The End of Oil Part 4

In this post I will attempt to present the ground breaking research by the Hills Group who are a group of mining engineers and project managers who published a paper in December 2013 entitled “Depletion: A Determination for the world’s petroleum reserve: an exergy analysis employing the Etp model.” A second version was issued in March 2015  as an update with extensive graphs, data sets and equations explaining their methodology and that is the version I will refer to.  This report can be obtained as a 65 page monograph for a modest price from their website.I believe their work is a uniquely original Nobel Prize quality effort to look at oil production and depletion from an entirely new perspective far different from  the work previously performed by economists, oil executives and corporations, energy organizations and journalists , analysts and geologists. The traditional approach has involved cataloging oil resources and reserves worldwide with production history and estimates of future supply and demand. Their metrics have included cost, volumetric and quantitative considerations primarily. Interestingly, depletion of world energy supplies has been to date a lesser consideration. Some analysts have looked at the energy side of things employing concepts  like EROEI, that is energy return on energy invested  stating an obvious point that to obtain energy, you will need to expend energy.  But to my knowledge no one has looked at oil production, processing and distribution from a strictly energy and cost analysis perspective attempting to show energy flows into the petroleum industry and energy flows into our industrial society.     Energy flows are exceedingly important in all manner of fields from ecology, astrophysics, meteorology, and economics and as it happens oil production. The Hills Group went outside the envelope and decided to use physics and thermodynamics to see if depletion could be estimated more accurately than previous methods.  They also wanted to look at how the energy flows might influence and predict cost and availability of oil going forward. It’s my guess that when they started their work developing their hypotheses they had no idea what they would find and the impact of their conclusions.  I should say at the outset that their report is highly detailed and complex employing a myriad of equations, graphs, and data sets and the serious reader  will need at least a college level understanding of physics, mathematics and calculus to truly understand their approach.  I have that background but found that I had to go back and refresh long forgotten concepts of thermodynamics to plow through the paper which I have read and reread. What I find extraordinary is that I have not seen any peer reviews or criticism of their work anywhere outside of a few excellent energy bloggers and YouTube videos. The silence has been deafening and I continue to scan the Net for commentary on their work. If necessary I will contact energy analysts with whom I am acquainted urging them to study the work of the Hills Group and see if they can spot flaws in their reasoning. My understanding is rudimentary at best but so far I find their conclusions largely accurate but I would urge caution totally accepting their grim conclusions without additional study and research. I have a few quibbles with some of their work. For example they use scientific notation which clutters their rather crude graphs. Their explanations involving thermodynamic principles could be improved and their use of for example the BTU as their preferred unit of energy seems inappropriate given that the Joule is in most respects the more standard and useful metric. I have redrawn many of their graphs to improve readability for myself. They don’t state in their paper that energy consumption by the petroleum production system should be the energy of the marginal barrel although that is implied in their work. They also seem reluctant to address the greater implications of what their work might mean to an energy dependent Industrial civilization which could be profound to say the least. I have little doubt they are unaware of the impact of their preliminary conclusions. Their work by my understanding seems to predict the imminent demise of the International Oil companies. They don’t say that oil production will cease. They just say that when the energy cost of oil extraction matches the energy delivered that oil production could cease. They don’t mention that oil production could continue if subsidized by another energy source.  But of course this is already being done on a large scale in Alberta’s tar sands using natural gas as an input to tease out the bitumen.             There are some uses of oil that have no realistic substitutes. They also didn’t emphasize the overweening importance of oil energy to the rest of the worldwide energy infrastructure. For example The BP report of 2016 states that oil as a primary energy source supplied 32.9% of the world’s primary energy in 2015 but the fact is that oil underpins and subsidizes to a huge extent the production from all the other energy sources. Most importantly for the world industrial economy, oil is literally the driving force of everything that moves, and without oil almost nothing would move, no trucks would deliver goods, few mines would function, industrial food production would cease and the automobile transportation system would largely collapse. These possible scenarios are whoppers. Now I’ve saved the worst for last. The Hills Group shows their Etp curve hitting a wall as early as 2030 or 2031! More on that conclusion in a future post after I have tried to describe in detail the methodology of their work. I will also address policy implications for the economy and society in general and my native Jackson Hole region in particular.

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The End of Oil Part 3

In my previous posts dealing with oil energy and depletion I’ve tried to get a handle on many aspects of oil production and use along with projected supply and demand using the conventional tools of most energy analysts such as resources and reserves with new reserve growth, field depletion, cost estimates along with production costs in my attempt to try to discern future use, cost and availability projections. I now know that this method is flawed because it ignores fundamental properties of the oil production and processing system. The first barrel commercially processed in 1859 in Titusville PA was our cheapest barrel to produce and every barrel since has cost more and every barrel in the future will cost even more. O f course I mean this generally, not literally but it turns out that a useful first tool could be to look cumulative production over a long enough period of time and compare that to cost and see what the relation might be. Another task might be to look at production and see if there might be a way to chart production cost say per barrel over time. Might there be a way to see how much energy the production side of things uses and see how much energy or wealth is delivered to the greater society from the distribution of that oil energy. Might there be a way to predict future depletion? We know that there is a correlation between energy consumption and economic activity which can be crudely measured in GDP. There are ways to measure how much GDP is generated by a unit amount of energy. For this analysis to proceed we will need first and foremost, accurate data sets. It turns out this is very difficult to acquire for many reasons. Among them are sloppy or absent record keeping, the desire of producers to conceal how much they produce or have as reserves and in some cases deliberate falsification of the figures for political or financial gain and so forth. It turns out that there are a few honest men who have made truth and transparency their goal. The best example is the Texas Railroad Commission who kept detailed records starting with the big oil boom in Texas earlier in the last century and there are other agencies which have done credible verifiable data collection. Another problem is there is a lot of data, a lot of DETAIL to handle and examine and for many reasons very few people bothered to look at this project. The first and most important person who did was M King Hubbert, a Shell geologist who presented a paper in Houston Texas in the late 50’s in which he showed a distribution function using a Gaussian curve showing oil production in the US up till then projected into the future. The most stunning part of his curve was he projected oil production in the US would peak in 1970 and world production would peak about the beginning of the 21st century. Allegedly loud guffaws and snorts were heard throughout the oil patch. The so-called Hubbert Curve was ridiculed and generally ignored by the oil executives and most petroleum geologists. But guess what happened? US production peaked in 1970 and world production peaked about the turn of century. This was in fact PEAK OIL, a term which can push some economists , executives,pundits and politicians into a lathering sputtering hissy fit at the sheer mention of the word.

