Welcome to the age of diminishing returns

Tuesday, February 24, 2015

The shale oil "miracle": how growth may falsely signal abundance



Oil production (all liquids in barrels per day) in the US and Canada. (From Ron Patterson's blog). Does this rapid growth indicate that the resources are abundant and that all the worries about peak oil are misplaced? Maybe not....


Sometimes, we use a simple metric to evaluate complex systems. For instance, a war is a complex affair where millions of people fight, struggle. suffer, and kill each other. However, in the end, the final result is seen in terms of a yes/no question: either you win or you lose. Not for nothing, General McArthur said once that "there is no substitute for victory".

Now, think of the economy: it is an immense and complex system where millions of people work, produce, buy, sell, and make or lose money. In the end, eventually, we think that the final result can be described in terms of a simple yes/no question: either you grow, or you don't. And what McArthur said about war can be applied to the economy, as well: "there is no substitute for growth".

But complex systems have ways to behave and to surprise you that can't be reduced to a simple yes/no judgement. Both victory and growth may well create more problems than they solve. Victory may falsely signal a military might that doesn't really exist (think of the outcome of some recent wars....), while growth may signal an abundance which is just not there.

Give a look at the figure at the beginning of this post (from Ron Patterson's blog). It shows the oil production (barrels/day) in the US and Canada. The data are in thousand barrels per day for "crude oil + condensate" and the rapid growth for the past few years is mostly due to tight oil (also known as "shale oil") and oil from tar sands. If you follow the debate in this field, you know that this growth trend has been hailed as a great result and as the definitive demonstration that all worries about oil depletion and peak oil were misplaced.

Fine. But let me show you another graph, the US landings of North Atlantic Cod, up to 1980 (data from Faostat).

Doesn't it look similar to the data for oil in the US/Canada? We can imagine what was being said at the time; "new fishing technologies dispel all worries about overfishing" and things like that. It is what was said, indeed (see Hamilton et al. (2003)).

Now, look at the cod landings data up to 2012 and see what happened after the great burst of growth.

I don't think this requires more than a couple of comments. The first is to note how overexploitation leads to collapse: people don't realize that by pushing for growth at all costs, they are destroying the very resource that creates growth. This can happen with fisheries just as with oil fields. Then, note also that we have here another case of a "Seneca Cliff," a production curve where the decline is much faster than growth. As the ancient Roman philosopher said, "The road to ruin is rapid". And this is exactly what we could expect to happen with tight oil

Sunday, February 22, 2015

Why have newspapers become so bad? There is a reason: it is another case of the "Seneca effect"



You probably have noticed the decline in the quality of newspapers. Actually, it is not just a decline, it is a true collapse: news are not verified, legends are published as fact, important issues are neglected in favor of gossip and let's say nothing about the way some crucial problems such as climate change are neglected and mispresented. There is a reason: as you see in the figure above, newspapers have rapidly lost a large fraction of their revenues in the form of advertising. In short, newspapers are a living example of what I called the "Seneca Effect", which states that "ruin is rapid." (Image by Mark J. Perry from the American Enterprise Institute.)


By now, you may think that I am becoming a bit fixated with this idea of the "Seneca Cliff", but the image above is so impressive that I just had to show it here. In previous posts, I described how decline could be much faster than growth (the "Seneca Effect" - see the graph on the left) in several historical cases involving the exploitation of natural resources. In these cases, the rapid collapse is the result of the attempt of operators to keep production constant or increasing, and hence overexploiting the resource.

The case of newspaper advertising looks similar. The decline of newspaper quality during the past few years has been startling and it can be explained by the graph at the beginning of this post. Advertising revenues for newspapers collapsed badly, "Seneca-style,"  starting with the early 2000s. This collapse took place while total advertising revenues actually increased; so, the data have to be interpreted as the result of the diffusion of the Internet. Apparently, Web advertising on social media and other channels provided better performance/cost ratios than newspaper related advertising and it is there that the advertising money went. And, without the money that came from advertising, it is no surprise that the quality of newspapers collapsed as well.

