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Peak oil and retirement : Comments
By Michael Lardelli, published 6/10/2008When planning for retirement in a post-peak oil world a new attitude is needed.
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There are some dark sub themes here that people may not be ready to think about. For example if summer temperatures hit 50C by 2020 or sooner will the aged baby boomers still get air conditioning? For having demanded a hefty price for entry into home ownership, Gen Y may decide to let the baby boomers do it tough. On the other hand Gen Y has little knowledge of hard times and may respect the wisdom of the elders. By 2020 will anybody have a secure job? Perhaps young and old will be picked up each morning by electric bus and dispatched to work in the fields. No wages, just a bag of vegies to take home. Those who don't see this coming are ignoring the early signs.
Posted by Taswegian, Monday, 6 October 2008 8:28:10 AM
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As everyone points out our civilisation is built upon cheap energy. The best way for us all to save for our retirements is for our society to continue to invest in renewables until they give us cheap energy.
We CAN have cheap renewables if we invest enough money in building capacity. All engineering systems become more efficient the more of them we build. This is the socalled learning curve and it applies to all engineering system. We find that each doubling of capacity of whatever product we build will drop the unit price between 10% and 50% depending on the type of product. If we take 20% as the reduction then after 3 doublings of capacity the cost per unit is halved. Solar thermal and geothermal are about $5,000 capital cost per continuous kw with running costs of 1 cent per kwh. The best coal plants are about $1500 with running costs of 2 cents per kwh. If we increase our renewable capacity 30 times over existing capacity the capital cost of renewables will be about the same as coal with half the running costs. Seems like a no brainer investment on which to build a retirement to me. I would suggest people 10 years or more out from retirement DEMAND that their super funds invest in renewable energy sources. Visit http://cscoxk.wordpress.com/2008/09/23/financing-renewables-and-solving-the-financial-crisis/ to see how to reduce emissions and solve the credit crisis at the same time. It really is very simple. Posted by Fickle Pickle, Monday, 6 October 2008 10:09:11 AM
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The NYMEX has light sweet crude trading at $98 in 2013. That looks like a good investment for the peak oilers! (Brian Matthews' recent post concerning humankind's alarming tendency to millenarianism is probably more relevant, though.)
Posted by OC617, Monday, 6 October 2008 10:33:48 AM
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I turn 65 today but I still ride my bike to work every day and decline to own a car. I was a disciple of Ivan Illich who said suburbia was the curse of western society and we had a duty to live within walking or cycling or public transport distance of our place of work and I followed that dictum all my life.
It's great to see more people on bikes these days, though it's still more blokes than women - maybe more workplaces need to provide women a place to change and shower. No excuse after retirement though, but I reckon I might get one of those electric power assisted bikes after I'm 75 or 80, as Hobart is very hilly. Posted by Pedr Fardd, Monday, 6 October 2008 11:26:06 AM
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Interesting item Michael,
Further to your thoughts on the life of computers after PO, I have been looking for information on the telecommunications network after PO. Some people working directly in the field feel that with the decent in place, as soon as manufacturing difficulties occur, the network will become unreliable. The network is basically in a hand to mouth supply as far as spares are concerned. The internet of course will descend at the same rate. So it will be back to copper landlines, if they have not been stolen for scrap. We will then be relying on HF radio for our long distance communications. The sudden discovery by some people that the money in circulation is less than the amount that actually exists and the demand that extra cash be inserted into the system to make up for the shortfall will cause very significant inflation. Perhaps the oil shortage is being caused by the lubrication of printing presses ? Posted by Bazz, Monday, 6 October 2008 2:22:38 PM
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A quick check of The Economist of 19 June this year will show that venture capital is already investing in renewable energy technology. Indeed, some argue that current levels of investment resemble the beginnings of the dot com boom. We can expect, then, that renewable energy technologies will get cheaper, mope reliable and more efficient, in much the same way as computer and related technologies have done, as the market and capitalist ingenuity drive them forward.
It is a geological impossibility for the world to run out of oil, but oil will inevitably become more expensive to find and recover over time. In this case, we can expect that our future energy demands will not decrease, indeed it would be an economic disaster if they were to do so, but that they will be met by a much wider mix of technologies than is currently the case. Posted by Senior Victorian, Monday, 6 October 2008 3:15:19 PM
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Thank you Michael for your thoughts and perspective on the recently recognised yet long existing crisis. Insofar as information and data preservation is concerned I mightn't be so concerned if it weren't for the political inactivity on infrastructure redevelopment. The advent of wetware or biological computers (which as of now can only perform basic arithmetic) is promising as an alternative form of microprocessor manufacture, a sort of computer or hard drive farming if you will, however a mass changeover of infrastructure would bring about just as much chaos as a complete collapse of conventional energy supply. A gradual phasing in of new technology and or retrofitting of existing systems would serve us better.
