When will the world reach peak fossil fuel production?

[JaWiB]

Solar has other more fundamental problems that prevent it from becoming a primary source of baseline power. For example, it doesn't work at night.

Which is why people are looking into energy storage solutions like hydrogen. It isn't an insurmountable problem

 

[brainstorm]

I was in the middle of a detailed response message when the power went out and I lost my work. Ironic that it happened while I was posting about energy developments! Anyway, the main issue, imo, is that people can't expect that current consumption patterns are going to magically cause solar power, fossil fuel supply, or any other aspect of energy resourcing to behave in ways they expect it to. People act as if the energy sources have to meet their cultural expectations instead of the other way around. If solar doesn't work it night, it may be that people are going to have to adapt their cultural patterns to go without electricity at night. It may not be necessary to do this right away or all at once, but it makes more sense to me that if you estimate that eventually it will be inevitable that you would rather transition slowly than wait for the sh*t to hit the fan, so to speak.

Currently, I believe the political-mechanical issue is whether free-markets are suited to adapt to energy production and consumption needs for the future. Presumable with valid knowledge about the future they would be, but the problem is that market interests themselves exert influence on future-knowledge in a way that suits short-term profit-motives and consumer-habits. In short, consumers are willing to pay to be told what they want to believe, even if that means making the disaster worse in the long run. Many people simply don't believe there's any disaster even coming - that it is just a trick on the part of people who want to generate cultural change.

The biggest question is whether government should allow solar developments to get priced out of the market, or whether some combination of subsidies and business-model intervention could push the solar-energy industry in the direction of making technologies more accessible, affordable, and therefore widespread. Of course, if existing energy-interests decide that growth of solar is going to interfere with their ability to maintain infrastructure with a narrower customer base, they will probably focus on preventing solar from gaining market share, just because they need the money to continue funding their operations, which they have a stake in maintaining.

 

[talk2glenn]

Many people simply don't believe there's any disaster even coming - that it is just a trick on the part of people who want to generate cultural change.

There is no "disaster". This is a political myth promoted by interested parties who regard petroleum and other carbon fuels as "bad", and so-called alternatves as "good". If there were any impending threat of a collapse in global oil supplies, the price of oil (which reflects both current supply/demand and anticipated future supply/demand, through the futures markets) would be significantly higher than it is currently. Even with recent inflation, which is a product of market distortion through public policy (war, energy subsidy, etcetera) and not fundamental changes in supply/demand (the increased demand from China is more than offset by increased production), refined oil remains extremely cheap, relatively speaking. This is because it is extremely plentiful.

Global proved oil reserves have grown every year since they began collecting the data using current methodology at the turn of the century. This means that we are finding new, economically exploitable oil (at current price and technology levels) faster than we are drilling it up. Or, another way of putting it is to say that the amount of oil we know of in the Earth TODAY is NO LESS THAN it was at the BEGINNING of the industrial cycle in the late 1800's.

Despite arguments to its "unsustainability", the engineering trends suggest that the rate of technology and productivity growth is more than enough to offset the drainage of known fields, with the effect being that oil is practically an inexhaustible resource, even if that is not theoretically accurate.

The biggest question is whether government should allow solar developments to get priced out of the market, or whether some combination of subsidies and business-model intervention could push the solar-energy industry in the direction of making technologies more accessible, affordable, and therefore widespread.

It is never the case that public subsidy causes an industry, any industry, to become more "affordable". It may be true that public subsidy increases accessibility in the short term, but this is at the expense of the long term (the short term increase in demand must ultimately be met by a long term reduction in that demand, to achieve balance of payments equilibrium - the debt government accrused today through subsidy must be paid tomorrow through tax, if you will, though this is a crude and not always accurate metaphorical explanation). To exercise this point, consider the recent cash for clunkers program. The program subsidized the purchase of cars in the short term, but everyone acknowledge that this would mean a later-term decline in car sales, once the subsidies were eliminated (in effect, people who would have otherwise purchased their vehicle in a month purchased it today; net sales were unaffected, just the rate of sales). Subsidy advocates argue that, due to unforeseen market conditions, it is worth moving future demand to present demand, for political reasons.

As to affordability, a subsidy has the effect of maintaining an immediate market price level that is below the clearing, equilibrium price (through cash rebates to consumers or producers; the price paid by the consumer is less than the actual price, which includes the subsidy). This means that consumer demand will exceed producer supply, in the short, subsidized term. In response, producers will ALWAYS raise prices. In effect, subsidies have the effect of RAISING the short term price. This is economic reality. Again, subsidy advocates will argue this is a politically desirable outcome; they cannot argue that this will not happen. Again to exercise this point, consider college tuition rates. Do to heavy subsidy through the DOE guaranteed loans programs, demand for a college education outpaces supply, and the price of tuition increases much more rapidly than inflation.

 

[apeiron]

Despite arguments to its "unsustainability", the engineering trends suggest that the rate of technology and productivity growth is more than enough to offset the drainage of known fields, with the effect being that oil is practically an inexhaustible resource, even if that is not theoretically accurate.

Have you read the study that is the subject of this thread and can you please explain how it is an inaccurate summary of actual known reserves and consumption trends?

You say:

Global proved oil reserves have grown every year since they began collecting the data using current methodology at the turn of the century. This means that we are finding new, economically exploitable oil (at current price and technology levels) faster than we are drilling it up.

Can you please supply the references for that statement?

 

[Proton Soup]

there is a huge amount of methane hydrate ice at the bottom of the sea. i find it hard to believe that we won't find a way to harvest it as soon as that becomes profitable. of course, that is not infinite, either (despite being continually produced biologically), but it would certainly buy more time.

