Category Archives: Peak Oil

Making Life Better, Part 3: Why These Big Island Issues?

I want to talk about why I’m involved in all these different Big Island issues: Geothermal. The Thirty Meter Telescope. The Hawaii Island Energy Cooperative.

These are not random, unrelated concerns. They are all directly related to what’s happening in our world and on our island.

I am always working toward making our lives better here on the Big Island, and making this a better place for our children and grandchildren.

Everything came together for me when I started going to the Peak Oil conferences  in 2007. That’s where I learned about Charlie Hall and his theory of Energy Return on Investment (EROI).

What was interesting to me about that his is a biophysical approach. A systems approach. It doesn’t put everything into its own silo, but instead takes everything into consideration all together.

EROI boils down to one basic concept: You have to have net energy to survive. This concept is discussed as an economic concept, but really it goes all way back to biology. Think about a rainbow trout swimming in a river and catching flies. At the end of the day, it has to have caught enough flies not only to survive but also to reproduce.

It’s the same for every animal. Look at cheetahs. They’ve got to be able to run down antelopes and rabbits and whatever they eat, and still have energy left over to reproduce and raise their kids.

It takes energy to get energy. We have to be able to get at our source of energy – like oil – and still have enough left over to power our society.

This concept applies to organisms, organizations and civilizations – everything.

How These Big Island Issues Apply

I’m no scientist. I’m a farmer who’s spent a lot of time out there on the farm, dealing with the physical stuff, out in the rain and the dirt. I come at this practically, always remembering my Pop’s lesson about, Not no can, can.

I am always trying to find a solution to something or other by thinking hard and planning ahead. When I went to school I learned there’s a name for this. It’s called “contingency planning.”

And it’s what we need to be doing now. Contingency planning. We need to take sustainable actions now to prepare for a better future.

What makes a solution sustainable? It has be economically, environmentally and socially sustainable.

As for the economic part, people understand what you need to do to make that work. Environmentally, too.

What is generally missing, and what I gravitate toward, is the social part of sustainability: leaving no one behind. I always come at everything from that point of view.

When we look at the Big Island, we have the lowest median family income, a homelessness problem and many other social problems. When I look at solutions, I want to make sure they address these problems.

Solutions

From what I see, education is the game changer. There are clear correlations between education and family income. And education and family income have a strong impact on the other problems. It’s not very complex.

The TMT brings $50 million to our island,  earmarked solely for our kids’ education. And geothermal and the Hawaii Island Energy Cooperative bring smart energy solutions to our peak oil crisis.

I’ve been influenced by my Pop, who taught me to look long term. When you’re looking long term, you don’t have to make radical decisions you might regret later. When you  focus on the long term, you can make gradual changes to get to where you want to go.

We need to have a sustainable energy situation, and that will help with everything else.

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Nate Hagens to Speak About the ‘Big Picture’ on Jan. 12

Young people, or anyone concerned about the world we live in and about leaving it better than we found it, should attend Nate Hagens’ talk next month.

Nate Hagens is a well-known speaker on “big picture” issues facing human society.

He’ll be speaking at UH Hilo on Tuesday, January 12th, in UCB 100 at 6:30 p.m.

Nate, who is on the board of the Post Carbon Institute, sent me the following. Have a look to learn a little bit about him and get a sense of where he’s coming from, and what he talks about.

Fifteen years ago I walked away from Wall Street. It was a fun place—I learned a lot, made a good income, and met fascinating people. But as I began to learn that the financial narrative about humans and our planet was a hollow facsimile of the real story, and therefore counterproductive to our real challenges, I quit.

Today I still meet fascinating people—in ecology, neuroscience, paleobiology, atmospheric science, biophysical economics circles, etc. And the collective story they’re telling suggests that we’re in a hell of a pickle. We dominate the planet’s sources and sinks, supported by a virtual army of powerful fossil slaves, who perform about 90% of the labor in our human system. With their help, we have grown our economies (and our impacts) exponentially over the past two centuries.

The largesse that spins off from this subsidy of ancient sunlight provides our wages, profits, jobs, cheap stuff, as well as the ability to do science, strategize about our future, and fund social and environmental initiatives. But, these fossil slaves are tiring (and they poop and breathe, which is of great concern regarding our oceans and biosphere).

The real stock market is our air, our soils, our forests, our oceans, and the biodiversity we share the planet with. This stock market has been in crash mode since I’ve been alive.

Two stock markets—one focused on the agenda of the gene, and one potentially focused by sapient minds. Which one should we focus on?

