Category Archives: Peak Oil

Aquaponics, Family of Farms, Food Security, Hydroelectric, Lowering Electric Rates, Peak Oil, Renewable Energy Sources, Sustainability, Water

State of the Farm Report

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Richard Ha writes:

Yesterday at the farm I had a meeting with all our workers. It was an update on where we have been and where we are going.

Where we’ve been

The price of oil has quadrupled in the last 10 years, and those who could pass on the cost did. Those who could not pass on the cost ended up paying more. Farmers are price takers, not price makers, so farmers’ costs increased more than their prices.

Anticipating higher electricity prices, we lobbied for and passed a law that the Department of Agriculture create a new farm loan program that farmers could use for renewable energy purposes. Then we started to design a hydroelectricity program to stabilize our electricity costs.

Where we are today

The hydroelectricity project is within weeks of completion. With the combination of a farm loan and a grant from the Department of Energy, we will stabilize our electricity price at 40 percent less than we pay today.

The pipe that transports the water appears to me like it will last for more than 100 years. After the loan is paid off, our electricity will be practically free for more than 60 years.

Where we are going

We are taking advantage of our resources – free water and stable electricity costs – by working with area farmers to help each other grow more food.

What kind of food? Responding to consumer demand, we want to
produce food with a wide variety of nutritional content, including protein, via aquaculture.

In order to be sustainable, the feed-based protein must be vegetation-based. And since the building block of protein is nitrogen, we are looking for an adequate nitrogen source. Unused, wasted electricity can be used to make ammonia, which is a nitrogen fertilizer and, like a battery, can be used to store energy.

What does the future
look like?

Other than stable electricity, which would help us, our serious
concern is the anti-GMO Bill 79. It seeks to ban any new biotech solutions to farmers’ problems on the Big Island. The result is that the rest of the counties and the nation would be able to use new tools for more successful farming, and the Big Island would not.

What would happen is that Big Island farmers would become
less competitive, which would put even more pressure on those already at the bottom of the pay scale. It would result in higher food costs, making consumers less able to support local farmers.

The folks pushing for the anti-GMO bill have not talked to farmers, and they have no clue that this bill would make Hawai‘i less food
secure. The bottom line is that food security involves farmers farming. If the farmers make money, the farmers will farm. If not, they will quit.

Food Security, Peak Oil, Sustainability

Growing Food: A Reality Check

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Richard Ha writes: 

Hawai‘i is located in the humid subtropics and it is a weed, bug and plant-disease paradise. We have no winter here to help us kill off
bugs.

Farmers are not pesticide-crazed sprayers of toxic chemicals. They use cost-effective solutions to the pest problems of their particular crops. They use what’s least toxic, because they don’t want to harm themselves. They don’t overspray, because that wastes money. Farmers have common sense.

When we send farmers into battle against the pests, don’t shoot arrows at their backs. When we send them into battle against pests that use cannons, don’t send them out with swords and clubs.

If we do not want the large biotech companies to grow corn for seed, then write a bill that prohibits that. If we do not want GMO foods at all, then start with corn flakes and soda and ban those.

Consider these facts:

• Hawai‘i imports more than 85 percent of its food. That’s almost all of our food.

• Hawaii uses oil to generate more than 70 percent of its electricity. The U.S. mainland, which is both our supplier and our competitor, uses oil for only 2 percent of its electricity – so its costs are not skyrocketing from rising oil prices as much as ours are.

• The price of oil has quadrupled in the last 10 years, and will probably go higher.

• As oil prices rise, Hawai‘i becomes less and less food secure.

These are the realities that Big Island farmers face every day. We must be one of the least food secure places in the world.

From my blog post Definitions: Food Security vs. Food Self-Sufficiency:

“Food security” means being able to get adequate and sufficient food, regardless of where it comes from. These days, it comes from all over the world. We are able to buy food from all over because money comes into our economy from the outside, with military spending and tourism being primary contributors. That provides us with money to pay for general services to our society and to buy our food.

Food security involves farmers farming. If the farmer makes money, the farmers will farm. And if the farmers make money, then their products will be competitive with imported foods. And that will mean lower cost foods for all.

Try to encourage those things that gives our farmers a competitive advantage. Leverage our sun that shines all year long. Don’t ban GMO corn that can give our cattle ranchers a fighting chance.