Shortly after US Oil output peaked A group of systems analysts called the Club of Rome from MIT(?!) put out a book called “The Limits to Growth” in 1972 in which they laid out a model of future trends in the economy using a new invention which greatly facilitated their work, the digital computer. Their model examined a variety of parameters such as energy and resource growth, population, pollution, and projected them into the future. Some people were stunned, including myself and their lives were forever altered. Many others fumed and snorted and went into full denial and attack mode. To this day there are still plenty of people  who regard the book as rubbish and they likely are the same crowd who drink at the climate deniers bar and grill and who are card carrying members of the Flat Earth Society.

Meanwhile oil production when through wild gyrations in price and availability with oil shocks in the 70’s and 80’s, with huge new discoveries in Alaska and the North Sea leading to rising production and falling prices and an economic boom which lasted for 25 years. It turns out those were that last big field discoveries. But price gyrations in oil continued with a spurt to $147/barrel and a stomach churning plunge back to $30 and back up and down where it now sits at about $50 a barrel. Some people including a few intelligent analysts, bloggers and economists started to voice the opinion that prices too high killed economies and price too low killed oil companies. What should be the price that oil needed to trade at to hit that Goldilocks Sweet spot? When oil prices were over $100 five years ago Wall Street went on a spending spree throwing money at anyone with a pickup truck and a drill bit as the new or not so new technique of hydraulic Fracturing took off in a frantic search for new sources of what came to be called “Unconventional” oil. The US was to become Saudi America with huge supplies of Tight oil locked within tight rocks and there were mountains, MOUNTAINS I SAY! In the southern Rockies made of oil shale lying there for the taking. Saudi America was going to be Energy Independent ! We would export to the world which would again become our Oyster. America could be Great Again! Wall Street and petroleum pundits sprouted like flowers after a rain and no one seemed to notice that those fracking wells petered out way too fast and some whispering could be heard that some weren’t making money,even at over $100.. For a while money was made by a fortunate few buying up oil leases and peddling them to the suckers born every day. Even the CEO of Exxon, Rex Tillerson, said a lot of people “were losing their shirts”. But not Rex of course. And then starting in 2013-2014 all this expensive to produce frackoil hit the market along with a continuing recession and before long oil crashed back to $25 and then mercifully edged back slowly up but it came too late for a lot of under capitalized wildcatters. At around this time a group of Project managers and engineering whiz kids led by a guy by the name of B.W. Hill at what was called the Hills Group decided to take a new look at sorting out the conflicting data on Oil availability and production using an altogether different methodology, Thermodynamics. Thermodynamics you say? You remember thermodynamics, right? The first law, the second law, the third law….Was there a fourth law? Stay tuned in a future blog while we try to find out how thermodynamic principles might lead us out of the desert into the promised land of true knowledge.

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The End of Oil Part 2

My post of Aug 11, 2016 entitled “the End of the Oil Age” laid out the probability that Oil Depletion is far more advanced than is generally assumed and that assumptions about how long the world’s oil supply will last may be severely erroneous. The Trump/Clinton election debacle included reams of what is now called “Fake News” put out by spurious sources in the media and the internet which was unverified, unresearched and untrue. It is my contention after reviewing data for many years on the world energy picture that there is fake news there as well. I have come to the conclusion that much of the information and opinions disseminated by economists, energy organizations, financial organizations and the mainstream media regarding the future of petroleum are at best misleading and incomplete and at worst completely wrong. It is not my intent to cast stones singling out particular people or organizations. My purpose is to point out what I perceive to be flawed assumptions, incomplete data and wishful thinking and to try to get at reliable methodologies in an attempt to determine how close we are to the End of the Oil Age.

I will state right at the first that trying to get reliable, verifiable information on something as important as oil energy is exceedingly difficult and time consuming. The questions that have been asked are how much oil do we have in the world? Who has it? How much can we use and for how long and how much will it cost us now and in the future? These sound like straight forward enough questions but unfortunately the answers are rarely straightforward.  I recall a quotation which goes something like : ”If they can stop you from asking the right questions, you’ll never come up with the right answers.”

