The "coffin corner" of the energy problem

[GliderGuider]

A commenter on The Oil Drum said something that made me go "Hmmm..." It has to do with why we are unlikely to be able to build out the massive amount of new energy sources we need to get ourselves off fossil fuels. The comment is in the thread Peak Oil Overview - July 2009, and is by "steve from Virginia".

The calculations for restructuring the economy are fairly easy; there won't be enough (GG: oil) in the diminished future because there isn't enough in the less- diminished now.

@ 80 million barrels a day, there is almost no restructuring taking place. Without anyone paying attention, the world shifted from a 'total growth regime' to an allocation regime.

An allocation regime requires choosing between commercial investment or energy use. In a total growth regime it would be possible to order- up both at the same time.

The allocation model has been gaining force for at least ten years. Actual hard- cash plus massively leveraged investments have taken place in demand- only areas such as housing, commercial real estate and in conventional auto- building capacity. All of this so- called 'investment' has amplified consumption. Investment directed toward energy production has been inadequate and grudging (Simmons). During the same period actual, net energy consumption itself increased. This is before the total of just- built demand has arrived in the market! The support of simultaneous commercial investment (on energy use) and energy demand required a dangerous increase in credit and risk. Every marginal increase in credit reduced the ability to allocate effectively by stacking risk and redirecting allocations away from energy production toward supporting financial institutions.

Energy- centric allocation was not and is still not considered necessary by the economic/political establishment. This form of blindness is likely to prove fatal to economic development as once reserves are directed into the credit 'black hole' there is less available for 'brick and mortar' investments in energy production or consumption efficiency.

What I think he's saying is that we may be in a sort of "coffin corner" with regards to our energy situation. Building out a replacement energy system takes money and oil (inter alia). The problem is that we can't produce enough extra oil to restructure our energy systems (production has been on a plateau for four years or so), and if we redirect oil away from our economic activities to build out new energy sources, the economy will suffer and we won't have the money.

That implies that we can only get the slack we need by promoting energy efficiency while maintaining the same level of economic activity. That could allow us to redirect the saved energy into the restructuring effort, but only if it can be kept our of the "free market" where much of it would be used to grow the non-energy economy.

What are your thoughts? Is he overstating the problem? Is there enough "unattached" energy available now to allow us to do this restructuring? Can we do it without using oil? Can we do it in the face of a continuing global economic contraction? Is there another way to think of the problem?

[phantom power]

1. The slack will probably come from decreased standard of living...

via economic collapse. We're seeing it already. Energy use is dropping. If we rebuild our economy via energy build-out, that may provide the way forward. No guarantee that we'll take that path, however.

[GliderGuider]

2. "Decreased standard of living" implies reduced economic activity.

We've seen what happens to the capital pool even when standards of living haven't dropped that much. How much economic contraction does it take to drop SOL to a noticeable degree? What will capital availability be like in such a world?

I also don't understand how we would rebuild our economy through an energy build-out. Aside from job creation, the build-out creates infrastructure that isn't directly economically active -- especially if it's simply replacing one form of energy with another.

[phantom power]

5. I'm thinking something analogous to rural electrification during the depression.

(the previous depression, that is)

We've got an unemployed labor pool. As you say, these people are all using less energy. Like the family of my former nanny, they're living with parents, or siblings. So, we have surplus energy. The govt uses the labor and the energy to replace coal plants with non-fossil generation. Electrified mass transit to reduce oil consumption. And, frankly, fewer people will be traveling, and fewer goods will be transported. Cuz we're in a depression.

They built non-directly-economically-active infrastructure all over the place during the depression, for not much more than three squares a day and a bed. What salary they got paid, fathers mailed home to their families. Eventually that infrastructure was economically active.

I don't know. It will either work or it won't. I think that covers the possibilities!

[XemaSab]

10. During the Depression

my great uncles worked for the WPA. They each made $30 a month, all of which he was required to send home to the family.

[phantom power]

17. My grampa worked for the CCC for a while.

Good programs. They kept a lot of people out of cardboard boxes, and built a lot of good things.

[kristopher]

3. Second post today with this line of bullshit...

The idea that there isn't enough oil to fuel a transition is one of the stupidest ideas I've ever seen.

First, petroleum is only one fossil fuel source, there are also supplies of coal and gas. Second, the economic activity to rebuild our energy infrastructure isn't a diversion from other activity that we can't do without. The actual economic landscape is one where a commodities that provides a foundation for long term benefits is NEEDED. Manufacturing plastic throw-away garbage isn't much of a value-added use of resources whereas the money and energy spent on upgrading our energy infrastructure is probably directing money at the best value-added set of commodities out there.