Maybe we can grow the grain that will encourage poultry farms and fish, too.

If we had poultry and cattle manure, our organic farmers would have a nitrogen source that could help them produce food for a profit.

Let’s all sit down and talk. Farmers are not the enemy.

Food Security, Peak Oil, Sustainability

What Our Bottom Line Should Be

Richard Ha writes:

I’ve said this before, but look at it again: The energy we use to get energy, minus the energy used to get our food, equals our lifestyle.
How much is left over – after we’ve used our energy to 1) obtain more energy and 2) feed ourselves – determines how we live.

This is the nexus of energy and agriculture.

Our bottom line right now needs to be: What should we do to ensure energy security? What should we do to ensure food security?

The cost of producing food is the cost of petroleum oil plus the technology that utilizes oil more efficiently.

The cost of the energy we use to get new energy is rapidly getting to the point where consumers are resisting paying. The estimated cost of tar sand and shale oil is close to $112/barrel. The current oil price is a little bit below that. Shell Oil just announced that last quarter it lost $4/ barrel from its shale oil operations.

If producers lose money, they will eventually stop producing the expensive new oil. If they stop production, we will keep on using the old cheaper oil until it runs out. Peak Oil will happen not because we run out of oil, but because we can’t afford to buy the new, more expensive oil. And that time is not as far off as we think.

In recent years I have attended five Peak Oil conferences, talked to many experts, and even traveled to Iceland and the Philippines to observe how they leverage petroleum issues.

Using GMOs is one way we can lower agricultural costs through technology. For example, every biotech solution to a disease eliminates the need for chemicals to control the insect spreading the disease. This results in increased saving to the farmer, in terms
of increased production and fewer labor and chemical costs associated with spray control.

And how can we leverage the Hawaiian sun for its energy? GMO corn could do that. (If you are unsure about genetically modified organisms, see my post about the American Medical Association’s stand, and about how one of the founders of the anti-GMO method has completely changed his mind.)

An added benefit of utilizing GMO corn is that this could rejuvenate the hog, cattle and poultry industries. Right now, organic farmers do not have a manure source to make compost, which limits the ability of organic farmers to feed a significant
number of people.

Bill 79 would make future GMOs disallowed on the Big Island, while other Hawai‘i counties could use them, and this would give the other islands a strong competitive advantage over our Big Island farmers.

I think we need to take a time out before making a decision on Bill 79, in order to make sure we do this right.

Eating Locally, Food Security, Peak Oil, Sustainability

Let’s Not Lose Sight of the Long-Term Goal

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Richard Ha writes:

In the midst of the current GMO discussion, it is easy to lose sight of the long-term goal. The big question that is not being asked is: How are we going to feed Hawai‘i’s people?

It’s going to take all of us – from traditional, conventional, organic, permaculture and Korean Natural farmers to home gardeners.

For those who participate in the market system to produce food, it’s about cost. If the farmers make money, the farmers will farm. My Pop told me, when I was a small kid, to find three solutions to every problem and then find one more, just in case.

We need to have a serious discussion of how we are going to feed Hawai‘i’s people.

For people buying food, it’s also about cost. Kumu Lehua Veincent told me something important several years ago. He asked: “What about the rest?”

When I ask myself that question, the answers become easier to see. It’s about all of us, not just a few of us.

Biofuel, Food Security, Peak Oil, Sustainability

Nothing Is More Important Than Being Able to Afford Food

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Richard Ha writes:

How are these two things related: The Aina Koa Pono biofuel project, which is subsidized by the rate payer at $200 per barrel, and Bill 79, the anti-GMO bill submitted by Councilwoman Margaret Wille?

There is a very good chance that we will soon start down the backside of the world oil supply curve. If there is even the remotest chance this will happen, we need to be focusing sharply on the things that are crucial to us, living out here in the middle of the Pacific Ocean.

Nothing is more important than being able to afford food.

We cannot waste time subsidizing $200 per barrel oil; what is the objective there? And we cannot waste time pitting farmer against farmer. We need to focus on helping all farmers make money. Because food security involves farmers farming. And if the farmer makes money, the farmer will farm.

