Death by Jevons Paradox

One of the most quoted myths among doomers is that it's impossible to cut back on Energy Usage without collapsing the economy or that any attempt to cut back in one area of oil usage will ultimately lead to more consumption in another area or that substitutes are impossible.

I won't argue in this post about efficiency programs such as those proposed by the Rocky Mountain Institute, but here instead I will focus on one application of "Jevons Paradox".

Jevon was a late industrial revolution thinker who suggested that Britain would eventually collapse because of it's dependence on coal. His reckoning was that consumption would be reduced in one area of demand but would balloon in another once overall demand was reduced temporarily.
The reasoning was that coal was so useful combined with no available substitutes that no attempt could be made to reduce demand. It's a variation of a single variable commodity in a commons accessed by multiple players with no incentive to limit their consumption, known as "the tragedy of the commons". This theory along with Jevons Paradox has several flaws, not least of which is specialization of trade in secondary commodities in exchange for the commodity produced from the commons.

This is the exact same fallacy that drives dieoff theory and most of the peak oil doomer arguments. There is no substitute to oil they say and demand can not be reduced by greater efficiency and thus once oil supplies peak and start to decline, death of industrial civilization is guaranteed.

Over time, it has become apparent that this is simply not true and that not only can efficiency and demand destruction reduce overall demand, but also there are substitutes to oil.

But wait, say the doomers, there is something called the export-land model.

This theory is also deceiving. What it basically says is a continuation of the original fallacy (there is no substitute and no possible efficiency gains) but that in exporting countries, the demand will continue to rise ad-infinitum until the point at which peak production is reached.
At that point, production will be declining but demand in the exporting country will be rising along with everybody else in the importing countries. Since the exporting countries demand rise will make less available for export, the importing countries will see a greater hit than the overrall decline rate.

Although the data bears this out (especially in Saudi Arabia) to a large extent for several (though not all) conventional crude exporters, there is no 100% consensus on the data across the board.
In reality we have at least one clear example where an exporting country limits its own consumption in order to export as much as possible: Norway.
There are other outliers, though the data suggest *some* basis to the export-land model.
In particular, the export-land people point to Saudi Arabia and Iran as both increasing consumption ahead of any declines and potentially even past decline.

Now taking any desire to build Nuclear Weapons out of the picture, it could be argued that the Iranians are going counter to Export-Land by seeking to build nuclear power stations rather than continue to burn oil in their power stations. Across the globe, import-land countries have substituted out oil fired generating plants for alternatives such as natural gas fired, nuclear and renewables.

Also, according to export-land it should be impossible for heavy importers such as the United States to decrease internal demand for oil never mind start exporting oil or oil substitutes. And yet, even when the United States has to spend a proportion of it's GDP to defend oil supplies militarily AND import two thirds of its oil, it is *still* exporting oil substitutes such as liquid natural gas. It should by all rights be converting every last cubic inch of natural gas into oil according to export-land, shouldn't it?

But let's ignore that and return to the star of export-land itself: Saudi Arabia.

Just recently, Saudi Oil Minister Ali al-Naimi stated that he sees "no difference between oil reserves and alternative energy" and that Saudi Arabia is now taking steps to utilize other forms of energy such as "their massive resource of solar energy combined with nuclear energy".

He notes that current consumption of oil within the Kingdom is around 3 million barrels per day and projects that consumption could rise to 8 million barrels per day around 2030. Since the volume of exports is 8 million barrels per day, even with no peak and decline in production, by 2030 there will be no oil available for export from Saudi Arabia.

Not even considering the effect on importing nations of losing Saudi Arabia, the impact on Saudi Arabia itself would be dramatic, since the economy is so skewed towards oil production and so lacking in other areas.

al-Naimi goes on to say, "a continued rise in local consumption will ultimately limit the export capacity of the Kingdom and it's DEVELOPMENT (emphasis mine). We must therefore
transform a country dependent SOLELY on oil to one using different sources of energy - nuclear and renewables,in order to conserve oil and keep it for export."

Thus the export-land paradigm is being intentionally broken even by it's superstar Saudi Arabia.

Further, al-Naimi goes on to say, "We are consulting with everybody who has technology in these areas - Koreans, British, Americans, Japanese and French".

In other words, the one with the most to gain from an increase in oil prices recognizes the solution both to Jevon's paradox and to the tragedy of the commons: Trade and Substitution. Even as oil prices go up and up, Saudi Plans to spread the wealth and limit the damage from rising oil prices precisely to those economies who would be most impacted by oil price rises and decreasing exports (assuming no substitutes existed).

Human ingenuity, greed, self-preservation and the profit motive win again.

