Tag Archives: Association for the Study of Peak Oil

Peak Oil

Best Possible Odds & How To Determine Them

Richard Ha writes:

I just attended my fifth Association for the Study of Peak Oil (ASPO) conference, which was at the University of Texas at Austin. I attend these conferences in order to figure out how to give our farming operation the best possible odds of succeeding in this world of finite resources.

Determining this requires understanding the main drivers in the world energy situation, how it all affects the U.S., and then how it affects Hawai‘i’s unique situation. When we understand that, we can determine how we need to move our farm to be relevant in a rapidly changing future.

Presentations at the ASPO conference are data-driven. None of them are based on any predetermined philosophy. It’s all about adapting to physical change and resisting B.S. Good data and a little bit of common sense keeps everything in its proper perspective.

In one sense, this is like a chess game. There will be winners and losers. The rules of physical science determine how things operate. Warren Buffett once observed that nine women cannot each have a baby in one month.

But unlike in chess, not everything is clear.  As Robert Hirsch said about Saudi Arabian oil reserves on Friday, some of the information is unknowable, and in those situations we must operate on best available information.

This is when we must use common sense. Even small kids know that when you’re in a pasture picking guavas and you hear hoofbeats, you don’t gather and have a meeting. You run!

Stay tuned and I will be writing about what makes sense for us, living out in the middle of the Pacific, and on the Big Island in particular. 

Peak Oil

2011 Peak Oil Conference, Part 3: Energy Return on Energy Invested

1 Comment

I was Hawai‘i County’s representative to the 2011 Association for the Study of Peak Oil conference in Washington, D.C., which just concluded.

This was the fourth time I’ve attended the conference. After my first ASPO conference it hit me: I learned too much! It became my kuleana.

This is the third in a series of posts about information gleaned from this year’s conference. Note that everything I’m writing about is based on numbers, not my opinions. I am relaying information from very credible people who have gone through the peer review process and been vetted.

Energy Return on Energy invested (EROI or EROEI)

In a sentence, the definition of EROI: “The energy it takes to get energy – minus the energy it takes to get food – equals our lifestyle.”

Charles Hall, David Murphy and others, who have done peer-reviewed analyses of the concept of EROI, argue that organisms, organizations and civilizations must generate surplus energy in order to survive. A mother cheetah must be able to chase down rabbits and gazelles, miss a few, feed the kids and still have enough energy to run down more or else the species goes extinct. Ancient civilizations followed this principle.

This is Charley Hall, the father of EROI, on the left.

IMG_0016

Awhile ago, I read through his paper “What is the Minimum EROI that a Sustainable Society Must Have?, which he authored with Stephen Balogh and David Murphy, and I immediately got it. At the conference, I asked Charley to autograph a copy of it for me.

I was sitting right next to him and asked him how come there are no analyses for “hot” geothermal, like we have in Hawai‘i and Iceland. His answer was that we are a tiny part of the world solution. I guess so – we are only 2 million out of 7 billion people that are so lucky.

If it takes more energy to get the energy (as in some biofuels), then someone needs to explain to regular folks why we would do that. Otherwise, we start thinking about Easter Island.

Can we pay back our debts if the economy cannot grow? It is clear that the economy cannot stand a triple digit oil price. We have been using twice as much oil as we have been finding for more than 20 years now.

AC1058

And it is becoming more difficult and, consequently, more expensive to develop new sources. It seems reasonable to assume that oil prices will rise and fall with demand. But the prices will tend to keep rising as the population’s demand rises and as old fields naturally decline.

And doesn’t modern economic theory assume continuous growth? But growth stops when oil reaches triple digits per barrel. Are we facing the end of growth? It is prudent that we plan for the worse and hope for the best.

Both Gail Tverberg and Jeff Rubin write blogs about this (both their blogs are always available by clicking in the side bar at right).

Here I am with Gail. I cannot refute her arguments, so I spend all my time figuring out workarounds. That’s why I push geothermal so hard. It’s the bridge that will enables other renewables to cross.

IMG_0020

Hawaii Pacific University (HPU) in Honolulu is sponsoring a talk about the end of growth by Richard Heinberg on November  9th. Heinberg is a Senior Fellow-in-Residence at Post Carbon Institute, a nonprofit organization dedicated to “building more resilient, sustainable, and equitable communities.”

This is Richard Heinberg on the left.

IMG_0019

This series of posts about my trip to the 2011 Association for the Study of Peak Oil (ASPO) continues. Read Part 4 here.

Go back to Part 1 and Part 2.

