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Implications of the End of Cheap Energy

G&G TGIF

September 30, 2011

Fred K. DuennebierEmeritus Professor of Geology and GeophysicsUniversity of Hawaiifred@soest.hawaii.edu

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Outline

• Energy is CHEAP??!

• The Future of Fossil Fuels

• The Lack of Replacements for Fossil Fuels

• The Future Without Cheap Energy

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When conditions are changing rapidly, the probability of reliably

forecasting the future is low.

Conditions on earth are changing VERY fast.

caveat

Forecasting the future is not easy!

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QUIZAT WHAT PRICE WOULD YOU CONSIDER GASOLINE TO BE

“EXPENSIVE”?

A.$5.00 /GALB.$10 /GALC.$100 /GALD.$3,000 /GAL

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A related question:

How much would you pay a laborer for a full day of work?

A. $50B. $80C. $100

D. $150

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One human, working hard, can do about 1 KWh of work per day using muscle power.

For such work you might pay a person about $80.

One gallon of oil contains about 40 KWh of energy for which you pay less than 11 cents/ KWh.

For the energy in gasoline to be as expensive as human muscle power, gasoline would need to cost more than 800 times what the price is now.

And you don’t need to feed it lunch....

ENERGY FROM FOSSIL FUELS IS CHEAP! 6

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Energy and Power

Power = energy per unit time

1 Watt= 1 kg m/s3 = 1 Joule/s

Energy = KWh (Kilowatt hour)= 1,000 Watts for one hour

1 KWh is a good reference –it’s the work one person can do in one day

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Another question:

What’s the human carrying capacity of the earth?

A. 3 billion peopleB. 5 billionC. 7 billion * D. 9 billion

* We pass 7 billion this year

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Cheap energy has made the population explosion possible. The expansion of human civilization is strongly linked to access to cheap, high-quality energy sources.

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From 1800 to, say, 2050, hydrocarbons partially removed the barriers to rapid population growth, wealth, and scientific progress. World population will have shot up from 1 to at least 8, and possibly 11, billion in this window.

When our finite resources are on their downward slope, the hydrocarbon-fed population will be left far above its sustainable level.... How we deal with this unsustainable surge in demand and not just “peak oil,” but “peak everything,” is going to be the greatest challenge facing our species.

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Are we really looking at the end of fossil fuels as a viable source of energy?

In what year did the United States produce the most oil?

A. 1930 B. 1970 C. 2010 D. haven’t yet reached the peak

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Peak Oil

Since I was born, the rate of oil production has increased ten-fold.

Hubbert’s Peak

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Will production drop soon? Has enough new oil been discovered to keep up the supply? When production begins to decline we will be at “peak oil”. 14

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Why do I emphasize oil over the other fossil fuels?Because it supplies almost twice as much energy in the USA as any of the others, and about 95% of transportation fuels.

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Fact: We have used up about half of the oil that can be reasonably drilled from the ground, and it was the cheapest, highest quality half.

We now have to drill in the deep ocean and arctic to find new oil, and what we find is in smaller amounts than what we have used.

The low-hanging fruit is gone.

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Glo

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1990 2000 2010 2020

90% confidence

limits

Predicting Future Oil Production

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Most of the people alive today will see the end of the oil age.

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So what?

What fraction of oil production is used for transportation of people and freight?

A. 25%B. 45%C. 65%D. 85%

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Big deal!

We can ride bikes instead of cars, change our lights to CFLs and turn down the air conditioner.

Not so fast… Doing lots of little things might make you feel better, but they will end up doing little to solve the

problem.

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Production of solar cells, bicycles, cement, electricity, wind farms, steel, aluminum, crops, literally EVERY manufactured product we use today REQUIRES the cheap energy provided by fossil fuels.

Factories do not run on solar energy – most (in China) run on coal...

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ALTERNATIVE ENERGY

SOURCES

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Energy History

Human muscle power: energy supplied by food

Animal power: energy supplied by food

Fire: Chemical energy from wood

Wind(sail): Solar energy

Water power (gravity): Solar

Coal: fossil solar

Oil/gas: fossil solar

Nuclear: fission

Each advance in technology was made possible by discovery of a better source of energy - not the depletion of existing resources.

