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

[Futilitist]

Correlation does not equal causation.

And therefore, the economy is not dependent on the energy from oil? That is what you are implying.

I don't want to put words in your mouth, billvon. Are you saying that the economy is not dependent on the energy from oil?

Sure. Your plot fails when data from after 2009 is added.

That isn't true. The following graph goes to 2013.

The graph above shows the very close correlation between oil production growth, total energy growth, and GDP growth. Another amazing coincidence?

True or false:
1) The economy is highly dependent on the energy from oil.

2) The energy from oil is the main driver of the economy.

3) There is a close correlation between world GDP and world oil production.



---Futilitist

 

[Beer w/Straw]

No one denies that oil is a form of energy. But speculating beyond that -you know, the apocalypse and everything- is a bit much. I'm curious as to why you don't play around with global populations in your speculations.

And I've been issued a warning? This is news to me. You should be issued a warning for spamming that stupid picture umpteenth times and that deliberate double post.

 

[exchemist]

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.


.

This response is aimed at interested readers generally (if there are any ), as I entertain no serious hope of a sensible debate with Fatuitist.

By shipping I meant shipping, in ships. These generally burn residual fuel oil rather than diesel, but the price of RFO is not unrelated to that of crude.

Look at the curves on page 10 of this UN report.

http://unctad.org/en/Docs/dtltlb20092_en.pdf

These compare sea freight rates with the crude price (Brent). What correlation there is is weak, making it clear that other factors dominate the market price for booking space on ships - which is what the freight rate represents.

In fact, the shipping industry tends to be cyclical. When freight rates rise, it is profitable and this attracts more investors to build ships and join the party, to cash in. But it takes 3-5 years from placing an order for the ship to enter enter service. What tends to happen in this business - and the chemical industry is similar, which is why I mentioned that too - is that investors continue to go on placing orders for newbuilds after there are already enough on order to make the freight rate drop back again, due to the resulting increase in supply of ships, compared to demand for space on them. So the last investors to get in get burnt and have trouble recovering their investment. The result is a cyclical pattern of freight rates over time, as many of the graphs in this report in fact illustrate.

The cyclical phenomenon is due to the imperfect way that markets match supply and demand, due to long lead times in investment and the psychology of human beings. None of this is physics, but it most certainly is economics - or business studies if you like. What is clear is that it has damn-all to do with the cost of energy.

My point in taking readers through this example is to illustrate that it is very foolish indeed to attribute economic outcomes to variation in the cost of energy alone. In practice there are all kinds of factors at work and energy is typically only a relatively minor component in the mix. On the contrary, the key to understanding what is going on is to analyse supply and demand and the factors that are responsible for those two things.

Thus, to try to draw economic conclusions on the basis of thermodynamics is ridiculous.

The shale oil phenomenon is a bit similar to my shipping example. High crude prices prompted the search for new sources of hydrocarbon, triumphantly vindicated by the development of shale oil and gas. This has now increased supply and caused the crude price to fall - in fact, due to geopolitics (Saudi Arabia's market share policy and so on) it has fallen so far that some shale oil and gas sources may now be mothballed. A cyclical market.

Nothing to do with physics. Supply and demand, psychology of human beings and geopolitics.

Fatuitist seems to be emotionally committed to walking around with a sandwich board, proclaiming "The End Is Nigh - Repent!", but is having to resort to appallingly contorted reasoning in the face of this phenomenon. I am reminded of diehard Marxists after the fall of the Berlin Wall. Some of them spent several years pretending nothing had changed or that black was white. But the arguments were not serious - just the galvanic twitching of a basically dead ideology.

 

[billvon]

1) The economy is highly dependent on the energy from oil.

True; it is our primary transportation fuel right now.

2) The energy from oil is the main driver of the economy.

False. Other factors have much more to do with the world's economy.

3) There is a close correlation between world GDP and world oil production.

There is some correlation. It is not unusually close, nor is it solely in the direction you think. When the economy improves, people can afford more purchases, including oil. Look at the graph of GDP vs automobile production, for example. They correlate quite well. It would be foolish to claim that therefore cars are the primary driver of our GDP.

 

[billvon]

Fatuitist seems to be emotionally committed to walking around with a sandwich board, proclaiming "The End Is Nigh - Repent!", but is having to resort to appallingly contorted reasoning in the face of this phenomenon.

And indeed constantly predicts this end. "The end will come in 2013 2015 Real Soon Now!"

 

[Futilitist]

Hey billvon.

This thread is to talk about the Etp model. You are off topic.



---Futilitist

 

[Futilitist]

Hi execonomist.

Welcome back. Before you left, I asked you this important question about the close relationship between oil and GDP:

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? Please answer this important point. Thanks.



---Futilitist

 

[sideshowbob]

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?

Non sequitur.

All relationships do not involve physics. Only physical relationships involve physics.

 

[Beer w/Straw]

Your graph and speculations may impress elementary school students, but as you get wiser you can see there are many other variables involved and that your arguments are overly simplified.

