Bill James

Oil: Does Supply and Demand Still Apply?

Oil production does not really matter. There will be some minor increases in production as mega-projects come on line.

Ignore the really big whoppers of politics, hoarding and weather. These can completely disrupt current concepts of supply and demand.

What is critical is oil available to be bought. Tally production increases, current field depletions and increasing domestic consumption in oil to get World Oil Exports or Net Oil Exports. This peaked in 2005 at 46.342 mbpd, 2006 at 45.838 mbpd, 2007 at 44.832 mbpd, 2008 at about 43.8 mbpd.

From the peak, this creates an oil deficit 3 times larger than the deficit caused by the 1973 Oil Embargo.

Worse, Economic Growth is equal to Energy Growth times Efficiency Growth. Energy Growth has stopped. Efficiency has not changed much. The decay in Economic Growth can be seen in foreclosures.

On the good side, efficiency in urban transportation is at 4%. This can be increased to about 70%. seekingalpha.com/artic...

Gas Lines Coming This Fall

Here is a link to World Oil Exports of 20 top exporters (about 93% of all exports). www.jpods.com/JPods/01...
and source, netoilexports.blogspot.../

You will see that since mid-2004 we plateaued. It is very difficult to manipulate this. If it could be manipulated, then we should be even more desperate to end food distribution's dependence on oil. If you want security, plant a garden, organize your neighborhood and help re-tool transportation.

Gas Lines Coming This Fall

Collectors 6-foot wide over the rails gather about 2.5 million watt-hours per mile per typical day (based on 16% efficient panels, 5 hours of effective sun per day). That is enough for 12,000 vehicle-miles of travel per mile of rail. Excess power during the day will be sold to the grid. Power at night will be purchased from the grid.

As the networks grow, the amount of excess power (rails with fewer than 12,000 trips per day) will grow. Instead of large solar arrays in remote deserts, very large solar arrays in cities will make local grids far more durable. During peak demand, high air conditioning periods, the amount of excess power climbs.

The need for collectors and short payback (1-4 years) will allow a lot of innovation in solar energy collection and storage. Example, I have seen a CO2 harvester that wants our excess power for their chemical process for recombining water and CO2 to natural gas and oxygen. That natural gas can then run electrical generators at night.

There is considerable synergy in this system approach to transport and power generation. It is a transport version of a solar calculator.

Gas Lines Coming This Fall

Hi Fireball
JPods are powered by electricity. Any type of electricity will work but in general we will install collectors of natural power supplies (solar, wind, etc...). It adds about $1.5 million per mile to the cost. Total cost is about $4-12 million a mile. Typical payback on early networks is 1-4 years.

JPods are a double paradigm shift
- from individual devices to networks
- with system integrate transportation and power generation.

This makes the systems very durable in turbulent times. The will also be very profitable. Operating costs of a car are at least 56 cents per vehicle mile (AAA 2004). Operating JPods is 4 cents. Our definition of profit is the difference between the value customers willing pay for and the cost to compete. JPods provide the service of a chauffeured car at a radically reduced cost to compete.

This profitability, increased value and lower costs, will help speed deployment.
Here is an article about investing in the PRT industry. Anyone interested in investing in JPods is welcome to contact me. My contact information is at JPods.com. seekingalpha.com/artic...

Morgantown was running since 1975. Here is a link: www.youtube.com/watch?...

Gas Lines Coming This Fall

FeverBuster
Thanks for the kind comment. JPods do change repetitive travel from a capital requirement (buy car, parking space, gas) to a lower cost service (horizontal-elevator, touch, go, abandon). I agree that they will co-exist with cars, bikes and other modes of transport.

Gas Lines Coming This Fall

I am well aware of Matt Simmons. What he says does not matter. Inventories matter and they are too huge to be manipulated. The momentum indicates risk.

Gas Lines Coming This Fall

We need to drill, we need to conserve, we need bikes, we need nukes, we even need coal. But mostly we need free markets and accounting for short and long term costs.

Accounting for all costs, wind and solar would have been cost effective since our wakeup call in 1973. Free markets would have allowed the orderly transition from fossil to renewable power. But we hit the snooze button. Centrally planned economies in power generation and transportation subsidized oil and distorted market mechanisms.

There was no conspiracy, just bureaucrats trying to implement their plan with as much consistency as possible. Innovations are an inconsistency. We got better at building HOW we built, but we did not change WHAT to build.

Gas Lines Coming This Fall

Love bicycles. They are be very important. If I had my way, we would not bus school children less than 5 miles. We would have bike day once of month during appropriate seasons, were everyone is asked to ride a bike to and from work.

With JPods, we plan to build bike lanes under nearly every rail so cities become bikeable and walkable.

We still need a way to consistently move people and cargo longer distances and in all weather. We still need a way for people who cannot ride a bike to have mobility.

I also believe there will be a market for ultra-light bike-cars. They will need safety waivers and accidents with them will not fair any better than motor cycle accidents.

Gas Lines Coming This Fall

Some of the discussions made me aware that it may not be gas lines but price riots.

If we rationed gas on amount, we would have lines now. Economically weaker people would still be able to compete for availability.

Currently we are rationing gas based on price. Lines are prevented because those that cannot afford gas are not waiting at the station for the price to drop. As more and more people cannot afford to get to work, while others drive gas guzzlers, the frustration will grow and express itself in protests and/or riots.

Gas Lines Coming This Fall

Give free enterprise a free market and you can convert the 120 year old analog networks of Bell to digital, the Internet and cell networks in 24 years.

