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Energy Crisis and Pessimissim

Magus

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It seems obvious that globally we are about to, or are already in the midst of, an energy crisis. There is no way that the material standard of living in the West is sustainable. The developing world won't be allowed to industrialise along the Western/Chinese model of fossil fuels as developed nations are already moving to securing dwindling natural resources for themselves. The USA isn't all over the Middle East because they like the sun, nor is China all over Africa because of a deep-seated concern for the wellbeing of the world's poor. This being the case, obviously then the prognosis of the populations of many third world nations ins't great, and the developed world is naturally stoking the fires for extremist ideologies to spread.

I am not really a fan of consumerism. I like innovation but don't get me wrong, I have no problem with the model of buying a new pair of shoes every 6 months going away forever or the demise of $10,000 handbags. No love lost there. What is worrying however is that many of our favourite technologies; from CAT scanners to modern day information systems and air transport are so dependant on energy that it is hard to see how in a world where energy is prohibitively scarce (and increasingly shared among different powerful nations) that they will continue to proliferate in the manner they have over the last 50 years, let alone continually develop into higher forms (does this mean no robots?).

A shift towards renewables (sun, wind, wave, geothermal) is of course inevitable. However none of these technologies are capable of supporting anywhere near our current energy usage habits and this hasn't been recognised. Renewables tend to be very inefficient in terms of land needed (we're talking like 30% plus of a nations' landmass in most instances given current usage rates) and implementing them in any meaningful sense would require both massive economic sacrifices and a level of political foresight and will which hasn't really been seen in the developed world for several hundred years. In the democratic West, we are basically in a political gridlock and suffering from systemic economic problems before we begin. There are riots across Europe due to the 'austerity' which really from an economic point of view isn't even austerity to begin with (government balance sheets are still growing) so I think its fair to say that the reality that we are going to have to scale back our standard of living hasn't quite sunk in yet.

For a detailed and neutral (quantitative!) study at the energy problem and the realities of renewable have a look at Cambridge Professor David McKay's free book.

http://www.withouthotair.com/Contents.html

Even so, I feel even he is a little optimistic in canvassing some of the hypothetical solutions to the problem. For example, he shows the solar panels necessary (about half the area of Libya -- due to it's being in the Sahara) needed to power all of Europe's current energy needs. But its not like Libya is a country which is willing or capable to invest trillions into turning itself into a giant solar array for the benefit of the West. Without trying to sound condescending, they are somewhat backward and still in the process of resolving a civil war. I mean, realistically it would literally have to involve the wholesale annexation of Libya by Europe to turn into a power generator if it was actually going to happen. The Libya solar array is probably his most ambitious suggestion, he canvasses several but I don't think its possible to over state the practical difficulties of it or any other possible "solution." Bear in mind of course, that even if possible over the next 50 years, all these 'solutions' merely generate the current amount of energy. If we want robots and spaceships and stuff, we would need to exponentially increase energy production.

What strikes me is that there is literally no-one in the public sphere that I can see who is willing to actually come out an challenge this dogma of "continuous economic growth/production/technology will save us" which pervades everything. Human beings have always struck me as ironic creatures. We are the only organism (as far as we know) which is capable of appreciating and even aggressively seeking out truth yet we invest so much energy in hiding ourselves away from it.

Thoughts?

Is it too early to go out and stock up on guns and gold? ... :storks:
 

ProxyAmenRa

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Six months ago I wrote a report for contract partners which involved an analysis of the increases in costs of energy to the consumers. None of the increases of energy costs to consumers could be attributed to increased material scarcity of fuel.

Edit: Most of the increased cost I identified were due to insufficient maintenance of transmission and distribution networks and constructing the networks to meet peak demands which did not manifest. Then there was the elephant in the room; the subsidization of renewable energy technology.
 

Architect

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Six months ago I wrote a report for contract partners which involved an analysis of the increases in costs of energy to the consumers. None of the increases of energy costs to consumers could be attributed to increased scarcity of fuel.

Precisely. In other words "what energy crisis are you talking about?"

There has never been a long term commodity shortage in anything. Ever heard of the Nitrogen Crisis? The fact is that people are amazingly good at overcoming a shortage when there is an incentive.

Guess what, you know the U.S. is going to become oil independent in the next 5-7 years? And an exporter after that?

Hubbard was wrong. We'll find more energy as long as we want it. There are planetoids in the solar system covered in hydrocarbons. We don't lack for energy, just the present incentive to get it.
 

Duxwing

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Six months ago I wrote a report for contract partners which involved an analysis of the increases in costs of energy to the consumers. None of the increases of energy costs to consumers could be attributed to increased material scarcity of fuel.

