Off the keyboards of Monsta666 & A. G. Gelbert
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Often I hear argument that if we deploy various renewable energy solutions then our modern industrial society can transition to a sustainable society. While many of these renewable solutions do indeed provide better outcomes than the current fossil fuel paradigm they will not – on their own – make our economy any more sustainable. The reason this is the case is because of the issue of perpetual economic growth that our economy demands which is largely (but not solely) driven by our debt based currency system. Until this fundamental issue of growth is tackled then achieving sustainability becomes an impossible task.
In the dialogue below is an exchange between me and fellow Diner and moderator agelbert who is one of the strongest advocates we have in the Diner in renewable energy solutions. Just to be clear, even though I do not see renewable energy as the ultimate solution to providing a sustainable environment this is NOT an argument against renewable energy. Moreover, I am of the belief that a technological solution is possible in the process of reverse engineering into a sustainable economy provided the technology is deployed in a sensible manner and is managed properly. For this reason I do support agelbert and his endeavours to getting the word out on the renewable story. However what I think is equally significant with the message agelbert projects is one of HOPE.
His zeal, commitment and pleasant nature offers people hope and in a world that faces so many challenges, some of which could well be fatal, hope is a powerful force on society and its effects cannot be neglected. One only needs to look at the incidents in Greece with people succumbing to drugs or crime in Egypt to see what happens when people lose hope. It is our duty as Diners to offer people hope and not go full doom Guy McPherson style. We must fight until the bitter end in offering a better tomorrow for future generations. We cannot save everyone but we must to strive to save as many as we can!
For this reason we must offer hope to people for without hope there is only anger and when people get angry they become worse than unproductive; they become positively destructive. So because of this agelbert offers a good service in a similar vain to Eustace Conway by offering an alternative living arrangement to Business As Usual (BAU). All such efforts must be supported and I encourage Diners to do the same. On this note by hitting the Donate button for the Diner you will be supporting the SUN project which is another attempt in escaping the trap that is BAU.
Anyhow, I am digressing here and to back to the original topic on hand I will post this debate me and agelbert had about how to create a sustainable economy in this planet:
JMG has a better handle on the most probable future in the next 50 years or so but I think he engages in hyperbole by classifying all of us techno-weenies as technology clinging denialists who don’t understand the laws of thermodynamics (I.E. he WRONGLY claims we need too much energy just to build the renewable infrastructure so it just can’t be done, won’t be done, the Archdruid has spoken and us chillen need to cut our losses and flush toilets and get with the program of getting used to having less beer and goodies).
I certainly agree with him that the rationalizations bordering on gymnastic pretzel logic that come from people when their predicted apocalyptic imminent scenarios don’t materialize on schedule is worthy of ridicule. Humans have an awful time letting go of ownership bias, whether it be a thing no longer worth what they thought it was, or an idea or a prediction that didn’t pan out.
Clever fellows like JMG try to sound like they are above it all dispassionately observing the poor slobs tied to faddish ideas, religions, pro-environment mantras, new age predictions or whatever. He’s NOT.
As a matter of fact, he is making the very mistake that he accuses others of. He sees any hybrid approach to solving our energy problem by combining a limited amount of fossil fuels with renewable energy technology during a transition phase as impossible.
I must disagree with this. I can certainly agree that renewable infrastructure does have its benefits and should be more aggressively pursued but I think we must recognise that renewables are not sustainable on a BAU basis. What we have to understand is BAU is based on a debt-based currency system and these currencies can only remain viable under the condition of perpetual growth. Perpetual growth is impossible unless we have infinite resources, infinite energy and bottomless sinks where pollution can be contained. To most people it is pretty self-evident we do not have infinite resources but on the matter of energy we must remember that infinite energy is only possible if the laws of thermodynamics are violated.
It is this requirement of perpetual growth that makes any energy platform (even the illuminatti’s wet dream of fusion energy) unsustainable as you will either reach limits in the amount of resources available, energy or the amount of pollution produced. Growth will end due to one of these stocks becoming a limiting factor. In other words growth is limited under the principle of Liebig’s law of minimum which states that total production is limited by the factor that is in most limited supply in the production process. This may either be resources, energy or pollution and so all these factors must be considered and managed if we wish to maintain a sustainable society. This is a basic fact and we must STRESS that the first law of sustainability is this:
Growth in population and/or growth in the rates of consumption CANNOT BE SUSTAINED!
Until we address the issue of economic growth and the continued rise of consumption then all talk about sustainability is futile. Alternate energy systems such as renewable energy are only viable if they do not operate under the paradigm of constant growth. Now this isn’t an argument against renewable energy and I agree with you they must be pushed but I do think a big part of this sustainability debate must centre on the fact that economic growth must end.
At the end of the day we need to recognise that our economic and environmental crises are – at their core – the result of man’s behaviour on planet Earth. Until we change our behavioural patterns then all technology does is postpone the day of reckoning. I say this because humans have a predisposition to increasing their population and consuming their resources as quickly as possible as they wish to pursue more prosperous lifestyles. This disposition towards population growth coupled with increased consumption of resources results in humans utilising technology and energy as an enabler of resources. As more sophisticated technology is developed; the resource base available to man increases; this increase in available resources allows a rise in living standards. Now if man simply stopped population growth and material standards at a certain level then they could enjoy the increased productivity this new technology would bring. Unfortunately it never works out that way because as living conditions improve human population increases until people live at a subsistence level at this new technological level.
The best example I can offer of this phenomenon at work would be the green revolution. The green revolution caused food production to rise rapidly resulting in food prices declining rapidly. This cheap food enabled human population to grow rapidly, so much so that man has become dependent on this unsustainable food production system at even a subsistence level in many places across the globe. In fact if current populations continue to rise and people move towards a more resource consumptive diet i.e. eating more meat that requires more resources to produce then even this system cannot even sustain future populations at a subsistence level. This creates pressure in developing another “technical solution” such as GM food or some other monstrosity. Even if we assume this technical solution could deliver its promised returns and had no blowback (I know this is never the case but for arguments let us suppose this is the case). What would happen then? Populations and consumption would just rise again until we hit the limits of this new technical solution.
