Saturday, April 11, 2009

Off Topic: James Kunstler

If you haven't noticed, the market has been rallying recently, and there is talk that several industrial signs are showing signs of life. Almost all economists now think that the market contraction will end around 2010-2012.

Not James Kunstler, America's foremost "peak oil" person. His basic conclusion is that everything is bad (he hates the American landscape, the American political scene, and believes that the suburbs are responsible for everything bad) and that everything is about to get worse. He thought Y2K was going to destroy us, then peak oil, and now the financial crisis. He thinks that the 1000+ year trend of more wealth over time will end and civilization (Wal-Mart, Disneyland, highways) will collapse. He also thinks that he can predict the future, even though he has NO credentials in what he is talking about (being a journalist =/= being an energy economist).

This is literally how he talks (I am copying his argument from his blog) :

James Kunstler: Now that banks are failing, the government will cause the currency to undergo hyperinflation (okay, that is somewhat of a leap of faith). This will cause all stores but the essential ones to close (okay, another leap of faith). The fall of banking will prevent us from getting food next year (what?) because farmers cannot get loans (citation needed?) City governments won't get financing (weren't they just sent money from the federal government? again, citation needed), which will cause social safety nets to disappear and the poor to start dying (so, some bank failures = massive starvation? didn't a bunch of banks fail in the 1980s (google Savings and loans scandal?). Tax revenues will go down, which will cause schools to close. Health care goes to third world levels (what the fuck?). It could be worse than the 1930s.

Let's parse that last comment for a second. It "could" be worse. Well, the next decade "could" be better than the 1990s, when our economy boomed. It's not a prediction, so it cannot be wrong.

As I said before, he sees the negative in EVERYTHING. Here are some things that bothered him in the same blog post where he mentioned the whole "Third World" healthcare hypothesis:

* America sucks because... James Kunstler's flights were delayed. He had to go on a BUS.
* Not only that, but traffic was slow on that bus for TWENTY MILES.
* The people of Aspen even had the nerve to NOT BUILD A TRAIN SYSTEM WHEN THERE WERE DELAYS AT THE AIPORT. We truly are the "Bulgaria of the Western hemisphere." My God, can you imagine the horror of GOING ON A BUS?
* The people at the conference James was attending organize this bus (for free) and give people accomedations for free. Now, ordinarily, you'd think that Kunstler could at least be happy with a FREE HOTEL ROOM.
* Wrong! THE IN-ROOM WIRELESS DIDN'T WORK. My God James, it was like you were staying in a hotel in the year... 2000.
* So, James can't go without blogging, so he has to go TO THE LOBBY for his FREE WIRELESS.
* James then reveals the real torment of his stay in the hotel: THERE WERE CHILDREN IN THE LOBBY SHOUTING.
* Also, America sucks because... the elevator was made by a foreign corporation. Seriously.

However, we might notice some contradictions here:
1) James Kunslter argues that public transportation has been critically ignored by governments. However, he flew to a Conference and did nothing but complain about how SLOW his BUS was. Does James think that buses are incredibly rapid in England (or even in Japan)?
2) James criticizes suburbia for destroying a sense of community. However, when confronted with actual children, he shows his "spirit of community" by commenting on the "idiocy" of everyone else there (for not liking public transit like BUSES), by calling the airline industry "idiots," and the Department of Transportation employees as "jackasses."
3) James predicts things are going to get worse. When they don't (like when the stock market went up instead of down when he predicted it), he just says that the bad things will happen later. If he has no professional training or expertise other than studying this issue and if his predictions are often alarmist and wrong, why should we listen to him?

Saturday, March 21, 2009

Urban Transportation and Peak Oil: A Modest Proposal

Public Transportation is based on a good idea: Vehicle Efficiency * Total Number of People in the Vehicle = Overall Efficiency. If we can just increase the number of people in each vehicle, a transportation system can become far more efficient. There is an obvious implication here: if we can increase overall efficiency, we can decrease petroleum consumption and avoid some of the more unpleasant effects of Peak Oil.

But Public Transportation DOESN'T WORK IN THE UNITED STATES. Even though the federal government spends billions of dollars subsidizing transit, ridership is stagnant and is still far below the levels it saw in its glory days. The average bus uses 3,200 BTUs to take a passenger one mile; the average passenger car (including all the Lexus/Buick/Ferraris etc. on the road) uses 3,500 BTUs. Transit just isn't that efficient, and almost no one uses it. Bus ridership makes up .8% of the total travel used by car. So, we have two goals: to make transit more efficient and to get people to use transit (after all, empty solar-powered buses don't save the environment, do they?).