Here in Hawai‘i, nearly 90 percent of our food is imported. We are going to need the help of all farmers to achieve food security. Bill 79 is a distraction that takes our focus away from helping farmers become economically viable. Worse, and most distressing, is that it pits organic farmers against conventional farmers.

We need the help of all the farmers to make Hawai‘i food secure.

The problem is that farmers’ customers are being squeezed by rising energy costs. The rubbah slippah folks can only go so far in supporting locally grown products. Oil costs have quadrupled in the last 10 years and electricity rates have continuously risen. It’s as if we had a massive tax hike. We’re in the middle of a crisis and we don’t even recognize it.

The small farmers on the Big Island know it, though. That’s why they are taking valuable time off from work to show support for each other.

An Interview with Steven Kopits

 | May 1, 2013

By Steve Andrews – The following is taken from an interview with Steven Kopits, managing director of the New York office of Douglas-Westwood, an international energy analysis firm.  The views expressed are atttributable to Mr. Kopits and do not necessarily represent those of Douglas Westwood.

…Peak oil does not occur when we run out of oil.  Peak oil occurs when the marginal consumer is no longer willing to pay the cost of extracting and processing the marginal barrel of oil.  And we can actually calculate what the related numbers are.

Q:  How do we do that?

Kopits: To begin with, we refer to the price a nation’s oil consumers are willing to pay as its “carrying capacity.”  For the US, carrying capacity is about $95-100 Brent [per-barrel oil price in London].  If the oil price is above this level, oil consumption will decline—which is exactly what we see and what we predicted four years ago.  But carrying capacity is not a static number.  It changes over time, specifically, with three things: GDP growth, efficiency gains in the use of oil, and dollar inflation.  So if GDP goes up, efficiency goes up and the CPI goes up, then the amount that consumers are willing to pay for oil will increase.  For China, by the way, we estimate the carrying capacity at around $115-120 / barrel Brent.  So oil consumption will increase in China at $115 Brent, but fall in the advanced economies—exactly the pattern we’ve seen in the last few years.

Q: So the story line getting a ton of ink of late—peak oil is dead….it isn’t actually quite dead yet, is it?

Kopits:   No.  But importantly, we’re going to peak out production not because we’re “running out of oil,” but because the marginal consumer is not willing to pay for the marginal barrel.  We seem to be pretty much at that level today.

We need to understand these dynamics better.  What are the combined effects of flat oil prices and rising production costs, that’s where I think the challenge is and where our professional work is focusing on the macro side…to better understand what these trends are, what they mean, and how companies in the industry should respond to it.

I’ll give you an example.  Normally, if you look at an oil production system, it tends to be symmetrical around the peak.  The rate at which you approach the peak is the rate at which you depart from the peak.  We haven’t done that.  What we’ve done is that we’ve approached the peak and we’ve leveled out production, the so-called “undulating plateau”.  But we’ve maintained that plateau by turning to non-oil liquids, by dramatic increases in upstream spend, and also by technological innovation related to hydrofracking.  All of these, as of today, look to be running their course.  Even shale oil.  Yes, it will grow for the next few years from the three majors plays in the US, but the peak of production growth is already behind us in the Bakken, for example.  On current trends, Bakken production will be increasing by single digits within two years.  Not a tragedy by any means, but not enough to move the global oil supply at that time, either.

Related article
Food Security, Peak Oil, Sustainability

How Hawaii Farmers Can Be Competitive & Make Money

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Richard Ha writes:

Nitrogen is the basis of protein production. But here in Hawai‘i, farmers have no control over nitrogen fertilizer costs.

What if Hawai‘i farmers had stable and affordable nitrogen costs, and therefore our products had a competitive advantage over imported foods? Then farmers would make money, and farmers would farm.

There is a lot going on in the area of ammonia production. Iowa State University has committed to doing research in this area.

Hawaii can build on the knowledge gained as we find a way to make ammonia fertilizer from electricity that is now being “curtailed” (thrown away).

If we can get to urea, it is a short step to blending so that it is available for most uses.

From Wikipedia:

Urea or carbamide is an organic compound with the chemical formula CO(NH2)2.
The molecule has two —NH2 groups joined by a carbonyl (C=O) functional group.