This pressure of population and consumption rises creates the need for technical solutions and because of this nothing really changes if taken on a long-term basis. We are on a constant hamster wheel to hell unless we change the way we behave. Man has a behavioural problem and NOT a technical problem. If we want to develop a manifesto that is truly sustainable we need to include some part that addresses population control and control of consumption. Doesn’t necessarily have to be direct eugenic style of population control nor do we have to set real limits to consumption. You can limit consumption by rewarding society in ways other than increasing material consumption. Some means of population is required and I would be interested in reading how the Japanese maintained their relative steady state economy during the Edo period where population was maintained around 30 million people for hundreds of years. This move towards a steady state economy that recognised the need to preserve the environment never gained traction in the “enlightened” European countries hence the push for empire building and later fossil fuel solutions to keep the hamster wheel spinning faster and faster to support growing populations/consumption patterns. Off course greed and other vices made all these issues worse. And the pigs and parasites have made things immeasurably worse and they must be punished accordingly.
No kidding! When did I say it NEEDED to be sustained? Population growth is going tits up ALL OVER THE PLANET! Check the stats. The top priority is to clean up the environment while getting off fossil fuels. Dealing with population pressures is secondary and, as I just mentioned, is less of a problem in numerical projections every year. If you want to get all flustered about how many humans there are, well go right ahead but SHOW ME SOME FACTS!
Whilst I would agree you never said BAU needed to be sustained; in fact I believe you are actually an advocate of ending BAU like me. However the reason I did mention this point was because I feel you do not stress the fact that business as usual can only work on the basis of continued growth. I feel this point really needs to be HAMMERED home if sustainability is the name of the game. In fact by stressing the madness of BAU with it requirements for constant economic growth and the inevitable end-points this mindless pursuit would entail (such as resource collapse, environmental catastrophe and global bankruptcy) people will become more agreeable to alternate means of living which can include renewable energy systems as you advocate. When promoting a sustainable lifestyle we got to understand that renewables by themselves are not going to deliver a sustainable lifestyle if the growth side of the equation is not tackled. What we need to do is address this aspect but that does not mean renewable energy cannot be part of the package.
But you wanted facts so let me offer you some. The rate of human population growth is indeed declining as you say but that does mean population is declining. It is still increasing but the rate of increase is decreasing. If we are to believe the figures provided by the UN Population Fund then world population will hit 9 billion by 2043. Like you have already alluded to the time to reach each successive billion from here on out will rise with the next rise of 1 billion taking 14 years while the one after that will take 18 years followed by 40 years for the final billion. So according to the UN world population should peak at just over 10 billion souls. I have ENORMOUS doubts this will actually transpire but those are the figures the UN currently projects. In any case though the fact of the matter is human population is still increasing so the problem is getting worse.
Looking at your article you open with the following sentence:
Why the 1% is responsible for more than 80% of humanity’s carbon footprint and why Homo sapiens is doomed unless the 1% lead the way in a sustainable life style.
While this sentence is true this fact does not cover the whole issue here and there are several problems with it. As I mentioned in my previous post there will be several potential limiting factors that will make further economic growth impossible. The example you highlight represents mainly C02 emissions which as we all know is a pollutant. Increasing pollution will wreck the environment and if it is severe enough will cause irreversible damage and will limit economic growth. However we need to remember that consumption of resources is also increasing at an exponential rate and I would figure these consumption rates are not the primary result of what the 1% consume. After all there is only so much a person may eat or drink. Posted below are rates of consumption of food and water. However look up the consumption of fish and other various commodities and all these will exhibit exponential growth and are likely to continue posting exponential if the economy does not collapse.
On top of these resource depletion issues the other problem comes from the implicit assumption that if we somehow eliminated the 1% who committed the 80% of the emissions then we would reduce carbon emissions by 80%. This is unlikely to happen as a new 1% (the Orkin Men perhaps?) would takeover. Why would this happen you say? This is because one of the emergent properties of our economic systems is to reward people who can maximise their consumption of resources. If you are clever and can find a means of extracting more resources then you will be given a good paycheck. In addition to this we need to remember money buys you not only POWER but STATUS also. If a person has lots of money they are deemed to be a “successful” member of society and people will look favourably upon you and tend to ignore mistakes, character flaws more easily and may even ignore FATAL defects if you are rich enough. Just ask Corzine for proof of this! You see this all the time with the most powerful and successful getting away with murder. All these factors act as powerful social cues that provide strong positive reinforcement to pursuing a lifestyle that maximises consumption as such behaviour is actively rewarded from a financial, social AND mating standpoint. Considering one of the primary objectives of all animals is to reproduce then this effect cannot really be understated. I feel even in your article you hinted at this point (please correct if I have misinterpreted something here):
The chimps engage in rather brutal wars with other chimp tribes where the victors set about to kill and eat very young chimps of the vanquished tribe. This is clearly a strategy to gain some evolutionary advantage by killing off the offspring of the competition.
I repeat, excessive aggression or same sex sexual activity as a dominance display is a downside to the “strong sex drive” successful evolutionary characteristic.
This “downside”, when combined with a large brain capable of advanced tool making, can cause the destruction of other species through rampant predation and poisoning of life form resources in the biosphere.
I would agree with these points and would also agree with the viewpoint that our increased sized brains have meant we have exploited our environment to an extent no other animal has been capable off and in a way our evolution has lead us into a bit of a dead end. I also agree with the bit you mention how more complex organisms tend to be less resilient as they tend to sacrifice resilience for increased efficiency in a particular environment. If the parameters of the environment were to change sufficiently then the organism’s capability to survive will decline more rapidly than a simpler more resilient life form like the bacteria you describe. This I feel only applies on a species level however as it is possible for there to be complex ecosystems that is highly resilient. This is possible because complex ecosystems can consist of a complex web or interdependent organisms that forms a very resilient network of animals so we must be specific on what level we are talking about when bringing up the efficiency/resilience debate.
