then, that generator has proved itself a life-line for me. He grew up in a time where prolonged power outages were unheard of. Don’t be fooled by his age, many people in their 40s can’t imagine it either.
Time spent researching this post = 1 hour
Electrical costs for this post = maybe 2 cents, value of this post = priceless.
“The number one cause of collapse will be power grid failure.”
You may very well be correct. And California will lead the way in the US!
Also, when all electricity is long distance and there is no charge for long-distance distance, what motivation do local areas have for adding more production (other than subsidies)?
How do we get the economy to pay for the huge cost of this upgraded grid? Doesn’t the high cost collapse the rest of the system?
When I look at the US EIA data for state carbon dioxide: 1990 total; 5054 Million metric tons of carbon dioxide, 2017; 5166. Please explain 60% increase cited(only 28 years but …), I was unable to find it in your ref.
https://www.eia.gov/environment/emissions/state/
summary spreadsheet
I really do not like the metric as land usage calculation is … interesting.
The US due to size and government factors things are different in different places(part of my problem with PG&E and CA Regulators). As I generally, motorcycle camping, lap the US for months each summer (avoiding cities and CA mostly) differences in locales is rather obvious. normally 10-20k miles.
I look out the window and see brand new power poles and power lines that were recently installed, replacing old stuff. (Then again go 2 or 3 counties over and they are not as good.)
Not to mention all the rebuilding of the local interstates, roads and such. Which has been on ongoing thing since the 70’s at least.
T2M
BP numbers for US total CO2 generation are similar to yours. They tend to run a little lower:
1990 BP 4946.6 EIA 5054
2017 BP 5014.4 EIA 5166
I am not sure what you are asking me to explain. I haven’t been talking much about CO2 emission numbers. I have mostly been using numbers ending in 2018, not in 2017.
Countries decided to outsource a lot of their heavy manufacturing to China, India, and some other countries about 1990. This helped emissions growth rates look much better for Europe, US, and other countries doing the outsourcing. This allowed the countries to look good in emissions calculations, which are on a country by country basis. For the world, it wasn’t helpful at all.
According to BP, China’s emissions increased as follows between 1990 and 2018
China CO2
1990 2311.5
2018 9428.7
% Increase = 308%
World CO2
1990 21,290.1
2017 33,242.5
2018 33,890.8
1990 to 2017 % increase = 56%
1990 to 2018 % increase = 59%
I don’t know where the 70% came from. Perhaps a different base year?
Not your comment Gail. I mostly agree with both this one and the previous one. Especially the outsourcing of manufacturing.
I was questioning this statement.
lokisrevengeblog says:
“– After 30 years of trying, wind, solar, and batteries, provide about 2% of the world’s energy and 3% of America’s. Emissions went up 60% during that time.”
Though the 59% from 1990 to 2018 explains it in your follow up. Thank you. I parsed it wrong. Oops! 🙁
Thank you again,
T2M
Thanks for the llink and numbers. I looked for the reference too, couldn’t find it, It came from a Kevin Anderson YT video a while back, Will be looking again.
Agreed. Electricity was last to develop and will be first to decline. California is an excellent example the rural periphery will experience ever greater and more frequent blackouts because the cost of maintenance for the few customers will be prohibitive. There may be some efforts by locals to maintain and repair their own powerlines but many will need to move closer to population centers because transportation will become prohibitively expensive. How will this effect house values?
After the power is gone there will still be oil and gas for a little while. But will there be food?
http://www.mnforsustain.org/oil_duncan_r_olduvai_theory.htm
Seems Olduvai Theory is pretty close to correct.
I spent a little time this morning writing to Bloomberg about the electricity transmission issue. A day or two ago, I wrote a letter to Bloomberg complaining about a report they published claiming that intermittent sources had reached grid parity, when this analysis did not consider the higher transmission costs for renewables. When they wrote back (saying that of course they are right), I gave them details regarding the need for more transmission for renewables, and the fact that this transmission causes fires.
We will see if this prompts them to do a little more investigation.
It against their best interests. They need believers to keep the market growing. Solar and wind are dead out of the gate but they are a tradable commodity. They have no real world value but they have large economic value. Bloomberg has a cognitive bias that profit equals value. If there’s profit they’d eat next years seed. Like student loans.
I seem to bang my head against the wall from time to time.
Thank you for the Olduvai link, a pleasant evening’s read ahead…..
I think Olduvai theory missed all of the coal production from China after it joined the World Trade Organization in 2001. That kept world energy consumption per capita up far longer than forecasters had expected.
Olduvai theory – awesome thanks
Olduvai theory – gorgeous!
“it is still only a matter of time before some shock triggers a new recession, possibly followed by a financial crisis, owing to the large build-up of public and private debt globally.
“What will policymakers do when that happens?
“…They will be under intense political pressure to prevent a full-scale depression and the onset of deflation. If anything, then, another downturn will invite even more “crazy” and unconventional policies than what we’ve seen thus far.
“In fact, views from across the ideological spectrum are converging on the notion that a semi-permanent monetisation of larger fiscal deficits will be unavoidable – and even desirable – in the next downturn…
“[However], fiscal and monetary loosening is not an appropriate response to a permanent supply shock. Policy easing in response to the oil shocks of the 1970s resulted in double-digit inflation and a sharp, risky increase in public debt. Moreover, if a downturn renders some corporations, banks, or sovereign entities insolvent – not just illiquid – it makes no sense to keep them alive. In these cases, a bail-in of creditors (debt restructuring and write-offs) is more appropriate than a “zombifying” bailout.
“In short, a semi-permanent monetisation of fiscal deficits in the event of another downturn may or may not be the appropriate policy response. It all depends on the nature of the shock. But, because policymakers will be pressured to do something, “crazy” policy responses will become a foregone conclusion. The question is whether they will do more harm than good…”
https://www.theguardian.com/business/2019/oct/29/when-recession-comes-expect-central-banks-to-rewrite-the-rules
“…central bankers have already shown signs that they are willing to get creative to force interest rates lower which, if successful, will exacerbate the dilemma that long-term investors face: accept lower returns or seek out higher yields in riskier assets?
“A danger here is that investors attempt to maintain their portfolio’s yield by taking on a greater amount risk… This is at odds with what investors should generally do amid a deteriorating global economy.”
https://www.cityam.com/what-do-negative-bond-yields-mean-for-investors/
“…the tide of angst about the unintended consequences is rising… Concerns have focused on the pain negative rates might be inflicting on the banking system… Yet the real damage is surfacing in another corner of the financial system.
“The pension industry is caught in a tightening vice of lengthening life expectancies and falling expectations for investment returns. It is this pension predicament that may also explain why sub-zero interest rates are not having the stimulative effect central bankers intended.
“Bonds are the bedrock upon which large parts of the global pension system is built. Although the rally in bonds and stocks since the financial crisis has lifted the value of pension funds’ holdings, what they really care about is generating the returns to match their future liabilities. With bond yields beaten down and equity markets having rallied for years, the ability to harvest those returns looks grim.”
https://www.ft.com/content/a730ce84-f95e-11e9-98fd-4d6c20050229
Pension funds do indeed have a lot of problems!
We really do need some creative solutions.
