Over the Peak

Testifying to the effectiveness of radically illiberal zero-tolerance policies, Outside in has just two semi-regular trolls. One, from the right, pops in occasionally to berate me for promoting the genocide of the white Volk. The other, from the left, specializes in cod psychoanalysis, directed primarily at my recent ancestors. Due to incontinent potty-mouths, mood-control issues, and addiction to argumentum ad hominum, in neither case can they be trusted with the door-key. Sporadically, however, some fragment of a spittle-flecked rant is worth passing on.

Quickly following upon the recommendation to readers here that the Archdruid Report contained some highly intelligent discussion of historical models (or ‘time shapes’), Left Troll turned up, in a slightly less deranged fury than usual, to denounce ‘our’ flirtation with druidic villainy. After scolding ‘us’ for the “ignorance displayed in this thread about the latest happenings in fusion research … [which] is just astounding”  (remedial education here), he noted that “No one has mentioned methane hydrate.”

Insofar as it can be unscrambled from the snark, this is not actually an unreasonable point — and nor it it one that I think the druidic hordes here would disagree with. The world is awash with hydrocarbon deposits, whose magnitude is most probably vastly greater than even the most optimistic estimates anticipate. If anyone has been vindicated by recent energy economics, it is the much-derided market fundamentalists (such as Daniel Yergin), who have persistently argued that price signals matter far more than geology when it comes to the unlocking of resources. When geophysics ventures into this territory, it is typically blind to the perspective constraints set by existing price conditions. What is ‘really’ there depends hugely upon the incentives to find it. The idea that scientific experts enjoy superior insight to market actors is a classical example of academic hubris.

Peak Oil is an intriguing theory, because — when strictly defined — it has to be true. It is near-impossible to refuse its claim, when it is abstracted to something like: Fossil fuel reserves are finite, and the consumption of any particular type of hydrocarbon deposit will tend to accelerate to a peak, followed by decline, characterized by rising extraction costs, and approximately described by a bell-shaped curve. Such a claim tells us much less than its most enthusiastic proponents pretend, however, since hydrocarbon resources are immensely heterogeneous, in chemical type and mode of geological confinement. A Hubbert production curve for Texas petroleum tells us almost nothing about the global prospects for hydrocarbon exploitation, in which the nature of ‘reserves’ can undergo sporadic, revolutionary revision.

Beyond denial, dismissal, and under-estimation of market dynamics, Peak Oil promoters have resorted to two main lines of argument, in order to keep their favored narrative on a rising curve. Firstly, they have incorporated Global Warming Weirding scares into their models, hoping perhaps to substitute a loosely-coupled moral panic for resource depletion concerns. (I’m going to bracket this topic for now, due in part to its fundamental irrelevance.)

Secondly, they have turned to the concept of EROEI (Energy Returned On Energy Invested), in an attempt to over-ride market dynamics with a second-order geophysical argument. The beauty of EROEI, from the Peak Oil perspective, is that it calculates hydrocarbon extraction in purely energetic — rather than economic — terms. A declining EROEI, even given extreme price incentives, still describes a collapsing energy economy. Alberta oil sands, for example, have a dismal EROEI that can be as low as 3:1 (you can’t get fuel out of the muck without heating the dirt). Unfortunately, for those binding their case to this type of calculation, the EROEI of hydrocarbon fracking is in the region of 85:1 (!). There’s no continuing trend (of EROEI-deterioration) to hang on to.

No surprise, then, to learn that central Peak Oil discussion hub The Oil Drum is being shuttered. The very last reason to read Greer is to bask in the wisdom of his Peak Oil analysis (whose principal merit is its comparative sobriety and moderation). In his sharply comical description of financial boom-and-bust, Greer ruthlessly skewers the “This time it’s different” mentality of band-wagon climbers. Peak Oil, too, is a “This time it’s different” story, and there’s no fracking reason to believe it.

As for methane hydrate, the principal point right now is that we don’t even need it yet. There’s still a lot of gas left in the tank.

