An urban legend to comfort America: crash programs will solve Peak Oil

This is the second post in a series examining “urban legends” about energy that comfort Americans.  These comforting myths about unconventional and alternative energy sources provide excuses for avoidign 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).  {The opening was re-written to better show the structure of the series}

These five myths are:

I.      Our massive reserves of unconventional oil.
II.     We’ll run crash programs to solve peak oil, just as we mobilized for WWII.
III.    Demand creates supply, by raising prices.
IV.    Oil is Oil, even if it is not oil
V.    Demand creates supply, from new technology.

Unfortunately, we can rely on none of these.  Certainly they are not substitutes for intense research and planning, which is how they are used today.  As I have described at length in previous posts, we know astonishingly little about our available energy resources, consumption patterns, and alternatives.  Nor has the available information been collected, analyzed, and used for models and simulations — the foundation of good planning.  News reports said that the recent satellite interception by the USAF cost $125 million; one-tenth of that could fund a multi-disciplinary project that would help plan a sound future for America’s energy supply.  Instead we rely on inspired guessing.

Side note:  what is our source of information about the monthly volume of Saudi Arabia’s oil exports?  Please place your answers in the comments.

Chapter II — We’ll run successful crash programs to beat Peak Oil just as we mobilized for WWII

The massive mobilzation during WWII has important differences from crash programs to prepare America for face Peak Oil.  Crash programs are probably necessary, but are no panacea.

  1. The economics differ; today’s mobilization might make things worse — unlike WWII.
  2. There may less potential innovation available.
  3. The causes of innovation are mysterious, and cannot be relied upon.

To sum this up, we turn to one of great rules of history:  past performance is no guarantee of future success.

1.  It is not 1940 — few idle resources

We rapidly and easily mobilized for WWII because WWII followed the Great Depression. Very roughly, a quarter of our resources – people and manufacturing capacity – were idle. The adaptation to WWII stimulated the US economy (esp. as the bombs produced landed elsewhere).

Crash programs to prepare for Peak Oil will operate in a fully functioning economy (at least, I hope so).  Allocating resources means diverting people and funding from something else. Either consumption — consumer spending and government services — or investment (construction, R&D, etc).  This will prove more disruptive to the economy than employing idle workers and re-starting empty factories during WWII.  That is, large-scale crash programs — however necessary — will make things worse in the short-term (until they produce results).

2.  It is not 1940 — no decade of massive underinvestment in everything

Also, WWII followed a decade of underinvestment during the Great Depression.  Unlike today, there were no venture capitalists beating the bushes for good ideas to fund.  So there had been an accumulation of “idle” technology, as a field long left fallow produces a good harvest when planted.

3.  What do we know about innovation?

There is a large literature about this subject, one of such vital importance to our society.  And it, unlike so many other subjects, has a wealth of hard data on which to work.  Here is a nice summary of what we know, from “The structure of invention“, W. Brian Arthur, Research Policy, March 2007 — Excerpt:

A significant difficulty that all theories face is that modern research shows that the actual process of invention varies greatly from historical case to historical case, so that universalities appear not to exist. Some novel technologies issue from an individual working alone, others from several groups working with independent ideas. Some derive from huge programmatic investment, others from private shoestring effort. Some emerge from years of trial and are marked by a sequence of intermediate versions that do not quite fulfill the goal, others appear whole cloth as if from nothing. “Attempts thus far to present a general interpretation of all technology change have foundered on the great diversity and complexity of that change,” says Constant (1980). As a result, in modern times the idea of “invention” has assumed a status like that of “consciousness” or “mind,” something we can speak of but not quite articulate. Textbooks hurry past it without explaining what it is.

About the conditions that foster inventive activity we are much better informed. We know that novel technologies are shaped by social needs; that they respond to economic opportunities, perceived risk, and factor price changes; that they cumulate with the accretion of cultural and scientific knowledge; and that they can be catalyzed by the exchange of information within networks of colleagues.

