Most people are aware to some extent how dependent the world is on cheap and abundant energy. But I wonder how many have thought this issue through in its broadest terms. While it's clear that overall economic activity could not have blossomed the way it has without this vital ingredient, energy-induced prosperity has had other self-reinforcing benefits. This includes reducing inefficiencies stemming from social tensions and lessening the need to divert substantial resources into civil and national defense. Similarly, booming growth has also been a driver for the expansion of democracy around the world.
One obvious question, then, is what will happen socially and politically as energy is costlier and harder to come by? In "Charley Maxwell On Problems With Peak Oil," Randall Parker of the FuturePundit blog highlights some less-than-optimistic views on the subject from a long-time energy maven.
Energy industry analyst Charley Maxwell wonders whether democracy will fare well after oil production goes into permanent decline and economies around the world contract year after year.
I think it’d be fair to say that our sponsorship of democracy around the world was rather presumptively based on the fact that there would be an expansion of living standards that you and I would understand would have to be based on hydrocarbons. The question is: can it be based on hydrocarbons? I think the answer is plainly no….
Our modern world is based on hydrocarbons. I think it’s going to slow and maybe even stop. And now I think the question is…
RB: It’s going to slow? You mean our way of life?
CM: Our rising standard of living. This is the first time you are getting people saying, “Every generation has created children who have a better standard of living than their parents. This is the first generation where that is not proving to be so.” And I think there will be more generations where it’s proving not to be so. To me, that’s the final problem here, that we lose our political way on the basis of economic problems that really are not so much bad policy as they are the misadventure of running out of fundamental materials that we need to support our economy in sustained growth.
People say, well, we have the scientific ability to work around that. And I think that we do over time. So I would expect that 100 years from now, the world will have a higher standard of living than [we do] now.
But nevertheless, it will slow. We can’t innovate scientifically as fast as the problems are going to accrue. So we are either going to slow to zero growth or to very low growth, perhaps something equivalent to our population growth, and then your per capita ceases to grow. Anyway, that’s what I fear.
Will an extended period of economic contraction cause the failure of democracy in some countries? Sounds plausible.
Some are more optimistic about our ability to handle declining oil production. But Maxwell argues many of the potential substitutes for oil require capital expenditures (capex) that take too many years to effectively respond to declining oil production. For example, nuclear power plants take several years to build. But Maxwell also mentions rail capacity increases that would be needed for big increases in coal production. I've made this same argument in comments of previous threads here. I do not see how we can capex fast enough even if have the technologies.
The capex argument is an interesting one from another standpoint: Energy sources that have short build times have the potential to play an outsized role in replacing oil. Solar photovoltaics looks like the strongest candidate by that measure. A PV factory can make solar panels rapidly and the panels can be installed rapidly. Any idea on how long it takes to build a PV factory? Probably depends heavily on type of PV. Maybe scaling up of thin film PV is faster than silicon because the silicon PV factories are dependent on silicon crystal factories. Anyone have insight on this?
But PV poses a big problem because PV puts out electricity. In order for electricity to substitute for oil in most transportation applications we need better batteries. In order for electricity to substitute in rail we need a big rail build of electric lines along the the rails as well as construction of electric engines. Not sure what is the time line required to do that. But we have a basic problem with how to use electricity to substitute for oil.
The big liquid hope for oil substitution comes from biomass energy to produce ethanol or biodiesel. If we need genetic engineering of algae to make this happen then that could take several years. Scaling it up would take years too. Obviously corn ethanol can't scale far enough. Cellulosic technology would scale higher than corn ethanol. But we'd lose a lot of wildlife habitat to forest destruction if we went with cellulosic technology to make ethanol.
Maxwell sees Peak Oil as very near and expects an accelerating decline in oil as a source of our energy.
What I’m saying is that as oil withdraws, it hits America with particular force because of our heavy dependence. I think oil is 40 percent of our total energy; worldwide, by the way, I think it’s 39. But I see it something like this, and I’m quoting from the BP Statistical Review: in 1996, oil was 40 percent of the world’s energy. In 2006 it was 39. So oil is not growing as fast as some others, or it wouldn’t be losing ground. So [that’s been in the last] 10 years, exactly a decade. I think it is going to take five years to lose the next percentage. And then I’ve calculated that it’s going to take three years to lose the next percentage. And then two years. Then a year and a half, and then a year. Something like that. It won’t be that exact. But I am just trying to give you the scale of what’s happening.
Maxwell thinks we'll hit the final oil production peak plateau in the 2013-2017 time period. After that the decline starts. He does not see how we can maintain economic growth during a period of declining oil production.
Maxwell says he was originally unenthusiastic at the prospects for compressed natural gas (CNG) as a transport fuel. But he says he's rethinking his position because he only sees batteries for electric cars as the only other possible alternative. We do not know yet when or even if batteries will become cheap enough and sufficiently high in energy density to make electric cars suitable substitutes for internal combustion engine (ICE) cars.
T. Boone Pickens is promoting the CNG car idea. He combines it with a big build of wind turbines as a means to free up natural gas from its current use to generate electric power. Maxwell thinks the assorted shale natural gas finds in the United States put the US in a good position to maintain natural gas production for the next 20 years.
In regard to electric rail, take a look at Spain. They are going full-bore to modernize the national rail system. One innovation is "hybrid" electric trains that draw directly from electric lines near population and industrial centers, then switch to battery power for the long rural runs. This greatly cuts down on infrastructure cost, and unlike cars, trains don't have a problem hauling large battery units along with them.
Posted by: Richard K | December 08, 2008 at 02:46 PM