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Cautionary Tale

General discussions of the systemic, societal and civilisational effects of depletion.
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Re: Cautionary Tale

Unread postby careinke » Sun 27 Nov 2011, 17:28:01

$this->bbcode_second_pass_quote('AdTheNad', '')$this->bbcode_second_pass_quote('careinke', '
')It would be great to have a nice government subsidized solar power setup, pumping to a big new water tank, placed high up the hill. Unfortunately, steal... er taking government subsidies would be a blow to my integrity, and I can not afford it on my own.

Either way you'll be using subsidised roads and oil for delivery.


True, but in this I have a choice.
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Re: Cautionary Tale

Unread postby ColossalContrarian » Sun 27 Nov 2011, 19:40:35

This thread makes me wonder about Deep Water Horizon in the GOM and the BP Oil Spill. What would an oil spills influence have on the money involved and does this even dent EROEI factors. I have a feeling BP actually made more money on the face time than they lost from any actual fines but I don’t know?

Was Deep Water Horizon a money maker for the shareholders of BP or was it a net loss? What about if you bought BP shares when they bottomed during the crisis?
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Re: Cautionary Tale

Unread postby vtsnowedin » Sun 27 Nov 2011, 19:42:05

$this->bbcode_second_pass_quote('AgentR11', '')$this->bbcode_second_pass_quote('vtsnowedin', 'H')ow do we sort this out? What if we remove all mandates to blend gasoline with ethanol. remove all subsidies and make tax law and policy the same for oil refineries and corn to alcohol plants.


And remove all military expenditures from oil producing regions, and walla, level playing field.

Sounds mostly like you just want to remove the subsidies from one side, and leave the subsidies in for the other.

If you will look back you can see that I said to remove "All" subsidies. Was that not plain enough?
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Re: Cautionary Tale

Unread postby AgentR11 » Sun 27 Nov 2011, 19:51:38

$this->bbcode_second_pass_quote('vtsnowedin', 'I')f you will look back you can see that I said to remove "All" subsidies. Was that not plain enough?


Context had me read that as referring to only subsidies related to ethanol production. My apologies if it was meant to apply to subsidies that are also provided in the form of military protection for overseas oil production, (and others).
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Re: Cautionary Tale

Unread postby vtsnowedin » Sun 27 Nov 2011, 20:00:41

$this->bbcode_second_pass_quote('AgentR11', '')$this->bbcode_second_pass_quote('vtsnowedin', 'I')f you will look back you can see that I said to remove "All" subsidies. Was that not plain enough?


Context had me read that as referring to only subsidies related to ethanol production. My apologies if it was meant to apply to subsidies that are also provided in the form of military protection for overseas oil production, (and others).

OK so let's move to the question. If you leveled the playing field as much as possible would anyone in the energy production business manufacture and sell any ethanol?
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Re: Cautionary Tale

Unread postby AgentR11 » Sun 27 Nov 2011, 20:19:32

$this->bbcode_second_pass_quote('vtsnowedin', 'O')K so let's move to the question. If you leveled the playing field as much as possible would anyone in the energy production business manufacture and sell any ethanol?


Well, given that anyone producing ethanol would, by definition, be in the energy production business, certainly.

That said, this is really about the incredibly complicated rules regarding gasoline mixtures. If the feds set any standards for gasoline mixture, do they include ethanol in the mix? The feds believe it to be to their economic advantage to include ethanol, so if they have the right to set the standard, and do so, that standard will include ethanol. If it includes ethanol, then there will be a market requirement for large quantities of ethanol.

Basically it boils down to this:
The constitution gives the feds the right to regulate interstate commerce.
The have the constitutional authority to set regulations about what constitutes legally salable gasoline.
The feds believe ethanol addition is in their economic interest.
The feds set regulation that mandates inclusion of ethanol.
Ethanol must be either manufactured or imported.
Ag produces and sells ethanol.

Short of changing the constitution, you just aren't going to get rid of any step in the above chain. So wishing away ethanol production is just not going to happen.

So; we are, and will for the foreseeable future have 10% of our gasoline be Ethanol. Thus there is demand.
Ag producers in the US can and do produce ethanol at a lower price per gallon than gasoline. Thus it is a wise business decision.
One gallon of ethanol requires much less than one gallon of diesel fuel to produce; thus it is a net increase in available liquid fuels.

