I've always wondered why most of the world's oil refineries were built in oil importing nations and not exporting nations. Is there some engineering rule that says an oil refinery can't be built at the point of production and an oil rich nation can get into the business of exporting gasoline and diesel fuel instead of raw crude oil? I know that gasoline is much more susceptible to evaporation which can be a serious fire hazard if stored in very large containers. This is one of the reasons why large ships are powered by bunker fuel instead of gasoline or diesel.
However if humanity has figured out a way to launch rocket ships into space I'm quite sure the technical challenges involved in figuring out how to store gasoline in very large containers can be solved.

That leads to only 1 conclusion. --> a failed government.
I guess if an investor is going to sink $10 billion into building an oil refinery, property rights would definitely trump cheap labor!

I think you have two opposing forces at work here, one is the economies of scale Mr Bill talks about which make larger ships which can use a variety of fuels for propulsion as being economic, the other one is smaller ships which run primarily on wind power and human labor as being economic.

He is right in the sense that during a transition period, scaling up works, but you also have to take into account the fact that overall the trade will decrease as the products themselves become too expensive to buy. So what happens faster here, demand destruction or shipping capability?

I think relative to what we see right now, demand destruction is the leader. Beyond the necessities of life of shelter, food and water, very little is going to be sought after in the downward spiral. All those commodities have to be available locally for any given community to survive. Mass shipments of grain will decrease as the grain needs to be distributed locally. Mass shipments of oil decrease as the price of the oil is out of reach of the consumers at the end of the shipping line. Clearly it takes some time for this to happen, but eventually it makes the big ships not economic to run. Not to mention, those big ports with the huge cranes lifting the containers on and off the ships take a lot of oil powered energy to work effectively.

Mr Bill's economic analysis is one which looks at the traditional aspects of supply and demand, its essentially correct but it does not take into account catastrophic failure of the system as a whole. In other words, at some point the big boats just won't be able to refuel at the point of destination in order to return back to the point of origin. Sailboats ALWAYS can do this.

The amount of international trade of all goods shrinks as the currency gets debased in all the countries. This is happening in China just as it is here, just in a somewhat different fashion, and its slightly lagging, but it fails as the economy here fails. At what point does the international trade fall off to such a point that the big boats are no longer economic to run, because it just costs too much in fuel to push them across the ocean at any speed? when is the actual volume too small to justify such big boats?

Well, I could project out here that it takes no more than 20 years for it to devolve to this level, and for really BIG boats, your lead time in building them and getting them fit out is gonna take a couple of years to begin with, and if you are to recoup the investment, they better keep operating for at least 20 years. Very risky proposition there.

Smaller boats take a much lower investment, and shorter lead time to get operating. The human labor needed to operate them is clearly out there desperate for work. Instant boats, instant labor, lower risk.

On the question of sailing into the wind using any technology, its clearly possible, its called TACKING. Makes the trip longer, but long as you can sail even just 20 degrees into the wind, its always possible to make decent progress. Obviously well designed sailing vessels can do better than that anyhow.

Reverse Engineer

cube wrote:



[align=center]World's biggest refinery to test oil bulls[/align]


Source: SINGAPORE, Aug 1 (Reuters)

This goes to a favorite concept here, EROEI. While technologically its certainly possible to transport gasoline, or compressed or cooled Propane or Natural Gas, the kind of ships you would have to build to do it would be very energy intensive. this would only make the end product more expensive than it already is for the consumer of the product.

Same reason you can't REALLY build communities on Mars or do anything more than fly to the Moon and back. It simply takes too much energy to do these things, and have enough left ober to actually start BUILDING something. If Mars had Oxygen and plenty of combustible materials and fertile soil, long as we could get there we could build there. It has none of those things in sufficient measure to make life viable, heck it would be easier to make life viable on Antartica, and even just keeping a Military Base there is a waste of money.

Sure its technoligically possible to build a ship that carries gasoline, but it would be expensive and chances are quite a few of those expensive ships would BLOW UP, like the Challenger did. You pull the oil in unrefined form to the place that uses it, then you refine it and send it out in smaller doses. The system developed this way for a REASON.

Reverse Engineer

The bunkering of large ships is done by smaller fuel supply ships in any case. In the hub and spoke trans-shipment of intermodal containers there will be bunker fuel at those larger hubs where the greatest demand is. There may not be bunker fuel available at those smaller places down the line that cannot afford to buy imported goods in any case. No ability to pay, no demand, no supply.

[align=center]Bunker ship in Limassol[/align]


As these large container ships can accomodate a wide range of fossil fuels using basically anything that can burn then they outlast what many of us see as a liquid fuel crisis. Grades of heavy oil that cannot be easily turned into gasoline and diesel can still be used as bunker fuel. But also coal to liquids and bio-fuels.

[align=center]Dhows used to transport bulk goods between Dubai to India[/align]


As bulk loads are less-efficient, and cost more to transport in smaller boats than by container, then those goods become even more expensive when delivered. So if there is no ability to pay via delivery by large ship then there is no demand for delivery by sail either. Then the only solution is local production close to the consuming market or doing without.

