Category Archives: General

Government Policies Are Shaping Our Countries Energy Future

As the United States government has grown, so has its influence on our society.  An area that the government has had an increasingly large influence is energy.  The government influences the type and quantity of energy and fuel sources we use today.  In order to finance ethanol producers the federal government has bolstered ethanol, a fuel source, through laws requiring its usage and through subsidies.  The strong support from the government has created a market for ethanol, but the large demand for ethanol would probably not exist if the government was not involved.  As many of you know ethanol offers a low Energy Returned On Energy Invested (EROEI); corn-based ethanol is roughly 1 and at worst has a negative EROEI.  Would a fuel that behaves like an energy converter be in high demand if the market were allowed to decide?  I would probably say no.  I believe the only thing that has been propping up ethanol is the strong support it has been getting from the federal government.  If the government were not supporting ethanol, it would have probably failed by now and we might see other more viable options.  Ethanol is not the only case, but ethanol is one of the best examples of why government should not be making energy decisions.

The United States Capital Building

Courtesy of Wikimedia

With promising advancements in fields like algae, diesel engines, and ammonia, it makes no sense for the government to endorse a fuel like ethanol.  Many of these more promising advancements are in the background operating quietly, which is a shame.  These advancements are competing with every other energy advancement on the market, but they have one major disadvantage, they have not yet gotten the full attention of the U.S. government.  Even without the full support of the federal government many of these other energy advances are progressing.  Imagine what might be if these energy technologies were only competing against other energy advancements, and not the government too.  While the government is out supporting things like ethanol in our gasoline and battery powered electric vehicles, which aggravate our energy problems, individuals are working hard trying to come up with real energy solutions.  It amazes me that our country is relying on politicians to dictate our energy future, when the free market should be.

In a free market profit motive is typically at the forefront of the decision-making.  This is directly related to EROEI without the people making the decisions even knowing it.  That is because typically a good EROEI will equate to a profit.  This is the type of force we need driving our energy future, not politicians that are swayed for personal and political reasons.  In the end the market will hopefully prevail and the energy advancement of the future will be chosen, but this is only if the federal government doesn’t make it impossible to exist.  The federal government should not be making decisive decisions about what energy we should use, but the government can help all possible alternative energy technologies by giving tax incentives.  Stopping the subsidizations of alternative energy would be ideal, and instead implementing tax incentives so the free market can have more freedom to work.  I believe that in order for new energy advancements to be successful, government must have as little interaction with them as possible.  Government is not capable of choosing the correct energy path for our future.

 

Peak Oil: The Limiting Factor Behind Government’s Social Programs

Franklin D. Roosevelt (FDR) was one of our Countries biggest proponents of progressive politics.  Through government initiatives like The New Deal, which created Social Security, and his Second Bill of Rights, FDR made a major impact on our Country’s social landscape.  This new social landscape promised services to individuals as if they were rights.  All of these services required additional resources and energy to maintain the social landscape that was being promised by the government.  These promises were easily maintained when cheap crude oil was abundant, making continued growth seem eminent.  In order to maintain these new rights, our country will be required to have continued energy production growth from limited energy resources, but continued growth can not continue.

As the world continues its plunge towards and beyond Peak Oil, creating a society that is energy efficient is very important.  All aspects of society must be considered, even the type of government that is implemented.  In a lower energy society anything that can promote hard work, innovation, and self-reliance is very beneficial.  I believe the United States Constitution creates the best government structure possible for post-Peak Oil.  The Constitution creates a system that does not require continual energy gathering in order to maintain a fully functional, and healthy nation; this is because The Constitution does not promise services to individuals, it only promises freedoms and creates basic structure.  Any philosophy that promises services to individuals will require the government to constantly take energy (resources) from one entity to give to another entity, in order to keep the promises made to the people by that government.

In a world where energy prices are high, and conventional crude oil has peaked (according to the 2010 IEA World Energy Outlook, pg. 6) is it possible to continue the never ending resource gathering?  The short answer is NO, so how can we expect ideals like FDR’s Second Bill of Rights, and services as rights be sustainable when the only way to maintain these ideals is through continuous gathering of limited resources (i.e. oil, natural gas).