About 1.5 billion people have yet to buy their first Ford Explorer and all the other trappings of western life; the energy requirement to satisfy that demand will surely jack up the price of fossil fuels, which, when burned, will accelerate the melting of the ice caps, raising ocean levels, and on into disaster.

Edit: Most of the increased cost I identified were due to insufficient maintenance of transmission and distribution networks and constructing the networks to meet peak demands which did not manifest. Then there was the elephant in the room; the subsidization of renewable energy technology.

A massive elephant in the room during US Congressional debates: the infrastructure of the country got a D+ from the American Society of Civil Engineers. We waste so much money by not taking care of the little things. But something must eventually replace hydrocarbons: they are limited and pollute terribly.

-Duxwing
 

Magus

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Well rather than energy crisis, its more of a depletion of energy reserves, the energy crisis if it happens will happen later. Its not like the power is about to go out, rather the cost of energy will become gradually expensive until it is prohibitively so.

Proxy, global demand for oil and coal is set, on current trends, to increase dramatically as developed societies consume more energy and as developing nations seek to industrialise. Given that the quantities of these materials are limited and production has stagnated, doesn't a general prediction that the price of energy will rise follow from that? Sure, prices will fluctuate in any given period, but the general trend would be up. Upward spikes in recent history may have been the result of several factors but the big picture trend is undoubtedly towards higher prices due to relative scarcity and higher demand. Prices would also depend on factors in a given area, e.g. regulation tax etc.

world-oil-shortfall.jpg


Architect, saying that it hasn't happened before obviously isn't evidence that shortages won't occur. At the risk of committing the fallacy of authority; most expects seem to think that our current energy usage is unsustainable.

Well of course energy is abundant in the solar system, that point is moot. The issue isn't whether energy is there, but whether you can turn a net energy profit in extracting it. If you can't it only costs you energy. I don't see how realistically in a 20-50 year timeframe large scale extra-terrestrial mining projects might be expected to cater for our energy needs.

Current shale projects suffer from a similar problem as although they are still net producing energy, it is a lesser rate than previous projects. And this the crux of the problem in the Bakken shale in the USA, the Bazhenov shale in Siberia, tar sands in Canada and the deep sea projects off Brazil. It's not that energy isn't there, but you're getting less for more cost. All the low hanging fruit so to speak has been picked, we're just left with the hard to reach stuff which while quantitatively might add up to a large total, is increasingly costly to retrieve. Its not sustainable in the sense that it will cost ever increasing amounts of energy to get smaller returns out; the margin of energy "profit" is being squeezed, hence the bell curve with a peak point.

I'm not about to become a druid or anything, but I can't see how these trends might be averted unless say some bright cookie worked out fusion or something along those lines. This just seems a bit fanciful though, I won't use the word 'faith' but there doesn't seem to be more to it than that. Renewables work, but cannot be expected to power what we have now, let alone robots and stuff we want to have. Where'd I go wrong lol? :confused:
 

ProxyAmenRa

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About 1.5 billion people have yet to buy their first Ford Explorer and all the other trappings of western life; the energy requirement to satisfy that demand will surely jack up the price of fossil fuels...

Ceteris paribus an increase in demand will lead to an increase in prices. Of course with price increases, formerly unprofitable alternatives become profitable. I saw no material reduction in supply.

A massive elephant in the room during US Congressional debates: the infrastructure of the country got a D+ from the American Society of Civil Engineers. We waste so much money by not taking care of the little things.
-Duxwing

Yes this is a substantial component of the increased cost of energy to consumers.

...which, when burned, will accelerate the melting of the ice caps, raising ocean levels, and on into disaster.

But something must eventually replace hydrocarbons: they are limited and pollute terribly.

Yeah...if one accepts the anthropogenic global warming hypothesis. I have read the entire IPCC 2007 report, journal publications and the criticisms. I have come to the conclusion that hypothesis is not adequately supported by evidence.

In the financial forecasts I ran, supporting renewable energy technologies will dramatically increase the cost of energy to consumers. My results were in line with other reports given to policy makers.
 

ProxyAmenRa

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Proxy, global demand for oil and coal is set, on current trends, to increase dramatically as developed societies consume more energy and as developing nations seek to industrialise.

Increase in demand does not entail a decrease is supply. Nor does it indicate supply won't increase to meet demand. Malthus's prediction never came to pass due to the fact that if desires can be fulfilled in a profitable manner, they will be fulfilled. Furthermore, we don't live in a world where knowledge is stagnant. Enterprising individuals are continuously searching for ways to satisfy the desires of consumers. To assume that calamity will eventuate due to some projections is an act pure naivety.