As for your mention of our faith based money system, it is undoubtedly clear that our economic system is fundamentally flawed; suggesting that currency without a standard represents the finite nature of resources (human or otherwise) available to our species. While what seems a noble implementation of the first law of thermodynamics is actually completely ignoring the human discovery of new resources, both new deposits of conventional sources or the advent of entirely new technological breakthroughs. Such a mode of operation facilitates gain, only at another's (usually nation's) expense. A finite source distributed amongst an ever increasing populace, carrying an ever decreasing real value is doomed to dilute wealth or the ability to influence change. As a third year genetics student under your tutorship and with an understanding of science, politics and philosophy I'm rather scared and resigned to a fate I've had little to no hand in creating. If you've a spare toaster and refrigerator to leave me please do so; maybe I can salvage the parts to concoct a device to provide me with some breathable air, lord knows there might not be a hell of a lot of that in times to come! By the by, don’t be hard on yourself. Being a research and educator you’re working actively on both fronts to arm the future generations with the tools to pull this species out of the sorry mess we find ourselves in. Posted by Detuned Radio, Monday, 6 October 2008 3:24:41 PM
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Bit of a suckup there DR. Let's hope your book learning will be of a kind that gets you out of growing spuds like the rest of us. As for comments that renewable energy can save us I'm not so sure. I think there will be an intractable core of economic activity for which no affordable amount of wind and solar will fill the gap when fossil fuels are gone. I guess we'll find out the hard way how big that gap is.
Posted by Taswegian, Monday, 6 October 2008 5:24:57 PM
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Utter Crap
Today oil is at US$94.00 a barrel. A month ago it was U$150.00 a barrel. Today petrol was AUD$1.45 a litre. A month ago it was AU$1.54 a litre So a month ago it was peak oil? Or peak petrol price? What has happened in the interim. Only one thing and it wasn't peak oil! The stock market and futures spectulation imploded. It was peak speculation. And of course Kevin and Wayne are still watching but nobody is doing the math. Oh and even after addng in a fall in the value of the AUD$ from .97c to .74c Then work out what we should be paying for petol. I reckon about, well let's see fall in dollar about 25% Fall in Oil per barrel 35% petrol prices should translate to about $1.25 a litre. Oih Kevvey where the f..k are you? In fact where are the media rabble? Posted by keith, Monday, 6 October 2008 9:05:39 PM
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As I approach retirement I fell increasingly optimistic about our ability to negotiate difficult challenges. However we are culturally primed to believe in the end of all things. I remember arguing with my parents that there was a parallel between the time of Christ and the 1970’s – in both periods it was widely believed that we would see the end of the world in our lifetimes. The flaw in my argument was that it didn’t happen in the time of Christ, nor did it happen at all the other times the end was prophesised. The success rate in achieving the end of the world wasn’t all that good.
The despair about peak oil underlines to me the importance of liquid transport fuels. With that in mind, the research being done and the technologies that already exist are grounds for optimism. Coal to liquid is old and proven technology as shown by Sasol’s profitability. Gas to liquid is another one. If you don’t like the fossil fuels, there’s the biomass to liquid technology backed by Royal Dutch Shell and a cluster of progressive car and truck manufacturers. These projects are large and expensive and with some forecasts of oil prices falling, there may be some reluctance to invest very heavily at present. OPEC might use their market position to crush people who start too big and too early – it’s the best way to kill off the competition. In the case of biomass to liquid, it is very close technically (plans for the first commercial plant are underway by Choren in Germany) and should easily compete with oil at over $100 a barrel. I think when oil is stable at over about $100 there could be some interesting and quite encouraging developments emerge from the shadows. But none of this satisfies the ongoing search for the end of all things. So cheer up Michael, it might never happen, because there’s a lot riding on us finding solutions. Perhaps optimism is a form of confidence, not a state of stupidity Posted by Rick, Monday, 6 October 2008 11:43:40 PM
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We can have cheap renewable energy generation, we can finance it, and we can replace fossil fuel energy within 10 to 20 years.
