Peak Oil: Meet Increasing Substitution of Gas for Oil in Plastics

As crude oil is increasingly replaced by substitutes in transportation, plastics, heating, etc. the demand for oil will continue to shrink. With supplies and reserves of oil growing every year, a downward pressure on prices should continue. Here is more on substituting gas for oil in plastics production:

Leading the charge is Nova Chemicals, a Calgary-based company that has secured a crucial lifeline for its sprawling Ontario chemical complex through access to the prolific Marcellus natural gas fields in the United States.

...Nova – which traces its roots to Alberta’s gas gathering system – has signed deals with Sunoco Pipeline LP and two Marcellus shale gas producers to ship ethane – which is derived from natural gas liquids – to its ethylene plant in Corunna, near Sarnia, Ont., from southwest Pennsylvania. By doing so, the company will replace its ethane feedstock derived from high-priced crude oil from Western Canada with a source produced from low-cost natural gas in the United States.

...For Nova and other North American petrochemical operations, the shale gas boom has proven a godsend, coming at a time when the industry was encountering increasing difficulty competing with major chemical operators in the Middle East and Asia.

...Dow Chemical Co. has announced plans to spend $4-billion (U.S.) to construct a “cracker” – which processes ethane into ethylene – on the Gulf Coast, re-open an idled one, and build two propylene plants. Royal Dutch Shell PLC is considering building a plant in economically depressed Appalachia, close to the Marcellus fields. Germany’s Bayer AG is in talks with several companies to construct new ethane crackers in West Virginia, while Chevron Phillips Chemical and Dutch-based LyondellBasell have said they are considering expanding operations in the U.S. _Globe&Mail

As more of the industrial infrastructure becomes tied to the vast new unconventional gas resources, the entire economic picture of these industries will change. This will throw most predictions of oil demand off, sometimes significantly.

Substitution for oil is still in the early stages. As gas-to-liquids, coal-to-liquids, kerogens-to-liquids, biomass to liquids, and methane hydrates to liquids begin to pick up steam, the price of oil will experience significant down-pressure due to loss of demand.

The only thing that could retard this process at this time is an all-out production blitz by any oil producers with excess capacity. That would include Saudi Arabia, Russia, Iraq, and perhaps Venezuela and Brazil. By forcing down oil prices before alternative substitutes could gain traction, OPEC and other oil dictatorships might well slow down this overall process. But given the societal dependency on oil which underlies these dictatorships, such a preemptive strategic move is unlikely.

Coal to Liquids Offers Vast New Supplies of Liquid Fuels

Options for Coal to Liquids
Engineers are developing a wide range of options for producing advanced liquid fuels out of coal, gas, biomass, and other carbonaceous materials. If politicians and faux environmentalists will get out of the way, industry can supply society with ample supplies of liquid fuels for generations to come. Here is more on the coal liquefaction approach to coal to liquids (CTL):

In indirect liquefaction, coal is first gasified to form syngas, which is then converted to liquids by means of a catalyst and Fischer Tropsch (FT) chemistry. By contrast, direct liquefaction uses pressure, heat and a catalyst to crack the coal to make liquids. In a 2009 presentation to NETL, John Winslow and Ed Schmetz of Leonardo Technologies called direct liquefaction the “sledge hammer approach”, as opposed to the “engineered” approach of indirect liquefaction.

They also noted that direct liquefaction efficiency may be higher than indirect technology and that direct liquefaction may have a better carbon footprint than indirect technology.

By incorporating Accelergy’s TerraSync terrestrial sequestration system—a carbon capture and recycle process—the integrated project will achieve a thermal efficiency in excess of 60% and achieve a 100% reduction in CO2 emissions, according to Accelergy.

In the TerraSync process, produced CO2 passes through a photobioreactor that is growing concentrated algae. The algae is derived from locally available cyanobacteria, harvested from soils adjacent to the facility. Once the growth cycle is complete, the algae is blended with proprietary additives to produce a bio-fertilizer which is then distributed on crops, continuing to capture CO2 from the atmosphere as it grows.

...Currently the world’s largest producer and consumer of coal, China’s output for coal-to-liquids is expected to jump from 1.5 million tons in 2010 to 30 million tons in 2020, according to a recent report on the global CTL market from Market Avenue.

Accelergy says that its Direct Liquefaction process offers China a solution that produces less carbon dioxide than traditional petroleum refining and has a significantly higher overall efficiency than conventional CTL technologies. _GCC

The world's vast supplies of coal, natural gas, methane hydrates, kerogens, and bitumens -- together with current tight supplies of liquid hydrocarbon fuels -- suggests the need for better methods of converting unconventional hydrocarbons into advanced liquid fuels. With the addition of a virtually limitless and ongoing supply of biomass which can be converted to advanced liquid fuels, the planet is unlikely to face doom from liquid fuels shortages any time soon. Unless, of course, our political overlords decide otherwise. If so, a revolution may be in order.

Accelergy's CBTL Approach

Compare the sliver of hydrocarbon energy that has been consumed by human societies, with the vast resources which remain. Human societies need to get rid of the dieoff.org green lefty-Luddites who are pushing them toward energy starvation, and unleash the energy which will let them advance beyond primitive combustion energies to the more advanced energies which drive the universe.

Shale Oil Boom Comes to More US Plains States

The ongoing US shale oil boom is helping to reverse the decline in US oil production, which began sometime around 1970. Although the US Obama administration has hampered oil production offshore, in the Arctic, and in the Rocky Mountain regions, Obama's energy starvation policies have been caught flat-footed by the rapid growth spurt in shale oils across the lower 48.

Some of the latest areas in the US to experience the boom are the high plains areas overlying the Niobrara shale.

Shale oil is not to be confused with another potential resource, usually called "oil shale," which is found in huge volume in the Green River Formation of western Colorado, Utah, and Wyoming. That is actually a crude oil precursor known as kerogen, which would require major heating and processing to be turned into usable fuel. Its development is seen as far off in the future.

But the shale oil now being produced through fracking is conventional crude oil, produced using unconventional means.

Roaring early success has led to outsize projections that shale oil, also known as "tight oil," that could boost U.S. production significantly over the coming decades. "There's potential for it to be a game changer," says Hill Vaden, an energy analyst at the consulting firm Wood Mackenzie.

But he cautions, "It's still in its early days, and there are a lot of questions."

(Related: "Methane on Tap: Study Links Pollution to Gas Drilling" and "New Brunswick Seeks Natural Gas, and a Safer Way")

Enthusiasm is spurred by production in another shale formation, the Bakken, which lies under North Dakota and Montana and stretches into Canada. Oil production in the U.S. portion of the Bakken went from 3,000 barrels a day in 2005 to about 400,000 now. The Bakken contains about 3.6 billion barrels of recoverable oil, making it the largest U.S. oil play since Prudhoe Bay in Alaska was identified in the 1960s, according to U.S. Energy Information Administration estimates.

Last year, U.S. oil production reached its highest level since 2004, about 5.5 million barrels per day, with North Dakota the state posting the largest increase in oil output.

North America's oil resources are "proving to be much larger than previously thought," thanks in part to shale oil, said a report this month from the U.S. National Petroleum Council (NPC), a federally chartered, privately funded government advisory board. It predicted that what it called "tight oil" production would grow to between 2 million and 3 million barrels per day, "depending on access to new plays and continued technology development."

At that rate, the new shale oil would not be enough to wean the U.S. from its foreign oil dependence, with the nation's current consumption habit of about 19 million barrels per day of petroleum products. But it could significantly bolster domestic supply. _NatGeo

This explosion of new jobs across the US plains is spurring yet another in a long series of migrations of workers, as workmen follow the jobs wherever they crop up. This has been a characteristic of the US since its beginning -- the quasi migratory nature of much of its workforce.

This shale boom of oil & gas is one of the few bright spots in the Obama economy. So it seems more than a bit paradoxical that Obama's EPA and Department of the Interior continue working in attempts to find an excuse to shut it down -- or at least slow it to a crawl, as happened with offshore Gulf of Mexico oil exploration due to Obama's de facto offshore moratorium.