Going back to my earlier point though, the big issue we have with the current BAU system is the destructive behavioural patterns that it actively promotes namely excessive consumption. If we wish for people to lower per capita energy consumption more rapidly we need to devise a means where lower capita is rewarded and status can be conferred through means other than greater material consumption. Mating can offer a strong incentive to a certain pattern of behaviour and this picture demonstrates a good example of this:
Why the dimorphism in the pheasants? It takes more energy to maintain a larger body; you become more conspicuous and obvious to predators with those bright colours. On top of that escape will become more difficult from an energy prospective as not only is there more mass to move but it is likely the pheasant will have run that bit further to escape the notice of predators. All these evolutionary costs are acceptable however because the result is more mating. If animals can change their composition by this degree on the basis of increased mating opportunities then imagine what we can do if we rewarded people with status by developing the right habits! Got any ideas how to go about this? I don’t think this point can be understated, BAU rewards destructive behaviours and if we want sustainability we need to tackle this issue otherwise there will always be a 1% to take over the last one.
Look what the biologist in Africa has discovered and PROVED! Desertification can ONLY be prevented by INCREASING THE SIZE OF THE HERDS MASSIVELY! ??? Can you handle that? This is exactly the opposite of what science had always believed!.:icon_scratch: It’s there in my channel. The man is an eminent authority on the environment. You can reject his counterintuitive FACTS but they are still going to be facts. :icon_mrgreen:
Is there a lesson there for human populations? Maybe, maybe not, but it does make you think.
This is the case that the biologist killed the elephants but unfortunately the study was flawed because they missed an even bigger ELEPHANT in the room which was man being the main culprit. Was this due to overpopulation or due to the excessive consumption lifestyles of pigmen wishing to gain more profit? This could be a matter of contention however what cannot be disputed is that man has been creating the larger deserts by either farming the land too extensively or through excessive emissions of various pollutants most likely C02 and other greenhouse gases.
Just to avoid arguments, lets say you are right about the population issue, can you get past that for a moment to consider the viability of a techno-fix? THAT’S my main beef with JMG. I know you want us to “reduce” ourselves because our carbon footprint is “unsustainable”. I’ve already dropped mine considerably for over 20 years! Tell me how many miles YOU drive each year and how many square feet YOUR house has (I drive less than 1,200 miles a YEAR and live in 980 sq, ft.).
First of all, congrats on reducing your C02 emissions! Good work and keep up the good fight! As for me, I don’t personally own a car so my mileage in terms of actual driving is flat out zero. However I do get lifts and the miles travelled in those journeys would probably amount to something like 1,200 miles per year. Reason for not driving is I am not going to spend lots of money financing an automobile. In addition to that I would have to pay around $9 for one gallon of gas not to mention over $3000 dollars a year on insurance for owning the said car. With my limited income this investment makes little sense so I depend on public transport and other good old fashioned walking. My worst C02 emissions likely come from the fact I travel on a plane about 2 or 3 times a year.
Back to your question however: I do think that the human population has to drop considerably especially if we consider the blowback that will come from climate change and the likely other environmental disasters that are to come such as nuclear meltdowns due to a breakdown of JIT supply lines. Because of these unpredictable events it is hard to determine what population will be sustainable exactly. It will not be 7 billion however especially when the rate of fossil fuel extraction declines.
As I said in my previous post; technology enables humans to increase their resource base by increasing productivity. By applying renewable energy systems the carrying capacity of humans can be increased so renewables can help. However it is hard again to say what the carrying capacity will be. You see, in my eyes total consumption rates is a product of population and per capita consumption. If you wish people to have a higher standard of living then the carrying capacity of society must be lower. If you want to increase carrying capacity then you must sacrifice per capita consumption. These sorts of decisions can only really be made on a local and not global level.
If a society wishes to work on a sustainable basis then they must decide what balance they require in terms of optimal population size and per capita consumption. On this note I don’t think it makes sense to maximise population as I feel it is more important to focus on QUALITY and NOT quantity of life (BAU and various religions seem to promote the latter). To me, quality and happiness of the people in the community is the thing we must strive to maximise and to do this we need to insure that nearly all people in society can meet their basic needs comfortably i.e. living comfortably above the subsistence level. It should be noted that on a general historical basis in the absence of rigorous checks on population there will be a tendency for the population to rise until most members can only survive on a subsistence level given the current level of technology deployed. To maximise happiness it is my personal opinion that populations must be kept below this natural limit. I can understand perfectly well if our views on this are matter are different as it is a highly contentious issue. I imagine the final decision made would vary quite markedly for each community.
Saying all that you don’t want population to be too low as that will mean that the amount of per capita consumption will become too great and too high an income will make people more susceptible to greed, other vices not to mention unequal power issues between different local communities which will pose a threat to maintaining a sustainable economy over a larger region. As always there needs to be a balance and what you deem as optimal will vary so I think it is impossible to give an exact figure. I do hope you see where I am coming from in this however. Again though, carbon emissions are only part of the story here as we need to consider resources, pollutants and energy as separate components when considering issues of sustainability. To achieve a truly sustainable economy all these components need to be addressed and we cannot simply put our focus on pollution.
Off the keyboard of Guy McPherson
Published on Nature Bats Last on November 17, 2012
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As Derrick Jensen points out, this “culture as a whole and most of its members are insane.” I continue to be surprised at the number of people who believe in infinite growth on a finite planet. I continue to be amazed at the number of people who believe a politician cares about them, and that their favorite politician will act in their best interests. I continue to be surprised at the number of people who actually believe in the political process. I continue to be amazed at the number of people who support civilization, knowing it is killing us all. I’m even more surprised, though, at the number of people who claim ignorance about the costs and consequences of industrial civilization.
