Robert Hirsch On Gas Prices

[MSimon]

Text:

http://www.nbc5i.com/money/16360253/det ... w&psp=news

Use this link for the video and avoid a lot of depressing Dallas News:

http://video.nbc5i.com/player/?id=254554

H/T Tom Ligon

[hanelyp]

"...forecast that we're going to be hitting $12 and $15 per gallon,”

Gasoline prices get anywhere near that high and there are multiple alternatives ready to go fast track to replace oil. I don't believe prices will go that high, or stay so inflated if the market is allowed to respond with more liquid fuel supply. But expect the current congress to continue obstructing new domestic supply.

[TallDave]

Coal can already make methanol at around $1/gal, and ethanol is competitive at current prices.

The problem is scaling up production fast enough.

[JohnP]

My wife and I, being "24" junkies, were watching a few-year-old episode last night on DVD. In it, the president character argued that it was patriotic to be involved in a covert plot to secure Asian oil because if Americans had to face $100 dollar a barrel oil it would be a *real* crisis.

We both laughed out loud.

[esotERIC D]

"...forecast that we're going to be hitting $12 and $15 per gallon,”

And i'll riot in the streets...

But seriously, i could see this happening in the next few decades (years?) as oil supplies run low and the dollar continues to weaken. It all makes battery electric hybrids look good along with cheap electricity from Polywell reactors.

(i'm new here, my first post)

[MSimon]

"...forecast that we're going to be hitting $12 and $15 per gallon,”

And i'll riot in the streets...

But seriously, i could see this happening in the next few decades (years?) as oil supplies run low and the dollar continues to weaken. It all makes battery electric hybrids look good along with cheap electricity from Polywell reactors.

(i'm new here, my first post)

Welcome to the conversation.

There is plenty of oil in America:

http://powerandcontrol.blogspot.com/200 ... r-oil.html

Congress has declared almost all the oil on Federal lands and off the coasts off limits.

Some people think the Saudis own Congress:

http://powerandcontrol.blogspot.com/200 ... yroll.html

Simon

[TheRadicalModerate]

There is plenty of oil in America:

Well, Simon, you finally goaded me into doing a bit of research:

Current proven US oil reserves = 21 Bbbl

Mean US estimated undiscovered reserves (as of 1995, which are the most recent data I could find in a moderate Googling--go figure) = 44 Bbbl

Current US daily production = 5.4 Mbbl/day
Current world daily production = 83 Mbbl/day
So US production = 6.5% of world production.

So now we need to do a modest conjuring trick to turn undiscovered reserves into daily production. Since 21 Bbbl proven reserves results in 5.4 Mbbl/day, we can assume a reserve-to-daily-production conversion factor of .03%, which I will arbitrarily de-rate by half due to the fact that new wells are finicky and offshore wells are especially finicky--say .015%. Multiply that by the 44 Bbbl of undiscovered reserves and you get:

Possible additional US daily production = 5.6 Mbbl/day

Now, if you add that additional 5.6 Mbbl/day to the current daily US and world production, you get:

New US daily production = 11 Mbbl/day
New World daily production = 89 Mbbl/day
New US percentage of world production = 12.4%
Incremental world production = 5.6/83 = 6.7%

Which is nothing to sneeze at, especially given how steep the demand curve is for oil. Sliding the supply curve just a little bit to the right makes the price plummet. So, all-in-all, I agree with Simon's statement.

However, a couple of caveats.

First, let's all agree that all this nonsense about "energy independence" is just that--nonsense--as long as you're just talking about petroleum. Oil is a globally traded commodity, so even if all that US-produced oil stayed in the US, that production would affect the world price of oil, just as rest-of-world production would still affect the US price. In other words, oil is truly "fungible". If the US were able to supply its entire domestic demand (which is something like 20.5 Mbbl/day) and somebody were to nuke the Norhern Gulf oilfields, the US price of oil would still skyrocket along with that of the rest of the world. (The exception to that would be if we completely isolated US production and demand from the rest of the world, which is such a bad idea that it doesn't even warrant consideration.)

Second, none of these numbers include unconventional petroleum: shale oil extraction, coal gasification/liquefaction, etc. If you add that stuff in, we could be truly petroleum-independent for a very long time--maybe even long enough to get tokamaks to work! Bottom line: there are still plenty of dead, hundreds-of-millions-of-years-old critters to set fire to.

Which brings me around to one last interesting tidbit. Freeman Dyson has a review of a couple of recent books on the economics of global warming mitigation, here.

(http://www.nybooks.com/articles/21494 in case the link didn't take).