So, we have here a good illustration of the ubiquity of Seneca's observation that "the way to ruin is rapid", but also a different case than that of the exploitation of natural resources as - say - shale oil (which is, by the way, starting to show a very nice "Seneca Cliff"). Nevertheless, all human economic activities have to do with the exploitation of resources of some kind. In this case, the resource being exploited is the capital available for advertising.

We can see the effect of the competition between Social Media and Newspaper advertising as a classic case of the "Gause's law of competitive exclusion", well known in biology. It says that when two species compete for the same resources, one will usually go extinct. This is what's happening with the two "species" which are Newspapers and Social Media - the first is probably going to be extinct soon.

Below, I'll show you a simple model on how we can simulate the competition of  two species for the same resource. But, intuitively, we do expect that the collapse of the less efficient species should be abrupt. We can imagine that the old species (say, foxes) had found some kind of homeostatic equilibrium with its source of food (say, rabbits) and then, suddenly, the new species appears (say, wolves) which catches rabbits much faster and more efficiently. It is disastrous for the foxes, which go extinct quickly.

This is not just theory, think of what happened when the Europeans arrived in the Americas with their firearms. It was a disaster for the local people - less efficient than the Europeans in the art of war. Not a nice story to tell but, unfortunately, this seems to be the way the world works.

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A simple model of Gause's law applied to advertising.
by Ugo Bardi

Here is the model's representation made using the Vensim software:





The model is built using simple assumptions which make it similar to the well known "Lotka-Volterra" (LV) model. It starts from an "advertising capital" (rabbits in the LV model), which is consumed by capital specifically dedicated to internet advertising (foxes in the LV model), assuming also that growth is quadratically damped, as it is often done in the LV model. There are two species in competition, Web and Newspaper advertising ("foxes" and "wolves") of which one starts with much lower numbers but with a higher efficiency of capital consumption. This second species appears as a "pulse" at about one third of the simulation. The result is that the first species (Newspaper advertising) reaches homeostasis, but collapses rapidly when the second species (Web advertising) enters into play. Here are the results of the investments on newspaper advertising






This is just a stab of a model, put together in an hour or so. Don't take it for more than that, but I think it does capture something of the system being modeled. For details write to me at ugo.bardi(zingything)unifi.it. I can also send to you the complete model.





Tuesday, February 17, 2015

Fooling peak oil one more time: can we find new sources of liquid hydrocarbons?



The world peak of conventional oil production took place in 2005-2006, but the supply of combustible liquids did not decline, mainly because of the contribution of the newly developed "shale oil" (or "tight" oil) fields. With the impending worldwide peak of "all liquids" it is likely that the industry will try a new, all out effort to squeeze out the last drops of liquid oil from whatever sources are available, no matter how dirty and expensive. It is not certain that the attempt will be successful, but it is likely that some new monstrosity will be created in Sauron's satanic mills. 



Peak oil is something referred to as a "theory," intended in a derogatory sense. But the concept is not just a theory; production peaks are historically observed facts, occurring not just for oil, but for any natural resource which is exploited beyond its capability to reform (e.g. for whale oil).

Not only peaks are a common phenomenon, but often they can also be predicted with good accuracy. That's the case for two of the major events of this kind; the peaking of oil in the US in 1970, and the worldwide peaking of "conventional" oil in 2005-2006. The first was foreseen by Marion King Hubbert in 1956, the second by Campbell and Laherrere in 1998.

Yet, despite the accuracy of these predictions, "peakers" are often taken by surprise when these peaks do not lead to a decline in the fuel supply. The US 1970 peak was offset by an increase of oil imports and by a major shift to coal for the production of electricity. The world peak of 2005-2006 was compensated by the increase in the production of non-conventional oil, in particular by "tight oil" (commonly referred to as "shale oil"). In the end, neither peak was the great turning point for humankind that some had foreseen.

Today, we are facing a new peak. The collapse of oil prices of late 2014 is an indication that the market cannot absorb the abundant - but expensive - unconventional oil that could be theoretically produced. The result is "peak liquids," arriving in a few years at most (according to Arthur Berman). But, just as it has happened in the past, the industry will not stand still. They will be actively seeking for new resources to keep production ongoing. Can peak oil be fooled once more, at least for some time?

