Techtrend

Military Study Warns of a Potentially Drastic Oil Crisis

By Stefan Schultz

A study by a German military think tank has analyzed how “peak oil” might change the global economy. The internal draft document — leaked on the Internet — shows for the first time how carefully the German government has considered a potential energy crisis.

The term “peak oil” is used by energy experts to refer to a point in time when global oil reserves pass their zenith and production gradually begins to decline. This would result in a permanent supply crisis — and fear of it can trigger turbulence in commodity markets and on stock exchanges.

The issue is so politically explosive that it’s remarkable when an institution like the Bundeswehr, the German military, uses the term “peak oil” at all. But a military study currently circulating on the German blogosphere goes even further.

The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the “total collapse of the markets” and of serious political and economic crises.

The study, whose authenticity was confirmed to SPIEGEL ONLINE by sources in government circles, was not meant for publication. The document is said to be in draft stage and to consist solely of scientific opinion, which has not yet been edited by the Defense Ministry and other government bodies.

The lead author, Will, has declined to comment on the study. It remains doubtful that either the Bundeswehr or the German government would have consented to publish the document in its current form. But the study does show how intensively the German government has engaged with the question of peak oil.

Parallels to activities in the UK

The leak has parallels with recent reports from the UK. Only last week the Guardian newspaper reported that the British Department of Energy and Climate Change (DECC) is keeping documents secret which show the UK government is far more concerned about an impending supply crisis than it cares to admit.

According to the Guardian, the DECC, the Bank of England and the British Ministry of Defence are working alongside industry representatives to develop a crisis plan to deal with possible shortfalls in energy supply. Inquiries made by Britain’s so-called peak oil workshops to energy experts have been seen by SPIEGEL ONLINE. A DECC spokeswoman sought to play down the process, telling the Guardian the enquiries were “routine” and had no political implications.

The Bundeswehr study may not have immediate political consequences, either, but it shows that the German government fears shortages could quickly arise.

Part 2: A Litany of Market Failures

According to the German report, there is “some probability that peak oil will occur around the year 2010 and that the impact on security is expected to be felt 15 to 30 years later.” The Bundeswehr prediction is consistent with those of well-known scientists who assume global oil production has either already passed its peak or will do so this year.

Market Failures and International Chain Reactions

The political and economic impacts of peak oil on Germany have now been studied for the first time in depth. The crude oil expert Steffen Bukold has evaluated and summarized the findings of the Bundeswehr study. Here is an overview of the central points:

* Oil will determine power: The Bundeswehr Transformation Center writes that oil will become one decisive factor in determining the new landscape of international relations: “The relative importance of the oil-producing nations in the international system is growing. These nations are using the advantages resulting from this to expand the scope of their domestic and foreign policies and establish themselves as a new or resurgent regional, or in some cases even global leading powers.”
* Increasing importance of oil exporters: For importers of oil more competition for resources will mean an increase in the number of nations competing for favor with oil-producing nations. For the latter this opens up a window of opportunity which can be used to implement political, economic or ideological aims. As this window of time will only be open for a limited period, “this could result in a more aggressive assertion of national interests on the part of the oil-producing nations.”
* Politics in place of the market: The Bundeswehr Transformation Center expects that a supply crisis would roll back the liberalization of the energy market. “The proportion of oil traded on the global, freely accessible oil market will diminish as more oil is traded through bi-national contracts,” the study states. In the long run, the study goes on, the global oil market, will only be able to follow the laws of the free market in a restricted way. “Bilateral, conditioned supply agreements and privileged partnerships, such as those seen prior to the oil crises of the 1970s, will once again come to the fore.”
* Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. “Shortages in the supply of vital goods could arise” as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. “In the medium term the global economic system and every market-oriented national economy would collapse.”
* Relapse into planned economy: Since virtually all economic sectors rely heavily on oil, peak oil could lead to a “partial or complete failure of markets,” says the study. “A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis.”
* Global chain reaction: “A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil,” says the study. “It is likely that a large number of states will not be in a position to make the necessary investments in time,” or with “sufficient magnitude.” If there were economic crashes in some regions of the world, Germany could be affected. Germany would not escape the crises of other countries, because it’s so tightly integrated into the global economy.
* Crisis of political legitimacy: The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could perceive the upheaval triggered by peak oil “as a general systemic crisis.” This would create “room for ideological and extremist alternatives to existing forms of government.” Fragmentation of the affected population is likely and could “in extreme cases lead to open conflict.”

The scenarios outlined by the Bundeswehr Transformation Center are drastic. Even more explosive politically are recommendations to the government that the energy experts have put forward based on these scenarios. They argue that “states dependent on oil imports” will be forced to “show more pragmatism toward oil-producing states in their foreign policy.” Political priorities will have to be somewhat subordinated, they claim, to the overriding concern of securing energy supplies.

For example: Germany would have to be more flexible in relation toward Russia’s foreign policy objectives. It would also have to show more restraint in its foreign policy toward Israel, to avoid alienating Arab oil-producing nations. Unconditional support for Israel and its right to exist is currently a cornerstone of German foreign policy.

The relationship with Russia, in particular, is of fundamental importance for German access to oil and gas, the study says. “For Germany, this involves a balancing act between stable and privileged relations with Russia and the sensitivities of (Germany’s) eastern neighbors.” In other words, Germany, if it wants to guarantee its own energy security, should be accommodating in relation to Moscow’s foreign policy objectives, even if it means risking damage to its relations with Poland and other Eastern European states.

Peak oil would also have profound consequences for Berlin’s posture toward the Middle East, according to the study. “A readjustment of Germany’s Middle East policy … in favor of more intensive relations with producer countries such as Iran and Saudi Arabia, which have the largest conventional oil reserves in the region, might put a strain on German-Israeli relations, depending on the intensity of the policy change,” the authors write.

When contacted by SPIEGEL ONLINE, the Defense Ministry declined to comment on the study.

Original article: http://www.spiegel.de/international/germany/0,1518,715138,00.html

Zeroshift sees a multispeed future for EV transmissions

Zeroshift is developing multispeed transmissions such as this one, aimed at enabling smaller EV drive motors.

Downsizing is the buzzword within the conventional powertrain industry, but now it is also being applied to electric drive systems for EVs. Engineers at U.K. transmission specialist Zeroshift believe that a route toward achieving this is to use a multispeed gearbox instead of the single-speed types now in general use.

The potential problem with multispeeds for EVs is the effect of torque interruption between shifts. But Zeroshift, which specializes in the development and application of power transmission and electronic control solutions, is developing a clutchless, multispeed transmission application of its proprietary gear shifting system that is claimed to meet the challenge.

Instead of a clutch, the system has a damper within the gear hubs together with electronic control of the motor. The configuration delivers shift quality that company engineers consider to be virtually seamless.

Managing Director Bill Martin believes the application of the technology could enable manufacturers to downsize EV electric motors and run them in the strata of medium speeds and loads, at which around 95% peak efficiency can be achieved.

The Zeroshift technology replaces the synchromesh of a conventional gearbox with paired, interlocking rings that change the ratios without causing torque interruption. Electronic control of the motor (or motors, depending on application) matches the shaft speed. An integrated passive damper system within the drive hub is used to isolate any vibration.

Martin explained that by varying parameters such as fluid properties, peak pressures, and end-of-travel speeds, it is possible to tune the damper’s performance to suit various applications. Zeroshift also uses sealed pockets of silicone fluid and mechanical compression springs to achieve shifts that Martin describes as “virtually unnoticeable” to the vehicle’s occupants.

He also stated that the company’s studies suggest that using a compact, multispeed transmission and a smaller electric motor improves operating efficiency by 10%. That gain “can be used to improve an EV’s range or to reduce the size, weight, and cost of battery packs,” Martin added.

Further benefits of the system would include an extension of in-service battery life. At present, range limitations may result in EV drivers depleting their vehicles’ battery cells to maximum allowable discharge level. Such deep cycling can diminish battery life.