Sometimes massed effort can overcome all obstacles.  But not all problems can be solved by a Manhattan Project.  Software development illustrates this, where resource inputs often have little to do with time until completion.  The relationship is certainly not a linear relationship; sometimes an inverse one.  Some inventions must await the right time in history, irrespective of when we need it.

Conclusion

How fitting that this mysterious process has become an object of near-religious faith in our culture.  Much as primitive peoples prayed to the Gods for rain, we put our faith in the upsurge of inventions, hoping for machines to appear to meet our current needs.  Just in time.

Afterword

If you are new to this site, please glance at the archives below.  You may find answers to your questions in these.

Please share your comments by posting below.  Per the FM site’s Comment Policy, please make them brief (250 words max), civil, and relevant to this post.  Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).

For more information from the FM site

To read other articles about these things, see the FM reference page on the right side menu bar.  Of esp relevance to this topic:

Some posts about unconventional and alternative energy sources

  1. Links to articles and presentations of some A-team energy experts , 11 November 2007
  2. The most dangerous form of Peak Oil , 8 April 2008
  3. The three forms of Peak Oil (let’s hope for the benign form) , 23 April 2008
  4. The world changed last week, with no headlines to mark the news, 25 April 2008
  5. Fusion energy, too risky a bet for America (we prefer to rely on war) , 4 May 2008
  6. Peak Oil Doomsters debunked, end of civilization called off , 8 May 2008
  7. When the King of Saudi Arabia talks about oil, we should listen , 2 July 2008
  8. Red Alert: the Saudi Princes have annouced the arrival of Peak Oil , 11 July 2008
  9. Good news about oil, but for our grandkids – not us , 14 July 2008
  10. The secret cause of high oil prices , 6 August 2008

51 thoughts on “An urban legend to comfort America: crash programs will solve Peak Oil”

  1. Regarding innovation — the most productive years ever, in all of history, for innovation (in terms of return oon investment, and in terms of massive shared benefit) were the 1880s. (Joseph Tainter). This was the time when first used were…electric light, radio, telegrams on mass scale, public sewage systems, widespread use of fertilisers (Haber-Bosch, 1886), primitive unemployment insurance, old age pesnions, public schooling and socialised medicine (in European countries), etc.

    — Arthur is 95% correct; however, there is ONE thing common to ALL inventions– declining return on investment over time. Doesn’t matter if the field of endeavour is art, energy, agricultural productivity.
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    Fabius Maximus replies: I agree about the primo role of the 1870 -1900 period as the peak of innvation. While we have done impressive things since then, the foundations for much of this were laid down in the late 19th century. The profound theoretical breakthoughs in many fields — physics, chemistry, health care — dwarf anything done in the recent decades.

  2. The most promising compression engine {FM: driven by compressed air} (imo) is this one: The Di Pietro Motor (Rotary Air Engine) {snip — go to the website for more information; specifics are off-topic at this site}

    The discussion about inventiveness is hobbled if we ignore the simple fact that money drives modern economies and legislation, not practicality, and money works best with centralised command and control. The political/legislative context, which also involves the underlying (spiritual) value system of modern society has to be addressed first before any mere tactical innovations can come into play.

    In fact, what is called for is 4G governance systems at this point, which looks like what we are going to get like it or not…i.e. a breakdown of overly centralised state behemoths and a return to more patchwork/region-based districts, functionally a bit more like densely populated countries of yore before the advent of cars and phones.

    (In other words, the problem with electrical power generation options is the a priori assumption that the centralised grid approach is the most efficient method. It isn’t. Except from the point of view of revenue-generation, in which case it is.)
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    Fabius Maximus replies: I believe allegations that corporations surpress substantial inventions are almost devoid of supporting evidence. Even if successfuly surpressed in the US, great inventions could be implemented elsewhere. There are many nations that would welcome new industry that gave them great competitive advantages. If we assume invisible all-powerful global conspiracies (including the USSR during the cold war), we go deep into fantasy-land.

  3. Who says they are invisible? Look at the Federal Reserve ‘conspiracy’! And look at what they just did with the GSE’s this weekend. Unless of course you think Treasury and the Fed are actually separate organs of government.

