Allen Fuller

Clean Energy ETFs Face Off

Although I like renewable energy, these P/E ratios are a bit scary... I just hope the underlying companies can start making better profits.

Nobody Cares How the Energy Crisis Gets Solved

Correction, the wild estimates are the P5 figures, not the P95 figures as I incorrectly said in my post at 4:11. In other words, the estimates these political figures are throwing around have less than a 5% chance of being true... even before they start adding non-conventional and unproven sources like oil shale!

Nobody Cares How the Energy Crisis Gets Solved

The full "fact sheet" from the USGS on the Bakken is at pubs.usgs.gov/fs/2008/.... They include the P95, P50 and P5 estimates, but they are labeled F95, F50 and F5 instead, which is commonly done in the industry.

Find out the facts for yourselves, folks... don't believe these figures of "trillions" that are just thrown around for political gain.

Nobody Cares How the Energy Crisis Gets Solved

To add one more point about the Bakken estimation from the USGS... it is an estimate of 3 to 4.3 billion barrels of "technically recoverable" oil. They don't make any estimate for "economically recoverable" oil which is usually lower, and depends on the spot price of oil. As usual, the last drops of oil are the most expensive to get out, so at some point it becomes unprofitable and some of the "technically recoverable" oil is left in the ground.

Nobody Cares How the Energy Crisis Gets Solved

Since we "don't know" how much of the "2 trillion" barrels in the Bakken Formation is actually recoverable... we better be prepared for the low end of estimates. I'd rather be ready, and be pleasantly surprised, than bank my future on oil that ends up not being there or not being extractable at economically feasible levels.

Incidentally, I don't know where you get this 2 trillion figure for the Bakken formation. The USGS just this year put out an estimate of 3 to 4.3 billion: (www.usgs.gov/newsroom/...). Your figure is almost 1000 times higher!

Historically, these wildly optimistic projections do not come true; the actual economically recoverable oil tends to stay BELOW the P50 estimate. (Estimates of recoverable oil tend to come in 3 figures: the P95, P50 and P5 figures. A P95 estimate of 500 million barrels indicates a confidence of 95% that we would recover at least that amount of oil; in contrast, a P5 estimate of 90 billion barrels indicates just a 5% chance of recovering 90 billion barrels.)

However, I have noticed a lot of talk-show boys and the like trumpeting how we have TRILLIONS of barrels of domestic oil "just waiting around to be extracted". To get these figures they quite often throw together the most wildly optimistic estimates they can find, usually the P95 estimates plus wildly optimistic estimates of oil we could recover from non-conventional sources such as oil shale, which have not been successful commercially to date.

They cobble together these wild estimates and then throw the numbers around as if they were undeniable facts. All of this is POLITICALLY MOTIVATED. I say, beware. If we do end up with a crisis and we are not ready, it will largely be because of this disinformation. Again, I'm generally conservative but I really am getting disgusted with the political degradation of the discussion here on both sides including the Republicans.

Nobody Cares How the Energy Crisis Gets Solved

ozzy43, I don't think we need to be as pessimistic as the hard-core doomers. Recent weeks and months have shown that oil demand is a bit more elastic than some supposed, for example. Price signals may well curtail our demand to the level that our remaining oil, while still declining, is a gentler slide than some presuppose. (The curtailment of demand of course will be harsh to our economy.)

Remember after all that peak oil is not the sudden absence of oil. It will decline, but there will still be enough oil, in my opinion, to allow us to transition. Granted, our economy may be in shambles by the time we attempt serious switchover to alternatives, but it's not like there will be no oil with which to create the photovoltaics. That's what gets me about some people like Kunstler. They get a little too carried away with themselves and don't give hardly _any_ room for human inventiveness and ingenuity.

I agree that our lifestyles will have to be severely curtailed, but I think the impetus for that will first be economic depression before a seriously severe shortage of oil. I do see a transition to a post-oil economy, a very bumpy one at this rate, and ultimately, a lifestyle that provides for our needs but is far from the profligate lifestyles of the present.

The main barrier to our starting this transition is the refusal to accept reality by the majority and especially the politicians. I don't think this barrier can stand up for more than a few years longer.

Nobody Cares How the Energy Crisis Gets Solved

"Most Americans don't think much about our present energy crisis, we just want it to end."

If that's true, most Americans will be sorely disappointed. It will only end when we break our dependency on fossil fuels. And that probably means *gasp* a change in our lifestyles! Oops, that violates the concept of our God-given right to do whatever the &*# we please. Forget I mentioned that...

"6. How much money it will take to develop the oil shale deposits in the Rocky Mountains, just spend it."

What if it takes more money than we have? Where is the limit? What if we spend hundreds of billions and only get a relatively small flow from it?

"8. How many nuclear reactors, wind farms or solar panels we need to ensure a reliable electric supply, just build them all."

Now that's something I can agree with. We will need them all, and will probably still have to accept a lower energy budget than we are used to.

"9. How we use coal, as long as reasonable efforts are taken to minimize its adverse effects."

Actually, most Americans don't seem to care even if we don't do ANYTHING about its adverse effects, though they should. They should also care that our coal won't last us "200 years" like most people think it will. Exponential growth will cut that down to 60 years or less, people, it's basic math...

"10. How Items #1-9 are accomplished, so long as our government drops whatever else it's doing and allows it all to start today!"

AMEN to the idea of focusing on this as a national priority.

I don't agree with the idea that drilling more will save us. If we drill as part of the package, I won't mind. But if all we do is focus on drilling and only pay lip service to the rest, we are doomed. There's just not enough there for us to close the gap.