As pointed out by French author and Nobelist in literature André Gide: “Everything that needs to be said has already been said. But since no one was listening, everything must be said again.” So, here I go, saying it again.
Apparently I’m a very slow learner. It’s a bad, sad time. I hate this culture.
It’s worse than all of the above, though. There are a significant number of people who believe we can continue the omnicide, and that doing so is a good idea. Consider, for example, proponents of the Third Industrial Revolution.
The five pillars of the Third Industrial Revolution infrastructure are listed below. After pasting a brief description directly from Wikipedia (in italics), I dismantle each of the pillars.
1. Shifting to Renewable Energy: Renewable forms of energy — solar, wind, hydro, geothermal, ocean waves, and biomass — make up the first of the five pillars of the Third Industrial Revolution. While these energies still account for a small percentage of the global energy mix, they are growing rapidly as governments mandate targets and benchmarks for their widespread introduction into the market and their falling costs make them increasingly competitive.
“Renewable” sources of energy are derivatives of oil. Oil is the master material. The availability and price of oil control every other “resource.” I’ve pointed out the absurdity and hopelessness of switching the extra-oil sources here, here, here, here, here, and here (in chronological order).
2. Buildings as Power Plants: New technological breakthroughs make it possible, for the first time, to design and construct buildings that create all of their own energy from locally available renewable energy sources, allowing us to reconceptualize the future of buildings as “power plants”. The commercial and economic implications are vast and far reaching for the real estate industry and, for that matter, Europe and the world. In 25 years from now, millions of buildings — homes, offices, shopping malls, industrial and technology parks — will be constructed to serve as both “power plants” and habitats. These buildings will collect and generate energy locally from the sun, wind, garbage, agricultural and forestry waste, ocean waves and tides, hydro and geothermal — enough energy to provide for their own power needs as well as surplus energy that can be shared.
First, see my comment above regarding “renewable” energy sources. They are a well-promoted myth. Second, consider if you will, the reality of our collective situation 25 years from now. If human beings persist on this planet — and that’s a significant if, based on the various paths by which we are vigorously pursuing human extinction — then it’s difficult to imagine a scenario that includes an industrial economy at the scale of the globe. We can have an industrial economy or we can have a living planet, but we cannot have both over another quarter century.
3. Deploying Hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies. To maximize renewable energy and to minimize cost it will be necessary to develop storage methods that facilitate the conversion of intermittent supplies of these energy sources into reliable assets. Batteries, differentiated water pumping, and other media, can provide limited storage capacity. There is, however, one storage medium that is widely available and can be relatively efficient. Hydrogen is the universal medium that “stores” all forms of renewable energy to assure that a stable and reliable supply is available for power generation and, equally important, for transport.
As a carrier of energy — but definitely not a source — hydrogen is neither stable nor reliable. The notion of stability is dismissed with a single word: Hindenburg. The hype about hydrogen is extreme and extremely ridiculous.
Transporting hydrogen is prohibitively expensive and requires distillates of crude oil. In addition, automakers will not make hydrogen fuel-cell cars until the hydrogen infrastructure is in place, and the infrastructure will not appear until there are a sufficient number of fuel-cell cars on the road.
4. Using Internet technology to transform the power grid of every continent into an energy sharing intergrid that acts just like the Internet. The reconfiguration of the world’s power grid, along the lines of the internet, allowing businesses and homeowners to produce their own energy and share it with each other, is just now being tested by power companies in Europe. The new smart grids or intergrids will revolutionize the way electricity is produced and delivered. Millions of existing and new buildings — homes, offices, factories—will be converted or built to serve as “positive power plants” that can capture local renewable energy — solar, wind, geothermal, biomass, hydro, and ocean waves — to create electricity to power the buildings, while sharing the surplus power with others across smart intergrids, just like we now produce our own information and share it with each other across the Internet.
Never mind the endless hopium associated with producing “renewable” energy for more than seven billion people. Never mind the war-based industrial economy of the world’s sole remaining superpower. If we’re counting on technology currently under testing in Europe, we’re also assuming Europe will exist as a political entity for a long time. We’re also assuming Europeans will continue to play nice with each other as well as people in other countries. The very idea of surplus power is being revealed as a horrifically bad joke as the Middle East and northern Africa come under daily attack from several more-industrialized nations.
5. Transitioning the transport fleet to electric, plug in and fuel cell vehicles that can buy and sell electricity on a smart continental interactive power grid. The electricity we produce in our buildings from renewable energy will also be used to power electric plug-in cars or to create hydrogen to power fuel cell vehicles. The electric plug in vehicles, in turn, will also serve as portable power plants that can sell electricity back to the main grid.
Car culture is a huge source of many of our worst problems. Cheering for the never-ending continuation of car culture is a death sentence for the living planet. In addition, as indicated above, transporting hydrogen is unsafe, expensive, and dependent upon distillates of crude oil. And then there’s that chicken-and-egg issue associated with construction of infrastructure to support hydrogen fuel-cell cars.
When these five pillars come together, they make up an indivisible technological platform — an emergent system whose properties and functions are qualitatively different from the sum of its parts. In other words, the synergies between the pillars create a new economic paradigm that can transform the world.
When these five pillars of sand come together, they make up an undistinguished pile of dysfunctional hopium — a pile of sand whose properties and functions are qualitatively and quantitatively irrelevant to the industrial economy. In other words, the synergies between the meaningless pillars create a new pile of false hope for those who wish to continue destroying the living world. Fortunately, the hopium is running out.
Contrary to conventional wisdom among civilized humans, we don’t need an industrial economy to survive. In fact, all evidence indicates the opposite is true, yet we keep cheering for this culture of death, cheering for continued destruction of all we need for our survival. Insanity has won, proving Ralph Waldo Emerson correct: “The end of the human race will be that it will eventually die of civilization.”