A growing number of US voters will be watching the incumbent US administration, to see how far it is willing to go to shut down US energy production, and further destroy US jobs and economic prospects. The more voters who catch on to Obama's anti-energy and anti-private sector prejudices and bigotry, the more dismal the US President's chances of re-election will become.

More Information on Recent Bioenergy Advances

Schematic of Renmatrix Plantrose Process

Renmatix (formerly Sriya Innovations), which exited stealth mode earlier this year, unveiled its Plantrose process, a supercritical hydrolysis process to produce sugars from biomass with less expense. At Renmatix’s demonstration facility in Kennesaw, Georgia, the company has already scaled its process to convert three dry tons of woody biomass to sugars daily.

Access to non-food derived low-cost industrial sugars, the foundation of the emerging bio-industrial economy, can enable a significant shift from petroleum-based fuels and chemicals to cost-effective bio-based alternatives. There are 3 general approaches to breaking down biomass for clean technology applications in the market place today: enzymatic hydrolysis, acid hydrolysis, and gasification. Renmatix’ is a new, fourth approach. _GCC

Brian Westenhaus takes a closer look at the new D2 bio-substitute from Berkeley's Joint Bioenergy Institute. The group is taking a microbial synthesis approach, which is aiming for high energy efficiencies of production. Expect this development to require a few more years to mature and scale to industrial proportions. This effort is likely to eventually utilise the low cost cellulosic sugars of the type being developed by Renmatrix, above.

Meanwhile, bio-butanol producer Gevo is working on producing a high quality bio-jet fuel for the US Air Force.

Gevo uses synthetic biology and metabolic engineering to develop biocatalysts (fermentation organisms) to make only isobutanol via fermentation at high concentrations—i.e., without the typical expression of co-products. The initial generation biocatalyst operates on fermentable sugars from grain crops, sugar cane and sugar beets. Gevo has already produced renewable gasoline and jet fuel that meet or exceed all ASTM specifications. The company is now developing a new generation of biocatalysts that can use the mixed sugars from biomass to produce cellulosic isobutanol. _GCC

Gevo plans to produce a wide variety of fuels and chemicals, using its basic isobutanol product as a starting point.

East SF Bay company Amyris is teaming with tyre maker Michelin to develop a process to produce bio-isoprene in quantity. Amyris is affiliated with Berkeley's JBEI (mentioned at top) and is at the forefront of the production of high value chemicals to substitute for petroleum feedstocks in many areas.

An interesting article from Biofuels Digest that attempts to explain the evolution and increasing sophistication of approaches to biofuels.

Energy from biomass has the potential to displace most of the current uses for petroleum, over time. This is a counter-intuitive assertion, but it is well supported by the trends in technology and by the potential resource base of biomass growth -- including the growth of micro-algae, macro-algae, halophytes, conventional biomass crops, biomass waste, forms of biomass currently being developed, and other forms of biomass.

The mindset of energy and resource scarcity is a self-limiting mindset which is not supported by developments in the real world.

PO Doomers Confronted With a Contradiction at The Oil Drum

Historical Price Trends for Energy and Energy Services in UK
An amusing situation has cropped up at the peak oil doomer site, The Oil Drum: An economic analysis of the long term trends in energy and energy service prices managed to slip through the censors and get published. The piece is a bit long, and links to some important supporting information which is much longer yet, but the ideas are much deeper than what the doomers are accustomed to. As a result, the comments reflect a certain amount of incredulity and indignation, that they -- the enlightened -- should be forced to undergo the undignified cognitive dissonance of confronting a sophisticated argument which refutes their enlightened beliefs. Quite interesting and more than a bit amusing, overall.

The key idea is that consumers pay for "energy services," rather than for specific forms of energy. Heating, lighting, transportation, power, etc. are among the many forms of energy services for which consumers are willing to pay. Some useful inferrences can be drawn from looking at the overall energy future in this manner.

....research shows that it is not the price of energy input (depletion) which matters for the economy, but the cost of energy input per unit of output (depletion + technology). Something which seems obvious but is often forgotten in the energy discussion. Also at The Oil Drum we often erroneously talk about effects of the oil price on the economy, and not the cost of an oil or energy service delivered to the economy. The latter not being affected just by energy prices, but by all inputs and the efficiency and cost.

Energy prices have risen considerably since the beginning of the twenty-first century. It is valuable to place these price rises within a historical context. Many peaks preceded the price hike of 2008, and there will, no doubt, be many more. However, if future trends follow past ones, then it is tempting to conclude that the long-run trend in individual and average energy prices will be generally stable or downwards. _TOD

The piece looks at likely future energy and energy services price trends based upon known energy resources. Links to downloads for PDF documents supporting the claims in the piece are included:

http://reep.oxfordjournals.org/content/5/2

http://manowar.ma.ohost.de/chapter5.pdf

New Sodium Ion Battery May Be Best Battery for Utility Grid

Whitacre's sodium-ion cells are similar in some ways to lithium-ion cells--the type used in portable electronics and in some electric vehicles. In both types of cell, ions are shuttled between the battery's positive and negative electrodes during charging and discharging, with an electrolyte serving as the medium for moving those ions. But because sodium is orders of magnitude more abundant than lithium, it is cheaper to use. To make the cells cheaper still, Whitacre plans to operate them at lower voltages, so that water-based electrolytes can be used instead of organic electrolytes. This should further decrease manufacturing costs, since water-based electrolytes are easier to work with.

The change to water-based electrolytes could also make it possible to eliminate much of the supporting material needed in conventional lithium-ion cells, again reducing costs. This is because increasing the ionic conductivity makes it possible to use thicker electrodes with fewer layers of separating and current-collecting materials inside the cell.

"In principle, a sodium-ion system can be low-cost, and with aqueous electrolytes, it could be really low-cost," says Jeff Dahn, a professor of physics and chemistry at Dalhousie University in Nova Scotia, Canada. _TechnologyReview

Jay Whitacre, a professor of Materials Science and Engineering at Carnegie Mellon University, is perfecting a sodium ion battery meant for use at utility-scale. It will contain no toxic materials, cost 1/3 as much as lithium ion cells per kwh stored, and will last longer through more charge-discharge cycles than conventional cells.

Aquion's battery uses an activated carbon anode and a sodium- and manganese-based cathode. A water-based electrolyte carries sodium ions between the two electrodes while charging and discharging. The principle is similar to lithium-ion, but sodium ions are more abundant and hence cheaper to use. Compared to solvent-based electrolytes, the aqueous electrolyte is also easier to work with and cheaper. Even better, the materials are nontoxic and the battery is 100 percent recyclable, Whitacre says.

Grid-scale trials of the technology are next. Aquion has started shipping pre-production battery prototypes to off-grid solar power companies. Next month, a 1,000-volt module will go to KEMA, a Dutch energy consulting and testing outfit, which has a facility outside Philadelphia.

...John Miller, an electrochemical capacitor expert and president of consulting firm JME in Shaker Heights, Ohio, says Aquion's battery could be the cheapest of the various battery technologies vying to provide grid storage. He compares it to today's most common grid storage technology, pumped hydro, which accounts for 95 percent of utility-scale energy storage. Pumped hydro involves moving water to an elevation when electricity demand is low, and releasing that water through turbines during peak periods. It is, however, limited by geology and space, and pumped hydro systems take many years and millions of dollars to build. Utilities are now starting to look at batteries because they can be delivered in months and, in principle, can be sited anywhere.

"Lead-acid is even too expensive," Miller says. "Aquion's technology is getting to the range of pumped hydro in cost, which is two cents per kilowatt-hour [over the system's lifetime]. They're unique. I would say it's very promising for grid storage."