Improving motor efficiency uses less of the energy stored for a given journey, thus easing discharge/recharge cycles and potentially reducing recharge time.

As well as pure-EV applications, Zeroshift is working with manufacturers on its integration into the next generation of seamless layshaft automatic transmissions for hybrid vehicles, both passenger and commercial.

“Until now, none of the transmission alternatives have provided a satisfactory option for EVs,” explained Martin.

He noted that conventional manual transmissions interrupt the drive to the wheels during gear shifting and require a clutch, thus adding cost and bulk to the tightly packaged EV powertrain. And conventional automatic transmissions also add bulk and introduce a 10% efficient loss, wiping out the potential motor efficiency benefits. Zeroshift may offer an alternative to both, as the industry’s EV development continues to expand.

Stuart Birch

original article: http://www.sae.org/mags/AEI/8714

Nine Challenges of Alternative Energy

Posted by Gail the Actuary on August 19, 2010 – 10:35am
Topic: Alternative energy
Tags: alternative energy, solar pv, wind [list all tags]

This is a guest post by David Fridley, known on The Oil Drum as Sparaxis. See end of post for more information.

The scramble for alternatives is on. High oil prices, growing concerns over energy security, and the threat of climate change have all stimulated investment in the development of alternatives to conventional oil. In this post (which is an excerpted chapter from The Post Carbon Reader: Managing the 21st Century’s Sustainability Crises edited by Richard Heinberg and Daniel Lerch), I give an overview of some of the issues I see, including nine challenges of alternative energy.

“Alternative energy” generally falls into two categories:

* Substitutes for existing petroleum liquids (ethanol, biodiesel, biobutanol, dimethyl ether, coal-to-liquids, tar sands, oil shale), both from biomass and fossil feedstocks.

* Alternatives for the generation of electric power, including power-storage technologies (wind, solar photovoltaics, solar thermal, tidal, biomass, fuel cells, batteries).

The technology pathways to these alternatives vary widely, from distillation and gasification to bioreactors of algae and high-tech manufacturing of photonabsorbing silicon panels. Many are considered “green” or “clean,” although some, such as coal-to-liquids and tar sands, are “dirtier” than the petroleum they are replacing. Others, such as biofuels, have concomitant environmental impacts that offset potential carbon savings.

Unlike conventional fossil fuels, where nature provided energy over millions of years to convert biomass into energy-dense solids, liquids, and gases—requiring only extraction and transportation technology for us to mobilize them—alternative energy depends heavily on specially engineered equipment and infrastructure for capture or conversion, essentially making it a high-tech manufacturing process. However, the full supply chain for alternative energy, from raw materials to manufacturing, is still very dependent on fossil-fuel energy for mining, transport, and materials production. Alternative energy faces the challenge of how to supplant a fossil-fuel-based supply chain with one driven by alternative energy forms themselves in order to break their reliance on a fossil-fuel foundation.

The public discussion about alternative energy is often reduced to an assessment of its monetary costs versus those of traditional fossil fuels, often in comparison to their carbon footprints. This kind of reductionism to a simple monetary metric obscures the complex issues surrounding the potential viability, scalability, feasibility, and suitability of pursuing specific alternative technology paths. Although money is necessary to develop alternative energy, money is simply a token for mobilizing a range of resources used to produce energy. At the level of physical requirements, assessing the potential for alternative energy development becomes much more complex since it involves issues of end-use energy requirements, resource-use trade-offs (including water and land), and material scarcity.

Similarly, it is often assumed that alternative energy will seamlessly substitute for the oil, gas, or coal it is designed to supplant—but this is rarely the case. Integration of alternatives into our current energy system will require enormous investment in both new equipment and new infrastructure—along with the resource consumption required for their manufacture—at a time when capital to make such investments has become harder to secure. This raises the question of the suitability of moving toward an alternative energy future with an assumption that the structure of our current large-scale, centralized energy system should be maintained. Since alternative energy resources vary greatly by location, it may be necessary to consider different forms of energy for different localities.

It is not possible to single out one metric by which to assess the promise of a particular alternative energy form. The issue is complex and multifaceted, and its discussion is complicated by political biases, ignorance of basic science, and a lack of appreciation of the magnitude of the problem. Many factors come into play, of which nine are discussed here.
1. Scalability and Timing

For the promise of an alternative energy source to be achieved, it must be supplied in the time frame needed, in the volume needed, and at a reasonable cost. Many alternatives have been successfully demonstrated at the small scale (algae-based diesel, cellulosic ethanol, biobutanol, thin-film solar) but demonstration scale does not provide an indication of the potential for large-scale production. Similarly, because alternative energy relies on engineering and construction of equipment and manufacturing processes for its production, output grows in a stepwise function only as new capacity comes online, which in turn is reliant on timely procurement of the input energy and other required input materials. This difference between “production” of alternative energy and “extraction” of fossil fuels can result in marked constraints on the ability to increase the production of an alternative energy source as it is needed.

Tar sands mining in Alberta, Canada.

For example, the tar sands of Canada (although often excluded as an “alternative” energy, tar sands are subject to the same constraints because the production of oil from the tar sands deposits is essentially a mining and manufacturing operation) have already achieved a fully commercial scale of production, and because of the immense reserves indicated in Alberta, tar sands are looked to be a backstop to declining conventional crude oil production. In 2008, production of oil from the tar sands reached 1.2 million barrels per day (bpd), less than 2 percent of global production of conventional crude oil. By 2020, the Canadian Association of Petroleum Producers projects that production will increase by 2.1 million bpd to a total of 3.3 million bpd.1 But the International Energy Agency (IEA) estimates that the global decline rate from conventional-oil fields is 6.4 percent, or about 4.8 million bpd per year.2 Thus by 2020, the new oil coming from tar-sands production will not even make up half of what is being lost from ongoing depletion of existing conventional-oil fields. Even with a “crash” production program, it is estimated that tar-sands production in 2020 could not exceed 4.0 million bpd, an increase still less than the annual rate of conventional crude oil depletion.3

Scale also matters in comparing projected production of an alternative energy form against expected demand growth. In 2007, the U.S. Energy Policy Act established a target for the production of ethanol in 2022 at 36 billion gallons, of which 15 billion gallons were to be sourced from corn and the remainder from cellulosic sources. In terms of gasoline equivalency, this target is equal to 890,000 bpd of additional supply. In 2008, however, the U.S. Department of Energy, in its Annual Energy Outlook, forecast demand for gasoline would grow by 930,000 bpd by 2022,4 more than offsetting projected supply growth from ethanol and leaving gross oil dependency unchanged.

This lack of the kind of scalability needed given the magnitude and time frame of conventional-oil depletion and in the face of continued demand growth is found as well in other biofuels, coal-to-liquids, and alternative liquids for transportation. Also of concern is the difficulty of scaling up alternative energy quickly enough to meet greenhouse gas emissions targets.

2. Commercialization

Closely related to the issue of scalability and timing is commercialization, or the question of how far away a proposed alternative energy source stands from being fully commercialized. Often, newspaper reports of a scientific laboratory breakthrough are accompanied by suggestions that such a breakthrough represents a possible “solution” to our energy challenges.