Of course, sailing ships need to be built-out of natural resources using energy as well. Basically anything you can build a sailing ship out of like wood you can burn - wood pellets or cellulosic ethanol made from wood chips - to power a container ship. If it is steel then that steel is using energy that can power a ship as well. LPG ships run on their own cargo.

I have to disagree about the endless supply of cheap labor though. Even in days of old not everyone was cut out to be a seaman. It is very tough physical work and quite dangerous. There are very many poor people in the world today. Not all of them are flocking to the sea in search of work.

Technically if they could they would be logging trees locally, building boats by themselves and taking to the sea as either fishermen or involved in transport. There must be a reason why that is not taking place today on a wider scale? The answer is that despite having trees and surplus labor they still could not compete against modern ships. I am not of the opinion that this will change in the next twenty years. Perhaps less container traffic due to reduced world trade. But not sail replacing container ships for transport.

Plus seamen still need to be fed. Long journies mean more men to feed for longer periods of time. That reduces the economics of the voyage or adds to the cost of the goods delivered. In the past that meant only low volume, high value goods were transported by sailing ships. Again the option is locally or regionally produced or going without. If the world runs out of oil and does not have an alternative then I cannot see the demand for sailing ships either? What would be their economic purpose?

RE wrote:


This is not true. Europe exports gasoline to the USA market as they consume more diesel than gasoline. India refines and then exports to Iran. S. Korea and China both export petroleum products regionally in Asia. Etc.


Total Imports of Petroleum (Top 15 Countries)

My thinking was not that a wind only vessel could be made from existing hulls, but that a wind assisted hybrid could...

rather than direct driven, electric generated to the existing electric drive props.. the generator being one of the vertical windmills such as you can see when crossing tehachapi on rt 58.

Several years ago I saw such a design but at that time wind assist was not worth the investment.. I only brought this idea up into a conversation of using existing hulls..


PS Mr Bill... I lived and worked in central america for several years and find you statements and facts about Africa similar to what I saw there...

Shipping Gasoline slightly pressureized and Propane a bit more so is not difficult, but transporting Natural Gas cryogenically is a whole different ballgame in energy intensity.

This applies to many products shipping and labour are not the only reasons. England did not grow cotton but in the 1800's had many spinning mills and textile plants. The USA does not grow coffee but has many coffee roasters/canners. Malaysia and Brazil grow rubber trees yet most of the processing does not happen there.

The infrastructure and support systems are not always available in the originating countries or the product may better suit processing near the end use. In many cases I suspect that the refineries are in the original industrialized nations due to earlier needs to suit the domestic market but have remained after the domestic supplies were reduced. I think the property rights may be a factor but it is not the only factor.

Another factor...



shrinkage.

The more valuable the item the more shrinkage from any handling.... And the closer to the end user the tighter the security usually.

By this logic, why were sailing ships EVER economic? Back in the years from around 1500 to 1750, the world had not run out of oil, but neither was anybody using it. Somehow in the absence of oil they managed to build the ships, and then once built they gave years of service transporting goods across the oceans, enough gold certainly got transported from Central and South America to do wonders for the Spanish economy. Enough Slaves got transported from Africa to do wonders for the American economy, and enough Rum got transported back to keep the ship full in both directions, a nicer backhaul payload than empty Containers.

Your postulate I gather is that as long as there is ANYTHING to burn, that the engine powered ship is going to be more economic than the sail rigged ship, It might be, but I think only marginally so and it would demand having big enough markets to make such large ships economic to run. Aren't we in agreement that the size of the markets is going to shrink tremendously due to die off? So will there really be enough people around to warrant such large vessels plying the oceans of the world?

Sailboats operate more autonomously, they don't NEED smaller vessels to refuel them at sea, they don't NEED large ports to offload their goods. They can make many stops at smaller ports to trade, wherever there might be a local economy running that has some goods another place needs, that needs goods another place produces. A sailing vessel in the time of Magellan or Cook could be 4 or more years before returning to its home port, not even needing any real port at all to drop anchor and send the crew out foraging for food. Dangerous business, no doubt, and many did not return from those voyages, but those who did return were made quite wealthy by them, the Captain and Owner of the vessel much more so than the crew, but even the crew did well on a successful voyage.

Large boats are limited to only being economic in a large economy. As the economy shrinks, the size of the vessels has to shrink with it. Again I ask you, do you wish to be ahead of the curve here, or behind it? Spend a ton of money on large boats that will burn your Bunker fuel, but in 10 years before the boat is half paid off there aren't enough goods to ship about to make it worthwhile, what have you got? A very large hunk of floating metal not worth a whole lot more than a GM Plant that used to produce cars. You have invested a huge amount of money in a machine that no longer is applicable in a smaller economy in the absence of cheap energy. However, will the population necessarily dwindle down below what it was in 1750? Unlikely except in the event of Thermonuclear War. About a 5/6ths reduction, around 83% not a whole lot different a percentage than what Merrill Lynch just sold off $8B worth of collateralized debt for, about 22 cents on the dollar. 78% reduction, 83% reduction, lets not quibble about 5% here, its only 300 million people or so out of the 4 or 5 billion drop off. LOL.