ADDED: Greer contra fracking (and technological fixes in general). Money quote: “The current fracking phenomenon, in other words, doesn’t disprove peak oil theory.  It was predicted by peak oil theory. As the price of oil rises, petroleum reserves that weren’t economical to produce when the price was lower get brought into production, and efforts to find new petroleum reserves go into overdrive; that’s all part of the theory.  Since oil fields found earlier are depleting all the while, in turn, the rush to discover and produce new fields doesn’t boost overall petroleum production more than a little, or for more than a short time; the role of these new additions to productive capacity is simply to stretch out the curve, yielding the long tail of declining production Hubbert showed in his graph, and preventing the end of the age of oil from turning into the sort of sudden apocalyptic collapse imagined by one end of the conventional wisdom. ”
More here.

ADDED: A brief hydrocarbons extraction technology update.

July 13, 2013admin 9 Comments »
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9 Responses to this entry

  • SOBL1 Says:

    The Peak Oil crowd switched to EROEI after they flirted with the Export Land Model for a while. They fit whatever evidence they can into their notion of the end of the world as we know it due to oil depletion. The PO internet trolls still never answer my statements that Venezuela’s production decline was due to Chavez firing many workers who did not take personal loyalty oaths. I do believe in peak cheap oil, which is the theory that the easy to reach, cheaper oil is gone. Peak Oil received the tremendous PR boost of being focused on the most visible commodity that experienced a pricing spike during the great commodity superspike of 2008. No one dared to ask if it was a coincidence or a monetary event that caused nearly every commodity to spike in cost that year.

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    admin Reply:

    “I do believe in peak cheap oil” — that’s reasonable, but even there it’s wise to avoid dogmatic certainty. Is it impossible to imagine robotic methane hydrate grazers eventually vacuuming up those resources quite efficiently?
    Markets hunt a price equilibrium, where innovation incentives balance consumer requirements. When venturing into challenging new territories,a relatively high price promotes a dynamic discovery process. So ‘cheapness’ is less an intrinsic geophysical factor than an indication of low innovation pressure. If any particular hydrocarbon extraction solution unlocks abundant supplies, there’s no reason why incremental technology and business process improvements couldn’t introduce an epoch of steadily declining energy prices — even down to a seriously low level.

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    Posted on July 13th, 2013 at 8:17 pm Reply | Quote
  • DojiStar Says:

    Like Peak Resource depletion, neither Export Land nor EROEI are wrong, per se. Regarding Export Land, ironically, like SOBL1 almost pointed out, countries with retarded policies that hinder extraction (I’m looking at you, Venezuela and maybe Mexico) will benefit from last mover advantage by still having cheaper reserves as other places run out. Export Land was certainly right about Indonesia and will almost probably be right about the traditional oil exporters of the Middle East within 20 years, especially given their dissatisfied burgeoning unemployed young (I mean, unless they all kill each other in a Sunni/Shiite mega conflict). EROEI wisely points out that a number of policies look kind of stupid particularly when you look at the _quality_ of energy being expended relative to the output. Wind, for example, requires the expenditure of a lot of valuable scarce transportation bunker and diesel in moving heavy equipment and transporting wind parts all over the globe — only to get a crappy intermittent random electricity source, often with huge transmission losses that’s also hard on the power grid. There are lots of ways to produce electricity; there are few good transportation fuels. Corn-based ethanol is just retarded, it’s like a crazy Rube Goldberg machine to convert natural gas, irreplaceable water, and food into a crappy transportation fuel… not much better than natural gas. Although really it’s a machine to turn money into primary votes in Iowa.

    In the long run, it’s just a matter of how many magic rabbits that can be pulled out of the collective rectum of the industry. But many of these magic rabbits are not cheap — shale oil is certainly no where near as cheap as the mega-fields of the Middle East. It requires sustained high prices and price volatility to coax out new solutions. Shale gas is relatively cheap — but if all the US does with it is replace coal plants with gas plants and distill more corn into ethanol, it’s not really being used very effectively. There will always be hydrocarbons; it’s how expensive they are that is the question.

