Monday, February 05, 2007

Energy and Liberty

It's interesting to note that Indonesia is taking Glenn Reynolds' advice. Well, Ok. It's a coincidence. But what Professor Reynolds said was, "coal and oil are, over the long term, far more valuable as chemical feedstocks than as fuels anyway, and burning them is unacceptably filthy regardless of greenhouse issues. We should replace them as soon as possible with nice, clean, greenhouse-friendly nuclear plants and other environmentally friendly power technologies. Burning less carbon is good planetary hygiene, and good practice generally, regardless of what you think of global warming." Indonesia is planning to build one of nice, friendly nuclear reactors now that it may be running out of oil. Indonesia running out of oil? Out of oil production capacity at least. Channel Asia News reports:


JAKARTA: Indonesia will pursue its plans to develop nuclear power as part of efforts to find alternative energy sources to address its growing needs, Environment Minister Rachmat Witoelar has said. Jakarta shelved atomic energy plans in 1997 in the face of mounting public opposition and the discovery and exploitation of the large Natuna gas field. But the plans were floated again in 2005 amid increasing power shortages.

It's often hard to imagine that oil exporters ever run out of the stuff. But they do for a variety of reasons ranging from the depletion of the resource to chronic underinvestment in maintaining production. The Energy Bulletin notes that Indonesia May Become an Oil Importer as Output Slides:

Indonesia, Southeast Asia's only OPEC member, may become a net oil importer this year as projects led by ConocoPhillips, Unocal Corp. and PetroChina Co. fail to stem falling output, helping to boost fuel prices to records. The country may turn to importing a net 61,000 barrels a day this year from net exports of 27,000 barrels a day in 2004, based on figures in a document prepared for the Energy and Mineral Resources Ministry and obtained by Bloomberg News. Indonesia is draining oil from global markets at a time when China's soaring demand helped to push prices to a record $58.28 a barrel on April 4. To revive exports, President Susilo Bambang Yudhoyono must resolve contract disputes that have curbed spending by companies including Exxon Mobil Corp.

Even Iran, which conjures up images of vast oil wealth may, like Indonesia, may soon be a net importer of oil. "As domestic energy consumption skyrockets, Iran is struggling to produce enough oil and gas for export. Unless Tehran overhauls its policies, its primary source of revenue and the basis of its geopolitical muscle could start to wane. Within a decade, says Saad Rahim, an analyst at Washington consultancy PFC Energy, 'Iran's net crude exports could fall to zero.'" That has two ironic effects: make Iran seek not-so greenhouse-friendly nuclear plants and second, to tighten the oil market even more, paradoxically increasing the power of its declining volume of exports. The Washington Post notes that the less spare capacity there is in the oil market, the more important the remaining capacity becomes. Just as people often ignore pocket change until the day they lose their jobs, so to does the world start counting its barrels as the fields age and dry out.

The reason Iran has any leverage is the change in the world oil balance. As recently as four years ago, the world had 7 million barrels a day of spare oil production capacity, but today that cushion between supply and demand is smaller than Iran's 2.5 million barrels a day of exports. Losing Iran's exports would spell disaster, with soaring prices and limited supplies. "There is no cushion that is that great," said Edward Morse, executive adviser of Hess Energy Trading Co. in New York. Saudi Arabia's spare capacity could cover 1.2 million to 1.5 million barrels a day of any shortfall, though that would be heavy oil unsuited for many refineries. Morse added, "If there were peace in Iraq or Nigeria, they could produce more. But there isn't peace in either place."

The relationship between the discovery of oil reserves and world peace is problematic. On the one hand, the discovery of huge sources of mineral wealth encourages the rise of parasitic, despotic governments which can subsist simply by pulling money out of the ground. Those very same despotic governments are in turn compelled to buy off dissenters, subsidize domestic petroleum products and discourage foreign investment, all of which reduce their ability to produce wealth in the first place. Iran's net oil exports, for example, are declining at the very moment when more reserves are being discovered. As its potential wealth increases, the inefficiencies of its dysfunctional government correspondingly reduces its ability to realize it. Oil, like some addictive drug, can destroy the capacity of those whom it momentarily catapults into wealth. While oil production rose in non-OPEC countries every year since 1993, most of world's reserves are (excepting Canada) in politically problematic countries.

