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Richard Heinberg a-blog

Richard Heinberg and others are now blogging on the re-designed Post Carbon Institute website. Below are Heinberg's three latest posts.
-BA

Another Tax Rebate?

August 1, 2008

Barack Obama is proposing that Americans receive another tax rebate—this one in the amount of $1000 to offset the rising price of gasoline and to counter the accelerating slide of the US economy into the black hole of universal bankruptcy. The extra cash would come from a windfall profits tax on the oil companies.

I’ll happily receive the check, as I’m sure just about everyone else will. But one has to wonder whether there might be better things to do with the money. Given that America is already broke (tens of trillions in liabilities) and will have to spend trillions on new energy and transport infrastructure to survive the effects of declining oil production and exports, shouldn’t we be spending more strategically whatever money we can collectively lay hands on?

There are millions of homeowners in the northern part of the country who will soon be unable to afford to heat their homes. Just helping them to pay their heating bills for one more season is no solution. They need their homes super-insulated, and they need alternative (solar and/or geothermal) heat sources. Given a check for a thousands bucks, a few of them will apply the money toward a long-term fix; most won’t.

Millions of Americans will soon find electricity costing much more—even as their incomes dry up in the worsening recession. A rebate check could keep the lights on, or it could pay other debts. Meanwhile, what is the nation doing to rebuild its decrepit power grid, or develop distributed generation of renewable energy?

Drivers will feel even more pain at the gas pump as oil prices resume their upward march back into record territory over the next few months. A check from Uncle Sam will mask the immediate discomfort, but it won’t keep the effects of high oil prices from rippling through the economy. America needs an integrated, long-range plan for dealing with the impact of Peak Oil—including investments in public transportation, incentives for ride sharing, and development of innovative new car-share programs.

Hello, Washington—is anyone there awake? Are there any adults in the room? We have some problems here that need immediate attention toward a long-range, concerted, strategic effort.


Net Energy: What Everyone Needs to Know

July 31, 2008

Over on www.theoildrum.com today there is fantastic article by Cutler Cleveland called “10 Fundamental Principles of Net Energy Analysis.” Cutler is one of the world’s very few experts on this subject, which I wrote about in THE PARTY’S OVER back in 2003.

It takes energy to get energy, and our net energy profit is what enables us to run human societies. The larger the profit ratio, the more complex a society we can build and manage (that’s a bit of an oversimplification, but it’s not too far off the mark). Fossil fuels gave us energy that was cheap and abundant—it took us only a trivial amount of effort in exploration and drilling to obtain an enormous energy return on our energy investment.

The peaking of world oil production is an easily understandable problem. Perhaps less readily grasped are the consequences of society losing ground in the net energy race. Alternatives to oil generally have a lower energy return on energy invested (EROEI). For oil itself, the energy profit from exploration is falling fast, and secondary and tertiary oil recovery methods also often entail a lower EROEI.

In agrarian society, most of the population had to be involved in food (i.e., energy) production in order to support a minority of specialists in management, violence, and psychological conditioning (i.e., kings, soldiers, and priests). With fossil fuels, we could afford to expand the middle class: full-time division of labor grew to encompass tens of thousands of unique job descriptions.

As net energy declines, society must simplify itself again. More of us will need to grow food.

The moral of the story is inescapable: if you want to survive in the new economy of the 21st century, develop a range of practical skills; learn to use, make, and repair tools of various kinds and degrees of complexity; and hone your gardening ability.


Oil Price Falls! Peak Oil a Non-Problem!

July 30, 2008

Two weeks ago, oil was soaring toward $150 a barrel; now it’s nosediving to $120 and may even see $100 again. Peak Oil? Humbug! Problem solved. The market works after all.

Not so fast.

I can see the headline of the Wall Street Journal a year or two from now: “Oil Price Falls from $300 to $275, Disproving peak Oil Theory.”

For years oil depletion analysts have been painting a consistent scenario that goes as follows. Sometime around 2010 (give or take two or three years), growing decline rates in oil production from existing oilfields will overwhelm new production streams coming online. The price of oil will rise dramatically. However, when it does it will cripple the trucking industry, the airline industry, tourism, agriculture—essentially, the whole economy. A serious recession will ensue, which will reduce demand for oil (among other things). Oil’s price will temporarily drop in response. Then, as declines in oil production worsen, the price will resume its upward march—but again in a
sawtooth or whipsaw fashion.

This scenario is hinted at in the second sentence of the Hirsch Report, which says, “As peaking is approached, liquid fuel prices and price volatility will increase dramatically….”

Volatility is in some ways an even worse problem than high prices, because sustained high oil prices make long-term investments in alternative energy sources and public transportation look sensible—whereas periodically collapsing oil prices discourage such investments.

Now, as the US economy is reeling, partly as a result of recent high oil costs (there’s also a bit of bother with banks, mortgages, and credit), there is the likelihood that urgent concerns on the part of families and policy makers to actually do something about dangerous oil dependency may wane if the downturn in gas pump prices continues. And of course politicians in Washington are doing their part to dampen the flames by insisting that all we need to do is rein in speculators or drill in protected areas and the good times of cheap gasoline can roll on forever.

What everyone needs to remember is this: the fundamental cause of the recent oil price spike has not gone away. Global demand for oil is still increasing; supply isn’t. The current brief respite from the hammering effect of new oil price records being set almost daily is not an occasion to go back to sleep, but an opportunity to consolidate efforts toward energy conservation and transition.

The days of skyrocketing oil prices will be back soon enough. Will we be ready?

What do you think? Leave a comment below.

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