September 30, 2006
The Sky is Falling!
For my record, first time ever, fitfh consecutive blog post I'm going to talk about ... alternative energy. You know, the alternative you can buy at any street corner for less than the cost of Perrier - gasoline. Some of what I'm about to say is based on this article in India's Rediff.com. Much of the rest is pulled straight from a dark place so fact checking by AlexC is encouraged.
Gasoline comes from oil. Oil comes from geologic deposits underground. The entire earth has been surveyed and all existing oil reserves have been located, mapped and accounted for on a gigantic spreadsheet at Iranian Oil Company. In fact, A M S Bakhtiari there says "peak oil" (the day when oil production reaches its maximum and begins a steady decline until it is gone in 40-50 years) will occur in 2006-2007. Shell oil experts disagree. They posit that the date will actually be in 2025 or later.
So who is right? Probably neither. Energy economist C M Lynch says there is "no visible peak."
All of this is reminiscent of the "population explosion" hysteria in the seventies. That fallacious prediction was based on extrapolation of then current birth rates, ignoring the reality that birthrates change over time. Similarly, the "peak oil" and "no more oil" predictions are based on current KNOWN reserves and historical rates of discovering new reserves (like Chevron's recent find in the Gulf of Extralegalalienville). But rates of discovery, like rates of baby making, are not constant over time. Large areas of the US remain untapped because the oil deposits are relatively small. Technology now exists to pinpoint these pockets and they are becoming economically viable to collect. And the prospect of actually running out of oil will cause monumental efforts to locate more and more oil in the coming decades.
These and other factors make the fossil fuel "alternative" a very attractive one. Not the least of these factors is that many currently vogue fuels like ethanol and bio-diesel have an EROEI factor (energy returned on energy invested) of less than 1. Like bin Ladin's, the reports of fossil fuel's death have been greatly exagerated.
Oil and Energy Posted by JohnGalt at September 30, 2006 11:56 PM
Hear hear. Not even mentioning Albertan oil sands -- and that the other side of the curve, if reached, would simply require additional efforts to collect and refine. Even our beloved token left-of-center friend loves oil, but I am going to step to the side.
Glenn Reynolds's TCS column on pebble reactors says "we live in a nuclear universe, why are we burning carbon?" and "are there not better things that can be done with petroleum than lighting it on fire?"
I just started "The Looming Tower" by Lawrence Wright. In Chapter Three, they've just discovered oil in Saudi Arabia and the princes and Osama bin Laden's father are getting wealthy. It's hard not to think "oh crap!" Here comes the funding for the enemy we face and, more importantly, the vehicle for tinhorn tyrants to rob the MidEastern people of freedom.
Let's go nuclear and drive plug-in hybrids. Another TCS column suggests that Lithium-ion batteries have not reached half their potential capacity and that someday batteries might outlast the vehicles which they power.
Yes, this is really jk (no sock-puppetry at 3srcs) I don't want a government program, all we need do is have the government allow utilities to build nuclear plants, the market will bring us the rest.
Posted by: jk at October 1, 2006 3:07 PMFor a high volatility liquid like gasoline the answer is no, there is nothing better to do with it than burn it - either in engines or napalm.
I support your private nuclear-electric initiative but in the meantime, I want my gas-o-line mister Gore!
Posted by: johngalt at October 1, 2006 5:18 PMHmmm, no commentary by AlexC yet. Either my "dark place" punditry is spot-on or he's commuting to or from the 49th state again.
Posted by: johngalt at October 1, 2006 5:19 PMAn Iranian talking about Peak Oil? I'd sooner believe Ted Kennedy talking about how alcohol makes one a better swimmer. Hmm, wonder why Iranians would be talking about this. Could it be because we're finding new deposits all the time, depressing prices and thus rendering Madman Mahmoud's "oil as a weapon" as effective as spitballs?
