free html hit counter Peak Oil Debunked: 103. EARLY MITIGATION PORK

Sunday, September 18, 2005


Many peak oilers believe that global peak oil is imminent, and the world is completely unprepared for it. They like to cite this passage in the Hirsh report:
The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and without timely mitigation, the economic, social and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.(P. 4)
These folks are alarmists, in a big hurry, who claim that the only prudent course is to start mitigating NOW!! Then if peak comes early, we'll be ready, and if it comes late, there is no harm done. But this ignores the fact that mitigating too early does cause harm.

Hirsch et al. allude to this problem in their report:
2. Oil Peaking Risk Analysis: Cost of Premature Mitigation versus Waiting
The date of world oil production peaking is unknowable, but it may occur in the not too distant future. Large-scale mitigation is needed more than a decade before the onset of peaking if economic hardship is to be avoided. If major efforts were initiated early and peaking was to occur decades later, there might be an unproductive use of resources. (Hirsch report, P. 88)
That's putting it charitably. What we're actually talking about here is massive-scale pork, the classic example being oil shale in the late 70s, early 80s:
The second great challenge the Democrats faced was an OPEC-induced surge in energy prices. Carter came in with some good and some bad ideas about how to alleviate the energy crisis. Democrats in Congress rebuffed the president's best plan--Carter's attempt to lift the price controls Richard Nixon had imposed on domestic energy. But congressional Democrats eagerly adopted his bad ideas, including the creation of the Department of Energy, which would become perhaps the most dysfunctional agency in Washington. House Speaker Tip O'Neill set up a task force to speed along passage of the authorizing bill, getting the agency running in a matter of months. Congress happily signed on in 1980 when Carter asked it to set up the Synthetic Fuels Corporation. The program ultimately spent $88 billion subsidizing American oil and gas companies to try to extract petroleum out of oil shale, an enterprise only slightly more cost-effective than trying to wring water from a stone. The SynFuels concept dispensed a lot of taxpayer money to a lot of Democratic interest groups but did nothing to solve the energy crisis.Source
There you go. $88 billion of public money oinked down by Unocal and others in the hog-trough of "early mitigation". That's the cost of mitigating too early.


Speaking of pork, wasn't the Iraq war a $200 billion subsidy for the oil companies and a porkfest for Halliburton?

Coal "synfuels" are still a multi-billion dollar a year tax credit scam 25 years after Jimmy Carter.

And right on cue, the refiners just can't seem to get the job done without another government hand-out:
Bob Slaughter, the president of the National Petrochemical and Refiners Association, told a House committee last week that Congress could expand tax incentives included in the energy bill as a way to encourage growth of the refining industry.Source: The Hill


At Monday, September 19, 2005 at 4:18:00 AM PDT, Anonymous Anonymous said...

The direct cost of mitigating early might be high compared to non-mitigation but if you factor in the indirect costs (i.e. environmental destruction from carbon energy sources, GW etc) early is better.
Plus with the uncertainty involved in estimating reserves it makes sense to plan as if peak had happened yesterday.
I have read the Hirsch report as many others and while I understand where Hirsch is coming from, I also understand that the shift to renewable energy sources, construction of nuclear power plants and a service based model for the transportation sector will create many more jobs, decrease the rate we utilize resources without turning us to (un-)happy farmers/hunter gatherers practising Darwinian Law.
The US and Australia (primarily) as well as Japan and EU will have to work hard to adjust to this new model of a high-tech society which is not structured around the personal auto. The sooner we start, the better

At Monday, September 19, 2005 at 5:30:00 AM PDT, Blogger JD said...

ES, you're absolutely right that we need to move away from cars ASAP. But we have to understand which measures help that, and which measures don't. Tax breaks and subsidies for liquid fuels producers and the oil/auto industry are suspicious on the face of it. We must beware of letting "peak oil" turn into a porkfest like it did last time in the 70s and 80s.