Dear Gail
Please allow me again to disagree. We do not need creative solutions, because that is how we became trapped in this narrow passage. We need old solutions, tried and tested: sound money, honest banking, self denial, and thrift. That worked for the Most Serene Republic, and it would still work, if enough of us had the courage to try it.
“We really do need some creative solutions.”
We know where some of the creative solutions will come from. Nanotech, AI, and biotech possibly fusion are near the top of the list. There is also a chance that serious life extension will come along. Nanotech and AI are what it takes for a Vinge type singularity. Kurtzweil thinks that’s going to happen by around 2045.
Is he right? No way to be sure, but he has the trend line graphs and a track record making him hard to ignore.
Will civilization hold together long enough?
Again, no way to be certain, but it seems possible, especially if you include the Chinese.
Here is one. This makes cheaper power *and* captures the CO2
https://en.wikipedia.org/wiki/Allam_power_cycle
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Thank you for your ongoing, thoughtful analyzes. I’ve recently encountered Peter Zeihan, a geopolitical strategist with an American oriented world view. The link is to a recent presentation. Under his perspective, North America does fine with a few other somewhat self-reliant, protected nations, that have strategic advantages. The U.S. is good for 100 years on shale oil and natural gas, but that’s no world solution. Demographics are a problem for most countries. Looking for perspective from you and other commenters. https://youtu.be/sfyrURHpUcM
The problem of the USA
is that it is not protected from the North by mountains. The winters can be drastic. That is why only fossil fuels allowed to build a civilization there.
The solar energy works in Texas, but what about the water and crops? Is their production in Texas efficient?
And what about the horrible debt of the younger generations. Does he think their purchasing power will save the USA, if they have catastrophic debt burdens?
He is an entertainer, nothing more.
Our world economy isn’t very flexible. The US cannot exist by itself in close to the current form without the rest of the world providing major inputs.
I listened to a bit of the presentation. I would agree that Zeihan is mostly an entertainer.
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The more I think about 1989, the more I tend to believe that this was the point when the things started to reverse, i.e. the world population growth from the new births stopped, the Japan bubble collapsed, my country (Slovakia) stopped to live from the production of weapons, the fight of the 2 continents (America vs Eurasia) ceased, the so called mad cows disease caused by the depletion of the nutrients in the soil broke out etc.
We have already been on this trajectory of the decline for 30 years without fully realising it. So we should not be surprised, if it only accelerates.
You may be right. The USSR didn’t collapse until 1991, but they certainly started to go downhill before then. The peak in the USSR’s energy consumption occurred about 1989:
https://gailtheactuary.files.wordpress.com/2018/06/fsu-energy-consumption-by-fuel.png
(FSU stands for Former Soviet Union). I would expect other countries affiliated with the USSR would show a similar pattern.
More recent resource charts for a larger area show a similar pattern.
https://gailtheactuary.files.wordpress.com/2019/07/domestic-extraction-of-eastern-europe-materialflows.png
Certainly, in your part of the world this was peak. But also in Japan, and perhaps Cuba, North Korea, and a few other places.
Ive solved it! We run a drive shaft from this to a generator. Its spinning like a dervish!
https://www.usdebtclock.org/
That is what we need!
Reading about the protests in truly desperate countries I find myself wondering how soon until we are as poor as they are…..
Don’t worry, Xavier, Gail has pointed out time and time again most of our so-called “wealth” is illusionary and dependent on our reliance of affordable, ever expanding, Fossil fuels and related resources. Take great comfort in looking over all your investment and financial statements! They hold great power and control over our current way of living.
You, I, and other readers here will be wise to that fact and won’t be too upset after the downside hits us like this
https://m.youtube.com/watch?v=8dxpMxULHnA
Take great comfort that we mostly had it better than 99% of all people that ever lived, and for that matter…to come….🤗
What so many miss is the time factor. Currently washing clothes consists of moving dirty laundry to the washing machine, going off to read OFW, returning to the washing machine and moving clothes to the dryer, going back to OFW, returning the the dryer and then putting said clothes away. In between perhaps a few minutes less of OFW and place the morning dishes in the dishwasher after rinsing food waste off and into the garbage disposer.
In my youth, washing clothes took my mother all day, there were wash tubs(ours were high class, on wheels not the floor) and a washing machine with a ringer, no spin cycle here. Each piece had to be rinsed prior to wringing and then hung up to dry, in the winter this was the basement, in the summer the yard – we have many bird lovers here, they poop, and sheets are really easy to hit; so rinse and repeat or tolerate a bit of stained area. Eight or so hours later and numerous trips up the stairs and down the stairs(you thought the machine was on the main floor, nope, in the basement) the job was done for another week. We did not have fixed clothes lines so the lines were taken down and the clothes poles put away(lines sag under weight, need additional support).
It is now the end of day and time to make dinner, breakfast and lunch are done, maybe do the dishes, by hand, while working in the kitchen Meanwhile, the posts are piling up unread on OFW, so perhaps the local paper, don’t worry about showers, the bathtub is very convenient for a weekly bath. We were very natural, and I assure you, we did not waste water, it cost money so the amount of water in the tub was minimal, and of course it was used for much of the family, sequentially. We were leaders in ecology, sort of like the college kids in the sixties who learned that boys and girls could share a shower in the dorm if done quietly so the housefellow wouldn’t chase them out, they were ahead of their time, the bathrooms were unisex or just available to all genders. I was one of the housefellows who got to call enough of saving water, out.
You are all going to love taking comfort in the old ways.
Ah, for my mother this was pretty good, the wash tubs of her youth were on the floor and at the end of the week were the bath tub, in the kitchen with water heated on the stove – wood stove that is, of course that was after someone chopped the wood. We are going to love it! Modesty, well perhaps not so much, again absolutely ahead of their time, but no selfies for sure.
Dennis L.
Clothes washing machines may be miracles, but washing dishes by hand barely costs more time.
I have seen clothes washed in a stream and dried over the tops of bushes. Even the wringer washer was an upgrade over this.
https://gailtheactuary.files.wordpress.com/2016/11/women-washing-clothes.jpg
I have an idea….another Fed Rate Cut is in order…
Back YahooFINANCE
Goldman Says Rush From Stocks to Cash, Bonds Biggest Since 2008
Christopher Anstey
BloombergOctober 28, 2019, 3:12 AM EDT
Goldman Says Rush From Stocks to Cash, Bonds Biggest Since 2008
(Bloomberg) — The outflow from U.S. equity funds this year has been the biggest since 2008, relative to the flood of money into cash and bonds, according to Goldman Sachs Group Inc.
That still leaves cash exposures “near historical lows,” according to Goldman strategists led by David Kostin. At 12%, the aggregate allocation to cash is only in the fifth percentile of the past 30 years, they calculated.
“High uncertainty, investor fears of a recession, and low starting cash allocations will likely limit a significant increase in equity allocations” in 2020, the Goldman team wrote in an Oct. 25 note.