Whether the total energy required to produce a gallon of ethanol is greater than the total energy available in that gallon of ethanol is of interest to no one other than academics.
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Re: Cautionary Tale

Unread postby vtsnowedin » Sun 27 Nov 2011, 21:02:34

$this->bbcode_second_pass_quote('AgentR11', '')$this->bbcode_second_pass_quote('vtsnowedin', 'O')K so let's move to the question. If you leveled the playing field as much as possible would anyone in the energy production business manufacture and sell any ethanol?


Well, given that anyone producing ethanol would, by definition, be in the energy production business, certainly.

That said, this is really about the incredibly complicated rules regarding gasoline mixtures. If the feds set any standards for gasoline mixture, do they include ethanol in the mix? The feds believe it to be to their economic(political) advantage to include ethanol, so if they have the right to set the standard, and do so, that standard will include ethanol. If it includes ethanol, then there will be a market(Bureaucratic) requirement for large quantities of ethanol.

Basically it boils down to this:
The constitution gives the feds the right to regulate interstate commerce.
The have the constitutional authority to set regulations about what constitutes legally salable gasoline.
The feds believe ethanol addition is in their economic Political)interest.
The feds set regulation that mandates inclusion of ethanol.
Ethanol must be either manufactured or imported.
Ag produces and sells ethanol.

Short of changing the constitution, you just aren't going to get rid of any step in the above chain. So wishing away ethanol production is just not going to happen.

So; we are, and will for the foreseeable future have 10% of our gasoline be Ethanol. Thus there is demand.
Ag producers in the US can and do produce ethanol at a lower price per gallon than gasoline. Thus it is a wise business decision.
One gallon of ethanol requires much less than one gallon of diesel fuel to produce; thus it is a net increase in available liquid fuels.

Whether the total energy required to produce a gallon of ethanol is greater than the total energy available in that gallon of ethanol is of interest to no one other than academics.

There clarified that for you. You are not answering my question. I am well aware of the political realities of our current system. My question is how much are we paying to make every potential presidential candidate viable at the Iowa caucuses?
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Re: Cautionary Tale

Unread postby AgentR11 » Sun 27 Nov 2011, 21:36:32

$this->bbcode_second_pass_quote('vtsnowedin', 'T')here clarified that for you. You are not answering my question. I am well aware of the political realities of our current system. My question is how much are we paying to make every potential presidential candidate viable at the Iowa caucuses?


If you insist on the short answer. The answer to your question is unknowable.

Proof:

How much does oil cost in the absence of any mid eastern oil export to the world market?
How much does ethanol cost to make in the event of massive crop failures?
How much does the US current accounts lose in the event of massive crop surpluses?

The variables are just simply so massive that any assertion about whether ethanol in gasoline mandates are a cost or a gain is simply unrealistic.

However, if you were aware of the political realities, you knew this answer already. The political realities flow from this physical reality. The mandate reduces the total volume of imported oil required. The mandate prevents massive surplus from crashing the price of grain. The mandate can also be suspended in the even of massive crop failure, adding additional grain to the market.

Ethanol and its mandated inclusion in over the road gasoline add an additional adjustment knob in the food/fuel export/import model. For the federal government, its a slam dunk win.
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Re: Cautionary Tale

Unread postby vtsnowedin » Mon 28 Nov 2011, 07:08:51

$this->bbcode_second_pass_quote('AgentR11', '')$this->bbcode_second_pass_quote('vtsnowedin', 'T')here clarified that for you. You are not answering my question. ?


If you insist on the short answer. The answer to your question is unknowable.

Proof:

.............. The mandate reduces the total volume of imported oil required. . For the federal government, its a slam dunk win.

You are still not answering the real question and I suspect that is due to you not liking the real answer.
Does the mandate reduce the volume of imported oil. That can only be true if the EROEI of corn to ethanol is positive which is the real question. without that real data your proof is worthless. And finally it is not what is a slam dunk win for the government and it's politicians I am concerned with but what is good for the citizens of the country. They are not always the same thing.
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Re: Cautionary Tale

Unread postby Pops » Mon 28 Nov 2011, 09:09:48

According to this page ethanol might be profitable without the subsidy (54¢/gal?) but I'd guess without the renewables mandate that adds demand above the oxygenator requirement the price would fall quite a bit.
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Re: Cautionary Tale

Unread postby AgentR11 » Mon 28 Nov 2011, 10:19:49

$this->bbcode_second_pass_quote('vtsnowedin', 'D')oes the mandate reduce the volume of imported oil. That can only be true if the EROEI of corn to ethanol is positive which is the real question.