I call the Peak Oil doomsayers, the ones who genuinely believe we're running out as opposed to those trying to create a false panic to drive up market prices, Malthus' philosophical descendants." I look to much earlier than the 1970s, John, for the first instances of "population explosion" Chicken Littles: we're all living proof that Malthus' 1798 prediction of mass starvation was pretty boneheaded. Similarly, the oil doomsayers are being proved wrong as we speak.
http://eidelblog.blogspot.com/2005/05/malthus-philosophical-descendants.html
Last year I wrote about John Tierney's bet with oil doomsayer Matthew Simmons. The latter thinks we'll have such a scarcity that by 2010 the price per barrel will be over $200 (in 2005 chained dollars). In hindsight, I think they shouldn't have bet an absolute number of dollars ($5000), because what if the price is $199? It would have been better to negotiate some sort of option, where Tierney can make his own prediction of oil's future price. That way the winner's profit would increase with how correct he was.
http://eidelblog.blogspot.com/2005/08/call-it-dumb-call-it-clever-ah-but-you.html
Let's say Tierney thinks oil will average $60 per barrel for 2010, so they contract that Simmons will buy 100 barrels from Tierney at $130 each (the midpoint). If oil averages $60 per barrel, then Tierney will profit $70 per (less broker fees). If oil averages $200 per barrel, then Simmons will profit $70 (again less broker fees). And the more the winner is correct, the more he'll profit.
Anyway, in that entry, I noted Don Luskin pointing out how our *proven* oil reserves are constantly increasing. As you guys noted last month, U.S. reserves are now up by an estimated 50%, 15 billion barrels. That's on top of the Chinese buying PetroKazakhstan (owned by Canada -- will the wonders of globalization never cease?) so they can explore tar sands in Alberta, and OPEC nations developing their own reserves. The latter for years have *already* been pumping (pun intended) profits back into exploration and development.
Strictly speaking, I won't say "we" should be going nuclear. There are lots of us who are content with fossil fuels for specific reasons, although I think nuclear reactors are great for household electricity. All I ask is that you don't have to subsidize my choices, that I don't have to subsidize yours, and that you don't force me to trade in my gas-powered car before I'm ready. The new nuclear pellets are very promising indeed, but the Department of Energy subsidized the project, while Congress still has environmental regulations that keep nuclear power too expensive, or entirely restricted in a lot of jurisdictions. Sigh.
Indian Point, which is pretty antiquated, and I are on opposite sides of Westchester County. There are two radii for determining evacuation, depending on the severity of any problems. I'm inside the second, I think, but I don't worry about it. The biggest problems are the perpetual ones keeping the damned warning sirens working. The occasional reactor problem is far less dangerous to me than the idiot drivers along I-684 and Route 22.
The environmentalist nutjobs are always trying to shut down the reactor. They know they can't, but their lawsuits make IP much more expensive to operate. Thus its electrical output is much more expensive than it should be, in addition to all the environmental restrictions. Some putz years ago tried telling me that nuclear energy is the most expensive kind, and I had to educate him on why.
Posted by: Perry Eidelbus at October 1, 2006 9:36 PMI actually think we're all in agreement here (mirabile freakin' dictu!)
Sorry for the side road. I certainly don't want to take away anybody's gasoline or subsidize any alternative. I believe that nuclear power is economically feasible without subsidy if we could protect the utilities from excessive regulatory burdens.
Posted by: jk at October 2, 2006 10:27 AMHmmmm, if all the parties agree, does that mean that 3Src has jumped the shark? All here in favor of building Nukes and stop buring oil for electric say Yeah! All against? (crickets...)
Ok, next order of business is that confounded wormhole technology allowing us to suck matter from the core of a black-hole and convert it directly into energy. If that damned Enron Front company had not failed, we could have kept it under wraps until our Alien Associates gave us the key-codes to unlock the regulator. When is Karl getting back from Plantet Halliburton?
Posted by: mdmhvonpa at October 2, 2006 11:38 AMI disagree. Not all of the earth's surface has been surveyed for oil. I'd venture to say that most of the oceans have NOT been completely surveyed.
In fact, known oil fields are re-surveyed as seismic technology improves.
Not to mention improved methods of production.
Let's conserve (it's good to be efficient), and let's explore (it's good to provide what people want). But let's quit with the hysteria.
Posted by: AlexC at October 2, 2006 7:32 PMThanks for sharing your thoroughly enjoyable prose on these here pages, MDM. (This is just a glimpse of his greatness, folks. For more see http://www.mdmhvonpa.blogspot.com/)
And yes, we are still all in agreement as my assertion "all existing oil reserves have been located, mapped and accounted for..." was said with tongue in cheek. I was counting on the "gigantic spreadsheet at Iranian Oil Company" for the proper context. (Poorly written, I know.)
Excellent conclusion AlexC: Quit with the hysteria. (But how else for the environmentalist nutjobs to change what "people want?")
Posted by: johngalt at October 3, 2006 11:33 AM | What do you think? [8]