Urea serves an important role in
the metabolism of
nitrogen-containing compounds by animals and is the main nitrogen-containing
substance in the urine
of mammals. It is a
colorless, odorless solid, highly soluble in water and practically non-toxic (LD50 is 15 g/kg
for rat). Dissolved in water, it is neither acidic nor alkaline. The body uses it
in many processes, the most notable one being nitrogen excretion. Urea is
widely used in fertilizers
as a convenient source of nitrogen. Urea is also an important raw material for the chemical industry.

Read more in the
Download Yara Fertilizer Industry Handbook, 2012.

Not no can. CAN!!

Biofuel, Peak Oil, Renewable Energy Sources, Video

Cutting Edge Info on Peak Oil: Here, Now & in November

Richard Ha writes:

Five Association for the Study of Peak Oil (ASPO) annual conferences later, it’s very clear to me that the information I learn at the conferences is cutting edge. It’s consistently two or more years before what the experts there are talking about shows up in the mainstream news.

From the first ASPO conference I attended, I noticed there were stock traders in the audience. I asked them why there were there, and one told me it was so he could make better investment decisions.

The oil decline situation is much more serious than people realize, and I highly recommend that anyone who wants to be on the cutting edge of knowledge attend the next ASPO conference. It is usually held around the end of November.

I also recommend you visit the ASPO-TV site and take in some of the videos there.

Robert Rapier gave this interesting talk at ASPO last year, which may be of interest to folks who have more than just a passing interest in energy issues.

Robert Rapier – Navigating a New Energy Reality from Peak Oil TV on Vimeo.

Robert, who presented at the conference the last two years, lives
in Waimea now, where he moved to take the job of Chief Technology Officer for Merica International.

He has written a book, Power Plays: Energy Options in the Age of Peak Oil:

In Power Plays: Energy Options in the Age of Peak Oil, energy expert Robert Rapier helps readers sort through energy hype, doom and gloom, and misinformation to understand what really matters in energy, and how it impacts individuals, investors, businesspeople, and policy makers worldwide. The book
covers the overall global energy situation, the particular risks for the U.S. with its present energy mix, the energy outlook for the developed world and emerging economies like China and India, what peak oil really means, and the present and likely future of natural gas, coal, oil, nuclear power, and alternative energy sources. 



The book also addresses common misconceptions. For instance, most readers are likely unaware that the U.S. is the third-largest oil producer in the world. Or that Canada leads the U.S. in per capita oil consumption. It will also highlight interesting facts—for example, China has solved part of its energy challenge by
mandating solar hot water systems in all new construction. Most
importantly, the book will provide specific energy insights unavailable elsewhere and help individuals and business planners chart future actions and decisions. 

In a recent blog entry, Robert talks about why rising natural gas prices will affect the biofuel industry (natural gas is a cost component of the biofuel industry).

He once told me that if a biofuel project has a negative energy balance, it would never be cheaper than oil.

He is highly technically qualified and has a knack of making difficult issues and conclusions easy to understand. I highly recommend both his book and blog.

Geothermal, Government, Lowering Electric Rates, Mauna Kea, Peak Oil

Geothermal Talk at the Democratic Party Convention

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Richard Ha writes:

On Saturday, I was on a geothermal panel at the Hawai‘i Island Democratic Party Convention, which was held at the Volcano Art Center. Brian Schatz at Hawai‘i County Democratic Party Senator Brian Schatz speaking

Also on the panel were State Senator Russell Ruderman and former Big Island Mayor Harry Kim.

It went very well and I’m very optimistic. I think most of us just want to do the best for all of us.

I made it a point to tell the audience that I went to O‘ahu on behalf of the Big Island Community Coalition and testified in favor of four
geothermal bills. What the four bills had in common is that they all contained provisions for “home rule.” I told the audience: This was so you could have a say in the geothermal issue.

My main point was that we are competing with the world for oil. And we need to seek a competitive advantage for the Big Island, and this has to do with cost.

We all know that the price of oil price rise; it’s only a matter of when, and how high. So if we can find a lowest cost solution, this will protect us from a rising oil price. It does not matter what the alternative is, so long as it gives us a competitive advantage.

Right now, it’s geothermal that has the potential for giving us that competitive advantage, assuming we don’t drive up its cost so high that we lose that advantage. Whether or not we achieve its potential is up to our leaders and to the Puna community.

