Peak Everything, by Don Elder
I have just finished reading Richard Heinberg’s latest book, Peak Everything. It is a collection of essays that explore the causes and effects of many resource limits. In short, we’re in for a bumpy ride and I highly recommend the book. Today, for some reason I’ve already forgotten, I was reviewing the powerpoint of Don Elder’s presentation to the Energy Federation last September. There it was - Don Elder telling us that:
Peak Oil 2010, Peak Gas 2015, Peak Coal 2025.
Boy that sounds familiar! He then went on to tell us how important it was that New Zealand continues to increase its amount of cows and coal in order to take advantage. It’s right there, on slide 5. I have often accused the state sector of keeping its head in the sand regarding peak oil and coal, but clearly an apology is in order. Don Elder knows that a crunch is coming and he is planning to make a mint from it. Never mind the environmental consequences. Never mind that if we just hang on to our coal rather than shipping it to China, perhaps our children will someday have a way to use it safely.
March 20th, 2008 at 4:54 pm
No collective action/clever infrastructural planing is needed frog. Trust the market always. Anyhow, if you, like most people, can’t get around in your car when petrol’s $2 a liter, then its your own fault for not being a member of NZ’s business elite. The market will always punish bad people like you, and reward good people like Michael Fay and David Richwhite. Amen.
March 20th, 2008 at 4:59 pm
Assuming human invention stands still. Are you saying that the means of power generation available to us now are the only means of power generation we will ever have?
Henry Ford: “If I’d asked my customers what they wanted, they’d have said a faster horse”.
March 20th, 2008 at 5:12 pm
BP (nice acronym for this thread), I suggest that you do some reading about peak oil. The Hirsch report is probably a good place to start for someone like you. suffice to say, if we rely on the market alone, there will be a lot more pain than there needs to be.
http://en.wikipedia.org/wiki/Hirsch_report
March 20th, 2008 at 5:25 pm
I suppose BP, the question is whether human invention will bring us anything IN TIME. There is obviously a question of ‘faith’ involved here, and I myself have faith that viable alternatives will present themselves…in time. But when? Before, during or after we suffer from rising costs?
I would add the possibly apocryphal quote from a Saudi prince-guy: “The Stone Age didn’t end because we ran out of stones”.
March 20th, 2008 at 5:30 pm
SR- There’s another cool quote from a saudi prince guy you may or may not know..
“my grandfather rode on a camel, my father rode in car, I ride in a jet, my children will ride in cars, my grandchildren will ride on camels”
March 20th, 2008 at 5:39 pm
lol what a Gloomy Gus
March 20th, 2008 at 6:02 pm
Yeah - he apparently wasn’t the eternal optimist.
As for “The Stone Age didn’t end because we ran out of stones�.
Nope, but no body ever powered an economy with stones either.
March 20th, 2008 at 6:32 pm
BP - the problem we have is those pesky laws of thermodynamics, which say, basically, that you cant create or destroy energy, only change its form. The chances that there may be some magic energetic substance we haven’t discovered yet available on a globally useful scale must be quite small.
Nuclear fission using reprocessing, no matter how unpalatable, is the only thing we have now that can work over some decent length of time. But we’ll probably kill ourselves in the process.
The hope is with the crackpots. Either big fusion or cold fusion. Who knows; the folks who work on these technologies may pull it out of the bag. But I wouldn’t hold my breath.
Or, we really may figure out how to break the laws of thermodynamics and create energy. Then again, a time machine is theoretically possible too…
March 20th, 2008 at 6:52 pm
And how does Don Elder propose that NZ deals with peak oil?
http://www.stuff.co.nz/4233171a13.html
Not too good if we’re concerned about climate change.
March 20th, 2008 at 7:12 pm
Now: Nuclear, wind, tidal, thermal, coal, sun, hydro, bio, oil….
Future: More efficient versions of the above, and sources yet to be harnessed.
Not so much faith, as the lesson of history.
>>The Hirsch report is probably a good place to start for someone like you
Someone like me? Duh.
Yes, I’ve read about Peak Oil. They keep getting it wrong.