In reality, the average time frame between laboratory demonstration of feasibility and full large-scale commercialization is twenty to twenty-five years. Processes need to be perfected and optimized, patents developed, demonstration tests performed, pilot plants built and evaluated, environmental impacts assessed, and engineering, design, siting, financing, economic, and other studies undertaken. In other words, technologies that are proved feasible on the benchtop today will likely have little impact until the 2030s. This reality is reflected in the key message of the now-famous Hirsch Report, which noted that to properly mitigate the economic impacts of peak oil, we would have needed to start fundamentally redesigning our national energy infrastructure twenty years in advance of the peak.5

3. Substitutability

Ideally, an alternative energy form would integrate directly into the current energy system as a “drop-in” substitute for an existing form without requiring further infrastructure changes. This is rarely the case, and the lack of substitutability is particularly pronounced in the case of the electrification of transportation, such as with electric vehicles. Although it is possible to generate the electricity needed for electrified transportation from wind or solar power, the prerequisites to achieving this are extensive. Electric-car development would require extensive infrastructure changes, including:

* Retooling of factories to produce the vehicles

* Development of a large-scale battery industry

* Development of recharging facilities

* Deployment of instruments for the maintenance and repair of such vehicles

* A spare-parts industry

* “Smart-grid” monitoring and control software and equipment

* Even more generation and transmission facilities to supply the additional electricity demand

The development of wind and solar-power electricity also requires additional infrastructure; wind and solar electricity must be generated where the best resources exist, which is often far from population centers. Thus, extensive investment in transmission infrastructure to bring it to consumption centers is required. Today, ethanol can be blended with gasoline and used directly, but its propensity to absorb water and its high oxygen content make it unsuitable for transport in existing pipeline systems,6 and an alternative pipeline system to enable its widespread use would be materially and financially intensive. While alternative energy forms may provide the same energy services as another form, they rarely substitute directly, and these additional material costs need to be considered.
4. Material Input Requirements

Unlike what is generally assumed, the input to an alternative energy process is not money per se: It is resources and energy, and the type and volume of the resources and energy needed may in turn limit the scalability and affect the cost and feasibility of an alternative. This is particularly notable in processes that rely on advanced technologies manufactured with rare-earth elements. Fuel cells, for example, require platinum, palladium, and rare-earth elements. Solar-photovoltaic technology requires gallium, and in some forms, indium. Advanced batteries rely on lithium. Even technology designed to save energy, such as light-emitting diode (LED) or organic LED (OLED) lighting, requires rare earths, indium, and gallium. Expressing the costs of alternative energy only in monetary terms obscures potential limits arising from the requirements for resources and energy inputs.

Window louvers with integrated thin-film copper indium gallium selenide

Because alternative energy today constitutes only a small fraction of total energy production, the volume of resources and energy demanded for its production has so far been easily accommodated. This will not necessarily be the case with large-scale expansion. For example, thin-film solar has been promoted as a much lower-cost, more flexible, and more widely applicable solar-conversion technology compared to traditional silicon panels. Thin-film solar currently uses indium because of its versatile properties, but indium is also widely used as a component of flat-screen monitors. Reserves of indium are limited, and a 2007 study found that at current rates of consumption, known reserves of indium would last just thirteen years.7

Table 18.1. Global Demand on Raw Materials from Emerging Technologies

Source: Gerhard Angerer et al., “Raw Materials for Emerging Technologies,” (Karlsruhe: Fraunhofer Institute for Systems and Innovation Research ISI; Berlin: Institute for Futures Studies and Technology Assessment IZT, February 2, 2009).

Can greatly increased demand for these resources be accommodated? As shown in table 18.1, successful deployment to 2030 of a range of new energy technologies (and some non-energy advanced technologies) would substantially raise demand for a range of metals beyond the level of world production today. In the case of gallium, demand from emerging technologies would substantially raise demand for a range of metals beyond the level of world production today. In the case of gallium, demand from emerging technologies would be expected to reach six times today’s total global production by 2030; for indium, more than three times today’s production—compared to just fractional increases in the demand for ruthenium and selenium.

Although alternative metals and materials exist for certain technologies (albeit often with performance trade-offs), embarking on a particular technology deployment path without consideration of long-term availability of material inputs can substantially raise risks. These risks are not limited to physical availability and price; they include potential supply disruptions as a consequence of the uneven geographical distribution of production and reserves. Currently, China is the dominant world source (over 95 percent) of the rare-earth element neodymium, a key input in the production of permanent magnets used in hybrid-vehicle motors and windmill turbines. In 2009, the Chinese government announced restrictions on the export of rare earths, ostensibly to encourage investment within China of industries using the metals. Whether for the rare earths themselves or for final products made from them, import dependency in the face of such a high concentration of production would do little to alleviate energy security concerns now seen in terms of import dependency on the Middle East for oil.

Alternative energy production is reliant not only on a range of resource inputs, but also on fossil fuels for the mining of raw materials, transport, manufacturing, construction, maintenance, and decommissioning. Currently, no alternative energy exists without fossil-fuel inputs, and no alternative energy process can reproduce itself—that is, manufacture the equipment needed for its own production—without the use of fossil fuels. In this regard, alternative energy serves as a supplement to the fossil-fuel base, and its input requirements may constrain its development in cases of either material or energy scarcity.
5. Intermittency

Modern societies expect that electrons will flow when a switch is flipped, that gas will flow when a knob is turned, and that liquids will flow when the pump handle is squeezed. This system of continuous supply is possible because of our exploitation of large stores of fossil fuels, which are the result of millions of years of intermittent sunlight concentrated into a continuously extractable source of energy. Alternative energies such as solar and wind power, in contrast, produce only intermittently as the wind blows or the sun shines, and even biomass-based fuels depend on seasonal harvests of crops. Integration of these energy forms into our current system creates challenges of balancing availability and demand, and it remains doubtful that these intermittent energy forms can provide a majority of our future energy needs in the same way that we expect energy to be available today.

One indication of intermittency challenges in electric power generation is the capacity factor, or the average percentage of time in a year that a power plant is producing at full rated capacity. As shown in table 18.2, photovoltaic systems produce at full capacity only 12 to 19 percent of the time over the course of a year, compared to an average of 30 percent for wind systems. In contrast, a coal-thermal plant will typically run at full capacity 70 to 90 percent of the time, while nuclear power operates at over a 90 percent capacity factor in the United States.

Table 18.2. Common Capacity Factors for Power Generation

Sources: Renewable Energy Research Laboratory, University of Massachusetts at Amherst, Wind Power: Capacity Factor, Intermittency; National Renewable Energy Laboratory, Assessment of Parabolic Trough and Power Tower Solar Technology Cost and Performance Forecasts, NREL/SR-550-34440 (Golden, CO: NREL, 2003).

Our current electricity system is dominated by large baseload coal- and nuclear-power generation. The integration of intermittent energy forms such as solar and wind is increasingly seen as a matter of expanding transmission capacity and grid interconnections to extend the area over which these variations are felt, as well as implementing more complex operations controls. This approach in effect relies on strengthening and expanding the large centralized energy production and distribution model that has characterized the fossil-fuel era, but may not necessarily be suitable for a future of renewable energy generation.

The key to evening out the impact of intermittency is storage; that is, the development of technologies and approaches that can store energy generated during periods of good wind and sun for use at other times. Many approaches have been proposed and tested, including compressed-air storage, batteries, and the use of molten salts in solar-thermal plants. The major drawbacks of all these approaches include the losses involved in energy storage and release, and the limited energy density that these storage technologies can achieve.
6. Energy Density

Energy density refers to the amount of energy that is contained in a unit of an energy form. It can be expressed in the amount of energy per unit of mass (weight) or in the amount of energy per unit of volume. In everyday life, it is common to consider energy density when considering food choices. Food labeling in the United States requires that both numbers needed for calculating energy density be provided: the number of food calories per serving and the weight or volume of the serving (expressed in grams or liters, respectively). Potatoes, for example, have an energy density of 200 food calories per 100 grams, or, expressed in units common in energy discussions, 8.4 megajoules8 (MJ) per kilogram (about 2.2 pounds). Cheese is more energy dense than potatoes, containing about 13 MJ per kilogram.

Energy density has also influenced our choice of fuels. Aside from alleviating a growing wood shortage, the conversion to the use of coal in the seventeenth and eighteenth centuries was welcomed because coal provided twice as much energy as wood for the same weight of material. Similarly, the shift from coal- to petroleum-powered ships in the early twentieth century was driven by the fact that petroleum possesses nearly twice the energy density of coal, allowing ships to go farther without having to stop for refueling. Even when used in a motor vehicle’s inefficient internal combustion engine, a kilogram of highly energy-dense gasoline—about 6 cups—allows us to move 3,000 pounds of metal about 11 miles.

