free html hit counter Peak Oil Debunked: December 2008

Wednesday, December 31, 2008


Through many changes, one thing stays constant in the peak oil community: opposition to growth. Colin Campbell, Kunstler, Heinberg, virtually the entire staff and readership of the The Oil Drum... They all believe that growth is insane, and have vehemently and incessantly attacked it for years.

I think it's high time that we followed this anti-growth agenda to its logical conclusion.

On the surface, an anti-growth site like The Oil Drum seems to be comprised of very smart, rational people who have the best interests of the public at heart. But is that really true?

Well, there's no doubt that the title of this post is true: Growth = Jobs. So a strong case can be made that anti-growth advocates are very much not in the public's corner. The logic is straightforward:
  • Anti-growth advocates (The Oil Drum, Heinberg etc.) are in favor of a halt in growth.
  • A halt in growth will cause massive unemployment.
  • Therefore, anti-growth advocates are in favor of massive unemployment.
To illustrate, here's a piece of standard anti-growth boilerplate from a peak oiler, corrected to reveal the subtext:
Infinite growth Employment has been so hard wired in the brains of so many, that it will be hard for most to imagine themselves out of having never-ending growth a job as an eternal goal.
Not quite so convincing, is it? Anti-growth rhetoric tends to be very smug, particularly since it ignores the central brute fact: there is nothing crazy or stupid or deluded or denialist about trying to keep people employed.

If anti-growth advocates were honest, they would admit that a massive depression (i.e. reversal of growth and shrinkage of the economy) is precisely what they are advocating. Some have already made that connection on the climate front:
Will the Downturn Save the Planet?
Many climate change skeptics and eco-fundamentalists will welcome the economic crisis, although some more openly then others.


On the other hand, eco-fundamentalists, many of whom define themselves as anti-capitalist, realized that the contradictions inherent in the market system made a major crisis, possibly a slump, inevitable at some point. Unlike Marxists, though, many welcomed this prospect, since they despaired of any other way to tackle climate change apart from economic collapse, which they think could result in a big reduction in greenhouse gasses. Whether they are correct in that assumption is another matter.

Professor Paul Crutzen, who won the Nobel prize for his work on the depletion of the ozone layer, was quoted by the Reuters news agency on October 7: "It’s a cruel thing to say… but if we are looking at a slowdown in the economy, there will be less fossil fuels burning, so for the climate it could be an advantage… we will have a much slower increase of CO2 emissions in the atmosphere… people will start saving [on energy use]."

Cheer up: You're not unemployed -- you're stopping the growth insanity and saving the planet

This line of thought occurred to me when I was reading about Obama's projected stimulus package, so I asked the folks at the Oil Drum about it:
My point is this: if you genuinely believe that we must stop growth because it is killing us (a view which I believe I can fairly ascribe to the vast majority of people on the Oil Drum), then how can you, in good conscience, support measures which are aimed at reigniting growth, such as Obama's upcoming stimulus package and similar packages in other countries?
The responses fell into a few basic types:

1) Don't get pinned down. Change the subject.

2) The dead-end doomer:
"We are GOING to be living in a contracting world, whether we like it or not. My preferences are irrelevant, this is reality and we had best face up to and adjust to it, the sooner the better.
Yes, a great many people will suffer terribly. That is going to happen and can't be helped. Futile attempts to hang on to the past and sustain the unsustainable will not help them, only hurt them even more." WNC Observer
3) Fessing up
"I, for one, am completely in favour of shrinking. Growth would condemn billions of people around the world especially in the poorer parts of Africa and Asia to a continuous life of strife, misery, and violence that is today much worse than the worse Long Emergency scenarios.

The only smart growth is shrinking. That increases the share of the commonwealth available to eash person and decreases the footprint each of us puts on Gaia's neck. We are a heavy burden and we are killing her. And nether can we live without her." Dryki
4) Waffling
"(1) Are there sectors that need to grow--yes.

(2) Are there obese sectors or ancient sectors that need to decline or die--yes.

(3) Is the human economy in its totality too large relative to the planet--yes.

Therefore, any stimulus plan needs to increase 1 and allow 2 to decrease so that total economic scale is reduced." Jason Bradford

[JD: Jason pays lip service to the Obama stimulus -- perhaps because he realizes how far outside the mainstream he'll go if he opposes it. Nevertheless, he adds the condition that economic scale must be reduced -- i.e. that the economy must continue to recess and shed jobs.]
"I could support a stimulus package aimed at reinstating a growth economy if it's primary side effect was to invest in renewable energy and to restructure society to be less energy intensive and more socially cohesive.

