# Oil Depletion and the Second Law of Thermodynamics: THE ETP MODEL

Discussion in 'Alternative Theories' started by Futilitist, Apr 11, 2015.

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1. ### billvonValued Senior Member

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Exactly! And his economic collapse he predicted is happening - it's just a slow upward collapse. Pretty soon people will experience the pain and horror of gradually improving standards of living, the excruciating pain of a slow transition to new forms of energy and the misery of a recovering economy.

3. ### FutilitistThis so called forum is a fraud...Registered Senior Member

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This thread is to talk about the Etp model. Everything else is trolling.

---Futilitist

5. ### FutilitistThis so called forum is a fraud...Registered Senior Member

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http://www.thehillsgroup.org/depletion2_022.htm

The Energy Factor, Part IV
The Price of Oil

The price of petroleum is controlled by two factors:

1) The cost of production.
2) The $amount that the end consumer (the NEGs) can afford to pay for it. What the end consumer pays must be sufficient to cover the cost of production. All production cost must be borne by the end consumer, who includes the end buyer, and the societal cost required to produce petroleum, and its products. The Petroleum Price Curve, shown below, reflects the two factors that have, and will continue to control petroleum prices. The ETP derived Cost Curve is constructed from the ETP model, and has mapped the price of petroleum since 1960 with a correlation coefficient of 0.965. It is the most accurate pricing model that has ever been developed. The Maximum Consumer Price curve was also developed from the ETP model. It represents the maximum price that the end consumer can pay for petroleum. It is based on the observation that the price of a unit of petroleum can not exceed the value of the economic activity that the energy it supplies to the end consumer can generate. The energy content of a unit of petroleum is fixed by its molecular structure. The energy to produce a unit of petroleum, and its products increases with time as a result of the entropy production of the PPS (Petroleum Production System). The energy remaining for use by the general economy declines, and the economic activity that the petroleum can power also declines. Chart# 161 below shows the historical, and projected economic activity in 2014 dollars that a barrel of petroleum (37.5° API crude) has, and will be able to power. Please Register or Log in to view the hidden image! A more complete explanation of how the Maximum Consumer Price curve was formulated is show in chart# 160 below: Please Register or Log in to view the hidden image! The two Maximum affordable price curves labeled 71% (black), and 62% (light blue) are skewed logistic curves. There is no explicit mathematical equation to describe them. They are derived numerically, and the dots represent values for specific years. The 71% curve is the maximum theoretical energy that can be extracted from a unit of 37.5° API crude. Its value is derived from the combustion equations of hydrocarbons. The 62% curve is the average energy extracted from the same hydrocarbon by the end user. It passes through the ETP derived price curve at the inflection point of the ETP curve in year 2012. 2012 was the energy half way point for petroleum production. It was the year when it required one half of the energy content of petroleum to produce the petroleum, and its products. The individual points are generated from the equation:$/barrel = (Energy delivered - ETP value/ BTU/$) * 42. Energy delivered = 140,000 BTU/gal *0.62 (140,000 BTU/gal - the energy content of 37.5° API crude) ETP value is derived from the ETP function BTU/dollars is taken from the BTU/dollars graph - Graph# 12 The Maximum Consumer Price curve is curtailed at 2020 at$11.76/ barrel. At this point petroleum will no longer be acting as a significant energy source for the economy. Its only function will be as an energy carrier for other sources. Production will continue as long as producers can realize the lifting costs at existing fields. E&D expenditures, and field maintenance costs will have been curtailed. All production from that point forward will be from legacy fields only. The economic impact that will result from the energy lost to the general economy is beyond the scope of this report.

The energy content of a unit of petroleum is fixed by its molecular structure. The energy to produce a unit of petroleum, and its products increases with time as a result of the entropy production of the PPS (Petroleum Production System). The energy remaining for use by the general economy declines, and the economic activity that the petroleum can power also declines. Chart# 161 below shows the historical, and projected economic activity in 2014 dollars that a barrel of petroleum (37.5° API crude) has, and will be able to power.

Historically, petroleum has been a primary beneficiary to the economy. The economic activity that it powered was greater than the cost of the petroleum. Its historical effect can be seen in Graph# 25 (World GDP vs Cumulative Production). That benefit is now declining, and by the early 2020's an increased use of petroleum will no longer add to GDP. It will become more cost effective for society to begin limiting its use of petroleum as the use of petroleum transitions from a GDP enhancer to a GDP reducer.

~The Hills Group

---Futilitist

7. ### FutilitistThis so called forum is a fraud...Registered Senior Member

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Let's try to stay on topic, please. Thanks.

---Futilitist

8. ### exchemistValued Senior Member

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The price of any commodity is determined by the balance between supply and demand, not by the cost of production and "the-amount-of-\$-that-the-end-consumer-can-afford-to-pay", the latter being a resultant of the supply/demand balance and the substitution alternatives the buyer has.