What do you think, do you believe limited resources will shape our government structure?  Comment below.

What the Kuwait Oil Study Says About Peak Oil

This year Kuwait University and the Kuwait Oil Company released results of a study using a modified version of Hubbert’s curve to predict that oil will peak in 2014.  This study seems to mostly agree with a another study that was popularized by Sir Richard Bronson of Virgin Group Ltd., which predicted that oil will peak in 2015.

There are many different arguments about the time frame of peak oil, some argue that it has already occurred (Dot 2 and/or Dot 3) and others argue that peak oil won’t occur for many years (Dot 1).  I personally do not get too hung up on when peak oil will occur or whether it  has occurred.  Either way you look at it peak oil is not something that can be ignored and as you get near the top of the curve you begin feeling the effects of peak oil.  This is because more costly sources are being used and it is more difficult to increase production.  Many of the economic troubles that we are experiencing today stem from these facts.

Peak Oil Curve

One of the major reasons the Kuwaiti study is so interesting is because a major oil producer is stating that it will no longer be able to keep up with the demand of its product and that the it will be more costly to acquire.  That is like Apple telling its consumers that even though demand for its iPhone is increasing, in a few years it will no longer be able to keep up with demand and the iPhone® price will also start increasing.  No oil corporation would want to admit peak oil’s effects on their business which is why this announcement is so unbelievable.

The really unfortunate part of this whole ordeal is that while oil companies, oil producing nations and numerous other respected organizations are releasing reports that peak oil is REAL and IMMINENT, we continue down the same path.  Cities, states and governments should be having serious discussions about how to deal with peak oil and should also be considering plans to deal with these conditions.  Instead, the United States government is busy talking about things like health care, broadband expansion, cap and trade and numerous other topics that are irrelevant in a world where cheap energy is no longer abundant.  Cities continue to spend money on beautification projects and citizens are living their lives like everything is just going to go back to the way things have always been.  I realize that NO ONE wants to talk about these things because it can paint a grim future for our society, but if we continue to put our heads in the sand we will have a major problem on our hands that no one is prepared for.  If we start planning now we could have a brighter future, but planning can only begin when everyone is mentally prepared to begin serious, tough discussions.

If you are interested in some more information about peak oil, visit one of Dan’s previous articles here.

Sources

http://www.msnbc.msn.com/id/35838273/ns/business-oil_and_energy/

http://green.autoblog.com/2010/03/18/kuwaiti-study-conventional-oil-to-peak-in-2014/2#comments

http://www.guardian.co.uk/business/2010/feb/07/branson-warns-peak-oil-close

http://www.theoildrum.com/node/5395

Global Warming, Peak Oil, and Economic Crisis

When Zach and I started this blog, we agreed that it should be in the technical domain, rather than the political one as much as possible. The hope was that with high quality information available to the political class and activists, the “solutions” would be forthcoming. As time goes on though, it seems that even as difficult as our energy challenges are, the political ones are tougher. This reality requires the Energy Strain blog to deal with issues that may be considered to be more in the political domain.

For the moment, the world seems focused on “Climate Change.” Climate change is the new term for what was originally termed “Global Warming.” It is difficult to figure out who changed “Global Warming” to “Climate Change.” I would argue that both of these names are actually very poor names for this problem. One thing that we know for sure is that the Earth’s climate has been changing for the entire time that it has existed. It seems to me that if you wanted to come up with a name to motivate people to action, you would not use a term that describes something that is “normal.”

Peak Oil is an equally poor name for the problems that people are using it to describe. Peak oil, when used in the M King Hubbert sense, is a perfectly correct term. Hopefully we all know of the work of M King Hubbert, and his curves describing how oil fields age. The problem with the way that “Peak Oil” is now used is that it now means hundreds of different things to different people. From the simplest and obviously correct meaning, that a mathematical curve can be applied to the theoretical extraction rate of an oil province, Peak Oil is now also being used as a substitute term for we’re running out of oil, Malthus was right, all problems are caused by running out of oil, and the end is coming.

Economic crisis is also a very poor name for a widely varied set of symptoms. Economists originally called it “Sub-Prime” Crisis, then “Recession,” and now their favorite seems to be “Economic Crisis.” The names are likely to change as the symptoms of the end of the Industrial Age present themselves.