Here’s what I told the Democratic Party Convention:

We are on a search for “competitive advantage” for the Big Island. Organisms, organizations and civilizations do this – it is called “survival of the fittest.” It isn’t the strongest or the smartest that survive; it’s the ones that can adapt – Charles Darwin

My name is Richard Ha. I am a farmer here on the Big Island. Together with our 70 workers, we farm 600 fee simple acres at Pepe‘ekeo. We have produced multi-millions of pounds of bananas and tomatoes over the past 35 years.

In my search to find competitive advantage for my farm’s future, I’ve now been to five Association for the Study of Peak Oil (ASPO) conferences.

Here is what I took away from these conferences:

  1. Oil price quadrupled in the last 10 years.
  2. The last 11 recessions were associated with a spiking oil price.
  3. Oil is a finite resource.
  4. The world has been using three times the oil it has been finding for many years now.
  5. The days of cheap oil are over.
    1. The cost to produce the marginal barrel of oil – the last barrel, as in shale oil and tar sands – was $92 per barrel in 2011.
  6. The U.S. mainland uses oil for only two percent of its electrical generation. Hawai‘i uses oil for more than 70 percent of its electrical generation.
    1. Anything manufactured on the mainland with cheap oil embedded makes our local producers and manufacturers less competitive. This affects Ag products.
  7. It is not the supply or demand of oil that will cause the
    greatest damage; it is the cost of oil.
  8. How much time do we have? Because it is about oil cost, we have less time than we think.

ELECTRICITY ON THE BIG ISLAND

  1. Uses 180 MW at Peak.
  2. Most of the increase in electricity bills is caused by oil pass through.
  3. Bio mass – as in wood chips – and geothermal have base power potential.
  4. Solar and wind must add storage to become useful as base power.
  5. Storage at utility scale is prohibitively expensive today.

ECONOMY

  1. Big Island electricity rates have been 25 percent higher than O‘ahu’s rates for as long as anyone can remember.
  2. The Big Island has the lowest median family income in the state.
  3. The Pahoa School Complex has, at 89 percent, the highest percent of students participating in the free/reduced lunch program in the state. Ka‘u at 87 percent and Kea‘au at 86 percent are close behind.

Education is the best predictor of family income. Yet the Big Island’s high electricity cost takes away from its education budget.

Rising electricity rates act like a giant regressive tax. The folks who are able to leave the grid for PV do so. The folks left behind pay more for the grid. Many of these folks are the ones already on the lowest rungs of the economic ladder: THE ONES THE DEMOCRATIC PARTY IS CONCERNED ABOUT.

Rising electricity rates take away discretionary income. Two-thirds of our economy is made up of consumer spending. Bottom-up economics benefit all, from the rubbah slippah folks to the shiny shoe folks.

GEOTHERMAL

  1. Cost to generate electricity from geothermal is estimated at 10 cents per kilowatt hour. This is less than half the price of electricity generated by oil, which is estimated to be 21 cents per kilowatt hour.
  2. The cost of the feedstock steam will be stable for a long time. The Big Island is estimated to be over the “hot spot” for 500,000 to a million years.
  3. Concentrating geothermal on the East Rift increases risk. Iceland mitigated the risk by keeping some oil-fired plants in operational reserve.
  4. Home Rule. The Big Island Community Coalition, myself as representative, personally voted for four of the bills that contained the Home Rule provision.
  5. Mediation vs. contested case hearing. It is a risk/benefit, cost, competitive advantage question. The lowest cost solution to accomplish the objectives is our target.
  6. How much time do we have? If cost is our primary concern, we have less time than we think.

I asked Dr. Carl Bonham: What happens if the oil price hit $200 per barrel? He replied that it would devastate our tourism industry.

I asked Dr. Bonham: What if we used geothermal as our primary base power? Wouldn’t we have a competitive advantage to the rest of the world as the oil price rose? He said, “YES.”

And, I asked, isn’t it fair to say that our standard of living would rise? He said: “YES.”

By giving the Big Island a competitive advantage in electricity rates, we can take care of all of us; not just a few of us.

WHERE ARE WE TODAY?

We are on a good track.

  1. We have 38MW of geothermal. The 25MW original contract, which is still tied to oil, is being renegotiated right now.
  2. HELCO has signed a 22MW power purchase agreement with Hu Honua. This is proven, stable and affordable technology – firewood, boil water.
  3. HELCO has issued a 50MW request for geothermal proposals.