I currently teach a class called Reality 101 at the University of Minnesota. My students—bright, curious, pro-social 19 year-olds­—are coming to understand this broad ecological backdrop. They are aware of—and incredibly concerned about—the loss of our natural world, the end of the kind of economic growth and opportunities that existed a generation ago, and the social angst percolating in our society. They want to make a difference, and somehow avoid the standard conspicuous consumption trajectory, which is to get a salary, follow the rules, pay the bills, and buy more gadgets. So, I struggle with questions like these daily:

  • How can we learn to navigate the complexities of a contracting economy, while still including the viability of a natural world as a core goal?
  • How can we steer societal values so that young people can hold true to their ideals that manifest the more benign aspects of our species?
  • How can social and environmental groups “fighting the good fight” for a livable biosphere and social cohesion stay afloat in what will be increasingly tough economic times?

I have been on the Board of Post Carbon Institute since 2009. PCI uses a small budget and a big heart to achieve significant impact. Of the environmental NGOs, it is the only one that I know that focuses on the challenges our societies will face as our fossil slaves leave us before we might succeed in firing them.

The staff, Fellows and Board Members who comprise the Post Carbon Institute do not offer prescriptions, Instead, we use a systems approach to provide information, analysis, examples, inspiration, and community that remains ahead of the curve of those promoting singular “answers” to societal challenges.

The monetization of the human experience—and its impacts—has metastasized through modern global culture. Anything of value can and is parsed into dollars. And this sets up an irony: there is no financial profit in working on changing the system to something more sustainable, less finance-centric, and more tethered to biophysical realities. The people doing this work depend on those who have some surplus, and who care enough to support these efforts. A pro-social virtuous cycle.

When I was 19 (and naive), I thought “finance” was the key to the future. But I now see that it is ecology. What do today’s 19 year-olds see as their future paths? How will tomorrow’s 19 year-olds define “success” in life? The answer to that begins with education, synthesis, and new stories that we start to tell, today. PCI is poised to expand its reach, with the specific goal of engaging young people to prepare them for the world they will inherit.

If the 20th century was the Century of Self, then perhaps the 21st can be the Century of a Livable Future, which will require sacrifices and creativity from broad swaths of human populations. Please consider personally engaging in this battle of values and vision in the years (and decades) ahead. Choose an issue you feel passionate about, take a deep breath, and get involved.

Put Nate’s talk on your calendar. January 12th. 6:30 p.m.

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Diagnosing Our Electricity Situation

This blog post by Gail Tverberg, Our Electricity Problem: Getting the Diagnosis Right, clearly explains what is going on in the world today and makes it easy to understand some things that seem counterintuitive at first glance.

She write about the oil price drop, and, recently, the economic slowdown. That’s the counterintuitive bit – you’d think with the drop in the price of oil, the economy would be picking up.

I have followed Gail’s analyses for a long time now. What she explains in this blog post is something she’s been predicting, and talking about, for quite awhile.

And here’s the thing – she’s been right on the mark for as long as I’ve known her. She is more doom and gloom about it than I am, but then I have never been able to prove her wrong. So it’s best to be prudent and try to protect ourselves as much as we can.

It’s why I’m pushing the utility co-op. An investor-owned electricity utility would just take us farther down the same old path in the wrong direction.

With a co-op, we are in control of our direction and our destiny. We would manage it ourselves; it would not be managed by people whose end goal was trying to make a dollar for investors. This is what I see as the basic difference between the NextEra plan and ours, and it’s a huge one.

We need to control our direction in order to take care of ourselves, and even more importantly so our kids and grandkids and their grandkids will be able to adapt to changing conditions and take care of themselves. The future is not going to look like, or work like, the past.

Go read Gail’s blog post, where she makes that easy to see. Things are already different, on many levels, and we need to be doing our long-term planning now. It’s like my Pop taught me – we plan for the future by taking small steps now so that later we don’t have to take drastic, catastrophic steps just to survive.

We have to take care of all of us, not just a few of us.

Those survival lessons I learned from my Pop were simple, and it’s time to put them into play.

If Gail’s wrong about how bad it will get, that’s okay. No harm, no foul. But if she’s right, we’ll have done the right thing. Either way, we will have protected ourselves.

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An Invitation for Young People

Nate Hagens, a well-known expert of global resource depletion, spoke on Turning 21 in the Anthropocene: An Invitation for Young People to Participate in their Future at the University of Wisconsin-Stevens PointIt encapsulates everything I learned at the Peak Oil conferences.

He visited our farm last year and stood under our sign that says “Powered by Water.” Read about his January 2014 visit to Hamakua Springs at this post Next 40 Years Will Not be As Easy.

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Shale Gas: Should We Take Their Word For It?