Let’s start with the first question. How much oil is there in the world? Even that is the wrong question. What is oil? Well oil is a complex mixture of hydrocarbons with varying composition, purity, density and utility distributed within the world’s 48,000 oil fields.  The oil of greatest value is a specific variety of crude oil with a specific density described by the American Petroleum Institute as a density between 30 and 45 degrees . Light sweet crude oil is one of the names given to this valuable fraction. This variety of crude has the greatest deliverable energy, is easily refined and yields the most net energy after processing. It is unfortunately only about 40% of the world’s supply. It is the fraction that powers the transportation industry yielding the highest quantity of refined gasoline and diesel. There are lighter and heavier varieties of crude oil which can be refined into transport fuels but they need additional steps like dilution or combination, vacuum distillation or removal of undesirable contaminants like sulfur or heavy metals, and water, steps that add to the processing costs.. So there is oil and then, THERE IS OIL. I am talking about this premium variety of crude oil, 30-45 API, which has been called “conventional oil.” There are several varieties of “unconventional “oil, some of which are called oil but which are not, such as Oil Sands which contain bitumen, a tarry substance. There is  ”“tight” oil  which requires  fracking to release a very light oil trapped in rock of minimal porosity. Then there are synthetic biofuels derived from crops which can get grouped with oil supplies and production. Unless I state otherwise, my discussions are conventional oil and any associated lease condensate associated with crude API 30-45. I have and will probably use the term  “Peak Oil” when describing API 30-45 crude. Peak Oil has become a pejorative term by some segments of the media who deny that the world is “running out of oil.”  The very idea that the world could be running out of oil is anathema to them and the very mention of it is bad for business. The fact is the world has already hit a peak of conventional crude oil and we hit it about 2006 at around 72 million barrels per day(mbpd). Today when you read about oil production you will see far higher figures but they now include the unconventional oils, NGL’s(natural gas liquids), biofuels and the most absurd and misleading category “refinery gains”, a deliberately deceptive category which relates to the fact that after refining a 42 gallon barrel, you will get more than 42 gallons of gasoline and diesel. The energy content of course is unchanged, just the volume is different.

But now back to the first question: How much oil is in the world? If you do a Google search you will find a huge disparity of estimates. The highest I have seen is 4300 BILLION barrels in oil Resources. The terms resources and reserves are bandied around to serve the biases of the particular pundits or organizations.  You include in world resources all types of hydrocarbons in all   locations in all types of rocks at all depths…..Everywhere. With unlimited energy and if cost were no object, there is probably 4300 billion barrels. But cost is an object and the category of RESERVES  is a much smaller figure because it includes all the oil that is known  and can be economically extracted. The BP Statistical Review of World Energy 2016 states that world reserves in 2015 were 1697.6 Billion barrels. BP also states that to date we have used 1290 billion barrels. As new oil is discovered those reserves are added to the figure but new discoveries have dwindled for decades. Last year discoveries were less than 3 billion barrels and the chance of finding a really big field like the supergiant fields of the Middle East are probably remote.  One important fact that is rarely mentioned in the media is that discoveries of new oil have been below world oil consumption since the 1960’s. For example last year the world used about 33 Billion barrels and discovered less than 3 billion, a pattern which has persisted for decades. Are we then running out of oil? Of course we will eventually run out of oil that is cheap and accessible. We live on a finite planet and there are finite quantities of oil and other resources. Right now the world has a glut of oil but in the not too distant future there won’t be a glut of cheap oil. In fact the world will never run out of oil but at some point the cost of extraction will exceed the value. When the amount of energy invested to extract and process the oil exceeds the amount of energy in the oil, the party will be over. It will be over unless we can use other energy sources to extract the oil.  In future posts I will try to attempt to answer the other questions I posed about oil at the outset. I will also try to  explain how the newer methodologies around oil production and depletion offer a potentially more reliable answer to these questions. I will attempt to amplify and explain the work of the Hills Group which I have alluded to previously.

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Best Energy Book of the Year

If you read just one book this year, When the Trucks stop running by Alice Friedeman should be that book. This book’s primary focus is the overweening importance of transportation energy which is 95% petroleum based to the country that uses the most oil and is the most dependent upon that oil. Her first chapter is entitled “When the trucks stop running, America stops” and she lays out a scenario  in  a 7 day period   exactly  what it would be like in the US on each of those seven days if the trucks stopped. Friedeman states  in exceedingly clear and graphic detail the danger of the United States’ over reliance on a finite resource, petroleum being the raison d’etre of our industrial civilization.  Her conclusion is that we are at or near peak oil which is the point where 50% of the world’s oil has been extracted and where supplies have entered terminal decline. She points out correctly that it doesn’t mean we are running out of oil because the world will never run out of oil. For example in 2030 we will have as much available oil as we had in 1980 but it does mean that what oil we have left should be used in the most efficient manner possible and not wasted. We should use the time and the oil we have left to prepare for a energy constrained future when we might obtain the energy to drive our industrial civilization on other sources which of course would include renewable sources of energy.  She states in exquisite detail with a well annotated source list exactly how and where we use energy and how much work is done by the end user. She states that trucks and trains and ships use the least amount of petroleum to do the most amount of work. For example she lists the amount of freight moved per ton mile and reveals some astounding facts. Take FedEx or UPS air freight. They use 600 times the energy to move a ton of freight as a ship and vastly more energy than their own trucks. Rail is 2-6 times more efficient than trucks. Helicopters use 1000 times the energy of that container ship.  66% of our transportation fuel is used by cars, light trucks and SUVs generating huge emissions and inefficiencies along 4 million miles of US roads and along the 47000 mile Interstate Highway network.  She points out that even though we have been using oil in this country since 1859 and have burned though half of the world’s oil, the other half   is still there to be extracted. Right? Well not exactly. It turns out that we have extracted the easy to get half, the cheap oil, and now what is left is the expensive to extract hard to get oil, the oil in deep water, the arctic, and from rock of low porosity. Many of the dominant oil exporters are politically unstable countries who cannot be relied upon. So Alice looks at alternative sources of oil energy. She examines in exquisite detail what these alternative energy sources could offer, what drawbacks exist to their adoption and whether they can be a replacement for cheap oil. She looks at various drop in fuels such as making transportation fuels from coal, from Natural gas, from biofuels as well as from unlikely sources such as algae and hydrogen fuel cells. She examines in great detail how electricity might be a source of transportation energy and whether we could switch from fossil fuels generating 75% of our electrical energy to renewable sources such as wind, solar, tides, and geothermal among others. She spends a large section of the book laying out the anatomy and physiology of the US electrical grid and what the consequences of adding wind and solar input to the grid and how the grid might be balanced with these diurnal and seasonal inputs. In order to utilize these new sources a reliable way to store the energy to balance out the peaks and valleys of electrical demand would have to be found and she explores again in great detail what that technology is and might be available in the future including pumped hydro as is used in Denmark, compressed air, utility scale batteries among other storage options. If oil declines before natural gas could the country move to natural gas as a “bridge” to the future not only generate the electricity but to move freight and to continue to provide the feedstock for plastics, petrochemicals and fertilizer production?