So far, no available technology meets all grid energy storage requirements, says Haresh Kamath, a program manager for energy storage at the Electric Power Research Institute. "Each technology has a different sweet spot" in terms of cost, safety, reliability, lifespan, and efficiency, he says. _TechnologyReview

Here is more information about the new battery from Aquion:

Safe

The core Aquion technology contains zero toxic or otherwise hazardous materials. This facilitates battery installation and manufacturing facilities by preventing delays associated with hazardous material zoning issues. The technology was designed such that harvesting and recycling both the packaging and the active materials is easy. The batteries are also much more efficient than traditional batteries at both a cell and systems level; the end result is an energy storage system that makes better use of the energy it stores.

Reliable

The centerpiece of the technology is an innovative hybrid energy storage chemistry. Over the last two years, the chemistry has been rigorously proven in a laboratory environment and certified by independent third party testing. The electrochemical couple that has emerged from this process is one that combines a high capacity carbon anode with a sodium intercalation cathode capable of thousands of complete discharge cycles over extended periods of time. The materials couple can deliver over 30 Wh/l as packaged. The device functions in a broad range of ambient temperatures and can be repeatedly cycled with little to no loss in delivered capacity. Rapid cycle testing indicates at least 5000 cycles with no fade in delivered capacity, while ongoing calendar life testing shows stable performance for over a year of continuous deep cycle use.

Affordable

To minimize cost, only the cheapest raw materials were considered in the basic R&D phase. As a result, sodium interactive materials and water based electrolytes are used instead of the traditional lithium-based materials and organic solvents. We are also vertically integrated, with manufacturing that incorporates in-house electrode active materials production. Processes borrowed from the food and pharmaceutical industries are then used to create freestanding electrodes that are then packaged into large units. _Aquion

It is likely to take years more to perfect the technology for industrial and utility scale use and production. But this technology would seem to be the most promising battery technology seen recently, besides flow cell batteries -- which will take up to 10 more years to perfect.

In the meantime, the cryogenic storage technology being developed in the UK is felt to be the most promising non-battery utility storage technology.

Flibe Thorium Energy Goes to the UK

Flibe Energy is Kirk Sorensen's Thorium Energy enterprise. Kirk Thorensen recently traveled to the UK for the launch of the Weinberg Foundation, an NGO founded to promote the development of thorium and molten fueled nuclear reactors. Kirk was able to meet with a number of individuals in the UK who will be key to educating both the public and policy makers in the importance of advanced fission reactors for the future.

Flibe Energy in the UK Part I

Flibe Energy in the UK Part II, Parliament, House of Lords

Flibe Energy in the UK Part III British Science Festival

Biofuel Briefs

Renmatrix announced an improved process for deriving cheap industrial sugars from cellulosic biomass. Cheap cellulosic sugars will be key to converting to biomass as feedstock for fuels, plastics, chemicals, etc. rather than using petroleum.
h/t Brian Wang

The US DOE Joint Bioenergy Institute at Berkeley has announced a new biofuel substitute for number 2 diesel. The D2 substitute is called bisabolene, and is produced from both E. Coli bacteria and S. cerevisiae yeast.
h/t Brian Wang

UK scientists are working to improve photosynthesis efficiency for better food, biomass, and fuels production.

Houston based Terrabon Inc. is voted "most transformative technology" by readers of Biofuels Technology, an online site. Terrabon's technology is expected to transform both the biofuels and the water treatment industries.

British Columbia is becoming a world-class provider of biomass energy

More on Renmatrix' recently unveiled industrial-scale cellulosic sugar process:

Renmatix’s PlantroseTM process is the first to break down cellulose at industrial scale through supercritical hydrolysis, which utilizes water at elevated temperatures and pressures to quickly solubilize cellulose. The supercritical state of matter has long been utilized in industrial processes including coffee decaffeination and pharmaceutical applications.

Before the arrival of the Plantrose process, supercritical water had never successfully yielded sugar from biomass at significant scale. The process breaks down a wide range of non-food biomass in seconds, uses no significant consumables and produces much of its own process energy. Current methods of breaking down biomass require expensive enzymes or harsh chemicals, and can take up to three days to yield sugars. With its water-based approach, Renmatix is able to provide cellulosic sugar affordably and on large-scale.

“Sugar has game-changing potential for the bio-based fuels and chemicals market,” said John Doerr, a partner at Kleiner Perkins Caufield & Byers and Renmatix board member. “The Renmatix breakthrough enables access to affordable non-food based sugar on an industrial scale.” _Renmatrix

Let's just hope the Obama administration stays away from advanced biofuels research. We need bio-substitutes for petroleum too badly to allow it to receive the famous kiss of death from the current US regime.

Big Wind and Big Solar: Big Disappointments to Taxpayers

Powerlineblog_via_DirectorBlue
The best way of comparing energy subsidies is per unit of energy produced. The US would appear to be getting its money's worth for all forms of energy except big wind and big solar. US taxpayers are getting shafted up the kazoo when it comes to so-called "green energy" projects. Not only is "green energy" unreliable and intermittent -- a hazard for power grids -- but it is exorbitantly expensive, and too often fails in the marketplace. Obama's green jobs plan has been a disaster for everyone except Obama himself, and his cronies.

Crony capitalism–in its full-blown version, national socialism–is always and everywhere a failure. You cannot create wealth by subsidizing the inefficient production of energy–a fundamental rule of economics that the Obama administration, sadly, has yet to learn. _Powerlineblog

It would be best for government to get out of the act of subverting the energy marketplace so as to stop wasting taxpayer money, stop energy starvation, and stop destroying the economy overall.

Wind Energy Facts

Why wind and solar cannot run an advanced economy

Why Obama's green energy policies are so idiotic

H/T DirectorBlue

Energy Renaissance as Supplies Grow and Demand Drops

“[Peak Oil] was once supposed to arrive by Thanksgiving 2005,” the newspaper [WSJ] said. “Then the ‘unbridgeable supply-demand gap' was expected ‘after 2007.' Then it was to arrive in 2011.”


The peak prediction is now sometime between this year and 2020. By next week that could change to 2025. Dire predictions about an oil shortage following an elusive peak have consistently been wrong. Between 2007 and 2009, 1.6 barrels of oil were added to the reserves column for every barrel of oil actually produced.


Oil is being produced in great quantities today in places where only a trickle was flowing a few years ago. Locating tomorrow's oil boomtown is as hard as accurately predicting when the production summit will be reached.

_Newsok

At the same time that the US has increased production it has reduced demand. Peak oil demand in the US was reached in 2005. “We will not see that peak reached again,” said Burkhard, who further explained, “The great recession had a negative impact on oil consumption, but it is not connected to the fall in demand.” That has been brought about by higher fuel economy standards and carbon regulations that were imposed under President Bush in 2007.

...“The decline in demand is a global trend,” said Burkhard. _EnergyRenaissance

Demand for oil is reducing for a number of reasons, including improved efficiency, a growing use of substitutions, and a prolonged depression in the global economy due to uncontrolled government debt and a declining demographic in most advanced economic nations.

But supply is still growing -- thanks to oil prices that have been held high by OPEC policies, energy starvation policies in the advanced world, and a speculative premium based upon many factors -- including corruption in global markets.

Here are more reasons for the growing supplies:

...the demise of oil was greatly exaggerated, even in a state where oil production peaked years ago. Someone forgot to tell energy firms that oil was no longer noteworthy — or profitable.

Oil sands, linked to the controversial Keystone XL pipeline project that would go through Cushing, make Canada the world's second-largest storehouse for oil in reserve. Producing the bitumen crude is made possible by technology and made profitable by higher oil prices.

SandRidge Energy, a five-year-old Oklahoma City firm with its roots in west Texas natural gas wells, told its employees recently that “Oil is our future.” Larger state energy firms known primarily as gas producers have also shifted more resources to oil. That's where the money is.

The Wall Street Journal noted Sept. 17 that the summit point for oil has been quite elastic. “It was once supposed to arrive by Thanksgiving 2005,” the newspaper said. “Then the ‘unbridgeable supply-demand gap' was expected ‘after 2007.' Then it was to arrive in 2011.”