We can finance renewables by the Reserve Bank creating zero interest loans to be used just for renewable infrastructure. That is the money has to be spent on renewable energy generation (or energy savings). Zero interest loans makes renewables immediately economic. It will not be inflationary because the money will be spent creating a productive asset that will return more money than is expended. We do not need emissions trading to make renewables a good investment opportunity. We can make them investment attractive with zero interest loans. We have several orders of magnitude greater than our current energy needs of renewable geothermal (hot rock) and solar thermal resources available for exploitation The current cost of geothermal (and solar thermal) is about $5000 per continuous kw produced and will drop to at least half the cost of fossil burning plants by the time we have built the needed capacity. (Each time build more of a particular technology then the cost drops due to the learning curve and for this sort of technology it is about 15 to 20% per doubling of capacity) We can replace all electricity generation capacity within ten years with electricity generated at half or less of the running costs of fossil fuel burning plants. This is a major engineering task but it is relatively simple technology and we can enlist the help of China India Japan Europeans the Arabs and the USA in exploiting these resources. Geothermal requires drilling holes in the ground. Solar thermal needs mirrors and pipes. Posted by Fickle Pickle, Tuesday, 7 October 2008 5:01:26 AM
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Senior Victorian,
Oil will not run out but it is not just a matter of cost. It is the energy used to produce the oil. The ERoEI is what will limit the available energy. Electrical energy is the only real path to the future. Oil should be reserved for plastics and fertiliser. That we will suffer an energy decent seems almost inevitable. The infrastructure investment to switch everything to electrical based energy use will be massive and may not be achievable. So investment in energy orientated companies seems common sense. Posted by Bazz, Tuesday, 7 October 2008 7:45:15 AM
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A timely and thought-provoking arrticle - I have long pondered these matters myself. There is of course a fundamental connection between retirement and energy input. The energy consumed both directly and indirectly by retirees must in some sense be made up from younger people still in the work force, and (at this stage at least) by energy input via oil or coal. As the lifestyles of those still in the workforce themselves become increasingly dependent upon oil/coal energy input, the problem(s) worsens exponentially. With decreasing availability of reclaimable oil/coal reserves we cannot be far from the knee of the exponential curve - perhaps even past it.
The final outcome - ie survival liklehood - of humanity and many other species gets down to a race between the energy factor on one hand, and international population decimation via infection of various sorts on the other. The current concern with a particularly virulent strain of TB; the sleeping giant that is malaria; aids; bird flu; etc etc provide ample cases in point. It should also be born in mind that medical research itself is dependent upon energy input. It all gets down to cheap and available energy. To me, it seems that nuclear power generation is the way to go - indeed the only way - despite the real or imagined risks. We are possibly damned if we do and undoubtably damned if we dont. Above all, we must dispense with any notion of a caring earth or indeed a caring universe. We must collectively internalise the notion that the earth simply doesn't care, and that there is no 'god' of any persuasion or of any teleological significance - we are on our own. We must either actively cultivate this mindset, ot have it thrust upon us by default - or at least thrust upon those of us who might remain. Posted by GYM-FISH, Tuesday, 7 October 2008 10:27:39 AM
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There has been a lot of talk about peak oil over the years with all the
"experts" suggesting that this will occur anywhere between 1970 and now Regardless of any of these forecasts energy will become extremely costly to produce and buy.Our ability to buy any form of energy is, or will be, relative to the current financial situation. In the last few weeks a barrel of oil has gone from $153+ to less than $100 which would suggest that it should be 1/3 less in price, but at the same time our dollar has crashed from 97c to 67c cancelling out that 1/3 decrease. Various articles refer to the "recovery" of oil suggesting that it may have been lost or misplaced. Oil is not recovered, it is extracted from the earth and in all its various forms used. The only recovery of oil is the recycling of so-called waste oil Posted by Oldbugger, Thursday, 9 October 2008 2:21:25 PM
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Old Bugger,
I don't think anyone has been suggesting 1970, unless you were refering to the US alone, and that was a spot on prediction. The general concensus seems to be that it is somewhere between 2005 and 2012. Certainly it has been flatlining since May 2005. The current financial kerfuffle will probably hold the depletion off by a year or two or three because of lower demand. I was talking to a retired bank loans officer just a couple of days ago and he expressed concern about how long the recovery might take. I pointed out to him, that if depletion of oil supply starts then the current financial mess could be permanent with no recovery ever. This to him was an impossible concept, but alas it is quite on the cards. Posted by Bazz, Thursday, 9 October 2008 2:53:35 PM
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