On Oil's Sesquicentennial, The Dream Becomes a Nightmare 54 comments
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On August 27th, we'll celebrate the 150th anniversary of Colonel Edwin Drake's completion of the world's first successful oil well near Titusville, Pennsylvania. That discovery and the many that followed planted the seeds of an industrial, economic and cultural revolution that transformed America from an agrarian backwater into a global superpower. For the next 114 years, oil was cheap, plentiful and the solid bedrock of the American Dream. Since the early '70s, however, the dream has gradually become a nightmare as domestic and global oil production began an irreversible decline.
My first graph comes from the Energy Information Administration and shows the annual U.S. production of crude oil over the last 150 years.
My second graph comes from Wikipedia and shows both nominal and constant dollar oil prices over the last 150 years (click on the graph for an expanded view).
The most interesting feature of the two long-term graphs is the general shape of the constant dollar oil price curve. If you smooth out the price shocks of the '70s and '80s, the graph shows a pronounced albeit elongated U-shape. While there are many theories about where oil prices will stabilize when the global economy begins to recover, it seems safe to assume that the price won't be $20 or even $40 per barrel.
My third graph takes historical oil price data I downloaded from the Energy Information Administration, adds a price channel overlay on the ten-year trend and shows why I believe oil prices will stabilize around $80 per barrel later this year and continue to move upward in the price channel over time.
Barring unexpected major new discoveries, there's only one way for oil prices to go over the long term.
It doesn't take much reflection to see that oil production, consumption and pricing have become major problems that can only get worse as six billion people in emerging economies strive to attain the lifestyle that 600 million Americans and Europeans have enjoyed for decades. The harsh but undeniable reality is that oil cannot sustain global economic growth for the next 20 years, much less the next 150. This reality is the driving force behind a concerted global effort to identify and harness alternative energy resources that can offer relevant scale solutions to a looming global shortage. Unfortunately, many alternative technologies are even less sustainable than oil because they depend on a smaller natural resource base.
There are only four unlimited energy sources known to man. The first is the internal heat of the earth itself. The second is the movement of the hydrosphere. The third is the movement of the atmosphere. The fourth is the sun. Where the Ancient Greeks taught that earth, water, air and fire were the classical elements, the new science of alternative energy teaches that earth, water, wind and sun are the true classics. When it comes to harnessing that energy, however, the only thing that matters in the long run is the mineral wealth of the earth's crust and oceans.
Many alternative energy technologies including windmills, PV solar cells, fuel cells, advanced batteries, and advanced electric motors depend on exotic metals that were pretty scarce to begin with. Like oil, each of these exotic metals will have a U-shaped price curve and while they're relatively cheap and relatively available for the time being, each will eventually hit an inflection point where they'll no longer be cheap or available. According to experts like Jack Lifton, many critical natural resources will reach their price inflection points within a few years, rather than decades or centuries. So far, the only alternative energy technologies I've identified that do not face daunting mineral scarcity risks are concentrated solar power, or CSP, and geothermal power.
Historically, investors have not had to worry about how natural resource constraints might impair their portfolio companies because the required raw materials have always been available for a price. As we enter the Age of Cleantech, the sixth industrial revolution, those rules will be re-written in ways that many will find shocking. I've previously described how raw materials shortages will impact the battery and hybrid electric vehicle markets. Over the next few weeks I hope to expand my focus to consider the principal raw materials that are critical to the development of a truly sustainable alternative energy infrastructure. Unlike this article, future installments will identify companies that enjoy specific natural resource advantages or suffer from specific natural resource risks, and hopefully help investors identify the likely winners and losers.
Given the long-standing animus between environmentalists who see themselves as protectors of the planet and miners who see themselves as simple providers of essential raw materials, I'm not optimistic that humanity will be able to solve its energy problems without catastrophic conflict and horrific environmental consequences. If we are to have any chance at all, the environmentalists must come to grips with the fact that a clean energy future depends on the robust and responsible development and use of all the earth's resources.
Disclosure: No positions
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This article has 54 comments:
after 1858 oil men from petrolea (as it was then spelled) traveled all over the world teaching others how to drill and find oil.