Saudi Arabia   264.3
Canada  178.8
Iran  132.5
Iraq  115
Kuwait  101.5
UAE  97.8
Venezuela  79.7
Russia  60
Libya  39.1
Nigeria  35.9
United States  21.4
China  18.3
Qatar  15.2
Mexico  12.9
Algeria  11.4
Brazil  11.2
Kazakhstan  9
Norway  7.7
Azerbaijan  7
India  5.8
Rest of World  68.1
World Total  1,292.50

Europe, which unlike North America does not have a Canada, will look to the Middle East and the former Soviet Republics for its energy needs. So too, will the growing economies of East Asia. "With a moderate decline in North Sea production, OECD Europe is expected to import increasing amounts from Persian Gulf producers and from OPEC member nations in western Africa. Substantial imports from the Caspian Basin are also expected. OECD Asian nations are expected to increase their already heavy dependence on OPEC oil. The non-OECD economies of Asia are expected to more than double their total petroleum imports between 2003 and 2030." Expect another two decades of anti-Americanism and anti-Semitism in Europe.

Unfortunately, Glenn Reynolds advice to shift to environmentally friendly nuclear reactors alone can only take the world so far off its addiction to oil. Most projected increases in demand will be in the transportation and chemical sectors, for which few sources of alternative energy currently exist. "Much of the world’s incremental oil demand is projected for use in the transportation sector, where there are few competitive alternatives to petroleum ... of the projected increase in oil use in the reference case over the 2003 to 2030 period, one-half occurs in the transportation sector. The industrial sector accounts for a 39 % share of the projected increase in world oil consumption, mostly for chemical and petrochemical processes." Until ways can be found to transform nuclear power into more portable stores of energy, the world's dependence on oil will continue. Recently a Pajamas Media special report focused on Hillary Clinton's energy policy, which apparently, now includes targeting oil industry profits to fund government energy programs. Will it work? At first glance Hillary's idea seems precisely the strategy that resulted in underinvestment with consequent declines in production, in Indonesia and Iran. In the short run taxing American oil companies will probably make the US more dependent on existing OPEC reserve production, in accordance with the principle that the reducing the cushion makes what is left of it more precious. But if Hillary's program has any potential for payoff down the road, it paradoxically lies in increasing the price of oil through scarcity. Painful oil price hikes make alternative sources of energy economically viable and stimulates research into new technologies. After all, one way to get a junkie off drugs is to deprive him of money. Ruin the oil sector, take America off oil. It makes sense in a way. But even so it must be a selective ruination, not the wholesale implementation of Green Regulation over the energy sector. The worst thing that could happen is to create an energy policy so hedged with environmental restrictions that even research into new technologies becomes subject to a Greenpeace veto. After all the planned Indonesian reactor is opposed by Environmentalists; and those who repose such confidence in Green predictions about Global Warming should remember how they once warned against nuclear power plans; and if they have had any second thoughts on the subject it is largely because of the collateral damage caused by their own misprescriptions. Maybe that's the best we can hope for. Energy independence through unintended consequences.

16 Comments:

Blogger BetaCygni said...

One thing on the horizon that offers hope for reducing the use of oil for transportation is plug-in hybrids. If you can drive 20-40 miles on electricity alone (which is 1/3 the cost of the equivalent gasoline), most people don't need gasoline except for long trips.

http://www.calcars.org/

2/05/2007 04:11:00 PM  
Blogger wretchardthecat said...

The inflection point will come when hybrids or something similar actually become better than pure petroleum-fueled cars. I recently returned from a Third World city and was struck by how much of the time cars spent in traffic. I would routinely overtake Lotuses and BMWs on foot. A car that would use an electric motor to inch along would be great; then it could recharge when it hit the open road. But that brings up two problems. The first is that there isn't much "open road" in a lot of Third World countries. Second, there aren't a whole lot of places to recharge a car in the idle hours. Hybrids require a lot if implied infrastructure, infrastructure one doesn't notice in a First World Country, but is absent in poorer countries.

One other thing I should mention is that cars are not fundamentally transportation in many Third World countries. They are modes of sending a message about status, for the same reason Government Ministers wear wool suits in sweltering tropical countries. It shows they can afford to be enclosed in an airconditioned cocoon 24x7.

Now the market may come up with a product that actually fills those needs in an energy efficient way, especially if gas prices rise sufficiently. But as long as it is cheapter to drive gas cars, people will.

2/05/2007 04:27:00 PM  
Blogger wretchardthecat said...

I should add that the two most effective energy saving measures that were in evidence in dense, overcrowded Manila had nothing to do with "conservation" or environmentalism at all. They were the result of two things. The cell phone revolution has meant that 80% of the population of a country which heretofore had practically no phones now largely communicates by SMS text messaging. This has saved countless hours in transportation time. In the past, there was no alternative but for someone without a phone to make a physical trip to another phoneless person (such as a company or government office) to make an enquiry. This no longer happens.