Off the keyboard of Gail Tverberg
Published on Our Finite World on October 17, 2012
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We keep hearing about the many benefits of natural gas–how burning it releases less CO2 than oil or coal, and how it burns with few impurities, so does not have the pollution problems of coal. We also hear about the possibilities of releasing huge amounts of new natural gas supplies, through the fracking of shale gas. Reported reserves for natural gas also seem to be quite high, especially in the Middle East and the Former Soviet Union.
But I think that people who are counting on natural gas to solve the world’s energy problems are “counting their chickens before they are hatched”. Natural gas is a fuel that requires a lot of infrastructure in order for anything to “happen”. As a result, it needs a lot of up-front investment, and several years time delay. It also needs changes on the consumption side (requiring further investment) that will allow this natural gas to be used. If the cost is higher than competing fuels, this becomes a problem as well.
In many ways, natural gas consumption is captive to other things that are happening in the economy: an economy that is industrializing rapidly will easily be able to consume more natural gas, but an economy in decline will find it hard to scrape together funds for new ways of doing what was done previously, now with natural gas. Increased use of renewables seems to call for additional use of natural gas for balancing, but even this is not certain, because in many parts of the world, natural gas is a high-priced imported fuel. Political instability, often linked to high oil and food prices, creates a poor atmosphere for new Liquefied Natural Gas (LNG) facilities, no matter how attractive the pricing may seem to be.
In the US, we have already “hit the wall” on how much natural gas can be absorbed into the system or used to offset imports. US natural gas production has been flat since November 2011, based on EIA data (Figure 1, below).
Even with this level of production, and a large shift in electricity production from coal to natural gas, natural gas is still on the edge of “maxing out” its storage system before winter hits (Figure 2, below).
Figure 2. US natural gas in storage, compared to five-year average. Figure prepared by US Energy Information Administration, Weekly Natural Gas Storage Report as of October 5, 2012.
World Natural Gas Production
The past isn’t the future, but it does give a little bit of understanding regarding what the underlying trends are.
World natural gas production/consumption (Figure 3) has been increasing, recently averaging about 2.7% a year. If we compare natural gas to other energy sources, it has been second to coal in terms of the amount by which it has contributed to the total increase in world energy supplies in the last five years (Figure 4). This comparison is made by converting all amounts to “barrels of oil equivalent”, and computing the increase between 2006 and 2011.
Figure 4. Increase in energy supplied for the year 2011, compared to the year 2006, for various fuels, based on BP’s 2012 Statistical Review of World Energy data.
In order for natural gas to be an energy savior for the world, natural gas consumption would need to increase far more than 2.7% per year, and outdistance the increase in coal consumption each year. While a modest increase from past patterns is quite possible, I don’t expect a miracle from natural gas.
Natural Gas: What Has Changed?
The basic thing that has changed is that fracking now permits extraction of shale gas (in addition to other types of gas), if other conditions are met as well:
- Selling price is high enough (probably higher than for other types of natural gas produced)
- Water is available for fracking
- Governments permit fracking
- Infrastructure is available to handle the fracked gas
Even before the discovery of shale gas, reported world natural gas reserves were quite high relative to natural gas production (63.6 times 2011 production, according to BP). Reserves might theoretically be even higher, with additional shale gas discoveries.
In addition, the use of Liquified Natural Gas (LNG) for export is also increasing, making it possible to ship previously “stranded” natural gas, such as that in Alaska. This further increases the amount of natural gas available to world markets.
What Stands in the Way of Greater Natural Gas Usage?
1. Price competition from coal. One major use for natural gas is making electricity. If locally produced coal is available, it likely will produce electricity more cheaply than natural gas. The reason shale gas recently could be sold for electricity production in the United States is because the selling price for natural gas dropped below the equivalent price for coal. The “catch” was that shale gas producers were losing money at this price (and have since dropped back their production). If the natural gas price increases enough for shale gas to be profitable, electricity production will again move back toward coal.
Many other parts of the world also have coal available, acting as a cap on the amount of fracked natural gas likely to be produced. A carbon tax might change this within an individual country, but those without such a tax will continue to prefer the lower-price product.
2. Growing internal natural gas use cuts into exports. This is basically the Exportland model issue, raised by Jeffrey Brown with respect to oil, but for natural gas. If we look at Africa’s natural gas production, consumption, and exports, this is what we see:
Figure 5. Africa natural gas production, consumption, and exports, based on BP’s 2012 Statistical Review of World Energy.
In Africa, (mostly northern Africa, which exports to Europe and Israel), consumption has been rising fast enough that exports have leveled off and show signs of declining.
3. Political instability. Often, countries with large natural gas resources are ones with large oil resources as well. If oil production starts to drop off, and as a result oil export revenue drops off, a country is likely to experience political instability. A good example of this is Egypt.
Figure 6. Egypt’s oil production and consumption, based on BP’s 2012 Statistical Review of World Energy.
No matter how much natural gas Egypt may have, it would not make sense for a company to put in an LNG train or more pipeline export capability, because the political situation is not stable enough. Egypt needs oil exports to fund its social programs. The smaller funding amount available from natural gas exports is not enough to make up that gap, so it is hard to see natural gas making up the gap, even if it were available in significant quantity.
Iran is a country with large natural gas reserves. It is reportedly looking into extracting natural gas for export. Again, we have a political stability issue. Here we have an international sanctions issue as well.
4. “Need the natural gas for myself later” view. A country (such as Egypt or the United States or Britain) that has been “burned” by declining oil production may think twice about exporting natural gas. Even if the country doesn’t need it now, there is a possibility that vehicles using natural gas could be implemented later, in their own country, thus helping to alleviate the oil shortage. Also, there are risks and costs involved with fracking, that they may not choose to incur, if the benefit is to go to exporters.
5. Cost of investment for additional natural gas consumption. In order to use more natural gas, considerable investment is needed. New pipelines likely need to be added. Homeowners and businesses may need to purchase gas-fired furnaces to raise demand. If it is decided to use natural gas vehicles, there is a need for the new vehicles themselves, plus service stations and people trained to fix the new vehicles. Additional natural gas storage may be needed as well. Additional industrial production is difficult to add, unless wages are low enough that the product being sold will be competitive on the world market.
