I grow more and more convinced each day that our energy problem is, in fact, a people problem.
The fact is, a wide variety of technologies exist today that, were they applied correctly, could do much to bail us out of the energy corner we've painted ourself into.
And in many ways, this is already happening.
If you haven't noticed, natural selection is occurring rapidly in the energy markets, and it's turned Wall Street into our own Galapagos laboratory. Energy evolution is happening as you read this.
Of course, the energy stalwarts will continue to be the energy stalwarts. Oil, gas, and coal will have a solid foothold—and provide much of the baseload power — for years to come.
But other technologies are proving their worthiness, as well. Renewable energy, for example, was the only electricity-producing technology to increase production last year. Coal was down 13%. . . Nuclear energy was down 12%. . . Natural gas was down 1.5%. This all comes right from the EIA's most recent "Electric Power Monthly" report.
And if hydro-electricity is included in this group, renewables generated 13% of the U.S.'s electricity last year.
That said, it's no longer kosher simply to spout off at the mouth about renewables' inadequacies, or about any other energy misconceptions for that matter. Misinformation and misconceptions are a large part of the problem here.
Recognizing that all technologies have a seat at the table is paramount, as is accepting that no single technology is an energy savior. I'm talking to you, oil junkies.
As I see it, one of the biggest problems standing in the way of legitimate energy development is inaccurate energy opinions, which seem to be rampant, even in these pages.
Here are comments we've received in the last quarter:
Misinformed Energy Comments (in their original, non-spell-checked forms)
- The last I heard, we have maybe 10 billion barrels in Alaska, 85 offshore, 300 in the Baaken formation in North Dakota, and more than 1 trillion in oil shale. Much of this is off limits by the Democrats and a few turncoat Republicans. Chuck S.
- Dream on - the technology is not here on a commercial scale. Oil & gas will be our primary source of energy for many years to come. Ed L.
- The only reason GE, Duke Energy, P&G & Goldman Sacks et.el. are investing or supporting so called green energy is so they can trade carbon credits and make millions!90% of all wind turbines & solar panels are made over seas! Indiana just bought all their turbines from Denmark. Banish
- Are you stupid if this energy bill passes. It is the first step to a comunis county. If you dont like or want your freedom then support the bill. If you do like your freedom then dont support the bill. Jason
- 4 nuclear plants have just been approved. We need 200. A coal fired plan puts out about 800 kilowats. A nuclear plant puts out 2000 megawats with no carbon output. Solar and wind generators are a joke! Don
- Let's start with what we already have...natural gas for eternity. Renewables won't make a dent. Obama and friends are negative on any kind of drilling. Get ready. Rob S.
- When price is right, oil from the arctic and offshore will provide all we will ever need. Even if Congress locks up those sources, Bakken by itself could replace OPEC oil. The key is to look at "provable" or "probable" reserves and the true extent of our vast supply will reveal itself. PEAK oil theory fails again. Wes.
- Nuclear plants are continuing to get operating extensions. They are heading to 60-80 year operating lives. Brian W.
- the greens will destroy the country..no jobs,,alt energy will not supply the us needs. Roger L.
- Ships loaded with crude are circling the earth with no onshore storage available. Eventually some of this crude will be "dumped" and prices will drop. Between Oil Shale, Bakken and offshore, USA can become a net oil exporter. Do not underestimate human innovation. Even Malthus recanted. Provable oil reserves have increased since the 70s and have discredited Hubbard's "theory". Try to be intellectually honest and you will have more subscribers. Wes
- It is with much concern I read about government "reaching" into my home forcing me to lower my thermostat against my will because some government flunky refuses to build clean nuclear plants or drill for the trillions of barrels of oil spread around the country and off shore. I read the prediction of the smart grid as 1984. I'll bet the elite will not have their homes "reached" into. I will not allow a "smart meter" to be installed on my meter base. William M.
My Response
At first, I was going to respond brazenly and deconstruct each ill-fated statement one by one. Instead, I think I'll offer a few broad rebuttals, and leave the rest of the chastising to our more informed readers.
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For those of you who think ANWR, or the Bakken, or offsore drilling is the answer. . . you need to have a conversation with Chris Nelder about flow rates. Having all the oil in the world (which some of the authors of the above comments feel the U.S. has) doesn't do a bit of good unless you can bring it to market — quickly and economically. That is simply not the case with unconventional shale and sand plays. Chris likes to use the analogy of having an ocean made up of oil, but only one straw through which to attract it.
Will we need it? Yes. Is it even remotely a panacea? Not in the slightest.
Start now (and we should, if the economics are right) and you may be bringing on a negligible amount of oil in a year or two.