The peak prediction is now sometime between this year and 2020. By next week that could change to 2025. Dire predictions about an oil shortage following an elusive peak have consistently been wrong. Between 2007 and 2009, 1.6 barrels of oil were added to the reserves column for every barrel of oil actually produced.

Oil is being produced in great quantities today in places where only a trickle was flowing a few years ago. Locating tomorrow's oil boomtown is as hard as accurately predicting when the production summit will be reached. _newsok

Searching for the True Shape of Peak Oil

The most simplistic graphic description of peak oil is shown above. The curve moves smoothly upward to the peak, then drops quickly to negligible levels. This is how unsophisticated peak oil doomers typically see the "peak oil" phenomenon.

A more sophisticated observor of oil and liquid fuels production is likely to be aware of the economic "recruitment" of new oil supplies and substitute fuels, as the cheaper, low-hanging fruit is plucked and prices trend upward. Notice the unsophisticated peak oil curve in dotted orange, labeled "Peak oil--Campbell."

But that is not to say that all peak oilers and peak oil consultants are as unsophisticated as Hubbert, Campbell, or Simmons. A new breed of more economically informed peak oil consultant is beginning to describe "peak oil" as more of a cyclical phenomenon, driven by the interaction between oil prices and economic growth.

Peak Oil is, in fact, a complex but largely an economically driven phenomenon that is caused because the point is reached when: The cost of incremental supply exceeds the price economies can pay without destroying growth at a given point in time. While hard to definitively prove, there is considerable circumstantial evidence that there is an oil price economies cannot afford without severe negative impacts.

The corollary is that if oil prices fall back to and sustain levels that do not inhibit growth, then economic growth will resume, with both recoveries and downturns lagging oil price changes by 1-6 months. _ChrisSkrebowski

You can easily see in the above definition of "peak oil," the driving forces of a co-cyclical pattern involving oil prices and economic growth.

But for peak oil to mean anything at all, it must incorporate an element of doom, catastrophe, and collapse. The above graphic reveals a cyclic economic pattern with attenuation, damping to very low levels of economic activity. This graphic might best depict the new, more sophisticated economic / geologic synthesis of peak oil doom consultants, as described by Skrebowski.

Contrast the "peak oil plateau" graphic that is second from the top, with the damped sine wave depiction of peak oil collapse in the lowest graphic. In the case of the "plateau," there would seem to be time for advanced societies to move to safe, clean, advanced nuclear sources for power and industrial heat. In the case of the damped sine pattern, it is not clear that societies could recover from the downward spiral.

A thinking person might perceive that different nations possess different resources -- both natural resources and human resources. Logically, the response curves to "peak oil" for different nations and societies would not be identical to each other. Rather, the response to "peak oil" -- no matter how it is defined -- is likely to vary widely between different economies, depending upon the available resources and the competence of national leadership.

A careful reading of the Skrebowski piece linked above, will reveal that government policies will have a great deal to do with how a society weathers high energy costs. If governments pursue policies of energy starvation -- such as the Obama government and certain European governments are doing -- economic harship within the society will multiply.

More:

Two sides to peak oil
An interesting historical look at the evolution of viewpoints toward oil resources and peak oil.

How an excessively gloomy view of peak oil might distort markets and cause unnecessary disruption and hardship

Primus' Biomass-to-Gasoline Process to Cost $1.95/Gallon

More information on Primus
GCC article about Primus' plans

Primus’s process is based on a proprietary variant of the ExxonMobil Methanol-to-Gasoline process, simplified to produce standard gasoline without need for separation or further treatment, the company says. The Primus process consists of three main steps:

Gasification of biomass (feedstock flexible) to produce a syngas;

CO2 separation and scrubbing of the syngas; and

catalytic liquid fuel synthesis using a four-stage catalytic system (the MTG variant).

Primus says that its gasoline is cost-competitive with fossil fuels without subsidies, utilizing carbon-efficient and high fuel-yielding non-agricultural biomass that does not compete with foodstocks.

A February 2011 report from the US Department of Energy’s National Renewable Energy Laboratory (NREL) conclude that gasoline produced via the methanol-to-gasoline (MTG) route (earlier post) using syngas from a 2,000 dry metric tonne/day (2,205 US ton/day) biomass-fed facility could have a plant gate price (PGP) of $1.95/gallon US ($0.52/liter). _GCC

The biomass is pelletised, then gasified. The syngas is converted to methanol, and the methanol is converted directly to gasoline, via Exxon Mobil's highly efficient MTG process -- as modified by Primus. More on MTG:

In the MTG process, dimethylether (DME), the dehydrated derivative of methanol, is reacted over a ZSM-5 zeolite catalyst, on which the chain growth of molecules is sterically hindered, thus allowing only production of gasoline and lighter material. The gasoline product from the MTG process has more than 51 compounds, similar to straight-run gasoline in a petroleum refinery.

This mixture is then separated using a process similar to that used in a gasoline refinery. The design utilized in the NREL model utilizes five distillation columns to separate the remaining gas, LPG, light gasoline, and heavy gasoline. The remaining gas is sent to the fuel combustor. The light gasoline continues without further treatment. The heavy gasoline could proceed through a durene isomerizer in order to eliminate the presence of the 1,2,4,5-tetramethylbenzenes by converting them to 1,2,3,5-tetramethylbenzenes. This stream would then be merged with the light gasoline. The two product streams are LPG and gasoline. _GCC

This is an entirely renewable biomass to gasoline process which is likely to impact the fossil fuels markets in good time. Perhaps the main obstacle to a large scale adoption of biomass to liquid fuels, is the current very cheap price of natural gas.

Taken from a previous article at Al Fin Potpourri

Domestic Fuel Cells Make More Sense than Big Wind & Solar

Imagine if each home were able to supply its own electric power, hot water, and space heat from one simple appliance -- the domestic fuel cell? Such a development would go further toward "disaster-proofing" your home than virtually any other single change you could make. Whether you chose to go off the grid, or to remain grid-intertied, a home fuel cell along with a backup fuel supply, could keep your home warm and well-lit during even extended power outages.

More on domestic fuel cells:

According to The Japan Times, demand for the fuel cell units has grown since the March 11th earthquake and tsunami, which severely impacted the supply of power in Japan.

Toho Gas sold 220 units in 2009, the first year on the market, and a further 515 last year.

Now, having already delivered 283 systems, the firm expects to sell 900 units this year, according to the newspaper.

"Since the March 11th disasters, more people have been revisiting the way they use energy at home and paying attention to the combination of electricity and gas for their use," Hironari Tachi, senior manager for marketing, told the news provider.

According to its makers, a household with an Ene-Farm system can save 50,000 yen (£425) a year in energy bills, and reduce CO2 emissions by 1.3 tonnes annually.

"The co-generation system offers the superb functionality of fuel cells in a compact and easy to use form, and can even provide you with hot water from the heat it generates producing power," they explain. _PlatinumToday

This unconventional fuel cell approach uses your home wastewater to generate power and fuel

One reason why power utilities have not objected more to having big wind and big solar crammed down their throats, is that even though big wind and big solar are very difficult to deal with technically, at least the utilities will still control end-user access to power. With the rise of home-scale generation of power, the big utilities will begin to lose a lot of support.

More:

Fuel cells generate electricity and heat as a by product. The advantages over stirling CHP are no moving parts, less maintenance, and quieter operation. The surplus electricity can be delivered back to the grid.[2]

As an example, a PEMFC fuel cell based micro-CHP has an electrical efficiency of 37% LHV and 33% HHV and a heat recovery efficiency of 52% LHV and 47% HHV with a service life of 40,000 hours or 4000 start/stop cycles which is equal to 10 year use.

United States Department of Energy (DOE) Technical Targets: 1–10 kW residential combined heat and power fuel cells operating on natural gas.[3] _Wikipedia

As long as utilities can pass the exorbitant costs of unreliable green fairy dust power schemes -- such as big wind and big solar -- along to their customers, they will play along with incompetent and ideologically bound governmental bureaucracies.

But you, as a free citizen, can do what you want.

Does Peak Oil Really Matter?