So, what should we do? Some people argue the solution is simple: expand public transit by increasing service to European levels. We should be able to see some problems here: traditional public transit has a hard time getting people to take it. We have several structural disadvantages (low density and lots of $$$$ to buy cars) that many European countries don't have. The secret is that transit's market share is even declining in Europe, as people move into the suburbs and earn enough money to buy a car.

So, we need to reimagine transit into something that will appeal to people more. Here is a three part proposal for when we hit $5+ Per Gallon Gasoline:

1. Greatly expand Flexcar/Zipcar by merging them with City Car Share and giving them 5% of the city's metered parking spaces (1,200 spaces). In order to deal with Peak Oil, the entire collection of cars should be transitioned to high-efficiency automobiles. You would basically have a choice between Prius, Honda Civic, Mini Cooper Diesel, small econocars, motorcycles, and scooters and Plug-In Electric Vehicles when they come out.
2. But how would you commute? You would use your Zipcar/Flexcar/whatever account to join a website called www.SFCarpool.com. You would enter in your residence, your place of work, and when you needed to get there. It would then plan the route that would be quickest for you and your carpool companions and tell you where to wait, etc.
3. And getting around when you didn't want to drive? You would use a Dial-A-Ride system. Simply call a 800-number and tell them where you are and where you need to be picked up. The system would then enter your information into the computer so that you could be routed with other passengers to your destination. This is basically a cross between a taxi cab and a bus ride. This method would primarily be used for those who cannot drive for one reason or another (paratransit).

A Comparison of Three Trips:

Conventional Driving:
1. Drive to Work.
2. Drive to Lunch.
3. Drive back to Work.
4. Drive to Grocery Store.
5. Drive Home.

Public Transit:
1. Walk to Bus Stop.
2. Wait for Bus.
3. Get On Bus.
4. Wait for Stop.
5. Get off Bus.
6. Walk to Work.
7. Walk to Lunch.
8. Walk to Work.
9. Go to Bus Stop.
10. Wait for Bus.
11. Get On Bus.
12. Wait for Stop.
13. Get off Bus.
14. Wait for 2nd Bus.
15. Get on Bus.
16. Wait for Stop.
17. Get off Bus.
18. Go to Grocery Store.
19. Walk to Bus Stop (with Full Grocery Bags).
20. Wait for Bus.
21. Get On Bus.
You get the idea.

Public Transit IN THE FUTURE:
1. Go outside your house at 7:45.
2. At 7:50, your carpool arrives. You get in, swiping your card (this charges your account to pay for gas, etc.)
3. You are dropped off at (or relatively near) your workplace at the time you need to be there.
4. You decide to meet a college friend for lunch. You go to the CityZipFlexShare station (a mere block from your office complex) and pick out a Vespa scooter to rent for 1.5 hours. You go to lunch and then comes back.
5. You decide to go to a nightclub after work. Using a computer, pay phone, cell phone, or a kiosk in the city, you swipe your card and tell the computer system where you want to go. It then swings around (carrying other passengers) and takes you to the nightclub. You do the same to get back home.

I need to work out more details, but I keep coming back to this idea. What do you think?

Sunday, March 15, 2009

Hydrogen Cars: Pointless

Consumer: Hey, I'm looking for that new FCX Clarity Vehicle.

Honda: That's great, but we're out right now.

Consumer: Aww, why can't you make more?

Honda: Well, we're losing hundreds of thousands of dollars on each one...

Consumer: Wait, they cost more than a HUNDRED THOUSAND dollars? That's crazy! Won't prices come down in the future?

Honda: Yes, we hope to get the cost down to one hundred thousand dollars...

Consumer: Okay, so that's disappointing. I heard California wants to build a hydrogen highway, so at least I'll have somewhere to fuel my hydrogen car.

Honda: Yes... but let's not talk about that. After all, we only have 24 stations in California, far less than the 100+ we were supposed to have.

Consumer: Wait, so I could only refuel my car at TWENTY-FOUR places in this state?

Honda: Well, most of those are private access only, so you can actually only fuel your FCX clarity at a handful of stations in Southern California.

Consumer: Couldn't I power it from home?

Honda: Yes, but you have to use natural gas (a fossil fuel) and we're not even CLOSE to selling home fuel stations.

Consumer: Well, at least I won't have to worry about drilling for oil...

Honda: But you will have to worry about the precious metals (like platinum) which are used to make the hydrogen fuel cells. Which reminds me, even if the price of our hydrogen car falls, we still won't be able to make that many of them because there is a limited supply of platinum that is avaliable for use.

