Friday, May 30, 2014

The transition to sustainable energy: how much will it cost?

In a previous post, I used the the concept of "Sower's strategy" to propose that the way to solve our predicament of depletion and climate disruption is to use fossil fuels as a way to get rid of fossil fuels. In other words, we need to use fossil energy - as long as we have it - to develop substitutes to fossil energy. This is equivalent of the old strategy of farmers of "saving your seed corn". But how much corn should we save, exactly? In the present post, Sgouris Sgouridis provides an answer. It turns out that in order to have a smooth and gradual transition to renewable energy before fossil energy becomes too expensive, we need to ramp up investments in renewables by a factor 4-10 that should be reached by means of an annual increase of the current investment between 6% and 9%. Eventually, the investment rate should reach amounts of the order of 1.5-2.5 trillion dollars by 2045. It is a tantalizing result, because  a 9% yearly increase is possible: we have been growing renewable power at faster rates up to now. And even a total amount of a couple of trillion dollars is not impossible considering that the present world's GdP is about 72 trillion dollars (compare also with the 1.7 trillion dollars per year spent for the world's military system). Unfortunately, it is is perfectly possible that the action of the fossil lobby will be able to slow down the growth of renewables or even to stop it completely. In this case, we will not be able to avoid a significant (and probably disastrous) dip in the amount of energy available worldwide as the unavoidable decline of fossil energy plays out. Nevertheless, any investment in renewable energy we can make now and in the near future will help make the transition less hard on all of us. 

Guiding the Energy Transition (Part 1): Principles and Implications

By Sgouris Sgouridis (*)

Abstract: Following on the sower’s metaphor, I present a quantified view of exactly how much energy we need to invest from our current bounty in order to be able to safely navigate a sustainable energy transition. This is in the context of a formal definition of five principles for the energy transition. We currently invest around 0.25% of our net available energy surplus into renewable energy generation capacity (this is the renewable energy investment ratio – "epsilon"). It needs to be increased to about 3% (an order of magnitude) for our energy systems to be able to provide for a 2000W per capita society at a global scale without crossing the IPCC carbon budget. (note that modern western life is consuming around 8000W per capita). If we do allow for unrestrained emissions then we still need to increase this rate to 1.5%.

Energy is a sine qua non for any self-organizing system and yet it features only in the margins of what passes for long-term planning of our societies. We have grown critically dependent on cheap, energy-dense fossil carbon but its price and climate externalities have been rising as we are nearing peak production. This necessitates a transition to renewable energy sources. This post addresses the implicit physical and financial requirements if this Sustainable Energy Transition (SET) is to happen as a result of a planned and seamless transformation; not forced upon our societies. More specifically, in Part 1 I present five principles (the three first are limiting and the latter two normative) that can be used as a guide for the transition. Based on the fourth principle, I demonstrate the need to increase the amount of investment in renewable energy resources globally by one order of magnitude to achieve a Sustainable Energy Transition within the IPCC carbon budget. Details of the assumptions and methodology can be found in Sgouridis & Csala 2014. In Part 2, starting from the fifth principle, I present a concept of an energy currency that could mobilize resources to achieve this target while better aligning the monetary system with the biosphere limits.

It is generally good to start with a definition to create the common basis for understanding and judging an idea. In this case, I will define SET (sustainable energy transition) as: 

a controlled process that leads an advanced, technical society to replace all major fossil fuel primary energy inputs with sustainably renewable resources while maintaining a sufficient final energy service level per capita.

As definitions are wont to be, it tries to capture a lot of concepts sinthetically. But the key words are “controlled”, “technical”, “all” and “sufficient”. The ideas conveyed indicate that the transition should be smooth and not associated with dramatic social dislocation (controlled). It should allow for society to at least maintain its technological capabilities (technical), and at the level of the individual meet a certain threshold of final energy availability (sufficient).

Knowing that the transition will be complete when practically all fossil fuels are replaced, we can backcast the evolution of the transition to the current energy situation. In this exercise, it is instructive to use an energy metabolism perspective focusing on the net energy availability. This way, an unambiguous and transparent picture emerges that pulls back the veil that economics placed in long range planning.

In order for this transition to be indeed “sustainable" we would need to concern ourselves with each of the three sustainability pillars (environmental, social, economic). Extending Daly’s ideas, we propose five principles that need to be met - de minimis - for a SET to be successful: 

I. The rate of pollution emissions is less than the ecosystem assimilative capacity.

II. Renewable energy generation does not exceed the long-run ecosystem carrying capacity nor irreparably compromises it.

III. Per capita available energy remains above the minimum level required to satisfy societal needs at any point during SET and without disruptive discontinuity in its rate of change.

IV. The investment rate for the installation of renewable generation and consumption capital stock is sufficient to create a sustainable long-term renewable energy supply before the non-renewable safely recoverable resource is exhausted.

V. Future consumption commitment (i.e. debt issuance) is coupled to and limited by future energy availability.

The first two principles address the environmental aspect (neither fossil nor renewables should impact the environment irreparably within a human generation). The third addresses the social aspect ensuring that (i) a minimum level of available energy is available, and (ii) the rate of change in energy availability is not so drastic that it creates breakdown of social support systems. A direct corollary of this is that a more equal society faces an easier SET task than an unequal one. Finally, the last two principles address economic sustainability (physical and financial). P-IV, a variant of the Hartwick rule in economic literature, ensures that the rate of investment in renewable energy is sufficient to compensate for the drawdown of the fossil fuel supply while, P-V makes the connection between debt issuance and the availability of energy to service that debt in the future (which is the subject of Part 2).