Peak Oil

2011 Peak Oil Conference, Part 2: Impressions From the Conference

This is my fourth Association for the Study of Peak Oil conference. Here are some highlights and some of my impressions:

Robert Hirsch pointed out that what we have is a liquid fuel problem, not an energy problem. Sixty percent of the world oil supply comes from a few giant oilfields. And giant oilfields decline naturally. The problem is that we have been using twice as much oil as we have been finding for 20 to 30 years.

There is some near-term potential: gas to liquids, coal to liquids, heavy oil refining, enhanced oil recovery and energy efficiency. He points out that in the long term we must implement much more electricity use. Robert Hirsch always makes common sense to me. His book The Impending World Energy Mess is well worth reading.

Robert Rapier pointed out that the U.S. uses 23 barrels of oil per person per year, while China uses only two barrels per person. At present oil prices, China’s economy is growing while ours is barely staying above water.

This is a zero sum game – they want to improve their standard of living, and we cannot afford to pay more, so our per barrel use must shrink. It looks to me that the Chinese cannot wait to jump into their cars and drive to McDonalds. I’m thinking, too, that we in Hawai‘i should be trying to implement lower cost energy as a top priority as we move toward renewables. Like geothermal?

Jeff Rubin: Two thirds of our economy is consumer spending. Peak Oil is not about how much oil there is, it’s about how much we can afford to pay for it. To grow the economy, we need cheaper oil. Market clearing prices do not seem to be compatible with economic growth.Transporting goods uses liquid fuels and the longer the distance the more the cost. Debt means borrowing on our future. We have done a lot of that. I wonder, will there be growth so we can pay it back?

There are links to both Jeff Rubin’s and Robert Rapier’s blogs in our sidebar, at right.

From the first ASPO conference that I attended, in Houston in 2007, it was immediately apparent to me that we needed to implement geothermal sooner rather than later.

I also learned a lot on the trip to Iceland that Ro Marth and I took. Iceland had the biggest economic collapse in the history of the world. The banks had been privatized a few years earlier and they just went crazy lending money to anyone without worrying about payback ability.

When the banks could not pay their obligations, the Icelanders let the banks collapse and they are now prosecuting the bankers for fraud. The big story behind all this is that Iceland is pulling themselves out of the hole. And that is exactly what I went to see for myself.

I saw that cheap energy is what saved them. And in Hawaii, we can do the same – with geothermal in the short term and with all the other renewables we have in abundance in the longer term.

Hawaii and Iceland, with a combined population of 2 million people, have the best geothermal resource in the world.

Our Big Island will be over the “hot spot” for the next 500,000 to a million years.

Our two million people, out of the 7 billion people in the world, are so lucky.

More commentary to come….

In the meantime, here are some pictures from Washington, D.C. This is Helen Davis, an energy staff member for Rep. Hirono. I’m so happy to see Hawai‘i’s people represented at the conference.

IMG_0027

Occupying the Capitol. There are rows of tents, all neatly organized. More than 50. I understand there is another Occupy encampment, too.

IMG_0030

When I was walking toward the Capitol, I saw this monument in a park.

IMG_0010

Read Part 3 of this series.

Go back to Part 1.

Biofuel, Geothermal, Peak Oil

2011 Peak Oil Conference, Part 1: As the ASPO Conference Gears Up

Some thoughts as the Association for the Study of Peak Oil (ASPO) conference is about to start here in Washington, D.C.:

The bad news

We are using twice as much oil as we have been finding for the last 20-30 years. And we are getting closer to the intersection of increasing world population and a finite resource.

Shale gas – 70 percent of the gas that comes from a gas well is used up in the first year. We do not have close to a 100 year supply. Lucky if we have 25 years’ worth.

Biofuels – The EPA had to revise its 2011 estimate of U.S. cellulosic biofuels downward from 250 million gallons to 6.5 million gallons. Also, the net energy derived from producing biofuels is very low.

The U.S. mainland has a liquid fuel transportation problem. Hawai‘i has both a liquid fuel transportation problem as well as a liquid fuel electricity problem.

The good news

Compared to the rest of the world’s population of 7 billion people, the 2 million people of Iceland and Hawai‘i have the best geothermal resource in the world.

The Big Island will be over the “hot spot” for 500,000 to 1 million years.

Geothermal costs around 10 cents per kWh to produce electricity. Oil, at $100 per barrel, costs more than 20 cents/kWh. Geothermal energy cost will stay stable for 500,000 years while oil will rise to unaffordable levels soon.

Like our ancient people a long time ago, we must make decisions for future generations. Can we continue to wait and hope for the best, or do we force change?

