Getting off oil with profits

[Michael Stuart Kelly]

I just saw a video on TED Lectures that blew my mind: We must win the oil endgame by Amory Lovins (19:38).

I am new to Lovins, but I must say that I was more impressed than I thought I would be. Lovins is not only interested in getting off oil, he shows how it can be done efficiently, with increased profits to the automobile manufacturing industry, with the creation of new jobs, and with just about every advantage anyone can think of, and all by 2040. The ONLY people who would suffer (if they are really stupid and do not migrate their business) would be the big oil companies. After the Middle East mess, regardless of the pro-oil rhetoric bandied about (both sincerely and otherwise), I sincerely think that most Americans are tired of the BS. They want some energy source they don't have to constantly go to war to use, and they don't want to fund terrorists and hostile social philosophies in order to drive a car.

The only thing I think that might not be palatable to Objectivists is that Lovins favors the green side of the ecology debate. However, when he presents his profit figures for business and efficiency figures and categories, I suddenly can't see where there is a rational problem anymore. Granted, some of his conclusions are probably debatable on details, but these details are measurable and in a form beyond mere opinion or speculation. His TED talk was much better that the global warming stuff I have seen. That means that for me (for now) the oil issue is partisan only. And as far as partisan goes, I don't like politics.

But just to be sure, I looked up the Wikipedia article: Amory Lovins, and the first thing I did was look for controversy. As of this post, there is no entry for controversy in that article. I tried a Google search for criticism of Lovins. I didn't find anything. I did find a criticism on Amazon for Winning the Oil Endgame (see below for download of the book), but the reviewer, seemingly with some satisfaction, thinks the whole fuel "party is over" for mankind, so he was certainly not defending big oil.

Lovins is cofounder, chairman, and chief scientist of the Rocky Mountain Institute (RMI). On this site there is a lot of information on oil, oil substitutes, benefits and the market (and a truckload of information on other areas). This Institute is providing a free download to the public of a book that presents Lovins's case:

Winning the Oil Endgame (information and free download)

A printed book is also available for purchase on that site (and at Amazon) for 40 bucks. Before anyone claims this is a liberal Michael Moore kind of thing or a conspiracy theory, I want to point out that this study was partially funded by the Pentagon. I have not read it yet, but I just downloaded a copy (all 332 pages). I will write more as I read it. I do know the lecture covered much more than just energy and knocked my socks off (like the part about lightweight hardened plastics that are much stronger and safer than metal for car bodies). I am going to listen to it again. (Warning: Lovins isn't the greatest public speaker on the block.)

I have lived in Brazil and owned ethanol cars for years. So I know how that works from living it. It was great. This is one of the reasons I have been completely deaf to prophesies of doom from those defending big oil. If we ever lost our oil advantages, we would use an alternative energy source post haste and it would be easy to do on the open market. Best of all, all that crap in the Middle East would no longer be so compelling.

I am so pleased I came across Lovins. He not only presents this view, but he does it with scientific and economic facts to back it up. Dayaamm! I am impressed!

Let me say that again. I am impressed!

One fact bothers me, though. This book was made available in 2004. I think it deserves much wider exposure.

But I am no scientist. So despite my enthusiasm, I intend to read much more about all this, both pro and con. What I can say for sure right now is that Amory Lovins definitely belongs on a must-read list for anyone seriously interested in energy.

Michael

[BaalChatzaf]

One fact bothers me, though. This book was made available in 2004. I think it deserves much wider exposure.

But I am no scientist. So despite my enthusiasm, I intend to read much more about all this, both pro and con. What I can say for sure right now is that Amory Lovins definitely belongs on a must-read list for anyone seriously interested in energy.

Michael

There is a good physical reason why hydrocarbons are (and have always been) the preferred energy source. The Energy to Mass ratio for hydrocarbons exceed just about anything else except fission and fusion. Geothermal heat would be a better source if we could only get to it (they can in Iceland, but that is very rare). Methane also yields good energy to mass. Unfortunately the main byproduct of burning methane is CO2. However burning methane is how we cook on our gas appliances. Our best bet for industrial strength energy production is nuclear fission.