What better way to kick-start the economy than spending a trillion dollars on wind power, upgrading the electric grid, developing adaptive (electricity) demand infrastructure, building and electrifying light rail systems, (small) electric or hybrid cars, etc. etc.

Of course the stimulus would fail, as we descend the energy slope, but it would be less painful. The US (and UK, and many other economies) are inevitably going to collapse. Better to use whatever credit the government can still control whilst it still has any, to build for the future." RalphW
5) Little pleasures:
"I happen to have my own boring list of what those are, things like reading, music, art, science, sailing, being with my loved ones, teaching, learning, watching sunsets, drinking good wine etc.. etc..

Not one of the things on my list requires growth." FMagyar
Ludi (responding to my statement "If you're in favor of a halt to growth; you're in favor of unemployment."): "Yep, sure am! I don't work much and I do pretty well (lower middle-class/working class).

Reduce the need to earn, I say. Leisure is wonderful. I spent two hours of my leisure today cutting brush with a handsaw. I'm exhausted but happy."
The Oil Drum pretends to be a community of rational, serious people who will guide us to a better future. I think the evidence points to exactly the opposite, at least if you regard employment as an important feature of that future. As you can see, anti-growth advocates believe that: a) increasing unemployment can't be reversed or even halted, or b) unemployment should be actively boosted by reducing the size of the economy. Meanwhile, their perspective on being unemployed is "art, music, sailing" and learning to enjoy your "leisure".

These views are totally at odds with the need of vast numbers of people to survive and better their lives by obtaining and keeping jobs.

If anti-growth advocates mean to make a serious contribution, they need to cut the self-righteous rhetoric, and address the reality of growth=jobs head on.
by JD

Thursday, December 25, 2008


[Note from JD: This is a guest post from Ari, a new contributor here at POD.]

One of the big fears of falling gas prices was that people would hop back into their cars and start driving again. It makes sense, one supposes, that as the cost of a good goes down, then people start consuming it more, right?

Well, life isn't that simple.

The one thing that people often ignore is that consumer decision making is not based only on simple "single variable equations." We don't walk into a store, pick up one item, and decide to buy it solely because its price goes up or down in a specific span of time. We comparison shop. Transportation, despite its being a relatively inelastic good, is not immune to this economic behavior.

And lo and behold, people appear to be comparison shopping, even as gas prices fall.

The Road Less Traveled
Like never before, Americans' travel habits have a special place in our national conversation. The combination of gas price fluctuations, economic stress, energy concerns, and public financing woes have transformed transportation issues from inside baseball to front page news and water cooler conversation.

A primary cause for this attention has been the major shifts in travel patterns. Americans have simply been driving less, when considering both historic growth rates and the most recent annualized measures of vehicle miles traveled (VMT).1 At the same time driving has declined, transit use is at its highest level since the 1950s, and Amtrak ridership just set an annual ridership record in 2008.

Not convinced? Here's more anecdotal evidence of this trend:

Cheap Gas Pulls Few off Bus, Metro

Even before it was costing us $75 a week to fill our gas tanks, as it did this spring and summer, we had already started to change our driving habits in ways unexpected years ago," said John B. Townsend II, AAA Mid-Atlantic's Manager of Public and Government Affairs. "Despite the fact that gasoline prices have been in a freefall since mid-July, consumption is still declining. Last week, U.S. gasoline consumption was lower than it was the same week a year ago."
"People who began to take public transit in 2007 with the rise of higher gas prices are sticking with it now that prices have dropped back down to their lowest level since early 2005, Townsend said.

Delawareans Stick with Public Transit

DART bus usage has backed off a bit since gas prices fell to near $1.50 in recent months, but remains strong. DART buses logged 850,260 fares in October, well up from the 746,731 rides during the same month a year earlier. But it's down from a high of 912,789 rides in July, when gas prices were sky-high.

SEPTA train use on the R2 line, which runs through Delaware, increased from 96,671 rides in October 2007 to 110,020 rides this October. Ridership in October was higher than it was during the summer: in July, riders took 105,768 trips on the line.

"What we believe is when people find out it does work for them, they continue to use it," said Darrel Cole, a spokesman for the state Department of Transportation. "There's nothing better than sitting on a bus, sitting on a train, being able to get work done while someone else drives for you."

Gas Prices Fall, but Ridership Still Rises / During Summer Many Found Public Transit was the Way to go, Groups Say

The nation's public transportation systems saw the largest quarterly ridership increase in 25 years as more Americans shunned their automobiles even as gas prices began to ease, according to industry figures to be released today.

Subways, buses, commuter rail and light-rail systems saw a 6.5 percent jump in ridership from July to September, according to the Washington-based American Public Transportation Association. During the same quarter, Americans drove 4.6 percent less on highways.

The average price for a gallon of gas peaked at more than $4 in mid-July, then began falling.