Viewed from a normative angle, the first three principles act as constraints of the transition function - the first gives an upper limit in the amount of fossil energy available, the second puts a limit in the amount of renewables that can be installed, the third provides a lower bound on the per capita energy availability (and of its first derivative during the transition). The latter two though are prescriptive and actionable - they offer a quantifiable approach to estimate the minimum energy investment in renewable energy and the maximum debt that can be extended for that level of investment. 

Focusing on the physical side, we can essentially create an equation that ties the renewable energy investment ratio (epsilon) to net societal energy availability which can be seen below (derivation in the paper and supplement):

This recursive equation can be solved numerically or analytically to establish the net power available under different assumptions for the value of epsilon. Below I provide, as a starting point of the discussion, a comparison of the evolution of future energy availability under the following scenarios. As typical of energy transitions (and to meet the discontinuity constraints of Principle III), we assume in the paper that it takes thirty years to change epsilon from its current value of around 0.25% (we actually assume 0.375% for this model) to the “target” value and simply compare energy availability with energy demand assuming that (a) population follows the UN mid-projections stabilizing at 9 billion by 2050, (b) per capita power demand converges to 2000W , and (c) the efficiency at which we convert primary to final energy improves by 25%. (the details on the assumptions regarding population are described in Sgouridis and Csala's paper).

Frying the Planet
Available Energy with No Carbon Cap Top: ε = 0.375 %, Bottom ε = 1.5 %.
Left: Breakdown by source. Right: Red line indicates Net Available Energy. Blue Line indicates where we need to be at a minimum 

50% chance of Slow Cooking the Planet
Available Energy with IPCC Carbon Cap Top: ε = 0.375 %, Bottom ε = 3.0 %.
Left: Breakdown by source. Right: Red line indicates Net Available Energy. Blue Line indicates where we need to be at a minimum

The results are starkly clear: if we allow fossil fuels to run their course frying the planet in the process, we will need to increase our rate of investment in renewables fourfold. If we decide to save the climate and adhere to the IPCC recommendations of no more than 3010 anthropogenic Gt CO2 in the atmosphere by 2100 for having a 50% chance of remaining below 2C by the end of the century (which, apropos, is still the moral equivalent of loading a revolver with three bullets and playing Russian roulette with our grandchildren) we need an eight-fold increase of the investment rate in renewables. Of course, there are key sensitive assumptions involved like the EROEI of renewables (in the scenarios shown starts at 20 and increases with installations) - readers are welcome to enter their own assumptions in our model - yet we believe that our choices are neither conservative nor aggressive and we intend to enhance the simulation’s resolution by disaggregating specific renewable energy technologies as we did for fossil fuels.

(*) Sgouris Sgouridis is Associate Professor at the Masdar Institute of Science and Technology (UAE). His research interests focus on understanding sustainable energy transitions using socio-technical systems modeling. He has been working on the energy currency concept, electric vehicle adoption, sustainable aviation, and local and global sustainable energy transitions. He initiated the development of the  Sustainable Bioenergy Research Consortium at MI and was a member of the Zayed Future Energy Prize review committee for the past four years. He holds a PhD in Engineering Systems (MIT-2007), MSc in Technology and Policy  and MSc in Transportation (MIT-2005) and a BS (Hons.) in Civil & Env. Engineering (1999-Aristotle University).

Wednesday, May 21, 2014

The sower's strategy: how to speed up the sustainable energy transition

This text was originally published as part of "Disrupting the Future", a series of essays correlated to "2052", a book by Jorgen Randers

by Ugo Bardi - 2013

… and when he sowed, some seeds fell by the wayside, and the fowls came and devoured them up: some fell upon stony places, where they had not much earth and forthwith they sprung up, because they had no deepness of earth: and when the sun was up, they were scorched; and because they had no root, they withered away. And some fell among thorns; and the thorns sprung up, and choked them: but other fell into good ground, and brought forth fruit, some a hundredfold, some sixtyfold, some thirtyfold. Who hath ears to hear, let him hear. (Matthew 13.4-9).

Abstract. In order to survive the double threat of resource depletion and climate change we need to move as quickly as possible to a sustainable society based on renewable resources. We are already moving in that direction, but we are still investing huge amounts of money to perpetuate our dependency on fossil fuels. Here, I argue that the transition can be eased and accelerated if we adopt the “sower's strategy.” Farmers, as well know, must not eat their seed corn; they must keep some of the harvest for the future. Applied to the world's economy, the sower's strategy dictates that we use part of the energy and resources produced by means of fossil fuels to build renewable energy plants and a sustainable economy. This strategy is primarily something to be agreed upon but it could also be embodied in an international protocol (the “sower's protocol”?) that would mandate that a fraction of the worldwide revenues from fossil fuels should be invested in sustainability and renewable energy. 

“Don't eat your seed corn!” is a well known saying. It refers to the age-old farmer's strategy of saving some of the harvest of the current year as seeds for the next. Unfortunately, however, our main energy source today, fossil fuels, produce no “seeds.” Once extracted and used, they are gone forever and the same is true for all our mineral resources. This is what we call “depletion.” In addition, fossil fuel burning is the main cause of climate change; an even more worrisome problem.

So far, we have been behaving like farmers who eat their seed corn; burning fossil fuels and consuming our resources as fast as possible. And we are still investing enormous amounts of money just to continue doing that. According to the Grantham research institute, about 650 billion dollars were spent to develop new fossil fuel resources in 2012, mainly for oil and gas and, in particular, for the so called “non conventional resources” (e.g., shale oil). This is the result of our current way of thinking which emphasizes short term gains. Not only does this strategy worsen the climate problem, but it forces us to spend more and more as depletion progresses and that perpetuates our dependence on fossil fuels. Obviously, that can't continue for a long time.