After studying the end of the Industrial Age for about five years, it all seems quite simple to me. These problems are all related, and must be contemplated and solutions proposed for the actual problems, not just the symptoms, and not with solutions that “feel good,” but rather solutions that fit the physics of the problem.

The problem is simple.
Man found a substance in Earth’s “basement” that allowed him to temporarily overcome the normal limit of living on Earth, that limit being: living on the energy that comes from the Sun. Man used the energy from this substance to continuously increase the amount of energy available from this substance. He also created an economic system that automatically creates more interest debt as time passes, and thus requires economic growth in order that it remain plausible that the interest accumulation could be repaid. As he used this substance, he put the undesired components into the atmosphere, hoping that it would be OK.

Now Industrial Man finds himself in the following situation.
1. The net energy (gross energy minus the energy used in the extraction) from fossil fuel is in decline.
2. His financial system is collapsing because repayment of the interest is not plausible, and the economy cannot grow enough without more energy to make it plausible.
3. The Earths formerly sequestered carbon is now in the atmosphere, and he is not sure exactly what it means. But most agree it’s probably not good.

So Global Warming, Peak Oil, and financial collapse are the same problem.
Maybe we should name the entire situation “DADESFFC” for Dying and Dysfunctional Energy System Feeding Financial Collapse. Ok, so maybe it’s not a sexy acronym. Or maybe it’s too complicated for some to understand. But the point is that without understanding the big picture, and without looking for solutions to the actual problems, we are left in the dark shooting at the symptoms.

Lately “Climate Change” has been in the news with the negotiations in Copenhagen, Denmark. Some of the activists seem to be advocating that we solve the problems with massive redistribution of wealth. Their solutions are simple–take money from the polluters and give it to the less fortunate. Problem Solved. If only it were anywhere near this easy.

The reality is that the technologies that are available to “replace” the current fossil fuel technologies are not drop-in replacements. A society created from alternative energy technologies will be profoundly different. Here are some of the technical challenges along with the implications of a post fossil fuel economy:

1. Renewable energy sources are powered by low density energy.
Low density means that the systems will be very large, and consume huge quantities of resources and labor in order to construct. In an economic sense, this by necessity means that the systems will be expensive.

2. Renewable energy sources have low energy return on energy investment (EROEI). Low EROEI means that renewable energy systems will have low profitability for their investors, and will take many years to return their initial investment. It also means that there is not room for mistakes in the implementation of these systems. Small mistakes in implementation that cause increased energy consumption, will convert low EROEI energy “production” systems into energy “sinks,” i.e., they cause consumption rather than provide energy.

3. Renewable energy systems are not a drop-in for fossil fuel technologies. This means that much of the most expensive equipment in our fossil fuel powered industrial economy must be replaced. A replacement society that is powered from renewable energy sources will be less wealthy, and have less complexity than a fossil fuel powered one. This may mean that there is no excess wealth to transfer from the former “wealthy” countries to the “developing” countries.

Simply transferring wealth from the “wealthy” fossil fuel consumers to the “developing” countries is very likely to aggravate the problems. It could leave the “wealthy” countries without enough surplus capital to develop renewable technologies, and it could just cause increased energy consumption in the “developing” countries.

Converting to a post fossil fuel era will not be easy. Resources will be scarce and financial systems very unstable. This means that in order to successfully accomplish it, we will have to understand what we are really up against, not choose one symptom and propose a “solution” for it that aggravates the real problem.

If we cannot solve the technical problems of operating a modern society from renewable energy, the only “deal” that we may be able to make is to lower our standard of living to their standard of living, if they agree not to try to raise theirs.

It goes without saying that this will be a difficult political sell, and I fear that those who are pushing these large redistributions aren’t as concerned about the environment as they claim, meaning that this would not be an acceptable solution, even though it may be the only one that is technically feasible with our current technology.

Living in a “GREEN” world

This whole notion of being “green” seems to be sweeping through every product line in the nation.  Seeing a “green” product at any store is pretty common but, just a few years ago you had to search for “green” products.  The fact that so many organizations are jumping onto the “green” bandwagon is both promising and troubling.