The second energy saver was the "Mallifcation" of Manila that was almost single-handedly achieved by a Chinese billionare named Henry Sy. In the past, people shopped at one of several central business districts. What Sy did was to create shopping complexes in different districts. Today, towns effectively function around his Malls. The Malls themselves have become mini town centers, with bill paying stations, clinics, transportation terminals etc. In fact, public transportation goes from one Mall terminus to the other. This compartmentalization has effectively reduced cross-town travel by a huge amount. If anyone wants to hand out a prize for the greatest contribution to reducing Greenhouse gases in the Philippines, the award should go to the private telecom companies and Henry Sy. Greenpeace in real terms, would probably rate in order of merit ten places below the Scavengers of Manila, who have been recycling garbage for at least sixty years.

In truth, there was not a single visible environmental improvement that was caused either by government programs or by the green NGOs, unless you count the pollution caused by their triumphalistic and disgusting billboards, which were everywhere.

2/05/2007 04:38:00 PM  
Blogger DB2 said...

As Barbara Tuchman wrote back in the '70s:

"The doomsayers work by extrapolation; they take a trend and extend it, forgetting that the doom factor sooner or later generates a coping mechanism...you cannot extrapolate any series in which the human element intrudes; history, that is the human narrative, never follows and will always foil the scientific curve."

Turning shale and asphalt into oil
http://israel21c.com/bin/en.jsp?enScript=PrintVersion.jsp&enDispWho=Articles%5El1522

Haifa-based A.F.S.K Hom Tov recently demonstrated its patented method of extracting high quality oil and natural gas from a mixture of bitumen and oil shale rock. Bitumen - or asphalt - is the residue obtained by distillation of crude oil.

Experts predict the process will return oil at just $25 dollars a barrel and the additional natural gas produced would further boost the financial feasibility. With crude oil prices currently floating over the $50 a barrel mark, this proposed method is generating interest around the world.

The Hom-Tov process uses oil shale as a catalyst to extract combustible organic material from the residual bitumen byproduct of crude oil refineries. The end product from the process can easily be refined into high-grade petroleum and other fuels.

Yisrael Feldman, A.F.S.K. Hom Tov CEO, and creator of the revolutionary technique, estimates it will cost $700 million to set up a production plant in Israel's Negev region that could produce 2.3 million tons of oil and natural gas from 6 million tons of shale and 2 million tons of bitumen.

DB2

2/05/2007 04:59:00 PM  
Blogger warhorse said...

BetaCygni ---

The trouble with plug-in hybrids is that they rely on the electric power grid. If they happen to be drawing from a clean source like hydro or nuclear, great. Unfortunately, usually what they're drawing from is a coal plant, which is often actually a net loss in terms of pollution.

2/05/2007 05:47:00 PM  
Blogger wretchardthecat said...

steve,

There are two separable goals here. One to reduce pollution. The other to reduce energy dependence. What if one could use less Middle Eastern oil by burning more coal? Would the Greens be for or against that? What if one could create more hydroelectric power by damming up another river?

Ideally, any rational solution should move in the general direction of improvement on both these counts. But there is a subtle interplay which is not often recognized. The DOE paper on oil remarks that demand will rise most steeply among the Asian powerhouses like India or China. Recall that Kyoto effectively penalizes Western production, where technology is ostensibly cleaner, in favor of Third World production, which is almost always dirtier. Here you have effects going in two directions. Kyoto indirectly encourages more -- and dirtier -- cars in the Third World while Saving the Planet. Who has done the net benefit calculations on that?

2/05/2007 06:23:00 PM  
Blogger Laszlo said...

This comment has been removed by a blog administrator.

2/05/2007 08:51:00 PM  
Blogger Laszlo said...

Betacygni
You are on the right track!
Plug-in Hybrid is the silver bullet that will slay OPEC!
Read the article from this website:
Here
Specifically read
This

2/05/2007 08:59:00 PM  
Blogger Fat Man said...

Very Optimistic spin on Hilldabeast. Unfortunately, its just not so. She is now, and always has been, a hard left socialist. She gets elected and we are in a boatload of trouble.

P.S. I read somewhere that Iran sells gasoline for $0.11/gal, which confirms your statement: "Those very same despotic governments are in turn compelled to buy off dissenters, subsidize domestic petroleum products and discourage foreign investment, all of which reduce their ability to produce wealth in the first place." And, explains Iran's soon to be inability to export. Fortunately, it is still impossible to get 2 lbs. of olives out of a 1 lbs. olive jar.

2/05/2007 09:13:00 PM  
Blogger Laszlo said...

