Energy Comments on Prestudy

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A presentation held by Gail Tverberg at the Green Economy Workshop in Stockholm 10-11/2 2014.

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Energy Comments on Prestudy

  1. 1. Energy Comments on Prestudy Gail Tverberg – Green Economy Workshop 560 -10 Feb. 2014
  2. 2. Peak Oil Forecast Limits to Growth Forecast 2
  3. 3. We know what has happened in the past Based on Secular Cycles, by Peter Turchin and Sergey Nefedov, Princeton University Press, 2009. 3
  4. 4. 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 4
  5. 5. 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   5 Need economic growth to repay debt
  6. 6. Difference in Views Tverberg  1972 LTG limit is hitting    Appears as Financial Limit    Dennis Meadow’s model Verified by Hall; Turner Debt related Comes from inadequate investment capital High energy costs adversely affect 6 economy Randers 2052  Peak oil limit    Based on depletion Lots of substitution No adverse financial impact
  7. 7. Specific Energy Problem Areas C. Hall Quote ‘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.’  7 Tverberg view  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
  8. 8. Specific Energy Problems 2.3 Current Economy view Renewable energy and improvements in energy efficiency will be phased in automatically once renewables have become competitive in relation to fossil energy.  8 Tverberg view   High energy prices of any kind will sink the economy. High priced oil + high priced electricity sink the economy simultaneously.
  9. 9. Specific Energy Related Issue 2.3 Green economy view The higher the EROEI and scalability (volume) a form of energy has, the higher its potential is.  Tverberg view    9 EROEI does not measure intermittent renewables well. Does not reflect debt needs, payback. Market cost calculation is extremely important.
  10. 10. Example of EROEI Problem   Solar PV EROEI supposedly 9.4 to 1 With batteries reaches1.3, after 30 years. 1.4# 1.2# Dynamic# EROI# 1.0# 0.8# OffC id# including# r PV# ba< eries# ba< ery# replacemeent# every# years# 7.5# 0.6# 0.4# 0.2# 0.0# 0# 1# 2# 3# 4# 5# 6# 7# 8# 9# 10# 11# 12# 13# 14# 15# 16# 17# 18# 19# 20# 21# 22# 23# 24# 25# 26# 27# 28# 29# 30# Year#  Dynamic EROEI with batteries, off-grid, based on figure by Graham Palmer in “Energy in Australia,” Springer, 2013. 10
  11. 11. 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    11 Requires huge costs to fix Not reflected in EROEI
  12. 12. Specific Energy Related Issue 2.3 Green Economy  Energy taxes help to accelerate the rise in energy efficiency; prevent development that is not energyefficient; and bring about lower costs in the long term. Tverberg view    Energy taxes move manufacturing to high carbon parts of the world. Ultimately counterproductive Exceptions:    12 Worldwide tax Private citizen gas tax High tax on imported goods made with coal
  13. 13. 4. Role of Business  Large businesses may fail as world changes  13 Need international trade; debt availability
  14. 14. 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? 14
  15. 15. 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   Knowledge depends on today’s fossil fuel world    Possible 40 years ago; not possible in the future No longer have 90% of humans involved in agriculture Availability of electricity, Internet, computers, books How do we keep knowledge, as we shrink back? 15
  16. 16. Climate Issues  Mentioned in several sections  Far less important, if fossil fuel use is shrinking rapidly, with no action on our part 16
  17. 17. Problems began as extraction became difficult Assumes hyperbolic growth in extraction costs. 17
  18. 18. Recent price rise due to depletion Based on BP 2013 Statistical Review of World Energy data. 18
  19. 19. Now subsidy to economy is disappearing Subsidy to economy from oil 19
  20. 20. Recessionary forces – Same countries with fall-off in oil consumption 20
  21. 21. China’s growth since joining World Trade Organization 21
  22. 22. Contact Information       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-thecontinuing-financial-crisis/ ) 22

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