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  • Chris Martenson: Peak Oil - The Really, Really Big Picture [View instapost]
    Despite alarmist claims, the fact is that the rosy past never happened. Oil never had an EROI of 100:1. It was first recovered in quantity in the US very inefficiently by sopping it up off of water with blankets and wringing it into buckets. The early wells were manually drilled at the pace of a couple feet a day by four men jumping up and down to lift and drop the iron bit while a fifth turned it by hand. Only a small fraction of wells were gushers, and then only for a short time before a thousand new wells erected by fellow speculators a few feet away drained the same reservoir. Far more people have been bankrupted in oil than have made money, and claiming it has been government subsidized is like claiming the California gold rush was government subsidized. The first wells found oil at a depth of 70 feet. When all the 70-foot oil was found, why didn't oil become too expensive to use? Because steam engines began to turn rotary rigs and oil in greater quantities was now accessible at greater depth and with improved EROI despite the greater upfront capital cost. That pattern of scarcity -> price spike -> massive wildcatting, exploration, capital investment and technology evolution -> massively increased production -> glut -> price collapse -> suspension of exploration and capital investment -> scarcity -> price spike has repeated itself at least 4 times in the US alone with the price spikes occurring in 1919, 1934, 1979 and 2008. Each time capital investment paid of with increased production--but there was a 6-10 year lag for the market and prices to catch on, and then one to several decades of low prices that put the crisis to sleep until the next price spike. The last glut/lull was 1986 to 2003 with sustained average crude prices of $20-$30 per barrel in 1990 dollars, which also happens to be the inflation-corrected historical average. The capital investment for our next lull began when the prices started up in 2003 and has largely already been accomplished in both proved reserves ready to be put into production and the efficiency gains on the consumption side that also inevitably come with price spikes. It remains for the markets to figure it out and for the prices to collapse again like they did in 1986.
    Bottom line is that man is an autotrophic creature--we make our own food and the fuel required by our civilization. It costs energy and intelligence to make it, but we have figured it out from wood to charcoal to straw to olive oil to tallow to whale oil to hydro and wind to coal to kerosene to gasoline and diesel and natural gas to pitchblend uranium ore to PV solar. We've been making ethanol for five millennia, but it has always better served as a beverage than a fuel (more history we've forgotten). We are now figuring out light tight oil and gas and tar sands. In the future we will figure out methane hydrates and helium-3. There is growing evidence that the deep earth is a factory for making inorganic hydrocarbons. Even if that should prove true and petroleum be discovered to be a renwable resource, the alarmists will still find something to stir panic.
    Mar 25, 2013. 08:01 AM | Likes Like |Link to Comment
  • Renewable Diesel And Jet Fuels From Lipids: An Investor's Primer [View article]
    Here are a couple of algae biofuel facts for potential investors from recent, rigorous life-cycle analyses published in reputable, peer-reviewed journals based upon modeling full-scale production. 1. According to UVA, the resulting algae biomass, if sun-dried and shoveled whole into a furnace to extract 100% of its higher heating value, would only offer break-even energy for what was invested in making it (EROI of 1:1), meaning it is of no net benefit. If any further energy was invested in an attempt to separate the lipids from the cells or to convert it into a liquid fuel, the energy output would be far less than the energy input (i.e., negative energy balance). 2. According to UT-Austin, just the energy required to circulate the water in a pond system is 7-times more than the energy present in the liquid biodiesel product. 