Do we really want to bet the Big Island’s future on the Energy Information Agency’s projections? It’s much more prudent to hedge our bets. Have a look at what people are saying about recent projections.

From the Post Carbon Institute:

Shale Gas Reality Check

The Energy Information Administration (EIA) recently released its Annual Energy Outlook 2015. How have their projections and assumptions changed over the last year, and how does it hold up to scrutiny against up-to-date production data from key shale gas and tight oil plays?

In 2014, Post Carbon Institute and David Hughes published the most thorough independent analysis of U.S. shale gas and tight oil production ever conducted, and now that analysis has been updated to assess the most current thinking from the EIA. 

The update shows that the EIA’s Annual Energy Outlook 2015 reference case suffers from even greater optimism than the previous year—raising what were already highly questionable projections for cumulative shale gas production through 2040 by nine percent…. Read the rest

This recent Los Angeles Times article is one example of some of the reality:

U.S. officials cut estimate of recoverable Monterey Shale oil by 96%

By Louis Sahagun

Federal energy authorities have slashed by 96% the estimated amount of recoverable oil buried in California’s vast Monterey Shale deposits, deflating its potential as a national “black gold mine” of petroleum.

Just 600 million barrels of oil can be extracted with existing technology, far below the 13.7 billion barrels once thought recoverable from the jumbled layers of subterranean rock spread across much of Central California, the U.S. Energy Information Administration said…. Read the rest

Steve Horn, Research Fellow with DeSmogBlog, also wrote about the EIA’s projects. This article, Drilling Deeper: New Report Casts Doubt on Fracking Production Numbers, appeared in the Huffington Post:

The report’s findings differ vastly from the forward-looking projections published by the U.S. Energy Information Agency (EIA), a statistical sub-unit of the U.S. Department of Energy (DOE).

…”The Department of Energy’s forecasts–the ones everyone is relying on to guide our energy policy and planning–are overly optimistic based on what the actual well data are telling us,” Hughes — a geoscientist who formerly analyzed energy resources for over three decades for the Geological Survey of Canada — said in a press release about the reporting’s findings. 

“By asking the right questions you soon realize that if the future of U.S. oil and natural gas production depends on resources in the country’s deep shale deposits…we are in for a big disappointment in the longer term….” Read the rest

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Is Our Culture Falling Backward?

This editorial ran in the Hawaii Tribune-Herald today. In case you didn’t see it, I’ll run what we sent them here.

***

The purpose of the Big Island Community Coalition is to work towards reduced electrical energy costs on the Island of Hawaii – where we pay up to four times the national average for our power.  We are particularly sensitive to electric power rates as very high rates serve essentially as a regressive tax on our population while greatly reducing the probability of generating jobs in any sector that is dependent on electricity.

There are occasions when events are so alarming that groups such as ours feel compelled to move beyond our primary task.  This is such a time.

We have observed with increasing alarm as our community has taken steps that inexorably blunt the forward movement of our economy and even move us backwards.  These include:

  1. Anti-Geothermal activists encouraged County government to ban nighttime drilling, effectively stopping expansion of a major source of renewable and inexpensive electric power beyond already-existing permits.This action was taken despite the existing plant meeting all applicable noise standards.  It appears that government officials took this action without first going to the site to verify that the noise was disruptive.  Once they did go to the site, some years later, government found that the noise was less than other environmental sounds (i.e., coqui frogs) and essentially no more than typical background noise.
  2. Anti-GMO activists lobbied to stop any new GMO products from being grown on the island – despite the fact that the vast majority of scientific, peer-reviewed studies found such products to be as safe, and in some cases more nutritious, as their non-GMO counterparts.  Legislation even prohibited GMO flowers – not consumed by anyone – from being grown on the island.  Thus family farmers lost the most effective new tools needed to reduce pesticide and herbicide usage while increasing productivity needed to keep their farms competitive.
  3. Now we have anti-Thirty Meter Telescope (TMT) activists taking steps to stop construction of the most advanced telescope in the world.  If successful in stopping TMT, despite its sponsors following every legal requirement over a seven-year period, we will lose our world leading advantage in understanding the universe.

All of these actions share similar characteristics:

  • The arguments used to justify such actions are consistently anti-scientific.
  • “Anti” groups often obscure the lack of scientific evidence to support their position by using emotional pleas intended to incite fear.
  • The only “win” for many of these groups is to completely stop, thereby making them completely unwilling to consider any facts that refute their position or to make any reasonable compromise.
  • Long-term consequences are significant both culturally and economically.

Cultures that survive and thrive embrace new technologies carefully, thoughtfully and steadily.  Cultures and economies that thrive are innovative beccause they generate ideas and solutions, solve problems and take calculated but careful risks.