Existing “pushes” toward better insulation have the effect of reducing the amount of natural gas used for heating homes and businesses, so work in the opposite direction. So do new techniques for making nitrogen-based fertilizer using coal, rather than using natural gas.
6. Touchy balance between supply and consumption. If additional production is added, but additional uses are not, we have already seen what happens in the United States. Storage facilities get overly full, the price of natural gas drops to unacceptably low levels, and operators scramble to cut back production.
The required balance between production and consumption is very “touchy”. It can be thrown off by only a few percent change in production or consumption. Thus an unusually warm winter, as the United States experienced last year, played a role in the overly full storage problem. A ramp up of production of only a few percent can also cause an out of balance situation. Unless a developer has multiple buyers for its gas, or a “take or pay” long-term contract, it risks the possibility that the gas that is has developed will not be wanted at an adequate price.
7. Huge upfront investment requirements. There are multiple requirements for investing in new shale gas developments. Each individual well costs literally millions of dollars to drill and frack. The cost will not be paid back for several years (or perhaps ever, if the selling price is not high enough), so debt financing is generally needed. If fracking is done, a good supply of water is needed. This is likely to be a problem in dry countries such as China. There is a need for trained personnel, drilling rigs of the right type, and adequate pipelines to put the new gas into. While these things are available in the United States, it likely will take years to develop adequate supplies of them elsewhere. All of the legislation that regulates drilling and enables pipeline building, needs to be in place as well. Laws need to be friendly to fracking, as well.
Growth in Exports to Date
Exports grew as a percentage of natural gas use through about 2007 or 2008.
Figure 7. World natural gas exports as percentage of total natural gas produced, by year, based on EIA data (older years) and BP’s 2102 Statistical Review of World Energy for 2010 and 2011.
In recent years, natural gas exports have fallen slightly as a percentage of total gas extracted. Thus, if world natural gas supplies have risen by an average of 2.7% per year for the past five years, exports available for import have risen a little less rapidly than the 2.7% per year increase. A major ramp-up in export capability would be needed to change this trend.
While we hear a lot about the rise in exports using LNG, its use does not seem to be adding to the overall percentage of natural gas exported. Instead, there has been a shift in the type of export capacity being added. There are still a few pipelines being added (such as the Nord Stream pipline, from Russia to Germany), but these are increasingly the exception.
The Shale Gas Pricing Debate
Exactly what price is needed for shale gas to be profitable is subject to debate. Shale gas requires the payment of huge up-front costs. Once they are drilled and “fracked,” they will produce for a long period. Company models assume that they will last as long as 40 years, but geologist Arthur Berman of The Oil Drum claims substantial numbers are closed down in as few as six years, because they are not producing enough natural gas to justify their ongoing costs. There is also a question as to whether the best locations are drilled first.
Logically a person would expect shale-gas to be quite a bit more expensive to produce than other natural gas because it is trapped in much smaller pores, and much more force is required to extracted it. In terms of the resource triangle that I sometimes show (Figure 8, below), it epitomizes the low quality, hard to extract resource near the bottom of the triangle that is available in abundance. We usually start at the top of the resource triangle, and extract the easiest and cheapest to extract first.
Berman claims that prices $8.68 or higher per million Btu are needed for profitability of Haynesville Shale, and nearly as high prices are needed to justify drilling other US shale plays. The current US price is about $3.50 per million Btu, so to be profitable, the price would need to be more than double the current US price. Prices for natural gas in Europe are much higher, averaging $11.08 per million Btu in September 2012, but shale gas extraction costs may be higher there as well.
The US Energy Information Administration admits it doesn’t know how the economics will work out, and gives a range of projected prices. It is clear from the actions of the natural gas industry that current prices are a problem. According to Baker Hughes, the number of drilling rigs engaged in natural gas drilling has dropped from 936 one year ago to 422, for the week ended October 12, 2012.
Backup for Renewables
One area where natural gas excels is as a back up for intermittent renewable energy, since it can ramp up and down quickly. So this is one area where a person might expect growth. Such a possibility is not certain, though:
1. How much will intermittent renewables continue to ramp up? Governments are getting poorer, and have less funds available to subsidize them. They do not compete well on when they go head to head with fossil fuels, nuclear, and hydroelectric.
2. When intermittent renewables are subsidized with feed in tariffs, and requirements that wind power be given priority over fossil fuels, it can provide such an unlevel playing field that it is difficult for natural gas to be profitable. This is especially the case in locations where natural gas is already higher-priced than coal.
The Societal “Recipe” Problem
Our economy is built of many interdependent parts. Each business is added, taking into account what businesses already are in place, and what laws are in effect. Because of the way the economy currently operates, it uses a certain proportion of oil, a certain proportion of natural gas, and more or less fixed proportions of other types of energy. The number of people employed tends to vary, too, with the size of the economy, with a larger economy demanding more employees.
Proportions of businesses and energy use can of course change over time. In fact, there is some flexibility built in. In particular, in the US, we have a surplus of natural gas electricity generating units, installed in the hope that they would be used more than they really are, and the energy traded long distance. But there is less flexibility elsewhere. The cars most people drive use gasoline, and the only way to cut back is to drive less. Our furnaces use a particular fuel, and apart from adjusting the temperature setting, or adding insulation, it is hard to make a change in this. We only make major changes when it comes time to sell a car, replace a furnace, or add a new factory.
In my view, the major issue the world has been dealing with in recent years is an inadequate supply of cheap oil. High priced oil tends to constrict the economy, because it causes consumers to cut back on discretionary spending. People in discretionary industries are laid off, and they tend to also spend less, and sometimes default on their loans. Governments find themselves in financial difficulty when they collect fewer taxes and need to pay out more in benefits. While this issue is still a problem in the US, the government has been able to cover up this effect up in several ways (ultra low interest rates, a huge amount of deficit spending, and “quantitive easing”). The effect is still there, and pushing us toward the “fiscal cliff.”