Yes. Yes it does reduce the volume of imported oil.
And it does it without the EROEI of corn to ethanol being positive.

This is true because the energy invested in the production of corn ethanol is mostly solid(coal) or gaseous(natural gas). Some oil is used in transport&tractor stuff so oil inputs into corn ethanol are non-zero; but they are much less than one gallon of oil per 6/5th gallon of ethanol.
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Re: Cautionary Tale

Unread postby vtsnowedin » Mon 28 Nov 2011, 23:58:33

$this->bbcode_second_pass_quote('AgentR11', '')$this->bbcode_second_pass_quote('vtsnowedin', 'D')oes the mandate reduce the volume of imported oil. That can only be true if the EROEI of corn to ethanol is positive which is the real question.


Yes. Yes it does reduce the volume of imported oil.
And it does it without the EROEI of corn to ethanol being positive.

This is true because the energy invested in the production of corn ethanol is mostly solid(coal) or gaseous(natural gas). Some oil is used in transport&tractor stuff so oil inputs into corn ethanol are non-zero; but they are much less than one gallon of oil per 6/5th gallon of ethanol.

Now we are getting somewhere.!!
6/5 Gallon?? much less then 6/5 gallon? Might that be 3/5gallon? And then there is that solid(coal) and gaseous (natural gas) which you say is "mostly" the energy invested in ethanol. But coal and natural gas are priced in barrels of oil equivalent, not exactly, but certainly not free. So mostly X 6/5 equals 4/5 plus (much less 3/5 )equals 7/5 gallon of energy to produce 5/5 gallon of ethanol which equals an EROEI of less then 1 :P
That is just what I thought.
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Re: Cautionary Tale

Unread postby AgentR11 » Tue 29 Nov 2011, 12:18:31

umm... we all agree that the EROEI for corn ethanol is less than one. The point is that, for corn ethanol, we aren't trying to create energy; we are trying to convert some energy into a lesser amount of energy in a more useful form.

Just like charging a battery. You lose some substantial amount of energy to heat in the charging process; but the energy stored in the battery is more useful, more portable, than the energy in the utility lines. You also lose some energy when you generate electricity in the first place; converting solid/gas energy, into electrical energy.

In fact, ANY conversion of energy results in some amount of loss.

This is why your focus on EROEI for corn ethanol is so wrong headed. It is of absolutely no importance, even if it takes 100 ergs of general energy to manufacture a single erg of energy stored in corn ethanol.

So what does matter?

Do we get more liquid form energy out, than we put in. Answer is plainly yes.

Is the dollar cost of producing ethanol so outrageously out of line with other liquid fuels that it disrupts the market? Answer is plainly no.

Thus, producing ethanol and mandating its inclusion in over-the-road gasoline is the correct policy choice.
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Re: Cautionary Tale

Unread postby davep » Tue 29 Nov 2011, 13:16:07

$this->bbcode_second_pass_quote('pstarr', 'B')igger picture; That crowd was proven wrong years ago when the market clearly and definitively told us ethanol is a failure.


But that does not necessarily mean the EROEI for ethanol is less than 1. It merely means that it has been less than easily obtained oil.
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Re: Cautionary Tale

Unread postby The Practician » Tue 29 Nov 2011, 15:59:41

$this->bbcode_second_pass_quote('AgentR11', 'u')mm... we all agree that the EROEI for corn ethanol is less than one. The point is that, for corn ethanol, we aren't trying to create energy; we are trying to convert some energy into a lesser amount of energy in a more useful form.

Just like charging a battery. You lose some substantial amount of energy to heat in the charging process; but the energy stored in the battery is more useful, more portable, than the energy in the utility lines. You also lose some energy when you generate electricity in the first place; converting solid/gas energy, into electrical energy.

In fact, ANY conversion of energy results in some amount of loss.

This is why your focus on EROEI for corn ethanol is so wrong headed. It is of absolutely no importance, even if it takes 100 ergs of general energy to manufacture a single erg of energy stored in corn ethanol.

So what does matter?

Do we get more liquid form energy out, than we put in. Answer is plainly yes.

Is the dollar cost of producing ethanol so outrageously out of line with other liquid fuels that it disrupts the market? Answer is plainly no.

Thus, producing ethanol and mandating its inclusion in over-the-road gasoline is the correct policy choice.