The theory that the world will run out of oil has been around at least since the 1880s. The prophets of oil dystopia have been proven to be wrong every single time for essentially the same reason that their Malthusian intellectual forbearers were wrong: The resourcefulness of human beings in a civilized context tends to expand the frontiers of what was previously thought possible.
The theory of Peak Oil essentially rests on the assumption that “this time will be different.” It rests on the assumption that technology will not enable the expansion of recoverable reserves and production (supply). And it rests on the assumption that technology will not enable efficiencies in consumption (demand). Peak oil also requires the assumption that technology will not enable the development of competitive substitutes.

These are very tall assumptions. For this reason, any investment thesis premised on the theory of Peak Oil is necessarily highly speculative _SeekingAlpha

Peak oil, as typically practised, is more of a religion than a scientific theory. It is relatively harmless as such, unless persons invest large sums of their own or other people's money, based upon the idea that oil prices will monotonically increase. In the great commodities crash of 2008, a lot of true believers lost money -- for themselves and for a lot of other people.

In 2008, even the most elementary cyclical analysis indicated that oil and oil stocks were a screaming sell. However, blinded by peak oil ideology, traders and investors continued to drive the price of oil and oil stocks higher long after it was clear that the bottom was falling out from under the global economy.

In 2008, oil and oil stocks were like internet stocks in 1999 – they could only go up. Skeptics were told they did not understand. “This time it’s different,” they said, “this is the new economy.” All such talk tends to end badly, does it not? _SA

And yet the true believers cannot escape their inner conviction that something will force energy prices upward into the range of unsustainability. For this cycle of true belief, the "cause" of the next run of "monotonic price increases" will be the exponential increase of demand from the BRICs -- especially China (and India).

China’s economy has been sustaining high growth rates in the past few years based on an unsustainable expansion of private sector and local government debt. The rapid expansion of debt-led investment growth has led to mal-investments in many areas. There are clear signs that these mal-investments have already begun to create problems for entrepreneurs, local governments and the banks that financed them.

China’s economy is highly export-dependent. A slowdown in the export sector of the economy could trigger an unwinding of various accumulated mal investments in the domestic economy. In theory, this could lead to a prototypical recession. _SA

It is unclear how long China's CCP can hold its house of cards together, and prevent a breakup of the current empire. China's empires have always tended to rise and fall in cycles, and the modern "communist empire" is not immune from historical and economic forces.

Certainly China's (and all the BRIC's) export markets are having a difficult time economically. This bodes ill for the future of these so-called "emerging markets."

All signs point clearly to a severe slowdown in global economic growth. Despite this, the price of oil is incongruously hanging around the $85 level.

This can only be explained by the fact that Peak Oil theory is again serving as a distraction in oil markets just as it did in 2008. However, just as in 2008, all the speculation about shortages ten years from now will not matter if global demand declines and the market becomes oversupplied in the present. _SA

Peak oil believers appear to be very slow learners. Not that they are mentally retarded. Rather, their faith is strong, and will not be contradicted by heretical ideas. They will burn the books and crucify the heretics, rather than to re-examine their own shaky assumptions.

Reality will have the last say, to the chagrine of the true believers.

Supplying the Needs of Big Energy: Alberta Black Shale Project

The size of this property is mind-boggling. To put it into perspective, the Alberta Black Shale Project is almost the size of Rhode Island.


It's so big, in fact, that it can supply America's nuclear industry, military technologies, electric car market, and renewable energy sectors forever! _EnergyandCapital

Big energy has many requirements in order to prosper. One of the most important needs of big energy, is metals and mineral ores. Energy projects require vast amounts of steel and other metals such as nickel, copper, silver, molybdenum, vandium, etc. Nuclear energy will consume huge quantities of uranium and thorium. And a wide range of energy projects will require rare earth minerals. And now, just in time, we are hearing about a vast mineral deposit in Alberta that could produce energy-vital minerals for hundreds of years.

The Alberta Black Shale Project is a massive polymetallic formation (1,050 square miles) that contains molybdenum, nickel, uranium, vanadium, zinc, copper, cobalt, silver, gold, and an array of rare earths including lithium. It’s a huge and valuable formation.

And it has the potential to be a complete game changer — so much so that the Canadian media is calling it “the mine of the future,” saying the “mineral wealth is virtually limitless.”

And who can blame them?

Recent results from a winter drill program suggest 1.4 to 1.5 billion pounds of polymetallic mineralization consisting of 1.1 billion pounds of rare earth elements worth an estimated $206 billion. _EnergyandCapital

There should be little doubt about the vastness of Earth's mineral and energy complement. The true limitations to the grand human venture are the limits to human innovation, resourcefulness, and wisdom.

Unfortunately, the current governments of the most advanced nations of Earth are embroiled in petty arguments of political correctness, and corrupt power grabbing. Very few are concerned about increasing human cognitive abilities, innovativeness, inventiveness, and vision. All human societies will suffer for this short-sightedness.

Titanium, Uranium, Diamonds, rare earths, and a wide range of industrial ores -- plus vast coal deposts -- are sitting in Alberta's rock.

If dieoff.orgiast greens thought think the oil sands projects are an insult to mother Gaia, what will they think of the Alberta Black Shale Project? Unfortunately for these faux environmentalists, their credibility has been self-decimated by their opportunistic flogging of the pseudoscience of carbon hysteria. The backlash from that grand crusade of "crying wolf" is apt to be painful to them, ultimately.

The Ultimate Post-Apocalyptic Energy Source?

There are times when it is best to lower one's expectations. The post-apocalyptic setting might well be such a time. As the incompetent and corrupt governments of the world muddle their way toward global economic collapse, the thoughts of a wise and prudent observer might tend toward a post-apocalyptic energy source. An energy source which does not depend upon armies of engineers, technologists, and craftsmen. A vast source of energy which does not require an exorbitantly expensive high tech infrastructure to realise its potential. Where would one look for such a civ-saving source of power, when the chips are down?

Brian Westenhaus may have hit upon just the thing: The wastewater to hydrogen route, using exoelectrogenic bacteria as your electron source.

“This system could produce hydrogen anyplace that there is wastewater near seawater. It uses no grid electricity and is completely carbon neutral. It is an inexhaustible source of energy.”

Logan with postdoctoral fellow Younggy Kim use microbial electrolysis cells that produce hydrogen for the basis of the development whereas previously to produce hydrogen, the fuel cells required some electrical input.

The study results were published in the Sept. 19 issue of the Proceedings of the National Academy of Sciences. The team concludes the abstract by saying, “These results show that pure hydrogen gas can efficiently be produced from virtually limitless supplies of seawater and river water and biodegradable organic matter.” _BrianWestenhaus

PNAS Abstract

Interesting. All you need is a few simple bacterial electrolysis cells, salt water from the sea, and wastewater. The details might need a bit of ironing out, and the amount of hydrogen available might restrict the ambitions of your nascent new post-apocalyptic civilisation, but the idea has some promise.

More from gizmag:

...researchers at Pennsylvania State University have developed a way to produce hydrogen that uses no grid electricity and is carbon neutral and could be used anyplace that there is wastewater near sea water.

The researchers' work revolves around microbial electrolysis cells (MECs) - a technology related to microbial fuel cells (MFCs), which produce an electric current from the microbial decomposition of organic compounds. MECs partially reverse this process to generate hydrogen (or methane) from organic material but they require the some electrical input to do so.

Instead of relying on the grid to provide the electricity required for their MECs, Bruce E. Logan, Kappe Professor of Environmental Engineering, and postdoctoral fellow Younggy Kim, turned to reverse-electrodialysis (RED). _Gizmag

EIA Projects 53% Growth Global Energy Consumption 2008-2035

All Images via USEIAThe USEIA projects a significant growth in world energy consumption between the year 2008 and the year 2035 (via GCC). The growth will come from a wide range of sources -- particularly coal, unconventional gas, and bitumens. The chart above reveals the expected growth in natural gas production in China, Canada, and the US, over the projected time period.