The strength of Friedman’s writing is her clarity, her parsimonious use of words and at times her humor and wit which shines through her arguments. I found it amazing that she could cover such a complex subject in such detail in just 131 pages. She draws most of her facts from official sources such as the IEA, EIA, and IPCC and government testimony before the House and Senate. Her detailed bibliography and annotation is stunning and she is to be commended for this magnificent work. As an amateur energy analyst I have a few criticisms of her effort. My strongest criticism is that this work is not likely to ever see the light of day and achieve the widespread dissemination it deserves. It was published as one of the many dozens of pamphlets issued by a remarkable academic publisher called The Springer Briefs in Energy started by the eminent academic Charles Hall. Her book is a paperback book of 131 pages and costs a mind boggling $54.99 from Amazon. I have yet to see a review of this book anywhere.  This book should have been published by a respected environmental house such as New Society Publishers or even by some of the big US publishers like Doubleday, Scribners or Penguin. I think it would have been better to be issued as a self Published work.  Unfortunately it is likely to be a gem buried forever unless someone can dig it up and give it the attention it deserves.

My other criticism is that Alice Friedeman does not explain the relation of energy to our Industrial Civilization and to the world of economics and how energy is the lodestone of societal wealth and standard of living in the world. And why cheap fossil energy isresponsible at least in part for the enormous explosion of new technology, inventions and innovations and wealth but also of pollution, global climate change and an unsustainable population explosion which has likely exceeded the carrying capacity of the planet. Readers who would like to read more from this remarkable woman are urged to go to her excellent blog:energysceptic.com.

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Book Review

  I include this book review which I posted on Amazon because it deals with the American Industrial Revolution which was fostered by the American Energy Revolution. This review is  of Robert Gordon’s new book entitled: “The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War”(The Princeton Economic History of the Western World) (Hardcover)
     This is a remarkable book by noted economist Robert Gordon and his team of undergraduates and graduate assistants who did much of the heavy lifting collecting data and histories of the American experience of the last 145 years from 1870 to the present. His thesis briefly stated is that progress and the great inventions and innovations of the period primarily from 1870 to 1940 were transformational like no other period before or since and are not likely to be repeated. Gordon states that these great “innovations” were among others, the invention and distribution of electricity, the light bulb, the telephone, the radio, indoor plumbing, clean water, the invention of the internal combustion engine, the automobile and the airplane, cleaning up the food supply and elimination of the horse with its associated manure pollution were the great innovations of the period and responsible for the enormous growth and development of the United States. His conclusion is that this growth period is now over and not likely to be repeated. His economist critics say “Nonsense!”. The next epoch will have a whole new revolution of Artificial intelligence, robotics, and so forth to continue the growth process.Gordon’s conclusion is that the party is over as the title of the book implies. I have high praise for the first third of the book which covers the period from 1870 to 1940. The next 30 years were primarily improvements to the innovations of the first 70 years and the last 40 years to the present are remarkable only for the computer age and improvements in communications. The first third of the book is worth the price of the book and is a must read for the most dynamic period in American History and as a readable economic historian, Robert Gordon has few peers with the exception of perhaps J.K. Galbraith. The glaring flaw in this book is the same glaring flaw in most contemporary books by economists. Economists look at this enormously productive period and explain and measure it by outputs, productivity, GDP, income,capital flows, labor efficiency and productivity and a myriad of other statistical analyses. What these economists and what Gordon misses entirely are the causes of this incredible growth. Why did this period happen to this country when it did? Gordon says that it was an unprecedented flowering of genius and invention occurring in a new world of seemingly unbounded resources and promise far removed from the stagnation, wars and decay of the Old World. It was indeed that. But Why? How? Gordon almost nowhere in the book uses the term “Industrial Revolution” in his explication. But of course that is what it was. It was a continuation of the Industrial Revolution running on coal which began in England a hundred years before but in the case of the United States, it was a turbocharged industrial revolution. But again. Why here? Why then? This period happened when it did and where it did primarily for one single reason. It was a revolution powered by almost free energy never before available in the history of the world. The United States had fossil energy in huge quantities which came on line just before 1870. The first oil well was sunk in Pennsylvania in 1859 and invention of the first internal combustion engine followed just 15 years later. Firewood and coal were just becoming available in huge quantities and it was this cheap and abundant energy which allowed the utilization and exploitation of the other abundant resources of the New World. The jump in productivity was made possible because it was now machines instead of animal and human muscle that was unleashed by the energy from coal and oil. Amazingly in 762 pages, this is given scant attention . Energy to an economist is a subset of the economy. In fact the economy is a subset of energy in this writer’s opinion. Gordon also misses in his conclusions why growth in America is falling and will continue to fall. Earth is a finite planet with finite resources and finite energy resources. The wealth of America was facilitated by almost free energy which generated enormous productivity gains, innovations, a population explosion and sadly unimaginable pollution and societal complexity yielding ever more diminishing returns. It is stunning to me that Gordon misses this possible conclusion why American Growth is at an end
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The End of the Oil Age?