Spoke to an interesting woman when I was in Dubai recently. She worked in business development for US oil companies. She shone an interesting light on the “peak oil” theory…
March 20th, 2008 at 7:30 pm
baited breath
March 20th, 2008 at 7:32 pm
BP - are you talking about Michael Lynch’s creaming curve analysis of ME producing areas (which has been thoroughly debunked) or what? Please elucidate …..
March 20th, 2008 at 7:45 pm
oh, and if you’re not convinced by the Hirsch report try the following sources…
Former US Secretary of Energy, Dr James Schlesinger.
http://www.davidstrahan.com/blog/?p=42
Former Saudi head of production and exploration, Sadad Al Husseini.
http://www.energyintel.com/om/program.asp?Year=2007#speakers
…..more in the next post …..
March 20th, 2008 at 7:51 pm
International Energy Agency chief economist, Fatih Birol.
http://www.energybulletin.net/32242.html
ConocoPhillips Chief Executive, James Mulva.
http://www.energybulletin.net/37000.html
This full PhD by Fredrik Robelius ….
http://publications.uu.se/theses/abstract.xsql?dbid=7625
March 20th, 2008 at 8:50 pm
Roger,
Have you shorted oil stocks?
The problem is the inability to independently audit stated reserves from many of the world’s biggest oil producers.
March 20th, 2008 at 9:09 pm
Fair enough peter. There are however two problems with that line of reasoning.
1) Most exerts estimate that OPEC oil reserves are in fact under-reported, not over-reported. i.e. The OPEC countries decided in 1985 to link their production quotas to their reserves. What then seemed wise provoked important increases of the estimates in order to increase their production rights. This also permits the ability to obtain bigger loans at lower interest rates. This is a suspected reason for the reserves rise of Iraq in 1983, then at war with Iran.
In fact, Dr. Ali Samsam Bakhtiari, a former senior executive of the National Iranian Oil Company, has stated unequivocally that OPEC’s oil reserves (notably Iran’s) are grossly overstated. In an interview to Bloomberg in July 2006, he stated that world oil production is now at its peak and predicted that it will fall 32% by 2020.
See the table, two thirds of the way down the following page:
http://en.wikipedia.org/wiki/Oil_reserves
2) Even if the OPEC producers in fact have more reserves than they say, they are a cartel, and the point of a cartel is to restrict supply in order to drive prices up. Now the International Energy Agency, has unequivocally stated that non-OPEC production will flatten off as of 2010. So even if OPEC can dramatically ramp up production after 2010, the likelihood is they wouldn’t, as they’re looking to keep prices high.
So, the conclusion - OPEC reserves are probably overstated (meaning we’re at peak in the next few years), and even if we’re not, a kind of artificial peak is going to be upon us by 2010. So we have no time to waste. We have to start preparing for more expensive oil now. This means decreasing the oil intensity (oil used per unit of GDP) of our economy (currently we have one of the highest oil intensities of any economy in the world) or our economy is in for a huge shock. This means getting out of our cars and on to public transport and shifting goods back from trucks to rail (or better still boat).
March 20th, 2008 at 9:55 pm
BP could have added wave power and geothermal. Neither will have a big impact on the global energy supply, but New Zealand is well resourced in both.
We have enough research in most areas. What is needed now is development so we can get economies of scale and ramp up production. A bit of research is required in mapping out geothermal, wind, wave and tidal resources, but we don’t need any research in the technology. (It wouldn’t hurt though.)
Trevor.
March 20th, 2008 at 10:02 pm
BP:
“Now: Nuclear, wind, tidal, thermal, coal, sun, hydro, bio, oil….
Future: More efficient versions of the above, and sources yet to be harnessed.
Not so much faith, as the lesson of history.”
The problem is more a medium term one (i.e. the next 5-20 years). Long term we will adjust, as market mechanisms kick in, but by then most of us will be old and decrepit.
But you would know all of this if you had read the Hirsch report…
March 20th, 2008 at 10:09 pm
> “The Stone Age didn’t end because we ran out of stones�.
Well no, it ended because people found something better. But if we had run out of stones, that would have ended the stone age.
Likewise, the oil age will end if we run out of oil.
the quote sounds clever, but it doesn’t tell you anything about the current situation.