Until now…..

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People Power has been replaced by fossil power

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Can “unconventional” sources of fossil fuels satisfy our liquid fuel

needs?

• Tar sands • Oil shale• Natural Gas Liquids (NGL)• Oil from Coal (CTL)

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These alternatives are NOT CHEAP. They require large amounts of energy to mine and refine, and the resulting waste products pollute the land, water and air – unless even more energy is used to mitigate this pollution, rendering the net energy produced uneconomical.

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A huge fear is that our addiction to oil and desire to “save the economy” will drive production of

these resources WITHOUT mitigation.

Suicide....

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What is Net Energy??

Every living thing must find more energy than it consumes - or perish.

Excess energy is used for growth or is stored.

Net energy is the energy available minus the energy invested to get it.

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What?….

Consider Your Budget:

Gross Income

Net Income= Gross - taxes

Fixed Costs (basic food, housing, insurance...)

Luxuries (entertainment, travel)

If your net income is greater than your fixed costs, you can take that vacation to

Paris....

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Consider the Energy Budget

Gross Income: Total energy in the fuel

Taxes: Energy needed to produce and deliver

Net Income= Net Energy: what’s left to be used

Fixed Costs: Energy necessary to sustain civilization

Luxuries: Energy needed for economic growth

If net energy <= Fixed costs, NO GROWTH

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It takes a net energy of about 8-10 to operate our society. We still run on fossil fuels with net energy of roughly 30, but the number is dropping quickly as old oil fields are depleted. New oil fields have net energy values of 15-22, but there aren’t enough of them.

If replacements for fossil fuels are not put into service soon, growth must reverse.

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RENEWABLE ENERGY SOURCES:

What do solar, wind, wave, tidal, hydro, geothermal, and nuclear energy resources have in common?

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What do photovoltaic (PV), wind, wave, tidal, hydro, geothermal, and nuclear energy resources have in common?

They all produce ELECTRICITY.

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What do photovoltaic (PV), wind, wave, and tidal energy resources have in common?

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What do photovoltaic (PV), wind, wave, and tidal energy resources have in common?

They are all intermittent, and all require either energy STORAGE or independent “base load” power generation – such as geothermal, hydro, OTEC, or nuclear running constantly to level the load.

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104 Coal Fired Plants

4 Three Gorges Dams

33K Wind Turbines

91,250,000 solar panels

2,600 Nuclear Power Plants

How much is needed?

The world uses ~ 1 mile3

of oil each year.

Each of the generators in the figure could produce 1/50th of that energy.

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What alternatives are available for LIQUID fuels?

CTL: coal - to - liquidNGL: natural gas – to - liquidbiofuels: net energy too low

NONE of these can produce the VOLUME of liquid needed to replace oil.

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A commercial jet burns as much energy each hour than can be stored in batteries weighing 5 times the weight of the aircraft.

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A new estimate of wind power potential estimates that the total global potential of wind turbine electricity generation is 1 TW... no more than 6% of today’s primary energy can be obtained from the wind.

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“We could... we should... we can...”

Just because some “improvement” in the state of the world is technologically feasible does NOT mean that it will be done. Many technologically feasible projects are not politically or economically realistic.

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BOTTOM LINE

"Based on everything we know right now, no combination of (renewableenergy

sources)... will even permit us to operate a substantial fractionof the systems we currently run -- in everything from food

production and manufacturing to electric power generation... We are in trouble." --

James Howard Kunstler, “The Long Emergency”

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WHAT IS BEING DONE TO REPLACE OIL?

We spend more money every ten minutes buying gasoline than we do on alternative energy R&D each year.

The NIH gets a yearly budget increase greater than the whole annual budget of the Department of Energy.

www.private-eye.co.uk

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The federal government is borrowing huge amounts of money to prop up the status quo to create the appearance of stability at the cost of even greater disruption in the future.Statistics are ‘gamed’ to obfuscate reality.

But the likely future of cheap energy is not a secret...