A free market in power generation and transportation infrastructure, where we account for all long term costs instead of dumping the on the future, and you will see radical innovation. Government control of power generation infrastructure is 69% inefficient. Government control of transportation infrastructure is 80% inefficient. Planned economies are based on plans that the planners hate to change; with the mobilization for World War I, the technologies of the day were locked into the plan (Bell, Ford, the Wright Brothers, and Edison). The efficiencies of the day were locked in place until communications was de-monopolized in 1984.

Germany de-monopolized power generation with Feed-in Tariff and has created 250,000 renewable energy jobs and captured much of the expanding wind and solar industry. Exports in 2007 of about $12 billion.

Inventors cannot navigate the complexity of government control. Apple, Google, YouTube and many Internet and micro computer companies would not have grown to commercial scale in a regulated communications infrastructure.

A centralized effort, "give it to the military" is a bad idea. Give a free market and allow military veterans is chance to preempt inefficiencies and convert costs to profits is a great idea. Nearly everyone in JPods' effort is a veteran. I am a West Point graduate and 8 year Infantry veteran.

Gas Lines Coming This Fall

Please consider that the fault for our current escalating oil prices has been in the making since 1956 when Hubbert clearly identified the nature of Peak Oil. Both political parties own the uncontrolled escalation of oil prices.

I am a conservative. I believe we should pay for what we use and subsidize very little. I love free markets; far from perfect, they allow more ingenuity and kill more stupidity than any other economic form. The risk in free markets is failure to account for long term costs. The current climate risks, the I-35W Bridge Collapse, escalating oil prices, 54 as the average age of farmers, and other facts indicate we have borrowed from our children.

There is plenty of responsibility for policies and use for us all to stop blaming and start pulling together to resolve the crisis. Peak Oil and Global Warming are civilization killers we can defeat by implementing free markets so inventors can profit by preempting waste and accrue resources for all costs.

Please consider reading Performance Governing (www.theoildrum.com/nod...) and Beating 100 mpg (seekingalpha.com/artic...) and how we can re-tool transportation by preempting waste (seekingalpha.com/artic...)

Gas Lines Coming This Fall

Freight rail averages 436 ton-miles per gallon of diesel. That is pretty efficient. Electrifying something so efficient does not seem like the best return on investment.

Light-rail and passenger rail are as inefficient as freight rail is efficient. On average they move 3 tons to move a person. Every stop-start requires applying power to that 3 tons of parasitic mass to rebuild kinetic energy.

Building PRT is important because they provide the efficiency of rail with very low parasitic mass and start-stops.

Parasitic Energy Consumption (PEC) is a good indicator of relative power waste.
It is a ratio of the kinetic energy of the moving mass divided by the kinetic energy of the mass of cargo and passengers times the number of start-stops.

The constants and velocity squared cancel and you "Beam me up Scotty" would be perfect use of energy; move only what you want to move with one start-stop. Passenger trains and cars have a PEC of about 200-400. JPods and other PRT's have a PEC of about 3-8.

As for metal recyclers. I think they will be premier investments for the next 2 decades.

Gas Lines Coming This Fall

In reference to a number of posts.

Like most organism on earth, we can live within a solar budget. I invented JPods to accomplish this in urban transportation. Instead of moving a ton to move a person, strive to move only the person. The result is 400 JPods suspended from overhead rails that get efficiencies similar to rail (CSX 423 miles per gallon commercial, www.youtube.com/watch?...)

JPods operate at about 200 watt-hours per mile (200 mpg) for people and 100 watt-hours per mile for freight (400 mpg). Solar collectors 2 meters wide mounted over the rails gather 2.5 million watt-hours per mile of rail per typical day. That is enough to power 12,000 vehicle miles per mile of rail.

To implement system like this we do not need a Manhattan Project. We need Performance Governing (www.theoildrum.com/nod...) like the development of the Internet. Set standards and allow inventors to invent to exceed standards. Change the role of government from managing HOW to build infrastructure to leadership in WHAT is needed.

Moving a ton to move a person is less than 4% efficient. Striving to move only the person can achieve 70% efficiency. A 17 times improvement in efficiency can counter the 6 fold price increase in oil in the last several years. But it will take time.

If you are interested in helping build networks in your economic community contact me. There is a profit in saving people time and money.

Gas Lines Coming This Fall

Hi Alpha23Seven
When an earthquake will trigger is difficult to forecast. That the momentum of moving tectonic plates will cause earthquakes is guaranteed.

Matt's warnings are that we need to prepare for the momentum of oil depletion. When it will trigger shortages is not precisely guessable. The inventory trends are a good indicator. Gas prices are good indicators.

With preparation, an earthquake is a scary event. Without preparation, water, power and everything needed to sustain a city collapse. The 97% dependence on oil for food distribution is not a problem so long as oil does not deplete or become expensive. We are no longer guess at when oil will hit $100 a barrel.

Gas Lines Coming This Fall

Hi Jack.

Here are links to the Senate letter to DOT to find a solution to the 1973 Oil Embargo. Note Morgantown's PRT system is in Morgantown and the Senate Letter is signed by Senator Byrd.
www.jpods.com/JPods/00...

Here is a link to the Congressional Office of Technology Assessment study PB-244854 that PRT will make our cities independent of oil. The report even notes that its finding will not likely be implemented because DOT "neglected near-term ... simpler approaches."
www.jpods.com/JPods/00...

I have exchanged emails with Assistant Secretary Karsner at DOE about the fact that neither Morgantown nor PB-244854 are listed at DOT or DOE web sites. We have failed to remember lessons learn at great expense from the 1973 Oil Embargo.