3. Solazyme, the only company producing commercial quantities of algae-based fuel, feeds their algae sugar instead of relying on photosynthesis. This is 100% direct competition with food. 4. Algae require huge amounts of fresh water. Even if the algae is a salt-water species, evaporation make-up water (3-5 mm/day) must be salt-free or the salinity will rise and kill the algae. If, against all economic analyses, square miles of enclosed bioreactor tubes are used, they must be sprayed down with massive showers of fresh water to clean them and cool them down or the algae inside will be cooked by the sun. BTW, Tristan, if you're going to give a science lesson, don't skip the most important part. All anyone needs to do to immediately see the fundamental thermodynamic flaw with any cultivated biomass approach to making fuel is to FOLLOW THE HYDROGEN. Hydrogen is the principle energy carrier in our hydrocarbon and alcohol and ester liquid fuels, with carbon being a distant second. Micro-algae don't consume only CO2 like the investment brochures claim (there is no combustion energy in CO2 as it is a combustion product), but they must take in hydrogen in the form of urea or ammonia (or sugar if you're Solazyme) in addition to what they get in their water bath. The hydrogen for these inputs comes either from animal waste, which comes from animal feed which is grown using artificial fertilizer made with ammonia synthesized from natural gas, or it is synthesized more directly from natural gas (i.e., fossil fuel is the source for a significant fraction of algae biomass). As described above, hydrogen must also be used to hydro-treat the lipids to make true "drop-in" fuels essential for use by the airlines and by the military. That hydrogen also comes from natural gas. Hydrotreating also releases CO2 (oops). So, fact #5 is that micro-algae energy is mostly from fossil fuel. And fact #6, if these hydrogen energy inputs are properly accounted for, algae-based fuel delivers a huge negative energy balance. 7. Argonne National laboratory has calculated that it takes 2.6 times as much fossil fuel energy to deliver a gallon of biodiesel into a gas pump as it does a gallon of gasoline, and that is before hydro-treating. 8. Biofuels are an attempt at perpetual motion in chemistry. As a good rule-of-thumb for evaluating any liquid fuel energy scheme, following the hydrogen mass balance will reveal where any hidden energy is being sneaked into the system. Unlike our government and the Navy, the laws of thermodynamics are not fooled. Our future as a viable and competitive nation depends upon more voters having a decent STEM education and rejecting the snake oil salesmen who are preying upon our ignorance. (Sources: 1. Clarens, et al. “Environmental Life Cycle Comparison of Algae to Other Bioenergy Feedstocks.” Environmental Science & Technology 44, no. 5 (March 2010): 1813–1819. ;
    2. Murphy, et al. “Energy-Water Nexus for Mass Cultivation of Algae.” Environmental Science & Technology 45, no. 13 (July 2011): 5861–5868.; 3. Frank, et al. Life-Cycle Analysis of Algal Lipid Fuels with the GREET Model. Argonne National Laboratory: Energy Systems Division, April 2008. ; 4. Pfromm, et al. “Sustainability of Algae Derived Biodiesel: A Mass Balance Approach.” Bioresource Technology 102, no. 2 (January 2011): 1185–1193. .
    Aug 20, 2012. 10:08 PM | 3 Likes Like |Link to Comment
  • Renewable Diesel And Jet Fuels From Lipids: An Investor's Primer [View article]
    The lowest price the U.S. military has paid for straight algae-based fuel is $61.33 a gallon from Solazyme last August. The fuel used for the Great Green Fleet was most Tyson chicken fat-based with just hint of Solazyme algae oil. The purchase was 450,000 gallons for just over $12M which equals $26.75 a gallon--a scientist should not be deceived by the sleight-of-hand of trying to blend down the price. One gallon of biofuel displaces exactly one gallon of conventional fuel, and the stark choice facing the military is whether to spend $2.30 a gallon on conventional fuel (current bulk contract price), or $26.75 a gallon for chicken-fat or $59.00 a gallon for camelina or $61.33 a gallon for algae.
    Aug 20, 2012. 09:51 PM | 2 Likes Like |Link to Comment
  • Solazyme Looks Promising On Growing Supply And Demand [View article]
    The Navy has paid Solazyme no less than $61.33 a gallon for its fuel, and as much as $430 a gallon (a world record it should not be proud of). This is only a fraction of the true cost because Solazyme is also receiving other federal assistance such as a $21.7M grant from DOE. The November purchase mentioned above works out to $26.75 a gallon, but, contrary to your article, the contract does not specify how much algae oil feedstock is required versus chicken fat and other materials. Only the output product quantities are specified. In January 2011 RAND published a study ( that pointed out how wasteful and pointless are the US Military’s continuing rounds of biofuels publicity stunts. Over 55 blends of biofuels have already been tested in commercial aircraft, ships, and trucks. The issue is not that biofuels can be made into drop-in fuels (they can), it is rather that the fuels are astronomically expensive and consume more energy in growing and in processing than they yield for use. This is how the Administration spends our tax dollars while carrying a $16 Trillion debt.
    Feb 1, 2012. 06:29 PM | Likes Like |Link to Comment