Consumer *weakly*: But I'm worried about global warming...

Honda: Well, the hydrogen fuel cell produces about one-half the greenhouse gases of the average American car... excluding the huge amount of energy needed to produce the cars themselves, produce the hydrogen fuel stations, etc. So, I would say that the FCX Clarity is slightly more environmentally friendly than our new Honda Insight hybrid.

Consumer *walks away*

Honda: Wait! I haven't told you about the links between the fossil fuel industry and hydrogen production! The lack of information about how long fuel cells will last! The high cost of hydrogen fuel compared to powering an electric car! Come back!

Monday, March 2, 2009

Carbon Capture and Storage / Air Capture

http://sciencepolicy.colorado.edu/prometheus/faq-to-accompany-pielke-2009-on-air-capture-4927

http://en.wikipedia.org/wiki/Carbon_dioxide_air_capture

http://www.realclimate.org/index.php/archives/2008/03/air-capture/

http://www.greenfacts.org/en/co2-capture-storage/l-2/8-cost-capture-storage.htm#1

Planetary geo-engineering is defined as the "intentional manipulation to change the global properties of a planet." Most of these schemes are dismissed as being flawed because they lead to unintended consequences, because they are too expensive, or because they are temporary. I just read these interesting articles about carbon capture methods, and I want to suggest that they may not be worth dismissing out of hand.

First, I need to say the obvious: carbon capture and storage cannot solve the problem alone. We will need to also reduce fossil fuel usage, increase conservation/efficiency, increase renewables, increase nuclear, throw everything we have at this problem.

Second, I understand that carbon-capture and storage has not been demonstrated on a full-scale; however, again, I think it is necessary to remain open to the fact that the technology to build CCS plants exists and that it simply needs to be implemented.

Third, while carbon capture and storage is not cheap, it is worth noting that the alternatives like renewables that I mentioned earlier are not cheap either. I just read a report by a consortium of organizations arguing that building new capacity for wind may cost hundreds of billions of dollars. When discussing a problem as serious as climate change, I feel that one must be willing to try projects that have not been attempted before if they can represent a solution to the problem.

Four, the air capture system that I described earlier allows carbon already in the atmosphere to be removed, a useful proposition when discussing stabilizing carbon dioxide concentrations (not just emissions).

Five, while leakage is always mentioned as a possibility, the IPCC suggests that well-chosen sites could have up to a 99% retention rate for hundreds of years. I do not think it is worthwhile to fret about the possibility of stored carbon dioxide leaking while we are letting millions of tons of carbon dioxide freely enter the atmosphere right now.

So, should we use Carbon-capture and storage or air capture?

Saturday, February 14, 2009

Could someone explain this to me...?

Who was rooting for FutureGen funding to be included in the stimulus bill (okay, it's not FutureGen per say, its just $1 billion for an unnamed "zero-emission coal plant)?

Environmentalists generally feel that clean coal technology is unproven and that it cannot provide either a fast reduction in carbon output or a reduction in the overall environmental impact (as coal mining is still environmentally harmful).

Economists would balk at the project's cost ($1 billion for a reduction of one million tons per year) and its unclear economic benefits ($1 billion dollars in other sectors would likely have a larger impact on employment).

Coal miners/people who dependend on coal for their electricity also have no reason to support funding "clean coal." Why not simply lobby for more "non-clean" coal plants? If you are a coal company, why are you concerned about global warming? And if you are, wouldn't it be easier just to invest in clean technologies?

And conservatives/libertarians are generally not in favor of the heavy-handed command-and-control approach to pollution reduction that subsidies represent. After all, the government is generally unable to do cost-benefit analysis (and the high price of Futuregen makes it one of the poorer ways of reducing carbon emissions), and this is a transparent interference in the "free market."

Again, who is this pork for?

Embodied Energy... (or Why Rail is Overrated)

Is BART green?

This study (click here) seems to suggest that the correct answer is no. The reason is that they posit that BART's huge construction costs imply a large amount of energy usage, which is so large that BART's energy savings per trip cannot "pay back" the initial energy used up front.

