Ratios, first post

In my essay (see the Oil1859 website), I talk a bit about return ratios.  I need to elaborate on that concept, because it's fundamental to understanding the elaborate structure of modern industrial societies.  In pre-industrial societies that depend on people and animals performing labor to produce food, raw materials, and finished products, not much complexity is possible.  A bit more complexity is possible when you can use wind or water energy to operate simple machines and sailing vessels.

The basis of the industrial revolution was coal.  A generation of machines was devised that burned coal to heat water into steam; the steam engine.  Societies grew more layers and got more complex.  I don't know what the return ratio was for digging up coal and burning it, but I'm sure it was intermediate between the return ratio of horses and the 15 to 1 return ratio of oil production.  The cornerstone of modern societies is electricity which powers all manner of machines attached to the electrical grid and oil-based fuels which power almost everything not attached to the grid.  The electricity is mostly produced by burning coal and natural gas, but digging up the coal and drilling the gas wells depends mostly on machines that burn petroleum fuels.  So the return ratio on oil production affects everything else.

To bring this back to society, look around you and ask yourself how many people you know that actually grow, mine, or make something.  Not many, probably.  My home state Arizona had about 2.855 million people at work at the end of 2009.  Arizona is the country's major copper producer and a significant source of timber, yet only 10,800 people are employed in mining and logging.  I've been told 7000 of those are miners.  That's only possible because mines depend on enormous oil-powered machines to dig and move the ore, controlled by a relative handful of people.  This in a state where most people worked in mines at the beginning of the 20th century.  159,000 people work in manufacturing jobs, and 132,00 people work in constuction.  443,500 people work in agriculture because Arizona is a huge agricultural exporter.  So that's 745,300 people you could argue produce something.  In contrast, 2,109,500 people work in service sector and transportation jobs.  Cheap oil allows a huge superstructure of "service economy" to be built on a small base of producer jobs.  As the cost of oil rises, the effect will be twofold.  People will spend less money on nonessential goods and services.  Human labor will become more valuable relative to fuel costs (no more weed-whackers...).

So how will the job structure shift as the service economy deflates?  More people will be probably be needed to grow food if there are fewer machines in the fields.  Will there be pickaxes in mines again?  Who will start the companies to do the work and how will they get the money to pay people?  A plan or two would be helpful.

"10 Pieces" Decade Overview: USGS Hiding, IEA Fudging

This is a short article that seems to be a listing of what Steve Andrews considers important factors and developments of the past decade--http://www.aspousa.org/index.php/2010/01/top-10-pieces-of-the-peak-oil-puzzle-during-the-2000s/.  Two of his "pieces" in particular shed light on topics I had wondered about.  Piece 1 is the USGS World Oil Studies, that inexplicably stopped after 2000.  Apparently before that they came out every 4-5 years.  Then see his Piece 10, an article in the Guardian from November 2009 that  reports that the Organization for Economic Cooperation and Development's International Energy Agency was pressured by the US (who exactly?) to underplay the rate of oil production decline from existing oil fields.  The stated justification for the pressure was avoiding a panic which would affect financial markets and damage America's access to world oil.

Unfortunately taken together, these pieces reinforce the sense that we're seeing around us is the aggregate of lots of denial.  I've discussed this with my psychologist friend Brian who specializes in anger management.  He thinks the dominant psychological mechanism at work in our society relative this issue is denial.  When forced to deal with the problem directly, the natural tendency for people in denial is to become angry, followed by depression and a sense of hopelessness.  Not very productive reactions.

As with the financial crisis (which was triggered by the first spike in oil prices), denial until the situation deteriorates to the point of collapse guaranties a much worse collapse when it comes.  Along these lines, I read a couple of days ago in Morgan Downey's blog that American cars buyers are no longer considering fuel economy as a top factor in vehicle purchase despite the recent history of high fuel costs.  Actually, in my experience, many people claim lack of knowledge of the prospect of oil decline, although part of the denial mental mechanism can be not attempting to investigate a topic if you're afraid you might learn something unpleasant.   Brian thinks he'll need to put on workshops for depressed, angry people when denial no longer works.  He may need to work pro-bono.

Reflections on slime

There's lots of money being directed to research on algae as a source of biodiesel.  ExxonMobil has committed $600 million to slime research.  Closer to home, the University of Arizona has several researchers up to their elbows in algae, as described in the local newspaper.  Some strains of algae are high in lipids (fats and oils) that can be extracted and burned, and what remains is high in protein, which animals can in principle eat.  My impression is that algae may have a better return ratio than corn (1.3 to 1; lousy), but to make sense, it needs to approach the 15 to 1 return ratio of conventional oil.  I'm trying to imagine scaling to the millions of barrels (42 gal/barrel) per day necessary to provide a credible supplement to declining conventional oil.

And now a website

The day after I wrote the paragraphs below I decided I needed an actual website to complement the blog, since I want to do web pages as well as blog posts.  I don't see the equivalent of WordPress's Page function, so we'll make do.

What is this?

I'm pretty sure we're at the peak of oil production worldwide, headed into the decline phase.  Everyone alive today in advanced economies treats petroleum and the products derived from petroleum, fuels and petrochemicals, as a given.  The reality is that oil is a scarce and limited resource, and we've used the bulk of what's easy and cheap to extract.  I'm trying to understand the situation and make reasonable extrapolations that are useful to me and those around me.

I decided a blog was the best place to organize the thoughts that I wanted to share.  We'll see how it develops.