 

 

It is impossible for and unsophisticated observer to understand the dynamics of what is going on in the petroleum market and extremely difficult for a sophisticated observer to follow the trends in supply/demand given the sheer number of voices reporting their opinions.

In this post I want to announce a stunning new opinion first reported on the blog “Cassandra’s Legacy” authored by Ugo Bardi who resides in Florence. See: http://cassandralegacy.blogspot.com/2016/07/some-reflections-on-twilight-of-oil-age.html.

In his July 12 2016 blog, Ugo reported on the work by the Hills group

(http://www.thehillsgroup.org).   , who are a group of engineers who have been studying the decline in net delivered energy to society from petroleum. They posit the shocking opinion that the end of the oil age as we know it could be upon us in just a decade. They base their opinion of the steady decline in net energy available since the first well was drilled in Pennsylvania in 1859 to where we are now with various unconventional sources of oil whose extraction and delivery are demanding ever more energy to deliver the end product to the consumers. Simply put, it takes oil energy to get oil energy and when we reach the point where the amount of energy expended matches the energy obtained, the game is over. Let me post a segment from Ugo’s first of three posts from the Hills group which illustrates their alarming conclusion:

 

The end of the Oil Age is now
If we had a whole century ahead of us to transition, it would be comparatively easy.  Unfortunately, we no longer have that leisure since the second key challenge is the remaining time frame for whole system replacement.  What most people miss is that the rapid end of the Oil Age began in 2012 and will be over within some 10 years.  To the best of my knowledge, the most advanced material in this matter is the thermodynamic analysis of the oil industry taken as a whole system (OI) produced by The Hill’s Group (THG) over the last two years or so (http://www.thehillsgroup.org).

THG are seasoned US oil industry engineers led by B.W. Hill.  I find its analysis elegant and rock hard.  For example, one of its outputs concerns oil prices.  Over a 56 year time period, its correlation factor with historical data is 0.995.  In consequence, they began to warn in 2013 about the oil price crash that began late 2014 (see: http://www.thehillsgroup.org/depletion2_022.htm).  In what follows I rely on THG’s report and my own work.

 

Three figures summarize the situation we are in rather well, in my view.

 

Figure 1 – End Game

 

 

For purely thermodynamic reasons net energy delivered to the globalized industrial world (GIW) per barrel by the oil industry (OI) is rapidly trending to zero.  By net energy we mean here what the OI delivers to the GIW, essentially in the form of transport fuels, after the energy used by the OI for exploration, production, transport, refining and end products delivery have been deducted.

However, things break down well before reaching “ground zero”; i.e. within 10 years the OI as we know it will have disintegrated. Actually, a number of analysts from entities like Deloitte or Chatham House, reading financial tea leaves, are progressively reaching the same kind of conclusions.[1][1]

The Oil Age is finishing now, not in a slow, smooth, long slide down from “Peak Oil”, but in a rapid fizzling out of net energy.  This is now combining with things like climate change and the global debt issues to generate what I call a “Perfect Storm” big enough to bring the GIW to its knees.

I would urge the interested reader to read the posts and  go to the Hills group website to explore the details of their methodology. To say that their conclusions are earth shattering would be an understatement.

I have spent time analyzing their data and conclusions and implicit in their work is that it applies on the margin for new supply. There are legacy oil fields where the energy expended to deliver the oil is low because of sunk costs and infrastructure constructed decades ago but for new sources it is a different  story. The Hills Group does not say that we will have no oil in 10 years. They just state that the energy costs of acquiring new oil are steadily climbing and as time goes on society gets less and less energy and less exergy, or the ability to perform work from each bbl of oil.

From my reading I understand that they are talking about the energy available just in oil to get oil energy. Other energy sources like coal or gas or nuclear energy can and is utilized to obtain oil. Their point is  on the net oil energy available after expending oil energy to explore, drill, process and distribute that oil. In most cases oil energy is the only feasible energy available.