The one sure way to ramp up natural gas usage is for the economy as a whole to grow. If this happens, natural gas usage will grow for two reasons: (1) The larger economy will use more gas, and (2) the growth in the economy will add more opportunities for new businesses, and these new businesses will have the opportunity to utilize more natural gas, if the price is competitive.
I have compared the situation with respect to limited oil supply as being similar to that of a baker, who is trying to bake a batch of cookies that calls for two cups of flour, but who has only one cup of flour. The baker is able to make only half a batch. Half of the other ingredients will go unused as well, because the batch is small.
To me, discovering that we have more natural gas than we had before, is analogous to the baker discovering that instead of having a dozen eggs in his refrigerator, there are actually two dozen in his refrigerator. In fact, he finds he can even go and buy more eggs, if he is willing to pay double the price he is accustomed to paying. But the eggs really do not fix the missing cup of flour problem, unless someone can find a way to change eggs into flour very cheaply.
Basic Energy Types
To me, the most basic forms of energy resources are (1) coal and (2) oil. Both can be transported easily, if it is possible to extract them. Natural gas is very much harder to transport and store, so it is in many ways less useful. It can be made work in combination with oil and coal, because the use of coal and oil make it possible to build pipelines and make devices to provide compression to the gas. With coal and oil, it is also possible to make and maintain electric transmission lines to transport electricity made with natural gas.
I sometimes talk about renewable energy being a “fossil fuel extender,” because they hopefully make fossil fuels “go farther”. In some ways, I think natural gas is an extender for oil and coal. It is hard to imagine a society powered only by natural gas, because of the difficulties in using it, and the major changes required to use it exclusively.
In the earliest days, natural gas was simply a “waste product” of oil extraction. It was “flared” to get rid of it. In many parts of the world, natural gas is still flared, because the effort it takes to collect it, transport it, and make it into a useful product is still too high.
The hope that natural gas will be the world’s energy savior depends on our ability to make this former waste product into a product that will replace oil and coal. But unless we can put together an economy that needs and uses it, most of it probably will be left in the ground. The supposedly very high reserves will do us no good.
Off the Keyboard of Gail Tverberg
Published originally on Our Finite World on August 14, 2012
Discuss this article at the Epicurean Delights Smorgasbord of the Diner
The issue of nuclear electricity is a complex one. In this post, I offer a few insights into the nuclear electric situation based on recent reports and statistical data.
Nuclear Electric Production Is Already Declining
According to BP’s Statistical Review of World Energy, the highest year of nuclear electric production was 2006.
There are really two trends taking place, however.
1. The countries that adopted nuclear first, that is the United States, Europe, Japan, and Russia, have been experiencing flat to declining nuclear electricity production. The countries with actual declines in generation are Japan and some of the countries in Europe outside of France.
2. The countries that began adopting nuclear later, particularly the developing countries, are continuing to show growth. China and India in particular are adding nuclear production.
The long-term trend depends on how these two opposite trends balance out. There may also be new facilities built, and some “uprates” of old facilities, among existing large users of nuclear. Russia, in particular, has been mentioned as being interested in adding more nuclear.
Role of Nuclear in World Electricity
Nuclear provides a significant share of world electricity production, far more than any new alternative, making a change from nuclear to wind or solar PV difficult. If nuclear electricity use is reduced, the most likely outcome would seem to be a reduction in overall electricity supply or an increase in fossil fuel usage.
Nuclear is the largest source of world electricity after fossil fuels and hydroelectric, comprising about 12% of total world electricity. Wind amounts to about 2% of world electric supply, and solar (which is not visible on Figure 2) amounts to one-quarter of one percent (0.25%). “Other renewable” includes electricity from a variety of sources, including geothermal and wood burned to produce electricity. These can’t be scaled up very far, either.
Note that even with the growth of renewables, there is still very substantial growth in fossil fuel use in recent years. If nuclear electricity use is reduced, fossil fuel use may grow by even a greater amount.
Role of Nuclear in Countries that Use Nuclear
The world situation shown in Figure 1 includes many countries that do not use nuclear at all, so the countries that do use nuclear tend to generate more than 12% of their electricity from nuclear. This means that if a decision is made to move away from nuclear, an even larger share of electricity must be replaced (or “be done without”).
For example, in the Untied States (Figure 3), nuclear now amounts to about 19% of US electricity production, and is second only to fossil fuels as an electricity source. US nuclear production tends to be concentrated in the Eastern part of the US, so that nuclear amounts to 30% to 35% of electric production along the US East Coast. This would be very difficult to replace by generation from another source, other than possibly fossil fuels.
For countries that are planning to reduce their nuclear generation, nuclear electricity as a percentage of total electric production in 2010 are as follows:
- Germany, 22%;
- Switzerland, 37%;
- Belgium, 52%; and
- Japan 25%.
Unless these countries can count on imports from elsewhere, it will be difficult to make up the entire amount of electricity lost through demand reduction, or through a shift to renewables.
Nuclear Electric Plants that are “Paid for” Generate Electricity Very Cheaply
Nuclear power plants for which the capital costs are already “sunk” are very inexpensive to operate, with operating costs estimated at 2 cents per kilowatt-hour (kWh). Any kind of change away from nuclear is likely to require the substitution of more expensive generation of some other type.
The electrical rates in place today in Europe and the United States today take into account the favorable cost structure for nuclear, and thus help keep electrical rates low, especially for commercial users (since they usually get the best rates).
If new generation is added to substitute for the paid off nuclear, it almost certainly will raise electricity rates. These higher rates will be considered by businesses in their decisions regarding where to locate new facilities, and perhaps result in more of a shift in manufacturing to developing nations.
Germany’s Experience in Leaving Nuclear
It is too early to know exactly what Germany’s experience will be in leaving nuclear, but its early experiences provide some insights.
