Traditional economics — as the price goes up, so does exploration, and so does the search for alternatives. There can be temporary problems as new sources are found and brought online, but eventually it works out.

Great idea, but it doesn’t work over the long term. It has serious limits into which we are running now.

The reality for petroleum in USA DISCOVERIES peaked in the 1930s — a bit less than 40 years before production started to decline. And what ho! WORLDWIDE discoveries peaked in the 1960s…. also around 40 years ago, so perhaps we should not be surprised that oil production worldwide plateaued in 2005 and is probably in decline now.

The simple reality is we find the easiest sources first. Mexico’s huge Cantarell field was discovered by a fisherman who noticed oil slicks in the Gulf of Mexico. The earliest metal ores exploited where very high quality — like in Minnesota, whole mountains that are very high quality iron.

When the easiest stuff is gone, you look harder, and eventually you find the rest — but the “rest” takes a lot more energy to obtain, and the process cannot go on forever. Eventually what’s left is too expensive and poor in quality to obtain.

Peak oil is near, and peak coal is nearby, and industrial civilization is at stake because idiot rat-like humanity keep lapping up the free food that poured out of the ground under its own pressure, and didn’t accept the inevitability that one day that nearly-free energy party would end.

northern spy@verizon.net (remove space)

Then after 20 years, they still ran for two more on the subeconomic ore, which is ore that was only worth running after the plant was fully paid for, and there was nothing better to feed in.

The price of coal has been so low for so long no one was looking for more. It also takes at least a decade to open a new mine. There is a gold mine north of here that has been in the permitting process for 17 years. The long time delay to bring on new production causes “short term inelasticity in price” from my old Econ 101 text.

If the price stays up for a decade or so, people will start looking again, whether it is for coal, uranium, or copper.

Normal R/P ratios are largely a reflection of the interest rate and so so spending exploration funds to discover additional reserves at a R/P of 144 makes sense only if you expect to find reseves that can be extracted at significantly lower cost than those you currently have.

I would hope for the health and safety of everyone we leave a lot of that coal in the ground and move rapidly to nuclear power generation.

My rough calculation was based on some figures for the embodied energy in the various types of pV.

This early paper states that it could be as much as 1060 kWh of electricity to make 1m2 of pV. Approximately 7m2 of pV is needed for a 1kWp array so the embodied energy is 7420 kWh of electricity.

I found some better figures for more modern cells, that reduce this to 1863kWh/kWp and 5598kWhe/kWp for the “Sliver” cells and conventional respectively

http://solar.anu.edu.au/level_1/pubs/papers/2CV_3_35.pdf – see table 1.

I then looked at a current technology from Evergreen Solar, which uses just 5kg of polysilicon in a 1kWp array, compared to the industry norm of 10 – 12kg. This figure is set to drop to just 2.5kg in a few years.

http://www.evergreensolar.com/app/en/technology/item/48

However, Evergreen are buying their polysilicon from South Korea, who have about 38% mix of coal in their power generation, and its debatable whether their suppliers energy requirements have been fully factored in.

It is in China where the largest growth of solar cell manufacturing has occured in the last 2 years, with companies such as SunTech with a 1GW per year production facility.

This article shows the main players – increasingly in China and Taiwan

http://seekingalpha.com/article/58786-pv-industry-in-oversupply-in-2008

So looking at the typical coal fired power plant efficiency in China currently 28%, with about 8% further transmission losses, means that to produce 1kWh of electricity, takes 5kWh of coal. Good quality coal typically has a calorific value of about 9.4kWh/kg.

So, if the conventional pV cells were made in China, the 1kWp uses 5598kWhe or 27,990kWh of coal. This equates to 2977kg of coal.

The early paper that stated 7420kWhe/kWp equates to 3.946 tonnes per 1kWp array, and the “Sliver” pV equates to 990kg/kWp.

So even the best pV technology is using nearly a tonne of coal in its production

2. We could get 40% better utilisation of our coal reserves.

By this I meant 40% better utilisation than the present UK average from a
pulverised fuel plant, such as Cottam or West Burton.

A supercritical coal plant or one using integrated gasification combined
cycle will produce electricity at nearly 50% efficiency, compared to the UK
typical plant efficiency of about 38%. Taking off the near constant 8%
transmission losses, and the net efficiency of production is the difference
between 42% and 30%. 42/30 = 1.4.