The chart above compares the expected energy consumption by fuel. All forms of fuel consumption are expected to rise.

According to EIA projections, growth in biofuel production is expected to keep pace with growth in oil sands production.

Unconventionals slowly make up a larger proportion of total fuels production, according to the EIA.

Nuclear energy is expected to recover from the current attitude of anti-nuclear green hysteria.

Summary of EIA report from Green Car Congress:

China and India lead the growth in world demand for energy in the future. The economies of China and India were among those least affected by the worldwide recession. They continue to lead world economic growth and energy demand growth in the Reference case. In 2008, China and India combined accounted for 21% of total world energy consumption. With strong economic growth in both countries over the projection period, their combined energy use more than doubles by 2035, when they account for 31% of world energy use in the IEO2011 Reference case. In 2035, China’s energy demand is 68% higher than US energy demand.

Renewable energy is projected to be the fastest growing source of primary energy over the next 25 years, but fossil fuels remain the dominant source of energy. Renewable energy consumption increases by 2.8% per year and the renewable share of total energy use increases from 10% in 2008 to 15% in 2035 in the Reference case. Fossil fuels, however, continue to supply much of the energy used worldwide throughout the projection, and still account for 78% of world energy use in 2035.

While the Reference case projections reflect current laws and policies as of the start of 2011, past experience suggests that renewable energy deployment is often significantly affected by policy changes.


Natural gas has the fastest growth rate among the fossil fuels over the 2008 to 2035 projection period. World natural gas consumption increases 1.6% per year, from 111 trillion cubic feet in 2008 to 169 trillion cubic feet in 2035. Unconventional natural gas (tight gas, shale gas, and coalbed methane) supplies increase substantially in the IEO2011 Reference case—especially from the United States, but also from Canada and China.

Other report highlights include:

From 2008 to 2035, total world energy consumption rises by an average annual 1.6% in the IEO2011 Reference case. Strong economic growth among the non-OECD (Organization for Economic Cooperation and Development) nations drives the increase. Non-OECD energy use increases by 2.3 percent per year; in the OECD countries energy use grows by only 0.6 percent per year.

Petroleum and other liquid fuels remain the largest energy source worldwide through 2035, though projected higher oil prices erode their share of total energy use from 34 percent in 2008 to 29 percent in 2035.

Projected petroleum consumption and prices are very sensitive to both supply and demand conditions. Higher economic growth in developing countries coupled with reduced supply from key exporting countries result in a High Oil Price case in which real oil prices exceed $169 per barrel by 2020 and approach $200 per barrel by 2035.

Conversely, lower economic growth in developing countries coupled with increased supplies from key exporting countries result in a Low Oil Price case in which real oil prices fall to about $55 per barrel in 2015 and then gradually decline to $50 per barrel after 2030 where they remain through 2035.

World coal consumption increases from 139 quadrillion Btu in 2008 to 209 quadrillion Btu in 2035, at an average annual rate of 1.5% in the IEO2011 Reference case. In the absence of policies or legislation that would limit the growth of coal use, China and, to a lesser extent, India and the other nations of non-OECD Asia consume coal in place of more expensive fuels. China alone accounts for 76% of the projected net increase in world coal use, and India and the rest of non-OECD Asia account for another 19% of the increase.

Electricity is the world’s fastest-growing form of end-use energy consumption in the Reference case, as it has been for the past several decades. Net electricity generation worldwide rises by 2.3% per year on average from 2008 to 2035. Renewables are the fastest growing source of new electricity generation, increasing by 3.0% and outpacing the average annual increases for natural gas (2.6%), nuclear power (2.4%), and coal (1.9%). _GCC

Al Fin energy analysts suggest that the EIA is significantly understating the impact of global political instability on energy production. It is also unlikely that the dominant energy starvation agendas of the governments of the US, Japan, and much of Europe will dissipate quickly enough to allow a rapid rebound in nuclear reactor construction.

The toxic impact of the dieoff global green movement on the human future is very strong and persistent. It will be difficult for more rational humans to shake off the suffocating effects of irrational and hysterical greens -- and their proxies inside governments.

The twin problems of debt and demographic decline will likewise throw a retarding effect on efforts to keep up with projected demand.

Peak manpower in the energy industry will be another obstacle to be confronted in the near future. This problem is being driven by both a widespread demographic decline and a societal decay resulting in a dumbing down of cultures and populations. It will be a difficult problem to overcome, and may only be solved with the development of advanced machine cognition and robotics.

Needless to say, energy starvationists such as Obama and their coteries will have to be ejected soon, if these projections are likely to have much credibility.

Sasol Ltd. Takes Its Fischer Tropsch GTL Technology On the Road

Sasol Ltd is based in South Africa, but is looking at building gas-to-liquid plants in Uzbekistan, Western Canada, and Louisiana. Its plans for a GTL plant in China are currently on hold pending official government approval of the project. In the meantime, Sasol is working to expand well beyond its traditional African territories.

The GTL plants being planned for Uzbekistan, Canada, and the US would cost roughly $5 billion with a capacity of almost 50,000 bpd.

South Africa’s Sasol, which has a deal with Calgary’s Talisman Energy Inc. to look at building a gas-to-liquids plant in B.C., said Monday it had signed an agreement with partners including Malaysia’s Petronas to develop a GTL project in Uzbekistan.

...Sasol also said last week it would conduct a feasibility study on a potential GTL plant in the United States which could produce transport fuels — mainly diesel — and other products.

Sparked by the Louisiana announcement, FirstEnergy Capital Corp. came out with a note Monday that gave the Talisman project a definitive thumbs-up. It figures each project will result in 96,000-barrels-per-day facilities to be built in two phases.

“At current commodity prices we see the economics of a GTL facility in Western Canada as being extremely attractive, with a calculated IRR (internal rate of return) of 17 per cent and a value net to Talisman approaching $1.50 US per share for a single phase 48,000 bpd project,” said the missive endorsed by analyst Michael Dunn.

The report noted each phase of the GTL projects would cost between $4 billion and $5 billion to build. _CalgaryHerald

Sasol –– a pioneer in the area of synthetic petroleum alternatives –– has continuously focused on the commercialization of its GTL technology by constructing plants in gas-rich regions of the world that will strengthen its position in the industry in the coming years.

With gas prices remaining at depressed levels and thereby diverging significantly from high oil prices, Sasol is looking to utilize the spread by using its GTL technology that is expected to be more profitable than the company’s traditional business of producing motor fuels from coal. _DailyMarkets

The petrochemicals group is investing heavily in growth, especially by expanding its shale gas portfolio. It recently bought two shale gas interests in Canada to boost its gas portfolio and secure feedstock.

Sasol and Canada's Talisman Energy are working on a feasibility study into a 48,000 barrels per day gas-to-liquids (GTL) plant that would eventually use the gas produced from their Farrell Creek assets.

Sasol said it had completed a feasibility study for a GTL plant in Uzbekistan and will decide in the near term whether to proceed to an engineering study on the project, depending on "certain commercial conditions".

...The company said due to a delay in China's approval for a proposed coal-to-liquids (CTL) plant the company had relocated staff and planned funding to other projects. _Reuters

As noted above, Sasols Fischer Tropsch GTL process yields a pure diesel product. The main industrial-scale alternative to F-T is Exxon Mobil's methanol-to-gasoline (MTG) process, which is said to be more efficient than the F-T process.

Full scale plants for either F-T or MTG would cost in the billions of dollars, limiting the number of companies able to participate in the potentially lucrative GTL play on current price differentials between oil and natural gas.

The third player for GTL is the microchannel Oxford Catalyst / Velocys technology, offering a scalable approach to F-T GTL, for smaller plays and smaller players.

As noted before, Sasol Ltd.'s technology can put the company in the middle of the international shale gas bonanza, as long as oil prices remain high. It is not a bad idea for the company to develop profitable operations outside of Africa, given the instability and corruption of most governments there.