See http://en.wikipedia.org/wiki/Energy_density

Pay particular attention to the big break in available energy per mass below nuclear fission. Five orders of magnitude decrease. The only way to go is fission. Controlled nuclear fusion is a pipe dream. The only chance for that to work practically is to mine Helium 3 from the moon. Don't hold your breath.

See http://en.wikipedia.org/wiki/Helium_3

Great stuff if you can get it. Too bad we can't.

Ba'al Chatzaf

Burn Ecologists, not wood.

Edited December 23, 2007 by BaalChatzaf

[Michael Stuart Kelly]

Bob,

Thanks for the standard opinion on hydrocarbons.

Any comment on the material I presented? Like did you even look at it? (The Pentagon sure is.)

Michael

[BaalChatzaf]

Bob,

Thanks for the standard opinion on hydrocarbons.

Any comment on the material I presented? Like did you even look at it? (The Pentagon sure is.)

Michael

The energy/mass ratio is not opinion. It is fact. Our menu of alternative energy sources will be dictated by facts primarily and by politics secondarily. Ultimately science is based on fact, not on mere opinion. Everyone is entitled to his own opinions but no one is entitled to his own facts

Ba'al Chatzaf

Edited December 23, 2007 by BaalChatzaf

[BaalChatzaf]

I saw the TED lecture. Very entertaining. Lovins is a fine expositor. I have down loaded the book (332 page pdf file). I will review it when I have read it.

Lovins has proven once again the triumph of brains over brawn. Bravo to him.

I did disagree with him on a few points. We cannot eliminate oil entirely. We still need oil as a chemical feedstock to make plastics and other lightweight material from which we will build our light new cars. Biomass based on corn is just a subsidy to the farmers. From an energy density point of view it is a looser. I hope they grow switch grass in North Dakota to grow among the wind turbine towers. Switch grass is twice as good a source of bio-Diesel than is corn.

I think the future of energy lies with heat sources wherein we do not have to burn anything (except hydrogen, which produces water as its only byproduct).

I like Lovins' approach. He is saying we have the technology in hand right now, why don't we use it. Indeed. Why don't we use it? Because the EcoPhreaks and the government are in the way. Remove them from the process henceforth.

Ba'al Chatzaf

Edited December 23, 2007 by BaalChatzaf

[Brant Gaede]

How to get hydrogen from water: Take one molecule of water, place it on a block, hit it with a hammer.

--Brant

[BaalChatzaf]

How to get hydrogen from water: Take one molecule of water, place it on a block, hit it with a hammer.

--Brant

Nah! Apply an electric shock to the genitals of the molecule.

Ba'al CHatzaf

[Brant Gaede]

How to get hydrogen from water: Take one molecule of water, place it on a block, hit it with a hammer.

--Brant

Nah! Apply an electric shock to the genitals of the molecule.

Naw, that's how you get water to talk.

--Brant

[Wolf DeVoon]

CHICAGO (Reuters) - Rising U.S. food inflation, now a 25-year high, is reminiscent of the 1970s and will continue for the next five years due to growing world economies, increased food demand and a sharp expansion of corn-based ethanol production, a top food economist said on Friday.

Edited December 23, 2007 by Wolf DeVoon

[Chris Grieb]

One of the items in the latest energy is more money for ethanol. Buy Archer Daniels Midland stock.

Food stamps as part of the budget will be more.

One of the problems when GOP and Dems agree.

[Wolf DeVoon]

The price of wheat doubled recently, because additional cropland was planted with corn for ethanol. Note that Brazil uses sugar, not corn for fuel. I don't know that there's any satifactory near-term solution in the United States. The Europeans have an extensive LPG fuel network for cars and trucks, which Boone Pickens is attempting for fleet vehicles in So California. Hydrogen seems far fetched. Swappable fuel cells have been proposed -- but again there is a huge retail infrastructure gap. As noted previously, crude oil supplies are declining.

It all depends on capital investment. Americans are net dis-savers and most new lending is frozen.

W.