Cultures that fall backwards are those that fear advancement, fear change and cling to a mythicized view of yesteryear.  The net result is loss of their brightest and most hard working youth.  Those youth that remain find fewer and fewer jobs – those jobs having greatly diminished economic value and lower wages.  The downward spiral becomes inexorable.

As we look to tomorrow, we need to ask ourselves whether we wish to give our children the exciting and invigorating job market typified by Silicon Valley or a job market that is much closer to the poorer regions of third world countries.  It is up to us to point one way or another.  Driving TMT out will be one more major step to cultural and economic poverty.

Signed,

Big Island Community Coalition

Richard Ha, President,

David DeLuz Jr., Rockne Freitas, Michelle Galimba, Wallace Ishibashi, Noe Kalipi, H.R “Monty” Richards, William Walter.

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How OPEC’s Decision Affects Hawaii

Richard Ha blog
The OPEC flag

Last week, OPEC decided to maintain oil production at 30 million barrels/day. Robert Rapier comments on the issues involved at his blog Energy Trends Insider:

OPEC Crashed the U.S. Rig Count

 By Robert Rapier

June 10, 2015

The OPEC Free Fall

 There is a popular narrative going around that I want to address in today’s article. Last November, after several months of plummeting crude oil prices, the Organization of the Petroleum Exporting Countries (OPEC) met to discuss the oil production quotas for each country in the months ahead. Many expected OPEC to cut production in order to shore up crude prices that had been falling since summer. This was the strategy favored by OPEC’s poorer members, as many require oil prices at $100/barrel (bbl) in order to balance government budgets…. Read the rest

Here’s recent background: In the latter half of 2014, oil prices were declining steadily, influenced mostly by large supplies of U.S. shale oil. When OPEC met in November to decide on production quotas, lots of folks expected it to reduce production in order to push oil price higher, but instead the organization decided to maintain market share by maintaining production at 30 million barrels/day. The price of oil dropped from a high of over $100/barrel to mid-$40/barrel. There was lots of speculation as to whether or not shale producers could sustain themselves at $40/barrel. As it turns out, above $70/barrel or so is where shale production increases and below that price it decreases.

Of all the states, Hawai‘i is the most dependent on oil. As soon as oil prices plummeted in November, we knew it would be good for us. The University of Hawai‘i Economic Research Organization (UHERO) has forecasted that Hawai‘i County will have economic growth for the next several years.

So what will happen between now and OPEC’s next meeting? If demand increases, then when oil hits $70/barrel, U.S. shale will start to crank up and that will hold the price around $70. If demand is not sufficient, prices will decline. Either way, it’s good for Hawai‘i.

What about the next OPEC meeting in November? Robert Rapier says that OPEC will probably be dealing with the effect of Iran’s increase in supply if a nuclear deal is made. This means lower price pressure, assuming the world’s political problems remain manageable.

Now if we can find a solution to our liquid transportation problem sooner rather than later, we in Hawai‘i will be well on our way to energy security. Think hydrogen for ground transportation and the Big Island will be in the best possible position to achieve energy security.

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Are Shale Oil Bankruptcies Coming Soon?

Richard Ha writes:

This Wall St. for Main St. video has oil and energy expert Robert Rapier as guest and it’s a very interesting discussion.

Robert, an internationally known energy expert who was recently on 60 Minutes, discusses various scenarios around the price of oil and cause-and-effect. I like Robert because he has no fear. He calls it like he sees it. He has a chemical engineering background and he has actually run a petroleum plant. He knows what it takes to make ends meet.

Here are some highlights of the discussion:

Robert says that because March and April are normal maintenance months it’s not likely that oil will drop into the $40/barrel range, unless it’s only for a very short time. Usage has started to ramp up in the last few weeks.

He thinks that oil will be in the $50-$70/barrel range for the next few years. The trend will be for the oil price to rise due to demand. T. Boone Pickens feels the price will hit $100/barrel in two years. Robert thinks it will be a little longer. $100 per barrel oil is not good. Any higher than that is bad.

Hedges come off in the next year, so most producers are hoping desperately for higher prices. Demand has increased by one million barrels every year for the last five years, mostly supplied by shale oil. But shale oil wells deplete very quickly. 

Rig count, normally a leading indicator, has fallen but we haven’t seen supply drop yet. Hedges running out in a year will add to upward pressure. Within the year we will start to see the effect of declining rig count.

Robert thinks Saudi will talk about raising prices at the next OPEC meeting. He doesn’t think Saudi Arabia expected to drop to the $40s.

