November 6, 2015

Do we need crude oil to make plastic?

No.  We'll find other ways to make things like plastic.  We already have, in some cases. We generally don't need to do it now, but it's technically reasonably straightforward, and affordable.

1) it's not made from crude oil - it's made with NGLs and natural gas, which are in surplus right now.

"In the United States, plastics are not made from crude oil. They are manufactured from hydrocarbon gas liquids (HGL) and natural gas. HGL are byproducts of petroleum refining and natural gas processing. These liquids are used as feedstocks by petrochemical manufacturers to make plastic and are used as fuels in the manufacturing process.  Hydrocarbon gas liquids (HGL):  A group of hydrocarbons including ethane, propane, normal butane, isobutane, and natural gasoline, and their associated olefins, including ethylene, propylene, butylene, and isobutylene. As marketed products, HGL represents all natural gas liquids (NGL) and olefins. EIA reports production of HGL from refineries (liquefied refinery gas, or LRG) and natural gas plants (natural gas plant liquids, or NGPL). Excludes liquefied natural gas (LNG)."

2) Plastic uses less than 3% of overall oil consumption.

In 20101, about 191 million barrels of HGL were used in the United States to make plastic products in the plastic materials and resins industry, which was equal to about 2.7% of total U.S. petroleum consumption. Of those 191 million barrels, 190 million barrels were used as feedstock and 1 million barrels were consumed as fuel to manufacture these products.

In addition to HGL, about 412 billion cubic feet (Bcf) of natural gas were used to make plastic materials and resins in 2010. This was equal to about 1.7% of total U.S. natural gas consumption. Of the 412 Bcf of natural gas, 13 Bcf were used as feedstock, and 399 Bcf were consumed as fuel to manufacture these products."

3) There are pretty good direct substitutes for many uses. For instance, a huge fraction of plastics are used for things like disposable beverage containers and food packaging. Those could easily be made out of aluminum, glass, and cardboard.

4) plastic is recyclable. We don't do a great job of it now, because we don't have to. If you recycle 95% of consumption (cars, for example, are 99% recycled), you only need to produce 5% as much.

5) We have enormous supplies of fossil hydrocarbons in the form of coal, methane, kerogen (shale oil), heavy oil, bitumen (tar sands), peat, etc, etc. for the next 200 years. They have problems for use as fuels: they don't flow like conventional oil in a way that prevents peak oil, and some have low or negative E-ROI, but they're enormous and perfectly affordable for materials like plastics, which are  niche, high value uses.

Materials like plastic don't have a CO2 emissions problem, assuming they're not burned (see recycling, below).

6) There's biomass, which is pretty badly suited for conversion to liquid fuel, but good for hydrocarbon feedstock.

7) Plastic consumption can be made more efficient by reducing packaging and redesigning structures to reduce density while maintaining strength (human bones are a good example: they're hollow, and even the tubular structures are mostly empty space internally).

Even now, much plastic is made from natural gas and coal.  Industrial chemistry can produce very simple hydrocarbons from any source of hydrocarbons, and build them into any compound our heart might desire. Various kinds of feedstocks would work. Some are more convenient or slightly cheaper than others. Whatever fossil fuel is convenient will work; biomass will work just fine, or hydrocarbons can be synthesized from seawater, atmospheric CO2 and renewable electricity (air, fire and water!).

March 6, 2015

What's the causal link between Peak Oil and recession/depression, and how strong is it?

One possibility: rising oil prices cause inflation, and that causes recession. This is a plausible argument: that PO would cause inflation, inflation would cause central banks to tighten credit, and tightened credit would cause recession.

But, that wasn't the case from 2004-08. Inflation never rose about 4%, and core inflation rose much less. Interest rates rose at a modest rate on a historical basis, but not because of oil prices - the Federal Reserve made an explicit decision to not worry about the impact of oil prices on the general price level, assuming that they'd come back down eventually (as they partly have). The Fed plans to continue this policy.

So, what's the causal link between PO and recession/depression?

James Hamilton showed one: that oil shocks caused fear, uncertainty and doubt among car buyers, who put off purchases, thus reducing overall capital investment, thus reducing aggregate demand, causing recession.

"..., the technological costs associated with trying to reallocate specialized labor or capital could result in a temporary period of unemployment as laid-off workers wait for demand for their sector to resume. Bresnahan and Ramey (1993), Hamilton (2009b), and Ramey and Vine (2010) demonstrated the economic importance of shifts in motor vehicle demand in the recessions that followed several historical oil shocks."

page 26

The problem: this is a short term effect. If oil prices stay high, they’ll switch to buying more fuel efficient vehicles and car sales will rise again. Again, this is what we say from 2011 to 2014: oil prices stayed high, and yet car sales recovered to historically very high levels.