 

[apeiron]

Fuel prices are not kept artificially low; the market rate is a product of supply and demand. If it is the case that supply of cheap fuels is decreasing irrecoverably, while demand for energy is increasing, then these prices will rise until alternative sources become viable.

If you want to talk about subsidies and free markets, you might want to consider this first...

IEA analysis that will be presented in the World Energy Outlook (WEO) 2010 -- to be released in November -- reveals that fossil fuel subsidies are much higher than previously thought. In 2008, fossil fuel consumption subsidies rose to USD 557 billion, up from USD 342 billion the previous year. Phasing out such subsidies would send a price signal to create incentive for more efficient use.

http://www.worldenergyoutlook.org/subsidies.asp

 

[mheslep]

... These policies make little economic sense; the homeowner does not have to pay for his share of the infrastructure, as you point out, and he does not have the overhead of grid maintenance.

Also, unless the residential solar is heavily cleaned up by batteries, the power quality is lousy (large variation on a time scale of seconds). As more and more solar comes online, this is likely to become a problem for the utilities.

 

[mheslep]

Solar has other more fundamental problems that prevent it from becoming a primary source of baseline power. For example, it doesn't work at night.

Clearly approaches like http://en.wikipedia.org/wiki/Andasol_Solar_Power_Station" 'work' technically at night. The economics of the storage are the question.

 

[Argentum Vulpes]

Solar Thermal is one possibility for night time power, hydrogen is another way to store excess power from solar power production for night time usage. The big problem that I see with that line of thought or any other "we need to develop technology" cures to make solar more in line with the western worlds expectations with the current power system is there is a tonn of "if" coming off of these plans.

Also solar panels require rare Earth materials to do their thing, so do all semi conductors in consumer electronics. China is the worlds suppler of these materials and they have announced a cut back in global exports, due to rising internal needs. Because of laws of supply and demand the cost of these panels will rise, and so will other consumer electronics. Solar if brought to large scale will not drop in price but rise, and so will anything else with a semi conductor.

It is incredibly disappointing that so many people on this thread have discounted Nuclear power as the solution to the problem. It all but displaced oil as a power source in the USA (approximately 20% of current grid power). It replaced oil/diesel on subs and aircraft carriers in the USA navy, and replaced oil in the Russian ice breaker fleet. All cases where nuclear power has clearly demonstrated a clear path for displacing fossil fuel sources.

As for having a plan that has some "if" coming off of it, that will succeed. Replace coal boilers with nuclear tea kettles, and use the excessive heat to run a coal to liquid plant. Looking at USA reserves of coal that gives approximately 344 billion barrels of oil just inside of the USA borders. Sounds like a good reserve to me, and no one will loose their job, heck might even create some more.

 

[aquitaine]

Which is why people are looking into energy storage solutions like hydrogen. It isn't an insurmountable problem

Adding extra expense. Even with a storage solution you'd need to build over projected demand to compensate for the extra load, which feeds the other problem: fundamental inefficiency. The fundamental efficiency limit is the amount of solar energy per square meter, 27 watts if I recall correctly (though feel free to correct me). Now, in order to generate the gigawatts needed to power a city, you'd need huge amounts of land turned into solar farms, many may hectares worth. Instead of doing that, why not just go with the sensible solution and use nuclear? After all, many power plants have several reactors allowing them to get 3+ GW at just one site or more. Or do we really want to use MORE land, destroy more habitat than we already are? Land usage matters.

 

[mheslep]

Also solar panels require rare Earth materials to do their thing, so do all semi conductors in consumer electronics.

No, rare Earth elements are not required in traditional PV crystal panels. Chemically they are simple http://en.wikipedia.org/wiki/Solar_cell#The_p-n_junction".

Solar if brought to large scale will not drop in price but rise

Solar PV panels are now produced at a rate of several gigawatts worth of panels per year, the price has continually dropped over time, dramatically so in the last two years. See, e.g.

http://www.1366tech.com/v2/
The main cost in crystalline panels is the highly purified silicon required; methods of producing the silicon wafers have become increasingly efficient over time.

 

[Argentum Vulpes]

No, rare Earth elements are not required in traditional PV crystal panels. Chemically they are simple http://en.wikipedia.org/wiki/Solar_cell#The_p-n_junction".

Now let's stop being disingenuous here. Yes the old generation one PV moncrystalline panels require no rare Earth elements. However those panels are lucky to get 20% efficiency. Have to be in large heavy sheet configurations. Have to track the sun, and the hotter they get the efficacy of the panels drop off. There is a reason they are generation one panels, and labs are barking up the generation four tree.

Solar PV panels are now produced at a rate of several gigawatts worth of panels per year, the price has continually dropped over time, dramatically so in the last two years. See, e.g.

http://www.1366tech.com/v2/
The main cost in crystalline panels is the highly purified silicon required; methods of producing the silicon wafers have become increasingly efficient over time.

Of course the cost of the panels are going to go down if it is artificially brought down by government subsidies. Also per your graph for the line to remain true there must be a 35% growth in solar power generation, and only 18% of that growth go into new based technologies. Also the production facilities must have an 18% capacity factor (CF) and rely on a 7% government subsidy. Sounds like a lot of restrictions to keep that graph true.

And for kicks and giggles let's look at how efficiently the largest large scale solar project vs largest nuclear power uses land. DeSoto Next Generation Solar Energy Center with a peak power output of 25 MW on 140 acres of land with a CF of 19.1%. So there is approximately 178 kW of electricity per acre 19.1% of the year. Palo Verde Nuclear Generating Station has a peak power output of 3,875 MW on 4,000 acres of land with a CF of 86%. So there is 800 kW of electricity per acre 86% of the year. So nuclear uses land 4.5 times more efficiently and dose it 4.5 times as long.