So a net 40% increase in electricty production for a given fuel consumtion
using one of the new coal technologies.

Lucas’s figure of 500GW pa.

It does seem a bit high – but we have seen examples of this sort of
bandwaggon expansion – especially in the corn to ethanol industry

I just came across a Scientific American article suggesting that the US
could attempt to have an installed base of 3000GW by 2050.

http://www.sciam.com/article.cfm?id=a-solar-grand-plan&page=1

This would need about 72GW manufacturing capacity for the next 42 years.

A more realistic figure is the earlier reference which shows the
manufacturing doubling to about 22.6 GW in 2010.

http://seekingalpha.com/article/58786-pv-industry-in-oversupply-in-2008

If this were extrapolated to a doubling every 2 years, then this figure
could be theoretically exceeded – but I doubt that even China has the
resources to bring this about.

2010 22.6 GW
2012 45.2
2014 90.4
2016 180.8
2018 361.6
2020 723.2

Add to this the option (or for economics: requirement) for Europe to place vast fields in a place like the sahara dessert, instead of inefficiently on northern german roofs.

Solar seems a good alternative to fossil fuels, but first we have to get smart about using it.

If you analysis is correct, coal consumption will increase for at least 3 reasons.

1. General economic and industrial growth, especially in India and China.
2. Coal increasingly used to replace liquid and gaseous petroleum fuels.
3. Reduction in the quality of the coal, with increased difficulty in mining and transportation costs.

I see also, a rather alarming trend emerging, and that is the increase in manufacturing output of solar pV, particularly in China.

Whilst not immediately quantifiable with any hard accuracy, a rough calculation suggests that there could be as much as 3.7 tonnes of coal used in the manufacture of 1kWp of photovoltaic panels.

As Lucas states above, the solar pV production could reach 500GWp per annum by 2018.

If this is to be mainly located in China, using electricity derived from coal fired power stations, then this could result in the consumption of a further 2 billion tonnes of coal per annum – just making pV panels.

This sets alarm bells ringing in that we use a significant proportion of our remaining fossil fuels to make solar panels, and this will further accelerate out path through peak coal and towards global coal depletion.

If this is the route that we are choosing to follow, it seems like a road to ruin.

We could get 40% better utilisation of our remaining coal reserves by moving towards supercritical and IGCC power plants. This would also produce a similar reduction in CO2 emissions.

There are also alternative solar technologies, such as solar thermal power generation, that should give better return on investment of fossil fuel energy, than solar pV.

“I then wonder how soon we can mobilize all these green, sustainable sources to fill some of that huge looming gap.”

Faster than you think. Bavaria (Germany) already was on 1,4% solar electricity in 2006 (which, considering the small, modular approach of photovoltaic (PV) electricity, should be something to think about…). The PV-branche organisation BSW in Germany just published record new installations of 1.100 MWp for 2007 (has to be confirmed as of yet, but staggering it is, even if it turns out to be hundreds of MWp’s less). Chinese rocket SunTech already is on the brink of 1 GWp production (a year), Q-Cells might even be bigger, together they took long-time market runner Sharp (Japan) by surprise, and you don’t know what is happening in China alone on this new frontier. The biggest company in the field, the Norse REC (which produces huge amounts of solar grade silicium because Norway has 98% (cheap) hydropower,) is going to build a 1,5 GWp solar production complex for app. 3 billion Euro in …. Singapore.

Etcetera…

This is a decrease in welfare, but not necessarily economically bad.

If you start to live closer to your work, you save money. This money will be spend on other things. This will probably trigger more economical activaty locally, instead of sending the money to oil producing countries.

The bad thing is, when people don’t cut back on their energy. Then they continue to send money abroad, not spending money for more local things.

Lucas

I’m delighted to see people reasoning out the future of energy prices with this fossil peak context. I’ve read a lot about all sorts of renewables: wind, solar PV, solar thermal, geo-exchange and geothermal, as well as biofuels like switchgrass, etc. Once I see the stark picture of fossil energy extraction facing peak and decline, as against WEO and IEA forecasts of decades more compound growth in demand (as population and GDP/cap. both keep growing), it all just doesn’t add up.