As well known, predictions are difficult, especially when they are about the future. But it seems evident that, out there, something is stirring up and new "solutions" are being explored to counter the inpending decline of combustible liquids. The emphasis on nuclear energy in the latest IEA report is a sign of the times. But nuclear does not produce liquid fuels and the costs and the associated complications make it an unlikely savior of the world. The same can be said of biofuels: inefficient and land consuming; they have already reached their practical limits. Rather, the oil industry has always been good at squeezing out flammable liquids out of the dirtiest possible sources. Tar sands remain a potentially large resource, but their exploitation is hugely expensive. Perhaps more likely, the new "miracle" could be found in the "coal to liquids" process. 

Turning coal into liquids is an old idea and, in the 1940s, the Germans powered their whole war machine using synthetic fuels manufactured from coal. It was a tiny production compared to what we need today, but it shows that, in an emergency situation, coal can come to the rescue.

Making fuels from coal was contemplated during the first oil crisis of the 1970s, although it turned out that it was not needed. Then, in his 2005 report, Robert Hirsch suggested that peak oil could be staved off by a crash program involving - among other things - coal liquefaction. The technology is known, some plants are in operation right now; Wikipedia lists 6 plants in operation in the US and 6 more outside the US. Many more are planned. So, if a crash program on coal were to be started now, it could produce a major fraction of the US demand in 10 years, around 5 million barrels per day (image below, from Hirsch's report), an impact similar to that obtained from shale oil over a similar period of time.



Is it really possible? Will we see a rush to coal similar to the rush to shale that we have seen in the past decade or so? It can't be excluded. The world's coal reserves are - theoretically - very large, even though whether they are all extractable is another matter. Before that is ascertained, however, it is not unlikely that the financial system can be convinced to sink great amounts of money into the new, potentially very profitable, coal adventure.

The real problem is, of course, that trying to replace oil with coal would mean wrecking the earth's atmosphere and moving well over the "tipping point" of climate change. It would mean to forsake a whole planet in exchange for riding our SUVs for a few years more. Yet, the thirst for liquid fuels is so strong, and the denial of climate science so widespread and entrenched, that it is hard to think that the rush to coal could be stopped if - Heaven forbid - it were to turn out to be (or just perceived to be) economically profitable. So, before giving up with liquid fuels and admitting that the only way out is to go renewables, it is perfectly possible that some new monstrosity will be created in Sauron's satanic mills.

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Note added after publication. Some commenters have correctly raised the question of the net energy of Coal to Liquids. Is it positive? Is it larger than that of Tar sands or tight oil? But it is also a difficult question to answer. The LCA/EROEI analysis is a good tool, but affected by uncertainties, and technologies always change. The point is, I think, not so much what is the actual value of the net energy provided, but the perception of the financial market of whether some money can be made from coal to liquids.

I think we can compare with the housing bubble. What is the net energy of a house? Negative, surely. And yet, the financial system poured in huge amounts of money in something that was known not to have an intrinsic value. So, it is all a question of perception. And people misperceive things badly enough.....



Sunday, February 15, 2015

Peak Movies

Doomstead Diner

Peak Movies: 1968 Filmography

Published on the Doomstead Diner on February 8, 2015
1968montage

Ugo Bardi over on Resource Crisis recently wrote an article about the Decline of Literature, another one of his many examples of the “Seneca Cliff” idea, which postulates that while the road up to the Peak of anything is fairly slow, the Road to Ruin is pretty quick.

Right after reading that article, while I was looking for film clips to use in one of my articles, which I always like to drop some pop culture or music reference into if possible, I noticed that several films which rank on my all time favorite personal list were ALL either produced or released in 1968.

Now, you will get film history buffs who can point to many great films NOT made in 1968, there are many of them of course.  However, from my own perspective, I can find no other year where SO MANY were all produced that have stood the test of time as truly GREAT FILMS, of one sort or another.  Not all are from major studios, in fact quite a few come from the “B” Film category.