The review of the Nordhaus book is especially interesting for our little group here. Nordhaus did some net-present-value modelling on investment in global warming mitigation over the next 1 to 2 centuries. Nordhaus uses standard IPCC data (FWIW) to compute the cost of doing nothing (i.e. business as usual) at about $23T by 2100 in today's dollars. Relative to that, he computes the NPV of several investment scenarios and gets the following numbers:

Nordhaus's computed optimal program = $3T better than nothing
Kyoto with US participation = $1T better
Kyoto without US participation = $0
Business as usual = $0 (since we're normalizing to this)
The "Stern report" policy = $15T worse
The Gore policy = $21T worse

But here's the really interesting one: Nordhaus also computes the effect of a "low-cost backstop" technology that can either obviate the need for fossil fuels or absorb excess carbon from the atmosphere relatively cheaply. Dyson wasn't thinking about fusion as such a policy (and you should take a look at his proposal--it's interesting) but fusion would definitely count. Based on such a technology, Nordhaus's model yields (drumroll, please):

Low cost backstop = $17T better

Dyson's conclusion, which seems pretty reasonable to me, is that we ought to invest modestly in fossil fuel mitigation (aka carefully targeted carbon taxes) and invest heavily in possible backstop technologies.

[MSimon]

Moderate,

You also have to factor in that reserves are not geophysical based. They are price based.

Me I worry about the lack of sunspots. The sun is going into a cooling phase. CO2 may be a response to climate (think ocean temperatures vs dissolved CO2) rather than a cause.

http://spaceweather.com/

[Munchausen]

Suggested reading:

http://publications.uu.se/abstract.xsql?dbid=7625

Abstract
Robelius, F. 2007. Giant Oil Fields -The Highway to Oil. Giant Oil Fields and theirImportance
for Future Oil Production. Acta Universitatis Upsaliensis. Digital Comprehensive Summaries
of Uppsala Dissertations from the Faculty of Science and Technology . 168 pp. Uppsala.
ISBN 978-91-554-6823-1
Since the 1950s, oil has been the dominant source of energy in the world. The cheap supply of
oil has been the engine for economic growth in the western world. Since future oil demand is
expected to increase, the question to what extent future production will be available is important.
The belief in a soon peak production of oil is fueled by increasing oil prices. However, the reliability
of the oil price as a single parameter can be questioned, as earlier times of high prices
have occurred without having anything to do with a lack of oil. Instead, giant oil fields, the
largest oil fields in the world, can be used as a parameter.
A giant oil field contains at least 500 million barrels of recoverable oil. Only 507, or 1 % of
the total number of fields, are giants. Their contribution is striking: over 60 % of the 2005 production
and about 65 % of the global ultimate recoverable reserve (URR).
However, giant fields are something of the past since a majority of the largest giant fields are
over 50 years old and the discovery trend of less giant fields with smaller volumes is clear. A
large number of the largest giant fields are found in the countries surrounding the Persian Gulf.
The domination of giant fields in global oil production confirms a concept where they govern
future production. A model, based on past annual production and URR, has been developed to
forecast future production from giant fields. The results, in combination with forecasts on new
field developments, heavy oil and oil sand, are used to predict future oil production.
In all scenarios, peak oil occurs at about the same time as the giant fields peak. The worst-case
scenario sees a peak in 2008 and the best-case scenario, following a 1.4 % demand growth,
peaks in 2018.

p.76

The production of the hundred largest, with respect to URR, giant fields is estimated to be around 32 Mbpd, which corresponds to about 45 per cent of the total volume of oil produced (GFP) (figure 6.3).

p.81

6.4 Discovery and Discovery trends of Giant Oil Fields
The discovery year, and hence the age, of the largest fields reveals an interesting
fact, the fields are all old (table 6.1). The youngest of the largest is East
Baghdad, which was discovered in 1979. Half of the fields are more than 50
years old. This indicates that the discovery of large giant fields is something
of the past.
Further indications of this is given by the discovery trend of giant oil
fields, which shows a clear peak in the 1960s (figure 6.6).Both the number of
fields discovered and the URR discovered was the highest during the 1960s,
and it has proved to be the most prolific decade for giant field discoveries.
The observed trend is that from 1970 and forward, the discovery rate
of giant oil fields has decreased. This is true with respect both to number
of fields discovered and the URR. In the 1960s, the average size was almost
4.4Gb per field compared to 1.9Gb per field in the 1970s and 1.3Gb per
field in the 1980s. This dropped even further in the 1990s, down to 1.2Gb
per field. However, the average size of the giant fields discovered so far during
the 2000s is 1.5Gb per field. This is mainly due to the discovery in 2000
of the giant Kashagan field in Kazaksthan, with an estimated URR of 13Gb
(OFN).

[93143]

"...the carbon dioxide in the atmosphere would be reduced by half in about fifty years."

Does anyone else think this "carbon-eating trees" idea might be a disastrously bad one?