> jack
Long most US Solar companies, CLNE, FSYS.
Looking forward to the next installment and some spirited discussion about investment opportunities from your knowledgeable readers.
The last 20 years have been characterized by rising U.S. oil consumption, but now the U.S. Energy Information Agency. incorporating the most-recent changes in U.S. consumer behavior, says there will be no appreciable growth in U.S. oil consumption between now and 2030, with biofuels accounting for all of the growth in liquid fuels
Rick, I'm nowhere near as pessimistic about the length or depth of the recession because for the first time in history, the six billion know there is something more than subsistence farming and dirt floors and they're working overtime to join the modern world. The baby boom was the most disruptive event in history as we all became consumers, but we pale in comparison to the law of large numbers impacts as Asia and South America come to the party.
Greatest, we may consume less oil in the future, but we can count on paying a lot more for it until some genius in a garage comes up with something better. The key for investors is to remember that a stroke of genius does not generally become obvious for several years (or decades) and there is an immense gulf between the laboratory bench and a factory floor.
Ferdinand, since you didn't comment on my supply constraint article, I worry that you might have missed it. It will warm the cockles of your economist heart:
seekingalpha.com/artic...
Alphameister, I'm a firm believer in humanity's fundamental genius for finding cheaper ways to do things. The thing that concerns me is the impact of government agencies getting into the genius selection business and proclaiming from on high "others need not apply."
Anyone with a global eye can see the major countries around the world are currently positioning themselves for the grab of all the natural resources they can control. The world with its every expanding population is on a collision course with the have and the have nots coming soon. Things like water, food and of course all the commodities that make the industrial nations world go round. Now, throw just a little greed into the mix and you have the end of times scenario playing its self out in the world.
A few other examples: windshield wiper blade materials that wear and work "forever"; electric power transformers made of amorphous metals that significantly reduce core losses; powerful efficient electric motors with magnets not using exotic materials; efficient thermionics permitting no-moving-parts-engines or eliminating the standard internal combustion engine in automobiles; try a new powerful electric motor driven nose wheel on 737 jets that not only allows moving about the tarmac from landing to takeoff without using it's engines but also provides backing-up from the terminal without a tug; and all controlled from a joystick in the cockpit (hppt:wheeltug.gi). What we need is a desire to innovate instead of looking for the next handout and bonus. Like Edison, Bell and Westinghouse had. We are a sick bunch of capitalists.
Our innovation stops where real hard work begins: ask wall street and all the paper pushers and service industry.
Sorry John but you are wrong on many points.
Oil will drop from now until the economy actually starts to improve which is not likely until next spring. Once it improves, oil hits $150/bbl again as speculators have few places to put their money and we hit peak oil last July, the economy drops into another recession, dropping oil again, then back up again, etc until about 10 yrs from now when RE, EV's are by far cheaper than fossil fuels forcing oil prices to stabilize at about $5/gal in todays dollars.
Now on to RE costs which you again miss the mark. Battery material costs will not be constrained by material costs as there are very good batteries that don't need expensive, rare materials.or instance Lithium/Iron/ Phosphate for LiFePo4 batteries are not rare but cheap, available.
Some are having kittens like you because they think Lithium is rare but it's not, we just have just started looking for it. For instance Lithium comes from brine. While it's not greatly abundant on the surface, underground it's very common as almost every oil, Ng well is trapped under a salt dome and many of these are already tapped, just waiting for someone to test which has the best Lithium concentrations!!
Next sodium batteries are inexpensive and will be the heavy duty standard for taxi's, trucks, utilities and things used a lot.
Then there are Zinc or Alum-air batteries which are good, just no orders as no EV's have been made to use them.
As for wind generators they use very little materials for the power out. CSP too needs mare materials but they are inexpensive.
Nor do you seem to consider one of the richest mining sites for metals, fuel which are garbage dumps of the past and recycling of future garbage, cars, ect.
New tech will make mining much cleaner, safer and as material rise in cost so those who use them pay their full cost like oil and coal should too, recycling, RE and in general using less there will be plenty for all.
So learn some about your subjects and look past 'experts' to reality and you'll see things are no where near as bad as you think.