I'm conflicted, because I think the author ignores the fact that the ratio of $/energy will not be the same for all urban transit systems. BART is a particularly obvious outlier, because it cost far more than similar systems owing to its proprietary track width (every other system uses "standard gauge.") For this reason, BART's cost might be a testament to the cost of designing a system that SHARED NO COMPONENTS with any other transit system rather than being an indictment of BART's construction energy usage. Also, BART is a government project, so much of that money spent will not go to energy-using activities like powering generators but will instead be embezzeled or lost (which throws off the paper's calculations even more). But the study is still an interesting read, and I am interested in seeing more life-cycle analysis of transit which consider transportation usage. Perhaps people should be talking about buses more, as even the study I cited (which is by an anti-transit author) suggests that bus transit saves energy when compared to car-based transit. We might want to consider adopting San Francisco's system of buses powered by overhead cables, which would give bus transit the benefit of lower carbon content as well. The problem seems to be that buses have a stigma in Western society, a stigma that trains do not have. From my own (relatively limited) experience, trains are often filled with commuters who own cars, while buses are generally frequented only by die-hard greenies and people who do not own cars. So I suppose my second question is: should urban transit advocates focus on getting people on buses (which may be greener/cheaper than rail in the long run)?

P.S: This article (click here) explains why none of this means you shouldn't take BART (read "Yes, you should still take Public Transit").

Sunday, February 1, 2009

Interesting News...

Oil consumption is set to decline to 2003 levels this year. This is generally considered to be caused by "involuntary conservation," as people buy less things and drive less (because they have less money, obviously). The second article I linked to did a good job of describing the levels of economic pain we are currently seeing (sales are down 5%!!), and much of that decline is seen in the automobile (the primary petroleum-consuming device in the United States). It also shows how inelastic oil demand is, as an economic downturn that has hit the entire world has only moved the dates of what I described early by five years, as well as the link between oil and economic development (while causality does not prove causation, I think it is fair to say that oil is fundamental to growth in the world' current economic system, so a drop off in economic activity will similarly lead to a drop off in oil consumption). This news points to the most powerful tool that society will use to combat a sharp unplanned drop in oil consumption once a peak is reached: a sharp drop off in economic growth as well.

http://www.autobloggreen.com/2009/02/01/2008-petroleum-demand-sinks-to-2003-levels/#comments
http://www.latimes.com/business/la-fi-econ31-2009jan31,0,6190270,full.story

Monday, January 26, 2009

Solutions #1: Bakken Oil Field

If you haven't noticed, I am skeptical of much of the technology that has come up in this class. To explain the pitfalls of optimism, I want to travel back in time to a year called 2007. Oil prices were high (and boy were we complaining!) and people started to discuss the possibility of oil being SCARCE in the future (imagine that!). But then we were saved by a little thing called the Bakken Formation. Investment emails (buy an interest now!) and conservative web forums (liberal whining disproved again!) all crowed about this discovery of "super massive 200 billion barrel oil field." Oil reserves were said to be five-hundred billion barrels, making the U.S. the next Saudi Arabia.

The U.S. Geological Survey report came out. Mean Estimated "Technically Recoverable" Reserves: 3.65 Billion Barrels. And remember that's "technically" recoverable. "Technically" Toyota could build cars that go 275 mph. "Economically," however, they cannot. So the reserves that will be "economically" recoverable will be much smaller than this number. We also must consider the costs associated with extracting oil contained in pockets surrounded by shale oil, so this oil will cost MORE to produce than the oil from Saudi Arabia it replaces.

But let's see what has happened since 2000. Production from this field primarily occurs in Montana and Nebraska, and production in these states has increased 90,000 barrels per day. Since that time, California's production has decreased 113,000 barrels per day. So, Bakken Oil rigs have ALMOST made up for the loss of oil production of ONE PART (not the largest) of ONE COUNTRY (not the largest). The proof is in the metaphorical pudding: U.S. oil production keeps falling. Bakken oil and other developments may help to decrease the rate of this decline, but they have not yet managed to stop it all together (over the long run).

So, what have we learned? We learned that energy rarely gives us a free lunch. We cannot expect to find a "second Saudi Arabia;" in fact, energy problems will more likely largely be solved by an increase in prices that promotes fuel-switching and energy efficiency. We cannot expect the transition to be painless; if we do, we can expect some... unpleasant surprises over the next thirty years.

For the figures I mentioned: http://tonto.eia.doe.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_a.htm

Saturday, January 24, 2009

Interesting Polling:

http://www.forbes.com/businesswire/feeds/businesswire/2009/01/12/businesswire118947995.html

Thirty-one percent of OIL EXECUTIVES (and, trust me, no companies deny Peak Oil more vociferously than oil companies) believe that oil will peak in less than ten years. That is quite scary, as ten years is essentially no time to do anything.