Just like this year, corporate demand will be the top source of U.S. equity buying in 2020, Goldman projected. While buybacks may drop, net demand is still seen as strong thanks to diminished initial public offerings and a rise in cash-based mergers and acquisitions. Households and foreign investors will also be net buyers, while pension funds keep whittling down their allocation, as they have since 2009, Goldman said.
https://finance.yahoo.com/news/goldman-says-rush-stocks-cash-071255627.html
Now listen to Goldman…they ALWAYS be solvent
https://m.youtube.com/watch?v=Cxjdj5_5yNM
I didn’t realize that pension funds have been cutting back their allocations since 2009. If they are aiming for fairly high returns, a person wonders what they are now investing in. Bonds for asset appreciation, as interest rates fall?
I also hadn’t stopped to think about cash-based mergers and acquisitions being a significant source of stock demand.
Can’t make a decent profit!? Ah, that’s too bad…for BAU and all of use cushy modern Folks…
https://finance.yahoo.com/news/big-oil-investors-bracing-bad-040002396.html
(Bloomberg) — Slumping energy prices, sluggish global demand and shrinking chemical margins are weighing on the oil industry as its biggest names prepare to announce quarterly results to investors demanding ever-higher payouts.
The so-called supermajors — Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., Total SA and BP Plc — are expected to disclose a 42% plunge in third-quarter earnings, on average, when they post results this week. That drop-off is too steep to blame on the 18% decline in crude oil prices, which means executives will have some explaining to do.
Exxon, Shell, and BP already have already taken steps to manage shareholder expectations by releasing limited data points on things like refinery repairs, asset sales and hurricane impacts on offshore oil production. Nonetheless, investors will be watching for additional color on what to expect for the remainder of 2019.
Most of the bad news already should be priced in. Exxon fell 2.6% on Oct. 2 after disclosing a half-billion dollar hit from lower oil prices, a deficit that wasn’t plugged by improved refining profits.
Meanwhile, Shell warned that oil and gas output inched lower, and its refineries and chemical plants operated at about 90% of full capacity. BP warned that its tax bill rose, production declined, and it incurred an impairment on some assets it sold, factors that dampened hopes of an imminent dividend increase.
Long touted as Big Oil’s next high-growth opportunity, petrochemicals are languishing. The U.S.-China trade war has weakened demand for plastics amid concerns that $40 billion in planned U.S. Gulf Coast chemical plants will create a glut.
“Current trends continue to suggest a prolonged downturn” in chemicals, RBC Capital Markets analyst Biraj Borkhataria said in an Oct. 17 note. Exxon, with its giant chemical division, is the most heavily affected by this trend among peers
Get your moonshine Distillery readyl that’s the only fire water you’ll have after these guys go bust!
HAHAHA
https://m.youtube.com/watch?v=MGg_PTBV6f0
Yep, those Fox Fire books I own will surely come in handy down the road….
Gail said correctly: “Humans don´t need to fell guilty!”
“As long as people try to “get rich” the ecosystem will burn and eventually collapse. But how can you grow without a profit, they ask. You can’t. You can’t grow without destroying the system (and yourself). But we want to grow said the cancer, it’s written in our genes. Go forth and multiply.”
James on Megacancer
We have lived in a bubble world for a long time. It always looks like the bubble can continue. But at some time, something must cause it to stop.
“Chile’s President Sebastian Piñera has dismissed his whole cabinet in order to form a new government and introduce social reforms demanded by protesters… More than a million people joined a peaceful rally on Friday in the capital Santiago, calling for social justice. Mr Piñera said he had heard the demands from the streets.”
https://www.bbc.co.uk/news/world-latin-america-50197673
“Argentina’s Peronists have swept back into power, electing Alberto Fernandez president in an election result that shifts the country firmly back toward the left amid an economic crisis.”
https://www.euronews.com/2019/10/27/peronist-candidate-alberto-fernandez-could-oust-conservative-incumbent
I wonder if the resources of the country are really sufficient to deliver these social reforms. Higher price on mineral exports (copper and lithium, among others) would help a lot.
“At least 67 people have been killed and more than 200 injured in protests in Ethiopia over the last few days, the police commissioner for the Oromia region told CNN on Saturday.”
https://edition.cnn.com/2019/10/26/africa/ethiopia-clashes-intl/index.html
“Large crowds of demonstrators have taken to the streets of Guinea’s capital, Conakry, to protest against a potential constitutional change that could let President Alpha Conde seek a third term. Organisers said a million people took part in Thursday’s march…”
https://www.aljazeera.com/news/2019/10/rally-guinea-capital-conde-3rd-term-bid-191024180335500.html
We need a globe with color markings to keep track of all of the areas of the world with problems!
We do! It feels like we have reached a tipping point of social unrest, starting with the “yellow vest” protests last year.
Is this what you have in mind?
https://www.zerohedge.com/geopolitical/we-now-have-mass-public-unrest-france-spain-algeria-iraq-lebanon-egypt-hong-kong
Dennis L.
You could add Argentina, Azerbeijan and Ethiopia to those lists, as they’ve certainly seen mass public unrest, too. Probably a few others.
It’s hard to know how this would compare with previous years but certainly the past few months have been noteworthy.
This is the world image shown:
https://www.zerohedge.com/s3/files/inline-images/2019-10-28.png
Thanks!
Gerald Celente, the founder of the Trends Journal has a great quote: “when people lose everything and have nothing else to lose, they lose it!”.
And that’s what we are beginning to see around the world. People are figuring out that just a few in this world have all the wealth and the rest have little or nothing. So, let them eat cake !
Why no unrest in the US?
What was that big glowing globe thing in Saudi that they all gathered round a year or two ago? Just the job!
Second thoughts, I don’t need that, I need a drink…..
If only it had been a Van de Graaff generator…
https://www.businessinsider.com/trump-orb-globe-saudi-arabia-what-was-it-2017-5?r=US&IR=T
“At least 67 people have been killed during two days of protest in Iraq, after clashes between demonstrators, security forces and militia groups. Hundreds more people were injured in what are the second wave of protests in October.
“The protesters, mainly unemployed young men, are calling for work, better public services and an end to corruption in their country.”
https://news.sky.com/story/more-than-60-killed-in-second-wave-of-iraqs-anti-government-protests-11846383
“Tens of thousands of Lebanese protesters have formed a human chain running north to south across the entire country to symbolise national unity amid a civil disobedience campaign against the government.”
https://www.aljazeera.com/news/2019/10/lebanon-protesters-form-human-chain-country-191027113442407.html
“Lebanon is on the verge of economic collapse unless an “immediate solution” can be found to end days of nationwide protests that have paralyzed the country, Central Bank Governor Riad Salame told CNN in an exclusive interview Monday.”
https://edition.cnn.com/2019/10/28/middleeast/lebanon-salame-economy-collapse-intl/index.html
How about striking for higher oil prices? This would seems to be what really is desired. With higher oil prices, the government of Iraq would have money to spend on programs desired by the citizens.
the riots exploding across the world at the moment are about lack of cheap surplus energy with which to make our lives easier
our lives were never meant to be easy–that’ s what evolution is all about
and the point that is being ignored
That seems to collide with the real degree of local control. Iraq has been for decade+ an American protectorate, and it’s on the verge or at least partly becoming Iranian one (incl. greater alliances thereof). Although it could also fracture completely down or some new domestic figure taking over, forcing homogeneous state entity up again.