I build custom EV's, RE, etc for the last 35 yrs and I'm not worried about the future at all, in fact quite happy about it as my knowledge finally is about to really pay off. No way will energy get too expensive as it's cheap to catch it once the equipment is in real mass production, no more than $.20/kwhr in most places and much less for some. A gal of gas is about 16kwhrs/ 20hphrs of mechanical work, do the math.
It is not a matter of supply vs demand, but rather the manipulation and control by speculators and the control of the current supply for profit. I am all for making a buck as the next guy, just not at the cost of the whole world’s economy. A global depression of huge proportions will follow if things remain the same. Just last week the spike in crude oil is being blamed now on Rogue Traders, I suspect that is what happened in the summer of 08.
> I agree with Alphameister - we have opportunities galore using known
> and proven technologies, even much more the yet to be developed/applied,
> to not only use less energy or other forms of energy but other ways
> of doing things, ALL OF WHICH HAVE BEEN ROADBLOCKED, MOTHBALLED,
> SMOTHERED, OR BOUGHT AND SQUASHED
Not all have been roadblocked, etc. We waste 25-40% of the fuel used in vehicles. A simple solution is available to all. Stop speeding, tailgating, & rapid accelerations/braking. Another is carpooling. The hybrid could have been a good thing, but what happened? It was found that people weren't getting the mileage they expected when they spent extra money to save money on fuel. What did we do? We dumbed down the estimated fuel mileage quoted to match that of bad drivers.
Thanks!
A frequent bumper sticker out here in mining country---
"EARTH FIRST"
We'll strip mine the other planets later
Amen, John. The bounds restraining Prometheus become greater each day.
One of my favorite examples is Chevron's supposed suppression of NiMH battery technology. It's a great battery, but it depends on a rare earth metal called lanthanum, which has not been produced in the U.S. for years, is almost exclusively sourced from China (97%) is limited to about 30,000 metric tons per year, and is a critical metal for the cracking catalysts used in petroleum refining. If Chevron thought it through to the logical conclusion, it decided that crippling the global refining infrastructure in favor of a hundred thousand PHEVs per year was a bad trade. My bet, however, is that they didn't even get that far in their analysis.
In our emerging world of 6.6 billion consumers, the detritus of our past cannot make a meaningful contribution to future global needs. We also need to understand that the rare stuff hasn't been thrown away for years. We have to start making some hard choices about the highest and best use of increasingly scarce metals: questions like which is a better use for a given quantity of neodynium, making the generator for a windmill or motors for HEVs. You can't do both so you better know which is more important.
People are correct in suggesting that there are a huge number of technologies that will be essential parts of the solution, but they are only miniscule parts of the global picture.
Mayascribe, it won't be a year till July 17th. Since I'll be on the road then, I'll try to do something special to commemorate the event.
"But the idea that functional and cost-effective technologies have been developed, proven and then hidden for the sake of corporate greed needs to be smashed. Business does not work that way. The technologies either didn't work or they involved too many collateral costs."
Collateral costs may just include "making a change", period; which won't happen until the competition dictates, and which sometimes cannot happen because of IP rights ownership; where the change being called for is not only both functional and cost effective, but beneficial to everyone. But, NIH, and NIMBY, NOMW (not on my watch) which can be solely based on short term performance greed. There is plenty of evidence if you travel in those circles.
NOw you also happened to pick another good example, regarding Neodynium. The motors I happened to mention in my earlier posted comment SPECIFICALLY DO NOT USE NEODYNIUM; THEREFORE, THE MOTORS ARE APPLICABLE TO WINDMILLS, HYBRIDS, ETC., WITHOUT CAUSE FOR, OR A CALL FOR CHOICE, IN THE DILEMA YOU STATE.
I'll find you some info.
If you didn't know this, consider what else may be lurking around the corner and hidden under many corporate rocks and unbrellas.
www.choruscars.com/Cho...
Chevron entered into a joint venture with a subsidiary of Energy Conversion Devices called, eponymously, Ovonic Materials, Inc to form (C)hevron (O)vonic (B(A)attery (S)(Y)(S)tems, COBASYS, in the late 1990s. The idea was to continue the development of rare earth metal hydrides as electrode materials for Nickel Metal (Rare Earth and Cobalt) -hydride batteries for vehicle electrification.