I would like to add a few points some of which were covered in the Cassandra’s Legacy blog and some not. Fossil fuels supply 86 % of world energy and the Hills group state that 88% of oil energy is “wasted”.  The percentage breakdown of that “waste” was not broken down in any of the data I was able to examine but the largest waste was unavoidable  thermodynamic waste inherent in the conversion from the chemical energy in the oil into thermal energy and mechanical energy as it is burned or oxidized. I assume that the thermodynamic losses relate to the enthalpy of the reaction combusting the hydrocarbons. Energy is consumed breaking bonds and energy is released forming new bonds in the products of combustion. For example cleaving the carbon/hydrogen bond is an endothermic process. It requires energy to break that bond. The products are CO2 and H20 which bond formation releases more energy than breaking the C/H bonds. Most of the energy consumed in an engine or power plant is wasted and dissipated as heat. Gas engines can be as low as 20% efficient and diesel engines can approach 40%. It is much the same with power plants whether burning oil or coal. Older plants are as low as 30% efficient and as high as 40% but that is still a lot of waste.  After exploration, production, refining, and delivery energy costs have been deducted, then that oil is burned in an engine which is only 20-40% efficient. It is pretty shocking how much we waste. In the case of a 4000 lb automobile, most of the energy is used to get the mass of the car down the road with the human occupants only a tiny percentage of that car’s mass.  The blog and the monographs also failed to mention the fact that since about the mid 60’s, the amount of new discoveries of oil failed to keep pace with world consumption. In 2014 or 2015, if memory serves ,the world used about 31 billion bbls of oil and new discoveries  totaled a bit less than 3 billion bbls and the cost of finding those 3 billion bbls has been going up about 7% a year since about 2000. Clearly business as usual(BAU) cannot continue with these numbers. Either we are going to have to use a whole lot less oil or find a whole lot more. If what new oil we find is too expensive for society, it will crash the economy. But sustained low oil prices will crash the oil industry. If the Hills group conclusions are right that the loss of this resource will be driven by thermodynamic factors and not financial or debt factors then we are entering a new paradigm.  My draw from the work of the Hills group is that oil availability will be rapidly diminishing in the next 10-15 years and if net energy declines as they propose, this rodeo will be over. The end of the oil age may be sooner than we think.

 

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Cal 48 For sale: Narrative history of her refit and travels.