They may have tried public transportation to get away from high gas prices, but many have since found it works for them," association president William W. Millar said. "I think this year has been a real turning point for the public's attitude toward public transportation."

Riders made 2.85 billion trips on public transportation during the third quarter, up from 2.67 billion trips a year ago. There have been gains in every quarter this year from 2007. Last year's 10.3 billion trips were the most on public transportation in 50 years.

As Gas Prices Fall, Transit Still Popular

Gas prices have plummeted during the past several weeks, but commuters do not appear to be returning to their cars, according to transit officials in the region and elsewhere, who say ridership is still increasing.

Transit officials attributed much of the ridership increase earlier this year to skyrocketing gasoline prices. But despite falling pump prices -- from a national average of $4.11 a gallon in July to $1.82 yesterday -- transit ridership is setting records in some parts of the country, officials said.

For the four months ending in October, Metrorail ridership in the Washington region was up 5 percent over the same period last year, senior planner Jim Hughes said. Preliminary data indicate that November rail ridership is up about 3 percent.

Gas Prices Drop, Bus Ridership Stays Steady (requires log-in)

"Gas prices may have dropped dramatically in the past few weeks, but Windham County residents who discovered the benefits of riding the bus when the cost of gas was high are sticking to their new routines.

Local public transportation like the Brattleboro Beeline and Connecticut River Transit has not seen a decline in ridership.

"We haven't so far, but prices did just drop," said Gary Fox, executive director of Connecticut River Transit.

"If people are going to look at making that kind of switch, maybe it just hasn't happened yet, but I don't think it will," he said.

Fox said there was an increase in people trying public transit when fuel prices were sky-rocketing.

With prices dropping, he thinks it's likely that spike will stop, but not likely that he will lose current riders."

Public Transit Use Up Over Last Year

This is an interesting article because it shows how a poor economy can affect transit in ways we don't often hear:

Commuters who jumped onto buses and trains when gas prices soared stayed on board when prices started falling this summer, but transit operators fear the poor economy will erase the gains.

Ridership on public transit increased 7% to 2.85 billion rides in July, August and September compared with that quarter last year, a report to be released today by the American Public Transportation Association shows. Gas prices began to fall in July after reaching a high of $4.16 a gallon.

"As gas prices rose, more and more Americans made the choice to ride public transit," says William Millar, the association's president. "Now, even though gas prices are falling, Americans tried public transit and many find it convenient."

And yes, some (maybe even most) of this has to do with the economy-- that is clear-- but if the Brookings study is any indication, then we may be seeing a shift in transportation habits in the long run. It's hard to say with any certainty (after all, prediction is a thorny business!), but it is interesting that a good with supposedly highly inelastic demand remains significantly down despite a price decrease of nearly 50%. Like most other "models" that the peak oil community has presented us, oil demand models are overly simplistic and do not account for enough variables. In other words, they have low predictive skill.

More than anything, however, this demonstrates that people are ADAPTIVE. Unlike those silly cartoons on YouTube that show people driving SUVs up and over a cliff to PEAK OIL DOOM, people react to signals and will change behavior fairly quickly. In just a few years, people have started using transit again in numbers that haven't been seen for almost a half-century! Unlike peak oil doomsters, who say that NOTHING WILL STOP DEMAND FROM INEXORABLY RISING, reality demonstrates that people consciously, and rather quickly, change behavior.

Surprise surpise.
by Ari

Sunday, December 21, 2008


Here's an interesting graph from the PV Status Report 2008.

No "limits to growth" there. I'll leave the extrapolation of this exponential growth curve as an exercise.
by JD

Thursday, December 18, 2008


Glimpse of the Future: Ota Solar City, Japan

SunPower Completes Smaller Solar Deals With Wal-Mart, Horizon Power
SunPower has deals with Wal-Mart and Horizon Power to install solar systems that are under a megawatt each.
The company recently completed installing a 554-kilowatt solar power system at the Wal-Mart store in Hanford. The system is expected to generate about 15 percent of the store’s electricity and reduce between 7,000 to 8,000 metric tons of GHG emissions per year.
L.A. pursues solar-power surge
Los AngelesMayor Antonio Villaraigosa has unveiled an aggressive solar power plan that aims to encourage the installation of 1,300 mW of solar power throughout the city and surrounding areas of Southern California by 2020.

