[Aaron]

Whew... long meeting...

Great comments.

I suppose the "subsidy" description might not be perfect, but is meant to convey the idea that oil functions as an effective subsidy to every market in the economy, in effect making stuff cheaper than it would be otherwise.

So the $64,000 question becomes, "Just how much cheaper?"

Just imagine what goods imported by sail power would have to cost? Why more? Because it forms a bottleneck for products and limits the available supplies.

The spice trade between Europe & China centuries ago demonstrates this idea.

In fact I'm hard-pressed to think of any consumer item which does not benefit from this "subsidy" effect.

When considering how alternatives scale against oil depletion, I think of it in the same terms as discovery of new oil against depletion.

Or what percent of projected depletion do we expect a combination of alternatives to offset post peak?

When I remember that an artificial shortage of only 5% oil imports for a few short weeks instigated a decade long economic recession in the 1970's, I can't avoid the deduction that known alternative energy sources are not poised to shoulder 95% of our energy burden.

Which brings us back to depletion rate.

Slow & steady depletion probably means life will become a Norman Rockwell painting.

Fast & turbulent decline... pick your nightmare... you won't be wrong.

[RealJoe]

I am sort of skeptical of photovoltiac cells, because the energy input to refine silicon is so high and there already is a shortage of PV grade silicon compared to market demand. Although Evergreen Solar's PV manufacturing technology is an improvement and the thin-film plastic PV cells may be on their way.

Metals may be the issue with wind power and nuclear energy, because it requires massive energy inputs to produce metals in every stage, from exploration to discovery to mining and extraction to processing and smelting to shipping to manufacturers. But we may not need to do a lot of basic mining. There is very likely to be a large supply of no-longer-needed automobiles, trucks and airplanes to smelt down.

Not to mention the treasures to be found by mining land-fills, which will likely be big business in the future. Plastics for depolymerization, metals for resmelting and organic waste to produce methane will all be able to be extracted from the immense waste left by our present civilization.

So, I guess the sticking point may be concrete to build the supports for wind turbines and the structures for nuclear power plants. Concrete is admittedly an energy drain to manufacture, but there will still be available oil and probably sufficient electricity for its manufacture for several decades yet. I guess I do believe that GE will always be able to afford the energy inputs.

Algae-based biodiesel production from livestock waste streams and human sewage is an elegant solution that addresses both the problems of water pollution and energy generation. I am thinking this is a real field for entrepreneurial development in the future.

Finally using methaneganous archaea bioengineering to break down heavy oils, tar sands, coal fields and biomass into methane may well be our salvation. I will post a bunch of links on this subject sometime in the future.

[aahala]

Aaron

I agree with the idea alternatives will probably not fill 95% of the decline.

As far as the decline in oil imports, I'm presuming you mean 1978-1982
in the US. That percentage decline was nearly 50%, not 5%.

The decline in US comsumption started in 1979 and total reduction was
about 17% over those remaining years. The reason imports declined a
year prior to total usage begun was 1978 was the biggest volume increase in Alaska oil.

[gnm]

Hmm, not sure I would agree with luducrisly expensive - I installed a small PV system in my home for a total cost of $4500. To upgrade the same system to handle 100% of my electrical usage I would need to invest another $5000. So say $10k not $50k. OF course I did do the installation and shop around for parts so I saved a lot there.

By way of comparison some people I know recentlly remodeled thier kitchen for a total of $8k.

I guess it depends what you want to spend your money on...

-G

[nero]

One thing you neglect to mention Aaron in this thread is that the real alternative to oil in the immediate aftermath of the peak is going to be natural gas and coal. Sure they'll eventually peak as well but their peak is not imminent.

I'm not saying we don't have anything to worry about, but for your following question:

$this->bbcode_second_pass_quote('', ' ') Or what percent of projected depletion do we expect a combination of alternatives to offset post peak?

[ubercrap]

$this->bbcode_second_pass_quote('gnm', 'H')mm, not sure I would agree with luducrisly expensive - I installed a small PV system in my home for a total cost of $4500. To upgrade the same system to handle 100% of my electrical usage I would need to invest another $5000. So say $10k not $50k. OF course I did do the installation and shop around for parts so I saved a lot there.

By way of comparison some people I know recentlly remodeled thier kitchen for a total of $8k.

I guess it depends what you want to spend your money on...

-G

[gnm]

Well we are not exactly livin large in our 1400 sq. foot double wide and I defintely can't find $10k in my pocket. Thats why I installed it a bit at a time. And had to save for those bits as well. As for the guy who did the $8k remodel they refied the house to get that and the whole place is worth about $100k so below the average for this region even. Mine comes in about $80k so also below average here. I understand people who are just starting out or are flat out poor or young etc, but there are a WHOLE lot of people who could afford it if they didn't buy that big screen TV, new car etc...