Is there a way out? Yes, if we go back to the wisdom of ancient farmers: don't eat your seed corn! Of course, we can't sow fossil fuels but we can sow what these fuels provide: energy and minerals. We can use some of this energy and these minerals as seed to create the structures needed for a sustainable economy until, in the future, renewable energy eventually produces enough “seed” to replace itself and we learn how to recycle minerals much more efficient than we do now. This is the sower's strategy applied to the modern world.

We are already using this strategy. At present, most of the resources used to build renewable energy plants and other elements of a sustainable economy come from fossil fuels. It is good that we are doing that, but are we doing enough? According to UNEP, some 250 billion dollars were spent in 2012 for new renewable sources. This is much less than what is being invested in fossil energy but, so far, it has nevertheless allowed a rapid and consistent growth of renewable energy. The problem is that there is no guarantee that the necessary levels of investment will be maintained in the future if we continue giving priority to fossil fuels. Already in 2012, indeed, we saw a decline in the investments in renewables. So, if we leave choices on energy to the market alone, we risk facing runaway climate change together with rapid resource depletion without having sufficient resources available to create a new energy system. If we continue along this path we will eat all our seed corn.

Instead, we need to save our seed corn. It means investing a significant fraction of the energy and resources we are producing today into a sustainable economy even though that may not provide the largest short term returns. First of all, it means investing in renewable energy. This is to be intended as energy technologies that don't produce greenhouse gases, are efficient in term of energy return for energy invested (EROI) and don't occupy too much land; in particular photovoltaics and wind. It also includes infrastructures and industrial technologies which tend to recover resources and avoid the use of rare and disappearing mineral resources. The concept of “efficiency” can also be included, with the caveat that it must not perpetuate dependency on fossil fuels (an example of an ineffective strategy in this sense is moving from coal to natural gas). 

Then, how do we implement the sower's strategy? It may not need formal measures; we can see it as a form wisdom that already exists in people's minds and that leads to supporting investments in renewables in general. But we can also think of an international protocol (the “sower's protocol"?) mandating that a fraction of the revenues obtained by fossil fuels must be dedicated to the development of a sustainable economy; in particular renewable sources. The protocol could be based on the revenues from a carbon tax but, perhaps better, it could directly act on private or state owned energy companies. After all, investing in energy production is their job and we are not asking them to pay money, we are asking them to make money; albeit on a longer time scale. The protocol could also mandate non-monetary measures, such as for governments to ease permits and reduce bureaucracy for investments in sustainability.

No matter how implemented, the sower's strategy implies that we need to invest enough to create a new energy system before depletion (or global warming) makes it impossible to do so, but not so much that it would be an excessive burden on people's welfare. It is a window of opportunity that will not be there forever, but which probably still exists today. Consider that the 58 largest world's oil and gas companies together collected in 2012 revenues for almost 6 trillion dollars (wikipedia). If they were to re-invest just 4% of those revenues in renewable energy, that would double the amount spent today in the sector.

Independently of the actual fraction to be set apart, we can say that the sower's strategy, especially if implemented as a formal protocol, could be a true game changer in sustainability since:

1. It speeds up the transition, ensuring that sustainability and renewable energy will remain consistently supported.

2. It diverts investments from fossil fuels, forcing them to decline faster than they would if left to market forces alone. That speeds up the transition and eases the problem of global warming.

3. It stimulates the economy and creates jobs. It has the force of a positive approach: we are not asking people to stay home in the dark: we are asking them to work for the transition and make money on it!

4. The well known principle: “do not eat your seed corn” is something that everyone can understand. It will be hard for negative propaganda to distort it so much to make it appear as part of a Communist plot to enslave mankind (but never underestimate the power of PR).

The sower's strategy by itself, formally or informally implemented, does not guarantee a smooth transition to a sustainable (and cool enough) world. It can't go against the laws of physics and it can't allow humankind to continue growing forever. Adapting our economy to renewable energy requires new infrastructure, rethinking industrial processes, adapting to the gradual reduction in the availability of all mineral resources. Among other things, we'll need to learn how to use renewable energy to power agriculture, to replace rare minerals with common ones (e.g. copper with aluminum), to manage waste as a resource and not as a burden, and much more.

Clearly, building up a completely sustainable economy is a difficult task, but it is not an impossible one. The only impossible thing is to keep civilization alive without energy and resources. The sower's strategy may give us a chance for doing that.

Every year, our farmer ancestors faced a choice: how much of their harvest to keep as seeds? Save too much, and they would starve that year; save too little and they would starve the following year. But they must have been making the right choices because they survived and we are their descendants. Today, we can learn from our ancestors how to make the right choices with fossil fuels too: save enough of their energy now to have enough energy in the future and also avoid disastrous climate change. Who hath ears to hear, let him hear.

Wednesday, May 14, 2014

How to destroy a civilization

This is the third post of comments on the "NASA-funded paper" (a term that went viral) on societal collapse by Motesharrei, Rivas and Kalnay (MRK). In my first post on the subject, I noted some qualitative features of the model. In the second post I commented on the debate. Here, I am going more in depth in the structure of the model and I think I can show that the results of the MRK model are very general as they can be reproduced with a simpler model. In the end it IS possible to destroy a civilization by spending too much on non-productive infrastructures - such as the Moai of Easter Island (image above from Wikimedia, creative commons license)

Mathematical models may be a lot of fun, but when you use them to project the future of our civilization the results may be a bit unpleasant, to say the least. That was the destiny of the first quantitative model which examined the future of the world system; the well known "The Limits to Growth" study, sponsored by the Club of Rome in 1972. This study showed that if the world's economy was run in a "business as usual" mode, then the only possible result was collapse.