Christened "Solar LA," the plan addresses solar power systems on residential, commercial, and municipal properties. The plan includes a requirement for the city's municipal utility, the Los Angeles Dept. of Power and Water (LADPW) to install 400 mW of solar power on city-owned property by 2014. By 2020, the utility will be required to procure an additional 500 mW of utility-scale solar power through contracts with third-party developers, with the option to purchase the systems after about eight years of operations.
Solar-powered marina planned in Fort Pierce
Ecocove, a Treasure Coast-based company, plans to build a 20-slip marina on the Fort Pierce Inlet that is thought to be the first of its kind in the state.
The complex would operate on solar power, and any excess electricity could be sold to the city's electric utility, the developers said.
Petrobras mulls solar power to increase well recovery
Brazil's federal energy company Petrobras is mulling plans to use solar power to boost oil recovery, BNamericas reports.
"Our idea is to replace hydrocarbons burn for solar power," according to Luiz Tadeu Furlan, energy efficiency manager at Petrobras' gas and energy department.
Alcatraz Cruises Launches Nation's First Hybrid Ferry Boat
Hornblower Hybrid Is Model of Alternative Energy Innovation
Representatives from the National Park Service, Mayor Gavin Newsom's office, NOAA and Save the Bay were among the 85 people to enjoy a breakfast gathering aboard the nation's first known hybrid ferryboat.
On Friday morning, December 12, at Pier 33 in San Francisco, Alcatraz Cruises, the National Park Service concessioner of ferry service to Alcatraz Island introduced the Hornblower Hybrid, a wind, solar and diesel powered hybrid vessel.
Conergy Asia-Pacific to develop Saudi Arabia's first large-scale solar power plant
Conergy Asia-Pacific (a regional subsidiary of Hamburg-based Conergy AG) has been awarded a contract for a 2-megawatt solar power plant for Saudi Arabia's King Abdullah University of Science and Technology (KAUST).
Amid Gloom, Solar Power Finance A Ray of Sunshine
In the booming new market of solar power purchase agreements (PPAs), near-term growth shows modest gains and the long-term outlook is exponential. These are the findings of a new report from AltaTerra Research entitled, Financing Growth: Will Solar PPAs Shine in Dark Times?[...]
"Any growth is a boon for any industry under the current financial conditions,” says Guice. “While growth may not be astronomical, as the solar industry has become accustomed to, gains have been made, and that’s more than a lot of other industries can say.”
Solar power catches on at airports
A hangar at Bob Hope Airport in California has followed the example of other airports by building solar panels in order to ease energy costs.
The rooftop of the $17 million Hangar 25 which is operated by charter flight operator Avjet, has enough solar panels to power lights, forklifts and tow vehicles.
San Fransisco Airport has already invested $5.5 million on the construction of solar arrays on its buildings which can generate enough power to run the entire airport during the daylight hours.
Water Department basks in solar project's success
Hillsboro Water Department has found another use for its Evergreen Reservoir site - power generation. Solar panels installed and brought on line in July have already produced 53 megawatt-hours of power.
Electricity generated by 570 panels is transferred back to the grid and offsets a significant share of the power needed to operate the reservoir's pumps. This sustainable energy source results in substantial money savings for the Utilities Commission and its customers.
Hybrid solar plant will power 11,000 homes
Florida Power & Light Company is gearing to switch to large-scale solar use with a new plant planned for Indiantown.
Billed as the world's first hybrid plant, the Martin Next Generation Solar Energy Center is set to be fully operational by 2010.
It combines natural gas with energy from the sun, instead of relying solely on fossil fuels to generate electricity, officials said.
Duke Wants to Rent Rooftops for Solar Power
North Carolina businesses, homeowners and schools would be able to rent their rooftops to Duke Energy Carolinas for solar power installations, if the utility's plan wins regulatory approval.
The energy company is proposing to invest $50 million over a two-year period in as many as 425 solar energy arrays atop the rooftops of homes, schools, stores and factories — or on the ground at those properties — to establish a solar distributed generation program.
Up on the Roof, New Jobs in Solar Power
MOVE over, Joe the Plumber. Spencer the Solar Panel Installer is here.[...]
Even in the recession, Mr. Bockus has been putting in plenty of overtime for his company, Akeena Solar, which is based in Los Gatos, Calif., and has offices elsewhere in California and in Colorado and the Northeast.[...]
Mr. Cinnamon is now the chief executive of Akeena, which has about $40 million in annual sales and employs 220 workers in seven states. Despite the recession, he estimates that his solar panel installation business will increase 40 percent from last year. [...]
GERRY HEIMBUCH, vice president for operations at the Solar Center in Rockaway, N.J., estimates that his company hires a new solar panel installer every month. Many good candidates have come from the sluggish homebuilding industry.
First Solar Reaches Grid-Parity Milestone, Says Report
First Solar has made it to grid parity, according to at least one analyst.
A 12.6-megawatt system installed by First Solar (NSDQ: FSLR) for Sempra Generation showed that the system can produce electricity at below the price of conventional power in the United States, said Mark Bachman, an equity analyst at Pacific Crest, in a research note Tuesday.
Chevron completes solar power project at Milpitas schools
Chevron Energy Solutions said on Monday that it has completed a districtwide solar energy system for the Milpitas Unified School District that is expected to supply 75 percent of the district’s annual electricity needs.
California growers going solar
Abundant sunshine not only grows crops, but now it powers the operations, too
For more than 70 years, California's abundance of sunshine has enabled the Lundberg family to grow rice in the Central Valley north of Sacramento.
Now the sun is helping the family churn out myriad rice products, from chips to cakes to pasta.
Lundberg Family Farms, which bills itself as the nation's largest producer of organic rice and rice products, is among a small but growing number of California growers and processors turning to solar power to help them run their operations.
California plans 80 solar projects, but environmentalists raise concerns
The first solar thermal facility in California in nearly 20 years recently opened in Bakersfield, and is one of at least 80 solar power projects planned in the state. State officials say that they expect renewable energy to transform California's electricity system. However, critics warn that the plants could create environmental problems because of power towers and high-voltage wires.
SFPUC Approves 5-MW Solar Project
The San Francisco Public Utilities Commission (SFPUC) has approved a new contract with Recurrent Energy to generate 5 megawatts (MW) of solar power atop the recently seismically-retrofitted Sunset Reservoir. The project, which is expected to be completed and generating solar power for the City in 2010, will be California's largest solar photovoltaic system and the nation's largest municipal solar project.
Huaneng to build up China's largest solar PV demon project in Yunnan by 2010
Huaneng Group, parent company of Huaneng Power International, Inc. plans to build up a 166 MW on-grid solar photovoltaic (PV) power generating project in Shilin of Southwest China's Yunan Province by 2010, which will be the largest solar PV project in China.
by JD