Nice try doomers, but still no cigar.

New Coal to Liquids Process significantly more efficient

Yet another process which will shore up hydrocarbon based heavy trucking during the depletion phase of peak oil has been created.
Previously there has existed the Fischer-Tropf process which allows conversion of coal to liquids, with significant energy costs, coal and other inputs including hydrogen.

This new process has been developed by a company called Quantex Energy based out of Calgary, Alberta and is significantly more efficient than the Fischer Tropf process to the point of estimating that it could be easily scaled to "millions of barrels per day in North America".

See www.quantex.com for news. Quote from the site follows:

"Quantex Energy Inc is developing a process which seeks to refine coal as easily and inexpensively as crude oil processing. Taking advantage of the fact that the hydrocarbon refining industry has already developed the technology for "upgrading" heavy hydrocarbons such as Venezuelan Orinoco crude, or Alberta Oil Sands crude, Quantex Energy Inc seeks to produce liquids that meet the same specifications as heavy crude.

This new process is in distinct contrast to processes of the 1970s and earlier, which assumed that coal should only be made only into sweet light crudes. Consequently, protocols of the 1970s called for adding 30 pounds of hydrogen per barrel of synthetic crude, in turn requiring enormous high pressure reactors with hour long processing times. In contrast, the Quantex Energy Inc process requires only a few pounds of hydrogen to liquefy coal. It is primarily a depolymerization and cracking process. The reasons why the Quantex process is perceived to be advantageous compared to conventional direct liquefaction are:

* Requires significantly less hydrogen per barrel versus other CTL technology
* Hydrogenation is accomplished through a patent pending process
* Requires only minutes of processing time rather than hours in the break through bio-hydrogenation reactor
* Is accomplished at pressures significantly lower then competitive processes
* No molybdenum or cobalt catalysts are required.

Unlike the Fischer-Tropsch indirect liquefaction process, the Quantex coal to liquids process produces no carbon dioxide during the liquefaction process. The Quantex process is not based on gasified coal at all. Rather, the Quantex process is a simpler-cheaper-faster direct liquefaction process, which seeks to produce commodity fuels and chemicals-particularly heavy products such as pitches and heavy crude at the lowest achievable pressure and residence time.

Hence, given the enormous amount of coal reserves in Canada and the United States, the Quantex process can be scaled to the level of millions of barrels per day at a fraction of the cost of conventional liquefaction schemes."

Electric pizza deliveries are go

While the doomers hole themselves up in their basement apartments with their canned beans, ammo and MREs awaiting the zombie hordes, I will be watching the show on my big screen TV with popcorn and pizza delivered from dominoes. As I stated elsewhere, the doomers are out to lunch when they suggest that the logistics infrastructure will collapse post peak oil.
Given that fully loaded semi trucks combined with a hub and spoke delivery system and long distance container based shipping is the most efficient use of oil we currently have, when oil prices start to rise because of peak oil, it's obvious that the dollars will go to these rather than "local" production of food. The remaining leg of the logistics infrastructure is the last mile which is currently inefficient since it's based on low mileage low efficiency gas or diesel vehicles to take the shopper to the store. In the case where the shopper sits on his/her ass watching TV and ordering by phone or online, the inefficiency of the last mile is removed. That's already true with pizza delivery to multiple stops on a single run even with conventional vehicles. But now we have all electric delivery vehicles courtesty of Ford. The all new 2010 Ford Transit Connect available at a dealership near you.

Also available: full sized electric buses from Optare and 12-15 seater minibuses from Smith Electric and electric taxis from Mercedes. Seems the shopping malls, commuting to work and having frivolous crap bought on the internet delivered to your doorstep are not dead either.

Peak Oil Dieoff? Hit the snooze button.

Limits to Growth's version of Dieoff

Debunking the "limits to growth" model of dieoff.

There are five main variables considered in the model (from the early 1970s!). They are:
Population, food production, industrialization, pollution and consumption of non-renewable resources.

Here are the limits:

Nonrenewable resources are assumed to have no possible renewable substitutes and will last 250 years. (A number pulled out of a hat). Further, it is assumed, however, that other non-renewable resources may replace the initial renewable resource. Technology is allowed to raise efficiency of usage by a factor of 4. (So far so good, quibbling about no substitutes for non-renewables by renewables aside, at least the model accepts that efficiency can stretch resources).

The absolute size of the global economy (agricultural and industrial) is assumed to rise linearly. Further it's assumed that raising global pollution 10 times will have a marginal effect on lifetime but raising it 100 times will have a large effect on mortality. (Arbitrary but let's run with it). In addition, it accepts that pollution may be reduced by pollution control technology by a factor of 4. (Again arbitrary but let's run with it).