This kind of unpleasant results is a feature of most models which attempt to foresee the long term destiny of our civilization. Not that it should be surprising considering the speed at which we are wasting our natural resources. Nevertheless, whenever these studies are discussed, they generate a lot of criticism and opposition. It is the result, mainly, of emotional reactions: there is nothing to do about that, it is the way the human mind works.

But let's try to put aside emotions and examine a recent study by by Motesharrei, Rivas and Kalnay (MRK) on the destiny of human society that became known as the "NASA funded model" after a note by Nafeez Ahmed. The model has attracted much criticism (as usual) but it is worth looking at it with some attention because it highlights some features of our world which we should try to understand if we still think we can avoid collapsing (or at least mitigate it).

The MRK model has this specific feature: it divides humankind in two categories, "commoners" and "elites", assuming that the first category produces wealth while the second doesn't. In some assumptions, it turns out that the elite can completely drain all the resources available and bring society to an irreversible collapse, even though the resources are renewable and can reform the initial stock.

I think this is a very fundamental point that describes events which have happened in the past. As I noted in a previous post, it may describe how the Roman Empire destroyed itself by excessive military expenses (we may be doing exactly the same). Or, it may describe the collapse of the society of Easter Island, with a lot of natural capital squandered in building useless stone statues while putting a high strain on the available resources (the story may be more complex than this, but its main elements remain the same)

So, it looks like elites (better defined as "non productive elites") may play a fundamental role in the collapse of societies. But how exactly can this be modeled? The MRK model does that using an approach that, as I noted earlier on, is typical of system dynamics, (even though they do not use the term in their paper). Not only that, but it is clearly a model in the style of those "mind sized" models which I had proposed in a paper of mine. The idea of mind sized models is to avoid a bane of most models - of all kinds - that of "creeping overparametrization". Since, as a modeler, you are always accused that your model is too simple, then you tend to add parameters over parameters. The result is not necessarily more realistic, but surely you add more and more uncertainty to your model. Hence, the need for "mind-sized" models (a term that I attribute to Seymour Papert)

So, let me try to rework the MRK model; simplifying it a little and making it more streamlined. Instead of speaking of "elites" and "commoners", let us speak of two different kinds of capital. One kind we call "productive", the other "non productive". Capital is the result of the exploitation of natural resources. "Productive" capital is the kind that leads to further exploitation and growth of the economy; the other kind is capital which is simply wasted.

Let me explain what I mean with the example of Easter Island's economy, productive capital is the agricultural structure, while non-productive capital is the Moai building structure. Agriculture sustains people who cultivate more land. Moai building doesn't do anything like that - it is a pure waste of resources and human labor. In our times, we can say that the productive capital is everything that exploits the available resources, from refineries to fishing boats. The non-productive capital is everything else, from private yachts to battle tanks.

So, can we build a model that includes these elements? Surely we can; here is a version of the model in the style of "mind sized" models. (done using the "Vensim" software).

The model is a streamlined version of the MRK model, where I added a "pollution" stock (missing in the MRK model) and where I simplified the productive cascade structure. It would take some time to explain the model in detail and there is not enough space here. If you want to go more in depth in this subject you can read my paper on "Sustainability" or this post of mine with the rather ambitious title of "peak oil, entropy, and stoic philosophy." But, please, understand that the model, though very simplified, has a logic; what it does is to describe the degradation of the thermodynamic potential of the starting resources (the first box, up left) into a series of capital reservoirs which, eventually, dissipate it in the form of pollution. The "Ks" are constants which determine how fast capital flows from one stock to another. The arrows indicate feedback: we assume here, for instance, that the production of industrial capital is proportional to the size of both the resources and capital stocks.

Now, let's go to the results obtained with some values of the parameters. Let's take r1=0.25, k1=0.03, k2=0.075, k3=0.075, k4=0.05. The initial values of the stocks are, from top to bottom, 5, 0.1, 0.1, 0.01 - you may think of the stock as measured in energy units and the constants in energy/time units. With these assumptions, the model produces the same phenomenon that MRK had observed with their model. That is, you observe the irreversible collapse of the system, even though the natural resources reform, becoming abundant as at the beginning of the cycle.

You see? Producing and non-producing capital (which MRK calls "commoners" and "elites") both go to zero and disappear. But note how the natural resources reform and return to their former value (actually higher than at the beginning!). This civilization had destroyed everything and won't restart to accumulate capital again for a long, long time. Note also how these results depend on the assumption that non-producing capital cannot be turned into producing capital. It is maybe a drastic simplification, but it is also true that turning swords into plowshares is a nice metaphor, but not something easily done.

At this point, let me say that this post is just a sketch. I can tell you that it took me about 15 minutes to write the model; a few hours to test it, and about one hour to write this post. So, these considerations have no pretense to be anything definitive: the model needs to be studied much more in detail. When I have time (and as soon as I can fix my cloning machine) I would like to write a full paper on this subject (anyone among the readers would like to give me a hand? Maybe someone with a better cloning machine than mine?).