Re higher oil prices, I was reading that Iran would need a break-even of $194.6 a barrel to balance its books next year. I’m going to go out on a limb and say we won’t be seeing $194.6 barrel oil in 2020.
https://kfgo.com/news/articles/2019/oct/28/iran-would-need-oil-at-195-a-barrel-next-year-to-balance-budget-imf/951428/
We won’t get $194.60 in 2050!
“…this year, traders complain, the festive shopping season [of Diwali] has been gloomy, with sales falling precipitously as a deepening economic slowdown hurts ordinary Indians.
“Hit by lay-offs, pay cuts and reduced earnings, anxious consumers are tightening their belts… Weak consumer demand is fuelling a vicious downward spiral.”
https://www.ft.com/content/798795ce-f4f6-11e9-b018-3ef8794b17c6
“Food, electricity and gas prices have risen sharply as [Pakistan’s] growth grinds to a nine-year low, bruising the middle class.
““The people of Pakistan are fed up with this government,” said Noor Ahmad Kakar, a 45-year-old supporter of Mr Rehman who travelled from the south-west province of Balochistan to Islamabad for the protest. “Inflation has never been higher and people don’t have jobs.””
https://www.ft.com/content/98c4bf5a-f6bf-11e9-a79c-bc9acae3b654
We seem to be seeing the same story playing out everywhere.
I have been to Dawali celebrations put on by the Association of Indian Faculty, Staff and Students of Kennesaw State University. Many Indian families would come in their nicest clothing. Various groups would entertain with song and dance. Some of these groups would be groups of children. Indian food would be served. Henna hand painting would be offered. Door prizes (certificates from an Indian grocery story) were given to a few. I am sure the celebrations are much bigger in India.
“Food, electricity and gas prices have risen sharply as [Pakistan’s] “GROWTH” grinds to a nine-year low, bruising the middle class.”
And there in lies the problem….(Perpetual) Growth. It’s baked into the cake when you have close to 8 billion humans roaming the planet looking to feed and support their families.
https://media.townhall.com/Townhall/Car/b/payn_c16893420191015120100.jpg
I keep having the feeling, “This couldn’t happen to a more deserving state.” A state that pushes wage disparity to the limit looks likely to have problems. A state that pushes renewable energy to the limit looks likely to have problems. A state that pushes electric cars to the limit looks likely to have problems.” A state that wants to be the ultimate in “green” at some point will figure out how that plays out in practice.
The way forest ecosystem collapses take place is through fires. Space is cleared away, for other species to grow. Also, some types of trees propagate well after fires. A new type of ecosystem can arise.
A person wonders if something similar happens with the California economy. Will this be a turning point for citizens deciding to move to California? At some point, I would expect individuals and businesses to pick up and move elsewhere.
“A person wonders if something similar happens with the California economy.”
It already has! There are tent camps and they keep growing in certain parts of Los Angeles where the homeless live in the streets and Gov’t officials can’t to a damn thing about it other than to discuss the problem. San Francisco also has a HUGE homeless problem. Both of these cities are “PAYING DEARLY” in many ways trying to fight the problem homelessness brings including diseases.
But SO many miss the point. That is what a “COLLAPSE” looks like.
Right!
Many years ago, my parents would take me on picnics in the great outdoors. The problem with summer picnics was wasps. And there was only one way to get rid of them: put the lid back on the marmalade jar.
San Francisco and Los Angeles are giant marmalade jars, where any illegal alien or bone idle vagrant can suck up as much welfare as they want, for ever. They are an object lesson in what happens when a polity robs the productive to reward the parasites. And if this trend is not stopped, soon the whole country will be paying into marmalade jars, until the social collapse engulfing those cities is universal.
One could also look at this as an example of a company (PG&E) putting profit above mitigating fire dangers, ie, properly maintaining equipment and burying power lines when possible. My brother in law worked for PG&E for 30 yrs in the Napa Valley–first hand knowledge of how much they cut corners, etc.
Electricity rates have been awfully high in California in the past. I expect PG&E would have had to materially raise rates to do a better job with their transmission. I doubt that this would be acceptable to voters in California.
California has tended to have high-priced electricity for a long time. In some ways, California is like an island. The Rocky Mountains make pumping liquids to California difficult, because they have to be pumped uphill from most states. Even natural gas supplies need to be carefully planned.
California has told itself that it is special. In many ways, it is special like an island. Another analogy is that it is special like most of Europe, with its grossly inadequate energy supplies.
Years ago, I remember ads would often say, “Price is $xx, higher West of the Rockies,” or “Price is $xx, higher in California.” With more imports from China, this problem has increasingly disappeared. But I think the underlying problem still exists.
Yes rates are high here but we ,on average ,use less electricity and natural gas than your average US citizen. Climate here means electric demand goes up with air conditioning and solar can adequately supply demand for residential uses. I have solar and batteries and only occasionally need grid power. I could get by without grid if I had to. Yes it costs a lot but consistent power is more valuable for me than a new pickup truck and with a 4 wheel F-250 diesel running about $80,000 solar and batteries are about $30,000 cheaper.
Priorities for me are living as best I can with minimum dependence on fossil fuels, travel at a minimum and provide food from my own land. Something like self sufficiency or as close as I can get. Retirement means controlling costs and having utilities paid in advance seems prudent. I can power the tractor with homemade biodiesel.
California is much easier to take if you just stay off the roads. If you do need to commute extra solar can supply power and even with a new Tesla 3 your costs for solar, batteries and an electric car are only slightly more than that new F-250.
Utilities have a lot of overhead costs. Whether or not you can get along most of the time on solar and batteries, the utilities will still have essentially the same overhead costs. One of these overhead costs is building transmission lines. Another is maintaining transmission lines in such a way as to prevent causing fires.
California clearly needs to do a whole lot more than they are doing now, if the transmission lines are not to cause troubles. They need to either bury the lines, at significant cost, or they need to do an unbelievable amount of cutting back of brush and monitoring the lines. In a dry area, I am not convinced even these will work. Perhaps electrically insulated wires would help, by themselves.
But these high costs have to be spread over a lot of users, even users for a small share of the time. Otherwise, these high costs become way too high for the users that find continuous electricity really essential. California will “go down the tubes” because those who need continuous electricity cannot afford it. Or because too much of the state burns down. Or because the utilities needs to cut off power to a large share of customers for months at a time.
If California was a single country economy it would be the 7th largest in the world. All we hear about is people is moving from California to Nevada. We would like people from California to not stop and keep going to some other states, cause now they now bitch about Nevada. All we hear about how California does things. Hypocrites! Same BS Different State.
Yup, same goes for those who live in Texas, they have been dealing with an influx of Californians. When I lived in Oregon the locals hated Californians moving to their State for the same reasons.
California has indulged in excessive Hubris: it will be punished by the gods accordingly…….maybe with the honour of the first major US state to collapse?
“maybe with the honour of the first major US state to collapse?”
Hasn’t it already? Just look at South Los Angeles and all the tent camps out on the street which continue to grow. Local and State officials can’t deal with the homeless problem let alone all the diseases that are springing up throughout the city because of it.
Then there is San Francisco who also has a major homelessness and drug problem to the extent that they are spending hundreds of millions per year just to sanitize the streets from all the human poop and urine.