Edited December 23, 2007 by Wolf DeVoon

[Selene]

The price of wheat doubled recently, because additional cropland was planted with corn for ethanol. Note that Brazil uses sugar, not corn for fuel. I don't know that there's any satifactory near-term solution in the United States. The Europeans have an extensive LPG fuel network for cars and trucks, which Boone Pickens is attempting for fleet vehicles in So California. Hydrogen seems far fetched. Swappable fuel cells have been proposed -- but again there is a huge retail infrastructure gap. As noted previously, crude oil supplies are declining.

It all depends on capital investment. Americans are net dis-savers and most new lending is frozen.

W.

"As noted previously, crude oil supplies are declining." Was there a source for this?

[Michael Stuart Kelly]

I saw the TED lecture. Very entertaining. Lovins is a fine expositor. I have down loaded the book (332 page pdf file). I will review it when I have read it.

Lovins has proven once again the triumph of brains over brawn. Bravo to him.

. . .

I like Lovins' approach. He is saying we have the technology in hand right now, why don't we use it.

Bob,

Thank you. Those are exactly what I was trying to convey.

Note that Brazil uses sugar, not corn for fuel. I don't know that there's any satifactory near-term solution in the United States.

Wolf,

You are correct about Brazil and there is a problem with a one-crop source for ethanol (as is starting to become evident with corn): government interference is REAL EASY. So here enters corruption, heavy-handed regulation and the whole shebang. Still, alcohol is a more than viable gasoline replacement.

I have a satisfactory near-term solution for the USA (from having studied this during my translation days). Garbage. Waste recycling can become HUGE BUSINESS for ethanol production (and other gases) if people want it, and at extremely low cost. There is never any lack of garbage in the world. It grows everywhere for free.

Michael

[BaalChatzaf]

One of the items in the latest energy is more money for ethanol. Buy Archer Daniels Midland stock.

Food stamps as part of the budget will be more.

One of the problems when GOP and Dems agree.

Arthur, Daniels, Midland ---- Welfare Queen of the World.

ADM, unlike the mythical Negress who pulls up to the welfare office in her pink Cadillac, is all too real.

Ba'al Chatzaf

[Wolf DeVoon]

"As noted previously, crude oil supplies are declining." Was there a source for this?

Politics > How To Defend America, bottom of page 3, link (scrolldown to chart). Please note that this source is correct about Oil In Place and Recoverable Reserves, however dead wrong about enhanced recovery and new deep discoveries. What Petrobras allegedly 'discovered' at 30,000 ft was gas condensate mixed with water, not oil, press agentry hoopla notwithstanding.

Wolf

Edited December 24, 2007 by Wolf DeVoon

[Michael Stuart Kelly]

Wolf,

Part of all that is Lula pussyfooting around with Chaves. (It has been a while since I have been involved, but backstage is quite entertaining.) Petrobras is Lula's pet government-owned company, so anything good it does gets magnified.

Michael

[Selene]

"As noted previously, crude oil supplies are declining." Was there a source for this?

Politics > How To Defend America, bottom of page 3, link (scrolldown to chart). Please note that this source is correct about Oil In Place and Recoverable Reserves, however dead wrong about enhanced recovery and new deep discoveries. What Petrobras allegedly 'discovered' at 30,000 ft was gas condensate mixed with water, not oil, press agentry hoopla notwithstanding.

Wolf

Interesting. Who is Jim Letourneau?

[Wolf DeVoon]

Interesting. Who is Jim Letourneau?

Don't know much about him, but the chart was correct and it was convenient. I have plenty of data in spreadsheets to back it up. Big story is recovery rate, which puts paid to phony "reserves" that assume every drop is recoverable. Shell had to write down half of their booked reserves, for instance, a couple years ago. Alaskan North Slope has more oil in place, which is a bright spot, ditto offshore California. Zero chance of permits to drill for it.

India, Bangladesh, Burma, Thailand, Malaysia and Vietnam have near shore fields to explore and produce, but there are political-bureaucratic problems and a shortage of capital equipment (esp. jack-up rigs). Above all, not really reported or openly discussed is the moratorium of brains, and I'm not kidding. I've seen incomprehensible incompetence at the majors, plain fraud at independents. Long story in a nutshell: the old guys who knew how to find oil (and wanted to!) are gone. Kids with computers don't understand what they are looking at or looking for subsurface.