Other research at the St. Louis Fed, which I can show if  desired,  shows that oil shocks only cause short term recessions.

So, what's the causal link between PO and recession/depression?

Hamilton ascribes more importance to it than most, and he thinks that the 2004-08 oil shock (in which prices rose roughly 5x) shaved roughly 2% off of US GDP, cumulatively. That's not TEOTWAWKI.

February 24, 2015

Are EVs affordable?

Yes.  In fact, they're the cheapest cars on the road even without tax credits.  With tax credits, they're insanely cheap.  Let's see.  The average car costs about 58 cents per mile to drive.

IRS Average New Car Cost per mile: 57.5 cents per mile.

The Leaf, without tax credit, is the cheapest car you can find to own and operate:

Total Cash Price $25,327
5 Year True Cost to Own: 28,079
Cost per mile: 37.4 cents per mile.

A typical small car like the Honda Civic Sedan is more expensive:

Total Cash Price $21,644
5 Year True Cost to Own: 36,154
Cost per mile: 48.2 cents per mile.

And a Chevy Volt, a car without any compromise because it can run on gas, is less expensive than the average car even without the tax credit:

Total Cash Price $31,500
5 Year True Cost to Own: 40,129
Cost per mile: 53.5 cents per mile. 1/27/15

If we subtract just the Federal credit of $7,500 (and several states have credits as well), that subtracts 10 cents per mile. The Leaf costs less than half of the average car, and the Volt is substantially less expensive than the Civic. 

And, you very rarely go to the gas station, and it's much more fun to drive!

February 20, 2015

Is it too late to cope with Peak Oil?


Well, personal transportation accounts for the majority of oil consumption.

Personal transportation is easily done with EVs - a Chevy Volt costs less to own and operate than the average US passenger vehicle, and gets 200MPG. A Nissan Leaf is the lowest cost vehicle on the road.

EVs can be ramped up pretty quickly - They're 3-4% of sales right now (including hybrids).  Production volume could be doubled essentially overnight, and doubled every two years thereafter.  In 8 years you could be at 80% of new vehicles, and in another 5 years they'd account for 50% of vehicle miles driven. In another 6 years they'd account for 75% (vehicles less than 6 years old account for 50% of VMT).  Ethanol accounts for about 10% of passenger transportation fuel, so a fleet of Chevy Volts could be powered with no oil at all.

There's a pretty straightforward path forward, if we needed a short term fix to get us through a period of fast depletion, or another oil shock while we were transitioning to EVs. The US could reduce passenger fuel consumption by 50% essentially overnight by raising the average passengers per vehicle from 1.2 to 2.4.  Look at Uber, look at smartphones for connecting with people.  There are very, very few destinations in the US that no one else is going to.  On almost any road, look around: there are other people on the road, going in the same direction.

With an ad hoc smartphone based system, you could find someone going in your direction almost anywhere. And, even with old-fashioned employer-based systems, about 10% of Americans carpool to work right now.

Carpooling - the horror.

February 19, 2015

Has human harm to our planet guaranteed social collapse?

No.  I think extinctions create serious risks for ecological networks.  I'm particularly worried about Climate Change, in all it's manifestations.  But, there's a big difference between large, unknown risks and Certain Collapse.

"These are the megafauna, the big predators of the sea, and the species we most value. Their depletion not only threatens the future of these fish and the fishers that depend on them, it could also bring about a complete re-organization of ocean ecosystems, with unknown global consequences."

That's bad.  That's something that's very important to avoid.  On the other hand, it's not Certain Collapse of Human Society.

"“We may be sitting on a precipice of a major extinction event,” said Douglas J. McCauley, an ecologist at the University of California, Santa Barbara, and an author of the new research, which was published on Thursday in the journal Science.

But there is still time to avert catastrophe, Dr. McCauley and his colleagues also found. Compared with the continents, the oceans are mostly intact, still wild enough to bounce back to ecological health.

“We’re lucky in many ways,” said Malin L. Pinsky, a marine biologist at Rutgers University and another author of the new report. “The impacts are accelerating, but they’re not so bad we can’t reverse them.”

So, the article is talking about possible catastrophe for ocean systems.  But, that's not exactly the same as catastrophe for human societies, and it's avoidable.  Again, there's a big difference between large, unknown risks and Certain Collapse.