Cobasys either had bad management from the beginning, or, perhaps, too much management. It began by sourcing nickel metal hydride powders made to its specification from Ovonic Materials, which was one of two facilities in the western world, in 1999, capable of manufacturing and "charging with hydrogen" nickel(+cobalt)-misch metal (mixed light rare earths) alloys. I believe that the charged powder was then, originally, fabricated into negative battery electrodes by COBASYS and electrolyte and anodes were then added and cased to make batteries for GM.
The manufacturing of the batteries and the quality control of the Ovonic Materials electrode alloys turned out to be a nightmare and uniform production of the batteries did not happen overnight.
In the mean time COBASYS' dreams of mass producing NiMH batteries for the GM EV1 and even for the Toyota Prius were dashed by GM's loss of inteerst in the project and by Toyota and Panasonic's superior R&D and manufacturing engineering skills. Soon everyone not making their own batteries was sourcing electrode material from either Chinese owned and operated or foreign owned and operated facilities in China to which Energy Conversion had originally licensed technology in exchange for access to rare earth metals.
COBASYS never made any money and was a cash burner. It wound up primariloy only assembling NiMH batteries for the few (less than 10,000 in their biggest year, 2007) full hybrids made by GM. The electrodes came from Japan's Sanyo, originally a licensee of Energy Conversion, but by 2003 or 4, miles ahead of COBASYS in NiMH battery component development as was Toyota-Panasonic, also originally a licensee of Energy Conversion Devices.
By the time that Chevron acquired Molycorp and its rare earth mining site, which could have made, along with COBASYS, a vertically integrated NiMH battery producer out of Chevron the idea had completely faded from the onslaught of cash losses both in COBASYS and the almost moribund Molycorp, which had been acquired by Chevron, as an unwanted part of a deal, when it acceded to a US government request to act as a white knight in the attempted acquisition of UNOCAL by the Chinese National Oil Company, CNOOC.
Chevron was literally inundated with offers to buy Molycorp in the summer of 2007, and since its Mountain Pass rare earth property had not then produced any new ore since 2002 Chevron was ready to sell. A cosortium led by Resource Capital and including Traxys, a very large trading house, and two investment banks, Goldman Sachs and Pegasus, bought Molycorp and is even now working to bring the mine back to the production of rare earths.
Ovonic Materials was sold to the Canadian rare earth miner, Great Western Minerals Group, in late 2007 when Ovonic's parent, ECD, decided to narrow its focus to solar cell manufacturing and development only.
The key to the story is that ECD sold licenses to Toyota, Panasonic, Sanyo, and so forth and so on which gave ECD royalties for any use of the batteries for vehicle electrification. So long as the licensor could argue that the battery was of the "type' licensed then its "use" was covered.
Chevron, as COBASYS, learned that it could only try to make batteries for licensees but could not itself sell them to new competitors, because the COBASYS batteries were not as good as those of the competitors. The Japanese companies had surpassed COBASYS in the quality of their in-house further development of the NiMH battery, so it was pointless for COBASYS to try to make and sell an obsolescent battery to the original licensees, none of which were going to show COBASYS how to make a superior battery.
When COBASYS was formed Chevron did not do a proper due diligence. There was never any conspiracy to withold a battery from the market. Chevron simply failed to have sufficient knowledge of the market or the development and use of the technology.
What on earth are you talking about? Global oil production has increased since the 1970's. Also if you look at the first chart in your article on U.S. production, on a monthly basis rather than annual, you will see the decline has flattened out, and even started to increase. Here's the link:
tonto.eia.doe.gov/dnav...
There is a huge amount of oil left in the world, but it is not cheap. Oil at $100 (which is gas around $3.40/gal – see gasbuddy.com) is plenty sufficient to give incentive to develop these sources like in the deep ocean, in the US and Canadian sands, tars, and shale, etc. Also, it gives the needed incentive to get more out of existing wells - Saudi Arabia has pumped less than half of its oil, but the rest is much harder and expensive to extract.