Anyhow, if sailboats were economic in 1750, why would they not work again in a world population roughly the same size with roughly the same kind of productivity? One could postulate we will do somewhat better on the productivity end, since at least some of the technology developed since can survive, so you probably have a slightly larger carrying capacity, but you also could build slightly larger sailboats by reworking the steel of old hulls into configurations more suited to sail, and certainly the Hull of one supertanker of today would provide raw material for a LOT of smaller sailing vessels that STILL could carry 10 or 20 Containers.

It appears to me here you are arguing both sides of this issue. In a prior post you argue that canals will become a more prevalent form of transportation for bulk goods as the railroads become uneconomic to run. What put the canals out of business? The railroads of course, just as the fossil fuel powered ocean vessel put out of business the sailing ship. However, as you work your way back down the ladder here, just as the canals once again become economic, so also do the sailboats. Now, if you had money to invest, which would you invest in for Canals, a few HUGE barges that require engine power to run, or many smaller barges that could be pulled along the canal by teams of horses? The latter model is more flexible, does not take so much initial investment, and can be grown as the economy grows. There is no difference on the ocean end of the transport, the smaller ships are more flexible and can still operate in a vastly smaller economy.

Again the main questions here revolve not around the endgame, but the timeline to the end game. If the lead time here to complete devolution of the economy is 20 years or more, then it might make sense to invest in larger ships that burn Bunker fuel, they might pay themselves off and you might eventually realize some profit from it. However, if in 5 years nobody is producing enough goods for you transport in such a large ship, your business will go Belly Up. There might very well be a Sailboat Captain in the slip next door to yours that can take a small load across the ocean and realize a hefty profit from it. A more human intensive labor business with more food costs for the transport no doubt, but it still is operating on the small scale a large ship cannot operate on. When the economy and population size shrink enough, this is the form of transportation that WORKS. It worked in 1750, it will work again.

Reverse Engineer

*warning may be controversial*
It's my observation that many people on this website like to think of themselves as "open minded" and definitely more "informed" than the majority "ignorant" unwashed masses.
A VERY common belief on this website is that in a PO world, humanity will stop transporting almost all goods beyond 1,000 miles. The argument is simple, expensive energy will make long distance transport economically unprofitable.
People who hold this position should go back and re-read their history books.
If we look at historical fact, even before the advent of steam engine ships, Europeans were drinking tea from India, smoking tobacco from Virginia, and drinking coffee from Africa. However this is not limited to "super premium" goods. Back in the old days the items listed above were luxury goods!
By very late Victorian times, steel hull sailing ships (Wind-Jammers), became efficient enough that even everyday mundane items like wool and grains could be transported from Australia to England economically.
Don't get me wrong I'm not saying we're going to be transporting cheap Chinese plastic toys 10,000 miles on sailing ships post PO, obviously there will be major changes to the world.
I'm just saying this ridiculous "Locavore-theory" that many people on this website subscribes too falls apart very quickly when compared to historical fact.

I lost count how many people on this website have this silly idea they have discovered some great knowledge that puts them above the unwashed masses.
People who fall into this category usually have a very firm belief what post PO will look like.
Unfortunately once you contradict their "theories" they tend to lash out violently.
People who fall into this category often get put on my ignore list.
I'm just rambling about what happened in another thread, everything is going fine in this post.
continue on....

To: ReverseEngineer
I believe you are misinterpreting MrBill's post.

I don't know where in the world you got all that "analysis" from but that certainly was NOT the impression I got from reading MrBill's posts.

I guess I am one of the "Ignorant Unwashed Masses". LOL.

Seriously, Cube's observation is correct at least so far as I have experienced life on the Peak Oil board to date. There are some long term members with "Expert" designations who have staked out their territories, and if you contradict them, you get belittled for it. Doesn't bother me much, I can hold my own in an argument, but as I read through the archives I see it all over the place.

Its always a mistake to think you "know it all" or that others might not have an insight you did not consider. Its easy once you have staked out a territory to belittle newbies, to tell them they are naive or they need to read the vast archives of the group or 10 books you read this year. I never accept such arguments myself, I argue from my own first principles. I do NOT know it all, I just know what I know, and I can defend it.

I am enjoying the discussion with Mr Bill. I hope he is as well, and to date it has not devolved to the point of endless flame. I been there, done that many times. It goes nowhere. Each of us has our own spin, and you can attack an IDEA, but attacking the PERSON who speaks the idea is counter productive always. I try not to do that, but when I get pushed, I can spit out fire like you would not believe. LOL. In any event, this discussion does not seem to be going that way, so far its just an exploration of ideas. That is good.

Reverse Engineer

There's a lot of people here who think just because they are PO aware they must have the amazing ability to predict the future. There's a lot of stupid ideas and theories that have been proposed on this website. That's what debate is for.
To weed out bad ideas from the good.
Hopefully I have not proposed too many bad ideas myself.

BTW here's a post I made awhile back.
It's "only" 1/3 rd of a page long and it is related to shipping.
The last mile and PO