So that is what a collapse looks like. Remember, first the periphery then the center and this will eventually go global because we are all doing the same idiotic monetary and banking shenanigans. The UK also has a huge homeless problem as well that their Gov’t tries to hide from the public.
“China’s third-quarter slowdown continued into October… Bloomberg Economics’ gauge aggregating the earliest available indicators from financial markets and businesses showed the economy cooling for a sixth month, with indicators for trade, factory prices, iron ore and copper all worsening.”
https://www.bloomberg.com/news/articles/2019-10-28/china-s-slowdown-rolls-on-into-october-early-indicators-show
“China-focused managers suffered their worst year since the financial crisis in 2018 as equity markets were hit by trade war concerns and big falls for technology.”
https://www.ft.com/content/94891341-cfb6-45d7-89eb-e32f9afc51c7
“Hong Kong’s financial secretary has said the region is in recession after more than five months of anti-government protests, and said it was unlikely to achieve annual economic growth this year.
““The blow to our economy is comprehensive,” Paul Chan said in a blog post on Sunday, adding that figures out on Thursday would show two successive quarters of contraction – the technical definition of a recession.”
https://www.theguardian.com/world/2019/oct/28/hong-kong-in-recession-after-protests-deal-comprehensive-blow
If Hong Kong were doing better financially, it would have more means at its disposal to fix the problems people are concerned about. Costs of homes are are very high in Hong Kong, leading to affordability issues for many workers. At the same time, businesses are not doing as well, because of all of their China-related trade. The recent disruption is hurting the travel industry too.
“China’s room to ease monetary policy to aid the slowing economy is being limited further by price rises due the ongoing swine fever epidemic, economists said.”
https://www.bloomberg.com/news/articles/2019-10-29/china-s-monetary-policy-is-being-hamstrung-by-inflation-surge
The biggest problem seems to be factory input prices falling. This is related to prices of oil, coal and gas being too low. Prices of other commodities affect this as well. Too little demand for automobiles and smart computers could feed into this.
It’s telling that it is the most energy-intensive bits of the global economy that are feeling the pain first – manufacturing, construction, freight etc – with service sectors still relatively buoyant.
Good point!
“The largest banking lenders to the oil and gas sector are becoming more cautious, marking down their expectations for oil and gas prices that underpin loans in a move expected to put further financial stress on struggling producers, industry and banking sources said.”
https://uk.reuters.com/article/uk-usa-oil-lending/small-oil-and-gas-companies-get-cold-shoulder-from-large-banks-idUKKBN1X70D0
Ultimately, it is ability to get funding that determines how long these businesses last. Also, whether there are “greater fools” willing to buy up these companies for lower amounts, and continue their operations. If the big oil and gas companies believe that there are truly economies of scale, there is still a chance that the acreage will remain under production, just with different owners.
A major concern is that cutbacks in the number of drilling rigs have been growing significantly larger in recent weeks. This suggests growth in oil and gas production will be tapering off or falling in the not too distant future. The EIA uses estimate in recently reported amounts. I would expect that some of these could be revised downward.
“…within 20 years, the US had made up for all the growth lost by the Great Depression and was back on the 2 per cent trend line started in 1900.
“Yet if you try to track the same sort of bounceback in the American economy from 2008, you quickly work out there’s no chance the US is going to make the same sort of recovery as it did in the wake of the Great Depression.
It [is] time to admit the world is in the “Great Stagnation”…
https://www.smh.com.au/politics/federal/the-great-stagnation-is-upon-us-but-our-leaders-haven-t-noticed-20191026-p534ig.html
Growth in energy consumption per capita is basically too low now.
After World War II, it was possible to ramp up oil production as well as some coal production. Many investments were made in infrastructure that was very productive (new electricity transmission lines, new interstate highway systems, new oil and gas pipelines. Energy consumption per capita soared, because oil and other energy products were inexpensive relative to wages. Debt was added to finance many of these investments. These investments really did pay back well, making the system work well.
Now we do not have a similar situation.
“The example in Figure 2 is based on the electricity usage pattern in Melbourne, Australia, which has a relatively mild climate. The example uses a combination of solar panels, batteries and diesel backup generation. Solar panels and backup batteries provide electricity for the 95% of annual electricity usage that is easiest to cover with these devices; diesel generation is used for the remaining 5%.”
I was a bit confused by this, thinking maybe Melbourne got 95% of its AC power grid energy from solar — but, it looks like that isn’t the case:
“The majority of electricity transported in Victoria is from the brown coal generators in the Latrobe Valley to Melbourne, the largest demand centre in the state. Jun 9, 2017”
https://www.google.com/search?q=Where+does+Melbourne+get+its+electricity+from%3F&sa=X&ved=2ahUKEwi7iuWpyL7lAhVFHTQIHf0qDOIQ3rMBKAJ6BAgLEA0&biw=1368&bih=729&dpr=2
As far as I know, no AC power grid on the world gets even nearly half its energy from IRE (intermittent renewable energy — wind, solar, etc.) — please straighten me out, if that’s not the case.
The only thing that was used in the model was the quantity of electricity consumed at various times of the day during the year. It had nothing at all to do with how the generation of Melbourne operated in the past. Thus, the model assumed the BAU would continue. Homeowners would continue to operate air conditioners as in the past, for example.
low crop yields…
Perhaps we can start the equivalent of local rain dances to fix our climate problems.
I laughed very much, didnt know that peak energy pessimism can be so much fun!
Regarding power-to-gas: according to Wikipedia (and some data memories in my back head) efficiency is 70% only. That means we loose 30% of the energy. https://en.wikipedia.org/wiki/Power-to-gas
If we use transmission lines we also loose 30% and storing in batteries is another 30% (0.7×0.7=0.49), so roughly we loose half of the produced energy. Power-to-gas plus pipelines could be more efficient.
I think costs are always relative. If we have to “work” more for one energy than for another, this “work” cannot be used to produce fridges and housing and leads to declining life standards. I am not sure if it will be recessive.
According to the german Wikipedia, renewable energy systems will be cheaper than fossile ones. They cite these publications:
Andreas Palzer, Hans-Martin Henning: A comprehensive model for the German electricity and heat sector in a future energy system with a dominant contribution from renewable energy technologies—Part II: Results. In: Renewable and Sustainable Energy Reviews 30, (2014), 1019–1034, S. 1027, doi:10.1016/j.rser.2013.11.032.
Deng et al.: Transition to a fully sustainable global energy system. In: Energy Strategy Reviews 1, (2012), 109–121, S. 118, doi:10.1016/j.esr.2012.07.003.
Olav Hohmeyer, Sönke Bohm: Trends toward 100 % renewable electricity supply in Germany and Europe: a paradigm shift in energy policies. In: Wiley Interdisciplinary Reviews: Energy and Environment 4, (2015), 74–97, S. 91f, doi:10.1002/wene.128.
I have no access to check them.