So, rather than saying things are hopeless and nothing can be done, it's better to say:

Fossil fuels are risky, dirty and expensive.  We should phase them out as fast as possible.

February 10, 2015

Who is leading in wind power deployment?

Iowa, for one.

Iowa wind power reached 27% market share in 2014, and they're on track to reach 34% in the next year or so, after they finish building another 1.2GW of wind capacity. Their most recent wind farms cost about $1.73 per watt to build - Iowa tends to achieve a 40% capacity factor, which suggests a pre-tax-credit cost of less than 4 cents per kWh, and a net cost (after Federal subsidies) of about 2 cents.  That helps explain average retail prices of about 7 cents - 60% of the US average.

Iowa's power imports peaked in 1997, at -13.3%, then declined to zero in 2008 and now Iowa exports about 10% of their generation.  They and their neighboring states are planning to expand exports of low cost wind power.

MidAmerican expands Iowa wind foothold
Matthew Patane, 12:02 a.m. CDT October 11, 2014
Iowa's reputation as a leader in wind energy production got another boost Friday when MidAmerican Energy announced plans to invest an additional $280 million in the renewable energy.
The Des Moines-based utility will add 67 wind turbines at two western Iowa locations.
Most of the turbines, 64 of them, will go to a new wind farm in Adams County in southwest Iowa. The other three will expand an existing O'Brien County wind farm in northwest Iowa.
The turbines have the potential to generate 162 megawatts of energy, enough to power 48,000 homes, company officials said.
Iowa is one of the leading states in the production of wind energy.
More than 27 percent of the state's energy comes from wind, the highest state percentage in the nation, according to a 2014 report by the American Wind Energy Association.
Iowa also has the seventh-best wind resource, or potential for wind energy generation, in the U.S.
William Fehrman, president and CEO of MidAmerican, said the company is continuing to invest in wind projects because they are a good way to reduce costs for customers and bring the state closer to meeting goals for reducing carbon emissions.
Wind generation "... continues the drive to reduce our overall carbon footprint and better position ourselves and our customers and our state to the changing regulatory environment," he said.
Last year MidAmerican began construction on $1.9 billion worth of turbines in five Iowa counties.
That project will add 450 turbines in Grundy, Madison, Marshall, O'Brien and Webster counties, and create 1,050 megawatts of energy, or enough to power 317,000 homes, according to the company.
Combined with the expansion announced Friday, Fehrman said the O'Brien County wind farm would be the largest in the state of Iowa and produce 502 megawatts of energy.
MidAmerican will contract with Siemens, a German-based engineering and electronics company, to build the blades and other components of the wind turbines. Siemens has a manufacturing plant in Fort Madison.
The Iowa Utilities Board still has to give regulatory approval for the $280 million project. Fehrman said his company would file its paperwork with the board Friday.
The utility is not asking for financial assistance from local or state officials, but MidAmerican will pursue federal tax credits offered for wind energy projects, Fehrman said.
If approved, MidAmerican said construction would start at the two sites next summer and be complete by the end of the year.
The two projects would create about 200 construction jobs, and once complete, MidAmerican said the sites would require at least 10 permanent positions.
The company made the announcement during a news conference with Gov. Terry Branstad and Lt. Gov. Kim Reynolds.
Branstad said the project is "the latest evidence of MidAmerican Energy's longstanding and ongoing commitment to renewable energy." He also said this and other wind projects help the state attract companies such as Microsoft and Google.
"Major companies from across the country and around the world are looking at Iowa as a place to locate facilities due to our commitment to providing sustainable, affordable energy solutions," Branstad said.
Earlier this year, MidAmerican signed an agreement with Google to provide 407 megawatts of wind-sourced energy for Google's Council Bluffs data center.
When its construction projects are complete, MidAmerican will have 21 wind-energy locations in the state.
Altogether, Fehrman said the company has invested about $6 billion in Iowa wind energy.

MidAmerican's wind projects
Once MidAmerican Energy's most recent projects are complete, here's how the utility's investment in wind will stack up:
21 wind projects across 22counties.
$6 billion invested.
3,500 megawatt production capacity.
More than 1 million homes that could be powered.
Source: MidAmerican Energy
Energy generated in Iowa
Iowans get their energy from a number of sources. This was the breakdown from a 2012 Iowa Utilities Board report:
62.3 percent coal.
24.8 percent wind.
7.7 percent nuclear.
3.4 percent natural gas.
1.4 percent hydropower.
Less than 1 percent other renewables and petroleum.

