energy comments on prestudy
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Energy Comments on Prestudy
Gail Tverberg – Green Economy Workshop 560 -10 Feb. 2014
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Peak OilForecast
Limits to GrowthForecast
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We know what has happened in the past
Based on Secular Cycles, by Peter Turchin and Sergey Nefedov, Princeton University Press, 2009.
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Hubbert symmetric model only applies with identical replacement
Source: M. King Hubbert, Nuclear and the Fossil Fuels, 1956. http://www.hubbertpeak.com/hubbert/1956/1956.pdf
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Ways Collapse Occurs Inadequate government funding
Increasingly impoverished workers Not enough tax revenue
Inadequate oil to “grow” the economy Need oil for extraction Need oil for road repair, wind turbines, mining, etc. Not enough left over for “growth”
Defaulting debt Need economic growth to repay debt
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Difference in Views
Tverberg Randers 2052
1972 LTG limit is hitting Dennis Meadow’s
model Verified by Hall;
Turner Appears as Financial
Limit Debt related Comes from
inadequate investment capital
High energy costs adversely affect economy
Peak oil limit Based on depletion Lots of substitution No adverse financial
impact
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Specific Energy Problem Areas
C. Hall Quote Tverberg view
‘The problem is not that oil is running out, rather than what happens when oil production can no longer meet the world’ s and national economies’ increasing needs.’
The problem is that we are reaching Limits to Growth in the next few years. We can expect Government funding
problems Debt defaults Inadequate oil to
“grow” the economy
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Specific Energy Problems
2.3 Current Economy view Tverberg view
Renewable energy and improvements in energy efficiency will be phased in automatically once renewables have become competitive in relation to fossil energy.
High energy prices of any kind will sink the economy.
High priced oil + high priced electricity sink the economy simultaneously.
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Specific Energy Related Issue
2.3 Green economy view Tverberg view
The higher the EROEI and scalability (volume) a form of energy has, the higher its potential is.
EROEI does not measure intermittent renewables well.
Does not reflect debt needs, payback.
Market cost calculation is extremely important.
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Example of EROEI Problem Solar PV EROEI supposedly 9.4 to 1 With batteries reaches1.3, after 30 years.
Dynamic EROEI with batteries, off-grid, based on figure by Graham Palmer in “Energy in Australia,” Springer, 2013.
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Very little sustainable “renewable energy” High cost of wind, solar PV lead to financial
problems for countries using them Today’s wind, solar PV are very fossil fuel
dependent
Intermittent electricity very low quality energy Requires huge costs to fix Not reflected in EROEI
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Specific Energy Related Issue
2.3 Green Economy Tverberg view
Energy taxes help to accelerate the rise in energy efficiency; prevent development that is not energy-efficient; and bring about lower costs in the long term.
Energy taxes move manufacturing to high carbon parts of the world.
Ultimately counter-productive
Exceptions: Worldwide tax Private citizen gas tax High tax on imported
goods made with coal
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4. Role of Business Large businesses may fail as world changes
Need international trade; debt availability
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5. Financial System Credit overexpansion will fix itself very shortly
Massive debt defaults likely in the next couple of years
Lack of credit will lead to rapid decline in energy production of all kinds
Real Question: How does one develop a financial system for a shrinking world economy?
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6. The goal of development We are facing massive shrinkage of the
economy in the near term
A Steady-State Economy is a pipe dream Possible 40 years ago; not possible in the future
Knowledge depends on today’s fossil fuel world No longer have 90% of humans involved in
agriculture Availability of electricity, Internet, computers,
books
How do we keep knowledge, as we shrink back?
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Climate Issues Mentioned in several sections
Far less important, if fossil fuel use is shrinking rapidly, with no action on our part
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Problems began as extraction became difficult
Assumes hyperbolic growth in extraction costs.
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Recent price rise due to depletion
Based on BP 2013 Statistical Review of World Energy data.
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Now subsidy to economy is disappearing
Reflects technology and efficiency improvements
Subsidy to economyfrom oil
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Recessionary forces – Same countries with fall-off in oil consumption
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China’s growth since joining World Trade Organization
Contact Information
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Gail E. Tverberg E-mail: GailTverberg at comcast dot net Website: OurFiniteWorld.com Twitter: @gailtheactuary Cell: (407) 443-0505
See my article “Oil Supply Limits and the Continuing Financial Limits,” Energy, Vol. 37, Issue 1, January 2012, Pages 27-37. (Free version at http://ourfiniteworld.com/oil-supply-limits-and-the-continuing-financial-crisis/ )
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