The consequence of low energy density is that larger amounts of material or resources are needed to provide the same amount of energy as a denser material or fuel. Many alternative energies and storage technologies are characterized by low energy densities, and their deployment will result in higher levels of resource consumption. As shown in figure 18.1, the main alternatives under development to supplant gasoline use in cars are dramatically lower in energy density than gasoline itself. Lithium-ion batteries—the focus of current research for electric vehicles—contain only 0.5 MJ per kilogram of battery compared to 46 MJ per kilogram for gasoline.

Advances in battery technology are being announced regularly, but they all come up against the theoretical limit of battery density of only 3 MJ per kilogram. Low energy density will present a significant challenge to the electrification of the car fleet and will raise challenges of adequate material supply: Today, the advanced Tesla Roadster has a lithium-ion battery pack weighing 900 pounds, which delivers just 190 MJ of energy. In contrast, a 10-gallon tank of gasoline weighs 62 pounds and delivers 1,200 MJ of energy. To provide the equivalent energy to a typical gasoline car, an electric-car battery pack would need to consume resources weighing 5,700 pounds, nearly the weight of the last Hummer model.

Figure 18.1. Comparison of energy densities.

Source: Kurt Zenz House and Alex Johnson, “The Limits of Energy Storage Technology,” Bulletin of the Atomic Scientists Web edition, January 20, 2009, http://www.thebulletin.org/web-edition/columnists/kurt-zenz-house/the-limits-of-energy-storage-technology.

The more dense an energy form is, the less land is needed for its deployment. Because many alternative energies are far less energy dense than fossil fuels, large-scale deployment will incur considerable land costs. For example, a single 1,000-megawatt coal-fired power plant requires 1 to 4 square kilometers (km2) of land, not counting the land required to mine and transport the coal. In contrast, 20–50 km2, or the size of a small city, would be required to generate the equivalent amount of energy from a photovoltaic array or from a solar-thermal system. For wind, 50–150 km2 would be needed; for biomass, 4,000–6,000 km2 of land would be needed. The sprawling city of Los Angeles, in comparison, covers 1,200 km2. The land-use issue is thus a problem not only of biofuels production; siting of alternative energy projects will likely be a constant challenge because of the inherent high land footprint.
7. Water

Water ranks with energy as a potential source of conflict among peoples and nations, but a number of alternative energy sources, primarily biomass-based energy, are large water consumers critically dependent on a dependable water supply. As seen in figure 18.2, the “full-cycle” water requirement (including water for growing and processing biofuels) for key ethanol and biodiesel feedstocks is in some cases hundreds or even many thousand times higher than for the refining of gasoline. In well-watered regions with regular and adequate rainfall, much of this water can be provided through rain; in a region such as California, where no rain falls during the summer growing season because of its Mediterranean climate, irrigation is an absolute necessity for growing commercial biomass feedstocks. However, all of California’s water resources have already been allocated, so existing uses for other crops would have to be reallocated to support biomass farming—raising the issue of “food versus fuel” from yet a different angle. The water problems, however, promise only to intensify with global warming as California’s winter snowpack fades and runoff to support summer agriculture declines.

Figure 18.2. Full-cycle water requirements for biofuel production.

Source: Winnie Gerbens-Leenes et al., “The Water Footprint of Bioenergy,” Proceedings of the National Academy of Sciences 106, no. 25 (June 23, 2009), 10219–10223.

Considering just the processing stage, biomass and unconventional fossil-fuel energy also often require much greater water usage than the 2.5 gallons of water required per gallon of gasoline produced. Coal-to-liquids production consumes 8 to 11 gallons of water per gallon of output, corn ethanol requires 4 to 6 gallons, and cellulosic ethanol needs 11 gallons. In the United States, Montana has looked into becoming a leader in coal-to-liquids production, yet Montana’s dry climate suggests that water could be a limiting factor.
8. The Law of Receding Horizons9

An often-cited metric of the viability of alternatives is the expected break-even cost of the alternative with oil, or the price that crude oil would have to be to make the alternative cost competitive. Underlying this calculation, however, is an assumption that the input costs to alternative energy production would remain static as oil prices rise, thereby providing the economic incentive to development. This assumption, however, has not always proved to be the case, particularly for those alternatives for which energy itself is a major input. Because of price linkages in the energy (and now energy and biomass) markets, rising oil prices tend to push up the price of natural gas as well as coal; for processes that are heavily dependent on these fuels, higher oil prices also bring higher production costs.

A good example of this phenomenon is the assessment of the economics of production from oil shale (kerogen-rich marlstone), found in vast quantities in Colorado, Utah, and Wyoming. In the early 1970s, shale oil was expected to flood the market if the price of crude oil were to rise above $2 per barrel. When world oil prices had shot up to $35 per barrel by 1979, oil-shale production still required federal government assistance, and when oil prices fell in the mid-1980s, development and production were abandoned. Fast-forward to 2008 when oil prices moved above $100 per barrel—oil shale was then expected to be economic at $80 to $90 per barrel, and the U.S. government again provided incentives to explore production in the area. This ratcheting up of oil-shale economics with the price of oil reflects in part the high energy-input requirement to the production process.

Similarly, the corn ethanol industry has recently been subject to the same dynamic step-up in costs as the price of oil has risen. Two major input costs to the industry are the processing fuel (usually natural gas) and the corn feedstock itself. Rising oil prices after 2004 pulled natural-gas prices up as well, increasing the processing energy costs for ethanol. At the same time, higher fuel prices made cultivating corn more expensive; this, together with the additional demand for corn created by the growing ethanol industry, helped push corn prices up even further. So, although the record-high oil prices of 2008 increased demand for ethanol, some ethanol producers were operating with minimal or no profit because they had to pay more for both their processing fuel and their corn feedstock.

Ultimately, the “law of receding horizons” is a phenomenon reflective of the general orientation toward financial and economic accounting to gauge project viability and prospects. Physical accounting—that is, analyzing the material and energy inputs to a process—would help in better understanding the degree to which an alternative energy production process is vulnerable to the rise in energy costs.
9. Energy Return on Investment10

The complexity of our economy and society is a function of the amount of net energy we have available. “Net energy” is, simply, the amount of energy remaining after we consume energy to produce energy. Consuming energy to produce energy is unavoidable, but only that which is not consumed to produce energy is available to sustain our industrial, transport, residential, commercial, agricultural, and military activities. The ratio of the amount of energy we put into energy production and the amount of energy we produce is called “energy return on investment” (EROI).

This concept differs from “conversion efficiency,” which compares the amount of energy provided as a feedstock to a conversion process (such as an electric power plant or petroleum refinery) with the amount remaining after conversion. Physics dictates that this figure is always less than 100 percent. In contrast, EROI can be very high (e.g., 100:1, or 100 units of energy produced for every 1 unit used to produce it—an “energy source”) or low (0.8:1, or only 0.8 unit of energy produced for every 1 unit used in production—an “energy sink”). Society requires energy sources, not energy sinks, and the magnitude of EROI for an energy source is a key indicator of its contribution to maintenance of social and economic complexity.

Net-energy availability has varied tremendously over time and in different societies. In the last advanced societies that relied only on solar power (sun, water power, biomass, and the animals that depended on biomass), in the seventeenth and early eighteenth centuries, the amount of net energy available was low and dependent largely on the food surpluses provided by farmers. At that time, only 10 to 15 percent of the population was not involved in energy production. As extraction of coal, oil, and natural gas increased in the nineteenth and twentieth centuries, society was increasingly able to substitute the energy from fossil fuels for manual or animal labor, thereby freeing an even larger proportion of society from direct involvement in energy production. In 1870, 70 percent of the U.S. population were farmers; today the figure is less than 2 percent, and every aspect of agricultural production now relies heavily on petroleum or natural gas. The same is true in other energy sectors: Currently, less than 0.5 percent of the U.S. labor force (about 710,000 people) is directly involved in coal mining, oil and gas extraction, petroleum refining, pipeline transport, and power generation, transmission, and distribution.