Positive outlook: the US has a domestic surplus of natural gas. Ditto Russia (for Europe). We won't freeze to death.

W.

Edited December 24, 2007 by Wolf DeVoon

[Wolf DeVoon]

Wolf,

Part of all that is Lula pussyfooting around with Chaves. (It has been a while since I have been involved, but backstage is quite entertaining.) Petrobras is Lula's pet government-owned company, so anything good it does gets magnified.

Michael

Hugh Chavez killed Pedevesa, fired 15,000 knowledgeable technocrats and replaced them with party hacks. Venezuela output has dropped by half, probably go completely offline in another year or 18 months, a Cuffy Meigs result. Brazil lost it's biggest offshore platform in an explosion, wiping out 6% of production.

It's worse than we think.

W.

Edited December 24, 2007 by Wolf DeVoon

[BaalChatzaf]

Positive outlook: the US has a domestic surplus of natural gas. Ditto Russia (for Europe). We won't freeze to death.

W.

We also have two to five hundred years worth of coal, based on the current crude and inefficient technologies. With technological improvement we will have plenty to burn for into the foreseeable future. As you say, we are not going to freeze. But the air may become a bit cruddy.

Ba'al Chatzaf

[merjet]

We also have two to five hundred years worth of coal, based on the current crude and inefficient technologies. With technological improvement we will have plenty to burn for into the foreseeable future. As you say, we are not going to freeze. But the air may become a bit cruddy.

Ba'al Chatzaf

Here is some news on the coal front. A big chunk of the money will be from tax dollars. I hope we taxpayers get a positive return. Montana is the largest coal-producing state, but Illinois ranks 2nd in reserves. Montana's coal is nearer surface. See here, for example, for more info.

[Dennis Edwall]

Michael,

Thanks for your thoughtful post on Lovins and RMI. I have not read the book, but I did watch the video and read the Executive Summary.

I am a scientist, and sympathetic to worry about the mess we have gotten ourselves into with oil dependency. But I think the solution is not so easy as he would have others believe. If it was, I would think that the major auto makers would be beating a path to his door to hire him to do what he says. If building a cheap, fuel efficient, lightweight, carbon composite car is practical and would sell to the masses, then let him try it. The fastest way to convince people he's right is to start doing it one step at a time, not just theorize.

His economics ought to be much more persuasive now with the price of oil where it is than several years ago when the video was made, and yet, what has changed? Economics tells us that people modify their behavior based on prices, but in this case it seems like adaptation is slow, both for people and corporations. We got ourselves into this problem slowly, and I think it will be a slow process to get ourselves out. Longer than just one or two generations.

He pays lip service to profits, but no doubt wants to use the coercive power of government to help achieve his goals, because he knows that without that, there is no hope. An example is his "feebates."

How do you get people to conserve and be more efficient, to make a smaller carbon footprint? Not as easy as he thinks! One beef I have is the people where I work who are so lazy or are so totally lacking in any kind of concern that they will not even push a button right in front of them to turn off a CRT monitor that they might use for a few minutes every few days, instead just preferring to leave the thing on 24/7. How do you change that kind of mentality? Do you think that that kind of person would go out of his way to operate a more fuel efficient car? It may sound like a little thing, but there are millions of these kind of people, but it all adds up. [And what a contrast to the eco-freak kind of person who cares more about the welfare of the brown, spotted toad fly (or whatever) than his fellow human beings.]

Lovins seems to think (unless I read him wrong) that the developing countries like China will be smarter than us. I don't think so. They will have some advantages of technology that we did not have, but nevertheless, basically they will develop with the same heavy reliance on fossil fuels just like we did. Because that's the cheapest way.