Nuclear power is hands down the most efficient way to produce power with current technologies. Solar is a nice idea that needs a tonn more research. In its current form solar power can not provide base load power now or in the foreseeable future.

 

[mheslep]

Now let's stop being disingenuous here.
Yes the old generation one PV moncrystalline panels require no rare Earth elements.

Exactly, I'm attempting to stop you from continuing to do so. You made a claim about rare Earth elements limiting the supply of PV panels:

Also solar panels require rare Earth materials to do their thing, so do all semi conductors in consumer electronics. China is the worlds suppler of these materials and they have announced a cut back in global exports, due to rising internal needs. Because of laws of supply and demand the cost of these panels will rise, and so will other consumer electronics

Provide a valid reference showing how mass produced PV (i.e. panels) require rare Earth elements in amounts sufficient to drive up PV panel costs or retract the claim and move on. Hint: You're confusing thin film solar, some of which does use rare earth, and polycrystalline silicon panels, which does not, even the modern ones.

However those panels are lucky to get 20% efficiency.

No, panels prior to 2000 yielded ~10-15%. Now, most panels mass produced panels hit ~18%, with a few at 20-22%.

Have to track the sun, and the hotter they get the efficacy of the panels drop off.

Sun angle and temperature still impact the output of 2010 PV mass produced crystalline cells; for that matter, temperature impacts the performance of any P-N junction semiconductor.

Also the production facilities must have an 18% capacity factor (CF) and rely on a 7% government subsidy. Sounds like a lot of restrictions to keep that graph true.

Capacity factor is not germane to PV manufacturing, but refers to the percentage of online operation time of a power source; for solar power this refers to the amount of time the PV produces equivalent rated power which depends of course on sunlight received, typically 1/5 to 1/6 of a 24 hr day, ie. 18%. The 7% figure is not a government subsidy, but the assumed interest rate on borrowed money, i.e. the discounted rate of future cash flows.

Regarding nuclear power, I haven't seen anyone dismiss it in this thread. Instead there has been discussion of how much nuclear could be built in a given time.

 

[JaWiB]

Adding extra expense. Even with a storage solution you'd need to build over projected demand to compensate for the extra load, which feeds the other problem: fundamental inefficiency.

You already have to build over projected demand, regardless of the energy source...

The fundamental efficiency limit is the amount of solar energy per square meter, 27 watts if I recall correctly (though feel free to correct me).

I think average insolation is in the hundreds of W/m^2

Now, in order to generate the gigawatts needed to power a city, you'd need huge amounts of land turned into solar farms, many may hectares worth. Instead of doing that, why not just go with the sensible solution and use nuclear? After all, many power plants have several reactors allowing them to get 3+ GW at just one site or more. Or do we really want to use MORE land, destroy more habitat than we already are? Land usage matters.

True, you would need a lot of surface area. But there also seems to be a lot of land available in various places. Solar farms aside, we also have plenty of parking lots and rooftops. It's hard to say how much infrastructure could cost, but I still think solar is one of the best options in the long-term.

As for nuclear, I'm not against it, but I've heard conflicting reports about the availability of fuel, overall costs (one speaker cited some project in France that went ridiculously over budget and wasn't completed on time), and it has the typical disadvantage that it uses up a lot of water.

 

[apeiron]

Nuclear power is hands down the most efficient way to produce power with current technologies. Solar is a nice idea that needs a tonn more research. In its current form solar power can not provide base load power now or in the foreseeable future.

A complete costing of nuclear is more complicated. For example, the waste has to go somewhere, which will do something to your land useage calculations.

But anyway, I think it is easily agreed that there needs to be a baseload system and other stuff slots in on top.

The major thing we are not yet set up to do is capture free energy at any scale which is most convenient. The public utility/private monopoly model distorts the market by favouring large scale energy projects. It is obviously better if, for example, the electricity grid was a two-way network that could function as a battery. So if I tiled my roof with PV panels, the excess would feed into the grid - where it might even be stored by pumping water back up into a hydrodam - and then I could take that electricity back at a later date at a similar rate.

Nuclear would have to be the big utility model of course. PV would be the consumer level probably. And wind could span the range.

The economic calculations are complex, but counting the cost of plugging new technology into old financial models of infrastructure is dumb. It is the new infrastructure that we are trying to imagine.

And the point of the OP is that we have less time than many imagine to get imagining and acting. If we wait for market forces, it will be too late as oil is not accurately priced as a commodity!

Scarce goods should have higher prices, but fossil fuels have been treated as a free lunch (where I would not automatically disagree that nuclear has been over-priced by the market in terms of its dangers and capital costs - I am just wary because the industry has been in large part justified by a desire for bombs).

 

[mheslep]

The fundamental efficiency limit is the amount of solar energy per square meter, 27 watts if I recall correctly (though feel free to correct me).

I think average insolation is in the hundreds of W/m^2

"[URL
1366 W/m^2[/URL] is the mean power density striking the Earth's upper atmosphere; 1000 to 1100 W/m^2 reaches the surface at sea level at mid day in lower latitudes. Then solar PV crystalline panels convert to electricity at ~20% in rated conditions, producing on the order of ~200 W(e)/m^2.

 

[mheslep]

... and it has the typical disadvantage that it uses up a lot of water.

So do many solar thermal systems. So do biofuel technologies - all of them. Solar PV requires no water of course.

 

[talk2glenn]

Can you please supply the references for that statement?

Much of the information is proprietary; it is difficult to find collectively published quantitative data over time in the public domain. However, see this link:

http://www.hubbertpeak.com/laherrere/supply.htm

Specifically, see figures 4 and 5, for US and World (minus) US proved reserves, respectively. Note that proved reserves are not linked to production per se; they are defined as "reserves which are practically harvestable given the current price of oil and current technology".