The challenge of a transition to alternative energy, then, is whether such energy surpluses can be sustained, and thus whether the type of social and economic specialization we enjoy today can be maintained. Indeed, one study estimates that the minimum EROI for the maintenance of industrial society is 5:1, suggesting that no more than 20 percent of social and economic resources can be dedicated to the production of energy without undermining the structure of industrial society.11

In general, most alternative energy sources have low EROI values (see figure 18.3). Because of their high energy-input requirements, biofuels produce very little or no energy surplus.12 Similarly, tar sands provide less than 3 units of energy for each unit consumed. In contrast, wind energy shows a high return on energy investment, but it is subject to the problems of intermittency and siting issues.

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Figure 18.3. Estimated EROI of selected alternatives.

Note: EROI measurements are not standardized; the shading indicates ranges from various studies. Abbreviations: PV = photovoltaic; CTL = coal-to-liquids; Vestas = Vestas Wind Systems.

Sources: P. J. Meier and G. L. Kulcinski, Life-Cycle Energy Requirements and Greenhouse Gas Emissions for Building-Integrated Photovoltaics, Fusion Technology Institute (2002); National Renewable Energy Laboratory, What Is the Energy Payback for PV? DOE/GO-102004-1847 (2004); Vasilis Fthenakis and Erik Alsema, “Photovoltaics Energy Payback Times, Greenhouse Gas Emissions and External Costs,” Progress in Photovoltaics 14, no. 3 (May 2006), 275–280; Luc Gagnon, “Civilisation and Energy Payback,” Energy Policy 36, no. 9 (September 2008), 3317–3322; Cutler Cleveland, “Net Energy from the Extraction of Oil and Gas in the United States, 1954–1997,” Energy 30 (2005), 769–782; Charles A. S. Hall et al., “Peak Oil, EROI, Investments and the Economy in an Uncertain Future,” in Biofuels, Solar and Wind as Renewable Energy Systems, David Pimentel, ed. (Springer Science, 2008); Vestas Wind Systems, Life Cycle Assessment of Offshore and Onshore Sited Wind Power Plants Based on Vestas V90-3.0 MW Turbines (Denmark, 2005); Alexander E. Farrell et al., “Ethanol Can Contribute to Energy and Environmental Goals,” Science 311 (January 27, 2006).

A high EROI is not sufficient to ensure that the structure of modern society and economies can be maintained, but it is a prerequisite. Unfortunately, EROI is not well understood or routinely used in energy analyses by government or industry, despite the insights it can provide. Because of the enormous investment in resources and energy that any alternative energy pathway will require, it is important that we look beyond simple financial payback, particularly in a future of rising energy prices, declining fossil-fuel resources, and increasing danger of climate catastrophe.
How Will Society Evolve in a Post-Carbon World?

Alternative energy forms are crucial for a global transition away from fossil fuels, despite the myriad challenges of their development, scaling, and integration. In face of the peaking of global oil production—to be followed by peaks in natural gas and coal extraction—and of the need to reverse trajectory in carbon emissions, alternative energy sources will need to form the backbone of a future energy system.

That system, however, will not be a facsimile of the system we have today based on continuous uninterrupted supply growing to meet whatever demand is placed on it. As we move away from the energy bounty provided by fossil fuels, we will become increasingly reliant on tapping the current flow of energy from the sun (wind, solar) and on new energy manufacturing processes that will require ever larger consumption of resources (biofuels, other manufactured liquids, batteries). What kind of society we can build on this foundation is unclear, but it will most likely require us to pay more attention to controls on energy demand to accommodate the limitations of our future energy supply. Moreover, the modern focus on centralized production and distribution may be hard to maintain, since local conditions will become increasingly important in determining the feasibility of alternative energy production.

Notes:

1Canadian Association of Petroleum Producers, Crude Oil: Forecast, Markets & Pipeline Expansions, June 2009, http://www.capp.ca/.

2International Energy Association, World Energy Outlook 2008, http://www.worldenergyoutlook.org/.

3Bengt Söderberg et al., “A Crash Program Scenario for the Canadian Oil Sands Industry,” Energy Policy 35, no. 3 (March 2007), 1931–1947.

4U.S. Energy Information Administration, Annual Energy Outlook 2008 (First Release), DOE/EIA-0383 (2008), January 2008. Note that subsequent revisions of Annual Energy Outlook 2008 changed the cited figures for gasoline demand.

5Robert L. Hirsch, Roger Bezdek, and Robert Wendling, Peaking of World Oil Production: Impacts, Mitigation, & Risk Management, U.S. Department of Energy report, February 2005,http://www.netl.doe.gov/publications/others/pdf/oil_peaking_netl.pdf.

6John Whims, “Pipeline Considerations for Ethanol,” Agricultural Marketing Resource Center, http://www.agmrc.org/media/cms/ksupipelineethl_8BA5CDF1FD179.pdf.

7David Cohen, “Earth’s Natural Wealth: An Audit,” New Scientist 23 (May 2007), 34–41.

8A megajoule equals 239 food calories; a typical adult male requires 10 MJ of food energy per day.

9As coined by user HeIsSoFly, comment on “Drumbeat,” The Oil Drum, March 7, 2007, http://www.theoildrum.com/node/2344.

10For a more in-depth discussion of energy return on investment, see Richard Heinberg, Searching for a Miracle: “Net Energy” Limits & the Fate of Industrial Society (San Francisco: Post Carbon Institute/International Forum on Globalization, 2009). Note that EROI is sometimes also referred to as “energy returned on energy invested” (EROEI).

11Charles A. S. Hall, Robert Powers, and William Schoenberg, “Peak Oil, EROI, Investments and the Economy in an Uncertain Future,” in Biofuels, Solar and Wind as Renewable Energy Systems: Benefits and Risks, David Pimentel, ed. (New York: Springer, 2008), 109–132.

12The often-cited 8:1 return on Brazilian ethanol and the high return estimated for cellulosic ethanol are not energy calculations; in these studies, the energy provided from biomass combustion is ignored. See, for example, Suani Teixeira Coelho et al., “Brazilian Sugarcane Ethanol: Lessons Learned,” Energy for Sustainable Development 10, no. 2 (June 2006), 26–39.

David Fridley has been a staff scientist at the Energy Analysis Program at the Lawrence Berkeley National Laboratory in California since 1995. He has nearly thirty years of experience working and living in China in the energy sector and is a fluent Mandarin speaker. He spent twelve years working in the petroleum industry both as a consultant on downstream oil markets and as business development manager for Caltex China. He has written and spoken extensively on the energy and ecological limits of biofuels. Fridley is a Fellow of Post Carbon Institute.

This publication is an excerpted chapter from The Post Carbon Reader: Managing the 21st Century’s Sustainability Crises, Richard Heinberg and Daniel Lerch, eds. (Healdsburg, CA: Watershed Media, 2010). For other book excerpts, permission to reprint, and purchasing visit http://www.postcarbonreader.com.

Original full article is avilable here:
http://www.theoildrum.com/node/6854

Peak Everything: Preface to the paperback edition

by Richard Heinberg

Note: Peak Everything: Waking Up to the Century of Declines will be released in paperback this month (September) by New Society Publishers.

In titling this book “Peak Everything,” I was suggesting that humanity has achieved an unsustainable pinnacle of population size and consumption rates, and that the road ahead will be mostly downhill—at least for the next few decades, until our species has learned to live within Earth’s resource limits. I argued that the industrial expansion of the past century or two was mainly due to our accelerating use of the concentrated energies of cheap fossil fuels; and that as oil, coal, and natural gas cease to be cheap and abundant, economic growth will phase into contraction. I further pointed out that world oil production was at, or very nearly at its peak, and that the imminent decline in extraction rates will be decisive, because global transport is nearly all oil-dependent, and there is currently no adequate substitute for petroleum. Finally, I noted that the shift from growth to contraction will impact every aspect of human existence—financial systems, food systems, global trade—at both the macro and micro levels, threatening even our personal psychological coping mechanisms.