I then wonder how soon we can mobilize all these green, sustainable sources to fill some of that huge looming gap. Many other studies have asked a similar question, and they typically conclude that we can’t, or won’t, expand renewable electricity sources fast enough to avoid a plateau and fall in total supply. The Hirsch Report, Pacala and Socolow, and even wind and solar industry watchers all seem to lead to similar conclusions: we can look forward to rapid growth in all such renewables, compounding year on year, and still not see much of a dent in the ‘big gap’ for many years.

I guess this is where conservation and efficiency have to take up the slack, driven by rising prices. We are grossly inefficient with all forms of energy now, compared to what is possible if energy prices were high enough to make us care and change. The good news is that we can get the same services and benefits for much fewer gigajoules per service, and these changes should start happening quickly as the price per GJ starts to climb ever higher (at least up to the “solar anchor” price If the price rises faster than we can increase efficiency, due to high capital costs and sunk costs in buildings, big cars, coal plants, etc, then we will actually see a drop in consumption of the beneficial services themselves: people will make sacrifices to stay solvent, and will make changes like taking the train to work, carpooling, moving closer to work, into a smaller house, cutting back on vacation travel, etc. This is what the oil analysts call ‘demand destruction.’

Ramping up solar PV is much more difficult, because it requires complex machines. 2007 world production was 4GWp, this is about 1GW coal plant equivalent. This is almost nothing on world scale. However, in 2011 production will be 21GWp. If growth continues (and there is no reason why not), production can be 500GWp in 2018. This means that the solar PV industry will be 1000 billion dollar a year. This is huge, but not ridicolous for an energy industry.

Furthermore, you have two stages:
- Stage 1, investing in fossil energy stops.
- Stage 2, fossil energy will be replaced by renewable energy.

Investors are totally stupid, so stage 1 will probably happen some years before the solar anchor has been reached. If I look to all the articles, I notice some decline in believe in fossil energy future. With 20% renewable target in EU, investors start to think, “my gas powered plant, might not be profitable in 5 years”, while the solar anchor is not yet reached.

Finally, the question is, is 100% renewable possible?

The answer is yes.

- Electricity can easily be produced by solar power.
- If you divert all waste processing and biomass for the use in industry and airplanes, this is probably enough.
- Cars should shift to electric, which is possible with current technology and batteryswapstations. Range will be limited, but, be serious, that is far from famine. Running cars on biomass, is not possible in a 100% scenario.

Finally, you can also run a car on ammonia. Ammonia doesn’t contain carbon and can be produces in solar plants from water and air. But this is rather poor man’s solution.

Absolutely. There should be no doubt about that. http://www.theoildrum.com had an article exploring a kind of “breaking point” price for oil, that would criple industrial civilisation if it should be sustained. A price of between 250$ and 1500$ was estimated.

In other words: energy prices could easily double or perhaps rise 15-fold before we would actually see industrial civilisation grinding to a halt.

I expect that if energy prices hold or continue to rise in the coming decades, that we will see a massive shift to solar and wind, even though the “party might be over”.

Lucas, I like idea of a “solar anchor”, I really do. I’ve come across it a few times in comments but I’ve never seen a decent article on it. If one assumes sunlight and the infrastructure required to harness are, for all intents and purposes, unconstrained. But the cost comes in at say 3-fold “conventional” electricity, there should be no need to electricity to ever cost more than 3-fold today’s price.

This is fine in theory however the problem is the time dimension. Taking his figure of 12cents/kWh, gas/coal/oil prices could still jump such that conventional electricity cost 20cents, we’d be paying 20cents as it would take decades to deploy the gigawatts of solar to displace the “expensive” conventional fuels. The market simply can’t respond fast enough.

Lucas covers this issue with the following note:

“Note, “that involves a transition and a transition takes time. Price of oil might temporarely be higher, then going down when the transitional technology improves, making the premium lower and making oil cheaper (because there is less demand).”

I suspect however this is the dominant factor in any practical situation rather than a minor note.

The electricity price will only stabilise when it hits the solar anchor, if the solar capacity can grow to cover all conventional generation – which will take significant time.

Final thought – can the world afford its current energy consumption at the solar anchor price, even if the solar capacity could be built swiftly?