Beyond this, there are vast quantities of unproved reserves - hydrocarbons we are reasonably confident are out there, but are not reasonably attainable given current price and technology levels.

Solar PV panels are now produced at a rate of several gigawatts worth of panels per year, the price has continually dropped over time, dramatically so in the last two years. See, e.g.

I do not know what methodology the architects of your graph used, because it is more certainly not the case that solar electricity production is anywhere near the level of $0.20/kWh. Current US aggregate production cost is ~$0.32/kWh. This is a customer-cost rate for residential, roof-mounted solar panels in optimal conditions. Because it is a customer-cost rate, it does not include subsidy-added costs, which can be upwards of 50% of net. This implies an unsubsidized rate of ~$0.48/kWh; this is many times higher than the average electricity rates paid by most American utility customers (for reference, average rate was 12 cents in 2009 in the United States, not including demand charges).

http://www.solarbuzz.com/solarindices.htm

For commercial/industrial electricity generation, costs are lower - between 15 and 30 cents/kWh. Note that this is still significantly higher than the costs of conventional and other alternative fuels. Further, solar has one critical disadvantage (shared by other renewables) - geography. Unlike conventional plant technologies (nuclear, gas, coal), in order to achieve these rates the solar plants must be built in "optimal conditions". In the US, this means parts of the contiguous southwest (Arizona and Southern California). Efficiencies drop dramatically as one moves east and/or north (for perspective, efficiency drops by about 50% when conditions go from clear to partly cloudy in Phoenix, AZ).

The typical response from solar-advocates is that efficiency will improve with time. Clearly, this is true. But it is also true that efficiency ratings for competing technologies will also improve with time. This implies two things:

1) You'd be foolish to install rooftop solar today, when it is both cost ineffective and will be less cost ineffective tomorrow.

2) We are foolish to subsidize solar technology development to the extent that such subsidies disfavor other, potentially more efficient alternatives. There is no reason the promise of "improved efficiency" should be uniquely solar. Any technology, lavishly subsidized by public funds as solar has been, will improve. Policy makers should be asking, is the gain in efficiency/dollar equal to or greater than the gains that could be had by spending the same amount on an alternative fuel source?

These points are addressed by markets. They are not addressed by policy makers. This is why solar subsidies (like all subsidies) are generally a bad thing, from an economic perspective.

In a free market, nobody would install solar, because it makes no economic sense. So the state heavily subsidizes both solar producers and solar consumers for residential PV installations. And, in a free market, investors would consider competing technologies and investment return before lending their money. The government is interested in neither the competition nor in earning a return, so it allocates its subsidy dollars inefficiently compared to the market. Since those government dollars are removed from the private, investably money supply, the economy in aggregate will be less efficient (less growth over time). From the policy-makers perspective, this is acceptable, because the long term goal for politicians is politically desirable outcomes (namely, the success of solar), NOT return on investment (aka profit or economic growth).

 

[JaWiB]

1) You'd be foolish to install rooftop solar today, when it is both cost ineffective and will be less cost ineffective tomorrow.

"You" as in the consumer might benefit from rooftop solar if you state happens to have good incentives

2) We are foolish to subsidize solar technology development to the extent that such subsidies disfavor other, potentially more efficient alternatives. There is no reason the promise of "improved efficiency" should be uniquely solar. Any technology, lavishly subsidized by public funds as solar has been, will improve. Policy makers should be asking, is the gain in efficiency/dollar equal to or greater than the gains that could be had by spending the same amount on an alternative fuel source?

These points are addressed by markets. They are not addressed by policy makers. This is why solar subsidies (like all subsidies) are generally a bad thing, from an economic perspective.

As I've stated, fossil fuels are awarded more federal subsidies than renewables, and most of the federal subsidies for renewables aren't even for solar (though I guess it might not be the same at the state level?) I also believe that you have to consider the environmental cost of fossil fuels because at some point it will translate into an economic cost.

In a free market, nobody would install solar, because it makes no economic sense. So the state heavily subsidizes both solar producers and solar consumers for residential PV installations. And, in a free market, investors would consider competing technologies and investment return before lending their money. The government is interested in neither the competition nor in earning a return, so it allocates its subsidy dollars inefficiently compared to the market. Since those government dollars are removed from the private, investably money supply, the economy in aggregate will be less efficient (less growth over time). From the policy-makers perspective, this is acceptable, because the long term goal for politicians is politically desirable outcomes (namely, the success of solar), NOT return on investment (aka profit or economic growth).

Huh? Last I checked a lot of the government money in solar is going into private industry and manufacturing. I guess I'm not understanding your point

 

[apeiron]

Much of the information is proprietary; it is difficult to find collectively published quantitative data over time in the public domain. However, see this link:

http://www.hubbertpeak.com/laherrere/supply.htm

Specifically, see figures 4 and 5, for US and World (minus) US proved reserves, respectively. Note that proved reserves are not linked to production per se; they are defined as "reserves which are practically harvestable given the current price of oil and current technology".

Epic fail Glenn .

You somehow seem to have cited a leading peak oiler. (Remember this? http://dieoff.org/page140.pdf)

Perhaps you did not read down to the conclusion (you certainly misread the graphs)...

Today we consume three times more than we discover. No technological breakthrough is foreseen! Technology helps to produce quicker and cheaper, but hardly increases the reported reserves which anticipate the technology.

The Middle East has most of the yet-to-produce reserves, but needs a great deal of money to meet the future increase in demand, as the production of the rest of the world will decline soon. Bankers are reluctant to invest in M.E. fearing instability, lack of demand of M.E. supply and future low price.