Also, with new natural gas drilling techniques, we are finding huge amounts of new natural gas in North America alone. The Barnett Shale under Fort Worth, Texas is a good example of a huge new discovery. en.wikipedia.org/wiki/.... Natural gas can, and probably will to some extent, substitute for oil in transportation.
Thus, I believe, that $100 oil gives plenty of incentive to increase yearly oil output for several years, and maybe a decade or more. The lesson here is don’t buy into the hype that emerging market demand will cause oil to shoot to $200/barrel as the world economy recovers in the next few years. But, there are reasons why it could.
Oil is the new hedge against inflation, so there is a huge amount of speculative pricing built into oil today. That is why it gyrates so much in price compared to just 10 years ago. Oil may go to $200/barrel in the next 3 years, but it will probably be another speculative bubble like in the summer of 2008, unless there is another factor involved – a falling dollar.
I believe that there is a better than 50% chance that the dollar will significantly decline in value as the world recovers from this deep recession. A country’s currency is a reflection of the economic health of a country, and the emerging markets are doing a better job of investing in the long term health of their economies, especially China. China’s stimulus package has much more infrastructure spending than in the US which is a big factor in strengthening an economy. Also, the US is going to be saddled with huge amounts of debt from the federal government down to the consumer which is going to be a drag on the economy for many years to come.
My crystal ball may prove to be inaccurate on this, but at least I’ve given you important factors to look for when it comes to the price of oil.
> Well, most of us will not have to worry about running out of oil
> for at least the next 200 years or so, like it will matter to us
> then, right?
But "Peak Oil" isn't about "running out" of oil, it's all about whether or not one is able to get it out of the ground, refined and shipped to the end user as quickly as they want to use it, and of course at what expense.
Someone who wins a million dollar lottery that pays it out at a dollar a year for a million years may not have to worry much about "running out" of dollars in the long run, and yet they might still be evicted from their home for not having enough *right now* if that is their only source of income.
The United States hasn't "run out" of oil by a long shot and yet we are still in the position of importing more than half of what we use on a daily basis. In other words, we still "care about" whether OPEC is going to cut production, or if militants were to shut down oil production in Nigeria even though we still have many decades worth of oil in the U.S.
> Also, with new natural gas drilling techniques, we are finding huge
> amounts of new natural gas in North America alone. The Barnett Shale
> under Fort Worth, Texas is a good example of a huge new discovery.
> en.wikipedia.org/wiki/.... Natural gas can, and
> probably will to some extent, substitute for oil in transportation.
That may be true, but the new "fracking" method they are using to break up those layers of rock to get at that natural gas is drawing some fire from environmentalists and the government. They are claiming that it is contaminating drinking water:
www.sfgate.com/cgi-bin...
industry.bnet.com/ener.../
www.donnan.com/frackin...
and some are even worried that it is causing earthquakes:
www.dallasnews.com/sha...
> Oil is the new hedge against inflation, so there is a huge amount
> of speculative pricing built into oil today. That is why it gyrates
> so much in price compared to just 10 years ago. Oil may go to $200/barrel
> in the next 3 years, but it will probably be another speculative
> bubble like in the summer of 2008, unless there is another factor
> involved – a falling dollar.
I think that the falling dollar is often a major, if not the primary, reason for speculation in oil futures.
But having said that, I'd like to point out that a number of economists attribute the 25% year over year oil price increases from 2004 to 2007 and then the much bigger spike in 2008 to the standard laws of supply and demand, rather than to speculation.
Nobel laureate Paul Krugman is one of those economists:
The Oil Nonbubble
Now, speculators do sometimes push commodity prices far above the level justified by fundamentals. But when that happens, there are telltale signs that just aren’t there in today’s oil market.
Imagine what would happen if the oil market were humming along, with supply and demand balanced at a price of $25 a barrel, and a bunch of speculators came in and drove the price up to $100.