Electricity will become more expensive, but when it reaches the price of solar energy it will stabilize. This has not yet happened and so, more price hikes are to be expected.

If the electricity price has reached the ’solar anchor’ (and only if), then a rise in oil price will not result in further price hike of electricity. Since, the solar anchor has not yet reached, a rise in oil price, will result in a rise in gas price, which results in higher electricty price.

Then fossil energy will continue to rise in price. With a stabilized electricity, this results in the premium inversion.

It is important to understand that with rising energy prices, people will act by using the energy more efficient. But if the relation between the energy remain more or less the same, no (or only marginal) transition will take place.

However, if the price relation between the different kind of energies changes (premium inversions), then transition will take place. Currently, only a premium inversion is taking place for oil.

Using a car on gasoline is an optimum engeneering solution. This optimum will not (or hardly) change, when all energy prices rise in the same way. However, if oil rises more quickly, then this optimum will shift eventually.

So, we will get some high energy hikes, but there are some stabilizing points (solar energy) and we are not very far from them.

First of all, you have to look to the energy source that is unlimited. Currently that is solar power and you might also take nuclear power.

That price is stable (although it might become a little bit more expensive, it will not rise sharply).

Assume that thermal solar power can be generated for 12 cents a kWh (it is probably lower if it will be done on large scale). This is the “solar anchor”.

Now, in previous days, we generated electricity by using fosil energy. So, electricity had a “premium” above fosile energy in its raw form.

When the energy price hits the solar anchor (which is not yet the case, because solar thermal power plants are not massively build yet), then you get the “premium inversion” on the fossil energies.

The fact that energy is in the form of gasoline, coal or something like, will be a premium. This premium inversion, is a rather quick raise in price of the energy form.

Currently, the oil price is in a premium inversion stage, but I don’t think it is yet finished. If you take a gallon of gasoline, the price per kWh (or Joule) is about the same as electricity. So, obtaining premium status, but not yet fully.

Suppose that the premium of gasoline is about 50% above electricity and you assume the solar anchor of 12 cents per kWh, then you get a oil price between 200 and 300 dollar. If the price (and premium) goes higher, then the pressure to switch from gasoline to electricity goes higher (because electricity will not become more expensive). The electric car will really outperform the gasoline car on energy price and the train will become much cheaper than the car.

Note, that involves a transition and a transition takes time. Price of oil might temporarely be higher, then going down when the transitional technology improves, making the premium lower and making oil cheaper (because there is less demand).

If coal production is limited, then the laws of economics say that coal has to compete with solar power. So, building a coal power plant in a sunny region is not a good investment (environment not taken into account). Building it in a region with little solar options, will be. However, don’t forget, electricity can be transported over long distances rather cheap.

My first dig into Peak Coal, and my suspicions about actual reserves seem vindicated. One more resource we can’t rely on.

Let’s go collecting power from that good old sun. May last another coupla billion years !

Start by taking the currently accepted numbers as valid for the purposes of argument. So right now there are approximately 850 billion tonnes of proved coal reserves, and at the current rate of consumption they are sufficient to last about 150 years. The rate of increase in consumption has been running about 5 per cent annually for the last half decade.

By using a quite simple algorithm that Dr. Bartlett leads us to, we can find how long those 150 years of reserves will last if that 5 per cent annual increase continues into the future. The result is that all of the 850 billion tonnes will be gone in the space of about 43 years.

Since the useful life span of a coal fired electrical plant is on the order of 40 years, any prospective investor who expects to receive a long term return on capital for a new coal plant should already be looking elsewhere. It is reasonable to ask questions about alternative scenarios.

What if the growth rate is just 2 per cent annually? The coal then lasts about 70 years. What if it turns out there are really twice as much reserves; 1700 billion tonnes, a 300 year supply at current rate? Then the coal runs out in about 100 years. How high will the price of coal rise when it eventually becomes obvious that it too has reached a peak of production? This is a question the economists haven’t yet figured out how to answer for oil.

Even though arguments about coal continue to center on its environmental problems, coal’s advocates and detractors should come to the table understanding that there is limited space for coal to continue to be marketed to the public as ‘abundant and cheap’ as opposed to renewable alternatives. The sooner that more informed data on coal reserves can be developed, the better it will be for all parties.