Nobody Cares How the Energy Crisis Gets Solved

sieraromero, I am ashamed that far too many of my fellow Americans have become as you say, but don't give up on us yet. There are still solid, thoughtful, hard-working, sacrificing, hopeful yet realistic Americans left in enough numbers that, I believe, our country still has a good future.

Back to the energy discussion, I encourage anyone interested in issues of resource availability to view Dr. Albert Bartlett's lecture on Arithmetic, Population and Energy.

The key concept is simple. Have you ever wondered how our economies could continue to grow infinitely into the future, in a finite world? That seems to be the view of most economists. Certainly we have improved efficiency and have overcome many of the limitations we have faced in the past. And we will overcome many more. Our human ingenuity is amazing. Yet if you project infinite growth into the future, it becomes obvious that you will eventually hit limitations that you cannot overcome. If our population grows at 2% per year, in several hundreds of years we will have one person per square meter on the earth. Now obviously that's not possible, so sometime before then, our growth will have to stop. Either we stop our growth intentionally, or we hit some fundamental limitation that we cannot overcome, and we crash. If you want to deny this, please exit the land of rational thought.

Nobody Cares How the Energy Crisis Gets Solved

A couple of final thoughts.

I hope we can all agree that we won't be burning oil forever. That at some point we will have to transition away from oil to other sources of energy, preferably renewable and clean ones, which don't run out.

THEN WHAT'S THE PROBLEM WITH MAKING THE STINKING TRANSITION NOW?!?

If peak oil predictions are right, then we may just save ourselves (though it may be too late by some predictions).

If peak oil predictions are wrong, we are prepared that much sooner. AND we save money in the long run.

Studies have shown that investing in renewable energy saves money over the long range. Even with relatively expensive solar panels, those who have "bitten the bullet" and installed them in spite of their high cost have usually ended up glad that they did, even economically speaking. The problem is that the payback is usually too far out for most people's economic thinking. All they can see is the big up-front cost.

As a society, shouldn't we be steering in the direction of technologies that have a long-term future? What is it with people that they want to just blow this all off, act like there's nothing wrong with burning up precious resources like there's no tomorrow, and only pay lip service to alternatives?

Finally, this is also a matter of national security. Our dependence on foreign oil is crippling. It bends our national policy, limits our options in dealing with certain countries, and exports our wealth. We use 21 million barrels per day, but only produce about 8 million per day.

If you think we can close that gap, more than doubling our current production, by drilling more and using our own national resources, you are dreaming. After U.S. production peaked in the 1970s, we started drilling frantically right and left, but that didn't halt the decline in oil production. Adding the "vast" oil riches of Alaska was the biggest thing we could manage, and that only provided a bump up on the downward slope of production. Drilling offshore or in the Arctic will be a similar bump on our downward slide. It would take HUGE national effort, plus luck (that all the optimistic projections are true) just to halt the current slide in production. And to make up the 60% gap between our production and our usage? Don't delude yourself.

Sure, go ahead and drill, don't leave ANY resources for our children, but at LEAST at the same time make an AGGRESSIVE effort to find alternatives! There is no other way we can become truly energy independent.

Nobody Cares How the Energy Crisis Gets Solved

Pretzel Logic, how appropriate a name.

You need to do your OWN critical thinking. Critical of the talk show boys you are probably listening to.

I'm pretty conservative, but have always thought conservatives should conserve resources as well as the values and traditions that made this country great.

What is conservative about spending our resources like there's no tomorrow, leaving nothing for our children and grandchildren?

You challenge the idea that there is an actual shortage in energy. Again, I say, engage your critical thinking and don't just accept the idea that our country has "plentiful" reserves of oil. It depends on what you mean by that. I heard one guy on the radio say we have a TRILLION barrels of oil in this country. That is laughable. Best industry estimates are that there are one trillion barrels of recoverable oil left in the WORLD. In fact, U.S. *proven* *recoverable* oil is around 21 billion barrels. LOOK IT UP. This guy on the radio was throwing together the most optimistic figures (not proven recoverable reserves, but the wildly high estimates of possible reserves, without regard to recoverability) along with oil shale, tar sands and everything else he could think of, to make his case. If you look at history, the oil we actually get out of the ground is much closer to the estimates of proven recoverable oil than to the estimates of possible oil that he was using.

In one sense he had a point, and so do you. "Oil" as a natural resource IS plentiful in the ground in various places. But the conventional, recoverable oil that drives our economy, that we used to be able to extract for such a cheap price, is becoming scarce. Unconventional oil can be recovered and used to some degree, but it costs more both in dollars and in energy. Thus, our crisis is one of a shortage of the cheap energy we've grown used to having.

Everything ozzy43 mentioned has a HUGE impact on the discussion. I hate to be personal, but it is clear he is far more educated than you are on the subject. EROEI (Energy Return on Energy Investment) is the measure of how much net energy you get after you spend the energy to get the stuff out of the ground and refine it. For unconventional sources, EROEI is very low. Most of the oil shale (not actually oil, but kerogen) for example, may not even have an EROEI that makes it worth extracting. Though some of it does, it takes huge investments in capital and time to get a relatively slow flow of oil.

The real charlatans are the ones spreading these lies about how we don't need to conserve, and how if we only drilled on our own land we would be home free. They are the ones encouraging that we use up our children's and grandchildren's resources LITERALLY like there's no tomorrow. They are the ones threatening our children's economic future.

I refer you to theoildrum.com, energybulletin.com, and various factual information you can look up for yourself on the Internet. Look for the fundamentals. Cut through the hype. The reality is that cheap oil is gone FOREVER... or at least until we find an alternative technology that is cheaper.