Gyroscopic Investing

stone wrote: I know there are a few climate change skeptics on here.

The earth stopped warming 15 years ago.  Provide any model which can predict/explain that and I'll happily believe anything you say.

stone wrote:Wild About Harry , I'm sorry but I don't think providing for all of human kinds energy needs by solar power would make any significant dent in the proportion of solar energy that gets reflected back into space. You said that solar power could heat the earth by reducing the proportion of solar energy that gets reflected back out. I think that idea gets the proportions involved massively out of whack.

It is a threshold thing.  I am just speculating here, but PV arrays do capture energy that would otherwise be re-radiated into space, they do store energy for later use, and ultimately that energy is converted back into heat that must then radiate back into space.  First, though, that energy would heat the atmosphere.   

All I am saying that renewable sources have potential side effects and unintended consequences.  While I am sure the calculation has been made, I don't know how many acres (or hectares!) of PV arrays would be needed to provide for current human power needs, but I bet it is a bunch.  And it would come at a tremendous environmental cost.  I do think we have a bunch of rooftops not doing too much that could effectively be used for PV arrays with minimal collateral damage.

Except for nuclear energy, all energy sources on earth, including most common renewables, are solar (ok, maybe not tidal energy).  Fossil fuel is simply solar energy that arrived on earth and didn't leave.

I think climate is way more complicated than the stock market, and all the money and computing power on Wall Street cannot reliably model or predict stock prices.  Models are wonderful tools to study complex systems.  For policy making, not so much.

WildAboutHarry wrote:  they do store energy for later use, and ultimately that energy is converted back into heat that must then radiate back into space.

PV arrays do not store any energy. They produce DC current. That DC current MAY be stored in batteries (introducing further energy losses during the conversion), or MAY be converted to AC current by means of inverters (more losses) and fed into the electric grid.

Hydro energy (which is the cheapest known today) is not solar. In fact the reason polysilicon purification factories (which is required to make pv arrays) are located in Washington, Oregon, Norway etc. where they can tap the cheap electric energy derived from hydro power.

Let's not confuse ourselves here. Climate change, peak oil, and renewable energy are all totally separate matters. Those who wish to stop or reverse climate change do themselves a disservice when they conflate them because if it turns out that it may be possible to reduce carbon emissions by, say, utilizing cleaner fossil fuels, they're always left trying to come up with some reason why it's a bad idea despite the fact that it is already working toward one of their stated goals (for example, natural gas fracking being far "greener" than coal mining or oil drilling).

stone wrote: All those against developing renewables: Are you also skeptics about fossil fuels running out?

Yep.  Peak oil was diffused by fracking.  The USA is on track to be the worlds #1 oil producing nation again.  We are also on the threshold of being able to tap into frozen methane hydrates, one of the worlds most abundant sources of hydrocarbons.

These are all finite resources and given a sufficiently long time scale they will run out.  But then again so is the holy grail of clean burning fusion energy.  That's a finite energy source too.  The point is that we have repeatedly shown that technologies that focus on the efficiency of extracting fossil fuels or finding new sources of high energy density fuels are just as or even more effective at providing for our energy needs than renewables.

I'm not opposed to renewables.  Quite the opposite.  I just think that the products need to be better and out-compete fossil fuels.

RuralEngineer wrote: The USA is on track to be the worlds #1 oil producing nation again. 

Beware the cyclical bull market in the midst of a longer term secular bear market.



Hubbert's discovery/production curve model has been pretty reliable without regard to the price of oil.

Hubbert's model suggests that production tends to peak several decades after discoveries peak in a given geographic area.  See the U.S. discovery curve below.



What does that suggest about future production?

BTW, here is what Hubbert's theoretical model looks like:

You think this is the end?  China and Russia have even more shale oil than we do.  I never expected the USA to maintain its position as a world leader of oil production.  Once the technology we used to get here goes world wide oil production is going to explode again.

That's the theory any way.

The reason why I don't worry about running out of fossil fuels is because if we ever start to, and we fail to find new reserves that can be used in a cost-effective manner, the price will go up and make other forms of energy more attractive. Suddenly solar power is 15¢/kW and natural gas is 30¢/kW; Boom, problem solved. Market forces already have a perfect way to solve the supply and price problems.

Libertarian666 wrote:

Pointedstick wrote: The reason why I don't worry about running out of fossil fuels is because if we ever start to, and we fail to find new reserves that can be used in a cost-effective manner, the price will go up and make other forms of energy more attractive. Suddenly solar power is 15¢/kW and natural gas is 30¢/kW; Boom, problem solved. Market forces already have a perfect way to solve the supply and price problems.

This will work so long as there is a positive energy return on the energy invested in making the new energy harvesting devices (EROEI). If that is not true, then it doesn't matter what the price of energy is.

In other words, the laws of thermodynamics trump the laws of economics.

That's true for the people extracting it, but not for the people buying it. Even if it's profitable to extract resources for energy source X, if you can't price it competitively with energy source Y, people are going to gravitate toward energy source Y instead.

Assuming a reasonably free market, of course.

RuralEngineer wrote: You think this is the end?  China and Russia have even more shale oil than we do.  I never expected the USA to maintain its position as a world leader of oil production.  Once the technology we used to get here goes world wide oil production is going to explode again.

That's the theory any way.

Perhaps world oil production will explode again, but if you look at production decline rates of conventional oil fields, you will see that it's a much tougher thing to do than it may at first appear.