Shale oil is not a panacea. The U.S. has a huge infrastructure advantage over the rest of the world. We have pipelines, water, and refineries in position. For the rest of the world, it means new capital spending. So supply from world shale oil will probably be minimal.

Conventional oil has been declining and U.S. shale oil will not last very long so the world needs to go to natural gas or deep water, and that will put pressure on natural gas prices. After shale oil and gas, there is no more. 

If you like to see the background to the oil and gas supply markets, I highly recommend Robert Rapier’s view of things. It gives you an insider view.

Here in Hawai‘i we depend on oil for 70 percent of our energy. We will transition to natural gas and before long that price will start to rise. We need to grab all the advantages we can get.

Do not throw away the Thirty Meter Telescope, geothermal, and biotech crops. These all help us cope in a world of declining petroleum products.

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Shale Oil & Gas: The Overhype

Richard Ha writes:

Art Berman says we don’t have as much shale oil and gas as we think we do. He feels that the shale oil and gas sector is largely uneconomic.

The first time I heard Art Berman speak was on a panel discussion at a 2009 Association for the Study of Peak Oil conference. He studied four thousand Barnett shale wells in Texas and found that the average well gave up 72 percent of its production in the first year.

He definitely had a different perspective than an oil company executive panel member, who said that according to his hyperbolic curve calculations, the average well would produce for 22 years.

I knew someone was wrong. I thought that the oil company executive was just blowing smoke, to sell stocks. I imagined that by the end of the 22nd year, the amount of gas production from his gas well would fill a balloon an hour.

Many thousand of wells later, several credible studies from other sources, such as by this Post Carbon Institutes study by David Hughes, support Art Berman’s initial observations.

We need to pay attention to this because we rely on oil for seventy percent of our energy, and this makes Hawai‘i especially vulnerable. It’s much better to be safe than sorry.

The Big Island is lucky to have an alternative to oil and natural gas to make our base power electricity: Geothermal.

As time goes on, and as oil and natural gas prices rise, future generations will have a competitive advantage over the rest of the world. We will be over our geothermal “hot spot” for 500,000 to a million years.

It takes energy to do work. No energy, no work done. But it is the net energy left over from getting the energy that society uses to grow the economy. And since two-thirds of our economy is made up of consumer spending, it boils down to how much extra money the rubbah slippah folks have that will determine the health of our economy.

So Kumu Lehua was right. He asked me: “What about the rest?” 

That is the key question. What about our kupuna on fixed income? The single moms? The working homeless? If they had extra money, they could spend it and everyone would benefit. Farmers are price takers, not price makers, and they would benefit. If the farmers made money, the farmers would farm.

Asking what about the rest will help us with food security. It all boils down to cost. That is to say, what are the combination of things that gives us the best net energy profile? This is more about common sense than rocket science. If we take our time to look for two solutions for every problem and one more just in case, we will find the solutions that make us competitive with the rest of the world.

This, in the final analysis, is about survival and adaptation. And it is about all of us; not just a few of us.

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Hawaii, Shale & Geothermal

Richard Ha writes:

Because Hawai‘i relies so much on oil for its energy, the state will be a major beneficiary of the shale oil phenomenon. Conventional oil development takes a long time – five to ten years – whereas activating a shale oil well takes less than a year.

The result is that whenever the Saudis try to raise the price of oil, our U.S. shale oil drillers will react wherever they can make money.

From The Barrel Blog, the essential perspective on global energy:

Energy Economist: Shale oil’s response to prices may call for industry re-evaluation

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up. It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economists, explains in this month’s selection from the publication. Read the rest

At $70 a barrel, a lot of people make money and at $40, a lot of people lose money. This safety valve is very good for us in Hawai‘i.

This will give us time to make rational energy decisions. Oil and gas are still finite resources. Because two-thirds of our economy is based on consumer spending, we need to find solutions that take care of the rubbah slippah folks. Low prices for them strengthens the economy for all.

Each island has its own basket of energy resources. The Big Island, because of its abundant geothermal resource, has the biggest basket of lowest cost alternatives. O‘ahu has the smallest basket of resources and so it needs help from the other islands—hence, the talk about cabling resources.

The elephant in the room is cabling geothermal resources from the Big Island. That will never happen, though, unless the Big Island residents themselves receive a demonstrated benefit from geothermal.

So now we need to work on getting Big Islanders definite low cost and other benefits from geothermal—like making hydrogen for transportation and even nitrogen fertilizer.

Then we can have a group of Big Islanders, representing the people, sit across the table and negotiate the conditions under which the people would approve exporting energy off island.

I would think education for our keiki might be a good starting point.

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