At Monday, September 19, 2005 at 6:51:00 AM PDT, Blogger James Shannon said...

Giving taxpayer money in grants to corporations that are experiencing runaway profits is the height of insanity.

Private sector innovation should be funded largely from their own pockets, and the government should, on its own, pursue initatives that the private sector is hesitant to undertake.

At Monday, September 19, 2005 at 7:01:00 AM PDT, Anonymous Anonymous said...

Coal synfuels a scam? Wait a minute, I thought earlier you were saying they were going to be really useful.

At Monday, September 19, 2005 at 7:03:00 AM PDT, Anonymous Anonymous said...

How about the government creating incentives to move away from cars & fossil fuels? Energyspin is right, GW and other factors mean we should get away from oil (and coal and gas, but especially oil) ASAP.

At Monday, September 19, 2005 at 7:42:00 AM PDT, Blogger Dukat- said...

GW is not acknowlegded at all in the econmic circles of business and governemnts, it has played no part in any desistions and it never has. They hear voices of envirnomental concern from groups but react in the sense of a scratchy noisy old record which make their facial expressions screw. They have heard the same record for 100 years and they just ignore it now as they did before and even more so, now it's like they wear earmuffs, so many more people showing concern but you can't tell whatsoever, it's still business as usual, too busy talking to industry about GDP and growth and whooing the public into thinking that all this is good for them. I honestly do not think the world will change so it best to attempt to being planning to survive in a hellhole enviroment. James can you really see government or industry being swayed at all to be enviromentaly resposible? and also knowing that if they decide to be responsable, they will lose profit?. That will never happen in a corperation. If they can destroy the enviroment while making an extra 1% profit they will do it with no disregard whatsoever. It is hopeless to try to defeat them at this stage, the defeating will have to unfortunalty be done after the aftermath.

At Monday, September 19, 2005 at 10:25:00 AM PDT, Anonymous Anonymous said...

There is no more oil to be found, or if I believe Lynch it can only be found in countries which are low on their "creaming curve" (i.e SA).
But the Saudis can pay for their own exploration - let Aramco do it. If they find more they can always give us a phone call and let independent auditors verify their claims.

But the Saudis are not going to open their country to exploration by the foreign multinational oil companies. Hence even if I , the Western taxpayer, were to agree to the tax breaks the money would not even be used to find more oil.

If the Foreign Oil companies want to go after the ultra-deep sea oil or the pristine ecosystems in the North/South Pole, they can do it but not with my money. In fact , if we let drilling take place there (and International law puts many restrictions on the commercial exploitation of the "iced" continents) then we deserve to die as a species.

No tax breaks - tax the hell out of the Foreign Oil Companies cause their profits down the Hubbert curve are going to be obscene. Tax the hell out hydrocarbons, where it hurts: at the pump. An international Apollo project will be needed to boost our non-carbon electricity generation capacity (Wind+Nuclear+whatever else makes sense locally) and this will need money. However such a project can create more jobs than the ones to go from our hydrocarbon economy.
If car companies are smart , they have to start offering pay-per-use services, leasing of small cars or autos. If Ford wants to stay afloat, they have to release a hybrid Focus version (the last and probably the best car I ever owned), and import the KAs in the US. Better yet, offer incentives to people to trade their old cars for the hybrids or offer upgrade from an ICE to an ICE/hybrid model.
If there is an easy way for a car to be switched to a hybrid (but I'd imagine that regenerative braking alone would be way to difficult to retrofit to a car), car companies should start offering this service. No one will be buying new cars as growth decelerates, but many people might be able to afford such a retrofit if it is practical.

Energy can be a money maker - companies that do not change now, will go extinct like the dinos.

Voters around the world should put pressure on their politicians to heavily fund their renewable energy and nuclear programs, expand and electrify trains, keep people in science/engineering/agriculture and re-organize the cities.
It is do-able-but not with car companies, airlnes and oil companies demanding a tax break.
Time for a New Deal type of economics (again)

At Monday, September 19, 2005 at 11:23:00 AM PDT, Anonymous Anonymous said...