March 21st, 2008 at 12:36 am
i don’t want to sound the catastrophist but we should have shot muldoon before he signed up with the IMF. now we are going to be asian unionists and have our right to buy vitamins and herbal remedies taken from us by the CODEX.
POP went the housing market! and now the eccentrics are toting “End of Days 2012″ which they have got it wrong and why is our milk more exspensive than the U.S?
Peak? had to happen, it’s just to bad for such a small country we have let so much control go to others, so much so that we can’t even try and think outside the box.
http://video.google.com/videoplay?docid=874167984066336720
http://video.google.com/videoplay?docid=-1610087835473512086&hl=en
http://peswiki.com/index.php/Directory:Surge_Motor_Technology_by_Troy_ Reed
http://www.zpenergy.com/modules.php?name=Downloads&d_op=getit&lid=1
dang can’t trust american marketing
March 21st, 2008 at 10:02 am
Don Elder is more progressive on climate change than John Key - Now that is a worry, a coal CEO who is not a climate skeptic. he has the same position the miners union in Australia has. the problem is in approach - miners and Don Elder say: lets dig up all the coal and burn it, oil is running out - so lets burn more coal and release more emissions.
climate change is a problem, but coal means i get paid lots. The other problem besides climate change (air quality, health problems, river pollution and mountian top removal destruction) is species loss due to mining damage of habitats.
Don Elder is a smart man, but he is no environmentalists or humanist. Just a cold coal pimp.
STOP SOLID ENERGY
http://www.savehappyvalley.org.nz
stop solid energy dead in its tracks
March 21st, 2008 at 10:06 am
i’ll ask the Venezuelan ambassador today what he thinks of coal and peak oil.
Interesting to know what Venezuela’s take on climate change is, being so dependent on oil.
What would NZ’s oil, gas and coal look like if it was nationalised? and Don Elder couldnt pimp our coal to china, japan, india and australia…?
What if Exxon Mobil, shell and Solid Energy etc didn’t control our oil supplies and energy..?
March 21st, 2008 at 10:07 am
p.s. you can email Don Elder yourself and ask him what you think about peak oil and coal:
don.elder@solidenergy.co.nz
March 21st, 2008 at 10:08 am
sorry what he thinks, or tell him what you think
March 21st, 2008 at 10:22 am
roger
So, have you gone long on oil stocks?
Regardless of whether peak oil is true or not, and if true, when it will happen, I think it’s sensible that we don’t rely on this one energy source.
March 21st, 2008 at 10:29 am
wether it is true? what is in question.. that oil will one day run out - theres no question there. the question is when and what will people do about it.
don elder’s solution along with labour and national is to replace it with coal, which is the worst move there could be.
March 21st, 2008 at 10:40 am
>>that oil will one day run out
We don’t know what we don’t know. The only reason abiogenic sources and deep extraction haven’t been more fully explored is because oil is still too cheap. However, on known reserves based on the (cough) published data, it would be reasonable to believe the Peak Oil theory.
March 21st, 2008 at 11:51 am
I have no problem with Solid Energy shipping some of our coal to China provided we use the payments to buy and ship in what we need to make us more sustainable - PV solar panels, wind turbines, Pelamis wave power generators, geothermal power generators, vanadium flow batteries, turbines and generators for hydro power stations, more electrical transmission infrastructure (e.g. transformers), etc and on the demand side LED lighting and other efficiency improvements.
Converting coal to liquid fuels is inefficient when an alternative is to substitute the use of potential transport fuels for coal where those fuels are not being used for transport. CNG (methane) is a useful transport fuel which we are burning in power stations or converting to hydrogen, both of which can be done with coal instead. Don’t get me wrong though - this is a better alternative, not a good alternative. Using renewable resources instead of CNG for non-transport applications would be much better.
I don’t see oil running out entirely. Small amounts can be produced from biological sources to keep our economy lubricated. However the days of using oil to power our economy are numbered, and I haven’t seen any data to suggest that peak oil wasn’t in May 2005.
Trevor.