Monday, December 15, 2008


It's amazing how quickly electric cars have gathered momentum. When I first got involved with peak oil in the summer of 2004, they weren't even on the radar screen. And when my blogging partner Roland wrote a couple of pieces on the subject for POD three years ago in 2005 (171. ELECTRIC CARS, PART 1 and 172. ELECTRIC CARS, PART 2), they were still an exotic niche topic. Now, three years later, the field is exploding, and there's a major scramble for position by carmakers all over the world, large and small. Indeed, it reminds me a lot of the early "wild west" days of the personal computer industry.

This is a key part of the shift away from oil, but I've found the coverage of it pretty spotty and inconsistent at sites like the Oil Drum. (Apparently, they're too busy posting Malthusian fruitcakery, like this piece by some university egghead demonstrating that agriculture itself is unsustainable. LOL.) So I've decided to produce some newsfeeds myself to balance the pessimistic slant at the Oil Drum and etc. These feeds will be a regular feature of POD, and will focus on different aspects of how people are actually SOLVING the peak oil problem. Today's topic: Electric cars. (Note: If you need a few laughs, compare the current news with Savinar's utterly bogus "proof" of why electric cars won't help, here.)

BYD to Introduce China's First Electric Car
A Chinese auto maker plans to unveil the country's first homegrown electric vehicle for the mass market, at least a year ahead of similar efforts around the world.

On Monday, BYD Co. plans to show reporters in Shenzhen the new F3DM, which runs off batteries that can be charged from a regular electrical outlet. BYD began marketing the F3DM this month to cab operators and other potential fleet customers, and plans to have it in showrooms by the end of this month, said Henry Li, a senior company executive. BYD plans to sell the car in the U.S. market as early as the second half of 2010.
(Note: BYD is partly owned by Warren Buffett.)

Ex-Chief Says Intel Should Power Cars
Former Intel Corp. chairman Andrew Grove is pushing the world's biggest maker of microprocessors to consider a new venture -- becoming a manufacturer of advanced batteries for plug-in electric cars.
Evonik, Daimler to make batteries for electric cars
German industrial conglomerate Evonik and carmaker Daimler have joined forces to develop and build advanced batteries for electric cars, the partners said on Monday.
SAIC to develop electric cars
Shanghai Automotive Industry Corporation (SAIC) Group and its subsidiary SAIC Motor plan to invest 2 billion yuan ($292 million) to develop electric-gasoline and electric cars. [...]

SAIC Group is China's largest automobile manufacturer in terms of sales.
Maui to test electric vehicles
Maui Electric will test electric vehicles through a new agreement with a California company.