As far as petroleum is concerned, the World is moving in the wrong direction because of very poor data and erroneous interpretation. An oil crisis could be coming and nobody is prepared.

Surplus or shortage?: the answer is surplus of oil resources (conventional and non-conventional), but shortage of oil reserves before 2010 In fact, as oil price will increase substantially, the demand will be less than anticipated. There are many fields for energy savings.

 

[mheslep]

I do not know what methodology the architects of your graph used, because it is more certainly not the case that solar electricity production is anywhere near the level of $0.20/kWh. Current US aggregate production cost is ~$0.32/kWh. This is a customer-cost rate for residential, roof-mounted solar panels in optimal conditions. http://www.solarbuzz.com/solarindices.htm

Recheck, e.g. solarbuzz. Of course the chart from that solar PV company is using a favourable bracket, which in the US for Industrial systems in sunny climates is now $0.192 per kWh for July 2010, so the chart from 1366 Tech is accurate for that case, especially since they draw the distinction between retail (residential) and wholesale electricity (two horizontal lines). The difference between residential and industrial PV is clearly due to greater installation and distribution costs, i.e. cost of installation scale, which is irrelevant to a figure on costs of PV cell production itself over time - the point of that chart.

Because it is a customer-cost rate, it does not include subsidy-added costs, which can be upwards of 50% of net. This implies an unsubsidized rate of ~$0.48/kWh; this is many times higher than the average electricity rates paid by most American utility customers (for reference, average rate was 12 cents in 2009 in the United States, not including demand charges).

Solarbuzz prices specifically exclude:

the impact of rebate programs that are available today in some European Countries, Japan, some States of the USA and through bi-lateral aid programs.

For commercial/industrial electricity generation, costs are lower - between 15 and 30 cents/kWh. Note that this is still significantly higher than the costs of conventional and other alternative fuels.

Yes for the moment. If trends continue as shown in the PV cost chart indicating solar PV is dropping 10% per year, then in 5-10 years that will no longer be true for some cases.

Further, solar has one critical disadvantage (shared by other renewables) - geography. Unlike conventional plant technologies (nuclear, gas, coal), in order to achieve these rates the solar plants must be built in "optimal conditions". In the US, this means parts of the contiguous southwest (Arizona and Southern California).

Well replace 'must be' with 'are more cost effective when'

Efficiencies drop dramatically as one moves east and/or north (for perspective, efficiency drops by about 50% when conditions go from clear to partly cloudy in Phoenix, AZ).

Capacity factor drops (% of daily sunlight available) in less than sunny conditions and thus cost per kWh rises in the E./N. Efficiency (% of incident light converted to electricity) of the PV panels actually improves in cooler climates.

The typical response from solar-advocates is that efficiency will improve with time. Clearly, this is true.

Agreed.

But it is also true that efficiency ratings for competing technologies will also improve with time.

Er, no. The efficiency of carnot cycle boiler plants are approaching their thermodynamic limits, have been for some time. More can and is being done in traditional heat cycle plants with rejected waste heat - combined cycle plants, and more efficient turbine blades. Though these gains are significant over the total scale of the grid, the efficiency gains themselves are small - unlike those seen in PV. More importantly, the cost of fuels for these plants (nuclear aside for the moment) is only going up, even if coal and gas reserves are plentiful at the moment.

2) We are foolish to subsidize solar technology development to the extent that such subsidies disfavor other, potentially more efficient alternatives. There is no reason the promise of "improved efficiency" should be uniquely solar.

Solar subsidies may or may not be over done, but not for the reasons you suggest here. PV efficiency is not limited in the way heat engine efficiencies are (http://upload.wikimedia.org/wikipedia/commons/c/c9/PVeff%28rev100414%29.png" ), nor are there limited fuel supply issues increasing costs as in the case of fossil fuels.

Any technology, lavishly subsidized by public funds as solar has been, will improve.

Fossil and nuclear have received much, much more government subsidies in total. We see figures of dollars per Watt produced showing renewables receiving more than fossil/nuclear, but I don't find that metric, by itself, useful.

Policy makers should be asking, is the gain in efficiency/dollar equal to or greater than the gains that could be had by spending the same amount on an alternative fuel source?
These points are addressed by markets. They are not addressed by policy makers. This is why solar subsidies (like all subsidies) are generally a bad thing, from an economic perspective.

I'm generally in agreement with you here on subsidies and I favor free markets when I can find one. Here, the competition (fossil/nuclear) has been given more subsidies by orders of magnitude in total than solar/wind/etc. Take away the $billions of subsidies given to fossil/nuclear including that which it received in the past, add back in the externalities cost (pollution), then let's talk.

 

[heusdens]

Don't forget about concentrated solar power, it is more cost effective then PV, and estimates are that it can be more cost effective as electricity produced by oil before 2020. Also, it has the additional capacity to be able to desalinate water from the excess heat, so it would be a good idea to place them in desert like regions with plenty of sunshine.

 

[heusdens]

Fossil and nuclear have received much, much more government subsidies in total. We see figures of dollars per Watt produced showing renewables receiving more than fossil/nuclear, but I don't find that metric, by itself, useful.
I'm generally in agreement with you here on subsidies and I favor free markets when I can find one. Here, the competition (fossil/nuclear) has been given more subsidies by orders of magnitude in total than solar/wind/etc. Take away the $billions of subsidies given to fossil/nuclear including that which it received in the past, add back in the externalities cost (pollution), then let's talk.

Right!

Those mentioning that renewables depend on subsidies never mention those facts, and they are being dishonest about it by claiming that fossil and nuclear would not cost subsidies.