Nevertheless, even though these results are only preliminary, I think that the fact that the MRK results are so easily reproducible indicate that there is something there. They seem to have identified a feature that, so far, most models had neglected. Although you can always accumulate capital by exploiting natural resources, the final outcome depends a lot on how you spend it. The model tells us, for instance, that a popular recipe to "save the economy" by "stimulating consumption" may actually destroy it faster.

So, are we destroying ourselves because we are wasting our natural capital in useless tasks, from battle tanks to SUVs? (and lots of bureaucracy and an overblown financial system, too). Are we destroying our civilization by building these useless structures just as the Eastern Islanders destroyed themselves by building Moai statues? It is something we should think about.

Note 1: I think this model has a lot to do with Tainter's idea of the "declining returns of complexity, if we take "complexity" to mean that lots of resources are used to build something that produces nothing. I already tried to model Tainter's idea with a mind-sized model in a previous post of mine and I am sorry to see that Tainter didn't like so much the MRK model. But I think it is mostly a question of different languages being used. If we work on communication, I think it is possible to find a lot of points of contact in the different approaches of modelers and historians.

Note 2. Doesn't this model contradict the conclusions of my book "Extracted", that is that our society is collapsing as a result of the depletion of mineral resources? No, it doesn't. The parameters I used for the run shown here are chosen to reproduce the results of the MRK paper, which assumes that resources are fully renewable. You can run this model in the hypothesis that resources are NOT renewable, which is an assumption closer to our situation. In this case, the model will tell you that the system will collapse leaving unused a large fraction of these theoretically exploitable resources; the larger the more overblown the non-productive capital stock will turn out to be. This is something that I think is very relevant to our situation: we saw it happening with the financial crisis of 2008 and the next financial crisis, I believe, will generate again this effect. (h/t Tatiana Yugay)  

Friday, May 9, 2014

The Frog jumps to here

After about one year on the web, I decided to close the blog "The Frog that Jumped Out," merging it with "Resource Crisis." As a result you'll see more posts dedicated to climate change here. In general, I hope that I can make it clear that resource depletion and climate change are not two separate issues and that you can't even remotely think to solve one while neglecting (or even worsening) the other. Resource depletion and climate change are two sides of the same coin.

The frog jumps to "Resource Crisis"

Thursday, April 24, 2014

One year ago, I started the blog titled "The frog that jumped out." The first post appeared on April 28 2013 and from then on I published 127 posts for a total audience of more than 80,000 contacts. Not a bad result for a blog that was a totally personal effort - without any attempt to use SEO or other Web tricks to diffuse it.

This year of blogging on "The Frog" has been a learning experience that changed my views of how to act on the climate problem. At the beginning, I thought that there was a problem of communication; that the fact that nothing was being done about climate change was the result of us not being able to pass the message in the right way. That is something that many scientists have discovered. The result has often been a search of better methods of communication. It has led, for instance, to books such as "Don't be such a scientist" where the main idea is that scientists should improve their skills of communicating with the public by becoming clearer and more entertaining. That, in itself, is not a bad idea: scientists are often extremely poor at communicating: boring, pompous, incomprehensible, and even worse. Improving on that is surely a welcome trend.

But transforming yourself into a Ronald McDonald of climate science doesn't solve the problem. No amount of gee-whiz power will carry the message across to people who don't want to hear it. The mistake in this idea is steeped in the so called "information deficit" model. It says that people are not doing anything about climate change because they are not informed enough. Therefore, if we find a way to explain to them how things stand, they'll do something. Hence, the idea of "sweetening the pill". Alas, no. It doesn't work that way.

The real problem can be summarized by a comment that I received from a friend of mine (DJ at Bottleneck Foundation):

"The main problem is that the deniers are rolling rocks downhill in human mindspace and we are rolling them uphill. "

I think this concept explains a lot of things, although I would personally modify it as follows: "The main problem is that we are trying to roll rocks in human mindspace and the deniers are trying to keep them where they stand".

That is, in order to fight the dire effects of human caused climate change, it is not enough that the problem is recognized. We need to generate deep changes in the way society functions. But this is almost impossible to do because society is simply not geared for deep changes. Our society, as most complex systems, exists because it has built-in mechanisms that resist change. It is much easier to keep things as they stand than changing them.
So, effecting change is a systemic problem, not just a communication problem. That makes the problem more difficult but, at the same time, gives a different perspective to it. Systemic changes occur all the time - they are simply unavoidable. No matter how much society tries to resist change, it must, eventually, cede to physical reality. So, at some moment in the future, we'll have to stop our emissions of fossil carbon in the atmosphere either as the result of depletion or as the result of the damage generated by climate change. The problem is that we are not doing that fast enough to avoid a traumatic adaptation (this is what I call the "Seneca effect"). However, the end result is certain: it is only a question of which trajectory we'll follow. Eventually, we'll have to learn to live within the limits of this planet.

These considerations affect the future of this small blog, "The frog that jumped out". Once you see the climate problem as a systemic problem, you see that the solution is not just communicating what the problem is (although that's also necessary) but promoting a whole array of actions that go from new technologies to new kinds of social and economic behavior. As a result, I think that the focus of this blog on communication alone is a bit too narrow. So, my idea is to merge it with my other blog, Resource Crisis, which has a similar focus. After all, the climate crisis is also a question of resource depletion: we are depleting the capability of the atmosphere to absorb the products of the combustion of fossil carbon without overheating.

"The Frog" does not disappear from the Web, I'll still keep it as a repository of posts specifically dealing with climate change. But most of the action will be on the other blog, Resource Crisis. So, thanks to all of you for your attention and your support and I hope we can continue the discussion there!