One cost is decommissioning. According to Reuters, German nuclear companies have made a total of $30 billion euros ($36.7 billion) in provision for costs related to the cost of dismantling the plants and disposing of radioactive materials. According to the same article, Greenpeace expects the cost may exceed 44 billion euros ($53.8 billion). If the amount of installed nuclear capacity in Germany is 20.48 million kilowatts (kW), the direct cost of dismantling the nuclear reactors and handling the spent fuel ranges from $1,792 to $2,627 per kW. This cost is greater than the Chinese and Indian cost of building a comparable amount of new reactor capacity (discussed later in this article).
David Buchanan of the Oxford Institute for Energy Studies did an analysis of some of the issues Germany is facing in making the change. Germany was in an unusually favorable situation because it had a cushion of spare capacity when it decided to close its reactors. When Germany closed its oldest eight reactors, one issue it discovered was lack of transmission capacity to transfer wind energy from the North to areas in the South and Southwest of Germany, where the closed reactors were located. In addition, the system needs additional balancing capability, either through more natural gas generation (because gas generators can ramp up and down quickly), or more electric storage, or both.
In Germany, natural gas is an expensive imported source of energy. The economics of the situation are not such that private companies are willing to build natural gas generation facilities, because the economics don’t work: (a) renewables get first priority in electricity purchases and (b) electricity from locally produced coal also gets priority over electricity from gas, because it is cheaper. If new gas generation is to be built, it appears that these plants may need to be subsidized as well.
Increased efficiency and demand response programs are also expected to play a role in balancing demand with supply.
Not All Countries Have the Same High Nuclear Electricity Costs
We don’t really know the cost of new nuclear electricity plants in the United States, because it has been so long since a new plants were built. The new reactors which are now under construction in the state of Georgia will provide a total of 2,200 MW of generation capacity at a cost estimated at $14.9 billion, which means an average cost of $6,773/kW.
In China and India, costs are lower, and may drop even lower in the future, as the Chinese apply their techniques and low-cost labor to bring costs down. The World Nuclear Association (WNA) in its section on China makes the statement,
Standard construction time is 52 months, and the claimed unit cost is under CNY 10,000 (US$ 1500) per kilowatt (kW), though other estimates put it at about $2000/kW.
In the section on nuclear power for India, the WNA quotes construction costs ranging from $1,200/kW to $1,700/kW, using its own technology.
If we compare the cost of US planned plants in Georgia to the Chinese and Indian plants, the cost seems to be three or four times as high.
These cost differences also appear in comparisons on a “Levelized Cost” basis. The EIA in its 2012 Annual Energy Outlook quotes an US expected levelized cost of nuclear of 11 cents per kilowatt-hour (kWh), anticipated for facilities being constructed now. The section on the Economics of Nuclear Power of the WNA quotes levelized costs in the 3 to 5 cents per kWh range for China, depending on the interest rate assumed. A cost in the 3 to 5 cents range is very good, competitive with coal and with natural gas, when they are inexpensive, as they are now in the United States.
Some of China’s nuclear reactors were purchased from the United States, and thus will be higher in cost because of the purchased components. But knowing that China has a reputation for “reverse engineering” products it buys, and figuring out how to make cheap imitations, I expect that it will be able to figure out ways to create low-cost reactors in the near future, whether or not it can do so today. So the expectation is that China and India will be able to make cheap reactors (probably without all the safety devices that some other countries currently require) for itself, and quite likely, eventually for sale to others. Sales of such reactors may eventually undercut sales by American and French companies.
Interest in Purchasing Reactors
The interest in purchasing electricity generation of all kinds is likely to be greater in developing countries where the economy is growing and the need for electricity generation is growing, than in the stagnant economies of the United States, Europe, and Japan. If we look at a graph of electricity production of Asia-Pacific excluding Japan, we see a very rapid growth in electricity use.
Figure 4. Asia-Pacific Excluding Japan Electricity by Source, based on BP’s 2012 Statistical Review.
The Middle East (Figure 5, below) is another area with an interest in nuclear. It too has shown rapid growth in electricity use, and a historical base of mostly fossil use for electricity generation.
Figure 5. Middle East Electricity by Source, based on data of the BP’s 2012 Statistical Review of World Energy.
Use of Thorium Instead of Uranium Would Seem to be a Better Choice, if It Can be Made to Work
I have not tried to research this subject, except to note that research in this area is currently being done that may eventually lead to its use.
Uranium Production is a Problem
World uranium production fell a bit in 2011, relative to 2010, according to the World Nuclear Association.
Production from Kazakhstan is becoming an increasingly large share of the total. Production in both the US and Canada declined in 2011. Spot prices have tended to stay low, in spite of the fact that an agreement that allowed the US to buy recycled Russian bomb material reaches an end in 2013. There are no doubt some stockpiles, but the WNA estimates 2011 production to equal to only 85% of current demand (including military demand).
Figure 7. World Uranium Production and Demand, in an image prepared by the World Nuclear Association.
A person would think that prices would rise higher, to incentivize increased production, but this doesn’t seem to be happening yet, at least. The uranium consulting firm Ux Consulting offers the following comment on its website:
The market that we now find ourselves in is like no other in the history of uranium. Production is far below requirements, which are growing. HEU [highly enriched uranium] supplies and the enrichment of tails material make up a large portion of supply, but the fate of these supply sources is uncertain. Supply has become more concentrated, making the market more vulnerable to disruptions if there are any problems with a particular supply source. Another source of market vulnerability is the relatively low level of inventory held by buyers and sellers alike.
The consulting firm ends the section with a pitch for its $5,000 report on the situation.
A person would like to think that additional production will be ramped up quickly, or that the US military would find some inventory. Markets don’t always work well at incentivizing a need for future production, especially when more or less adequate current supplies are available when Russian recycled bomb material is included. The discontinuity comes when those extra supplies disappear.