In the interest of remaining objective, here's what Reuters says about energy in the future:
Bush said opening federal lands off the U.S. coast — where oil drilling has been banned by both a presidential executive order and a congressional moratorium — could yield about 18 billion barrels of oil. That would meet current U.S. consumption for about 2 1/2 years, but it would likely take a decade or more to find the oil and produce it. The prospect of more energy supply down the road could calm nervous traders who see a looming global oil crunch, but any actual supply would be years away even if Congress acted quickly.
With respect to ANWR, here's Reuters again:
The government estimates up to 16 billion barrels of oil in ANWR are technically recoverable, although much of that would be too expensive to produce at today's prices. With prices at or above $35 a barrel, energy companies could economically recover an estimated 6 billion barrels of oil from ANWR.
If leasing is permitted on ANWR and commercial exploration and development begins, it could take up to 12 years before any oil reaches the market, according to government and industry estimates.
And concerning nuclear, the same situation applies. Indeed, building 200 new reactors would do much to alleviate our energy concerns. But when was the last time we built just one? It was called "Watts Bar," and construction began in 1973. It came online in 1996, after a construction halt in 1988.
Currently, 26 applications have been filed to build new reactors. Only 6 have been approved. That's a far cry from 200. And it seems an even further cry when you consider the intense oppositions, immense red tape, long approval times, long equipment lead times, and general lack of qualified engineers to build them.
We've had one in the past three decades. . . let's not hold our breath for 200 new ones.
Those are just my initial thoughts on some of the misguided concepts identified above, but I want to hear what you have to say.
Is it just me, or is it crazy to think that "we can drill our way out of this?"
Does anyone rationally think we can get nukes built in time?
And who, pray tell, can dismiss renewables as a joke, or deem them as "not being able to make a dent," when not only are they being turned to as a major catalyst for economic recovery. . . but they also have the fastest growth rates of any energy-producing technology and were the only segment to increase electricity production over the last year.
I await your thoughts.
Call it like you see it,
Nick
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So good luck with your idea.
Fred
You made some good points regarding the viewpoints held by some of your readers. We can't drill our way out the problem but at the same time we are not going to find anything more then a incremental solution to our energy supply with the current technology of wind and solar.
The only solution comes from moderating demand by price. A solution that will be presented by the market.
yours,
J
Thanks for pointing out all of these standard misconceptions!
-Cheers
You guys deliver great stuff. Rings true every time. Keep it up.
Maybe one day we will meet.
and other roofing types, to assuage style requirements of suburbanites and architects.
that's 1 to 2 million acres, for starters, of solar power. Needed, as usual: political incentives.
Not only are we not finding enough oil to do any good but you can't just stick a straw in and get as much as you want. As fields get older it is harder to get the oil. The flow rate decreases rapidly and soon you have a Cantarell with 30% reductions in production a year.
Combine decreasing field production with no new significant finds in 30 years (and they have been trying!) with an increasing Indian and Chinese middle class and the desire of the Chinese to get access to oil and you have the seeds for the next world war.
First: Immobile energy production is in need of supply. We have that supply covered if we really need it. Coal or liquified coal will be there if we truly need it.
Second: Mobile energy must be liquid and portable. Meaning that it must be easily moved in a container on the transport vehicle.
Hydrogen is out because of its leakage and pressure and corrosion problems. Natural gas is out because it is a fact that there will not be enough for transportation and electrical generation. Coal will be business with the electrical generation too.
Electrical transportation vehicles still do not have the necessary battery power needed for heavy lifting or economically priced cars.
The biggest problem will become energy for transport. I see a future for trains. They can be electrified easily. They already are in much of Europe. We can too.
Individual cars and trucks are the problem. To change the American paradigm will be very difficult. We are spoiled and wasteful and love it.
But when fuel (whatever form it takes) is $10/gal and up, we may have to rethink our preferences.
I have been against nuclear from day one. However, it is now possible to produce much safer energy with it. And, THORIUM, might just be the best answer.
All the rest of the alternative energy suppliers are needed, and badly. Encourage them and invest in them. They can take some of the pressure off of petroleum.
I must remind you that petroleum will become a luxury that only the elite will be able to afford in the near future (say 40 years, tops). In the interim, we will see less and less production and depletion will go to zero. It will be painful and reorder the entire world and all society.
It can not be helped. When one mines a resource it eventually runs out!!
Oil, cheap oil, is the basis of all our current lifestyle. Yes, all. If you think about it and the loss of it, you will find a very nasty new world approaching at speed. Are we prepared or preparing for it? Not really. It is coming just the same. When it arrives everyone will point fingers and heads will roll. But that will not solve the problems.
Food and water will become the biggest problems for our entire world. Petroleum has given us those items in abundance for decades. Populations have grown to depend on increased food and water production. All supplied by oil.
So. I encourage you all to push for every type of energy available as fast as possible. 'Cause the time of plenty is ending.