Let’s go!

Go to Part 2 of this series.

Biofuel

National Research Council: Biofuels Costly, Impacts Questionable

Cellulosic biofuel projects have been a financial disaster for U.S. taxpayers.

From Robert Rapier’s Energy blog:

NRC Report to Congress: Cellulosic Biofuel Mandates Unlikely to Be Met

A congressionally requested study by the National Research Council — an arm of the National Academy of Sciences — concluded that next-generation biofuels are costly, and their impacts questionable. “Absent major technological innovation or policy changes, the … mandated consumption of 16 billion gallons of ethanol-equivalent cellulosic biofuels is unlikely to be met in 2022,” the report stated. This conclusion should come as no surprise to readers of R-Squared Energy, as its author Robert Rapier covered this in a recent article: Cellulosic Ethanol Targets: Mandating the Nonexistent. Read the rest

You can learn about this and other important liquid fuel subjects at the Association for the Study of Peak Oil (ASPO) conference, which will be held November 2 – 5 in Washington, D.C. I highly recommend decision makers send people to this conference.

I’ll be representing the County of Hawai‘i at this year’s conference, my fourth time attending. Mahalo to Mayor Billy Kenoi. He knows what is going on.

Peak Oil

Peak Oil Conference in November

In November, I will attend my fourth Association for the Study of Peak Oil (ASPO) conference.

I highly recommend that Hawai‘i people in decision-making positions attend.

This year’s conference theme is “Truth In Energy,” and it will focus on the importance of transparent and reliable energy information, and the need to educate influential leaders and the public on the peak oil energy challenges facing our nation.

Energy is a very complex subject, and it’s sometimes difficult to separate the truth from the marketing hype. The value I get from attending these conferences is in being able to determine the difference between the middle ground, the fringe, the hopesters and the hypesters.

For example, when I went to my first ASPO conference in Houston, a speaker pointed out that the peak of oil production in the U.S. occurred in 1970. Although Saudi Arabia keeps their oil reserve data secret, there are ways that regular folks can make reasonable assumptions. He said that there were people from Saudi Arabia working in the oil industry in Houston, and that they had learned how to not waste their resource.

On April 13, 2008, Reuters reported that King Abdullah said, “When there were some new finds, I told them, ‘No, leave it in the ground, with grace from God, our children need it.’”

That was not reported in the mainstream media, but because I went to the ASPO conference, I read about it. I heard the King very clearly.

There are also others who, through regular means like Google Earth, make reasonable assumptions.

Take a look at this animation and narrative about Saudi oil fields. It seems reasonable to assume that the Saudis cannot keep on pumping endlessly.

Any “rubbah slippah” person can understand that this shows more and more oil being sucked out of the ground, and it will begin to decline. It’s all about supply and demand, and because oil is a finite resource, we should expect rising oil prices.

At the 2009 conference in Denver, someone showed a graph that pointed out the direct relationship between oil price, GDP and the last several recessions. The data showed that when oil prices exceeded $85 dollars or so, we could expect a recession.

The worrisome part is that hardly anyone makes the oil cost/recession connection. If they did, they would realize that unless we in Hawai‘i find a way to avoid the rising cost of fuel and electricity, we are at best looking at a future of very little economic growth. Because we are more reliant on oil than most, our future could be very bleak.

That is why we, in Hawai‘i, must force the change and go to low and stable cost geothermal faster, rather than slower. This will allow us to dodge the oil bullet, and will give us the opportunity to unleash the abundance of renewable energy alternatives available to us.

I really returned from a study trip to Iceland and learned that by using cheap geothermal and hydroelectric, that country is now food and fuel secure.

I am noticing more and more homeless people here. Many of them are working homeless. As we bring on more low-cost, stable geothermal, our standard of living and economic activity will rise. More and more of the working homeless will be able to get their families off the street. We can do this without having to tax the people.

We must force the change, but we will need everyone’s help. We are all in this together.

Dr. Charles Schlumberger, who is in charge of the airline section of the World Bank, spoke at the last ASPO conference. Watch video of his talk The Future of Air Transportation.

Jeff Rubin, former Chief Economist for the Canadian bank CIBC, spoke too, explaining how the world economy will shrink as oil prices rise. Here is his Oil and the End of Globalization speech.

This has very strong implications for Hawai‘i. We all know that we must get off oil. But the problem is the cost and practicality of the solution. Solutions need to be cost-effective and proven technology, as well as environmentally friendly.

Geothermal fits this requirement. But we need to move much faster than we have been.

When I return from this year’s conference, I will post this year’s speeches.