Tuesday, May 6, 2014

The invasion of the resource zombies

 (image from WikiHow - Creative Commons license)

You probably heard that new ideas are "are born as heresies and die as superstitions". But it can be worse than that: there are ideas which simply refuse to die and, like zombies, continue forever haunting the human mindscape. One of these ideas is that the problem with mineral resources consists in "running out" of something. A typical manifestation of this zombie-idea is a recent article by Matt Ridley which appeared on "The Wall Street" journal with the title "The World's Resources Aren't Running Out"

I can hardly imagine a more unhelpful article than this one: it contains all the platitudes typical of this field, including the almost obligatory smear at the Club of Rome on the basis of the idea that "The Limits to Growth" study of 1972 had predicted that by now we should have run out of mineral resources (and, of course, we didn't). Pure legend; that study never said anything like that. It is just another zombie-idea haunting the human mindscape.

But, apart from platitudes and legends, the article by Matt Ridley is wrong because it is based on a classic strawman: the one that says that we should worry about "running out" of mineral resources. It is not so. Let me say it emphatically, assuredly, and unequivocally: we are NOT running out of anything. That's not the problem; the real problem with resources is diminishing economic returns. It means that we have extracted the "easy" (i.e. inexpensive) resources and that now we are forced to extract from "difficult" (i.e. more expensive) resources. Let me show you what's happening with an example: the case of silver extraction.

This image, from the blog "SRSrocco Report," says it all. In less than 10 years, the yield of silver extraction went down to nearly half of what it was at the beginning. That is, we need today to process almost twice as much rock than it took 10 years ago to extract the same amount of silver. And, of course, processing rock is expensive. We are not running out of silver: production has remained more or less constant over the past decade, but extracting it costs more. This is just an example; as I discuss in my recent book "Extracted", all mineral resources are showing the same problem: diminishing yields of extraction.

Now, you can rhapsodize about new technologies as much as you want (and as Matt Ridley does in his article) but there is a real problem here. To extract minerals, you need to drill, lift and, grind rock and that takes energy and resources (read: money). Technology can make many things, for instance wonderful smartphones, but you can't grind rock with smartphones. Technology, just like almost everything else, suffers of the problem of diminishing returns (I discuss this point in detail in a recent article of mine).

So, there is a reason for the increasing prices of all mineral commodities - it is diminishing economic returns. Unfortunately, however, some minds tend to be infected by the virus of the resource zombie that tells us that there is nothing to worry about. But there is a lot to be worried about: if something costs more, then you may not be able to afford it. In such case, you might as well say that it is not there (or even that you "ran out" of it).

So, it is not a good idea to sit back and hope that the wonders of technology will free us from resource depletion: no problem can ever be solved if you refuse to admit that it exists. Then you can find solutions in the form of higher efficiency, substitution, recycling and more. It can be done, but we need money, planning, and sacrifices. More than all, we need to shoot the resource zombie in the head and recognize the problem in order to act on it.


H/t SRSrocco report

Saturday, May 3, 2014

"Extracted": a press review from Luis de Souza

A review of the recent publication of "Extracted" by one of the co-authors of the book, Luis de Souza, from his blog "At the edge of time". In this post, Luis examines mainly the recent developments of the Ukrainian crisis and other features of the world energy situation.

Press review 03-05-2014 - Extracted

by Luis de Souza

Two years ago Ugo Bardi invited me to take part in the redaction of a book on raw materials. I spent much of the 2012 summer researching and writing to produce a chapter on two particular metals: silver and gold. After a first edition in German language last year, the English version has finally arrived, to what appears to be a warm reception.

"Extracted" provides an overview on the relationship between our society and economy and the stocks of raw materials found in the Earth's crust. These stocks are sources of negentropy - negative entropy, meaning organised or concentrated matter, as opposed to chaos and dispersion - that feed our industries with low cost inputs. The economic difficulties we live today are closely linked to a decline in the quality of the resources needed to feed our economies - meaning an increase in entropy - that may at some point even translate into a decline of extraction rates.
Resource Crisis
"EXTRACTED" published
Ugo Bardi, 29-04-2014

My new book, "Extracted" is now on sale. It is an updated version in English of the German version which was published last year. You can get it directly from the editor, Chelsea Green or from the usual sources.

This book was a lot of work, but I must say that I am very happy about the final result and I would like to thank my co-authors, who provided the specialized expertise for the "glimpses" about specific mineral commodities, the staff of Chelsea Green for their highly professional help in editing, and the staff of the Club of Rome for having made the task possible.

The first reactions to the book seem to be highly favorable, which is, I think, a bit worrisome. Fortunately, there has been at least one negative review on by someone who says he feels "insulted" by the book, but nevertheless he gives it three stars out of five!
But on the short terms concerns are more on the geo-politics of raw materials. Moscow has issued an ultimatum to Ukraine on its gas debts, threatening to cut supplies beyond the 7th of May. Days later the IMF approved an aid package to the troubled country, proving that control comes with a bill attached.
The Telegraph
Ukraine: Russia's Gazprom issues May 7 ultimatum over gas supplies
Emily Gosden, 25-04-2014

Russian state-controlled energy giant Gazprom has ratcheted up the pressure on Ukraine, issuing a May 7 ultimatum to settle $3.5bn unpaid debts or start paying in advance for its gas.

Alexander Medvedev, deputy chief executive, warned that Europe must help Ukraine pay the bill – and a further $5bn needed to refill storage facilities this summer - or face “severe problems” with gas supplies this winter.