You only think you are ready. You aren't. I assure you. You are not ready. Every level of society in the world will be affected adversely.
You better learn some new skills.
Can you grow your own food?
Can you drill a water well or develop catchment?
Can you ride a horse and care for it?
Can you make soap or candles from fat? Can you make cloth and clothes from that cloth?
Well, you better learn. Start now.
The oil is definitely running out.
Aloha, Tom
We have to look at the reason it takes so long to get the product to market. It isn't because the oil companies can't get the studies and equipment in time, but because of the excesssive regulation and environmental constraints that are placed on them.
We can get to all of this oil much quicker...but we hide behind the ridiculous regulatory system that has built up over the years to make the argument that it takes too long.
I know you didn't make up this argument, but let's tell our politicians to lean out the process and watch the oil flow in half the time.
Has anyone noticed that the World Trade Center still doesn't have a stick in the air--8 years later? Same problem. We have overregulated and it's choking off progress.
You got it right with - I grow more and more convinced each day that our energy problem is, in fact, a people problem.
Then you lost it.
There is only one problem, and billions of symptoms.
Finite planet and too many people.
Industrial revolution, 1750 one billion peolpe.
First oil well, 1860 one and a half billion.
I was born in 1940, 2 billion.
Now, six point eight billion.
No matter what energy source you look at, it will not cope with that many people with their aspirations.
What chance do the young, un-born etc have with population growth like that, and no, the birth rate is not the problem, science has blocked the drain of people dieing.
Its not allowed.
Regards
Bernard
http://www.pbmr.com/
and micro reactors
http://www.nextenergynews.com/news1/next-energy-news-toshiba-micro-nuclear-12.17b.html
http://deals.venturebeat.com/2008/04/17/portable-nuclear-reactor-maker-hyperion-gets-funding/
can be added to our power grid VERY VERY quickly. Hell, the reactor can be delevered and hookes up in days, not years. Not the whole answer, but a very big START!
Add Anwr, the Williston Basin, the Colorado Oil Shales, THE hugh reserves of natural gas, developed slowly, but starting NOW, and we will have cheap energy for decades to come.
Eventuallly, we will have FUSION POWER which will run xcivilization for as long as it lasts. As you know, the sun is fusion at a distance.. This can be done, but we have to stop stuiopdly doing almost nothing and get to work.
Peter
Water, energy and terrorism are three survival issues facing this country and the world, yet the general public is very willing to accept the 60 second sound bites promoted by our leaders, special interest groups and others. In my opinion, all of the comments reflect a lack of understanding about our energy and water infrastructure.
I believe our energy mix needs to include alternative sources, oil, coal, nuclear etc. However, I the idea that we are going to drill our way out of this crisis is wrong. As an expert in water issues, I have looked a both oil shale and tar sands and they have significant water challenges that may or may not be overcome.
What we really need is a national energy discussion and policy. I propose gathering some of the brightest minds (not politicians) available in each of the respective energy technologies to advise us and develop such a framework. Then we mandate that this policy be implemented by our government. Sadly, this is probably only possible with a far more informed public.
Your remarks were right on. Thank you for your informed and reasoned article.
I think you are entirely right that this is a people problem.
Take the analogy of being stranded on a desert island with a limited supply of food and some seeds. What would you do? You have two options.
1. Would you have a big feast every day in the hope that someone will come along and save you before you run out of food?
2. Or would you plant the seeds and ration the food you have so that you will eventually be able to grow your own food (i.e. become sustainable)?
While we are sitting around our banquet table debating how much food we have left and whether the tomato seeds are better than the pumpkin seeds, time is running out.
These are the facts
1. Nobody is going to come and save us (unless you believe in extra-terrestrials)
2. We are going to run out of food, the question of when is much less relevant than what are we going to do about it?
3. The effects of running out of food will be catastrophic.
Of course you can substitute the word food for economically viable crude oil and seeds for renewable energy
I simply cant believe the short-sighted stupidity of the human race. Perhaps we deserve our fate just like the Easter Islanders!
Tim Williams
And guess who will be the first to cry foul when it all comes crashing down!
I am no fan of Cap and Trade or any more government spending. We are going to need a market for renewables or do without.
As an engineer, i do the numbers on energy availability & the atmosphere: this shows that
1. Fossil fuels won't last long, despite their charm, that the atmosphere cannot accept the waste they generate when all 6 billion of us use them, and
2. Solar energy at the earth's surface supplies ten thousand times our current consumption. Hence development of economical solar is certain to be a good bet.
As the owner of a new solar technology, i see the psychological problem reflected in a lack of investment. Solar is not yet common or well understood, so it is seen as risky and idealistic. My work shows that solar electricity can be produced for under 3 cents per kwhr with technology we already have, and usage of only very common materials - but not via PV panels on your roof. With further developments under 2 cents could be feasible. See Sunengy.