February 2, 2015

Are renewables low density/diffuse?

No, they aren't - not if you compare apples to apples.

Wind and solar generate a very high "density" form of energy, electricity: electric wires can carry very high energy density thousands of km, to where its needed.  On the other hand, wind and solar require a "catchment" area which is no larger than the overall land requirements for producing oil and other fossil fuels.  For instance, the US government leases about 35 million acres of land for a minority of US oil production (, and since 1982, the federal government has leased or offered 229 million acres of public and private land in 12 western states for oil and gas drilling, an area greater than the combined size of Colorado, New Mexico and Arizona.  Another way to look at it: the US has about 500,000 producing oil wells*, each of which requires access and working areas, as well as water disposal wells, etc. - these require a minimu of 1 acre per well, and perhaps much more.  There are about 120,000 gas stations in the US, at perhaps 1 acre per (some cities require a minimum of 1 acre).  The wells and gas stations add up to a minimum of 720,000 acres.

Of course, we also need to include 185,000 miles of oil pipelines - at 75 feet of right-of-way, that's 1.7M acres. Then there's storage, refinery and port facilities. Not to mention dry/abandoned/capped wells, of which there are probably several million.   - 2.5 million acres total for the US industry appear to be a minimum.

If 2,500,000 acres are required for 9M bpd oil production, that works out to about 20 watts per sq meter, much less than solar power.

Looks like oil is pretty low density!

What about Coal?

Estimate: Solar thermal energy requires about 16.4% less land than coal, and wind power requires about 96.3% less land than coal, to produce a given amount of electricity over a 60-year period.

Liquid petroleum fuel is energy dense and portable. Doesn't that make it hard to replace?

No. The perfect is the enemy of the good. Diamonds are the hardest substance know to man: does that mean they're essential for daily tasks that require hardness?

Plug-in hybrids like the Chevy Volt can reduce light vehicle consumption by 90% with no sacrifice in convenience, and do so cheaply. Electric rail can do the same for freight. Batteries can do for water shipping some of what batteries do for surface plug-in cars. Only airplanes present any real difficulty: for them efficiency and rail substitution under 500 miles can probably reduce requirements by 60%.

For the residual 10-15% of fuel requirements, there are several solutions, including fuel cells; synthetic fuel (from atmospheric carbon, waste water and renewable electricity); and biofuels. They would be more expensive (maybe the equivalent of $5-$10 gasoline to do properly, especially biofuels), but the greatly reduced consumption would make that matter very little.

Batteries etcetera are good enough!

Some followup questions:

What's the source of the numbers that say consumption would be reduced by 90%?

This is from GM's observation of a reasonably large sample of real-world drivers, which found that 78% of miles driven would be within the Volt's 40 mile electric range. The remaining 22% would be on the backup ICE generator, which would give roughly 50 MPG, a 50% reduction in consumption compared to the average 22 MPG vehicle on the road today. That gives you an 89% reduction in fuel consumption.

Does this just include consumption of oil?

Yes. Fortunately, PHEV's have an elegant synergy with wind power (see my most recent post describing how PHEV's help buffer intermittency), so that PHEV's will promote and facilitate wind. This means that one doesn't need to be too worried about the CO2 emissions from existing grid power (which would be less than a Prius in any case).

Aren't little details like having to plug the car in every night important to consider?

Think of the inconvenience of stopping for gas at a service station. If people really find it annoying, undoubtedly someone will devise an automatic docking procedure, like that of many cell phones.

What about pure electric vehicles?

I think the Volt serial hybrid design is the practical solution. The infrastructure for gasoline will be far more extensive than that of electricity for quite some time.

OTOH, pure EVs will work for some quite nicely.

What about Vaclav Smil's discussion of energy intensity in Energy at the Crossroads?

First, V Smil greatly underestimates wind resources and power density. He uses average wind speed over the entire land mass, a bit like estimating the average oil content of the earths crust or the energy in hydro electricity on rainfall/m^2.   Solar, wind, hydro, geothermal, tidal energy are all concentrated in specific regions so using average power density is meaningless.

2nd, he's not making a proper comparison of the whole system land requirement, as discussed above.

*The total number of producing oil wells in the U.S. increased at a steady pace in 2011, reflecting stepped-up drilling programs spurred by $100/bbl prices. World Oil’s estimate of producing wells, based on surveys of state agencies and company sources, indicates a rise of over 16,000 wells to 535,951. This is up 3.2% over 2010.