Nothing has happened in the past three years to change that outlook—but much has transpired to confirm it.

A good case can now be made that the year 2007, when this book originally appeared, was indeed the year, if not of “peak everything,” then at least of “peak many things.” Since then we have begun a scary descent from the giddy heights of consumption achieved in the early years of this century.

* Worldwide economic activity began to decline in 2008 and does not appear set to return to 2007 levels any time soon.
* Global energy consumption likewise achieved its zenith in the years 2005 through 2007; since then, consumption growth has been confined to the Asian economies and a few oil and gas exporting nations.
* Personal income in the U.S. (excluding government benefits) is still far below total and per capita levels registered in 2007.
* Worldwide shipping, a good index of global trade and manufacturing, peaked in 2007.

Of course it is simplistic to argue that everything has peaked (though Peak Everything makes for a better book title than “Some Things Peaking Now, Most Others Soon”). Perhaps the most glaring exception is human population, which continues to grow and is virtually certain to pass the seven billion mark within the next couple of years.

Here’s another non-peak: China’s economy is still growing rapidly, at the astonishing rate of 8 to 10 percent per year. That means it is more than doubling in size every ten years. Indeed, China consumes more than twice as much coal as it did a decade ago—the same with iron ore and oil. That nation now has four times as many highways as it did, and almost five times as many cars. How long this can go on is anyone’s guess. But surely not many more doublings in consumption rates can occur before China has used up its key resources.

For what it’s worth, my forecast is for China’s continuing boom to be very short-lived. As I argued in my recent book Blackout, there are hard limits to China’s coal supplies (the world as a whole will experience peak coal consumption within the next two decades, but China will get there sooner than most other countries because of its extraordinary consumption rate—currently three times that of the U.S.). Since China has no viable short-term alternatives to coal to fuel its industrial machine, by 2020 or so (and possibly much sooner) that country will have joined the rest of the world in a process of economic contraction that will continue until levels of consumption can be maintained by renewable resources harvested at sustainable rates.

World population growth may likewise continue for a shorter period than is commonly believed, if global food production and economic activity peak soon in response to declining energy availability.

In short, the world has changed in a fundamental way in the past three years, and the reverberations will continue for decades to come. Indeed, we have just seen the beginning of an overwhelming transformation of life as we’ve known it.

Let’s look at a few specific factors driving this transformation, starting with limits to world supplies of petroleum.

Oil Spike Triggers Economic Crisis

It is still unclear whether world oil extraction rates have reached their absolute maximum level. As of this writing, the record year for world crude oil production was 2005, and the record month was July 2008. The 2005 to 2008 leveling-off of extraction rates occurred in the context of steadily rising oil prices; indeed, in July 2008 oil prices spiked 50 percent higher than the previous inflation-adjusted record, set in the 1970s. As a result of that price spike, the global airline industry went into a tailspin and the auto industry crashed and burned.

The only serious argument that world oil production could theoretically continue to grow for more than a very few years is put forward by parties who explain away the evidence of declining discoveries, depleting oilfields, and stagnating total production by claiming that it is demand for oil that has peaked, not supply—a distinction that hinges on the fact that oil prices these days are so high as to discourage demand. But since high prices for a commodity are usually a sign of scarcity, the “peak demand” argument really amounts to a distinction without a difference.

The oil situation is dire enough that one might assume it would be dominating headlines daily. Yet in fact it garners little attention. That’s because the world’s ongoing and worsening oil crisis has been obscured by a more dramatic and obvious financial catastrophe. As we all know only too well, Wall Street banks—which had spent the past couple of decades giddily building themselves a quadrillion-dollar house of cards—went into a free-fall swoon in the latter half of 2008 (right after the oil price spike), only to be temporarily rescued with trillions of dollars of government bailouts and guarantees. It was a spine-tingling show—and would have amounted to months of fine entertainment, had it not been for the fact that millions of jobs, thousands of small businesses, and the economies of several sovereign nations also came tumbling down, and there just weren’t enough trillions available to rescue all of them (it obviously pays to be “too big to fail” and to have friends in high places).

The financial aspects of the crisis were so Byzantine, and the cast of players so opulently and impudently villainous, that it was easy to forget the simple truism that all money is, in the end, merely a claim on resources, energy, and labor. A financial system built on staggering amounts of debt and the anticipation of both unending economic growth and absurdly high returns on investments can only work if labor is always getting cheaper, and supplies of energy and resources are always growing—and even then occasional hiccups are to be expected.

But that set of conditions is so last century.

While the oil price run-up was hardly the sole cause of the ongoing world economic crisis, it has effectively imposed a limit to any possibility of “recovery”: as soon as economic activity advances, oil prices will again spike, causing yet another financial crunch.

Thus Peak Oil likely represents the first of the limits to growth that will turn a century of economic expansion into decades of contraction. But more constraints are lining up in the stage wings, ready to make their entrance.

Evidence of Peak Non-Renewable Resources

In the original edition of this book, increasing scarcity of non-energy minerals was barely mentioned. In the three years since, the subject has received increasing attention from researchers and journalists. One report, “Increasing Global Nonrenewable Natural Resource Scarcity,” by Chris Clugston (a former corporate executive), deserves a couple of quotes here. Clugston analyzed 57 non-renewable natural resources (NNRs) in terms of production levels and price. He begins his report by pointing out that

During the 20th century, global production levels associated with 56 of the 57 analyzed NNRs (98%) increased annually, while global price levels associated with 45 of the 57 analyzed NNRs (79%) decreased annually. Generally increasing global NNR production levels in conjunction with generally decreasing global NNR price levels indicate relative global NNR abundance during the 20th century. On the whole, global NNR supplies kept pace with ever-increasing global demand during the 20th century.

So far, so good. But that’s changing.

Generally slowing or declining global NNR production growth in conjunction with generally increasing global NNR prices indicate increasing NNR scarcity during the early years of the 21st century. . . . Annual global production levels increased during the 20th century, then decreased during the 21st century; while annual price levels decreased during the 20th century, then increased during the 21st century. . . .

Clugston’s conclusion: “We are not about to ‘run out’ of any NNR; we are about to run ‘critically short’ of many.”

The same message appeared in a prominent article in New Scientist magazine on May 23, 2007, “Earth’s Natural Wealth: An Audit.” Here’s a useful tidbit from that article:

Take the metal gallium, which along with indium is used to make indium gallium arsenide. This is the semiconducting material at the heart of a new generation of solar cells that promise to be up to twice as efficient as conventional designs. Reserves of both metals are disputed, but in a recent report René Kleijn, a chemist at Leiden University in the Netherlands, concludes that current reserves “would not allow a substantial contribution of these cells” to the future supply of solar electricity. He estimates gallium and indium will probably contribute to less than 1 per cent of all future solar cells—a limitation imposed purely by a lack of raw material.

The specifics with regard to supplies of a host of nonrenewable resources can be examined easily with a few mouse clicks using the U.S. Minerals Databrowser, which features data from the U.S. Geological Survey.

The Resource Pyramid

When presented with evidence of depleting stores of fossil fuels and minerals, some still object: New technology will enable us to continue increasing the amount of energy available to us. And if we have enough energy, we can solve our other supply problems: We can desalinate ocean water, grow crops in multi-storey greenhouses, and breed limitless supplies of fish in captivity. We can capture mineral resources from very low-grade ores. We can even mine gold and uranium from ocean water. We can harvest minerals on other planets and ferry them back to Earth. With enough energy, anything is possible!

As an example of what can be done with technology, just consider what has happened in the natural gas industry in the past couple of years: horizontal drilling and “fracking” (fracturing dense gas-bearing rocks with water and chemicals) have expanded U.S. gas reserves and production rates, at a time when energy pessimists had been forecasting a supply collapse. This “unconventional” gas is more than making up for declines in conventional natural gas.