I like to see that companies are trying to improve things like, operating efficiencies of their products, reduce their company’s overall energy consumption, reduce materials used while packaging, among many other things.  In addition to all of the positive environmental impacts, this is good and beneficial to everyone because, it costs the end user less to operate and it can cost less for the manufacture to produce/ship.  Why suddenly are we seeing so many “green” products, well there are several reasons for this but the main reason is that consumers are demanding them.  Energy costs have risen and because of this, consumers want devices that use less energy. For the very same reason companies are trying to reduce their energy consumptions.

The downside to seeing so many “green” products is being able to sort out the beneficial and non-beneficial products.  It is becoming increasingly difficult to find products that actually have a positive affect both environmentally and in reducing energy.  It seems the term “green” is being so over used that marketing departments are throwing the “green” label on anything they possibly can, in hopes of appealing to consumers.  Whether the product is actually all that “green” or not is besides the question.  Since “green” is the new favorite phrase of marketers, it is very important to be conscious of these tactics and to do some research for yourself. Don’t  buy something just because it says that is “green.”  Next time when you see a “green” product ask yourself some of the following questions:

What makes this product green?

How does this product compare to other products?

Does this green labeling have any actual positive affect on the environment or in reducing energy?

The United States Government is also getting on the “green” bandwagon.  Some of the things the government is doing are good and some of the things it is doing aren’t so good.  For example, the United States Government is planning on improving federal and state building efficiencies.  This is a good thing and it will not only save the government (and taxpayers) money but it will also use less energy.  Also, in order to reduce energy and environmental impact the government passed a bill that will end up phasing out incandescent light bulbs.  This bill requires that light bulbs be 70% more efficient by 2020.  As energy costs have gone up, people have been buying energy efficient products like compact fluorescent light bulbs (instead of incandescent light bulbs) without the government dictating anything.  We are seeing similar behavior with the Cap and Trade bill.  The Cap and Trade bill is going to try and force you to live a “greener” life by raising the costs of energy.  The hope is that doing this will reduce energy usage and benefit the environment.  Again, we are seeing an actual “green” change occur in all aspects of society already but, these changes are occurring because the market is adapting to higher energy prices.

So, Am I against going “green?”  No.  Am I against forcing people to go “green?” Yes.

I am fully in favor of trying to minimize the amount of natural resources we use and to use the resources we do use efficiently.  Also, I am in favor of using products that are more efficient and in favor of replacing incandescent light bulbs with more efficient bulbs.  I am not however, in favor of having someone else dictate to me what I have to do.  If someone does not want to stop using incandescent bulbs then they should not be forced to.  Instead of having big brother breath down our necks let the people and the market make the decisions.  That is how things are supposed to work, after all aren’t we suppose to have freedom and be a capitalist society?

Tell me your thoughts; I would be very interested to discuss some of these topics further.

Energy or Money–Which Is More Real?

Often while I am studying our energy future, I run into this question:

“As the price of energy increases, won’t the market respond by inventing new systems that generate new supplies of energy and prevent energy supply problems?”

This question begs the following question.

Does money control the energy supply? Or does the energy supply control the value of money? In order to answer these questions, we first need to understand the concepts of energy and money.

What is energy?
The word “energy” comes from the Greek word meaning activity, “energeia,” and is the quantity of work that can be done by a force. The study of energy turns up in nearly all scientific endeavors, from studies of the beginning of life to space travel.

While energy can take many forms and is never lost, there are observed behaviors of energy expressed by the laws of thermodynamics. These laws are part of physical reality, preventing mankind from “creating” energy and also placing strict limits on its conversions.

Energy is an important part of anything that is alive. One definition of life is “a characteristic of an organism that uses biological processes to change free energy or energy containing substances to a degraded form.” Energy separates life from death, growth from decay, and breakdown from repair.

Most marvels of the modern world are massive energy consumers. A list of industries in the modern world reveals that nearly all are large consumers of energy. Modern transportation, housing, health care, and food production all require huge inputs of energy. The availability of large quantities of energy has changed human existence in such a profound way that it difficult to even contemplate. Much of what is commonly thought of as “amazing technology” and/or the “power of money” is actually “energy availability.”