[Dennis Edwall]

In related news, see below for a report on 3 to 4.3 billion barrels of technically recoverable oil here in the continental U.S. Should give us a little more breathing room.

http://www.usgs.gov/newsroom/article.asp?ID=1911

3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate—

Released: 4/10/2008 2:25:36 PM

Contact Information:

U.S. Department of the Interior, U.S. Geological Survey

Office of Communication

119 National Center

Reston, VA 20192 Clarice Nassif Ransom 1-click interview

Phone: 703-648-4299

David Ozman 1-click interview

Phone: 720-244-4543

Reston, VA - North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in an area known as the Bakken Formation.

A U.S. Geological Survey assessment, released April 10, shows a 25-fold increase in the amount of oil that can be recovered compared to the agency's 1995 estimate of 151 million barrels of oil.

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3 to 4.3 Billion Barrels of Oil in North Dakota and Montana

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Technically recoverable oil resources are those producible using currently available technology and industry practices. USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources.

New geologic models applied to the Bakken Formation, advances in drilling and production technologies, and recent oil discoveries have resulted in these substantially larger technically recoverable oil volumes. About 105 million barrels of oil were produced from the Bakken Formation by the end of 2007.

The USGS Bakken study was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocol as required by the Energy Policy and Conservation Act of 2000.

The Bakken Formation estimate is larger than all other current USGS oil assessments of the lower 48 states and is the largest "continuous" oil accumulation ever assessed by the USGS. A "continuous" oil accumulation means that the oil resource is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences. The next largest "continuous" oil accumulation in the U.S. is in the Austin Chalk of Texas and Louisiana, with an undiscovered estimate of 1.0 billions of barrels of technically recoverable oil.

"It is clear that the Bakken formation contains a significant amount of oil - the question is how much of that oil is recoverable using today's technology?" said Senator Byron Dorgan, of North Dakota. "To get an answer to this important question, I requested that the U.S. Geological Survey complete this study, which will provide an up-to-date estimate on the amount of technically recoverable oil resources in the Bakken Shale formation."

The USGS estimate of 3.0 to 4.3 billion barrels of technically recoverable oil has a mean value of 3.65 billion barrels. Scientists conducted detailed studies in stratigraphy and structural geology and the modeling of petroleum geochemistry. They also combined their findings with historical exploration and production analyses to determine the undiscovered, technically recoverable oil estimates.

USGS worked with the North Dakota Geological Survey, a number of petroleum industry companies and independents, universities and other experts to develop a geological understanding of the Bakken Formation. These groups provided critical information and feedback on geological and engineering concepts important to building the geologic and production models used in the assessment.

Five continuous assessment units (AU) were identified and assessed in the Bakken Formation of North Dakota and Montana - the Elm Coulee-Billings Nose AU, the Central Basin-Poplar Dome AU, the Nesson-Little Knife Structural AU, the Eastern Expulsion Threshold AU, and the Northwest Expulsion Threshold AU.

At the time of the assessment, a limited number of wells have produced oil from three of the assessments units in Central Basin-Poplar Dome, Eastern Expulsion Threshold, and Northwest Expulsion Threshold.

The Elm Coulee oil field in Montana, discovered in 2000, has produced about 65 million barrels of the 105 million barrels of oil recovered from the Bakken Formation.

Results of the assessment can be found at http://energy.usgs.gov.

For a podcast interview with scientists about the Bakken Formation, listen to episode 38 of CoreCast at http://www.usgs.gov/corecast/.

USGS provides science for a changing world. For more information, visit www.usgs.gov.

Subscribe to USGS News Releases via our electronic mailing list or RSS feed.

**** www.usgs.gov ****

Links and contacts within this release are valid at the time of publication.

[Wolf DeVoon]

New geologic models applied to the Bakken Formation, advances in drilling and production technologies, and recent oil discoveries have resulted in these substantially larger technically recoverable oil volumes. About 105 million barrels of oil were produced from the Bakken Formation by the end of 2007...

Sorry to quibble. Porosities in the Bakken average about 5%, and permeabilities are very low, averaging 0.04 millidarcies -- much lower than typical oil reservoirs. Current production uses horizontal drilling, extremely expensive, no guarantee it can be replicated throughout the structure. Best estimate of recoverable reserves is 10% of 3 billion = 300 million barrels.

W.

further reading: a competent person

Edited April 22, 2008 by Wolf DeVoon