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http://www.fas.org/man/eprint/joe2010.pdf

New Zealand Parliamentary report

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

July 11, 2011

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The end of cheap energy is a global problem, but the consequences will be local – felt by everyone.

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HERE’S THE DIFFICULT PART:

What consequences are likely:Resource nationalismThe end of the global economy,

banks fail, currencies failThe end of economic growthLong-distance transportation declinesCentral governments fallHealthcare suffersThe end of grid electricityThe Internet collapses : :

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Governments (we) will no

longer be able to afford to maintain

infrastructure –sewersroads

water supplieswaste disposal

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Will humanity survive?

: “My worst case scenario is so bad that you don't want to go there.” -- Mathew Simmons

Is there any way to prevent these consequences.

Probably not.

Why aren’t governments preparing for this?

It is difficult to get a man to understand something when his salary depends on his not understanding it. --Upton Sinclair

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What can we do?

stay healthy

prepare

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The monkey trap - Letting go

A monkey trap consists of a hollowed out gourd with a hole in it large enough for a monkeys fist. A large piece of food is inserted in the gourd, and the gourd is attached to a stake with a rope.The monkey grabs the food but cannot pull it out of the gourd. When the hunter approaches, the monkey would rather be captured or killed than lose the food – even though being killed is a far worse consequence than losing the food by just letting go.

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increasing your chances

• LET GO. Don’t be a monkey – or a lemming.• Invest locally.• Learn a useful trade.• Invest in tools, books, supplies.• Get to know your neighbors - you will need them.• Join a group of like-minded people.• Learn how to protect yourself• Learn what technologies might be saved, for how

long, and how to make them work.• Get out of debt.• Move away from large population centers.• Move to where there are local sources of necessities.

- food- water- shelter

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Ancient Chinese proverb: “When you’re thirsty it’s too late to dig a well.”

How and when might this all come down?

If Saudi Arabia falls, it’s too late.

If terrorists hit Abqaiq, or block the Straits of Hormuz it’s too late.

There is a distinct possibility of global resource wars.

Possible rationing, food shortages, fuel shortages, the end of tourism, the end of entitlements, inflation, failures of airlines, hoarding, anarchy, ...

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"As a scientist I have asked myself: What is the most challenging problem that science and technology must solve in the coming decades? It is going to be sustainable energy. If we can't solve that, we have got a real problem." -- Dr. Steven Chew, Secretary of the U.S. Dept of Energy

To save us, the breakthrough must provide renewable, dense, clean, safe, and transportable energy that can scale up rapidly, with a net energy equivalent, or better, than that of oil. --Bill Gates, Microsoft

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WHEN?

5757MAHALO !

OIL

"So let us not talk falsely now, the hour is getting late.”-- Bob Dylan

We’re out of time….

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http://www.drmillslmu.com/peakoil.htm lots of good figures and videos

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(When we finally can no longer deny peak oil, climate change, or the limits to growth, it will hit us) " ...like a grenade in a glasshouse, shattering denial and delusion and leaving it like a pile of broken glass on the floor of the old economic model. Then we’ll be ready for change."

-- Paul Gilding, The Great Disruption

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1) Hold no debt (for most people this means renting)2) Hold cash and cash equivalents (short term treasuries) under your own control3) Don't trust the banking system, deposit insurance or no deposit insurance4) Sell equities, real estate, most bonds, commodities, collectibles (or short if you can afford to gamble)5) Gain some control over the necessities of your own existence if you can afford it6) Be prepared to work with others as that will give you far greater scope for resilience and security7) If you have done all that and still have spare resources, consider precious metals as an insurance policy8) Be worth more to your employer than he is paying you9) Look after your health!

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"Oil peaking will be catastrophic, beyond anything I have seen... We are about to drive the car over the cliff and say, `Oh my God, what have we done?' " -- Robert L. Hirsch, Ph.D., US Department of Energy consultant.

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AND because it is used for about 95% of transportation fuels.

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Oil is an incredibly good fuel, with twice the energy density of ethanol, and it is a far superior way to STORE energy than any battery.