Even if this were purely a financial play on the part of the speculators, it would have major consequences in the material world. ...As a result, the initial balance between supply and demand would be broken, replaced with a situation in which supply exceeded demand... The only way speculation can have a persistent effect on oil prices, then, is if it leads to physical hoarding — an increase in private inventories of black gunk. This actually happened in the late 1970s, when the effects of disrupted Iranian supply were amplified by widespread panic stockpiling.
But it hasn’t happened this time: all through the period of the alleged bubble, inventories have remained at more or less normal levels. This tells us that the rise in oil prices isn’t the result of runaway speculation; it’s the result of fundamental factors...
----
An editorial in Energy News expressed the same opinion:
EDITORIAL: Peak oil, not speculation
www.energycurrent.com/...
"After many years of solid growth, oil production plateaued in October 2004. Regardless of the price level, the oil supply simply stopped responding, and from then on, the world had to make do with broadly flat supplies. Ordinarily, the expansion of the world's economy would be accompanied by increased energy consumption and an inelastic oil supply might have been expected to hinder economic development. It didn't. In the four years to mid-2008, the world economy expanded by 18 percent. The global economy boomed, even without new oil.
However, this came at a price. In the absence of oil supply growth, demand accommodation was required. This was achieved by secular prices rises averaging 25 percent per annum from 2003 to the end of 2007. In other words, the price of oil went up, and this constrained consumption by causing the marginal consumer to drop out of the market. This proved a workable solution for a time, but the global economy could not sustain 25 percent annual price increases indefinitely, and by the second half 2007, the situation was becoming critical. Consumption was being maintained by continuing draws on inventories averaging 1.4 mbpd, and virtually every producer, with the possible exception of the Saudis, was running flat out. By early 2008, even the Saudis were throwing the kitchen sink at the market - all to no avail. On paper, it looked like a peak oil nightmare.
Of course, consumers were responding. From 2005, the EU and Japan began to shed consumption and, from late 2007, US consumption also began to decline as the US consumer sought to escape high oil prices. Notwithstanding, developed economy consumers were not abandoning the market as fast as Chinese consumers were entering it, and prices continued to rise. In early 2008, prices took off and some argue that speculation took over. Still, as inventories continued to fall until May 2008 and all the oil producers were running at full output, the case for market manipulation at that time is hard to make. Indeed, the market was in backwardation most of this time. In backwardation, futures prices are lower than spot prices, the equivalent of the market saying, "Well, prices are high now, but they'll be lower later." The market - those very speculators - believed that oil was over-priced but was continually surprised as demand kept pushing up prices.
Prices did ultimately fall, but not because the supply situation eased, nor because speculators fled the market, and not because inventories were released. Prices fell because the global economy collapsed."
www.nytimes.com/2008/0...
I'm much more concerned with oil being used as fuel as opposed to non-energy uses e.g. petrochemicals
Everything from plastics to medicine to fertilizer
I heard the breakdown once & it's a relatively small portion, but essential. some of these applications have few substitututes
jimbo, I agree that the secretary does seem to give gas short shrift, but looking at the bright side there are a lot of deep wells along the gulf coast that have intriguing geothermal potential. Maybe that will grab his attention;-)
Roadrunner, I may well be wrong, but I don't see the price channel for oil flattening - ever. The industry will always find and develop new resources, but I've spent enough time in Asia to understand how overpowering the fundamental demand drivers are and are likely to be. The point of this exercise is not to get back to my roots in the oil industry, but to set the stage for a more detailed analysis of how much help various AE technologies can be in overcoming the problem.
JeffDB, many thanks for your contributions.
Don Harmon, you've been with me for a long time and understand that some promising AE technologies (NiMH batteries for one) are rapidly approaching the limit of their ability to contribute. There are others that are every bit as limited but not as well-understood. I'll be writing about some of the other important resource constraints while I wait for something interesting to occur in the storage sector.
Philais, nuclear is a good start and will prove essential. Flywheels are great for minute to minute load-smoothing but they have no stamina and are incredibly expensive. The heavy lifting will have to be done by pumped-hydro, compressed air, thermal storage and big batteries.
Galewhitaker, I hate it when readers give me homework assignments, but thanks for the heads up.
TinyTim, I think we can assume that the highest and best uses will always take priority in the market because they're less price sensitive, but there's no question we have a real mess on our hands!