    As soon as the US is no longer the main economic driver – including consumer market – more innovation will indeed flourish since its regulatory and other limitations will no longer predominate. As the $2,500 car from TATA in India this year illustrates, with the air compression one coming out for about $5,000 next year. But that’s just a car, not a revitalised politico-economic system which is what you are invoking here.

    Speaking of cars and Feds, in your other post you mentioned the auto industry lining up next. They did already: Auto Industry Asks for $50 B loan. But a peasly 50 billion. Small potatoes.

  4. Pingback: Alternative Fuels Now » DrumBeat: September 6, 2008

  5. One theme going around in some of the replies is “The Market” (I gave up counting after finding 20 mentions).

    Markets are just convenient ways to describe the sum total of individual transactions by people and organisations. Now under the current ideology that everyone, at least pays lip service to, the market is composed of perfectly rational, all knowing, all seeing individuals, making perfect buying and selling choices. Unfortunately, this is not Vulcan, this is the Earth. Full of ignorant, logic impaired, mathematical nincompoops, statistically incompetent, emotionally (mostly greed, fear and s*x) driven idiots.

    Just as an experiment, every time you hear the word ‘Market” (often spoken in words of reverence with the Capital Letter, as in “the Market thinks this”, “the Market forecasts this”, etc, usually with more reverence than given to God) mentally change the word to “mob”. Think of a mob of drunken yahoos out on a bender, staggering to a football game, screaming for their team … would you trust these people to run a chook raffle? I think not.

    Now see how it sounds: “the mob thinks this”, “the mob forecasts this”, “the mob has already taken this into account”. Do it and it is guaranteed to cure you of any tendency to ‘Market’ worship.

    Now in the real world I’ve never met a businessman yet who believes in anything but getting monopolies, though they will settle for a well organised oligopoly. Markets are things to be destroyed, subverted, conned and abused. Businessmen know that people (ie the so called market participants) are idiots …. and pitch their products, pricing and advertisements accordingly. Think, when was the last time you saw an ad appealing to your intellect?

    Getting a monopoly is the first priority. Either a niche, eliminating (buying or bankrupting usually) all competition, or , best of all, getting a Govt given monopoly (the holy grail). On the latter it is just like the history books, a Baron courts the King and gets a profitable monopoly (such as the spice trade, nowadays doing something like making a useless fighter plane) in return for political obedience and a bit of a cut of the action (nowadays called a campaign contribution).

    I trust you see the parallels to today’s situation (e.g. it answers why the MSM is so subservient).
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    Fabius Maximus replies: How odd that so many look to free markets to solve the emerging energy crisis, while the government’s solution to the current financial crisis is nationaliation (aka socialism). That’s logic!

  6. In Canada on a CBC program I heard a while back that there is legislation in the pike that would outlaw the use of herbal/alternative substances unless manufactured and distributed by licensed companies. It is so extreme that a housewife caught growing camomile and peppermint for teas/stomach upsets could be fined. I find this hard to believe, but that is what they said on this govt-sponsored radio program. This to me is a classic example of just how overboard corporate influence on legislation is, and also how, as OldSkeptic says above, this notion of ‘free markets’ is just propaganda.

  7. “If we assume invisible all-powerful global conspiracies (including the USSR during the cold war), we go deep into fantasy-land.”

    If you ignore them, that’s where you stay!

  8. Constance Dogood-er

    “Thank you for restating the myths that this series discusses.”

    Mighty dismissive aren’t you. I’m old enough to remember gasoline at $0.40 per gallon. If you are looking for the halcyon days of countries not capitalizing on the value of their oil wealth you will be forever disappointed. If you define “peak oil” as available for a price that includes the cost of drilling, refining and transporting then you are right we are way past “peak oil” and have been for 30 years.

    An economist looks at supply, demand and price. Your article, the one shooting down the myths I restate, has a oil shale production cost of about $46.50 a barrel– not including capital and transportation costs. With oil at $140 per barrel this is not a difficult equation, at $40 per barrel it is more difficult.