These lies we see over and over again (currently in the Netherlands the right-wing liberal and anti-islamic parties, claim in a similar fashion that windenergy only costs subsidies, while the truth is that wind power is taxed more as subsidized).

They have an agenda to keep us on fossil as long as possible (maximizing the profits of the oild- and gas companies) and hand us over into the monopoly of nuclear power.
Nuclear power will become the favourite targets of terrorists. But windmills will never be a target for terrorists.

Nuclear power will require a very centralized form of energy distribution, and that power will be in the hand of a few. But a mixture of many renewables is much more democratic as every citizin and region can provide their own energy. No centralized form of control possible in that option.

 

[mheslep]

Don't forget about concentrated solar power, it is more cost effective then PV, and estimates are that it can be more cost effective as electricity produced by oil before 2020.

Yes concentrated solar thermal is more cost effective than PV at the moment, but concentrated solar thermal also has the drawback of generally coming in one size, large, and generally requiring lots of water.

 

[mheslep]

These lies we see over and over again (currently in the Netherlands the right-wing liberal and anti-islamic parties, claim in a similar fashion that windenergy only costs subsidies, while the truth is that wind power is taxed more as subsidized).

They have an agenda to keep us on fossil as long as possible (maximizing the profits of the oild- and gas companies) and hand us over into the monopoly of nuclear power.

Do you have a source showing where these Netherlands political parties make these claims and state this agenda?

 

[talk2glenn]

Epic fail Glenn .

You somehow seem to have cited a leading peak oiler. (Remember this? http://dieoff.org/page140.pdf)

Perhaps you did not read down to the conclusion (you certainly misread the graphs)...

Their data was sound, which is what I was citing. Their conclusions were not. Did you notice that paragraph was written in 1997? For the past 13 years, proved reserves have in fact gone up (most recently by 0.7% in 2009, according to BP).

This directly contradicts the claim that production demand was greater in '97 than new discoveries. Their predictions are directly contradicted by observed evidence, as has always been the case for "peak oil" theorists.

I am reminded of a famous bet entered into by an economist and, I believe, a geologist. The names of the principals escapes me. The economist told the geologist to pick a basket of 10 commodities of his choice; the economist cared not what was chosen. The price of that basket would then be tracked over a period of ten years. If the average price of that basket was greater at the end of the bet than at the time it was placed, the economist would lose to the geologist. If the reverse was true, the geologist would lose to the economist.

Can you guess what happened? At the end of the bet term, the real price of the basket was not only lower, but the price of every commodity selected was also lower. The geologist lost absolutely.

Solarbuzz prices specifically exclude:

True, but the impact of other subsidies, which represent a significantly larger share of the net subsidy than simple customer cash rebates at time of purchase, are already built into the quoted costs used by solarbuzz.

Including rebates, retail solar subsidies approach 60% in some jurisdictions.

Er, no. The efficiency of carnot cycle boiler plants are approaching their thermodynamic limits, have been for some time. More can and is being done in traditional heat cycle plants with rejected waste heat - combined cycle plants, and more efficient turbine blades. Though these gains are significant over the total scale of the grid, the efficiency gains themselves are small - unlike those seen in PV. More importantly, the cost of fuels for these plants (nuclear aside for the moment) is only going up, even if coal and gas reserves are plentiful at the moment.

I am not an engineer, so it is difficult for me to argue with this. My concern is simply this: it is understood in economics that capital investment produces increased output, regardless of industry. A capital investment in solar will produce increased productive output. Similarly, a capital investment in coal plants will produce increased productive output.

I cannot predict and in fact do not care which investment will produce greater production gains. However, if it is the case that an investment in solar power will produce a greater return that a like kind investment in a competing technology, the public subsidy should not be necesarry. The subsidy is necesarry only to the extent that, in the absence of the public funds, there would not be an equal or greater investment of private funds. If private investors will not invest in a given business model, it is because they rationally expect to achieve a greater return through some competing, alternative investment.

Ergo, I can simply assume that because the solar subsidies exist and are lavish, it is because solar is politically rather than economically favored.

Fossil and nuclear have received much, much more government subsidies in total. We see figures of dollars per Watt produced showing renewables receiving more than fossil/nuclear, but I don't find that metric, by itself, useful.

Are we talking over program life times? This may or may not be the case, but it is certainly the case that so-called conventional energy sources are today negatively subsidized. That is, the amount of any government assistance to these industries is less than (substantially less than) the cost of taxes, fees, fines, and royalties.

I am also skeptical of the claim that the startup of these industries required lavish government interventions. These industries are established and dominant because they are cheap and plentiful, a fact which attracted massive initial private investment. It simply was not necesarry that the government support the oil, gas, and coal industry; it has always been the most economically viable means of fixed and portable energy production.

They have an agenda to keep us on fossil as long as possible (maximizing the profits of the oild- and gas companies) and hand us over into the monopoly of nuclear power.
Nuclear power will become the favourite targets of terrorists. But windmills will never be a target for terrorists.

This is conspiratorial; who is "they", and why do they care where you get your electricity?

"You" as in the consumer might benefit from rooftop solar if you state happens to have good incentives

My point exactly. In the absence of such incentives, no rational person would install solar panels, today.

Huh? Last I checked a lot of the government money in solar is going into private industry and manufacturing. I guess I'm not understanding your point

My point is that, because government is motivated by political rather than economic ends (that is, government is not concerned with achieving the maximum possible return on its investment dollars), those subsidy dollars would achieve a greater effect if invested privately in more efficient, competing alternatives. Government investment produces jobs and production output, of course. The question you should be asking is, would an identical investment in another industry have produced more jobs than the government plan? There are always opportunity costs. Markets are assumed to produce gains of maximal possible efficiency, given current conditions. There are no such assumptions for governments.