Any business manager will tell you that the cost of production does not determine the price at all. The cost of production determines the profitability of sales, that is all.

None of this is physics.

9. ### FutilitistThis so called forum is a fraud...Registered Senior Member

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Energy Physics for Dummies *

You are 100% wrong! Available energy is always the starting point if you want to accomplish any actual work. And that has everything to do with physics.

Let's say you had a shipping company, like you just mentioned, for example. If you want to ship any actual stuff (and make some actual money), what do you need besides some trucks and some drivers? Here is a hint: The obvious answer is energy, in this case diesel fuel. Without it, your shipping company cannot possibly move the weight of goods to be shipped. And if the cost of diesel fuel is too high, your shipping company will not make a profit. Period. So, the physics of energy is very closely related to the dollars you can earn. No energy = No economy.

No one ever suggested that a rise in energy cost inevitably leads to shrinkage of the economy. That is a straw man. You go on to say that economic growth is inhibited by rising energy costs. This is logical and true because of the physics of energy, and how that relates to the economy. But you also seem to be at least implying that while economic growth can be inhibited, it cannot ever be stopped or reversed. This is clearly false.
This is the invisible hand argument. It is an economics argument, not a physics argument.

1) All markets aren't necessarily free. Have you factored that in to your claim?
2) Markets, free or not, do not have an unlimited ability to adapt to anything that comes along. If you are claiming that markets actually do have some sort of magical unlimited capability to adapt to high oil prices, then the burden of proof for that stupid claim is on you.
See what I mean? This is a very wishy washy thing to say. What if the degree and/or rate of rise is higher than can be accommodated by the invisible hand you keep invoking? What happens then? (Hint---the oil price will crash, just like it did starting in June of 2014.)

It is good that you are finally at least able to recognize that energy is needed for the economy.
Who said anything about about a perfect one to one relationship? That is a straw man. Here is the actual relationship between world oil production and world GPD:
http://www.thehillsgroup.org/depletion2_012.htm

That is a very close relationship, isn't it? That is because the relationship is based on the physics of energy.

A 99.5% correlation is not a coincidence! If the relationship between oil use and GDP has nothing to do with physics, how do you explain the close correspondence between world oil production and world GDP?

Wrong.

Wrong again.

Wrong yet again. You are so repetitive. And no one with a solid physics background would make such a stupid claim. Please re-read this post to see why your stupid claim is factually incorrect.

You still sound more like an execonomist than an exchemist. This thread is for physics arguments.

My post here is a bit sarcastic (you deserve it, considering what you are trying to claim), but this is also quite a serious post about the physics of energy and how it is related to the economy. If you want to be sarcastic to me in kind, you are welcome to try. But please, do at least attempt to include some kind of serious answer to the physics point in question. Thanks.

---Futilitist

Last edited: Apr 26, 2015
10. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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That would require double posting by me. I (and many others) have explained why physics is not of much if any importance as cause of world's oil based economies in post 1728 of the thread you started some years ago.

Here the last line of post 1728:

By suggesting laws of physics require liquid fuel cars must use gasoline, trucks diesel, you are not only wrong, but worse: An ignorant stooge for "big oil"

And stop with new posts showing you are ignorant of economics and a stooge of big oil.

I would advise you to go away for a couple of years again, and come back, if you must, when there are new people active here you can try to mislead for Big Oil.

Last edited by a moderator: Apr 26, 2015
11. ### FutilitistThis so called forum is a fraud...Registered Senior Member

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BillyT,

I never suggested that the "laws of physics require liquid fuel cars must use gasoline, trucks diesel...". You are working hard to put words in my mouth. You are an ignorant stooge for "big sugar cane", and it says so on your avatar. Your post is off topic here. If you want to rant about sugar cane, please start a separate thread on the subject. Thanks.

The correlation between world GDP and oil is about 99.5%. There is no such correlation for sugar cane alcohol fuel.

---Futilitist

12. ### Beer w/StrawTranscendental Ignorance!Valued Senior Member

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You're right!

He should use ethanol from corn.

13. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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No the ERoEI of corn based alcohol* is 10 times lower than that of sugar cane, mainly for these two reasons:
(1) The heat of distillation in US is nearly 100% obtained from burning natural gas, not from burning the crushed cane (solar energy). In fact that cane burning releases zero net CO2 and lots of quality (high temperature heat) that on an annual average generates more than 4% of Brazil's electric energy! The exhaust gas from the electric turbines is several times hotter and with more energy than needed to distill the alcohol from the fermented sugar juice, so some heat is just dumped to the air.