Peak Oil Post #2: Question of Economic Scale

The next question is: what does a shortfall mean for the price of oil? The question depends on the price elasticity of oil demand; in other words, it depends on how much oil prices change for a change in the quantity supplied. Let's try to use some real world data (this is a total simplification, but it is still worth considering). In 2004, the average cost of a barrel of oil was $42.35 and world oil demand was 82.41 million barrels per day. Then, oil began a steady rise, and by the second quarter of 2008, oil prices were constantly around $100 per barrel. That's a 159% percent RISE in price. Did oil demand plummet by 40%? 25%? 10%? 5%? 1%? Actually, it didn't decrease at all; world oil demand during that period was higher than it was is 2004 by around 3%. So, huge rises in price (at least in the short term) don't decrease the demand for oil at all. If a 159% rise won't decrease demand, how much will prices rise if oil production falls by 6.7%? Quite a lot.

Oil demand in the United States is significantly more elastic, but there are still limitations. First, there is the delay; oil prices started to rise after 2000 but behavioral changes only started occurring eight years later. Second, cutbacks were relatively small. It would be easy for the U.S. to cut demand by 5% without hurting our standard of living, but a cutback of 15% would be far more difficult for most people. Third, because the United States uses so much oil, it is far harder for everyone else in the world to cut back on oil consumption. In Europe and Japan, people do so much conservation that it would be difficult to make any more significant cutbacks; once you drive a 40 mpg diesel car less than half as much as the average American and take public transit for 10% of your trips, there is not much more you can do. It is even harder for countries like China to reduce oil consumption; again, if you consume 1/3 of the oil as the U.S. per capita, it is far harder to find ways of making cuts without hurting economic growth. I guess I am trying to say that it would be hard for us to extrapolate the U.S.' decline in oil consumption with a worldwide decline for the reasons stated above; America's situation is fundamentally different.

Plus, all of this is ignoring the economic harm done by high oil prices, which makes any transition quite different. Consider that rising gas prices were the force that originally began hurting the Detroit Big Three and the economic damage that would be done by a loss of the automobile industry if it were to happen again.

If Peak Oil happened rapidly enough, it could lead to economic harm that would be far more destructive. Many policy experts did a "war game" involving oil production: http://www.washingtonpost.com/wp-dyn/content/article/2005/06/23/AR2005062301896.html. While they were assuming that violence and political activity would disrupt oil supply, a sharp drop in oil production would essentially do the same thing. Their predictions were double-digit inflation and a 28% fall in market prices (for the record, the current 1 year decline of the markets is around 35%), and all of this was done with TEMPORARY POLITICAL CRISES. Peak oil is not a temporary phenomenon; it implies a decline in fuel production that will last for far longer than any political crises.

Tuesday, January 6, 2009

Peak Oil Post #1: Geological Scale

350 is a scary number, but the scarier number than no one knows is 6.7%. That figure is the observed decline rate for oil fields past peak. The "peak" of an oil field, remember, is the moment when the field produces the largest amount of oil that it will produce during its lifetime; after this point, fields begin to decline as it becomes harder and harder to extract the remaining fuel from them. And this ratio is increasing, because off-shore oil rigs tend to decline much faster than on-shore production (some off-shore oil fields decline faster than 10% a year!)

Taking this to account, if we do not discover or develop any new oil or any new alternatives, oil production will decline by 4.5% a year. Combine this with the simple fact that we are on the cusp of reaching the economic "tipping point" for car ownership in China/India. Once China's average per capita income reaches a certain level, HUNDREDS OF MILLIONS of people will want access to automobiles (consider the meteoric rise in automobile ownership seen in the United States as we got richer). Let's use the EIA's (Energy Information Administration, a department of the Department of Energy) projection for world oil demand in 2030: 118 million barrels per day. Currently we are around 85 million barrels per day produced. So current oil production (assuming we don't discover/improve anything) will be.. carry the three... 32 million barrels per day. So, we need to develop new sources of oil that produce the shortfall, which is roughly equivilant of trying to find everything we've found over DECADES of searching in twenty years.

Another way of putting it is to say that we need to put six million addition barrels per day of oil into production EVERY year to avoid crisis. If we wait two years, we need to find 6.5 million barrels per day. SIX MILLION FREAKIN' BARRELS EACH DAY! More than TWO BILLION barrels produced each year. 62 BILLION GALLONS PER YEAR. Study the problem, and nothing seems to be able to describe the scope of the problem.

There are other methods of producing oil, other fuels, yadda yadda yadda, and I will describe them in the future. But my next post will be on the economic implications of shortfalls.