Here are my Top Ten Films from 1968, with a short review of each, and a clip or trailer I was able to dig up on You Tube.  They come in no particular order, and there are some I left off the list which are favorites just to keep it down to 10.

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Read the whole post on the Doomstead Diner 


Monday, February 9, 2015

The last astronaut: the cycle of human spaceflight is coming to an end

Smart, dedicated, competent, polyglot, and more; Samantha Cristoforetti seems to have been invented for a "Star Trek" episode. She is shown here at the International Space Station, where she is staying at the moment of publication of this post. Cristoforetti may not be the last astronaut to orbit the earth, but it is possible that the end of what was once called "the space age" will not be far away in the future. (image credit: ESA/NASA)



I experienced the enthusiasm of the "space age," starting in the 1960s, and I am not happy to see the end of that old dream. Yet, the data are clear and cannot be ignored: human spaceflight is winding down. Look at the graph, below. It shows the total number of people launched into space each year. (The data are from Wikipedia - more details.)


As you see, the number of people sent to space peaked in the 1990s, following a cycle that can be fitted reasonably well using a bell-shaped curve (a Gaussian, in this case). We have not yet arrived to the end of space travel, but the number of people traveling to space is going down. With the international space station set to be retired in 2020, it may be that the "space age" is destined to come to an end in a non remote future. 

The shape of the cycle can be seen as a "Hubbert curve." This curve typically describes the exploitation of a non-renewable resource; fossil fuels in particular, but it also describes how economic activities are affected by a diminishing availability of resources. In this case, the shape of the curve suggests that we are gradually running out of the surplus resources needed to send humans into space. In a sense, the economics of human spaceflight are like those of the great pyramids of Egypt. These pyramids were expensive and required considerable surplus resources to be built. When the surplus disappeared, no more were built. The shape of the pyramid building curve was, again, Hubbert-like.

This result is not surprising, considering that we are reaching the planetary limits to growth. In part, we are reacting to the diminishing availability of resources by replacing humans with less expensive robots, but sending robots to space is not the same as the "conquest of space" was once conceived. Besides, the decline of space exploration is evident also from other data, see for instance this plot showing the budget available to NASA (from "Starts with a Bang").Note how the peak in human spaceflights coincides with the peak in the resources destined to space exploration.




If space exploration is directly related to the availability of resources, it is also true that, from the beginning, it was not meant to be just a resource drain. The idea of the  conquest of space involved overcoming the limits of the earth's ecosphere and accessing the resources of the whole solar system. Some of the concepts developed in this area were thought explicitly as ways to avoid the dire scenarios laid out in the 1972 study, "The Limits to Growth." Proposals involved placing giant habitats at the Lagrange libration points, where no energy was necessary to keep them there. The idea gained some traction in the 1970s and, in the figure, you see an impression of one of those habitats - the "Bernal Sphere."(image credit: NASA)

Today, we can't look at these old drawings without shaking our heads and wondering how anyone could take them seriously. Yet, these ideas were not impossible in themselves and, in the 1970s, we still had sufficient resources to make it possible some kind of human expansion into space, even though not on the grand scale that some people were proposing. But we missed that occasion and we much preferred to invest our surplus in military toys. Today, we can't even dream of colonizing space anymore. 

The space age is not completely over, yet, but it is becoming more and more difficult to sustain the costs of it. Right now, the Russians are still willing to launch to orbit West European astronauts. But how long will they continue to do so while Western Europe is enacting sanctions devised to cripple the Russian economy? Samantha Cristoforetti, brave and competent Italian astronaut, may well be a member of the last patrol of humans orbiting around the earth for a long time to come. 


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Note added after publication: This post  generated several interesting comments. It is clear that our interest in space has not faded: we are still going to space and we still think that there is a future there. However, it is also clear that we need to cut corners in whatever we do and the "conquest of space" as it was envisioned in the 1950s and 1960s is today completely beyond our means. Surely we can send robots up there, but the conquest of space means to go there and stay there, as human beings, but for that we missed the (space) boat.

There still remains a big question mark about what what role will have space in our future. Will we decline so sharply that we'll have to abandon all space exploration? It may well be and, in this case, the curve will "look Senecan", indeed. Or, we may be able to maintain a certain level of activity, up there. And it might even expand, pick up momentum, and become something that moves by itself.