 

[mheslep]

I am reminded of a famous bet entered into by an economist and, I believe, a geologist. The names of the principals escapes me. The economist told the geologist to pick a basket of 10 commodities of his choice; the economist cared not what was chosen. The price of that basket would then be tracked over a period of ten years. ...

You are referring to the http://en.wikipedia.org/wiki/Simon-Ehrlich_wager" wager. Both were academics; Simon was an economist-business professor, Erlich is a biologist-ecologist. Simon's point, validated in winning the wager, was not that the supply of a given commodity will simply keep increasing via exploration, but that as the price of a given commodity increases users find less expensive alternatives. Simon also bet on commodities that can never really be depleted in a conservation of mass sense - metals. That is, there is just as much Nickel on the planet today as there was 10,000 years ago. Energy is different. Once used and 'dispersed' (its entropy is said to increase) it can never be re-concentrated without using even more energy. However, for what it is worth I believe Simon's point still applies to energy sources over a longer time frame.

 

[heusdens]

Do you have a source showing where these Netherlands political parties make these claims and state this agenda?

These claims (esp. against wind-energy) were made over and over again in the past elections. View their websites (in dutch) www.vvd.nl[/url] and [url]www.pvv.nl[/URL]

That they have some agenda, is just my own political intuition.

The "geert wilders" anti-islamic party (called "PVV" party of freedom) is a racist, xenofobic and anti-islamic party (and very pro-israel), which derived as a fraction of the VVD. They offer "simple" solutions to complex issues, they want to barrier immigration (esp. from moslim countries), want to repell moslims from the Netherlands when they have comitted illegal acts, want to forbid islamic schools (we have freedom of religion in netherlands, meaning all religious groups can raise their own schools), they want ethnic registration, etc.

The VVD, PVV and CDA (christen democratic party) find each other on the issue of not-abolshing the tax reducation on interests for mortgages. Economically that isn't feasible cause this tax-reduction causes house prices to become staggering high as to be non-afforable for starting household, and which is the current cause of the stagnation of the housing market.

The housing market, with house prices raising more as five times in 30 years, is a giant bubble, which serves the capitalist economy for maximum creation of money (any debt creates new money, that comes into the economy, gets spend, etc.) but when house prices are too high, and buyers do no longer afford that high costs, this tears down the whole economy.

Almost all other parties want to get rid of this absurd tax-reduction policy for mortgages, so that house prices in the long run will be afforable again, but within a reasonable time frame.

Both the VVD and the PVV are arguing from the point of view that the whole climate debate makes no sense and esp. the PVV argues that "climate gate" proved that climate change caused (AGW) by humans is a "fraud".

They plea for nuclear energy, same as the VVD, and possible also the CDA, and plea against subsidies for renewables (based on false information, regarding both the subsidies issue as the climate argument - there was no scientific fraud).

As the neo-liberal agenda caused us the past and current and future crisis (the deregulation of many sectors, including the financial sectors), they have every reason to make people affraid of other threats (the Islam as the main enemy). It (this racist/xenofobic policy) serves a purpose of course, as this looks upon Muslims as being less then human-less civilized, which in turn serves the purpose of the illegal occupations of Muslims countries (Iraq, Afghanistan and the whole Israel/Palestinan issue).

[ As in previous periods for instance during the colonization of Indonesia, the Indo indigious people were treated as uncivilized and treated in a racist way, and also during the slavery periods, racism esp. had the form of anti-negro sentiments as being uncivilzed and less then human, so the racist policies always coincide with some other political/economic policy. ]

Undeniable the Iraq and Afghanistan occupation only serves the plundering of their crude resources, and no democratic or humanitarian goal. The military occupation has never pacified any of these countries, has not served their human interests and does not create a stable democracy, and also the military struggle can never be won. But as long as there is a war to fight the troops have an excuse to be there, so there isn't any intention to 'win' the war there, it just serves the political/economical goal. Iraq has been transformed into a pseudo-democracy, in which the real power is in the hand of the dominating oil-producing industries.

 

[talk2glenn]

You are referring to the http://en.wikipedia.org/wiki/Simon-Ehrlich_wager" wager. Both were academics; Simon was an economist-business professor, Erlich is a biologist-ecologist. Simon's point, validated in winning the wager, was not that the supply of a given commodity will simply keep increasing via exploration, but that as the price of a given commodity increases users find less expensive alternatives. Simon also bet on commodities that can never really be depleted in a conservation of mass sense - metals. That is, there is just as much Nickel on the planet today as there was 10,000 years ago. Energy is different. Once used and 'dispersed' (its entropy is said to increase) it can never be re-concentrated without using even more energy. However, for what it is worth I believe Simon's point still applies to energy sources over a longer time frame.

Precisely. I absolutely agree that there may be a point where competing alternatives are more cost-effective than additional conventional energy producing infrastructure. That point will be marked by an unsubsidized negative rate difference (the costs of bring an additional kWh of solar online will be less than the costs of bring an additional kWh of coal or LNG online).

When we reach that point, investors will stop building conventional plants and start building solar plants. This will have the effect of raising the cost solar energy, and lowering the cost of conventional energy, until the ratio is positive again, and investors switch back.

This means that practically, if not theoretically, our supply of any commodity which has demand market value is infinite. Price ratios, production profit incentives, and the existence of competing alternatives guarantees it to be so.

This is why economists don't lose sleep at night worry about how we will feed exponentially growing populations. The market will find a way, even if it means that the cost of food as a proportion of total household expenses must go up (an unlikely but possible outcome; more likely cost of food will go down, which is the observed outcome over time, historically).