These posts from the Oil Drum are so far wrong in facts and logic that criticism could go on and on, but suffice to say that this crap seems intent on fostering beliefs that, if accepted, lead inevitably to inaction on climate and energy issues.

[GliderGuider]

6. So what, in your opinion, are the hard problems in getting the transition accomplished?

If money is no problem, and energy is no problem, and technology is no problem, is it purely a political problem in your view?

[kristopher]

7. Yes.

[Terry in Austin]

11. Those stupid people at the Oil Drum!

suffice to say that this crap seems intent on fostering beliefs that, if accepted, lead inevitably to inaction on climate and energy issues.

Now why in the world would they want to do that, do you think?

You've restated the argument into a very coarse straw man, dismissed it as "stupid," and offered some rambling market idealism as an alternative to "stupid." Now we're supposed to accept that this is smarter.

The convincing part of your argument is yet to come, I'd say. Sorry.

[kristopher]

13. I'm not speculating on motive...

...just effect.

If you think what I wrote constitutes a strawman, then you don't know what a straw man is. If you think it represents "market idealism, you also don't know what that is.

Even *if* we were to accept all other premises of the argument the fact is that petroleum is not the only fuel available. That alone invalidates the logic presented and the entire dreary prognostication is riddled with such basic errors.

[GliderGuider]

14. Well, you did use the phrase "seems intent on"

That speaks to motive rather than substance.

On edit: You've also claimed that the argument is "riddled with basic errors", but the only concrete objection you've posed is that "oil isn't the only fuel". I agree with that, but the real "riddle" is what you think those other errors are.

[kristopher]

15. "Intent on fostering beliefs"

"Well, you did use the phrase "seems intent on" ...That speaks to motive rather than substance."

No, it doesn't. Motive and intent aren't the same thing. Any time someone writes a manifesto of this sort they write with the intent to persuade. *Why* they wish to persuade is the question of motive.

I have no interest in carrying on a detailed discussion of the garbage in the OP, picking lint from my navel is a better use of my time. Since you are the person being sucked in by the piece, I'd suggest you expend the effort to read the paper critically in an attempt to find some of those errors. You might also contemplate your own willingness to overlook these errors when you are judging the validity of things you read.

[GliderGuider]

16. My underlying motivation is clear enough to be explained in few sentences.

Despite the shining brilliance of some individuals, I have realized and come to accept that our civilization as a whole is riddled with cancer. I have identified enough physical and cultural malignancies that a terminal prognosis is highly likely (say better than 75%, with massively damaged quality of life in the event of survival). As an act of compassion, and in order to ensure the survival of a very promising species, I have adopted a personal DNR order on this civilization and will not support any efforts to prolong its life.

In doing this, I feel regret but no despair. I turn my attention instead to the support of individuals, and to fostering the latent brilliance I see in them.

[kristopher]

18. So?

I didn't ask about your motives. We were on the topic of spotting (or not spotting) obvious errors and I wrote: "Since you are the person being sucked in by the piece, I'd suggest you expend the effort to read the paper critically in an attempt to find some of those errors. You might also contemplate your own willingness to overlook these errors when you are judging the validity of things you read."

You totally evaded that discussion. You are suffering from severe and chronic depression. Get help.

[GliderGuider]

19. Thanks for your diagnosis, Dr. Frist.

I agree the piece was superficial and didn't present any convincing evidence why oil supply limitations per se would be a crucial limiting factor in the build-out of alternative energy. However, I liked the "coffin corner" analogy that popped up when I thought about it, so that was the real point of the post. The possibility that there could be a combination of circumstances that would keep us from either speeding up or slowing down, when one or the other might be essential for the continued stability of our civilization, is intriguing.

I readily admit to having a confirmation bias in favour of finding events that will impact negatively on civilization. I clarified my motivation precisely to shed some light on why that might be. My bias does influence me heavily towards discounting optimistic avenues, because I have no desire to see the current state of affairs perpetuated any longer than necessary.

Contrary to your impression of depression, I find great joy in the idea that humanity may one day be unshackled from our involuntary servitude to the toxic and alienating systems we have created, and find liberation in the restoration of our direct relationship with the universe.

[kristopher]

20. That isn't n appropriate comparison

Frist watched one videotape. I've been interacting directly with you for years in what I assume is an open and transparent manner.