In fact, however, the natural gas situation offers an instructive example of what depletion looks like. Depletion of oil, gas, coal, and other nonrenewable resources is often wrongly portrayed as “running out,” as though it indicated the complete exhaustion of the substance. What we are really talking about are the inevitable consequences of the tendency of resource extractors to take the low-hanging fruit first, and to leave difficult, expensive, low-quality, and environmentally ruinous resources to be extracted later. Unconventional gas is more expensive to produce than conventional gas, and extracting it has worse environmental impacts (due to the need to inject a toxic brew of chemicals underground to break up the rock). The result: “fracking” technology may have enabled the industry to gain access to new sources of gas, but natural gas prices will have to rise significantly to make the business of producing this new gas profitable over the long run—and no one knows how long that “long run” is likely to be, given the rapid depletion rates of most unconventional gas wells.

Geologists and others who routinely deal with mineral ores and fossil fuels commonly speak of a “resource pyramid”: the capstone represents the easily and cheaply extracted portion of the resource; the next layer is the portion of the resource base that can be extracted with more difficulty and expense, and with worse environmental impacts; while the remaining bulk of the pyramid represents resources unlikely to be extracted under any realistic pricing scenario. The optimist may assume that the entire pyramid will eventually be usable, but this is simply not realistic. We have built a society on the basis of cheap energy and materials. At some point, as we move down the layers of the resource pyramid, rising commodity prices and increasing environmental cleanup costs (think Deepwater Horizon) will undercut both demand for resources and economic activity in general. As that happens, we see not just higher prices, but more volatile prices.

This is exactly what happened with the oil price spike of 2008. Many commentators who understand the essence of the Peak Oil dilemma have tended to assume that, as petroleum and other resources become scarcer, commodity prices will simply escalate in a linear fashion. What we saw instead was a rapid rise in prices (driven by rising demand and falling supply, and then exacerbated by speculation) precipitating an economic crash, followed by collapsing oil prices and curtailed investment in oil exploration—which, in due course, will provoke another rapid price rise. The cycle begins again. Each time the cycle churns, it will likely have an even more devastating economic impact.

The same will happen with natural gas as conventional gas grows scarce and the industry is forced to rely on quickly depleting and expensive-to-produce shale gas; and the same will happen with copper, uranium, indium, and rare-earth elements. Meanwhile, we will puzzle over the fact that the economy just doesn’t seem to work the way it once did. Instead of having plenty of energy with which to mine gold from seawater, we will find we don’t have enough cheap fuel to keep the airline industry aloft. Alternative non-fossil energy sources will come on line, but not quickly enough to keep up with the depletion of oil, coal, and gas. Prices of energy and raw materials will gyrate giddily, but the actual amounts consumed will be dropping. In general, labor costs will be falling and raw materials prices rising—the exact reverse of what occurred during the 20th century; but the adjustments will be anything but gradual.

It will take most folks a while to realize the simple fact that conventional economic growth is over. Done. Dead. Extinct.

The End of Growth—and What Comes After

The economic crash of 2008 is commonly perceived as another in a long series of recessions, from which a recovery will inevitably ensue. Recessions always end with recovery; of course this one will as well—or so we are told.

Yet now the situation is different. With oil production peaking, climate changing, and fresh water, soil, fish, and minerals depleting at alarming rates, the computer-based scenarios of the 1972 Limits to Growth study seem thoroughly and frighteningly confirmed. Decades of expansion fueled by consumption and debt are ending; the time has come to pay bills, tighten belts, and prepare for a future of economic downsizing.

Now and again we may see a year that boasts higher economic activity than the previous one. But we will probably never see aggregate activity higher than that in 2007. The Asian economies of China and India will be brief hold-outs from this general trend; but, as coal supplies in that part of the world tighten, even the “Asian tigers” will soon be forced to confront limits to growth.

Contemplating the end of growth—not as a theoretical possibility, but as a fait accompli, forced upon us by circumstances largely of our own making—is of course a bit depressing. The 20th century was one long expansionary surge interrupted by a couple of nasty World Wars and a Depression. At the beginning of that century world population stood at a little over 1.5 billion; by century’s end, it was 6 billion. In the industrialized West, per capita GDP grew from an average of $5000 to nearly $30,000 (in inflation-adjusted terms). We all came to believe that “progress” would go on like this more or less forever. We would build colonies on the Moon, other planets, maybe even in other solar systems; we would conquer disease and hunger—it was only a matter of time.

But while we were planning for utopia, we were in fact setting the stage for collapse. We were depleting our planet’s usable resources and altering the composition of Earth’s atmosphere. And we were building a global financial regime built on the expectation of perpetually expanding consumption and debt, a regime that could not function in a condition of stasis or contraction without generating billowing crises of default, insolvency, and foreclosure.

So, instead of being characterized by a continuation of the upward trajectory we have all grown accustomed to, the 21st century is destined to be one long downward glide punctuated by moments of financial, political, and geopolitical panic. And in retrospect, we’ll all probably eventually agree that our descent began in 2008.

We really have reached Peak Everything . . . but we’ve barely had a chance to enjoy the view; how brief was our moment at the apex! From here on, it’s going to be a bumpy downward roller-coaster ride.

What’s the Point?

Why bother to mention any of this? Is it just to wallow in cynicism? Clearly, the only useful purpose would be to somehow improve our collective prospects. Further economic growth may not be an option for global society, but that doesn’t necessarily signify the end of the world. Indeed, the range of possible futures arrayed ahead of us is still wide, encompassing everything from (at one end of the scale) graceful industrial decline leading to a mature, sustainable world community of re-localized cultures, to (at the other end) human extinction, or something very close to it.

It’s not hard to see what could lead to the latter outcome. If we are all still planning for expansion and it doesn’t ensue, many people will likely become furious and look for someone to blame. Politicians, seeking to avoid that blame and channel citizens’ anger for purposes of their own aggrandizement, will offer scapegoats. Some of those will be domestic, some foreign. Scapegoating of nations, religions, and ethnicities will lead to global violence. Meanwhile very little attention will go toward addressing the underlying problems of resource depletion and environmental degradation (the death of the oceans, collapsing agricultural production due to climate change and desertification, etc.)—problems that warfare will only exacerbate. Add nuclear weapons, stir vigorously, and voila: a recipe for utter and complete destruction.

It doesn’t have to end that way.

If we understand the nature of the limits we are confronting, it is still possible to back our way out of the population-resources cul de sac humanity has entered. In other words, if we plan for contraction, we are likely to do a much better job of transitioning to a sustainable level of population and consumption than if we are still planning for growth and are continually finding our plans frustrated.

The first thing we must do to plan successfully for contraction is to set achievable goals, using sensible indicators. We must cease aiming for increases in scale, amplitude, and speed with regard to nearly every material parameter of the economy. We must aim instead to increase society’s resilience—its ability to absorb shocks while continuing to function. That means re-localizing much economic activity. We must aim also to shore up basic support services, education, and cultural benefits, while de-emphasizing economic activity that entails non-essential consumption of resources.

Attainment of these goals will be greatly facilitated by the adoption of appropriate indicators. Currently, nearly all nations use Gross Domestic Product (GDP) as their primary economic indicator. GDP represents the total market value of all final goods and services produced in a country in a given year, and a rising GDP is generally taken as a sign of progress. If GDP is set to decline relentlessly in a post-growth world, then we need a way to focus our collective attention on non-consumptive aspects of economic and civic life so as to motivate useful action in directions where progress is still possible.

Fortunately, alternative economic indicators are beginning to garner attention in cities and nations around the world. I discuss the Genuine Progress Indicator (GPI) on page 17 of the Introduction of this book, but it’s also important to mention Gross National Happiness (GNH). That term was coined in 1972 by Bhutan’s former King Jigme Singye Wangchuck to signal his commitment to building an economy that would preserve Bhutan’s Buddhist culture as the nation opened trade with the West. Canadian health epidemiologist Michael Pennock helped design GNH, and has advocated the adoption of a “de-Bhutanized” version of it in his home city of Victoria, British Columbia. Recently, Seattle has also expressed interest in adopting GNH.