70th Nuclear Blog Carnival @ ANS Nuclear Cafe + LENR News

The Carnival of Nuclear Energy blogs has celebrated its 70th edition, hosted by ANS Nuclear Cafe. (H/T Brian Wang)

Here are some excerpts:

Atomic Insights

Rod Adams at Atomic Insights has coined a new word to replace “renewables”; he is now calling them “unreliables.” In this post he describes how unreliables cannot be called upon when needed or where needed to provide enough energy per unit time to enhance national economic or military power.

He also describes his life long love of the great outdoors and includes a copy of a comment he posted to a discussion with people interested in the Sierra Club. As a nature lover and self-professed “hard headed BHL” (bleeding heart liberal), Rod cannot understand why a club formed to protect wilderness areas and natural vistas would support industrial scale wind and solar energy development. He cannot imagine any logical reason that the club has decided to maintain its long time antinuclear stance even to the point of supporting the use of deep wells and horizontal drilling combined with hydraulic fracturing to extract natural gas from shale.

4 Factor Consulting

Margaret looks at four anti nuclear groups, identifying the origins of their anti-nuclear stances. It seems that groups moved from anti-nuclear weapons to anti nuclear power after the test ban treaty in the 1970′s. It appears that originally it was more of a survival strategy for the leadership than anything else. Sierra Club was pro-nuclear for a time, recognizing that nuclear power generated electricity with less impact on the land than any other option, but changed their stance in the early 1980′s.

Atomic Power Review

In this opinion piece, Will Davis tries to get at the root of why we’re still buying into the myth of solar energy as an even competitor to nuclear energy; does the problem go all the way back to the “Energy Crisis?” Probably.

ANS Nuclear Cafe

Cornelius Milmoe “NRC terminates Yucca Mountain proceeding” — Despite the ASLB and court rulings, the NRC has suspended all agency action on the Yucca Mountain application and refused to release the Safety Evaluation Report (SER) prepared by NRC staff. It seems likely the court of appeals will conclude the NRC is guilty of unreasonable delay…

Brian Wang reports on some recent testing of Andrea Rossi's updtated LENR technology.

The new test was performed at Ny Teknik's initiative. One of the motives was the discussion that has been going on during the summer regarding energy calculations for the E-cat, including the issues with steam quality.

As in previous tests, water was pumped into the E-cat during operation, and evaporated into steam. No measurements of steam quality were made but we found that:

- The temperature inside the E-cat, which we assume is the steam temperature, reached over 130 degrees, while the pressure was probably about one atmosphere.

- The steam was invisible at the outlet indicating high steam quality.

- Directly at the outlet we observed water flow corresponding to about half of the input water flow. This water may have been condensed steam, but we considered it to be non-evaporated water. _...More on the test @ NYTeknik

It appears that nuclear power will survive the current anti-nuclear hysteria from the less than pristine environmental factions. It also seems that Andrea Rossi is continuing to develop his LENR reactor, and is not likely to give up his quest any time soon.

Peak Oil: One Man's Nightmare, Now a Mass Delusion

Hubbert was very pessimistic about future supply. He warned that the era of oil would be only a brief blip in mankind's history. In 1978, he predicted that children born in 1965 would see all of the world's oil used up in their lifetimes. Humanity, he said, was about to embark upon "a period of non-growth." _WSJ

Marion King Hubbert was a technocrat among technocrats. Technocrats such as Hubbert believed that their rightful place was at the top, in control of all society. In their own minds, they were the only ones who could manage the finite, steady-state world of no-growth which they imagined inside their own minds.

...Technocracy promoted the idea that democracy was a sham and that scientists and engineers should take overthe reins of government and impose rationality on the economy. "I had a boxseat at the Depression," Hubbert later said. "We had manpower and raw materials. Yet we shut the country down."

Technocracy envisioned a no-growth society and the elimination of the price system, to be replaced by the wise administration of the Technocrats. Hubbert believed that a "pecuniary" system, guided by the "hieroglyphics" of economists, was the road to ruin. _WSJ

It is not difficult to perceive the quasi-religious nature of technocratic ideas. And although the underlying ideas have morphed into a different shape, under different names, the religious undertones of technocracy have survived and intensified into the present.

"Hubbert was imaginative and innovative," recalled Peter Rose, who was Hubbert's boss at the U.S. Geological Survey. But he had "no concept of technological change, economics or how new resource plays evolve. It was a very static view of the world." Hubbert also assumed that there could be an accurate estimate of ultimately recoverable resources, when in fact it is a constantly moving target. _WSJ

It is as if Hubbert the technocrat could not see inside himself to the emotional and intuitive core of his own nature, because this tender core was so intently armoured and papered over with unwittingly arbitrary and self-serving mathematical and technological ideas.

Hubbert did not understand the intensely economic and political nature of oil reserves and oil production -- and so neither do his followers who persist in reliving Hubbert's nightmare, night after night.

Estimates for the total global stock of oil keep growing. The world has produced about one trillion barrels of oil since the start of the industry in the 19th century. Currently, it is thought that there are at least five trillion barrels of petroleum resources in the ground, of which 1.4 trillion are deemed technically and economically accessible enough to count as reserves (proved and probable).

Based on current and prospective plans, it appears that the world's production capacity for "oil and related liquids" (in industry jargon) should grow from about 92 million barrels per day in 2010 to over 110 million by 2030. That is an increase of about 20%.

But this is no done deal. There are many "buts," having to do with what happens above ground. The policies of governments around the world—especially concerning taxes and access to resources—have a major impact on whether and when oil is discovered and developed.

Wars and civil wars, social turmoil and political upheavals, regional conflict, corruption and crime, mismanagement of resources—all of these can affect not only current production but also investment and future prospects. Environmental and climate policies can alter the timing and scale of development, as can geopolitics and politics within oil-producing countries.

In short, in a world whose $65 trillion economy depends greatly on oil, energy security will be a lasting and critical preoccupation.

Meeting future demand will require innovation, investment and the development of more challenging resources. A major reason for continuing growth in petroleum supplies is that oil previously regarded as inaccessible or uneconomical is now part of the mix, such as the "presalt" resources off the coast of Brazil, the vast oil sands of Canada, and the oil locked in shale and other rocks in the U.S.

In 2003, the Bakken formation in North Dakota was producing a mere 10,000 barrels a day. Today, it is over 400,000 barrels, and North Dakota has become the fourth-largest oil-producing state in the country. Such "tight" oil could add as much as two million barrels a day to U.S. oil production after 2020—something that would not have been in any forecast five years ago.

Overall U.S. oil production has increased more than 10% since 2008. Net oil imports reached a high point of 60% in 2005, but today, thanks to increased production and greater energy efficiency (plus the use of ethanol), imports are down to 47%. _WSJ

If there is a profit to be made somehow, via trade, entrepreneurs and their hired scientists and engineers will move heaven and earth to do what is necessary to reap the profit. But since the fire that drives entrepreneurs is so utterly alien to the hearts of doomers and pessimists, they cannot understand how the future can turn out differently than their own visions and nightmares of doom.

Wars, political and environmental prohibitions, and financial cycles of collapse can disrupt supply and demand for the energy industry -- and certainly will in the future. Yet the quantity of hydrocarbon in the Earth is far larger than humans can understand, because they cannot see into every nook and cranny in the Earth's crust -- nor can they comprehend the dynamic forces occurring within the Earth's mantle.

Peak oil doom is a nightmare born of ignorance and lack of imagination and insight. It did not began with Hubbert, although Hubbert gave it depth, heft, and breadth. It has grown into a mass delusion that has generated its own clashing dogmas, its own cyclic economies. Think of it as a diverting sideshow in the larger theatre of life.

Is There Anything Synthetic Biology Can't Do?

Synthetic biology involves the creation of new forms of life that have never existed before. These new lifeforms will be designed to produce valuable products such as fuels, medicines, high value chemicals, food products for animals and humans, and more.

Biologists have built two artificial chromosome arms and put them to work in a living yeast. They plan to replace the entire yeast genome over the next five years and then evolve new strains to order.