There is a lot of wishful thinking in academic articles, I am afraid. If they don’t come out with happy endings, it is hard to get them published. Many people (those giving research grants, heads of a departments, government officials, peer reviewers, book publishers) like happy endings. Since professors live in a “publish or perish” world, they spew out lots of optimistic articles.
smartgrids…
The micro-grids that work are gas fired micro-grids. They are basically locally gas powered electricity generation. The only distribution lines that are used are some local lines. The quantity of electricity generation can be scaled up to handle business and government needs as well. This approach is basically going back to the “local electricity by fossil fuel fuels, generated everywhere” model. If a city doesn’t have enough generation, it has a problem. Long distance transmission is not much used. Costs are basically local costs. The underground gas pipes and short transmission lines keep fire risk down.
Micro-grids based on local solar energy plus batteries are a joke. They have all of the problems of solar generation plus the additional problem of small scale. They produce way too little solar in winter. Every time that there is a spell of a few cloudy days, the electricity is likely to go off. They are likely to have a lot of unused excess on sunny days in the spring and fall. This excess needs to be curtailed. The cost of the system become overwhelming for the local residents, if it is scaled up to produce enough electricity, with enough backup batteries.
An example of recent problems.
http://joannenova.com.au/2019/10/oopsie-cloud-causes-system-black-event-at-alice-springs-affecting-thousands/
Cloud in this case is more like a front. But brand new 41 MW gas power station, newish 5 MW battery that was supposed to allow for up to 50% solar.
More than likely a system failure at the NG RICE engines software but …
T2M
I hope people planning micro-grids will sit down and look at how their implementation has fared in the past. This report says things like:
These things are similar to the implementations attempted by several islands. In this case, it seemed to use natural gas as well. (Islands tend to use oil-fired generation to back up their wind and solar.) None of these implementation has operated as well as hoped, as far as I know. None is fossil free.
And a very large problem is the gas infrastructure is too small. One project I’m familiar with wanted to increase their service from 1”to1 1/4” the connection fee was $70,000.00. Basically a one time demand charge. California has had very little heating demand so the system is simply too small for micro gen without massive investment.
I believe this.
California would need a massive build out of infrastructure. They would need lots of gas storage, to cover the time when solar energy is not available in winter, if not for heating. I am not sure that storage can even be built. It usually uses natural underground formations that are suitable for storage.
“natural underground formations”
There are such in the LA area.
“Hydrogen is hard to store.”
No kidding. Fluffy like goose down. A cubic meter of water is 1000 kg. A cubic meter of liquid hydrogen is 70 kg.
You can store it underground and move it by pipeline but that’s not (in my opinion) the best way. The least complicated way is to convert the hydrogen to hydrocarbons. We know how to do that. Humans also know how to store, move and use hydrocarbons. We have well over 100 years of experience.
I always figured that (if we build them) power satellite off-peak power would be used to make hydrocarbons. But it looks like the cost trends for ground solar might give us reasonable priced synthetic hydrocarbons.
Storing as ammonia is a lot better than trying to deal with liquid H2, we know how to make ammonia as well. But it is still much harder than dealing with hydrocarbons.
You tell a good story. But, like Bill said in the video: There is no substitute for how our economy runs today.
We as humans adapt, we change, probably you are right, but the economy will adapt and there will be a tomorrow.
The hydrocarbon idea has some merit, hydrogen is just too tough a nut to crack at this point.
What do we have to lose?
Thanks, Keith for a positive.
Dennis L.
That’s the point. The economy runs on around 100 million bbls of oil a day. This is a proposal to replace all that oil we get out of the ground with cheap, carbon-neutral synthetic oil.
Thank you, Keith. Hydrogen is perhaps the worst possible energy storage medium. If you don’t believe me, watch that video of the Hindenburg blowing up. That is the energy of 200,000 cubic
meters of hydrogen, and Adam Savage could probably do better with a dozen cars and a crusher.
Hydrogen also leaks out of almost anything, except the intestines of cattle, which is what the Hindenburg’s gasbags were made of. We can do better today, but membranes impermeable to hydrogen are still expensive. And piping hydrogen is even more expensive, since only continuous preventive maintenance can keep the stuff secure.
Ethanol (CH3CH2OH) or, as you say, hydrocarbons would fix the hydrogen in a convenient and much denser liquid.
We seem to need to relearn the lessons of why hydrogen doesn’t work every time the subject comes up. The first time was before the Hindenburg. There have been many attempted implementations since that have never gone anywhere. The storage and explosion issues would seem to quickly put an end to keeping a supply of it anywhere, or piping it anywhere.
“membranes impermeable to hydrogen are still expensive.”
I would not know this except for my connection to StratoSolar. Metalized potato chip bags leak less than 1% per year.
“And piping hydrogen is even more expensive since only continuous preventive maintenance can keep the stuff secure.”
There is still enough damand from refineries and such to support a couple of hydrogen pipelines in the US and one in Europe.
https://en.wikipedia.org/wiki/Hydrogen_pipeline_transport
I think the main use for hydrogen in refineries is to displace sulfur from fuels.
Thanks for the comments.
Just some articles circulating in the green lobby
https://www.carbontracker.org/reports/apocoalypse-now/
https://www.irena.org/publications/2019/Sep/Hydrogen-A-renewable-energy-perspective
https://www.rechargenews.com/transition/1867257/green-hydrogen-can-beat-fossil-fuel-h2-on-price-by-2030
reduced to fundamental levels, we require energy for 2 purposes, how you measure it is ultimately irrelevant
1 to provide fuel to drive our physical selves
2 to have enough surplus to procreate and rear young to maturity
everything else is extra, and we have built our civilisations and all they contain, on that ‘extra’
the struggle to produce that extra is what has brought our species to the edge of collapse, it has become our sole aim, to provide that extra to keep ourselves going —- literally into infinity.
We have used the basics of that civilisation, (which was the product of surplus energy) to invent myths and gods to prove to ourselves that surplus will keep growing, and that we can invent still more energy and we can provide better ways to move it around
We call these myths and gods “scientific models.” This allows them to be held in high esteem, no matter how poorly they have been done.
Thanks for the links. The first link is about how much money solar companies are losing and how that will drive them out of business. https://www.carbontracker.org/reports/apocoalypse-now/ Intermittent electricity is competing unfairly with them, causing at least part of the problem. But I think the world is reaching peak coal, related to prices not rising high enough to cover all costs, especially when added scrubbers to reduce coal particulate are includes.
The other two are green hydrogen articles. It seems like green hydrogen has a ways to go. Hydrogen is hard to store. Maybe it can be used for some time-shifting to bring the cost of intermittent wind and solar down. But will the cost be low enough, soon enough?
Nice to encounter another Norwegian who doesn’t think that the only way is up. Any advices on how to get by in this land of spoiled technology optimists?
Storing sunlight in synthetic oil.
“about one gigajoule of energy per ton of carbon dioxide captured,”
https://www.eurekalert.org/pub_releases/2019-10/miot-med102519.php
A GJ is 1,000,000 kW-s or around 277 kWh. At 1.7 cents per kWh, about $4.72 per ton of CO2.
Making oil, ~CH2 takes.
CO2 + 3H2 = CH2 + 2H2O
44 + 6 = 14 + 36
14 tons of oil would take 44 tons of CO2. The CO2 for 14 tons would cost $207. There is 7.33 bbl per ton so 14 tons would be 102.6 bbls. That’s almost exactly $2.00 for the CO2 needed to make a bbl of oil.