Narrative history of our Cal 48 KOHO

Well the day has finally arrived to pass on our beloved Koho to someone who will take care of her. We purchased KOHO in Tampa in 1998, trucked her to Portland OR where we worked on her and then to Pocatello ID to  continue work on her and then to Napa CA to finish the job. I tried to follow the recommendations of a very complete marine survey by RD Shelley in Tampa, FLA as well as my own refit desires. In 2005 we headed south from the Bay Area to spend the Fall and winter in Mexico with the goal of heading across the Pacific in the spring.  I had totally rebuilt and refurbished  the 1967 Yawl personally and with expert help.  Major life events abrogated our world cruising plans and she was dry-docked in San Carlos MX for a few years. In 2009 my daughter Heidi and I sailed her back from southern Mexico to Alaska where she had remained in dry storage in Hoonah, Alaska, a beautiful native community across from Glacier Bay Natl Park.  I brought her back to the Pacific Northwest in May 2014.  I have some current photos taken there last summer. We cruised her a summer visiting old haunts and harbors in SE Alaska but changes to my  health  necessitate  selling this sturdy, swiftboat to someone who will use her. I will post info on these fabulous Cal racers but I see the Cal48 has a facebook page here http://www.facebook.com/#!/pages/CAL-48-Yachts/102018083197140. KOHO also has a Facebook page called Koho Owens created by Heidi here.. with more pictures.
KOHO will be for sale for $39K  which is less than the cost of her refit. She needs little  in the way of work to head across the Gulf of Alaska or around the world. She is primarily set up for Northwest cruising with extensive and expensive electronics(Furuno) including radar, chart plotter and charts, multiple depth sounders including a powerful internal furuno transducer.  The Interphase depth sounder has fwd looking and side scanning modes making it extremely useful navigating into uncharted waters and among pinnacles. It slides out on a track easily seen from the cockpit. I have a full complement of Paper charts but we almost always used a laptop with charts using the Maxsea navigational software.We have CD charts of the ENTIRE WORLD which will go with KOHO.. I added a color LCD display mounted in the cockpit which not only outputted the charts but also Nav Data and even the Furuno 36 mile color Radar NAVNET display.  She also has the optional Furuno Weatherfax/Navtex unit which was very valuable in the Pacific. Koho has 2 Furuno GPSs and an ICOM VHF radio with 2 antennas She sports a commercial hydraulic auto pilot(WH) as well as a canvas sided pilothouse with hard aluminum dodger topped with a large array of solar panels which run all electronics and keep the batteries topped up without the need to run the engine which has a 90 amp and large 200 amp twin belted alternators. She has ample diesel tankage. Her base cupronickel 70 gal factory tank plus an added 50 gallon aluminum keel tank. I installed a fuel polishing system which constantly cleans the tanks when we are under power by means of circulating the fuel through large Racor filters. She has a diesel cookstove(Adriatic) as well as a deluxe Aussie Broadwater propane stove and oven. We lost our Hood furler near a  minimal Cat 1 hurricane in Mexico  but she sails very fast with just hank on sails as she takes little in the way of canvas to make 8-9 knots. We added new sails for her return trip to Alaska from Mexico. She has 2 mains, staysail, storm trysail, storm jib, a 100% jib and a  few rarely used genoas.  We blew out our little mizzen in a gale off Oregon so she will need a new mizzen. During the same gale our old fully battened main parted and we completed the voyage on a backup main. She has all new over strength 316 SS rigging(3/8″), new  oversize super duplex stainless chainplates and  mast tangs, and  bronze 5/8″turnbuckles  with sta-lok or Norseman terminals. The rigging and mast is grounded below water by bronze and copper bolts and strapping  for lightning protection running full length along the keel. We skirted a tropical depression in MX and sailed in  numerous gales on the trip up the West Coast on our way to Alaska. This is one strong boat. Before the refit, not so much. I was formerly a commercial fisherman in the Gulf(Alaska) and have seen some really rough weather and KOHO saw quite a lot of Force 6-8 conditions with no worries. She is sleek, dry and fast and underwent extensive hull and deck and bulkhead reinforcement  to all bulkheadswith epoxy fiberglass, a layer of kevlar and laminated yellow cedar forward for impact protection, and a 5/16” steel shoe  on the fwd keel .  One of our intended destinations as the South Atlantic and Antarctica and hull and rig strength was foremost in our minds. She has sheet urethane foam insulation in hull and deck which keeps her warm and dry below with no annoying water drips.  An overhead was installed using Off white vinyl and #932 eggshell Formical attached to ¼” plywood, screwed to epoxy fastened backing strips facilitating easy removal for later maintenance. The boat from the factory had only painted fiberglass overhead, and cabin sole.  Two Laminated deck beams and additional plywood were added  under high stress areas like deck tracks and under the heavy  windlass.  She  had 2 small areas  under the sidedeck staysail tracks with some dry rot which was repaired with injected West Epoxy following their detailed instructions. Her hull to deck joint was cleaned and sanded and lifted off the hull and reattached with #5200 and rebolted with SS bolts and then re fastened and epoxy glassed inside and out to solve the problem of hull to deck leaks, a common problem in older racers. All the bulkheads were then reglassed to the deck and reinforced where needed with many layers of epoxy and glass especially in high stress areas in the fwd bulkheads.  The leak prone Teak toerail was removed and replaced with a ½”X2” aluminum toerail and  black ¾” X 2” UHMW rub strips bolted or blind tapped to the hull for protection against barnacle encrusted pilings and other boats. New cleats were added which were bolted to ¼” aluminum plates and aluminum angle which were in turn bolted to bulkheads where possible.  Virtually all the blocks were replaced with new Garhauer ss units. In the cold wet Alaskan climate she is warm and dry with her diesel Dickinson stove. Additionally, she has 2 electric 110V baseboard heaters under the salon settes for use in port.  She has a large  powerful Ideal vertical windlass with  400′ of  HT  3/8”chain. The windlass can be operated in the bow with foot controls as well as in the cockpit and has a SS handle for backup hoisting of the 66 lb Bruce anchor. She may be sold with our NZ aluminum hull Hypalon inflatable. She has a Isuzu 60 hp diesel with about 660 hours with a feathering adjustable Italian made  22″ 3 BLADE MAX PROP. She is highly maneuverable with her spade rudder and under power with her large 3 blade feathering prop. She has a large V berth stateroom forward. Aft to port is the forward head with a Lavac toilet used offshore only. Across from the fwd head is a large cedar lined hanging locker with light. Aft is the main salon with a slide out settee berth. Outboard of that is a secure sea berth with lee cloths. She has aqua Naugahyde like upholstery and high density cushions throughout which are in v. good condition, many lightly used. To port in the salon I eliminated the full length settee berth and pilot berths and converted them to food and book and gear storage. The long folding 6′ long salon table was removed and replaced with 2 small folding eating tables. The table was removed because in the narrow hull, it dominated the salon making any movement difficult when folded down and impossible when deployed. Koho has an enormous teak cockpit and we found our family always took our meals there instead of below. I did take care in the salon remodel by leaving virtually all the original cabinet and furniture structure intact and my added cabinetry was attached to the existing framing with aluminum and steel angle brackets.  This would allow a later owner to restore the interior to her original racing configuration should he or she so desire. To continue the tour: aft of the port salon is the Dickinson cookstove mounted centrally  with the ss flue exiting the hull in the midline.  Above deck the flue has strong 316 ss grab rails protecting it from errant lines, sails etc. SS grab rails also protect the deck dorades. To port along the hull is a large gimbaled Broadwater propane stove with oven and broiler. Over this stove I added an opening Bomar deck hatch for ventilation. This  stove  has an electric shut off  solenoid on the two 7.5 gal aluminum  propane tanks  which are located aft of the mizzen masts on deck. After two failures in 3 years(one replaced under warranty) we elected to turn off the tanks manually. The poorly insulated Cal 48 icebox was replaced with a foam insulated custom fridge with a Glacier Bay type vacupanel lid. It is cooled by a 1/2 horse 12 V powered commercial compressor utilizing a water cooled cupronickel condenser and ss holding plate.All maintenance controls are easily accessed below the Port berth. Additionally it has a finned air cooled condenser for use in dry storage. To starboard is the unusual salon entry ladder flanking a large hanging locker which we used for food storage. The small shallow sink was replaced with a deep double ss sink with both fresh and saltwater faucets. The fresh water is accessed by foot pump. The fresh water tanks are  expensive cupronickel like the diesel tank. They are over 45 years old and have never leaked a drop! the fresh water has  a delicious taste as well. Initially we had a new pressure freshwater pump and accumulator tank installed but disconnected it when we headed across the Pacific to abrogate the accidental depletion of the water tanks. We now use only hand and foot pumps.