"Nothing like this has ever been done before," says Jef Boeke of the Johns Hopkins University School of Medicine in Baltimore, Maryland, who is leading the research. As well as designing and building the new genome from scratch, his team has come up with a way to systematically scramble it to produce new strains.

The artificial yeast are similar to Craig Venter's synthetic cells, announced last year. Venter replaced the entire genome of a bacterium with a synthetic genome – but the task is far harder in yeast, because it is a more complex organism and has a bigger genome. _NewScientist

Science is very early into the project of synthetic biological organisms, but no matter how slowly the progress, the information learned will be invaluable.

Yeast has 16 chromosomes, all of which have been sequenced. Boeke started small, replacing the right arm of chromosome 9 and part of the left arm of chromosome 6. He began by designing the new sequences on a computer, using the known sequence as his starting point. He stripped from this virtual DNA all the meaningless "junk" DNA, which does not code for proteins. Then he added markers called loxPsym at the ends of all non-essential genes – those that could be changed or deleted without killing the yeast. In the real world, these markers can be attacked by an enzyme called Cre, which swaps genes between the marker sites. Finally, he created these new sequences in the lab using the chemical building blocks of DNA, and inserted them into a living yeast in place of its natural chromosome arms.
Shuffling genes

"This is another remarkable example of how synthetic biology can be used to rewrite chromosome sequences at a sizeable scale," says Daniel Gibson of the J. Craig Venter Institute in Rockville, Maryland. He says it could help us understand the rules governing genome structure.

For instance, the reshuffling technique can test how different arrangements of genes affect the yeast. Boeke has already done this by shuffling the genes on the artificial chromosomes using the Cre enzyme.

"You can take a yeast gene and insert it somewhere else in the genome, and you tend to get a healthy yeast," Boeke says. That suggests a reshuffle wouldn't matter, but different yeasts consistently use the same order. "Maybe there are hidden rules of genome structure that we can distil," Boeke says.
Make your own yeast

Boeke now intends to repeat this re-engineering process with the other chromosomes in yeast. Once the entire genome is laced with loxPsym sites, Boeke plans to use Cre to make wholesale changes. Because the method targets only non-essential genes, and does not interfere with their internal structure, it should mostly produce healthy yeast. _NS

Very ambitious indeed. And it is just the beginning.

Proterro is a biotech company that aims to produce high volumes of low-cost sugars from water, CO2, sunlight, and basic nutrients -- using their own custom designed micro-organism.

Proterro’s patent-pending biosynthetic process combines an engineered photosynthetic microorganism with an advanced high-density, modular solid-phase bioreactor to provide a fermentation-ready feedstock, called Protose. Produced by combining only water, carbon dioxide, sunlight and nutrients in the biosynthetic process, Protose is projected to cost less than such feedstocks as sugar cane and cellulosics, and can be used to produce a variety of commercial scale fuels and chemicals through standard industrial fermentation methods. _BiofuelsDigest_via_BrianWestenhaus

Proterro's plan is ingenious, but time is a critical factor. If the company cannot produce high volumes of its sugar reliably and economically within the next 5 years, it will probably be crowded out of the market by the other companies highlighted in the article linked above.

Biomass can be grown over 80% of the Earth's surface -- land or ocean -- and does not require the care that special microbial bioreactors require. Dozens of companies are devising better ways to produce cheap sugars from biomass, and at least a few of them are likely to come up with profitable approaches within the next 5 years. Once cheap biomass sugars are available, the cost of making biofuels and other renewable chemicals will suddenly become less of an obstacle.

The Price of Oil Has Gone Down Since the Year 1950, in Gold

...in 1950, it took 2.5 grams of gold to buy a barrel of oil. Today, 2 grams of gold will buy you a barrel of oil. Thus, if you take the loss of the dollar’s purchasing power out of the equation, you’ll find that the price of oil has remained very flat.

_PorterStansberry
As the US dollar declines in value, the price of oil appears to rise. But if you compare the price of oil to currencies which hold their value fairly well -- such as gold or the Swiss Franc -- compared to the cost in US dollars, oil prices in gold or francs hold more steady over the decades.

FinancialTrendForecast
Oil prices are volatile even in US dollars. This volatility is a reflection of the many geopolitical and economic factors which influence oil pricing. But over time one can see that the price of oil in gold tends to return to the same range.

TER: But the cost to extract the oil is increasing. We don’t have “easy oil” anymore.

PS: No, that’s not true. Just as with any other economic activity, the more experience we have in oil extraction, the more efficient we become at it. In fact, the real price of oil would go up considerably if the true costs of extraction were going up as well, and as I explained, the real price of oil has been flat.

Let’s be very clear—you can’t measure these things in dollars because the dollar has lost 90% of its purchasing power since 1971. It’s lost 50% of its purchasing power since 1990. Measuring the oil industry in dollars gives you a very warped view. Pick a sound currency such as Swiss francs or gold grams and look at the oil business through that lens.

I believe that what’s happened with the U.S. dollar over the last three years has resulted in an enormous mis-pricing of oil. Speculators are rushing into oil and fleeing the dollar, which is producing an unsustainable demand for oil. Because this demand is investment-based and not economy-based, it is stimulating production that exceeds real demand by a wide margin.

...PS: What’s happening onshore in the U.S. with oil and gas production is amazing. We’re setting new records for hydrocarbon production in the U.S. this year. Obviously, you can’t have record levels of hydrocarbon production if you’re supposedly running out of oil, so serious proponents of peak oil have their heads in the sand. _PorterStansberry

North American oil production has begun to climb again -- despite Obama's de facto offshore and Arctic drilling embargo. When the US breaks free from its current suicidal spell of energy starvation, its oil production will also break free from any semblance to a Hubbert Peak production curve.

As you can see from the table below, Saudi Arabia and Russia are the world's largest oil producers, followed by the US in 3rd place. Remember that the US has been explored about 1,000 times more thoroughly than Saudi Arabia, and much more thoroughly than Russia's wild Siberia as well. Oil production technology used in the US is top grade, and maintenance operations are superior to those in either of the top 2 producers. In other words, if the US has a lot of room to grow, think how much more production Saudi Arabia and Russia could be cranking out if their governments opened the fields up to world class producers who were motivated to truly pump some oil. Something to think about.

Here is some data on recent oil production by nation from Wikipedia:

#	Producing Nation	103bbl/d (2006)	103bbl/d (2007)	103bbl/d (2008)	103bbl/d (2009)	Present Share
1	Saudi Arabia (OPEC)	10,665	10,234	10,782	9,760	11.8%
2	Russia 1	9,677	9,876	9,789	9,934	12.0%
3	United States 1	8,331	8,481	8,514	9,141	11.1%
4	Iran (OPEC)	4,148	4,043	4,174	4,177	5.1%
5	China	3,845	3,901	3,973	3,996	4.8%
6	Canada 2	3,288	3,358	3,350	3,294	4.0%
7	Mexico 1	3,707	3,501	3,185	3,001	3.6%
8	United Arab Emirates (OPEC)	2,945	2,948	3,046	2,795	3.4%
9	Kuwait (OPEC)	2,675	2,613	2,742	2,496	3.0%
10	Venezuela (OPEC) 1	2,803	2,667	2,643	2,471	3.0%
11	Norway 1	2,786	2,565	2,466	2,350	2.8%
12	Brazil	2,166	2,279	2,401	2,577	3.1%
13	Iraq (OPEC) 3	2,008	2,094	2,385	2,400	2.9%
14	Algeria (OPEC)	2,122	2,173	2,179	2,126	2.6%
15	Nigeria (OPEC)	2,443	2,352	2,169	2,211	2.7%
16	Angola (OPEC)	1,435	1,769	2,014	1,948	2.4%
17	Libya (OPEC)	1,809	1,845	1,875	1,789	2.2%
18	United Kingdom	1,689	1,690	1,584	1,422	1.7%
19	Kazakhstan	1,388	1,445	1,429	1,540	1.9%
20	Qatar (OPEC)	1,141	1,136	1,207	1,213	1.5%