:EDIT:

Also, this is the wrong section for this thread.

 

[origin]

Hmmm, so when GDP is high we consume more energy and oil when the GDP is low we consume less energy and oil? Gee, that doesn't seem that surprising now does it.

 

[exchemist]

Hi execonomist.

Welcome back. Before you left, I asked you this important question about the close relationship between oil and GDP:

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? Please answer this important point. Thanks.



---Futilitist

I explain it by obvious economics, not physics.

Growth in GDP causes an increase in consumption, of many things, oil included. Any economist will tell you that. Note the direction of causality.

Origin and Billvon have both made similar points.

This is nothing to do with physics.

Economies can adapt to increased energy cost by becoming less energy-intensive as they develop. This is shown by the graph I referenced on the other thread and which I repeat here: http://www.eia.gov/todayinenergy/detail.cfm?id=10191 in which you can see that the US economy has reduced its energy per unit output to less than half the level it was in 1950s, and is projected to halve it again by 2040. I'd like to hear how you account for that graph. Perhaps you think it is lies, put out by US government agencies - sort of men in black type of thing?

On a global scale we have had a number of new, very energy-intensive economies taking off in recent years and they will dominate the global picture. But, just as with population growth, to predict the future, one needs to look at how the more mature economies have evolved, later in the life-cycle, because that is what we can expect the newer ones to do in time as well. To take one example the Chinese construction boom, a hugely energy-intensive process, is now over. They have their houses, railways, dams etc (and actually how have a property bubble!) and will never need to build them all again in the way they just have.

This is nothing to do with physics whatsoever, let alone entropy specifically, as was absurdly alleged at the start of this thread.

 

[billvon]

A 99.5% correlation is not a coincidence!

Correlation is not causation. I gave an example of a 99.3% correlation which you admitted was not causal. Thus high correlations can easily be coincidence - as you yourself admitted.

 

[Billy T]

In post 70, as part of why alcohol from heavily fertilized with nitrogen Iowa corn (in part to speed growth & compensate for short growing season) I note that the run-off down rivers was creating algae blooms that die making large dead areas in the Gulf of Mexico not far from where the Mississippi enters the gulf (no O2 in the water). I noted this damaged US's Shrimp industry - that now more than half of the shrimp eaten in US was imported.
What an understatement! Now 94% is imported, and with some health risk:
Watch this consumer reports' video https://screen.yahoo.com/farm-fork-journey-imported-shrimp-195842610.html
That nitrogen speeding the growth of corn, that does not run off into rivers is mainly converted to toxic NOx in the air which is a much worse green house gas than CO2. But it viromental damage is global, now as this text from the video note:

Americans eat about three times more shrimp than we did 35 years ago. To satisfy our insatiable appetite, the U.S. has become a massive importer: About 94 percent of our shrimp supply comes from abroad, from countries such as India, Indonesia, and Thailand.*
But our love affair with shrimp does have a downside. Most of the shrimp we import is “farmed”—grown in huge industrial tanks or shallow, man-made ponds that can stretch for acres. In some cases 150 shrimp can occupy a single square meter (roughly the size of a 60-inch flat-screen television) where they’re fed commercial pellets, sometimes containing antibiotics to ward off disease.

If ponds aren’t carefully managed, a sludge of fecal matter, chemicals, and excess food can build up and decay. Wastewater can be periodically discharged into nearby waterways. “Bacteria and algae can begin to grow and disease can set in, prompting farmers to use drugs and other chemicals that can remain on the shrimp and seep into the surrounding environment,” says Urvashi Rangan, Ph.D., executive director of the Consumer Reports Food Safety and Sustainability Center. Those shrimp-farming practices raise a variety of concerns—not just about how safe shrimp are to eat but also about the environmental damage that can be caused by farming them that way.

* three of the five which had more than 50% contaminated with serious to health bacteria. See table by country of origin at above quote's link.

Again, as in post 70, I note that "gasohol" is more damaging to the environment (and health) according to Nobel Prizer winner's study of it, both globally and locally in many countries where shrimp is "farmed" than just burning only gasoline, which is in turn much worse for the environment than zero net CO2 release and RENEWABLE alcohol for sugar cane.

 

[Billy T]

... Origin and Billvon have both made similar points. ...

Me too & and in terms simple enough for even Futilitist to understand here:
http://www.sciforums.com/threads/electric-cars-are-a-pipe-dream.101877/page-164#post-3294039
Where in summary, I said there:
Your "physics and/or entropy mandates world must run on oil" is no more valid than the same argument applied to wood 200 years ago is.

 

[billvon]

Saw an interesting take on this from The Peak Oiler, a website talking about how peak oil is not the end:
(and anyone note a similarity between the Peak Wooder below and a poster on this thread?)

================
When humans made the step from hunting/gathering to agriculture, they stepped down the EROEI ladder. Farmers have to work a lot harder than hunters to harvest a unit of energy. But this step did not lead to contraction and the collapse of civilization. Ironically, it lead to a massive explosion of growth and the formation of civilization.