-G

[FatherOfTwo]

$this->bbcode_second_pass_quote('Ludi', '
')What the hey? I can only afford enough PV to run a few lightbulbs and maybe a super-efficient freezer. Whadya mean it "isn't expensive enough?" Not expensive enough for what?

[Aaron]

$this->bbcode_second_pass_quote('aahala', '[')b]Aaron

I agree with the idea alternatives will probably not fill 95% of the decline.

As far as the decline in oil imports, I'm presuming you mean 1978-1982
in the US. That percentage decline was nearly 50%, not 5%.

The decline in US comsumption started in 1979 and total reduction was
about 17% over those remaining years. The reason imports declined a
year prior to total usage begun was 1978 was the biggest volume increase in Alaska oil.

[Whitecrab]

$this->bbcode_second_pass_quote('Aaron', 'I') would argue that:

1) Hydrocarbon energy massively subsidizes almost every aspect of our civilization to an extent which will render all known oil alternative technologies hopelessly expensive as oil prices rise.

[Ludi]

$this->bbcode_second_pass_quote('gnm', '
')I guess it depends what you want to spend your money on...

[halfin]

Here's an example of what the OP meant. I follow some of the biodiesel forums. Many of these guys buy B100 which is pure vegetable oil based diesel. It runs about $1/gallon more than regular diesel. Of course, gasoline and diesel have gone up a lot in the past year. So maybe B100 is getting more competitive?

Not really. B100 is going up just as fast. Why is this?

Two reasons. First, supply and demand. People are willing to pay that $1/gallon premium to know they are doing something good for the environment. As other prices go up, biodiesel goes up with them.

But second, some of the cost of biodiesel does relate to the cost of other fuels. There are energy intensive processes involved in growing the crops and turning them into oil and then into diesel. As other energy costs rise, biodiesel costs rise too.

Now, this won't go on forever, because energy is not 100% of the cost of biodiesel (as with most things). So a 10% increase in energy costs won't cause a 10% increase in biodiesel costs. Eventually you will get a crossover and biodiesel will be cheaper.

But the point is, that crossover price level is likely to be a lot higher than what most people think. They look at price of electricity from solar or wind, or the price of alternative fuels like biodiesel or gasohol, and they say, if conventional energy prices rise X percent, these alternatives will be just as cheap. But that's not true. When conventional energy prices go up, the alternatives get more expensive too. We may have to see much higher energy prices than you'd think, before the alternatives are cost effective.

[MonteQuest]

$this->bbcode_second_pass_quote('Aaron', 'A')nd even if we somehow figure out some wonderful new power source today, can we ramp it up to meet the anticipated depletion rates?

And that is I think the ultimate arbitrator of this argument.

How much freakin oil is left?!?!

Until we have reliable info on reserves, we can't know the exact midpoint, or calculate a meaningful depletion rate globally.

I have almost no doubt that every technology I mentioned will indeed become viable sources of energy. But if we believe Simmons & co are correct in predicting rapid declines past midpoint, I can hardly see how it will matter.

[JohnDenver]

$this->bbcode_second_pass_quote('MonteQuest', 'T')he scalability of any basket of alternatives is woefully lacking.

[MonteQuest]

$this->bbcode_second_pass_quote('JohnDenver', ' ')
Also, Aaron talks about the "hydrocarbon subsidy", but that is the old switcheroo we see so often on this site. We don't have to worry about losing the hydrocarbon subsidy any time soon, because only conventional oil is peaking, not hydrocarbons.

[JohnDenver]

$this->bbcode_second_pass_quote('MonteQuest', 'A')nd these "other" hydrocarbons will be as cheap, have the same energy density, and be as transportable as oil?

[heyhoser]

I don't like playing ball with the majors, but here's something that just jumped out at me:

$this->bbcode_second_pass_quote('JohnDenver', '
')I think T. Boone Pickens has the right idea. Convert power grids from gas to nuclear, and use freed up natural gas as transport fuel.

[Aaron]

$this->bbcode_second_pass_quote('JohnDenver', '')$this->bbcode_second_pass_quote('MonteQuest', 'A')nd these "other" hydrocarbons will be as cheap, have the same energy density, and be as transportable as oil?

[FatherOfTwo]

$this->bbcode_second_pass_quote('Aaron', '
')Do conversions from one hydrocarbon to another benefit from current cheap oil?

Are these alternatives already less desirable as transport fuels today?

How will the rising price of oil affect the cost of these conversions?

How long to convert the millions upon millions of vehicles, fueling stations, processing plants?

And how do the answers to these questions compare to expected depletion rates and projected growth of energy use?

[highlander]

It seems to me there is a logical disconnect between oil and energy. Oil is mostly consumed for transportation. LPG and coal are used to produce power, with which we make all our widgets. Even when there is no oil, we still will have, what, 10 years of LPG and 100 years of coal left. How we transport these energy sources to their point of use could be problematic. Wind and solar aren't very effective. Biodiesel works for me, but won't make a significant difference nationwide. No worries, we will still be able to watch reality TV long after we have quit driving.