The Slavery of Oil - Francois Collier

An excellent article on energy use, GDP, wealth and energy expenditure by a system modeler Francois Cellier:

The Slavery of Oil
http://europe.theoildrum.com/node/5388

Short snippets:

"As energy becomes more expensive, we may soon experience a situation where we spend our entire GDP and more just to procure the energy needed to maintain our life style. This claim is what I wanted to verify."

Last year as oil went up to $147/barrel, the procurement of oil alone started to near 12% of GDP. Oil is black gold and will be more so in the future. Even if price tanks this year to $30/barrel, it will multiply in years to come.

"This means that, if ever the price of energy should rise to a level of $0.37/kWh, we would spend our entire GDP just on the procurement of energy. This corresponds to an oil price of $590/barrel."

$590 of 2009 dollars sounds a lot. Still, many analysts have already flashed estimates of $300/barrel (inflatated) dollars. Even inflation adjusted that would be near $200-$250/barrel in a few years. So, roughly 30-40% of GDP.

"Why are the Norwegians spending more energy than the Swedes? There is no good reason for it. They do it, because they can."

This is a good reminder. If you have energy, you will waste it, even when it's expensive, as long as you can make for the additional expenses by selling surplus to others at a higher price. High oil prices only increase consumption in the oil exporting nations, as Middle-East countries so effectively demonstrated us in the past years.

Finland would probably be slightly below and to the right of Sweden. That is, less wealthy, but wasting more energy. Is that something to be proud of? Is that a good position to start from, once we start on a global liquid energy diet?

Lots of more good stuff in the article and in the comments below. Be sure to look at Euan Mearn's related follow up article at TOD also, titled "The Financial Return of Energy Invested".

Images for the Age

Click for larger versions.

Study. Understand.

Cars without Oil - Can it be done?

One of the recurring themes here and in other oil depletion blogs is the problem of cars. There are about 800 million oil powered motor vehicles on the roads of the world. That number is estimated to go up by a few hundred million by 2020 - even if the economy doesn't recover to BAU levels.

This poses many questions from the point of view of peak oil:

• Assuming near and sharp oil peak, where is the energy going to come from to power the cars?
• If not oil or brain dead bio-fuels, what is the fuel & and the energy carrier?
• Who's going to build the new cars?
• Which country is going to adopt this new system - requiring massive investments in infrastructure?
• Car fleet replacement rate is c. 2% p.a. - how long time will the transformation take?
• Who's going to fund all this massive investment?
• Can it be made economic to compete with ICE cars?
• Will it cut down our CO2 emissions?

Well, looks like Shai Agassi's (ex-SAP/Oracle) new company Better Place is asking exactly these questions and trying to answer them.

Below is Agassi's presentation from TED on the issue. Very good points and worth spending 20 minutes on, even if you don't share his optimism about replacing the worlds cars in a decade or so. Also, it is a very good showcase of rhetoric - enough data points to convince, emotions to draw you in, morality to remove defenses and hope to make you believe.

We need more people and examples like this. What can you do?

G-20 money *might* be enough, but oil will NOT be

Kjell Aleklett of ASPO and professor of physics at Uppsala University puts the G20 stimulus trillions into perspective for the whole world::

"The world’s wealthiest nations, the G20 group, have decided to light a fire but have forgotten a very important detail – to check whether there is sufficient fuel to enable the fire to burn.

During the last 20 years we have had global economic growth of approximately 3% per annum. Fuel use in the form of oil has increased, on average, by half of this rate, i.e. 1.5% per annum.

[W]e show that oil production from those fields that are currently in production will decrease by 6 percent per year during the next 5 years. This means a decrease in the rate of production by 18 million barrels per day after 5 years. The G20 nations want to increase oil use but the forces of Nature say that there will be a decrease.

The same nations that now require increased oil consumption will meet in December with the world’s other nations in Copenhagen. They will then discuss what measures they can take to reduce oil consumption.

What the G20 group should discuss is what investments will be required for this transformation of the energy system to become reality."

So where does it end? Will the next boom be cut-off by another oil crunch, leading again to a new bust, as the newly minted money and debt evaporates? The cycle begins anew, until we hit the oil ceiling again? Repeat ad infinitum?

"Why this is not the 1980s" - Matt Simmons Interview

Very interesting 43 minutes, going back 16 years and comparing the oil price dips of the 80s and 90s to that of last year.

If you are to understand why this is not the 80s in regards to oil, you need to see this.

Video of the day - Natural World - A Farm for the Future

Source: http://video.google.com/videoplay?docid=4152340418943461860

Rebecca Hosking investigates how to transform her family's farm in Devon into a low energy farm to prepare for Peak Oil. Lot's of good stuff on farming, food production and oil dependency.

Tidbit of the day - Drinking Oil

"From start to finish, bottled water consumes between 1100 and 2000 times more energy on average than does tap water.

U.S. bottled-water consumption in 2007 required an energy input equivalent to 32 million to 54 million barrels of oil. Global energy demand for bottled water is three times that amount.

To put that energy use into perspective, Gleick says to imagine that each bottle is up to one-quarter full of oil."

" - Gleick & Cooley, Environmental Research Letters, 3/2009

Banks of the World

You've been warned. Twice.

Link Round up for Q1/09

Shamelessly stolen from Energybulletin, PeakOil and The Oil Drum.

Total Oil - World Oil Production Near Peak

"The world will never be able to produce more than 89m barrels a day of oil, the head of Europe's third-largest energy group has warned.

Meanwhile, Mr de Margerie now expects a faster decline in production at older fields, such as those in the North Sea."

IEA warns again on Oil Supply Crunch due to lack of investments

"Currently the demand is very low due to the very bad economic situation," he said. "But when the economy starts growing and recovery comes again in 2010 and onward, we may have another serious supply crunch if capital investment is not coming."

OPEC: Oil industry capital investments have collapsed due to crisis

"Investments in the oil industry in the Gulf region have faced a major contraction due to the global financial crisis which could endanger the future of the industry."

Crisis slowing investments in renewables

"Economic slowdown and the recent collapse in oil prices is slowing investment in alternative energy, needed to wean the world off dependence on hydrocarbons, the International Energy Agency (IEA) said"

Sir David King predicts century of Resource Wars

"Future historians might look back on our particular recent past and see the Iraq war as the first of the conflicts of this kind - the first of the resource wars.

Unless we get to grips with this problem globally, we potentially are going to lead ourselves into a situation where large, powerful nations will secure resources for their own people at the expense of others."

Are We In The Post-Peak Era?

"Due to the factors (Russia, the tar sands, etc.) explained above, it will no longer be possible to replace over 2 million barrels of lost production each year after 2010 as production follows the general decline shown in Figure 1. Thus if OPEC capacity gains do not exceed losses outside the cartel, world oil production peaked in July, 2008."

Water running out for oil, coal and tar sands production

"Water is increasingly moving from an operational issue to one of strategic significance, according to Thirsty Energy: Water and Energy in the 21^st Century, a new report by the World Economic Forum and Cambridge Energy Research Associates (CERA), an IHS company (NYSE: IHS). The report warns, “Energy’s share of water is likely to be squeezed in the future in many parts of the world.”

The big picture matters. Everything else is mere noise.

Need a primer? Here's one

The Crash Course in 38 minutes with American style over-simplification. You can't get easier than this.

Click image for Windows Video streaming version or download a Quicktime video.

Ignore the presentation if it rubs you the wrong way. Understand the contents and its meaning.