Plug-in electric-g a s o l i n e hybrid is the only solution to alternative energy problem as a short term solution. Every other offering is pipe-dream. Be it shale be it Canadian tar sand, hydrogen (fuel cell),alcohol. Energy security has to be priority even over environmental considerations. Remember that all the other solutions require an unbelievable expensive infra structure to build to compete against the many trillions of dollars worth of petroleum (gasoline) infrastructure. OPEC can manipulate petroleum prices to stifle any of the above because of the built-in advantage of existing infrastructure. The plug-in gasoline-hybrid system can gradually be introduced with existing technology with existing energy infrastructure of a electric grid a garage and an electric plug with an extension chord and a garage for overnight recharging.
Every minute of driving off of the recharge saves gasoline which I believe will set up a virtuous cycle which when expanded later to flex fuel as a secondary source would influence market forces to pull down OPEC. Go to the links at my previous post. By the way the silver bullet mentioned earlier refers to the 20-40 etc gasoline free miles that existing technology offers as posted by Betacygni (the first post on this thread.)

2/05/2007 09:38:00 PM  
Blogger Charles said...

Scientists develop portable generator - trash into electricity
Purdu University ^ | 2/1/2007 | Douglas M Main

Posted on 02/05/2007 12:48:54 PM PST by listenhillary

WEST LAFAYETTE, Ind. - A group of scientists have created a portable refinery that efficiently converts food, paper and plastic trash into electricity. The machine, designed for the U.S. military, would allow soldiers in the field to convert waste into power and could have widespread civilian applications in the future.

"This is a very promising technology," said Michael Ladisch, the professor of agricultural and biological engineering at Purdue University who leads the project. "In a very short time it should be ready for use in the military, and I think it could be used outside the military shortly thereafter."

The "tactical biorefinery" processes several kinds of waste at once, which it converts into fuel via two parallel processes. The system then burns the different fuels in a diesel engine to power a generator. Ladisch said the machine's ability to burn multiple fuels at once, along with its mobility, make it unique.

Roughly the size a small moving van, the biorefinery could alleviate the expense and potential danger associated with transporting waste and fuel. Also, by eliminating garbage remnants - known in the military as a unit's "signature" - it could protect the unit's security by destroying clues that such refuse could provide to enemies.

Researchers tested the first tactical biorefinery prototype in November and found that it produced approximately 90 percent more energy than it consumed, said Jerry Warner, founder of Defense Life Sciences LLC, a private company working with Purdue researchers on the project. He said the results were better than expected.

The U.S. Army subsequently commissioned the biorefinery upon completion of a functional prototype, and the machine is being considered for future Army development.

The tactical biorefinery first separates organic food material from residual trash, such as paper, plastic, Styrofoam and cardboard. The food waste goes to a bioreactor where industrial yeast ferments it into ethanol, a "green" fuel. Residual materials go to a gasifier where they are heated under low-oxygen conditions and eventually become low-grade propane gas and methane. The gas and ethanol are then combusted in a modified diesel engine that powers a generator to produce electricity.

Ladisch and Warner said the machine eventually could be deployed in disaster situations, similar to Hurricane Katrina, or at any crisis location where people are stranded without power. Emergency crews could then use the machine to turn debris such as woodchips into much-needed electricity, Warner said.

The refinery also could provide supplementary power for factories, restaurants or stores, Ladisch said.

"At any place with a fair amount of food and scrap waste the biorefinery could help reduce electricity costs, and you might even be able to produce some surplus energy to put back on the electrical grid," he said.

Much of the fuel the system combusts is carbon-neutral, said Nathan Mosier, a Purdue professor of agricultural and biological engineering involved in the project. Carbon-neutral fuels like ethanol do not cause an appreciable net increase in atmospheric levels of the greenhouse gas carbon dioxide. This is because the fuel releases carbon that has only recently been taken up by plants during photosynthesis, the process by which plants convert carbon dioxide to oxygen and sugars. The same is not true for petroleum, in which the carbon contents were removed from the atmosphere millions of years ago.

The biorefinery generator initially runs on diesel oil for several hours until the gasifier and the bioreactor begin to produce fuel, Warner said. In the initial commissioning test, researchers measured the amount of diesel oil burned and electricity produced to calculate its efficiency.

The machine produces a very small amount of its own waste, Warner said, mostly in the form of ash that the Environmental Protection Agency has designated as "benign," or non-hazardous. Any leftover materials from the bioreactor are put into the gasifier, which has to be emptied every two to three days.

"It's about enough to fill a regular sized trash bag, and it represents about a 30-to-1 volume reduction," Warner said.

Other companies collaborated in this project, including Bowen Engineering of Indianapolis, Huston Electric of Lafayette, Ind., and Community Power Corp. of Littleton, Colo.