Agricultural assumptions state more or less that the world cannot feed 20 billion people.
(Again, arbitrary).

Population is assumed to be uncontrollable even with contraceptives, based on the "fact" that the average preferred family size, even for a wealthy and healthy population is 3 children or more always.
(May be based on statistics. I can see flaws but let's run with it.)

With all of these assumptions, we get the population growing to nearly 10 billion by 2060-2070 and then collapsing due to pollution, failure of agriculture and non-renewable resource depletion.

If we take the efficiency combined with pollution control model and assume unlimited resources, the population still crashes, although it gets to nearly 20 billion before doing so, and the economy grows much larger before crashing along with the population.

There are significant flaws with these assumptions.

Population is static or declining in all rich countries with the exception of the United States, which is (barely) above replacement levels. Clearly raising income limits population growth.

Agriculture: There is more than enough to go around even today, but yet, people are starving. Obviously the availability of enough food is not the limiting factor. A realistic assessment shows that incomes are too low. Interestingly it seems that the very poorest countries are the ones with the highest birth rates. Putting these two together, deductive logic shows that raising incomes should therefore limit population. And it does, as is shown by 40 years of data after the model was proposed. In addition, there is significant effort in the non-agricultural area to produce non-conventional food from sources such as algae (which, while not currently affordable for anyone outside the rich world, are in theory, capable of feeding billions of people on non-agricultural land)

Substitutes for non-renewable resources
If we look at the end-use for *necessary* non-renewable resources, they fall under the categories: Heating, Cooking, Fertilizers and Transport.
As JD has shown on his blog (and here too) there are *several* substitutes in all of the areas that do not need non-renewables. In the case of Heating, Cooking and Transport electricity is an adequate substitute. In the case of fertilizer systems changes might be needed at the societal scale for phosphate fertilizer, and nitrogen fertilizer is readily available from electricity and air.

Pollution control.
The assumptions are wildly inaccurate. Pollution can be reduced down to close to zero at considerable expense and reduced to tolerable levels much more inexpensively.


I thus reject the limits to growth model which (like the peak oil dieoff model) is so flawed as to be unusable.

Batteries will save us

The premise is this: dieoff says technology is not a substitute for oil.
In this post I will argue not only that technology is in fact a substitute for oil but that we've been using technological substitutes for an age and a day.

In the middle ages, we reached "peak wood" where Europe's population had soared due to the invention of better farming methods, and correspondingly, the hugely increased demand for wood depleted Europes forest. Subsequently, there was the great plague and replacement of wood with coal, but was there anything else notable that happened?

Why yes there was. Since the population collapsed, there weren't so many laborers available to for example, mill flour. So what happened?
The response was technology. More specifically wind.

Windmills and river mills were invented and this renewable power freed up labor to do other things, like go off and invent steam engines.

Other times technology has saved us are the taming of fire (we could cook tough plants previously unable to be eaten raw), the invention of agriculture, the green revolution etc.

So I guess we could say there is precedent for us escaping from bottlenecks.

Now we are faced with a bottleneck of how to get our energy system off of oil before it begins it's precipitous decline.

Hubbert himself argued that nuclear would be the next big thing. I won't call him a liar, but I will say that nuclear though it could do so all by itself, is not our only solution.

Every day we have more wind and more sunlight coming into the Earth energy system than our entire world consumption for a year.

It's also worthwhile pointing out that while oil in in imminent danger of depletion during the next decade, this is not true of either natural gas or coal. So any transition period could be partially backed up by natural gas or coal.
Both of these are good substitutes for oil if a little expensive to get them into liquid form. But we have plenty for now.

In the meantime, the build rate of wind is scaling up at 35% increase in global installed base every five years and accelerating. Likewise solar. Nuclear is hardly budging in North America and Europe but China is growing it's installed base of nuclear at half the rate it's growing it's wind. It's also worth pointing out that we have several regions with large installed bases of Nuclear already. i.e. they don't need any more. France and Ontario are two such regions. Sweden is another.

What does electricity have to do with oil depletion?
Plenty as it happens. Up till this decade the closest substitute for oil powered transportation such as automobiles and 18 wheeler trucks was biofuel and natural gas.
Well we have a glut of natural gas right now so that's not such a problem.
Previously, though, that was it. Sure there were electric trains and electric streetcars and trolley buses etc, but in many regions the streetcars and trolley buses are now gone and replaced with interstate networks.