    My point was and is “Our current petroleum age will end when clean nuclear energy is widely adopted.” We have more than enough energy available to us until this occurs.
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    Fabius Maximus replies: There is no reason for you to have read the About page, so let’s restate the operating rules of this site. I post a long (average 1,000 words) essay. Folks get to attack it. I get to defend. We debate things on the edge of the known, so free and fierce discussion is welcome in the pursuit of truth.

    If you just state an opinion without support, in effect saying “my post was wrong”, you can expect a harsh reception. </em.

    I am not sure to what guesses you refer to about the cost of large-scale mining and refining of about kerogen (aka “shale oil”). My comments about this were as follows:

    There is as yet no proven large-scale commercially feasible process for mining and refining shale oil, although some are under development. Most estimates show that decades will be required to perfect and scale-up extraction and refining of these reserves — assuming the many problems can be overcome. I believe the largest plant is that of Fushun Mining Groupin China, scheduled to produce 7,400 barrels/day in 2008 and 14,000 b/day at some point in the fuure (source).

    For more information see WIkipedia on shale oil and shale oil extraction, and the Congressional Research Service report on Shale Oil dated 13 April 2006 (32 pages).

  9. Pingback: an urban legend to comfort America: crash programs will solve peak oil | Dismantle Civilisation

  10. Digressing a bit, I was thinking more about the fact that we really need Vulcans to rule us, instead of the sociopaths that currently do. Sadly I haven’t seen any announcements about warp drive in the New Scientist recently and was reluctantly abandoning the idea, until I listened to an ABC Science Program podcast (transcript at: http://www.abc.net.au/rn/scienceshow/stories/2008/2343877.htm).

    I suddenly realised we actually have Vulcans amongst us, many of them, in all sorts of places – the high functioning Aspergers. Daniel Lightwing (silver at the International Maths Olympiad ) put it this way: “The truth is, if everyone in the world, for example, had Asperger’s then the world would work in a much more efficient, much safer way and it would develop very quickly.”

    Climate change, solved decades ago, oil/energy shortages never would happen, war .. only for the stupid, and so on. Our home grown Vulcans. Logical, fact driven, basically incorruptible, can’t be influenced by rhetoric or lies or group think or social trends or panic or unfounded optimism (with its deadly cousin – cognitive dissonance). So we have a solution. Every political candidate (and every senior executive or public servant), should be tested for Asbergers, if they don’t have it, then they fail and are completely ineligible for office. Then we neurotypicals can carry on with our lives playing our little social games, but secure in the knowledge that we are being looked after and everything is being taken care of properly.

    I know this may seem extreme to some people (though notably less extreme than ‘bomb, bomb, Iran’, war with Pakistan or, shudder, war with Russia – which we neurotypicals seem to be heading for), but I haven’t came across any better ideas to get us out of our multiple messes.

  11. Climate change has already been solved. No sunspots today.
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    Fabius Maximus replies: Since M. Simon almost never cites sources for his often outrageous assertions, I often wonder if he’s just playing with us. Perhaps acting as the FM site’s unofficial jester!

    Those who read James Watt’s blog “Watts Up with That“, or the posts on this site, know that this is nonsense. I know of no major scientist studying solar cycles who believes that the current data on solar cycle 24 yet allows a reliable forecast. If the cycle does not accelerate in the next 6 months, then we have a basis for forecasting that the cycle will be “small” — and perhaps the Earth’s weather will cool. Two conjectures hiding in M. Simon’s bold but unjustified assertion.

    Worse, a “small” cycle might — by some theories — result in climate change in the form of global cooling. Bad news for agriculture, esp with grain inventories so low.

    For more on these things see many references on the FM Reference Page about “Science, Nature, and Geopolitics.”

    Update: Perhaps M. Simon will consider climate change unsolved, now that the sun has what appears to be the largest cycle 24 sun spot since the very first one on 4 January 2008! More seriously, just as the low incidence of spots so far this year was data — so is a new spot just another datum. What happens over the next few months might be important indications about global weather for the next decade.

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