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An urban legend to comfort America: alternative energy will save us

Fabius Maximus
This is post #5 in a series examining “urban legends” about energy that comfort Americans. Here we discuss three comforting myths about alternative energy sources. These are excuses for not doing the hard work of gathering information, analysis, planning, and executing programs necessary to prepare for the multi-decade transition through peak oil to the next era (whatever that will be).

… All of these [existing energy technologies] have great potential for use today, but improvements will likely be incremental. They will take many years to rollout on a large scale to provide a significant fraction of our global energy supply. While valuable tools to help us adapt to peak oil, none are panaceas.

… Most likely peak oil will be “fought” with the tools we have today, a “come as you are” party. While the future will see radically new ways to generate and use energy, peak oil might have come and become irrelevant (due to our adaptation) before these achieve large-scale development.

Timeline of peak oil

There are 3 important things to know about forecasts for the arrival of peak oil.

1. Publicly available data is inadequate to reliably forecast it.
2. Forecasts range from 2005 (T. Boone Pickens and Kenneth Deffeyes) to after 2030 (Cambridge Energy Research Associates-CERA, and the Energy Information Agency-EIA)
3. Forecasts are being moved in, not out (International Energy Agency-IEA from 20+ to aprox 5 years; Shell from 20+ to aprox 10 years, S. Husseini from 2015 to now).

Our adaptation to peak oil will be rapid, from a historical perspective.
(15 September 2008)

Peak Oil, or Just Peak Oil Prices?

Keith Johnson, Environmental Capital, Wall Street Journal
Do falling oil prices mean “peak oil” has been banished for now?

This summer, as oil prices set record after record, many in the “peak oil” camp were thumping their chests. The massive price spikes in the space of a few months underscored their warnings that global oil supplies weren’t keeping up with global oil demand, and that things could only get worse.

Plenty of analysts figured $200 oil was inevitable; at the very least, $100 would be the “new norm.” The era of permanently high and rising oil prices were going to spark an energy revolution in the U.S. and the rest of the industrialized world. Oil prices rose so much so fast, Congress all but started replaying tapes of Jimmy Carter’s cardigan speech to get in the “energy independence” mood again. SUVs became instant highway pariahs. Tire pressure came to dominate part of the presidential debate nationwide. Californians decided offshore oil drilling wasn’t so bad, after all.

So what happened?
(16 September 2008)

Were We Wrong To Fret About Peak Oil?

Bradford Plumer, The Vine, The New Republic
Remember when $200-per-barrel oil looked inevitable? Or, at the very least, a $100-per-barrel plateau looked certain? Plenty of oil analysts thought that was just over the horizon (yes, I was also guilty of this). But now crude futures are hovering down around $90, despite the succession of brutal hurricanes in the Gulf of Mexico—mainly due to fears that the crisis on Wall Street will knock more wind out of the U.S. economy and further dampen demand. So does that mean all the frantic concern about “peak oil” and all the apocalyptic blather about the end of mass air travel and so on and so forth was all totally baseless and wrong?

I’m not sure about that. But maybe it’s worth trying to clarify what peak oil would actually entail. Here’s Richard Heinberg of the Post Carbon Institute: …

The fact that prices came back down rather quickly doesn’t seem like a good reason to get complacent. On the other hand, if we’re in a world of wildly volatile—rather than permanently high—oil prices, that also makes it much harder for alternative energy sources to get a foothold in the market without government support.
(16 September 2008)
“The Vine” is the New Republic’s environment and energy blog.

High Costs Could Prompt Premature End to Oil Production

Charles Cresson Wood, Renewable Energy World
Consider what’s now happening at the major mining companies as a harbinger of what we can expect to see with oil production companies. According to a recent article appearing in The Wall Street Journal (link below), a number of mining companies are curtailing certain of their operations, in some cases shutting them down completely. The explanation, which at first blush seems strange, especially given the run up in commodity prices over the last few years, has to do with operating and investment costs. The cost of energy to run mining trucks and other equipment has skyrocketed. In addition, certain materials needed to make mining buildings and related infrastructure, materials like steel, have also become considerably more expensive.

Mining nickel, lead, copper and other metals from the ground actually has many similarities to pumping oil out of the ground. While the processes are technologically different, in both cases we are talking about discovering and extracting a commodity that is in limited supply. In both cases, the supply of these commodities is in the process of being exhausted, and as a result, these commodities are increasingly more difficult to find, and increasingly more expensive to extract from the earth.
(15 September 2008)

Study: Health care begins to feel economic impact

David Ellison, Houston Chronicle
Higher oil prices, a weak U.S. dollar and other factors are increasing the cost of raw materials used for health care products, according to a recent study.

However, the trade association representing medical product distributors, which produced the report, and officials with two health-care facilities in Houston said so far the price increases haven’t trickled down to patient costs.

… Rising oil prices affect the cost of goods made from petroleum-based materials such as plastics, says the report called Navigating the Perfect Storm: Understanding the Steep Rise in Supply Chain Commodity Costs.

That cost also impacts the price of natural latex rubber, which is affected by the demand for man-made rubber. Also, the production price for steel — used to make surgical instruments, needles and other items — jumped 26.5 percent since May 2005. The price for bulk paper and pulp — used for patient and surgical gowns and masks — also has increased.

Van Ostrand said the report doesn’t examine the patients’ cost.

“If you were to see these trends continue, there’s going to be price pressure,” Van Ostrand said.
(15 September 2008)
Dan Bednarz and others have been warning for years of rising healthcare costs due to oil. -BA