I suggest people look more deeply at what is really needed worldwide - not just for the US & Europe. We are all neighbours now - like it or not.
Good article. I suggest we look at what the Germans, Danes and Icelanders are doing with solar, biomass and geothermal sources.
Nuclear is Ok if and only if the US finally decides to standardize plants as they do in France and Japan.
I know, I know free enterprise and all that.. get the engineers from all the manufacturers -GE, Westinghouse etc. to come up with one standard design that could be built by any one of them. The advantages are obvious to any engineer no matter where he studied.
Finally, its about time that all countries educate their citizens,especially the well off, to consume wisely and more sparingly.
Bernard ret. Canadian electrical engineer
get upwards of 50 mpg.. This is known to be vey possible if only
the powers in Wash. would mandate
the auto makers to do this and ignore the oil lobyists
Let's look at the facts of some of the biggest renewable plays. Wind and solar. Wind, to put it mildly is pathetic. Here in Ontario we have a number of operating turbines. What's their perforance been? 80% of the time they are producing, collectively, less than 14% of their name plate. 5% of the time they produce nothing at all. A 2006 report to the Ontario government stated clearly that when demand for power was within 10% of peak, turbine production ranged between 13-18%. At this rate for Ontario to get 15% of its power from wind, as the government has promised, would require the contruction of 15,000 wind turbines and take more than 100 years to build. Not including the 3 million each to built.
Solar is even more pathetic. In Ontario, for example, we have virtually no sun from November to January. For the past 2 winters I have measured less than 15% sunshine days or part days. In Sarnia they have built a 1000 acre solar farm. It produces enough power for only 60 days of immigants into Canada, then it is swamped.
Unless there is some major breakthrough in the sciences of these two they will never amount to anything more than monuments to our despiration.
Great point of view article. You know, the Club of Rome had it right 30+ years ago. Prophets are rarely accepted in their own time. But I hope you will keep up the good work you do by spreading the word from an investment/investor perspective. Change happens at the margins, not in the mainstream.
There's a wonderful thread on the US page of theoildrum.com about energy EROEI and making the transition away from fossil fuels. I'd like to encourage your unconvinced readers to visit that site and read the article and the commentary.It touches on all the issues in your article and more.
Cheers!
Angus
Good article. Would seem however that it is a bit of a "back away" from some previous articles on this subject, especially as it would apply to drilling and the Bakken Field more precise.
No matter, point is, without a start nothing ever gets finished and so, while it could very well take 10 years to get things done, if all of this had started at least the 25 years ago that I and many others have been pressing the points on this matter, we would be at least 15 years beyond the 10 required and more secure in terms of energy and crude.
Unless some environmental hysteria is taken out of this equation and some very serious and responsible policy decisions come out of Washington (two factors I doubt a lot), we are doomed to remain in the condition we find ourselves at this time along with the hostage situation we are in to the OPEC boys.
Leadership, leadership, leadership.
Something we have not had on this front and are certainly not likely to get any time soon.
For my part, I am buying the ETF´s for higher crude prices and shorting the dollar.
I am guilty of typing mistakes but many comments, plus any found out there on AOL et al, show frightening stupidity.
But then, that's what the powers want because stupid people are easy to influence and control.
Keep up the good work.
Why is it I have never heard of where the electricity is coming from for electric vehicles? Chances are the problem will be addressed when supply and demand make electric power as expensive as gasoline. Yes windmills and solar power will help but they aint going to get it done.
As far as alternatives, I think we should drastrically cut subsidies, so only real, efficient, power sources get built. At least, we should get an honest reporting of ALL the costs of all of these, including how much fuel is used to dig the copper and other ore out of the ground. That will stop us wasting huge amounts of resource on expensive Wind and Solar, which are NOT the solution, at least not at this time. They are more expensive, and you still have to have conventional power plants or storage to back them up. The huge amount of storage needed would be very expensive. One solution would be to pump water to an elevated reservoir when there's excess energy and let it flow back down through a hydroelectric generator when you need the power. This would require a lot of reservoirs, which may meet with local oposition. Another solution would be to use the wind and solar to synthesize some liquid fuel, or maybe hydrogen. This would be a form of storage.
Geothermal may also be expensive, but it doesn't need backup. However, most places you have to go quite deep to get enough heat. United Geothermal, in Idaho, only has to go down 6,000 feet to get something like 280 degrees. In much of the country you'd have to go down more like 6 miles, so I'm sure it's quite expensive.
We will need something lilke this eventually, but we're now throwing away good energy like oil and coal and going after wind and solar, which aren't reeady for prime time yet.
Global warming? It's been cold lately - starting maybe 1998.