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    admin Reply:

    For sure, and you’re right to note the impact of political dysfunction on energy markets. In any world less moronic than ours, corn ethanol would not even be imaginable except as the punchline of a joke.

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    Posted on July 14th, 2013 at 1:58 am Reply | Quote
  • Alrenous Says:

    Even EROEI doesn’t really matter. Only raw energy profit matters. If you have truly huge fracking deposits, you can pay for the extra fracking with fracking.

    I understand that ‘truly huge’ is indeed the size of untapped deposits. Additional oil discovery has outpaced consumption since forever. (Sadly, I don’t think I saved the source on that.)

    In any case, what is the EROEI on methane hydrates…after equilibrium innovation has been reached? Only way to know is to innovate and find out.

    The energy density of fuel oil kind of matters, but ethanol proves that we can use energy to make the required substances, and anyway society would be better off with far lower car usage. (I see no reason that more-local communities can’t scale, they’re not parasitical.)

    Somebody mentioned that the political barriers to coal and nuclear are entirely signalling and rhetoric, right? As soon as someone’s lattes are threatened, one or both will become just as righteous and inevitable as gay marriage.

    Greer’s philosophy and psychology are excellent, as one might expect from his line of work.

    His political science is bad (OWS is oppressed? Excuse me, dying of laughter) and his economics frankly seem nonexistent. His complaints about nuclear waste are cringeworthy, and don’t seem to understand how big Earth really is. I just realized, we have to dig up all that uranium; we could simply put it back when we’re done and defile exactly 0% more land in the process.

    I should stress that his philosophy and psychology are so good as to render my complains merely cautions; thanks Mr. Land for the tip in Greer’s direction.

    The simple fact is that yeah, Peak OIl has to be true, analytically. Nobody knows when it will hit, or what the consequences will be, though. Accept your ignorance, or reality will laugh at you. Again.

    That said I wholeheartedly jump into the simplistic thinking Greer wants to oppose. Obviously, we are in decline. The problem is government. I ran the numbers for Handle in some Foseti thread, and easily got up to 60% of GDP. May I suggest that having a working population that’s 60% parasite and 40% host is not likely to end well, especially when the parasite class is actively recruiting. This is also how Rome made itself vulnerable to immigration/etc in the first place. (PDF)

    [Reply]

    admin Reply:

    What Greer does best, IMHO, is meta-history. He’s also generally good at anything applying cybernetic models, so there’s some interesting socio-political analysis, and his theoretical ecology is usually impressively rational. I agree that his economics is sporadic at best, and his specific moments of eco-panic are lamentable (yes, the nuclear waste scare is probably the worst — approaching a green hysteric level of skirt-clutching).

    It seems to me — on a still far from complete trawl back through the archives — that his most recent few months of posting have been by far the best yet. When I finally get around to discussing his work, they’ll most likely be the center of gravity. His ‘Shape of Time’ analyses are especially excellent (although still questionable, in productive and interesting ways).

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    Alrenous Reply:

    I haven’t run across this cybernetic model stuff yet, or the theo-eco.

    I also enjoyed the ‘shape of time’ stuff, though a better name would be shape of history. The shape of time per se has been forward linear or tight helices. I haven’t even seen Terry Pratchett’s troll’s backward linear in real societies.

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    admin Reply:

    Agreed, the ‘shape of time’ is badly named, but problems stemming from systematic, only partially-acknowledged subjectivism are sheer philosophical adrenaline.

    Posted on July 17th, 2013 at 12:48 am Reply | Quote
  • NRx_N00B Says:

    Horizontal drilling in tight, low porosity/permeability rocks combined with multi-stage fracking—resource plays—is dependent on complex supply chains. It can take eight or more long reach laterals to drain a square mile; sometimes up to 65,000 tons of proppant w/ an obscene amount of water; $10-$20 million to drill and complete a single horizontal well. These wells have very steep decline rates. One has to wonder what happens once the economic momentum stalls and evaporates—how easy will it be to get going again.

    [Reply]

    Posted on July 1st, 2014 at 5:39 am Reply | Quote

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