These 110MWs of stable, affordable electricity base power represent 60 percent of the Big Island’s peak power usage.

O‘ahu has 10 percent of its base power electricity coming from stable affordable sources.

If we all work together, to take care of each other, we can be on track to have a competitive advantageover the rest of the world.

***

Some good resources on this topic:

Geothermal Assessment & Roadmap is a report compiled by the Pacific International Center For High Technology Research (PICHTR) under contract to Hawaii Natural Energy Institute, University of Hawaii in January 2013.

Peak Oil Warning From an IMF Expert: Interview with Michael Kumhof is a modeling done by the International Monetary Fund (IMF) economic team. Although it is not an official IMF document, it was done by the team that does economic analysis and modeling for the IMF.

We are dependent on air transportation, and this video, Charles Schlumberger: Out of Gas: Implications for Transportation, gives a sobering view of what we can expect in the future. Dr. Schlumberger is head of the air transport division of the World Bank.

Articles, Eating Locally, Geothermal, Peak Oil

Agreed: Local Products Shouldn’t Be More Expensive

Richard Ha writes:

Over the weekend, Scott Bosshardt of Kea‘au had an important letter to the editor of the Hawaii Tribune-Herald.

His point was that products produced and purchased locally shouldn’t be more expensive than the same product purchased abroad.

One extremely important fact that the “Think Local, Buy Local” proponents shouldn’t overlook is that local businesses need to “price local.”

Products produced and purchased locally shouldn’t be more expensive than the same product purchased abroad.

He also wrote:

“Price local” instead of as if our Big Island-grown tomatoes and coconuts were imported from half way around the world or some other planet, then people will be much more inclined to “buy local.” This holds true for everything we produce here. Think about it. When you live in Columbia, you don’t pay more for coffee than you do in San Francisco.

He’s right: Prices are higher here, and we need to lower them. It’s what I keep talking about. We need to find a way that we can lower our costs.

I first noticed our farm costs rising steadily back in 2005 and 2006. Rising costs affect every aspect of our farm, and it was very worrisome. Looking into it, I realized that the rise in price was due to the price of oil increasing.

Here in Hawai‘i, we are being squeezed extra hard. More than 70 percent of our electricity comes from oil. Compare this to the U.S. mainland –  Hawaii’s primary competitor in many produce and food manufacturing categories – which relies on oil for only about two percent of its electricity generation.

As the price of oil rises, you can see how our local farmers and food manufacturers become less and less competitive with the mainland.

Farming is very energy intensive, and farmers’ refrigeration and water pumping costs have steadily gotten more expensive. Wholesalers’ and retailer refrigeration costs have gone up, too. This means food costs more.

Oil prices have quadrupled in the last 10 years, and this has put the economy into a continuous recession. Everything has been squeezed. Government workers’ pay has been cut. Electricity costs have gone up steadily. School budgets have been squeezed. Medical costs have risen.

I have so far attended five annual Association for the Study of Peak Oil (ASPO) conferences trying to figure out how to protect our farm from the rising price of oil. I don’t have a degree in chemistry or the sciences – but I am a farmer with common sense. So I spent my time figuring out who I can trust for good information

I determined that the folks at ASPO can be trusted because they have no other agenda than to produce good information. It is up to me to decide if their studies are valid or not, or whether I agree with their conclusion. On the other hand, I thought that people whose livelihood depends on putting on a happy face would probably just put on a happy face.

I have learned that the world has been using two to three times as much oil as it has been finding, a trend that continues. I’ve learned that the oil being produced now is much more expensive than what they found 50 years ago. It takes more energy now to get the energy. The cost of producing oil from shale and oil sands was $92 per barrel in 2011, and the floor price of oil is probably not much lower than that.

The era of cheap oil is over. And the stuff produced in the future will be even more costly, setting a higher floor as time goes by. Unless we do something, it will squeeze us all even more.

Look around: It is happening right now, even with a banner tourism year. Imagine what it will be like if we have a significant downturn.

Also important to note is that the rubbah slippah folks have less and less discretionary income. Consumer spending makes up two-thirds of our economy. Our consumers will have more spending money when we can lower the cost of our electricity.