In a pinch we *could* rebuild the streetcar networks and in fact, many countries are in fact doing so. The notable laggards are the UK, Canada and the United States.
To be fair, though, most Canadian cities already have electric mass transit systems of some sort. Even Calgary which is the oil capital, has the electric C-Train. Toronto's mass transit system is electric and world class.

But what about systems that are not point to point, like bus based networks or the logistics networks of supermarkets?

Well as it turns out we have a model for the logistics networks from 1950s Britain.
They are called milk floats. 30 mile range, slow moving lead acid battery powered delivery vehicles. Using even this basic technology combined with electric trains, the logistics network of the 1950s could even then have been run off of electricity.
Sadly, though, this technology fell out of favor and was replaced by the more versatile diesel truck with a higher speed and a better range.
In a pinch, however, if need be, we could get by with a 1950s logistics network.
But we don't have to. Batteries have advanced so much in the last ten years that we now have 13 ton trucks with a top speed of 65mpg and a range of greater than 150 miles. Easily adequate to run a logistics fleet.

If we ignore for a minute that in the same time frame they used streetcars and trolley buses in place of the diesel powered buses we have now, what are our current options?
Well as it happens, we also have in recent times developed high speed, decent range elecetric buses such as Proterra buses which can be charged to 80% capacity in 10 minutes. With a range of 100 miles, a ten minute charge gets an additional 80 miles.
This can easily be adapted to virtually any modern bus service.

Now the question will no doubt arise from our doomer friends: where will we get all the electricity to do this if we have millions of electric trucks and electric buses?

The answer is simple: we will build more gas plants, coal plants, nuke plants and more windmills.

Production capacity to build all these electric vehicles will take some time to ramp up but in the meantime it's very straightforward to convert to natural gas. And like New Zealand did in the 1970s during the last oil crunch (where they converted up to 10% of their fleet to natural gas) we will likely do the same, all the while, gradually building up an all electric fleet.

Now one point that's not been adequately covered is the rate of advance we've seen in the last ten years and then a comparison of where we are now and where we will be ten years from now.
When I originally freaked out after reading dieoff.org all those years ago, battery tech had hardly advanced since the 1950s. Sure there were NiCad and Nickel Metal Hydride, but the energy density and the range was only 2-3 times that of lead acid batteries. That meant you had literally tons of weight for a range of, say 50-70 miles which took 10 hours to charge.
Compared with a standard automobile or truck which could be recharged at a gas station in ten minutes by filling up and then drive for hundreds of miles, clearly the existing technology at the time was a poor substitute. I've already argued that it was a "good enough" substitute to keep the lights on and food in the supermarkets, but certainly not good enough to have all electric hummers.

Are we there yet?
i.e. can we have all electric hummers with a 200 mile range?
Unfortunately with the current best-of-breed batteries (Lithium Ion) we cannot.
We have 13 ton trucks with a 150 mile range than take ten hours to charge or can charge to 100 mile range in half an hour.
Likewise we have smaller personal automobiles like the Th!nk city with a range of about 100 miles which take 4 hours to recharge or else a range of 80 miles after a fast charge of 30 minutes. The Tesla Sportscar is similar. 200 mile range in ten hours or 150 mile range with an hour fast charge.

Clearly these are adequate to keep more or less the current paradigm running. They are not, however, a complete replacement.
Is a complete replacement even possible with batteries? Well with current generations of batteries no.

But there are several breakthroughs on the horizon it has to be pointed out.

There's this:
"Air fueled battery has 10 times the energy density of current lithium ion batteries"
So we could have a small car with a range of 1000 miles. Surely acceptable.
Do you think we could maybe have a Hummer with a 150 mile range?

There's this:
"New Lithium Battery can store three times the energy of conventional lithium batteries"
http://www.sciencedaily.com/releases/2009/05/090518111731.htm
So a 450 mile range on a small cheap car or else a hummer with a 75 mile range?
Acceptable to anybody? I'd say yes.

And there's this:
"MIT Lithium Battery could recharge in seconds rather than hours"
Hmmm. If we combine a 450 mile range battery with recharging in seconds, can we say that's a perfect replacement for what we have now?

And last but not least there's this:
"Project Better Place will provide a network of battery swap stations that will allow owners of electric cars to have a depleted battery swapped for a fully charged one in a drive through station like a car-wash, all in less time than it takes to fill the gas tank of a conventional car"
http://www.betterplace.com/solution/charging/

So unlike the opinion of the dieoff crowd that technology won't save us. I'd have to disagree. Not only will technology save us, but it will be a pre-existing old technology that will save us: the humble battery.

For those with more interest in this topic,
please also visit peakoildebunked and ghawareguzzler as well as sciencedaily, newscientist and greencarcongress.