Gov. Linda Lingle, Maui Electric Co. and Phoenix Motorcars announced Tuesday the plan to test all-electric vehicles and an electric vehicle infrastructure on Maui.
Japan taps Better Place for electric car charging
Japan's Ministry of the Environment announced a program on Tuesday to test electric vehicles and a network of charging stations, some supplied by auto start-up Better Place.
San Francisco plans to be electric car capital
San Francisco Bay Area cities promise to build the electric car capital of the United States, announcing a plan to put battery-powered automobiles on the road in 2012.
Electric car venture unveils charge stations in Israel
California-based electric car operator Better Place unveiled in Israel on Monday its first charging stations as part of a network it hopes will replace gasoline-powered engines worldwide.
Mini E Electric Car Arrives in NYC
The fanatical Mini groupies at MotoringFile have confirmed that the first Mini Es have arrived from Europe for distribution in the U.S.
REVA Electric Cars May Soon Be For Sale in Israel
BDO-I2I is looking to bring Indian-made electric cars onto the Israeli market. REVA Electric Car Company and consulting firm BDO-I2I are still finalizing the details, but there are reports imports could start before the end of January.
FedEx Delving Into the World of Electric Cars. Chooses UK-Based Modec for Initial Order of 10 Delivery Vans
Adding to its green fleet of more than 170 hybrid electric delivery vans worldwide, FedEx has decided to try out fully electric vehicles as well with a small group of 10 London-based test trucks.
Ford accelerates electric-vehicle plans
Ford Motor made electric vehicles a centerpiece of a turnaround plan presented to Congress on Tuesday, saying that it will introduce an all-electric van for fleet use in 2010 and a sedan in 2011.
Daimler plans serial production of electric cars: report
Daimler AG has decided to start the full serial production of several electric cars, weekly WirtschaftsWoche reports Sunday, citing people from within Daimler.
In an advance copy of a report from Monday's magazine, WirtschaftsWoche says that according to internal planning documents, the carmaker aims to deliver an electric version of the Smart to dealers in 2012, followed by electric versions of the Mercedes Benz A- and B-class models several months later.
Electric Cars for Military Bases in USA
Environmental Leader relays a Gannett’s Army Time article, which states that the US Army plans to order 400 electric vehicles from sources like Columbia ParCar Corp., Native American Biofuels International, and other manufacturers in 2009. Quantities are expected to rise to 4,000 in FY 2010, and may total 10,000 by the time the program ends.
Electric car maker seeks to fire up assembly line
Porteon seeks $15 million, bristles at the attention given to Asian automakers
After three years of quietly designing prototypes, Porteon Electric Vehicles Inc. wants to raise $15 million to begin production of a lineup of electric cars.
Michelin Develops Revolutionary Active Wheel for Electric Cars
Is this tire really the "Holy Grail of Eco-Transportation," as Treehugger believes? Maybe. Time will tell if the electric engine inside the Active Wheel from Michelin will catch on and further drive down the cost of electric vehicles.
Electric Car Conversions See Increase
Despite gas prices creeping down, a local man who converts cars from gasoline engines to electric motors says he's seen a spike in business.
Tesla Schooled By Tango In Electric Car Drag Race
[Highly recommended. The video is hilarious.]
In what may be the first ever drag race between production electric cars, the geeky Tango electric cruiser edged out the trendy Tesla Roadster electric sports car.
Companies in Europe plan electric car infrastructure
Automakers in Europe plan new business models for electric vehicles and plug-in hybrids before 2011.

The business models will eliminate the need for gasoline stations. Energy will be supplied by utility companies. The automakers also will need to take into account the life span of batteries, which will depreciate and wear out quicker than the cars themselves.

Toyota Motor Corp., Daimler, Renault-Nissan, Volvo, and General Motors are among the carmakers that plan to bring plug-in hybrids and full-electric cars to market in 2011.

When that happens, carmakers, utility companies, and battery suppliers will need to be ready to take over the role of energy suppliers from oil companies. This will require a restructuring of energy supply arrangements and infrastructure.
Enel, smart launch electric vehicle initiative in Italy
Italian utility Enel and smart, a Daimler Group brand, have launched the e-mobility Italy initiative aimed at spreading the use of electric vehicles supported by a specially tailored infrastructure providing intelligent and safe service.
Fuji Heavy Shows off Spacious Electric Vehicle
Fuji Heavy Industries Ltd exhibited "Plug-in Stella Concept," a new electric vehicle, at the G8 Hokkaido-Toyako Summit (See related article).

Fuji Heavy Industries brought five of the vehicles to the site of the summit and showcased them to government officials and journalists from all over the world. The company plans to commercialize an electric car in 2009.
Mitsubishi to start electric car production
While many car companies are still trying to perfect their electric cars, Mitsubishi Motors Corp has forged ahead with its i MiEV electric car that is set to enter production next year [2009].

Unveiled to the media yesterday ahead of this week’s International Petroleum Technology Conference, the i MiEV electric car does not look much different from the 660cc petrol-powered “i” car on which it was based.