Space has some peculiar characteristics as an environment, for one thing, it can be seen as the opposite of the earth's environment in terms or relative availability of energy and resources. The earth's surface is rich in mineral resources, but relatively poor in energy sources. Space is rich in energy resources, but poor in terms of mineral resources. Decades of studies about the "self replicating lunar factory" have built up a lot of knowledge on how a self sustaining metabolic system could be built in space to harness the available energy and resources. But it is very difficult and space enthusiasts have a tendency of launching (almost literally) themselves in wild speculations which, then, leave the details unwritten. Think of the "Dyson sphere", for instance. Beautiful concept, but how do exactly dismantle Jupiter and turn it into a solid sphere that surrounds the sun.... ? Still, space is part of our world view and it will remain there for quite a while.


Then, I thought I could also mention the debate on the "Lunar Landing Hoax" which, apparently, keeps flaring up, and did so also in relation to the present post on the "doomstead diner". On this point, I am absolutely sure: even Samantha Cristoforetti is a hoax and I have solid proof of this. See the image below. She is not a real human being; she is just a cartoon character created by Walt Disney Studios! (source)








Saturday, February 7, 2015

Overshoot



The many comments appearing all over the Web for the death of William Catton , the author of "Oversoot", show how deep the impact of this book was on many of us. 


"Overshoot" was part of that wave of books and studies of the 1960s and 1970s which tried to come to terms to the consequences of the unavoidable limitation of the natural resources available to humankind. The initiator of the trend was, perhaps, Garrett Hardin with his 1968 "The Tragedy of the Commons." Earlier on, in 1956, Marion King Hubbert had proposed the concept of "peaking" of oil production, a remarkable first in a field in which the term "depletion" was all but banned. But Hubbert remained within the conventional paradigm that saw technology as able to solve all problems and he believed that nuclear energy would come to the rescue. Hardin, and later Catton and others, instead, saw the root of the problem in humankind's behavior: the tendency to overexploit natural resources; to use today what should be left for tomorrow. The basic message of "Overshoot" is that overexploitation is a basic consequence of the way human beings behave in the ecosystem. It is not something that can be solved by technological wizardry.

We may compare "Overshoot" to another book that carried a similar message: "The Limits to Growth" of 1972. Conceived at about the same time (even though "Overshoot" was published only in 1980), these two books can be seen as opposite in terms of public relation strategies. Overshoot never was a best-seller, nor it was translated in any language (except, recently, in Russian and Spanish). Instead, "The Limits to Growth" was sold in millions of copies and translated into almost every language which appears in print. But, as a consequence, "The Limits to Growth" was the target of a strong demonization campaign which turned into an obligatory laughing stock for anyone who dared to mention it in public. "Overshoot", instead, escaped the attention of the powers that be and never received the same treatment. So, it has been quietly influencing an entire generation of people who have understood the root causes of our problems (see, e.g. this comment by John Michael Greer).

Re-examined more than 40 years after its conception, "Overshoot" appears dated in many details but not in its basic message. Its strength remains having posed so openly and so clearly the essence of the problem: human beings are part of the ecosystem and they tend to behave accordingly; trying to expand as much as possible and to appropriate as many resources as they can. It is normal: we are gradually discovering how the laws of physics and biology apply to the economy (Hardin was a biologist, after all). Unfortunately, if humans behave as just one of the species of the ecosystem, they tend to appropriate as many resources as they can, and as fast as possible. Then, the result is the phenomenon called "overshoot," with the associated suffering, destruction, and assorted disasters at least for that subsystem of the ecosystem we call "humankind". Can we avoid that? So far, it doesn't seem so: we even refuse to acknowledge that the problem exists.

On the other hand, if overshoot is part of the way the ecosystem works, we have to accept it; no matter how bad its consequences can be, at least from our viewpoint of human beings. One of the rules of the ecosystem is that in order for something new to be born, something old has to die. That is how the ecosystem has been working for billions of years; it will keep working in the same way for the future; with or without human beings. 







Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014)