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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (4720)	9/8/2006 10:54:37 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 24206

A Letter to My Brother * -- DRAFT -- * My brother asked "What should we do ?" I have been pushing a partial solution, but never consolidated a comprehensive "solution" Below is what I typed up but have not sent yet. Comments appreciated. As I said, it is difficult to forecast the future of oil supplies, but below are two data points to consider. 20 Percentile Scenario - World Conventional Oil & Liquids Production Peaks in 2011 at just above 90 million barrels/day, and declines by -1% or less till 2015. After that, conventional depletion increases to -3% to -4% each year. Unconventional Oil increases from 1.4 million b/day in 2006 to 4 million in 2015 and surges after that to 8 million in 2020. 90 Percentile Scenario - World Conventional Oil & Liquids Production Peaks in 2006 at 84 million barrels/day, and declines by -3% or less till 2010. After that, conventional depletion increases to -6% to -8% each year. Unconventional Oil increases from 1.4 million b/day in 2006 to 3.5 million in 2017 (project delays) and surges after that to 6 million in 2025. Price elasticity of supply has an 7 to 10 year time lag due to capital project schedules. Effectively no notable response (> 1/2 million b/day) before 2012/14. 200 Euro/barrel vs. 60 Euro/barrel should add 2 to 3 million b/day of conventional oil by 2020. Most price sensitive projects are small and remote. There are no half million barrel/day prospects waiting for higher oil prices, but a series of much smaller prospects. In the last five years, 9 barrels were consumed for every one found. OTOH, "stranded" Natural Gas to gasoline projects will compete with Liquified Natural Gas, mainly in Iran, Qatar and Russia and Coal to Liquids projects will become financially viable. Five to ten years from decision to production with "bottlenecks" that limit quantity in short time frames. Canadian tar sands production increases are fixed at 1.75 million b/day till 2015/17. Venezuela has significant asphalt reserves that could be exploited, and the Chinese may finance that. World Oil Exports will decline faster than World Oil Production. The US and the "Fourth World" will be (IMHO) at a disadvantage to the EU, Japan, China, India and other 3rd World exporters because we do not export enough to pay for what we want to import. So decline in World Oil Production < decline in World Oil Exports < decline in US Oil Imports. Our 25% of world oil consumption will decline, perhaps to 22% or 20% ? The default means of reducing oil consumption is recession (and depression). Demand destruction. Other means are MUCH better. The US price elasticity of demand for oil is quite low, but elasticity for natural gas demand is fairly high. This lack of elasticity means that structural changes and gov't incentives and taxes are needed to limit the free market solution of prolonged economic decline. The appropriate specific strategies vary by scenario (see above). One proposal is over $5 trillion (+$3 trillion operating) invested in coal to liquids, oil shale, enhanced oil recovery and improved vehicle efficiency to replace 2/3 of US oil demand over 20 years. IMO, the projections overstate the possible in just two decades except for vehicle efficiency. And they would more than double US transportation carbon emissions. My alternative is more multi-faceted, and gives more protection against a sudden oil supply interruption. Goals (Methods to reach goals can be discussed later) ============ Make it both patriotic and "cool" to save energy. Dramatic increases in new vehicle fuel mileage and speeded up replacement of poor mileage vehicles Shifting natural gas, electricity and butane/propane to speciality transportation from home heating via widespread solar water heating and limited solar space heating if any excess over declining supplies can be generated. Greater home insulation to shift natural gas, electricity and butane/propane to speciality transportation if any excess over declining supplies can be generated. Displace natural gas from electricity generation by increased conservation, wind and nuclear production and limited coal fired production. A nation wide HV DC grid to shift non-carbon electricity into natural gas generation areas. Replace most oil fired space heating with ground loop heat pumps. Wood and other bio-fueled district heating and cooling may work in some areas. Investigate displacing industrial oil use with bio-sources for specific monomers. More research into cellulose source ethanol and butanol. Corn source ethanol is not to be encouraged. Use more concrete and less asphalt for road repairs. Reduced transportation miles (higher mpg x fewer miles = less oil) Generate carbon dioxide for enhanced oil recovery nearby with either advanced coal gasification fired electricity or coal-to-liquids plants. Use coal-to-liquids only if the process CO2 is sequestered. Electrify almost all US rail lines and encourage capacity expansion (double tracking). If completely new rail lines are needed, change laws to make it easier. Discourage long and medium distance inter-city trucking (Interstate Highway tolls ?). Consider semi-high speed passenger and freight service. Basically expansion of the North East Corridor down the East Coast and to Great Lakes and California. Perhaps Texas. Build Urban Rail at a rate comparable to 1897 to 1916 when a much smaller and very much poorer US built 500 streetcar systems in less than two decades; including much of the NYC, Chicago, Philadelphia and Boston subways. The worse things get, the more effective and desirable will be non-oil transportation. Build electric trolley buses on any heavy bus route not suitable for streetcars. Make transportation bicycling easier, including inter-modal with mass transit. Do nothing to preserve or artificially support energy inefficient urban forms, including building or expanding highways. Do support energy efficient, walkable, dense neighborhoods and mass transit accessible offices and other employment centers. Use the carrot more than the stick to change living patterns. Add a fourth leg, energy, to the three legs of major gov't taxation, income, sales and property. In particular, shift the burden off payroll taxes and sales taxes and onto energy taxes. "If you want less of something, tax it", is a fundamental conservative precept. Gov't needs funding and the source should be things that public policy wants to discourage. AlanfromBigEasy on Friday September 08, 2006 at 10:47 AM EST theoildrum.com