The original “i” car’s engine and fuel tank have been replaced by an electric motor drive system and lithium-ion battery pack.

Mitsubishi Motors Malaysia Sdn Bhd chief executive officer Keizo Ono said the i MiEV was not a concept car but one ready for mass production.

The electric car will go on sale in Japan next year with launches planned in the US and Europe markets in 2010.
Chrysler's plan to beat the Chevy Volt
Chrysler is pinning a huge part of its future on a plan to produce a full line of electric vehicles, at a reasonable cost to both the carmaker and the consumer.

While General Motors is moving ahead with its Volt electric midsized car, Chrysler says it already has plans in place, not just for electric cars, but also for minivans and even off-road vehicles.
by JD

Wednesday, December 10, 2008


A number of new analyses suggest a growing, long glut:

Oil analyst Philip Verleger claims that OPEC needs to reduce output by at least 7 million barrels a day to balance supply and demand:
Just how daunting is OPEC’s challenge to rein in falling oil prices? Beyond its control, if economist and oil-market analyst Philip Verleger is right.

Mr. Verleger, a former Carter administration official, academic, and energy-industry consultant, says OPEC can forget about tiny production cuts of 1 or 2 million barrels when it meets later this month in Algeria. The cartel needs to wipe out at least 7 million barrels per day of oil production to bring oil markets close to balance, he says, according to Platt’s The Barrel.

And that’s not likely to happen, which spells even more happy times for oil bears, Mr. Verleger says: “Since cuts of such magnitude are out of the question, one should expect prices to come under further downward pressure.”

His thesis? Global demand for oil has cratered much, much more than the spreadsheets used by groups like OPEC and the International Energy Agency. Mr. Verleger says global demand in December dropped to 81.6 million barrels a day, compared with 86.8 million barrels a year ago. That’s dramatically uglier than OPEC’s most recent diagnosis of oil demand, which put fourth-quarter global demand at 86.2 million barrels per day, up from 85.9 million a year ago.Source
Stocks are definitely rising. The oil market is currently in a "super contango", and crude is piling up not only in monitored storage like Cushing, OK, but in tankers parked at sea:
Royal Dutch Shell Plc sees so much potential in the strategy that it anchored a supertanker holding as much as $80 million of oil off the U.K. to take advantage of higher prices for future delivery. The ship is one of as many as 16 booked for potential storage instead of transporting crude, said Johnny Plumbe, chief executive officer of London shipbroker ACM Shipping Group Plc.

Oil Storage

The tankers, if full, hold about 26 million barrels worth about $1 billion, more than the 22.9 million barrels sitting in Cushing, Oklahoma, where oil is stored for delivery against Nymex contracts. U.S. crude inventories rose 11 percent this year to 320.4 million barrels, according to the Energy Department.

“All the market operators keep placing oil in storage,” said Francisco Blanch, head of global commodities research at Merrill Lynch & Co. in London. “Even though the contango is steep, it could get steeper.”Source
More broadly, a new report from the World Bank called Global Economic Prospects 2009(pdf) declares that "Like earlier commodity booms, this one has come to an end." and states:
The strength, breadth (in terms of the number of commodities whose prices have increased), and duration of the current commodity boom have prompted speculation that the global economy is moving into a new era characterized by relative shortage and permanently higher (and even permanently rising) commodity prices. This outcome does not appear likely. Over the next two decades, slower population growth and weaker (though still strong) income growth are projected to cause trend global GDP growth to ease (figure O.3) and, with it, the demand for commodities.
According to Andrew Burns, Lead Author of the report:
Over the longer term, the supply shortages that contributed to the sharp rise in commodity prices are expected to ease. Demand for energy, metals, and food should slow due to weaker population growth and an expected reversal in China’s high demand for metals as investment rates there decline.Source
Now that things have settled down, the commodities price spike/collapse of 2008 is looking more and more like a mundane rerun of the commodities price spike/collapse of the late 70s. Except this time we had a whole army of chicken littles, pumped up by the steroid of the internet, to loudly worry and moralize about it 24 hours a day. Six months ago, we were all going to die because we were running out of everything. Now the same stuff is piling up in overflowing tankers, silos and warehouses.

Peak everything. Honestly, how butt stupid did you have to be to buy into that? How likely is it that mankind was running dry of every single natural resource, at exactly the same time? Not too likely, as we've seen. The only thing that was really peaking was financial overextension and hype.
-- by JD

Thursday, December 04, 2008


Peak oilers are a restless bunch, working round the clock to turn anything and everything into another reason why we're doomed. You'd think that a massive $100 dive in the price of oil, and an ever-growing glut of the substance, would shut them up for five minutes, but no such luck. First we were doomed because of high oil prices. Now it turns out we're doomed because of low oil prices. Yup, the latest doomer talking point is that the plummeting price of oil will make it uneconomical to produce the "expensive" oil, so we're in big trouble.