The problem is with their definition of mitigation, and the goals implicit in it.

Mitigation, in government-speak, is "do whatever is necessary to continue with our current way of life undisrupted".

Real mitigation involves a transformation of both the economy and energy sectors towards true sustainability. Oil shale/tar sands/coal synfuels are not part of that picture, except maybe as a short-term solution while we ramp up other technologies.

At Monday, September 19, 2005 at 11:23:00 AM PDT, Anonymous Anonymous said...

The problem is with their definition of mitigation, and the goals implicit in it.

Mitigation, in government-speak, is "do whatever is necessary to continue with our current way of life undisrupted".

Real mitigation involves a transformation of both the economy and energy sectors towards true sustainability. Oil shale/tar sands/coal synfuels are not part of that picture, except maybe as a short-term solution while we ramp up other technologies.

At Monday, September 19, 2005 at 11:27:00 AM PDT, Blogger James Shannon said...

Dukat:"James can you really see government or industry being swayed at all to be enviromentaly resposible?"

Canada is one of the signatories to the Kyoto protocol, and has launched the One-Tonne Challenge, outlining steps for each Canadian to reduce their carbon output by one ton over the course of one year (check it out, there may be some tips in there you didn't know about). But in the States, no. As long as the Rethugs are in power, I think that convincing the Bush Administration to be environmentally repsonsible will be a steep uphill battle at best. Better efforts to publicize the real costs of climate change and PO should be launched using cold hard facts (i.e. costs to society in $$$) using non-profit organizations. If one thing has been shown, sagging poll numbers and indirect potitical pressure has been more effective at leveraging change with this administration than by petitioning them directly.

Dukat: "... and also knowing that if they decide to be responsable, they will lose profit?

Not necessarily true. Waste in manufacturing processes costs money. By reducing waste, the company saves money in raw materials and labour costs, thus adding to the bottom line.

At Monday, September 19, 2005 at 11:48:00 AM PDT, Anonymous Anonymous said...

"In fact , if we let drilling take place there then we deserve to die as a species."

Sounding like a misanthropic Gaia-worshipper does not further your credibility.

At Tuesday, September 20, 2005 at 12:12:00 AM PDT, Anonymous Anonymous said...

To the last anonymous who said: "Gaia earthworshipper"
There is absolutely no reason to drill there ... carbon has to be phased out anyway.
There is a big difference between earth-worshippers, money-worshippers and simple logic. Common sense starts by asking: what do we want to accomplish by this, and proceeds to ask questions about benefits and risks.
I think JD answered the first question: if one wants to drill there to advance sprawl/car culture for a couple more years then he or she has lost all credibility to my eyes. This is a dead-end decision ... one did not solve the original problem, just postponed it.
Postponing is a sign of intelectual laziness and personal irresponsibility: let someone else figure this out.
If the decision is motivated by such a goal, the human species does prove that is incapable of making rational decisions and deserves the extinction waiting down the road.

If one wants to use it to do XYZ that will promote a different future, the answer is a maybe.
One has to go further down the check list. But further down the check list one finds things like biofuel and cell ethanol which at small amounts (20-30% of current liquid fuel usage) could be used to "run society" , but not the personal auto. Or one could think about plugin hybrids and nuclear and renewable electricity. It will take more time (2-3 years exploration, 10-15 to build infrastructure) to discover oilfields down the South Pole. It will take less time to boost the rail system, electrify it and build electricity generation capacity.
After all said and done, drilling down there (even as mitigation towards a "sustainable" future) is a suboptimal solution.
Which means that if do so, we will have made a wrong decision. Wrong decisions at this point mean death IMHO.
After analyzing all the brances on the decision tree, the verdict speaks against drilling down there. If we make a foolish decision we will have to pay the piper which means that we end up dying as a species/civilization.
But in the end, one deserves one's final fate .


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