The energy that humans currently use has allowed modern societies to break free of the limits that preceded and will follow this period. That limit is living with the energy that arrives at Earth each day from the Sun.

What is money?
Money is an accounting system used to facilitate trade and the keeping of accounts. United States money is a “fiat” currency system. Fiat means that federal law requires the currency be accepted for public and private debts. There are no guarantees the money will retain any value. In fact, the US government neither guarantees the value of money nor actually owns any money. All US dollars are owned by a private banking consortium called the Federal Reserve, and congress is prohibited by law from interfering with the wishes of the bankers. The private bankers adjust the money supply and therefore the value of the money as they see fit.

In summary
Money, at least the kind that most modern societies use, is a concept created by man and does not exist in the physical world. The rise and fall of currencies is of little consequence to the laws of energy and energy will limit the “wealth” of all organisms, beings, and societies long after all human currencies have collapsed and cease to exist. Money must be managed carefully by humans so that it remains useful in the face of changes in the energy system, for it is energy that powers everything from the human heart to the world’s largest building.

Energy Strain About Page

I just recently created and posted the “About Energy Strain” page.  This page can be found by clicking here or from the navigation bar under the Energy Strain logo.

Go ahead check out the about page and learn about myself (Zach) and Dan.

Towards the end of the week I will start my series on energy conservation.  Keep an eye out for it, I think you will enjoy it.  Don’t forget to subscribe to our RSS feed or Email feed.  Both feed links are in the upper right-hand side of our website.

High Efficiency Google Server Design

Yesterday, Google revealed their own “home-brewed” data server design.  Google has been using this custom design since 2005, while constantly improving design efficiencies.  Google has custom designed servers in order to achieve maximum energy efficiency.  Some key aspects to this custom design include: a 12v battery built into every server and a custom made power supply that only uses 12v power rails, instead of the typical 12v/5v combination.

How much efficiency is Google really seeing with all of these improvements? Well, for example, Google has seen battery usage efficiency as high as 99.9%.  This is roughly a 4%-7% increase over using conventional centralized UPS systems.  Now this may not sound like a lot but when you have literally thousands of servers, this becomes a very big deal. Google has really displayed that they have a passion to make their company as energy efficient as possible.  Not only does Google have custom servers designed to maximize efficiency but Google continues to invest in energy through their Google.org arm as well.

Google is one of the few companies that openly and actively tries to reduce their energy consumption. Google seems to understand two very key aspects of energy:

  1. Energy is a valuable resource
  2. We need to help each other in reducing the amount of energy consumed

Now, lets not forget to mention one of the most obvious aspects to this: less energy means more profits.  Google must have an electrical bill the size of a small country so, any amount that they can reduce is a positive for them financially.  I mean, who doesn’t like making more money right.  :)

If you would like to look at some pictures or read more about this check out this CNET NEWS article.

Crash Course

Crash Course: Economy, Energy, and the Environment

As discussed previously on this blog, with time more and more is understood about the effects of decreasing net energy on the industrial economy. Eventually one comes to the realization that nearly everything in Industrial Man’s world will change or will have to be changed.

Few things will have a bigger impact on the day to day life of everyone in the modern industrial world as the destabilization of the exponential financial system. All of us have been taught the “power” of compounding. In high school, I was told that if I put a little money in the bank each year, eventually my wealth would begin to grow in a near vertical curve. I learned this from a teacher who did not understand physics, and it would be 30 some years before I realized the absurdity of this curve. Where would the energy come from to cover my consumption if this were to occur and I were to spend that money? The answer is of course that the system would fatally collapse because the energy is not available.

In the process of studying the decreasing net energy collapse of the exponential economy, I found a web-based course called “Crash Course” from Chris Martenson at http://www.chrismartenson.com. This course is very good and is available on the web and via DVD. Chris Martenson has a very deep understanding of what is happening to the exponential financial system. Chris has a PhD in science and an MBA in finance and is the best teacher of this material that I have found. Chris even allows you to burn and sell his DVDs for profit.

Please check out the “Crash Course.” If you are stuck without high speed Internet, please contact us here at Energy Strain and we will send you a copy of the “Crash Course” DVD.

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