This view has a couple of problems. First of all, if the price is dropping, that means there's no demand for the expensive oil. Ergo, it's no big deal if we don't produce it. In fact, it's better all around if we don't produce it because that will: (a) save more oil for later, and (b) reduce pollution and CO2 emissions.

Second, and more important, is the erroneous assumption that "expensive" oil is somehow inherently expensive, and that high costs will stay high as the price of oil drops.

In fact, high oil production costs have been driven primarily not by geology or EROEI, but by the same bubble dynamics that made the price of everything go up. Numerous projects were cancelled in the last year or two because the industry was overheating. Rigs, steel, white collar expertise, manual labor, materials, shipping -- everything was too expensive, and project budgets were ballooning out of control. Now that the bubble has popped, construction costs will come back down to earth. The smart players will do their project construction now, at bargain basement prices, and reap the benefits in the next cycle of high oil prices. That's the secret to riding the oil wave: build when costs are low, and pump when prices are high.

The peak oilers are fretting as if oil prices going down the toilet is some kind of new phenomenon. They still haven't caught on: oil is a cyclical business. Always has been for the last 150 years. As previously noted, the grizzled veterans have seen it all before:
"We're a cyclical business," David J. O'Reilly, chief executive of ChevronTexaco, the second-largest American oil company, said in a telephone interview, "and at the high end of the cycle it makes sense to get the company in good shape and strengthen our balance sheet. "History tells us that what goes up also goes down."Source
Consider the oil sands. In 2006, the average cost of producing a barrel of oil in Alberta was 32USD. Here's the breakdown (click to enlarge):

Up through the summer of 2008, costs in Alberta skyrocketed due to the fever of speculative bubblenomics:
"Labour shortages and increased material costs have created a hyper-inflationary environment within the oil and gas industry in Alberta. With the sheer number of oilsands projects, together with the future Arctic pipelines and conventional oil and gas developments in Alberta, labour demands in Canada will be pushed to their limits," he said.Source
The "high costs" we keep hearing about were actually driven by hyper-inflationary conditions, and are now coming down. Contrary to the naive view, production costs are not fixed. In Alberta, the primary drivers of high costs are steel and labor:
Five years ago [i.e. 2003], the capital cost of building a project that mined bitumen and processed it into high-quality crude was around C$40,000 per barrel of production, reckons Andrew Potter, a UBS Securities analyst. The same project today could cost C$180,000 per barrel, or around C$18 billion for a typical 100,000 barrel-a-day development.
Soaring raw material prices, notably for steel, have played a big role. Oil sands will likely find some relief here: Steel prices have slumped three-quarters from summer highs as major consumers - China in particular - rein back demand amid fears of a global economic slowdown. But the main culprit is labor.Source
Steel is already down the toilet, and wages aren't set in concrete, particularly in a time of deflation and surging unemployment. The only reasonable conclusion is that the cost of producing in the oil sands is (or will soon be) rapidly dropping, together with the price of oil.

And that's when the smart firms kick into gear:
The collective impact of project delays may work out rather well for companies that still decide to push ahead.

Through its affiliate Imperial Oil Ltd. (IMO), ExxonMobil is still sticking to schedule for the C$8 billion Kearl oil sands mine.

"[While] some of the other oil sands projects may be slowing down or whatever, that could actually provide some benefit to us in respect to lower cost, both for raw material and services," David Rosenthal, ExxonMobil's vice president of investor relations, said on a conference call Thursday.Source
And (hat tip to OilFinder):
6. Is there a benefit for Hyperdynamics to have a lower oil price?

My Answer:

Yes. I don't think the price will drop to lower levels than we have seen in years past and so I will take it either way at the moment. Actually, I would prefer the price of oil to stay lower until we make a discovery, and then I would like it to go up for the benefit of Guinea and our shareholders. I know this is a capitalistic statement and I apologize to any Socialist reading this. The lower the price of oil, the easier it is to secure some of the critical resources necessary to do the exploration work, such as drilling rigs. Moreover, we can secure the resources at lower costs. Obviously, if the price of oil is $147 per barrel, drilling rigs are receiving a premium and are working continuously. A lower price of oil could actually allow us and our partners to obtain a rig sooner and at more reasonable cost. This is especially true for us due to the economics of our prospects. The potential volumes in our prospects can make up for much of a lagging price of oil.Source
It reminds may of a famous saying by Konosuke Matsushita (founder and former President of Panasonic):
Good times are good. Bad times are even better.
by JD