Your comment in your latest response to Don that "...some promising AE technologies (NiMH batteries for one) are rapidly approaching the limit of their ability to contribute." is particularly apt in these discussions. No one should, and I ceratinly never would, say that some of the technologies being tried for energy storage aren't brilliantly conceived as "science," but the problem is that no matter how efficient or easily mass produced a technology may be it can still fail the test of practicality.
The US military is finding to its great concern that many technologies it has adopted and the adoption of which have changed the way it operates are production limited by the availability of the critical rare metals used to make them.
The problem for both the U.S civilian and the U.S. military sectors is that they have both lazily careened from one resource limited technology to another. Now the sudden and irreversible rise in BRIC economies has added a huge demand for rare metals that has brought the day of reckoning upon them before they have had a chance to address the problem of the security of supply.
Fracturing does not break up layers of rock. It mostly widens and lengthens naturally occuring fractures to maybe a 1/4 of an inch. This void is filled with sand and the pressure is released. The earth goes back to an equilibrium similar to the original. In other words fracturing just makes a narrow channel about this width ][ for the gas to travel to the wellbore. Producing drinking water can cause subsidence, such as in Houston, but gas cannot hold up anything except balloons.
Also, there are downhole tools that can map these fractures and determine if they break through to a different formation, i.e. aquifer. Weatherford has such a tool. Gas companies utilize this tool because they don't want gas they just spent millions of dollars to get to leak out into an aquifer or any other formation.
My old pappy used to speak of how folks talked about cars when they first happened, impractical toys for the rich, etc. In that context I would offer this: HYDROGEN. It will be solved and used. For the moment we only hear of its limitations. That will change
Thanks again for a fabulous piece.
His thesis is germane since it assesses “technology designs within two promising technology domains: thin film solar photovoltaics, PV … and batteries for battery electric vehicles, BEVs.”
frt.fy.chalmers.se/PDF...
Unfortunately, neither lanthanum nor silver are discussed in the thesis. Silver is a potential issue since it is used as a contact material for silicon solar cells. Here is a November 2006 presentation that addresses silver and other material issues (In, Ga, Te, …) for Terawatt solar cell deployment.
www.rio6.com/proceedin...
NorthernPiker, many thanks for the reference links. I'll read them on the plane.
As a retired petroleum & synfuels guy, this article seems right on target. Love your lively comments, too.
Be sure and post a full report on your evaluation of the conference since a lot of us really want to know what goes on inside these sessions?
www.sustainablenuclear...
Don, I'm really looking forward to the StorageWeek conference because it will give me a great opportunity to network and hopefully gain some insights that go beyond mere presentations.
On an unrelated topic, did you see yesterday's Seeking Alpha article on Toyota's plans to roll out a Li-ion PHEV in 2012? They're apparently looking at a 12 to 18 mile electric only range and a price that's comparable to the Volt and the Mistubishi EV. It lead me to use a new term for the development - eco-bling (which I just found that others have been using since 2006).
seekingalpha.com/artic...
rispskil, yesterday Secretary Chu testified about the importance of getting nuclear back on track, so with any luck that will become a much more important issue in coming years. The magnitude of the looming problems terrifies me because I worry that my kids and grandkids will have a much harder life than I did. So I'm all in favor of anything that's cost-effective and helps overcome the problems.
www.energy.gov/news200...
The Ph.d. these you cite itself refers to an article by Rade who was a co-author of a 2002 book entitled "The Life Cycle of Copper, its Co-Products and By-Products," published by Kluwer for the World Business Council for Sustainable Development. If the figure for the percentage of tellurium typically contained in copper (the source of the overwhelming majority of our available tellurium) is true then any technology based critically on tellurium is a dead-end commercially. I will be posting a brief article on this particular topic later today, and I had not previously read Andersson's thesis, so I am astounded that I independently chose the word "conjecture" to describe the way that business models ignore the issue of security of supply.
If you are in the Washington, DC, region you might want to consider attending the "Risk Managemetn for Critical & Strategic Materials" conference to be held there on Oct.20-22. It is aimed at procurement officials for industry and the military, but investors in alternate energy technologies, the natural resource demands of which will be discussed, are welcome. I will be the co-chair of the event.