 

[mheslep]

...Are we talking over program life times? This may or may not be the case, but it is certainly the case that so-called conventional energy sources are today negatively subsidized. That is, the amount of any government assistance to these industries is less than (substantially less than) the cost of taxes, fees, fines, and royalties.

I'll have to look at that some more, but I suspect that the same is true for solar and wind. I know for certain its true (on balance negative subsidy) in at least one well studied case of a large California 1980s-90s solar farm - the property taxes killed them.

I am also skeptical of the claim that the startup of these industries required lavish government interventions.

Probably not, but then I'm reasonably certain that when coal, gas, and oil started up they didn't have to compete with existing industries already subsidized by the government for decades.

These industries are established and dominant because they are cheap and plentiful, a fact which attracted massive initial private investment.

Agreed, but again I'm arguing for the same level playing field under which fossil energy got started. I argue that but for substantial government support of fossil/nuclear renewables such as solar would be also be more attractive.

It simply was not necessary that the government support the oil, gas, and coal industry; it has always been the most economically viable means of fixed and portable energy production.

Yes, fossil fuels have been a great energy source for the better part of a century but of course not 'always.' Before fossil oil there was http://timetoeatthedogs.files.wordpress.com/2008/09/whaling-ships.jpg" Before coal there was wood. And at least in the case of oil, government support by way of the US 7th fleet keeping the Gulf of Suez open was and is absolutely required.

 

[talk2glenn]

Before fossil oil there was http://timetoeatthedogs.files.wordpress.com/2008/09/whaling-ships.jpg" Before coal there was wood. And at least in the case of oil, government support by way of the US 7th fleet keeping the Gulf of Suez open was and is absolutely required.

I am glad you brought this up, because I was eager to enter the example of whales into the argument.

Whales were not saved from human-induced extinction by environmental laws, but rather by market laws. As the efficiently harvestable supply of whales was reduced (given the technology availabe to whale hunters at a fixed time), the cost of whale blubber as a fuel source increased. While this was happening, the efficiently harvestable supply of crude oil was increasing (given the technology available to speculators at the same, fixed time), which had the effect of lowering the cost of kerosense as a fuel source, until the ratio was negative (kerosene was cheaper than blubber).

Once negative, consumers stopped lighting their homes with blubber, and started lighting their homes with kerosene. In principal, it could one day become cheaper to light your homes with blubber again, but in practice this has not happened (oil continued to become cheaper, while our productive capacity to harvest whales for their blubber hasn't improved much).

But the de facto result was that whales were never driven to extinction by human economic activity, and never would have been. As the value of whale blubber goes up, consumers have an incentive to exploit competing alternatives, and producers have an incentive to produce more whale oil (increase the supply through exploration, farming, efficiency of blubber output per whale, or whatever).

I'll have to look at that some more, but I suspect that the same is true for solar and wind.

Solar and wind are often exempted from public startup costs (be it property tax exemptions, environmental regulation exemptions, etcetera) by local governments, and because they are usually not profitable in any near terms, they have an unintended but real income tax exemption.

Couple this with public grants and loan guarantees, and you have a positive net subsidy.

 

[mheslep]

Undeniable the Iraq and Afghanistan occupation only serves the plundering of their crude resources, and no democratic or humanitarian goal.

http://img.timeinc.net/time/daily/2010/1007/time_cover_0809.jpg" , and off topic.

 

[Office_Shredder]

Solar and wind are often exempted from public startup costs (be it property tax exemptions, environmental regulation exemptions, etcetera) by local governments, and because they are usually not profitable in any near terms, they have an unintended but real income tax exemption.

First, Walmart is often exempt from public property tax (how is a yearly payment a startup cost anyway?) along with many other big chains. Towns supporting businesses through eminent domain, tax breaks etc. in order to boost their economy is something that happens all the time, and to single out solar power for getting this benefit occasionally also is disingenuous.

You'll need to provide evidence of this common environmental regulation exemption.

Also, the income tax exemption because of lack of profit is just nonsense. Oil companies have the same opportunity (for example, Exxon-Mobil paid no income tax to the US in 2009)

 

[apeiron]

Their data was sound, which is what I was citing. Their conclusions were not. Did you notice that paragraph was written in 1997?

Yes, I noticed. Was there a reason for quoting old data rather than something current? And can you be specific about which data you are citing because it sounds like you are taking as valid exactly the trend lines the study criticises for faulty methodology.

For the past 13 years, proved reserves have in fact gone up (most recently by 0.7% in 2009, according to BP).

Now what you originally said was...

Global proved oil reserves have grown every year since they began collecting the data using current methodology at the turn of the century. This means that we are finding new, economically exploitable oil (at current price and technology levels) faster than we are drilling it up.

But you do know the difference between actually finding new reserves and simply reclassifying known unconventional reserves, right?

 

[mheslep]

Also, the income tax exemption because of lack of profit is just nonsense. Oil companies have the same opportunity (for example, Exxon-Mobil paid no income tax to the US in 2009)

No, ExxonMobil is not an example of a zero tax bill because of net losses. http://www.forbes.com/2010/04/01/ge-exxon-walmart-business-washington-corporate-taxes_slide_3.html" , they just paid it elsewhere and not in the US. There may be plenty of good reasons to object to the tax laws that allow this, but these have nothing to do with this topic - tax liabilities or avoidance that may / may not apply only to renewable energy.

Edit: Forbes later updated their story to show Exxon did pay US taxes in 2009:

And for all you commenters outraged that Exxon isn't paying taxes in the U.S., don't worry, it is. Our article only focused on income taxes, but it's worth noting that the 10-k also records $7.7 billion in other taxes in the U.S. (like sales taxes)