March 21st, 2008 at 12:07 pm
but what solid energy are doing with their profit is putting back into coal and Don Elder and the boards large income.
the SOE money goes back into solid energy. so in effect what happens if the money goes back into coal, slowing down solar and tidal investments. they spend money on coal research, hiring spies and PR for coal along with clean up costs of their mines and polluted rivers due to mining activity.
we would be better to use the oil from the great south basin, if we wanted to use fossil fuels rather than make coal lignite diesel and build coal power plants or export coal to steel producers like India, Japan and China.
Solid Energy is investing in the overseas coal industry and steel titans, not renewable energy or NZ
March 21st, 2008 at 12:09 pm
50% of solid energys coal goes overseas. to china, india, japan, australia, south america, south africa, norway, UK and America.
that is the opposite of using coal to prop up renewable energy trevor.
it is coal or clean energy.
March 21st, 2008 at 2:25 pm
BluePeter - Peak Oil is not a theory, it is a geological fact that the oil industry deals with every day at individual fields. The only theory involved is figuring out when we will reach this geological fact on a global scale.
Will we run out of oil? Absolutely never. The geological fact of peak oil says it is nigh on impossible to ever run completely out of oil. The economics are destroyed long before a field could be pumped totally ‘dry’.
March 21st, 2008 at 2:33 pm
>>geological fact that the oil industry deals with every day at individual fields
So they say. There is also the temptation to shill prices upward. Scare tactics have proven rather effective AND they get the environmentalists on board.
I call that art….
March 21st, 2008 at 2:58 pm
BTW:
Here’s an interesting side-track from the doom-n-gloom energy goths.
CERN are about to switch their new baby on.
“We don’t even know what to expect,” says French physicist Yves Schutz. “We’re now in a domain of energy that nobody has ever explored.”
darkroastedblend.com/2008/03/time-machine-worlds-biggest-particle.html
March 21st, 2008 at 2:59 pm
i call it finite fossil fuels and oil companies wanting to delay the decline of the oil market.
March 21st, 2008 at 3:03 pm
its not doom and gloom, its a reality that certain energy sources deplete and lifestyles and cultures change.
March 21st, 2008 at 3:39 pm
Follow the money.
March 21st, 2008 at 4:09 pm
Was watching Aussie morning program today and the petrol companies over there have jacked up their prices 15 CENTS (give or take) for the Easter weekend. Bonkers!
March 21st, 2008 at 6:43 pm
follow the money aii…?
March 21st, 2008 at 10:22 pm
This quote: “The Stone Age didn’t end because we ran out of stonesâ€? keeps popping up. It is true that the stone age didn’t end because of a shortage of stones, however, stone age people did manage to exhaust a number of resources (many species of large animals). The depletion of large animal species didn’t cause the end of the stone age, but possibly tipped the balance in favour of agriculture as a source of reliable food.
March 22nd, 2008 at 8:17 am
How many peak oil (theme) books have made the big (chain) stores?. I bought the Party’s Over from Amazon
March 22nd, 2008 at 9:57 am
BP
The link didn’t work.
Were you talking about this?
http://public.web.cern.ch/Public/en/LHC/LHC-en.html
BJ
March 22nd, 2008 at 10:11 am
I miss read that, I followed the link and I thought is was the Large Hadron Collider that didn’t work.
March 22nd, 2008 at 10:16 am
>>The link didn’t work.
Hmmm….worked for me.
Google “Time Machine: CERN’s Large Hadron Collider”
I wonder if the “ON” button is engraved “Do You Feel Lucky?”
March 22nd, 2008 at 11:36 am
don elder and oil companies dont care about climate change, they are about selling coal and oil and anything else, no matter what the consequence.
was interesting that Venezuela is looking at what it used before oil and other things that are important outside of teh oil industry.
oil isnt the blood of the world, or more imortant than anything else (ie the sun), it is a commodty that has become normalised and now there is a depenency on it, an addiction.
March 22nd, 2008 at 1:09 pm
BP - I don’t think “particulate drivers” are going to do anything to mitigate the impact of the oil shocks which are sure to cause stagflation throughout the world during the next 20 years. We need a short to medium-term fix, and unfortunately demand reduction, through restructuring of infrastructure is the only option on the table.
March 22nd, 2008 at 2:10 pm
Talk is cheap, Roger. Have you gone long on oil stocks?