Continuing the tour aft you pass through a companionway door into the aft cabin. To stbd is the Nav station, to port is the aft head with another Lavac .  This head diverts waste to a holding tank or overboard by a valve.  I should mention that all the ancient gate valve sea cocks were replaced with marine  ball valve units with new marine hose with all new SS hose clamps. Aft of the head is a double berth. Aft of the Nav Station is a quarter berth traditionally the off watch berth of the skipper. The Nav station is the electronic heart of the boat with a large 12V breaker panel above and 110 V breakers below, well separated for safety.  A Prosine inverter/charger is mounted below. The boat was entirely rewired with tinned copper marine grade wiring with subpanels distributed throughout the boat facilitating troubleshooting of circuits. The original boat had only 2 110V outlets using non marine #14 gauge automobile quality wiring and outdated house breakers.  The 12V wiring was a few  old #14 and #16 gauge circuits with a mix of old breakers and fuses, poorly secured and difficult to access. Treadmaster covered steps allow access to the pilothouse/dodger area. The drop boards are ¾” teak or ¾” acrylic for good bombproof visibility!  The cockpit has a thick laminated glass dodger forward and vinyl windows port, starboard and aft. In warm weather the pilothouse curtains can be lifted and secured. The top of the pilothouse is Aluminum and it is well braced. There is an acrylic hatch in the roof to view the sails and the sides have fiddles to collect rainwater along with SS rails for outboard safety. I designed the pilothouse to be removable for truck transport and we have removed the house both times we trucked Koho across the country. It takes half a day to reassemble and re bolt the house. Both in the pilothouse and below are ample and sturdy grab SS grap rails replacing flimsy teak rails for security in a rolling seaway.  Some double as webbing attachment for deck gear such as the Inflatable. I replaced the low and flimsy factory stanchions and pulpits with thick wall 36″ high  316 SS stanchions using 316 ss sockets of my own design with fish netting for safety. Her aft factory cable quadrant steering was rebuilt with new cable, sprockets and bearings . At sea we rarely steered with anything other than the WH autopilot remote which was powerful, sensitive and accurate and allowed movement forward for enhanced visibility. Aft of the cockpit is the mizzen mast which does double duty as a mounting platform for the electronics. Both masts have steps to the top for facilitating rig inspection and maintenance chores. There is an Aires Windvane mounted on the stern which we used once to confirm it worked properly(which it did). We disconnected  the wind vane lines. It remains as a a backup in case the WH autopilot fails. It never has. I prefer to steer by a heading rather than by wind direction. The WH hydraulic/electric autopilot is the same design as what I had installed on my 80,000 lb commercial Halibut/Salmon troller where it never failed in the at times rough Gulf of Alaska. It performed flawlessly on the recent trip south from Alaska in May 2014, steering virtually the entire way.

The hull was   double epoxy sealed barrier coated  using the WEST System and Copperpoxy followed by conventional antifouling paint. When I purchased her she had a few small blisters despite a well done epoxy barrier coat by her previous owner in Florida. She has been blister free ever since despite spending  years in warm Mexican waters as well as  in SE Alaska. The spade rudder was removed and X-rayed to inspect the  internal steel framing for corrosion, None was found and additional epoxy fiberglass was added. The rudder tube was also epoxy/graphite lined and reinforced per WEST system recommendations to reduce friction. There is a Gore Tex bearing/seal the the top of the rudder housing which has never leaked.

KOHO was painted with Epoxy and top coated with Sterling 2 part LP in 2005. The hull has lost luster and the deck could use a fresh coat after 9 years of wear and tear. Belatedly I must mention that during this long expensive refit,

No boat is perfect and Koho by now after 4 years in the harsh Alaskan climate will need some cosmetic attention.  I removed the shower and water heater for our transpacific trip because her tankage is just 90 gallons.The cockpit  and below deck teak  may need re varnishing and there may be leaks in all the usual places boats can leak. The electronics were all functional when I left her but electronics age just like the rest of us. She will need a new set of batteries if abundant voyaging capacity is desired. She has 2 new deep cycle batteries installed for the trip south from Alaska in 2014. She has capacity below for 7-9  #27 or #31 batteries. This  Cal 48  is big and powerful  and  without modern labor saving aids like headsail furlers, she  can be a real handful in gale conditions and above.  Nevertheless we have sailed her  shorthanded on long  Pacific voyages with just hank on sails. I have extensive offshore experience on a variety of sail and power vessels and I can honestly say I have never sailed a boat as controllable , predictable, stable and comfortable as this Cal 48. Steve Dashew in his book the Offshore Handbook recommended the Cal 48 as an excelled example of classic plastic. But I digress… With the fully battened main and Hood furler, I could single hand her 10 years ago under mild to moderate conditions.  The good news is that her sleek hull is easily driven with only modest canvas..  This boat like most old  CCA racers is not a roomy beamy liveaboard apartment. She has no current shower and we removed the large water heater after it failed very early on. She was designed to go to distant  places fast. That she does. In spades. To my knowledge Koho is structurally sound and most of the expensive refitting and strengthening has been done. If I were to keep her I would purchase a headsail furler, because in gale conditions Koho is perfectly balanced under just mizzen and staysail w or w/o a reefed main.  I would install a new mainsheet traveler  as well.
We may be reached at our mailing address: Hugh Owens, PO Box 309, Wilson WY 83014 or through our web sites: Cal48koho.wordpress.com or cal48koho.blogspot.com or at cal48.com.  Our home phone is 307 203-2109. Call is 307 699-2254. I have additional pictures of the interior.  There are a few short sailing videos of Koho on the other links listed as well as some pics under sail and at anchor.

https://www.flickr.com/photos/12248912@N07/

https://www.youtube.com/watch?v=YnRIDRpGLC0

https://www.youtube.com/watch?v=7hoHlowWo4I

http://svkoho.blogspot.com/2005/12/sf-bay-to-la-paz.html

Nav Station
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