2/05/2007 10:30:00 PM  
Blogger Charles said...

In December I blogged about peak oil predictions of the collapse of production of Saudi oil production.


A couple of things happened in the last month that I think will
result in the collapse of demand for oil in the next 10 years. First GM
introduced the hybrid Volt
at their auto show in January. The car goes 40 miles on a charge and
then switches over to gas. It costs an extra $5000 to make. It can be
recharged in 6 hours overnight. (Since standard commutes are 33
miles daily most cars can be charged overnight without using gas.) The
DOE released a study
saying that 85% of the US could run off hybrids without need of
upgrading the current US electrical system because cars would be
charged at night–during a period of low demand. Finally, Bush signed an executive order mandating
that federal vehicles use uses plug-in hybrid (PIH) vehicles. So GM
will have enough demand to justify investments to ramp up production
that will leverage economies of scale to bring down prices that will
make the car attractive the public.



On top of that US electrical generation will undergo a big change as photo voltaics get cheaper than the cheapest coal in the next couple of years. I talk about this in the context of my blog on using photo votaics to power pumps to pump desalinized water inland 1000 miles into the worlds deserts to turn the deserts green the world over.

2/05/2007 11:00:00 PM  
Blogger herb said...

Three things will happen:
1. Oil price will go up.
2. As a result, more will be found. Does anybody think that Siberia has been fully explored? or South America? We're still living off low hanging fruit.
3. Also as a result, technology will advance. Solar energy conversion will become sufficiently effective that oil will be feedstock, which it will be as it should be.
Lets worry about things that are real threats, like the Islamicists.

2/06/2007 06:53:00 AM  
Blogger Annoy Mouse said...

The onus is on the developed world to innovate beyond the dirty industrial age. Taxing industry for carbon credits as those outlined in Kyoto are regressive and only stand to inhibit innovation. But unless the average citizen makes the informed choices for greener technology, such a transformation is unlikely to occur. In San Diego, hybrid cars are becoming the new “statement” of status right along with KPBS license plate frames. An informed populous could do wonders to advancing green technology by creating demand driven markets. If Europe was less inclined to rag tag the US perhaps they could show the world how it’s done.

Meanwhile, the US government needs to step up to the plate and allow for resource exploration and exploitation in places like ANWAR and to clear the legislative way for nuclear power which has become not only the most reasonable alternative to dwindling oil reserves but a strategic centerpiece to calming world markets and improving the outlook for long term peace, but leadership in these areas is like all politically sensitive hot buttons, to be ignored.

2/06/2007 10:56:00 AM  
Blogger Mike H. said...

Ya'll are talking about the effect of the energy problem on cars alone.

Question: How many cars do you see delivering produce to grocery stores? Screw around with availability of fuel and the trucking industry takes a header. Then what of the economy?

All factors need to be considered, and integrated into the solution. Hybrids only work for a small segment of the energy consuming sector.

BTW the hybrids that are in use today are not dainty sippers, the locomotives take a big draught.

2/06/2007 05:18:00 PM  
Blogger Tarnsman said...

Back in the days when he was blogging about events and issues rather than anime Steven den Beste over at USS Clueless spent several posts examining energy issues and the problems of scaling and feasibility of alternative energies. Of course, these posts generated a lot of “ankle-biting” from devotees of this or that energy source. No one likes engineers telling them that their pet notions just aren’t practical nor economic feasible. But his reasoning is hard to refute. For those serious about the daunting tasks before us:

http://denbeste.nu/cd_log_entries/2004/06/NomeansNo.shtml

http://denbeste.nu/cd_log_entries/2002/09/Obscureenergysources.shtml

http://denbeste.nu/cd_log_entries/2004/06/Energyscalingproblems.shtml

http://denbeste.nu/cd_log_entries/2003/08/Quicknon-fixes.shtml

http://denbeste.nu/cd_log_entries/2002/09/Morepracticalproblems.shtml

http://denbeste.nu/cd_log_entries/2002/07/Carbonemissions.shtml

http://denbeste.nu/cd_log_entries/2002/09/Moreonenergydependence.shtml

http://denbeste.nu/cd_log_entries/2004/06/AnewManhattanProject.shtml

http://denbeste.nu/cd_log_entries/2003/06/Biomass.shtml

http://denbeste.nu/cd_log_entries/2003/08/Lettersonpower.shtml

http://denbeste.nu/cd_log_entries/2002/09/Finitesolutions.shtml

http://denbeste.nu/cd_log_entries/2002/01/fog0000000129.shtml

2/06/2007 05:23:00 PM  

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