Given the stated reserves, I understand your position. It is reasonable. I’m skeptical about the size of the reserves, and this same skepticism exists within the oil industry.
Else I’d go long on oil….
March 22nd, 2008 at 6:38 pm
His serious aviation habit means he is hardly the best person to lecture others on the environment. But John Travolta went ahead and did it anyway.
The 53-year-old actor, a passionate pilot, encouraged his fans to “do their bit” to tackle global warming.
Scroll down for more…
http://www.dailymail.co.uk/pages/live/articles/showbiz/showbiznews.htm l?in_article_id=445490&in_page_id=1773
March 24th, 2008 at 2:45 pm
BP:
“Given the stated reserves, I understand your position. It is reasonable. I’m skeptical about the size of the reserves, and this same skepticism exists within the oil industry.”
For some reason you haven’t considered point 2 in my above argument, So I’ll post it again for you.
And yes - if I had the money I would surely go long on all stocks - and I’ve told all my friends and family do it.
March 24th, 2008 at 2:45 pm
sorry, “oil stocks” not “all stocks”.
March 24th, 2008 at 2:57 pm
>>they are a cartel, and the point of a cartel is to restrict supply in order to drive prices up
Was Iraq invaded to keep oil flowing onto world markets. Or was the intent to PREVENT Saddam from flooding world markets with oil, as he did in 1990?
March 24th, 2008 at 3:11 pm
BP - I think the Iraq war was about keeping the $US as the world’s reserve & oil currency, which Saddam was threatening to change by selling the world’s last big pot of really cheap oil in Euros. Iran has just gone and done it by opening an oil bourse in Euros. Fortunately, while they have pretty good stocks of cheap oil, they are not as big or developed as Iraq’s. We’ll see how long W lets them keep going before the next attack. While this conspiracy theory is far from the complete truth, I suspect it is one of the underlying motivations for the occupation of Iraq and the current anti-Iran rhetoric. (Not to underplay Iran’s nuclear intentions, but the real immanent threat to the US is a further collapse of the $US when oil is no longer sold in dollars.)
March 24th, 2008 at 4:16 pm
Has anyone noticed that some peakests talk about the world having peaked already others have a later date (2010)?
March 24th, 2008 at 5:58 pm
The only way to see a peak is in the rear view mirror… it’s flat now… will output go up from here?
March 24th, 2008 at 9:14 pm
jh, that’s simply because oil producing nations aren’t being entirely honest about their reserves. Different peakest make different allowances for this which results in different peak periods.
March 24th, 2008 at 9:44 pm
What is the situation with Iraq? Is the spigot on full?
March 24th, 2008 at 9:47 pm
What I meant (above) is that these people ought to know that crude production peaked in may 2005 so maybe they think their is an air blockage somewhere?
March 24th, 2008 at 9:47 pm
BJ - that is the real question at the moment. Is the current two and a half year plateau in oil production the peak or just a lull before a new production boom? Most of the authors I follow, which include many non-peakists, say that there will be at least one more production spike, albeit tiny, that will give us a new record high but no real new production. (Sometime in 2008) Most believe that we are at the peak now. Peak oil that is, not all liquids, which some estimate will reach 90-100 mbd before the economics and the alternative resource limitations make further growth unlikely. That would put peak liquids another 5-10 years out.
jh - It is the distinction between peak oil and peak liquids that even has the peakists confused about the date. Only in 2007 did the IEA start talking about liquids production instead of just oil. Some peakists argue that this was a sure sign that the plateau in oil production was real and being hidden in the still growing numbers.
March 24th, 2008 at 9:51 pm
jh - Iraq is on again and off again. This should be affecting prices but I guess no one is taking their production seriously in the markets. I read somewhere, (no reference) that upwards of 80% of Iraqi production was being siphoned off by the black market. I don’t really know if that is true. Most of the news is about the pipelines being sabotaged and exports dropping, then recovering.
March 24th, 2008 at 9:58 pm
Communism has been thoroughly discredited but now the free market has been shown to be massively wasteful. Only God knows what to do but he’s an Atheist. I keep imagining how much better off we would be in the future if a guiding hand had built rows of energy efficient homes around a commons (square) etc, etc.