Recently, I've been reading the doomer favorite The Collapse of Complex Societies by Joseph A. Tainter, and it has an interesting section with a bearing on this issue. Tainter writes:

The fuel resources used first by a rationally-acting human population, and the mineral deposits mined first, are typically those that are most economically exploited, that is, the most abundant, most accessible, and most easily converted to the needs at hand (Rifkin and Howard: 73). When it subsequently becomes necessary to use less economical resources marginal returns automatically decline.
The development of the coal-based economy in England is a case in point. Wilkinson (1973) has shown that major jumps in population, at around A.D. 1300, 1600, and in the late eighteenth century, each led to intensification in agriculture and industry (see also North and Thomas [1973]). As the land in the late Middle Ages was increasingly deforested to provide fuel and agricultural space for a growing population, basic heating, cooking, and manufacturing needs could no longer be met by burning wood. A shift to reliance on coal began, gradually and with apparent reluctance. Coal was definitely a fuel of secondary desirability, being more costly to obtain and distribute than wood, as well as being dirty and polluting. Coal was more restricted in its spatial distribution than wood, so that a whole new, costly distribution system had to be developed. Mining of coal from the ground was more costly than obtaining a quantity of wood equivalent in heating value, and became even more costly as the most accessible reserves of this fuel were depleted. Mines had to be sunk ever deeper, until groundwater flooding became a serious problem.(P. 98-99)

Isn't that remarkable? It turns out that the step from wood to coal (like the step from hunting/gathering to agriculture) was actually a step down, not a step up. You can practically hear the snorts of the "peak wooders" in Tainter's text.

Peak wooder: We are so screwed. Where are we going to get enough wood to meet demand? Everything we do -- our entire society is based on wood. We'll collapse without it.

Cornucopio: We'll switch to coal.

Peak wooder: Oh, yeah right. And monkeys are gonna fly out of my butt. You idiot. Our whole economy is based on cheap wood. Wagons, housing, tools, transport, shipping, cooking, packaging, heating, blacksmithing, furniture. We're doomed without it. Do you have any idea how foul coal is? And how far you have to go to get it? Where are you going to get the wood to move all that coal? For God sakes, wood just grows out of the ground, and you're proposing that we dig into solid rock for that filthy substandard junk? You need to up your medication. Do you have any idea how many people its going to take to dig those holes? And how are you going to make their houses, and keep them warm, and get them to the job without wood? What are you going to make their shovels and wagons out of? The only reason those people can dig coal now is because they're subsidized with cheap wood!!! And even supposing that you could marshall all those people you need to do the digging, you'll just hit water, and then it's game over. You can't bail out the water because YOU NEED WOOD TO MAKE THE F*CKING BUCKETS. Sorry man, but coal is nothing but a bunch of wishful thinking. You're pinning all your hopes on it because you're afraid to face the fact that our wood-based society is doomed. The stupid, myopic wood party is over and the hangover is going to be killer. There is simply nothing which can replace the convenience, versatility and cheapness of wood.

 

[exchemist]

Me too & and in terms simple enough for even Futilitist to understand here:
http://www.sciforums.com/threads/electric-cars-are-a-pipe-dream.101877/page-164#post-3294039
Where in summary, I said there:
Your "physics and/or entropy mandates world must run on oil" is no more valid than the same argument applied to wood 200 years ago is.

Quite right and sorry for not acknowledging your contribution. And I was about to add that the same goes for coal 150 years ago - but then saw Billvon has beaten me to it with a comprehensive post on the subject.

 

[Billy T]

Quite right and sorry for not acknowledging your contribution. And I was about to add that the same goes for coal 150 years ago - but then saw Billvon has beaten me to it with a comprehensive post on the subject.

No problem with omission. I mainly wanted to note that history refutes Futitilist's silly "physics proves were are doomed when oil becomes too expensive" argument, not once, but EVERY time the energy base has changed.

Billvon's last paragraph, quoting "Peak Wooder" is GREAT.
It alone should drive Futitilist away for a few years again, until some new people are reading here that he can try to mislead with his nonsense.
If Billvon does not post the last three paragraphs in the "Etp model" thread soon, I will, but hope he does - he should get the credit.

 

[Futilitist]

I am once again requesting that James R, or someone with a sufficient physics background, make some determinations of some basic physics questions that are under dispute here. I don't believe there is any useful way to proceed until this happens. In the meantime, thank you all for your patience.



---Futilitist

 

[Kittamaru]

I am once again requesting that James R, or someone with a sufficient physics background, make some determinations of some basic physics questions that are under dispute here. I don't believe there is any useful way to proceed until this happens. In the meantime, thank you all for your patience.



---Futilitist

In other words, you don't like the answers being given... so you want to put the thread on hold until someone agrees with you...

 

[Beer w/Straw]

I'm not studying physics so as to make it big on the stock market!

There is no physics questions you pose. I could say chemistry doesn't exist because it deals with atoms and quantum physics is more bitchin.