Given that the quantities of these materials are limited and production has stagnated, doesn't a general prediction that the price of energy will rise follow from that?

There is a finite amount of energy and matter in the universe. When you use this energy, it is converted into a less useful form. This is in itself not argument to why there would be an energy crisis.

Sure, prices will fluctuate in any given period, but the general trend would be up. Upward spikes in recent history may have been the result of several factors but the big picture trend is undoubtedly towards higher prices due to relative scarcity and higher demand. Prices would also depend on factors in a given area, e.g. regulation tax etc.

One of these wonderful factors was speculation in the commodities markets fueled by credit expansion. These bubbles pop as soon as they appear. The latest bubble in commodities has popped. Demand dropped severely. Prices across the board are dropping and unprofitable production is ceasing. Since Australia's largest exports are commodities, the Australian dollar lost 15 cents on the US.


Am I meant to consider this as being credible? It looks like a simple univariate projection with an assumption of the peak oil hypothesis. I see no analysis which involves market processes. The most adequate modelling technique would be system dynamics modelling but it would merely quantify the qualitative model I suggested above.
 

Duxwing

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Ceteris paribus an increase in demand will lead to an increase in prices. Of course with price increases, formerly unprofitable alternatives become profitable. I saw no reduction in supply.

And thereby economies of scale bring down the price again--hopefully. But where did I say that supply should be down right now? My point was that oil--a fossil fuel--must eventually run out.

Yes this is a substantial component of the increased costs of energy to consumers.

I guess we need to get more funds, then.

Yeah...if one accepts the anthropogenic global warming hypothesis. I have read the entire IPCC 2007 report, journal publications and the criticisms. I have come to the conclusion that hypothesis is not adequately supported by evidence.

Want to switch to PMs, or perhaps make a new thread on this subject? As long as global warming does not cause an apocalypse, we can ignore it in this discussion.

In the financial forecasts I ran, supporting renewable energy technologies will dramatically increase the cost of energy to consumers. My results were in line with other reports given to policy makers.

Wow. Yikes. Why do renewables do that? Will they always do that? (i.e., could we build a better mousetrap?)

-Duxiwng
 

ProxyAmenRa

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And thereby economies of scale bring down the price again--hopefully. But where did I say that supply should be down right now? My point was that oil--a fossil fuel--must eventually run out.

They may do so and be replaced by other tech, they may be replaced more profitable tech without ever running out, consumption will become more efficient or a combination of the previous two points. If they can maintain that fusion reaction for greater than ten seconds, energy will become quite cheap.

I guess we need to get more funds, then.

If I could publish my report without breaching the NDA, I would. :P Yes, more funds are needed.

Wow. Yikes. Why do renewables do that? Will they always do that? (i.e., could we build a better mousetrap?)

-Duxiwng

The distributed energy storage and generation technology is developing may help. I am still a year away from discerning whether or not the technology will yield value. If they do not I will be calculating the price at which the technology will be viable.
 

Magus

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Increase in demand does not entail a decrease is supply. Nor does it indicate supply won't increase to meet demand. Malthus's prediction never came to pass due to the fact that if desires can be fulfilled in a profitable manner, they will be fulfilled. Furthermore, we don't live in a world where knowledge is stagnant. Enterprising individuals are continuously searching for ways to satisfy the desires of consumers. To assume that calamity will eventuate due to some projections is an act pure naivety.

No but in this case the decrease in supply is a given... Although there is still oil left in the Earth, this oil isn't as useful as it is more costly (in terms of energy) to extract. We have the prospect of ever increasing demand and decreasing returns on investment. Its not so much the end of energy, rather the end of cheap energy as we don't have a way to realistically produce cheap energy looking forward. I don't doubt markets will ultimately adapt to this situation, but its going to lead to widespread structural changes. More expensive energy has knock on effects obviously; stagnation in standard of living, limits on the amount of technology a society can support, slow growth etc.

I don't personally believe that the world is coming to an end, but lets be realistic about the situation. A faith in the ability of people to innovate their way away from the environmental realities is surely just as misplaced. I guess we'll have to see what happens over the 20 years, but barring some paradigm shifting innovation, fusion or something like that its hard to see how we won't see a situation in which energy becomes a limiting factor on growth.
 

ProxyAmenRa

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No but in this case the decrease in supply is a given... Although there is still oil left in the Earth, this oil isn't as useful as it is more costly (in terms of energy) to extract.