Unlike corn, the entire mass of the plant (not just the corn) must be transported from the field where the cane grew. This means the fields must be less than about 200 miles from the alcohol production plants. Cane is bulky and a truck load is of too low value to transport most of it even 100 miles. Likewise these distillation plants are near the main cities to keep fuel truck delivery to market cost low. As the closest part of the Amazon Rain forest is more than 800 miles away from the main cities, "big oil" lies when telling that a switch to sugar cane alcohol would destroy the rain forests of the world.

There is enough abandon pasture to supply the alcohol needs of all cars that could be using liquid fuel ten years from now. (Conversion of a gasoline car to one using pure alcohol cost less than 1% of the cost of Tesla's not yet available cheaper EV.) I suggest a decade for full switch from gasoline to pure alcohol as many more distillation facilities need to be built, mainly in Africa where labor is cheap, for cutting and planting cane. Many now living out-side of the cash economy there would become buyers of 1st world products. - A win/win change for all but big oil.

(2) Sugar cane is a grass, that stores sunlight energy. So it is most economically grown in the tropics with their greater annual sunshine. If sun's energy is collected by corn, grown in Iowa, then a great deal of nitrogen fertilizer must be used to speed growth and compensate for the much shorter growing season. This not only is a large financial cost, but a large energy input cost too.

Even worse: Some years ago a Noble Prize winning soil biology expert evaluated Iowa based "gasohol" and found that soil bacteria convert most of the heavily used nitrogen fertilizer (that does not run off polluting rivers) into toxic air-born NOx compounds, which are far worse "green house gases" than CO2. I. e. Using gasohol is much more damaging to both human health and the global warming problem than just using pure gasoline in your car!

I have made more than one post naming him, and quoting his results, but don't want to find them now. Also I have posts noting that dying algae bloom which the nitrogen fertilizer makes annually now not far from where the Mississippi enters the Gulf of Mexico is a large and growing "dead zone" (no O2 in the water) and growing larger every year. Already it is adversely effecting the shrimp industry - so much so that more than half of the shrimp sold in the US now is imported (some from Brazil).

* AFAIK, no disinterested study shows that corn based alcohol's ERoEI is as large as 1.2** and many, including universities, like Cornell's large study show corn based alcohol's ERoEI is significantly less than unity (several times less than the error uncertainty could explain).
** Only the University of Iowa got nearly 1.2 as I recall.

Last edited by a moderator: Apr 26, 2015

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15. ### FutilitistThis so called forum is a fraud...Registered Senior Member

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This thread is to talk about the Etp model. Anything else is trolling.

The chart above shows a 99.5% correlation between world GDP and world oil production. This means that the energy from oil is the main driver of the world economy. Period. No one here will acknowledge this. I wonder why?

---Futilitist

16. ### Beer w/StrawTranscendental Ignorance!Valued Senior Member

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You should speak at the UN. Avert the collapse of civilization.

17. ### Beer w/StrawTranscendental Ignorance!Valued Senior Member

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I hope you're not calling me a troll. Telling me what I can and cannot do.

Some might deem in what little I've posted to be more educational than everything you have in this thread.

18. ### billvonValued Senior Member

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Welcome to the "Futilitist called me a troll" club!

19. ### FutilitistThis so called forum is a fraud...Registered Senior Member

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This thread is to talk about the Etp model. Anything else is trolling.

The chart above shows a 99.5% correlation between world GDP and world oil production. This means that the energy from oil is the main driver of the world economy. Period. No one here will acknowledge this. I wonder why?

---Futilitist

Last edited: Apr 27, 2015
20. ### Beer w/StrawTranscendental Ignorance!Valued Senior Member

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I don't know if you've discussed anything. Just spam your graph and speculate.

21. ### billvonValued Senior Member

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Well, and he has called anyone who disagrees with him a troll.

22. ### FutilitistThis so called forum is a fraud...Registered Senior Member

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1) I don't see how your comment is on topic for a physics discussion about the Etp model.

2) You are being very disruptive to the thread.

3) Do you have any data to prove that my charges are false?

4) It is quite logical to think that you might be a troll, considering how you follow me around the internet. Why are you in these discussions with me all the time? Are you a hard core peak oil denier like Russ Watters so casually admits to being?

5) Kittamaru has given Beer w/Straw a warning for trolling.

The following graph shows a relationship between two things:

The relationship shown is a 99.5% correlation between world GDP and world oil production. That means that the world economy is very, very dependent on oil as a power source.

The energy from oil is the main driver of the world economy. Period.

This point is totally fundamental to understanding the Etp model. I want people to acknowledge this simple, indisputable FACT so that we can at least have a reasonable, rational discussion, rooted in science.

billvon,
You have discredited yourself (IMHO) by claiming that the causal relationship seen in the graph is a mere coincidence. Are you now willing to admit that you are wrong?

Beer w/Straw,
Will you acknowledge the simple fact that the energy from oil is the main driver of the world economy?

---Futilitist

23. ### billvonValued Senior Member

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It was not. It was a reply to your post in which you called people trolls.