The 6 tons of hydrogen is more expensive. At 50 MWh/ton, that would take 300 MWh to make the 6 tons. At 1.7 cents per kWh, or $17 MWh, the power cost would be about $5100, about $49.70 per bbl.
The CO2 and hydrogen would cost close to $52 per bbl. The capital cost of the F/T plant is around $10/bbl, so oil made this way would cost around $60/bbl and most of that is the cost of power for making hydrogen.
Lower-cost power would help. At one cent per kWh, the hydrogen would cost $3000 or about
$29 per bbl and the synthetic oil would come in at around $40/bbl.
Intermittency is not a problem and it’s easy to store oil for years.
This approach to dealing with CO2 certainly sounds more sensible than carbon capture and storage. The question is whether the synthetic oil could be made cheaply enough, and of the right characteristics, for today’s devices. Natural oil contains many different lengths of hydrocarbon chains. Some are even in rings.
My impression regarding gas to liquid plants today is that they only make specialized liquid fuels that are relatively high priced (because they are in high demand, compared to portion of these fuels in the natural supply). It doesn’t make sense to make most fuels, unless prices are quite high.
“cheaply enough”
It’s largely the cost of energy. If PV can get down to a cent per kWh, the oil cost would be ~$40/bbl as above.
“Natural oil contains”
Not a problem. Refineries make rings out of straight chains all the time.
“sense to make most fuels”
The Sasol plant in Qatar makes very low sulfur diesel fuel which is in demand. What comes out of the F/T reactor is a long chain wax. They run the wax into a cracker to make the relatively short chain diesel fuel. The output could also be used for jet fuel.
Not saying this is a solution, but intermittency isn’t a problem and neither is storage.
I seem to remember that Saudi oil is produced for something like $6/bbl. It does not make economic sense for them to make synthetic oil at $40 to $60 per bbl. However, there is a lot of pressure on carbon. It’s possible that there could be a market for higher-priced, carbon-neutral synthetic oil.
Reading back into the article, Gail wrote
> Greatly overbuild the renewables-based energy system, to provide enough electricity when total energy is most needed, which tends to be in winter.
This has problems especially in places where there is not a lot of sunlight in the winter. Or long transmission lines.
> Add a huge amount of storage, such as battery storage, to store electricity for months or even years, to mitigate the intermittency.
Batteries self-discharge. If you are trying to store power on a year scale, batteries are the wrong technology. Making synthetic hydrocarbons and storing those would give far lower loss. If you just had to use batteries for year-long storage, something like an aluminum-air battery might work. Those will last for years if they are dry.
> Either of these approaches is extremely high cost.
True. However, very large amounts of cheap, carbon-neutral synthetic fuel would make backup power for renewables more attractive.
“It’s largely the cost of energy. If PV can get down to a cent per kWh, the oil cost would be ~$40/bbl as above.”
$40 would be okay now, but in the near future will be too high for most consumers…
wages per capita will be falling soon enough, if not already, due to the at-least-flat or probably declining net (surplus) energy flowing through the world economy, which is bringing on the severe 2020 recession…
I predict oil averaging under $50 next year, and going lower as the 2020s proceed…
most new tech will have no chance in that future scenario…
It this is used in larger scale, culdn’t it lead to a local deficiency in CO2 were the synthetic fuel plants are located. Especially if it’s not windy enough. This is a problem already for the photosynthesis in forrests. That’s the reason forrests grow quicker if you increase the carbondioxide level.
Interesting point!
” local deficiency in CO2″
Good point. Downwind from a lot of these F/T plants, the CO2 might be low enough to hurt biological plant productivity. The CO2 extraction should be in the desert belts where there is not much growing. It is something that can be modeled.
Some years ago I was in a lecture by Stuart Strand. He was proposing adding a handful of genes to maize that would remove methane from the air. The US maize crop filters the whole atmosphere several times a year.
The deficiency may also hurt productivity of the fuel plants themselves.
I worked out the intake area for a presentation at a military conference about ten years ago. As I recall, the intake area was a few meters high and several km long. But it was for a much smaller throughput.
H2o infinite? Free? Shall we consider its availability at your proposed middle eastern sites? Purity levels of h20 required for process?
No problems seen here with the carbon capture?
“As the battery charges, an electrochemical reaction takes place at the surface of each of a stack of electrodes. These are coated with a compound called polyanthraquinone, which is composited with carbon nanotubes.”
And I doubt thats the end of it. IMO every single part of the hypothetical prices based on a proto type alpha model paper that you are treating as real will take energy inputs that you conveniently ignore by using $ values. $ values ignore energy input because we have oil priced in $ at current availability.
I find your analysis fantasy pure and simple. You take tiny pieces of information create massive constructs out of them treat them as real then base even more constructs on them. You ignore whatever you want to reach your same conclusion of every fantasy you create. Technological infinite energy. Just my opinion. The power satellite thing not working for you?
Simple models seem to underestimate real costs simply because they cannot foresee all of the things that go wrong and all of the workarounds that are needed. This is why engineers usually go through a several step process in rolling out a new technology. They first think out a new possible approach. Then they make a lab-sized model. They then scale up to larger and larger implementations, and see what actually goes wrong in practice. They figure out ways to optimize the new technology. It takes two or three practice implementation before the new technology widely. Even then, buyers usually wait to replace existing devices, unless there is a very large cost advantage or the old devices are reaching the end of their lifetimes.
“Simple models seem to underestimate real costs”
Right. In the Sun to Oil scheme, I looked at I was using a PV bid to supply power and a small existing F/T plant.
Starting with just an idea, it would have to go through all the steps you so clearly describe.
While the things that you mention are very practical in a development process one thing i thing you may have underestimated is peer review. One would hope that in a large scale project that you are working with a team that has experience in the dicipline that you are hopefully pioneering in. in my experience often ideas have been thought of and tried by peers previously. Often great intellect is accompanied by great ego. It is a balance. While one should not abandon an idea at the first questioning of its principles if informed minds bring up significant problems and or errors in its conception at some point it should be abandoned. An idea has to be manufacturable as well as possible. THe ability of a team of brilliant minds working in a team to evaluate ideas in a dynamic matter accept feedback is in my opinion key to success. That means you damn well better have all your ducks in a row and be competent to discuss barriers with informed minds or be repared to be shot down and rightfully so. It goes along with getting up on the stage in the spotlight.Nothing kills a project more surly than the lack of peers or the inability to interact with them dynamically.
“H2o infinite?”
Effectively. That turned into oil gets burned and the water released.
” Free?”
No. Water will probably cost around a dollar per ton. In the context of ~$360/ton synthetic oil, that’s not much.
“Shall we consider its availability at your proposed middle eastern sites? Purity levels of h20 required for process?”
Given that these places are very dry, water will have to be carefully considered. The ratio of water in to oil out is 18/14. Making 100 million bbls a day will require a water infrastructure about equal to the pipelines that take the oil to the sea. Maybe somewhat more if we are using water for cooling (and cleaning dust off the PV).
“analysis fantasy”
This is the way you start analyzing any problem you face. Look first to the fundamental physics/chemistry to see if it makes sense. Then go to economics. Then steps such as Gail discusses in the next post. If you have a better way to solve problems, please talk about it.