By May 7, Ukraine would owe about $3.5bn for gas it has used in recent months, Mr Medvedev said. If it failed to pay, Gazprom would stop supplying Ukraine with gas for domestic usage from June, unless it paid for it in advance.
Here is one of the reasons why Russia can't simply let Ukraine pass onto the sphere of influence of the US. And why extending NATO that far is such a terrible idea.
David Stockman's Contra Corner
Why The War Party Is Playing With Fire: Much Of Putin’s Military-Industrial Complex Is In Eastern Ukraine!
Pater Tenebrarum, 30-04-2014

However, it turns out that there is something else that makes the Ukraine’s East especially important – for Russia. Back when the Ukraine split from the Soviet Union, it took some 30% of the country’s industry with it – inter alia a big chunk of its defense industry. As pointed out in an article in the FT by Jan Cienski , Russia’s military-industrial complex remains highly dependent on spare parts produced by Ukrainian factories – and their deliveries have not surprisingly recently been halted. This sheds new light on the backdrop to the previous gas discounts and the sudden decision to threaten a delivery stop unless the Ukrainian government pays its debts to Gazprom. Tit for tat. However, there are additional implications. [...]

The article points out further that ‘invading the Ukraine in order to get hold of these plants would be a 19th century way of looking at a 21st century relationship’, an assessment one must agree with. Absent the current tensions, the Ukrainian factories would still sell these parts after all – it is their business and they cannot eat them. Since many of the parts are probably highly specific, it won’t be easy to retool the factories, especially for an essentially bankrupt country like the Ukraine.

Would Russia’s president Putin invade the Ukraine for that? We rather doubt it actually. However, Russia is not a monolithic country ruled by an almighty dictator. Putin has a great advantage at present because he enjoys truly stunning approval ratings in Russia (as of mid-March, they were at a new high of 76%). Twelve times more people said they ‘like and even admire him’ compared to those expressing dislike. Some recent results of detailed polling questions can be found here.
In Iraq a farcical election took place where 270 parties ran for a 320 seat parliament. The winner(s) will in fact be taking power over Baghdad and little else of the country. The war front keeps neighing on the capital, both from the east and the north.
New York Times
Militants Pose Threat on Eve of National Elections in Iraq
Tim Arango and Duraid Adnan, 28-04-2014

That reality, which the government appears powerless to remedy, offers a sobering postscript to the American war and a volatile backdrop to elections scheduled for Wednesday. The vote will be Iraq’s first nationwide election since the withdrawal of United States forces at the end of 2011, and it is clear it will be held amid rapidly growing violence and sectarian bloodletting. On Monday, six suicide bombers struck polling sites around the country as security force members voted in advance, killing at least 27 people, officials said.

The greater fear, though, is that there is no way back this time, that the sectarian division of the nation will become entrenched as the government concentrates its forces on protecting its seat of power in Baghdad. With fighting in Abu Ghraib, on the western edge of Baghdad and less than 20 miles from the city center, the government recently shut down the local prison. Insurgents have gained strength in Salahuddin Province, to the north of Baghdad, and in Diyala Province, northeast of the capital.

“All arrows are pointing toward Baghdad now,” said Jessica D. Lewis, research director at the Institute for the Study of War, who has closely followed the fighting in Anbar.
At websites like the accuracy of figures published by the EIA on gas production in the US have been questioned one way or another for some time. This week I came across the article below, that exposes what seems to be deliberate data manipulation.
Post Carbon Institute
The EIA is Seriously Exaggerating Shale Gas Production in its Drilling Productivity Report
David Hughes, 21-04-2014

“Natural gas output from US' Marcellus edges closer to 15 Bcf/d: EIA” declared the headline in Platts that attracted my attention, since the latest data on the Marcellus shale gas play of PA and WV indicated production was less than 12 bcf/d. This headline was based on the latest issue of the EIA’s new monthly Drilling Productivity Report published April 14. Reading further, the article claimed that the Haynesville shale play “peaked at about 10 Bcf/d in 2012”, when in fact it had peaked at closer to 7 bcf/d in 2011. These errors are serious exaggerations of reality and bear further investigation, as the EIA Drilling Productivity Report is widely read and quoted in the media.

Fortunately the EIA also publishes independent production data by shale play in its Natural Gas Weekly Update. A check of production data for the Marcellus revealed that it was at 11.8 bcf/d in February and that the Haynesville had indeed peaked at 7.2 bcf/d in November 2011. These figures are also corroborated by Drillinginfo, a commercial database which is used by the EIA.
The erroneous view the EIA (and more widely the Obama administration) has been trying to convey regarding gas reserves and production in their country is a clear attempt to lure investors towards a doubtful industry. So far it is working, cheap money has been readily available to companies that spend far more than what they earn. Until one day; call it "shale subprime".
Shale Drillers Feast on Junk Debt to Stay on Treadmill
Asjylyn Loder, 30-04-2014

Rice Energy Inc. (RICE), a natural gas producer with risky credit, raised $900 million in three days this month, $150 million more than it originally sought.

Not bad for the Canonsburg, Pennsylvania-based company’s first bond issue after going public in January. Especially since it has lost money three years in a row, has drilled fewer than 50 wells -- most named after superheroes and monster trucks -- and said it will spend $4.09 for every $1 it earns in 2014.

The U.S. drive for energy independence is backed by a surge in junk-rated borrowing that’s been as vital as the technological breakthroughs that enabled the drilling spree. While the high-yield debt market has doubled in size since the end of 2004, the amount issued by exploration and production companies has grown nine-fold, according to Barclays Plc. That’s what keeps the shale revolution going even as companies spend money faster than they make it.