Sure, it makes economic sense right now, but if we are using 100 ergs of other forms of fossil fuel to get 1 erg of corn ethanol, that's 100 ergs that will never be there again to perform useful work in the future, in the form of electricity or directly as natural gas or whatever. When you take your economist blinders off, corn ethanol looks more like a waste of energy than anything else. But lets not forget, when it come to the economy, wasting energy is the name of the game! Like I said in my "energy subsidy for tar sands" thread, wasting energy is what the economy is all about. the more waste the better--as long as there is "cheap" available energy in some form (liquid? solid? doesn't matter!) that can be put to work as wastefully as possible, everything's gravy. When that energy is gone, it's gone, and the waste economy will die with it, and the more energy and capital we throw at propping the waste economy up while it's "economically viable", the harder it's gonna fall.
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Re: Cautionary Tale

Unread postby radon » Tue 29 Nov 2011, 18:04:13

$this->bbcode_second_pass_quote('AgentR11', '
')Just like charging a battery. You lose some substantial amount of energy to heat in the charging process; but the energy stored in the battery is more useful, more portable, than the energy in the utility lines.


Yes.
Oil is often implicitly identified with energy on our forums, just like this: oil=energy. But oil does not equal energy. Oil is not energy, it is a product - like sugar, wheat, bread, shirt, iPhone, car etc. - or the electricity in the battery.

Ethanol is also a product. Even if the world runs out of oil, ethanol may still be produced as long as someone is willing to buy it thereby making its production economically viable, and as long as a reasonable degree of social order is preserved. Some future feudal warlord may drive an ethanol powered car, unavailable to the general public, just like some enjoy the luxury of private aircraft today.

Subsidizing ethanol might not be too different to, for example, subsidizing military industry - if the government thinks it makes sense than it goes for it.

Back to the OP - those economic NPV/DCF calculations include so many long-term future variables presently unknown that it makes the economic risk/reward analysis somewhat shamanistic. From that point of view, EROEI analysis of a project may be a more objective assessment of its merits, as you do not need to convert physical values in (unknown/unpredictable) monetary values.

Still, Kazakhstan is probably quite happy to have that oil in the ground.
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Re: Cautionary Tale

Unread postby The Practician » Tue 29 Nov 2011, 18:43:19

$this->bbcode_second_pass_quote('radon', '')$this->bbcode_second_pass_quote('AgentR11', '
')Just like charging a battery. You lose some substantial amount of energy to heat in the charging process; but the energy stored in the battery is more useful, more portable, than the energy in the utility lines.


Yes.
Oil is often implicitly identified with energy on our forums, just like this: oil=energy. But oil does not equal energy. Oil is not energy, it is a product - like sugar, wheat, bread, shirt, iPhone, car etc. - or the electricity in the battery.


No. Straight up wrong. Oil produced at positive EROEI is a PRIMARY ENERGY SOURCE, not a PRODUCT PRODUCED BY THE CONSUMPTION OF ENERGY!

Ethanol is also a product. Even if the world runs out of oil, ethanol may still be produced as long as someone is willing to buy it thereby making its production economically viable, and as long as a reasonable degree of social order is preserved. Some future feudal warlord may drive an ethanol powered car, unavailable to the general public, just like some enjoy the luxury of private aircraft today.
[/quote]

I do not deny that at some point in the (relatively) near future, this might be the case, but it looks like a tacit admission that oil is a bit more than just a "product". what you are describing is the massive appropriation of resources to prop up the extravagant lifestyles of the few at the expense of the many. Does this situation sound familiar to anyone?
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Re: Cautionary Tale

Unread postby radon » Tue 29 Nov 2011, 19:23:11

$this->bbcode_second_pass_quote('The Practician', '
')No. Straight up wrong. Oil produced at positive EROEI is a PRIMARY ENERGY SOURCE, not a PRODUCT PRODUCED BY THE CONSUMPTION OF ENERGY!


Barrel of oil whose production took 2 or more barrels of your oil of the same quality would probably require some serious justification, but you have to demonstrate that this was the case.

Production of a barrel of oil (or ethanol-equivalent) with the help of coal whose energy is equivalent to that of 2 or more barrels of oil could be quite reasonable. This is because oil and ethanol are liquid, and coal is not.

Production of a barrel of oil (ethanol equivalent) with the help of exported electricity, whose generation consumed 2 or more barrels of oil of the exporter country, could also make sense in certain circumstances.
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