Yes, let's just totally disregard all of the new tech which is being implemented to extract oil from new fields, extend the life of existing field and reopening closed fields.

Your "in terms of energy" is bullshit as well. Value is subjective. People employ means to attain valued ends. If oil is a means to an end, people will drill for oil. This is regardless of whether or not there is more energy content in the oil being extracted than the energy required to extract it.

We have the prospect of ever increasing demand and decreasing returns on investment.

If there is ever increasing demand, the investments in fossil fuel extraction will be ever increasing in profit. This additional profit will promote more investment until the point where the market reaches equilibrium.

Its not so much the end of energy, rather the end of cheap energy as we don't have a way to realistically produce cheap energy looking forward.

Actually there is cheap fuel out there and it is not running out anytime soon. It is called fossil fuels.

I don't doubt markets will ultimately adapt to this situation, but its going to lead to widespread structural changes.

So what? There was widespread structural changes away from steam powered mechanical equipment to electricity powered.

More expensive energy has knock on effects obviously; stagnation in standard of living, limits on the amount of technology a society can support, slow growth etc.

You have not put forward any argument to validate your assumption that any "changes" will be detrimental. All I see is a bunch of people who don't understand how markets work proclaiming that the end is near.

I don't personally believe that the world is coming to an end, but lets be realistic about the situation.

"Let's be realistic about the situation." Does this mean that you wish no one to object to what you're saying and just take as fact? This is not going to happen.

A faith in the ability of people to innovate their way away from the environmental realities is surely just as misplaced.

Does this mean you wish people should stop putting forward arguments which invalidate your hypothesis? This is not going to happen.

I guess we'll have to see what happens over the 20 years, but barring some paradigm shifting innovation, fusion or something like that its hard to see how we won't see a situation in which energy becomes a limiting factor on growth.

People have been saying that oil is going to run out in the next ten years for 100 years. They have all followed in the stead of Malthus. Just like Malthus, their forecasts of the end of civilisation have been wrong.

What is so good about growth to begin with?
 

scorpiomover

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Six months ago I wrote a report for contract partners which involved an analysis of the increases in costs of energy to the consumers. None of the increases of energy costs to consumers could be attributed to increased material scarcity of fuel.

Edit: Most of the increased cost I identified were due to insufficient maintenance of transmission and distribution networks and constructing the networks to meet peak demands which did not manifest.
I can see how that might be reasonable I have read a number of sources that most people simply don't seem to ever mention or consider, that led me to the conclusion that the energy crisis doesn't have to be a problem, except for the fact that there is a huge outlay in the development of energy supply based on oil, and to switch, would mean another huge outlay, to change everyone to the new system, and that in these sorts of situations, corporations prefer to defer the change, so as to maximise their profits from their initial investments.

Then there was the elephant in the room; the subsidization of renewable energy technology.
In the UK and in Europe in general, there has been a lot of subsidisation into renewables. But the estimated return on investment for the average person to put in their own solar panels with current technology, was that it would take 25 years just to break even.

I've also watched a lot of science documentaries on renewables. The technology has been available for consumer use, since the 70s. There are plenty of other things that the average person could do, that could be significantly advanced. But most of that seems to be seriously under-funded.

There has been a huge amount of funding into developing renewable energy sources. But most of it has been to try to develop it on an industrial scale, such as putting in lots of solar panels in the Sahara, as you mentioned.

That helps utilities companies continue making humungous profits, by maintaining the consumerist lifestyle that is dependent on paying large corporations, because even when oil might run out, people will still have to keep paying for their energy by buying it from utilities companies. But for the average person, they stand to see no lowering of their bills.
 

Duxwing

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They may do so and be replaced by other tech, they may be replaced more profitable tech without ever running out, consumption will become more efficient or a combination of the previous two points. If they can maintain that fusion reaction for greater than ten seconds, energy will become quite cheap.

Excellent. :)

If I could publish my report without breaching the NDA, I would. :P Yes, more funds are needed.

Darn! :/

The distributed energy storage and generation technology is developing may help. I am still a year away from discerning whether or not the technology will yield value. If they do not I will be calculating the price at which the technology will be viable.

Do you do these reports and calculations for a living?

-Duxwing
 

Architect

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Well rather than energy crisis, its more of a depletion of energy reserves, the energy crisis if it happens will happen later. Its not like the power is about to go out, rather the cost of energy will become gradually expensive until it is prohibitively so.

I used to be a Peak Oil/Hubbard believer, until I realized it was wrong. I'll leave the discussion to others, but will point out that ultimately it's a defeatist position, and when has being a defeatist ever worked?
 
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