“your same conclusion of every fantasy you create. Technological infinite energy.
In the context of how much energy the sun puts out, it’s close enough to infinite for current humans.
“Just my opinion. The power satellite thing not working for you?”
Unfortunately no. We may have acceptable solutions to some problems like trying to get them up through the space junk, but it is really difficult to get the energy cost down to where it makes Gail happy. The Chinese may build them anyway as a reason to become supreme in space.
I do appreciate that you have affirmed that what you propose is basically fantasy not reality. Thank you for your civil discourse. You are not doing what you describe. Defining feasibility from a “economics” standpoint in a energy depleted world using dollar values in a non energy depleted world is ridiculous. “Better way to solve problems” Accept limitations rather than decide that those limitations are unacceptable. Design less complex systems that will work. That would mean population comes voluntarily down and people get by with less. Unfortunately we cant get by with less it means collapse. Collapse is baked into the cake now. What extend do we have any control over what happens during and after collapse using designs? IMO little to none but if you disagree perhaps you have ideas. Because collapse is taboo subject you would probably not reach great fame designing that way. I would consider looking how to lessen suffering post collapse as a very worthy if it is possible. We flail about like minnow in the sun. Thermonuclear war is omost a certainty now. Our world is a certain way. Its certainly not random. You might call it a design. We can only accept its design on the macro level. Perhaps you are more of an optimist. If you could design anything that would allow the continuance of the more positive characteristics of our species post collapse that would indeed be a achievement. IMO we are not really in a great position with great options. More like a a firefighter that is tempted to grab a drip torch and start back burning. I indulge in a bit of design. A pv system here and there. a structure here and there. mostly i try to just live a calm peaceful life. Every problem is not solvable Keith. You wont even except death with your posts of downloads to data banks and cryogenics. I see lack of acceptance as the crux of our species problems. Because of that i continue to confront this characteristic in you. Tenaciousness is one thing arrogance another. Just as your characteristics ring untrue to me the characteristics of this board ring untrue with you.
We come here to express sorrow for the human condition. you are what you are. I am what I am. It is what it is. Essence.
Jobs everywhere depend on the system continuing as is. Kieth isn’t alone in assuming everything will continue as usual. People can’t stop working simply because we strongly expect there is a collapse around the corner. Thing might hold together longer.
But I agree with you. A less complex solution would be more sustainable.
Everday i live in the BAU world is a beautiful thing as far I am concerned. Gail you optimist you 🙂
Seeing where we could be headed can give us a greater appreciation for what we have today!
” I do appreciate that you have affirmed that what you propose is basically fantasy not reality. ”
Not fantasy, back of the envelope calculations to see if we can do something useful with intermittent renewable energy. Can we? I don’t know, Making 100 million bbl of oil per day is not obviously wrong, though paving over that much of the land with PV may have unintended consequences. (Black PV doesn’t reflect light the way a desert does.)
” Collapse is baked into the cake now.”
If that’s the case, there is nothing we can do. But wouldn’t you feel silly if nanotechnology and AI were to turn the world into a paradise?
” collapse is taboo subject you would probably not reach great fame designing that way.
Such fame as I have and a few bucks will get me a coffee at Starbucks. What I have done in my life has been because it needed doing. Though I certainly recognize that fame and status *are* strong human motivators. I was once lectured from the bench about something I had written about status by a federal judge (who was a great example of someone who gave up a lot of money as a lawyer for the status of being a federal judge)
” I would consider looking how to lessen suffering post-collapse as a very worthy if it is possible.”
Oh, that’s easy, stock up on suicide pills.
Or consider this: if we came to a place where a big fraction of the population was going to die because of famines, we *could* pop that fraction of the population into cryonic suspension. It does not take that much effort to keep a lot of people frozen (far less than feeding them). Of course, you have to assume the technology to get them back is developed, but if things are bad enough, that may be acceptable.
” Every problem is not solvable Keith. You wont even except death with your posts of downloads to data banks and cryogenics.
Cryonics.
“I see lack of acceptance as the crux of our species problems. Because of that i continue to confront this characteristic in you. Tenaciousness is one thing arrogance another.
If you want to consider me arrogant, go right ahead. I have been called much worse things by the clam cult.
Along that line, I have a “Certificate of Courage” hanging on my wall. It was awarded to me by https://en.wikipedia.org/wiki/Paulette_Cooper about 15 years ago. Perhaps I should take a picture and post it somewhere.
” Just as your characteristics ring untrue to me the characteristics of this board ring untrue with you.”
It’s not a monolithic board. Not everyone here is convinced that almost all of us will die in a collapse.
Keith;
Dont forget to dial in the engines and composition of your synthetic fuel to minimize contamination of your “infinite water supply”. Water is needed for a few other things on this sphere as i recall. a tiny detail not really noteworthy I am sure. Could water possibly be more valuble to be used in other simpler ways ways to utilize the admittedly near infinite energy of the sun.
The Thermodynamics of Exhaust Gas Condensation 2017-01-9281
Water vapor is, aside from carbon dioxide, the major fossil fuel combustion by-product. Depending on its concentration in the exhaust gas mixture as well as on the exhaust gas pressure, its condensation temperature can be derived. For typical gasoline engine stoichiometric operating conditions, the water vapor dew point lies at about 53 °C. The exhaust gas mixture does however contain some pollutants coming from the fuel, engine oil, and charge air, which can react with the water vapor and affect the condensation process. For instance, sulfur trioxide present in the exhaust, reacts with water vapor forming sulfuric acid. This acid builds a binary system with water vapor, which presents a dew point often above 100 °C.
Exhaust composition after leaving the combustion chamber strongly depends on fuel type, engine concept and operation point. Furthermore, the exhaust undergoes several chemical after treatments. The transformation of pollutants in these components drastically affects the composition of the possible exhaust condensate, which can for instance shift its pH-value from acidic to alkaline.
Detailed analysis of these condensable exhaust components and understanding of condensate composition becomes of increasing importance with the growing relevance of exhaust gas recirculation (EGR) cooling and when thinking of exhaust gas as a potential water source. In spite of this, the complexity of the exhaust condensation process is, especially with regard to gasoline engines, a field of relatively low focus up until now. The goal of this study is to present a theoretical analysis of the thermodynamics of gasoline engine exhaust condensation including an experimental data based validation. Through investigation of the influence of the air/fuel ratio, pollutant concentrations, and temperature conditions, an improved understanding of the condensation process is gained.
DOI: https://doi.org/10.4271/2017-01-9281
Citation: Garrido Gonzalez, N., Baar, R., Drueckhammer, J., and Kaeppner, C., “The Thermodynamics of Exhaust Gas Condensation,” SAE Int. J. Engines 10(4):1411-1421, 2017, https://doi.org/10.4271/2017-01-9281.
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Author(s): Nuria Garrido Gonzalez, Roland Baar, Jens Drueckhammer, Christoph Kaeppner
Affiliated: Volkswagen AG, Technische Universitat Berlin
Pages: 11
ISSN: 1946-3936
e-ISSN: 1946-3944
Also in: SAE International Journal of Engines-V126-3EJ, SAE International Journal of Engines-V126-3