“There’s a lot of Kool-Aid that’s being drunk now by investors,” Tim Gramatovich, who helps manage more than $800 million as chief investment officer of Santa Barbara, California-based Peritus Asset Management LLC. “People lose their discipline. They stop doing the math. They stop doing the accounting. They’re just dreaming the dream, and that’s what’s happening with the shale boom.”
More bad news to the petroleum and gas sector in the US is the growing possibility of environmental regulation coming into place. First it was drinking water supply protection, more recently earthquakes, but now flaring seems the main threat.
Is This Issue About to Explode for Big Oil?
Dave Forest, 28-04-2014

It's no secret that oil production has surged in many new parts of North America recently. Often in areas that have limited infrastructure in terms of pipelines--especially for natural gas.

That means oil producers need to flare any gas produced alongside oil output. Burning off the stuff because there simply isn't a way to get it to market.

But this month two regional governments have said that gas flaring needs to stop.

The most critical is North Dakota. Where the state Department of Mineral Resources is reportedly looking at new rules to limit flaring.
The hypothesis of China taking the opportunity of relatively low gold prices to build a relevant strategic reserve of this monetary metal has been around for almost an year. Now even the mainstream media is contemplating this hypothesis. This story is part of a bigger plot that brings us back to "Extracted", the difficulty in finding and accessing high quality resources is shifting power away from old power structures.
China allows gold imports via Beijing, sources say, amid reserves buying talk

China does not release any trade data on gold. The only way bullion markets can get a sense of Chinese purchases is from the monthly release of export data by Hong Kong, which last year supplied $53 billion worth of gold to the mainland.

"We have already started shipping material in directly to Beijing," said an industry source, who did not want to be named because he was not authorised to speak to the media. The quantities brought in so far are small, as imports via Beijing have only been allowed since the first quarter of this year, sources said.

The People's Bank of China (PBOC) is believed to be adding to its gold reserves, according to the World Gold Council (WGC), as it looks to diversify from U.S. Treasuries. The central bank rarely reveals the numbers.

Gold's 28 percent plunge last year and China's record bullion imports in 2013 sparked speculation that the PBOC has added significant amounts of gold to its reserves, and could likely make an announcement this year.
An editor of the Financial Times proposing the nationalisation of banking? Yes, this crisis is forcing the re-thinking of traditional structures and systems. While positive outcomes could be expected from such move, ours is not exactly a problem of money, no matter how disappointed monetarists may be.
Financial Times
Strip private banks of their power to create money
Martin Wolf, 24-04-2014

Banking is therefore not a normal market activity, because it provides two linked public goods: money and the payments network. On one side of banks’ balance sheets lie risky assets; on the other lie liabilities the public thinks safe. This is why central banks act as lenders of last resort and governments provide deposit insurance and equity injections. It is also why banking is heavily regulated. Yet credit cycles are still hugely destabilising.

What is to be done? A minimum response would leave this industry largely as it is but both tighten regulation and insist that a bigger proportion of the balance sheet be financed with equity or credibly loss-absorbing debt. I discussed this approach last week. Higher capital is the recommendation made by Anat Admati of Stanford and Martin Hellwig of the Max Planck Institute in The Bankers’ New Clothes.

A maximum response would be to give the state a monopoly on money creation.
Some space now for renewable energies. I followed particularly close the development and deployment of the Pelamis wave energy systems in Portugal some years ago; they were in the water just for a couple of months, to simply fade into oblivion afterwards. Wave energy is indeed a promising resource but the technology is far from anything mature, as the article below details.
Why Wave Power Has Lagged Far Behind as Energy Source
Dave Levitan, 28-04-2014

It’s not difficult to imagine what wind energy looks like — by this point we have all seen the towering turbines dotting the landscape. The same goes for solar power and the panels that are spreading across rooftops worldwide. But there is another form of renewable energy, available in huge quantities, that doesn’t really call to mind anything at all: What does wave power technology look like?

Wind and solar power have taken off in the past decade or two, as costs have come down rapidly and threats from climate change have made clear the need to transition away from fossil fuels. Meanwhile, numerous studies have concluded that wave power — and to a lesser extent, tidal power — could contribute massive amounts to the overall energy picture. But while the industry has made halting progress, experts agree that it remains decades behind other forms of renewables, with large amounts of money and research required for it to even begin to catch up.
Maturity is something PV does not lack. Below a remarkable example of its market penetration, providing energy to poor communities that can not possibly afford to tap electricity from the grid.
Deutsche Wella
Solar energy lights up lives in Kenya
Victoria Averill, 29-04-2014

Fifty-two-year-old Daniel Tempes Olonapa stands outside his greenhouse perched on a hilltop overlooking the towering buildings of Kenya's capital, Nairobi. He points to two paper-sized black panels on top of his roof.

"Can you see them?" Daniel asks, pointing towards the panels excitedly. "They are small, but they are very powerful. I rigged them up there myself and put in the batteries. Then the sun comes and we get light, we can charge our phones. My six children can do their homework at night. "

The solar panels supplying Daniel with precious electricity come from the solar energy startup M-Kopa, which means "borrow" in Swahili.

The company is on a mission to supply cheap, clean and affordable solar power to the thousands of rural, off-grid Kenyans like Daniel, who up until now have only dreamt of having electricity on tap. M-Kopa has brought together the latest solar technologies with high quality solar panels, batteries and lights, and is selling them at kiosks and shops around Kenya.
European followers may wish to read mid-week commentary on the first ever presidential debate. Have a pleasant weekend.


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)