[tombo]

We know that humans can survive an ice age.
We don't know that humans can survive a runaway greenhouse effect.
I would rather try the experiment first on Mars not on my own life support system.
If it turns out we need to reverse an ice age, well hey it might be good practice for Venus.
An advanced energy supply will give us more options under almost any scenario.

[MSimon]

As far as I can tell the runaway greenhouse effect is a figment of the "please believe in AGW so we can take your money and run your life without complaint" crowd.

Atmospheric CO2 has been as high as 7,000 ppm and here we are at near ice age temperatures. And that was before so much CO2 was locked up in carbonates.

If CO2 goes below about 200 ppm plant life starts to suffer. Below about 90 ppm and plants die. Optimum CO2 in the atmosphere for plant life is about .5% or 5,000 ppm. Think about it. How did plants get optimized for 5,000 ppm?

http://spaceweather.com/

We are at the very least headed in to a Little Ice Age. There is a solar cycle of 300 years - not included in the models making all the scary predictions. The modelers admit that they do not model clouds well. In fact they don't even know the proper sign for cloud feedback let alone the magnitude. They mostly assume a positive sign because it gives the results that keeps the funding coming.

Now about that 300 year cycle. The current warming began around 1850. A 300 year cycle says that we should be entering a cooling phase. And lo global temperatures have been stagnant from 1998 to 2007. And in 2007 the globe gave up at least 1/2 and maybe all the warming since the 1970s. Proof of nothing of course. However, it is suggestive.

Doing the wrong thing will be worse that doing nothing.

In any case some time between 2065 and 2100 we will be off carbon fuels due to the natural evolution of technology. In the mean time we will need that net energy to keep civilization going and to do the research to get us to zero carbon fuel use.

[tombo]

I would feel more confident if we moved at least as slowly and carefully with the planetary life support system as with high voltage electronics.

Climate predicting codes do not inspire my confidence.
As you point out we don’t even know the signs of some of the feedback terms and the lag times are decades to centuries.
I would bet money that we don't even know all the effects to include.
I’d rather not screw it up before we figure out how it works.
Doing nothing is exactly the proper response when you don't understand the system.
And of course Krakatoa could change the game overnight.

Something my mother pointed out is that the prediction has oscillated between ice age and greenhouse at about the period it takes to raise a new crop of grad students.
And it has done so since the 1920’s or earlier.

5000ppm? 7000ppm?
It is now less than 400ppm
5000ppm would leave us gasping for breath.
We REALLY don't want to go there.
Those carbonate rocks were laid down long long before the current cycle of ice ages.

Besides, regardless of the truth, the more people that believe CO2 is a problem the easier it will be to raise funds for fusion.
So what is the point of badmouthing it here.

[TheRadicalModerate]

Oops--didn't mean to start an AGW religious war.

The interesting thing about the Nordhaus models, IMO, is that it kinda confirms some nice, conservative intuitions, i.e., that doing nothing is considerably better than doing something overly aggressive, and that investing in either non-carbon energy tech or carbon-abatement tech is considerably better than doing nothing and dirt cheap on an appropriate time scale.

Of course, the whole AGW debate is merely a second-order effect compared to the "can we continue using petroleum to run our civilization?" debate. There, the decision tree looks pretty straightforward. Use of petroleum is at the very least a huge national security problem and if you happen to drink even the most watery flavors of the Peak Oil Kool-Aid, it's an economic problem to boot.

So, given that you probably ought not to get things with wheels to move by setting fire to petroleum for very much longer, you come down to a fundamental decision: Do we want to develop a whole bunch of new technology based on coal and oil shale, or do we want to bite the bullet and develop non-carbon energy technology instead?

This is obviously where the second-order AGW debate gets factored in. If you're absolutely, 100% sure that AGW isn't going to be a problem for another 100 years (and, frankly, I put people who are 100% sure of that into the same bucket with people who are 100% sure that AGW is a problem), then you ought to go with coal. On the other hand, if you think that there's some non-trivial probability that AGW might be a problem, then you ought to spend the money to develop non-carbon energy alternatives.

Personally, I'm pretty skeptical about AGW but at the same time increasing atmospheric CO2 by 17% in 50 years can't be all that good, so encouraging the market to throw a hundred billion or so at some interesting technology over the next 15 years seems like a pretty prudent action.

Now we can have a nice discussion about the best way to encourage that kind of financing. Hint: it involves a certain amount of government policy, although probably not a whole lot.

[MSimon]

Besides, regardless of the truth, the more people that believe CO2 is a problem the easier it will be to raise funds for fusion.
So what is the point of badmouthing it here.

For me truth takes precedence over political advantage. YMMV.

I have lost very good paying jobs by telling the truth. I see no reason to quit now.