Jack Lifton
On Jul 07 04:40 PM NorthernPiker wrote:
> In anticipation of your tour de force on material supply issues related
> to alternative energy technologies, your faithful readers may want
> to scan an extensive and still relevant 2001 doctorate thesis, “Material
> Constraints on Technology Evolution: The Case of Scarce Metals and
> Emerging Energy Technologies”, by Björn A. Andersson. It is less
> than 50 pages and quite readable with useful graphs.
>
> His thesis is germane since it assesses “technology designs within
> two promising technology domains: thin film solar photovoltaics,
> PV … and batteries for battery electric vehicles, BEVs.”
>
> frt.fy.chalmers.se/PDF...
>
> Unfortunately, neither lanthanum nor silver are discussed in the
> thesis. Silver is a potential issue since it is used as a contact
> material for silicon solar cells. Here is a November 2006 presentation
> that addresses silver and other material issues (In, Ga, Te, …) for
> Terawatt solar cell deployment.
>
> www.rio6.com/proceedin...
>
These are the articles by you I like best.
Reflective and thought through.
Sack Chu, appoint JP.
Lights stay on.
Problem solved.
earth2tech.com/2009/04.../
www.autobloggreen.com/...
seekingalpha.com/artic...
A countervaling force to the Jevons effect in the efficiency gain whihc reults in lower resource use per mile traveled. The net result depends on which of the coutervailing forces dominates. In the case of a large stepwise improvement of efficiency, the efficiency gain dominates the Jevons effect for a net reduction of resource use (note that we still have coal (Jevons study) left on the planet). The addition to parallel hybrids, which use gasoline 100% for every inch moved, of ER-REVs and BEVs which use 100% electric drive (for an at vehicle efficiency leap of more than 60% (around 25% real world for liquid fuel engines to around 90% for electric motors) relative to extra time available for long road trips (who has time enough to increase their recreational driving by 60%?) and the limited AER of ER-EVs and BEVs before somewhat slower recharging or less currently ubiquitous power pack swapping provides some current disincentives for long road trips. We can thus see the efficiency of electric drive will dominate the Jevons effect at the vehicle level as vehicles increasingly have electric drive dominate their propulsion.
Plus, I'm not counting that electric drive can use anything for an energy carrier or for ER on the fly recharging, including propane (lpg), CNG, compressed air, fuel cells, non-food bio-fuels, etc., etc.
The part of the Jevons effect that will hasten declining oil use in vehicles (even if less so, overall, which still has benefits in lower production costs) is that as oil is demanded less, due to increased adoption of electric drive in vehicles, the price of oil goes down, which makes general production cheaper, through cheaper energy input costs, which makes vehicles with electric drive less expensive to produce which hastens their adoption. As the economy recovers, oil prices will stabilize at moderately high levels, but much less of the demand will be coming from personal transportation, that's all. Less pollution, which equal less health care costs which also reduces production costs.
The net result of all of thiswill be higher quality of life, less expensive products, oil companies will survive, though not with obscene profits and consumers get intrinsically high perfromance, luxury vehicles with maximum torque at 0 rpm and any time up to about half the maximum speed, instant, seamlessly smooth acceleration at all times, luxury quiet opartion and well controlled acceleration and braking in poor road conditions, all built in qualities of electric drive. Also, we'll see less military involvement overseas for the US to control low sulfur (transportation) oil resources, with corresponding reductions in costs and lives lost.
ak, all, rip my analysis to shreds.
On Jul 06 10:10 PM galewhitaker wrote:
> It's not a moot point. We have waited too long to convert to alternative
> energy (thanks to the oil companies). Peak oil will insure shortages
> which will cause chaos, war, starvation and death. There are almost
> one billion cars and trucks in the world today. Think what will happen
> to our economy when there is not enough gasoline to keep everyone
> moving. Think hybrids are going to solve the problem? Study Jevon's
> paradox. Jevon's paradox will insure that as cars and trucks get
> more efficient the public will use even more gasoline which will
> cause even more shortages.