Med Jones, President of International Institute of Management, has elaborated on GNH, measuring socioeconomic development across seven areas, including the nation’s mental and emotional health:

1. Economic Wellness: Indicated via direct survey and statistical measurement of consumer debt, average income to consumer price index ratio, and income distribution;
2. Environmental Wellness: Indicated via direct survey and statistical measurement of environmental metrics such as pollution, noise, and traffic;
3. Physical Wellness: Indicated via statistical measurement of physical health metrics such as severe illnesses;
4. Mental Wellness: Indicated via direct survey and statistical measurement of mental health metrics such as usage of antidepressants and rise or decline in number of psychotherapy patients;
5. Workplace Wellness: Indicated via direct survey and statistical measurement of labor metrics such as jobless claims, job change, workplace complaints, and lawsuits;
6. Social Wellness: Indicated via direct survey and statistical measurement of social metrics such as discrimination, safety, divorce rates, complaints of domestic conflicts and family lawsuits, public lawsuits, and crime rates; and
7. Political Wellness: Indicated via direct survey and statistical measurement of political metrics such as the quality of local democracy, individual freedom, and foreign conflicts.

Contraction in population levels and consumption rates doesn’t sound like much fun, but a few decades of improvement in Gross National Happiness—potentially achievable at least in five or six of the above metrics—should be an attractive notion to most people.

The related idea that life can be better without fossil fuels is a core tenet of the Transition Town movement, which started in England in 2005 (I quote its founder, Rob Hopkins, on pages 135-136). Transition Initiatives are grassroots efforts to wean communities off dependence on oil and other carbon fuels by promoting local resilience (through development of things like local food systems and ride-share programs). Transitioners realize that it is probably futile to wait for elected officials to take the lead in planning for the great energy shift, given that very few politicians understand our predicament—and given also that, even if they did, the measures they would likely propose would be deeply unpopular unless the populace were educated about constraints on fossil-fueled growth. The genius of the movement lies in its engagement of the citizenry first. The Transition Initiatives appear to be taking off virally, with nearly 300 official sites around the world and over 70 in North America (as of mid-2010).

During the past two years, car sales in North America have declined while bicycle sales have soared; the number of young people taking up farming has increased for the first time in decades; and organic seed companies have had a tough time keeping up with mushrooming demand from home gardeners. These trends show that higher fuel prices and public awareness will indeed motivate behavior change. But we have a very long way to go before we, the people of the world, have broken our dependency on fossil fuels, scaled back our use of other resources, and sufficiently reduced our impact on natural systems. Meanwhile, public education and citizen-led efforts (like the Transition Initiatives) are essential now to build community resilience so as to absorb the economic and environmental shocks that at on their way, and to help us all adjust to life after growth.

The peak has happened. Get over it—and get to work.

Original article: http://energybulletin.net/node/53860

Blown in the WindThe U.S. should stop wasting billions to subsidize unreliable wind energy projects.
By Robert BrycePosted Monday,

Aug. 16, 2010, at 1:38 PM ET

They like everything big in Texas, and wind energy is no exception. Texas has more wind generation capacity than any other state, about 9,700 megawatts. (That’s nearly as much installed wind capacity as India.) Texas residential ratepayers are now paying about $4 more per month on their electric bills in order to fund some 2,300 miles of new transmission lines to carry wind-generated electricity from rural areas to the state’s urban centers.

It’s time for those customers to ask for a refund. The reason: When it gets hot in Texas—and it’s darn hot in the Lone Star State in the summer—the state’s ratepayers can’t count on that wind energy. On Aug. 4, at about 5 p.m., electricity demand in Texas hit a record: 63,594 megawatts. But according to the state’s grid operator, the Electric Reliability Council of Texas, the state’s wind turbines provided only about 500 megawatts of power when demand was peaking and the value of electricity was at its highest.

Put another way, only about 5 percent of the state’s installed wind capacity was available when Texans needed it most. Texans may brag about the size of their wind sector, but for all of that hot air, the wind business could only provide about 0.8 percent of the state’s electricity needs when demand was peaking.

Why does Texas get so little juice from the wind when it really needs it? Well, one of the reasons Texas gets so hot in the summer is that the wind isn’t blowing. Pressure gradients—differences in air pressure between two locations in the atmosphere—are largely responsible for the speed of the wind near the Earth’s surface. The greater the differences in pressure, the harder the wind blows. During times of extreme heat these pressure gradients often are minimal. The result: wind turbines that don’t turn.
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Lest you think the generation numbers from Aug. 4 are an aberration, ERCOT has long discounted wind energy’s capabilities. In 2007, ERCOT determined that just “8.7 percent of the installed wind capability can be counted on as dependable capacity during the peak demand period for the next year.” And in 2009, the grid operator reiterated that it could depend on only 8.7 percent of Texas’ wind capacity.

The incurable variability of wind is not restricted to Texas. Consider the problems with wind energy during the frigid weather that hit Britain last winter. In January, the Daily Telegraph reported that the cold weather was accompanied by “a lack of wind, which meant that only 0.2 [percent] of a possible 5 [percent] of the UK’s” electricity was generated by wind over the preceding few days.

Understanding wind’s unreliability is critically important now, at a time when America’s basic infrastructure is crumbling and in desperate need of new investment. In June, the Government Accountability Office issued a report that said that “communities will need hundreds of billions of dollars in coming years to construct and upgrade wastewater infrastructure.” Add in the need for new spending on roads, dams, bridges, pipelines, and mass transit systems, and it quickly becomes clear that politicians’ infatuation with wind energy is diverting money away from projects that are more deserving and far more important to the general public.

Imagine a company proposed to construct a bridge in Minneapolis, or some other major city, that would cost, say, $250 million.  The road would be designed to carry thousands of cars per day. But there’s a catch: During rush hour, the thoroughfare would effectively be closed, with only 5 percent, or maybe 10 percent, of its capacity available to motorists. Were this scenario to actually occur, the public outrage would be quick and ferocious.

That’s exactly the issue we are facing with wind energy. The reality is that towering wind turbines—for all their allure to certain political groups—are simply supernumeraries in our sprawling electricity delivery system. They do not, cannot, replace coal-fired, gas-fired, or (my personal favorite) nuclear power plants.

Despite these facts, wind-energy lobbyists have been wildly successful at convincing the public and—more importantly—politicians, that wind energy is the way of the future. More than 30 states now have rules that will require dramatic increases in renewable electricity production over the coming years. And wind must provide most of that production, since it’s the only renewable source that can rapidly scale up to meet the requirements of the mandate.

The problems posed by the intermittency of wind could quickly be cured if only we had an ultra-cheap method of storing large quantities of energy. If only. The problem of large-scale energy storage has bedeviled inventors for centuries. Even the best modern batteries are too bulky, too expensive, and too finicky. Other solutions for energy storage like compressed-air energy storage and pumped water storage are viable, but like batteries, those technologies are expensive. And even if the cost of energy storage falls dramatically—thereby making wind energy truly viable—who will pay for it?

An unbiased analysis of wind energy’s high costs and flaccid contribution to our electricity needs is essential in this time of economic constraint. Despite the dismal economic news, despite the fact that the wind-energy sector, through the $0.022 per-kilowatt-hour production tax credit, gets subsidies of about $6.40 per million Btu of energy produced—an amount that, according to the Energy Information Administration, is about 200 times the subsidy received by the oil and gas sector—wind-energy lobbyists are calling for yet more mandates. On July 27, the American Wind Energy Association issued a press release urging a federal mandate for renewable electricity and lamenting the fact that new wind-energy installations had fallen dramatically during the second quarter compared to 2008 and 2009. The lobby group’s CEO, Denise Bode, declared that the “U.S. wind industry is in distress.”

Good. Glad to hear it. It’s high time we quit blowing so much money on the wind.

Original article : http://www.slate.com/id/2264111/pagenum/1