I hope Hubbert's theory will be invalidated by experience; it just hasn't been yet anywhere in the world.

Pointedstick wrote: The reason why I don't worry about running out of fossil fuels is because if we ever start to, and we fail to find new reserves that can be used in a cost-effective manner, the price will go up and make other forms of energy more attractive. Suddenly solar power is 15¢/kW and natural gas is 30¢/kW; Boom, problem solved. Market forces already have a perfect way to solve the supply and price problems.

Yes.  In a reasonably free market, it is impossible to "run out of" any key resource, since the price of that last unit of the resource will be infinite and no one would be able to afford it.

MediumTex wrote:

Pointedstick wrote: The reason why I don't worry about running out of fossil fuels is because if we ever start to, and we fail to find new reserves that can be used in a cost-effective manner, the price will go up and make other forms of energy more attractive. Suddenly solar power is 15¢/kW and natural gas is 30¢/kW; Boom, problem solved. Market forces already have a perfect way to solve the supply and price problems.

Yes.  In a reasonably free market, it is impossible to "run out of" any key resource, since the price of that last unit of the resource will be infinite and no one would be able to afford it.

I don't think anyone has claimed that we would "run out of" energy, just that it would become unaffordable. Which you seem to agree with here.

Libertarian666 wrote:

Pointedstick wrote:

Libertarian666 wrote: This will work so long as there is a positive energy return on the energy invested in making the new energy harvesting devices (EROEI). If that is not true, then it doesn't matter what the price of energy is.

In other words, the laws of thermodynamics trump the laws of economics.

That's true for the people extracting it, but not for the people buying it. Even if it's profitable to extract resources for energy source X, if you can't price it competitively with energy source Y, people are going to gravitate toward energy source Y instead.

Assuming a reasonably free market, of course.

1. If no one extracts it, no one is going to buy it.
2. No one is going to extract it if it is not profitable to extract.
3. If it takes more energy to extract than it produces when extracted, then it is not going to be profitable to extract except for fairly rare circumstances in which  the energy used in extracting it is cheaper or not generally substitutable for some reason, e.g., a nuke plant to produce steam to help extract tar sands oil.
4. But even in the circumstances in #3, general price increases for energy will not improve the profitability.

Currently we do not have a free market for renewables.  Solar PV is subsidized by taxpayers and ratepayers both at the production stage and the consumption stage and so "becomes" profitable even while your No.3 applies.  This is a conscious political choice. While I don't agree, these political choices will always be with us.

Mdraf wrote:

Libertarian666 wrote:

Pointedstick wrote: That's true for the people extracting it, but not for the people buying it. Even if it's profitable to extract resources for energy source X, if you can't price it competitively with energy source Y, people are going to gravitate toward energy source Y instead.

Assuming a reasonably free market, of course.

1. If no one extracts it, no one is going to buy it.
2. No one is going to extract it if it is not profitable to extract.
3. If it takes more energy to extract than it produces when extracted, then it is not going to be profitable to extract except for fairly rare circumstances in which  the energy used in extracting it is cheaper or not generally substitutable for some reason, e.g., a nuke plant to produce steam to help extract tar sands oil.
4. But even in the circumstances in #3, general price increases for energy will not improve the profitability.

Currently we do not have a free market for renewables.  Solar PV is subsidized by taxpayers and ratepayers both at the production stage and the consumption stage and so "becomes" profitable even while your No.3 applies.  This is a conscious political choice. While I don't agree, these political choices will always be with us.

The end game is that the price of those subsidies will "increase beyond all bounds", as von Mises would say, as the energy inputs become increasingly expensive. Then the system will collapse.

Libertarian666 wrote: The end game is that the price of those subsidies will "increase beyond all bounds", as von Mises would say, as the energy inputs become increasingly expensive. Then the system will collapse.

Interestingly we are beginning to see the next stage. Germany was at the forefront of the subsidy game which they began about 10 years ago under pressure from the Green Party. Subsidies were so generous that you could purchase a solar installation and it would become a cash cow, especially for farmers and businesses with large rooftop areas. Italy, Spain etc. followed. This caused China to decide to "cash in" and subsidized the production of solar panels at such low cost it drove other US and EU producers out of business.  Last year Germany decided to cut subsidies as this was becoming unsustainable. The green lobby immediately threatened the coalition that they would be putting 200,000 jobs in jeopardy (distributors & installers). So now they are at a stand-off.

We in the US are still at the early stage with subsidies increasing.  No doubt we will be heading down the same road.
As a matter of interest, look at your latest electric bill. Depending on where you live you will find a line item charge that mentions Environmental or Renewable or Alternative something.  It is usually $0.00xxx/kWh. Multiply that by the total kWh you used that month. That is your monthly subsidy paying for others' solar systems.

Mdraf wrote:PV arrays do not store any energy. They produce DC current. That DC current MAY be stored in batteries (introducing further energy losses during the conversion), or MAY be converted to AC current by means of inverters (more losses) and fed into the electric grid.

Hydro energy (which is the cheapest known today) is not solar. In fact the reason polysilicon purification factories (which is required to make pv arrays) are located in Washington, Oregon, Norway etc. where they can tap the cheap electric energy derived from hydro power.

Correct, PV arrays produce DC.  But AC is what is transmitted and used.  In order for solar to meet our energy needs 24/7 (which is what stone was alluding to, I think), there would have to be some significant energy storage.

Hydro is, of course, ultimately solar.  How does water get "upstream" into the rivers and behind dams?  Solar evaporation of water and rain/snow fall.