What about the happy news that the U.S. will become the largest producer of oil and gas in the future? In 2009, Art Berman, a petroleum geologist,  showed that in a study of 4,000 gas wells in the Barnett Shale, most of the production came out in the first year. Sixteen-thousand wells later, we see that 90 percent of shale gas and shale oil wells were more than 90 percent depleted within five years. And the decline rate for all the wells is more than 30 percent. We will need to drill one third as many we have now just to keep production steady.

One can reasonably conclude that the shale gas and shale oil phenomenon may not be a game changer. It probably won’t make a large dent in world oil production.

Meanwhile, the overall trend continues. Most of the world’s oil is produced by giant and supergiant oil fields, and lots of them are declining. Folks who study this estimate that the decline rate is around 4 to 6 percent annually. That is about 3 million barrels a year. This is going on all day, every day, no matter what the stock market does.

What can we do on the Big Island to lower electricity costs, and the cost of locally produced food? Biomass and geothermal can do that today. There may be other choices maturing in the next few years, too.

Producing electricity from geothermal here costs half as much as producing it from oil. And the Big Island will be over the hot spot that provides us with geothermal for 500,000 to a million years.

Iceland is pulling itself out of the largest financial crash in history because it has cheap electricity from geothermal and can export fish.

Let’s say that one wanted to payoff an oil-fired plant that produces 60MW today. That difference in price would save $6,600/hour and $158,400 /day. This is more than $50 million per year. Seems like we could be creative with writing off stranded assets.

We are very lucky to have these options here.

Read more about this:

The Farmer’s Point of View on Geothermal and Biofuels

Let’s Fight Rising Electric Rates, Not Teachers

Peak Oil

Middle East Worries About Peak Oil

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Richard Ha writes:

Qatar just held the Middle East’s first-ever Peak Oil Conference, and when Arab countries start showing concern about peak oil, we definitely need to pay attention.

Energy expert Robert Hirsch attended the Qatar conference and wrote about it at the Association for the Study of Peak Oil (ASPO) website.

By Robert L. Hirsch PhD, Senior Energy Advisor, MISI

I was fortunate to be among the few westerners invited to attend and speak at this first-of-its kind “peak oil” (PO) conference in a Middle East. The fact that a major Middle East oil exporter would hold such a conference on what has long been a verboten subject
was quite remarkable and a dramatic change from decades of PO (Peak Oil) denial. The two and a half day meeting was well attended by people from the GCC as well as other regional countries.

The going-in assumption was that “peak oil” will occur in the near future. The timing of the impending onset of world oil decline was not an issue at the conference, rather the main focus was what the GCC countries should do soon to ensure a prosperous, long-term future. To many of us who have long suffered the vociferous denial of Peak Oil by GCC-OPEC countries, this conference represented a major change. In the words of Kjell Aleklett, who summarized highlights of the conference, the meeting was “an historic event.”

A flavor of the conference can be gotten from the following loosely translated, random quotations:

  • This is a groundbreaking conference.
  • The organizers were brave to organize this conference.
  • Peak oil provides an incentive to consider important national and regional issues. The GCC is currently working new problems with old solutions.
  • Oil revenue represents about 93% of the Saudi budget. Everything is now imported — foreign expertise and most labor. Saudi can’t continue on the current track, because it would lead to a “bad future.” We need radical change.
  • After peak oil, will there be great cities, or will Middle East cities end up like the gold mining ghost towns of the old U.S. west?
  • So far we have wasted our opportunity.
  • Shale oil in the U.S. is so much foolishness and does not invalidate peak oil. We definitely must worry about peak oil.
  • Political reforms have failed to properly address our lack of democracy and accountability.
  • When people are excluded from politics, they get unruly.
  • Citizens in the Middle East prefer public sector jobs because they pay better than private sector jobs.
  • Foreigners are the majority of our populations, typically 80%.
  • Schools are teaching children “old stuff.” Schools are a disaster.
  • The current culture is one of waste….

Read the rest.

This country’s conference on peak oil is coming up in November, and Hawai‘i needs to send more people to it. We need to be smart about what we do. It’s all about cost and effect on the rubbah slippah folks.

We must base our decisions on good, verifiable data. We need to play the position on the chess board that exists in front of us, not the position we wish we had.

In the end it is about all of us, not just a few of us — in the spirit of aloha.