[GliderGuider]

21. Diagnosing over the intertubes is hardly more accurate.

You do know that in interpersonal communication 93% of all information is non-verbal? A data pipe that transmits only 7% of the essential information should not be relied on when doing something as complex as a psychiatric diagnosis. Actually, given that Frist watched a videotape, he might even have been in a better position than you, he just let his agenda get in the way...

There have been times you've sounded a wee bit strange to me too.

[joshcryer]

12. "... lead inevitably to inaction on climate and energy issues."

Indeed. These opinions are asinine. If the rapture were to come, then why must I act?

[Terry in Austin]

22. self delete -- moved

[Vinnie From Indy]

4. We should ask Goldman-Sachs. They run the show now.

[OKIsItJustMe]

8. I believe he is wrong

We can bootstrap a new energy model. (i.e. New sources of energy can be used to produce the new sources of energy. Ex. The electricity generated by a solar farm can be used to manufacture more solar panels.)

In the meantime, there is a great deal of slack in the system; as demonstrated by the vast amounts of energy we waste every day.

[Fledermaus]

9. Dang it, won't be long now.

SOYLENT GREEN IS PEOPLE!

[Terry in Austin]

23. The "spare capacity" issue

GG raises it here as "the coffin corner." Others have also started to http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=199240&mesg_id=199420">consider this issue, and it's not going to go away. In fact, it's hard not to see it as a crucial policy issue as well as a technological one. So cornucopians would do well to listen up!

It goes like this:

If the proposition is to rebuild our energy infrastructure, then it's vital to ask "with what?" Presumably, our need to rebuild it is largely because of the fact that, being based on fossil fuels, it's pretty well maxed out. Put another way, its capacity to provide for ongoing energy demands is fully spoken for.

However, the most prominent demand on our energy base is our manufacturing capacity. Any new energy infrastructure is going to be a result of applying available manufacturing capacity. So we've got a budget situation here -- only instead of allocating dollars, we're allocating manufacturing capacity and the energy necessary to drive it.

Budgets always entail choices, and tight budgets mean tough choices. Right now, there isn't sufficient spare capacity (energy/manufacturing) to allocate an interesting amount of it toward a replacement energy infrastructure. Such capacity would have to be diverted from its current commitments -- meaning we'd have to give up quite a few of the "energy slaves" we currently enjoy.

Sure, this energy budget can be tweaked incrementally with efficiency gains, new techniques, etc. But substantially, we've got what we've got -- energy is the real wealth here, and it doesn't get "created," only allocated.

This is not to say a rebuild wouldn't be doable -- given the political will, exquisite logistics, a cooperative and mobilized corporate sector, a public ready to endure a period of privation, and a fair amount of luck. We certainly have to make the attempt. We just have to make sure that our expectations are as well-managed as the project itself.

Now, whether or not the resulting alt.energy infrastructure would be sufficient to restore us to the energy-per-capita levels we currently enjoy, well, that's a whole separate discussion.

To restate the point: rebuilding our energy infrastructure will depend greatly on coming up with the spare capacity needed for the task, and most of it will have to come from diverting existing capacity.

[kristopher]

24. Please, please, please

Take a couple of courses in economics, at LEAST read a book on the topic.

You wrote: "Presumably, our need to rebuild it is largely because of the fact that, being based on fossil fuels, it's pretty well maxed out. Put another way, its capacity to provide for ongoing energy demands is fully spoken for."

Not true. We are moving from fossil fuels NOW because of CLIMATE CHANGE!!!!!!!!!!!!!!!!!!!!!!!!!!!!

There is no collapse of our energy supply.

[GliderGuider]

25. And you should learn to read what others, and you yourself, write.

Of course "there is no collapse of our energy supply", but of course TiA didn't say there was. As you quoted, he said. "it's pretty well maxed out" -- no collapse, just not growing much any more (especially oil). Nobody, not even the Peak Oilers, say there is a collapse in our energy supply. They say our supply of oil is on a plateau.

So if we want either to continue to grow economically or to combat climate change (or both) we're going to have to transition away from oil to do either. If we want to use oil to facilitate the transition (and right now oil plays a significant role in the alt energy build-out), we may need to reduce our consumption of it for other purposes, because currently we're using pretty much every drop we can pump. If we don't want to use oil to do it, we'd better start making some plans (beyond just one or two solar-powered solar cell plants). Also, if we don't use oil to do it, we should expect to keep burning all the oil we pump and use something else for liquid fuel. Unfortunately the only significant candidates for that right now are ethanol (boo, hiss) or natural gas (oops, another fossil fuel). Having an alt energy infrastructure may reduce our CO2 emissions. Building that infrastructure in the first place may not.