Here Comes The Double Dip Pt. 3

[pstarr]

(but that was okay really because corn ethanol remains a loser). It's true that corn ethanol is a way to convert sunlight, electricity (from coal and natural gas via milling/fermentation/distillation) and lots of diesel (growing/harvesting corn) but as others pointed out, you might as well use the coal and NG directly.

I don't know about corn ethanol. However I have everything lined up to plant sunflower to be processed into bio diesel. Cost of production (all included, also depreciation of equipment, and processing into diesel), approx $2/gallon. How can that be ?

I am also going to give sunflowers a shot here, but mostly as a nutritional oil crop. (it's difficult to grow oil in coastl california)

Regarding biodiesel eroei; here is a link to Pimentel's seminal paper on the subject. Go to page 73 of the report where you will find a chart. Notice how comprehensive the chart is; he depreciates everything! So did you include all farm inputs in your energy accounting? Lime is a big number for soybeans. (don't know about sunflower) Notice the cost of steam to process the oil into biodiesel. Lots of hidden energy costs.

[Lore]

I guess it's much more complicated. In the same way as it is profitable to sell batteries (even though they have a lousy EROEI), it is possible to sell <1 EROEI oil, extracted with the help of NG.

Batteries are profitable because people are willing to pay a price that exceeds the amount of energy lost for the connivance of portable power on demand. Storage batteries are also not a finite base resource. However, in the case of oil you can never exceed the supply, especially at a loss, over the actual demand at profit. You only have to witness the slow down in NG fracking due to oversupply to view this at work.

Exactly, me too, I would be willing to pay for gas to power my chainsaw, even if the gas was made at a loss (energy wise). It's the convinience factor, it's worth a lot, and goes way beyond EROEI.

But there in lies the catch because at a certain point in which that price exceeds the benefit, or your ability to pay for that benefit, you then must seek an alternative. On top of which, fossil fuels are fungible commodities traded on a global market. So you compete for its use by being the next world wide highest bidder, unlike batteries.

While a few precious gallons may still make sense for your chain saw so you can cut wood for the winter, it may just be too expensive to be justified for use in your auto.

[dsula]

So did you include all farm inputs in your energy accounting? Lime is a big number for soybeans. (don't know about sunflower) Notice the cost of steam to process the oil into biodiesel. Lots of hidden energy costs.

I included all the costs relevant to me which is planting and harvesting (including fertilizer etc). For processing it goes to a bio diesel plant that charges me. I have no idea if they operate at a loss or are subsidized.
Sunflowers are hard on soil, you can only plant them one out of 5 years in the same spot. My calculation assumes that the land is not idled but used for other purpose 4 out of those 5 years.

[dsula]

I guess it's much more complicated. In the same way as it is profitable to sell batteries (even though they have a lousy EROEI), it is possible to sell <1 EROEI oil, extracted with the help of NG.

Batteries are profitable because people are willing to pay a price that exceeds the amount of energy lost for the connivance of portable power on demand. Storage batteries are also not a finite base resource. However, in the case of oil you can never exceed the supply, especially at a loss, over the actual demand at profit. You only have to witness the slow down in NG fracking due to oversupply to view this at work.

Exactly, me too, I would be willing to pay for gas to power my chainsaw, even if the gas was made at a loss (energy wise). It's the convinience factor, it's worth a lot, and goes way beyond EROEI.

But there in lies the catch because at a certain point in which that price exceeds the benefit, or your ability to pay for that benefit, you then must seek an alternative. On top of which, fossil fuels are fungible commodities traded on a global market. So you compete for its use by being the next world wide highest bidder, unlike batteries.

While a few precious gallons may still make sense for your chain saw so you can cut wood for the winter, it may just be too expensive to be justified for use in your auto.

I agree, but it has nothing to do with our conversation.
The point is, energy is produced (extracted, processed, pumped, collected, whatever) not on the basis of EROEI, but on basis of PROFIT.

[pstarr]

While a few precious gallons may still make sense for your chain saw so you can cut wood for the winter, it may just be too expensive to be justified for use in your auto.

Key point. Americans are practically immobile without their cars, inexpensive gasoline, and expensive-to-maintain roads, gas stations, pipelines, traffic lights, highways, parking lots, curbs, pothole repair, highway police, salt-spreaders, line-painters, road lighting, traffic signs, overpasses, underpasses, tree pruning, grass cutting, dead-deer-removal, trash collection, roadside assistance, power lines. We Americans are a pricey people.

[Plantagenet]

Americans are practically immobile without their cars, inexpensive gasoline, and expensive-to-maintain roads, gas stations, pipelines, traffic lights, highways, parking lots, curbs, pothole repair, highway police, salt-spreaders, line-painters, road lighting, traffic signs, overpasses, underpasses, tree pruning, grass cutting, dead-deer-removal, trash collection, roadside assistance, power lines.

Speak for yourself. There are millions of Americans who take buses, trains, trolleys, ride bikes, motorcycles, scooters or live close enough to work that they commute by walking. I just rode my motorcycle in to my office ----and its goddamn 26 degrees this morning------so your BS about people being immobile without their cars doesn't sit too well just now......

[vision-master]

lol - nice heated office, eh planted. I wonder what the operating costs are for that per year?

[Lore]

I agree, but it has nothing to do with our conversation.
The point is, energy is produced (extracted, processed, pumped, collected, whatever) not on the basis of EROEI, but on basis of PROFIT.

My point is the two are interchangeable, ER = profit, EI = cost.

[ralfy]

Given that they are now fracking the cream, how long will it really be before they hit the wall on EROEI?

EROEI is not important. What is imporant is the price, or better, the PROFIT.

It should be the other way round, as the latter involves money, which we are able to create readily (in this case, at least $600 trillion in unregulated derivatives). We can't do the same when it comes to energy.

[pstarr]

So did you include all farm inputs in your energy accounting? Lime is a big number for soybeans. (don't know about sunflower) Notice the cost of steam to process the oil into biodiesel. Lots of hidden energy costs.

I included all the costs relevant to me which is planting and harvesting (including fertilizer etc). For processing it goes to a bio diesel plant that charges me. I have no idea if they operate at a loss or are subsidized.

well there you go. I guess you and the rest of America's oil-seed producers can stop supporting those murderous bastards in the ME.

[Anvil]

It could be that optimists realise there infinite energy strategy/booming economy has not got a leg to stand on given the current world economic depressionary realities. They therefore resort to petty and insulting name calling tactics to keep the realists on the back foot with labels like doomer.

If its one thing optimists really excel at is name calling the trouble is that is the only thing keeping there economic theories afloat that and fudged figures.

[pstarr]

Americans are practically immobile without their cars, inexpensive gasoline, and expensive-to-maintain roads, gas stations, pipelines, traffic lights, highways, parking lots, curbs, pothole repair, highway police, salt-spreaders, line-painters, road lighting, traffic signs, overpasses, underpasses, tree pruning, grass cutting, dead-deer-removal, trash collection, roadside assistance, power lines.

Speak for yourself. There are millions of Americans who take buses, trains, trolleys, ride bikes, motorcycles, scooters or live close enough to work that they commute by walking. I just rode my motorcycle in to my office ----and its goddamn 26 degrees this morning------so your BS about people being immobile without their cars doesn't sit too well just now......

You don't get a slap on the back for that kind of behavior. You get a suspicious sideways glance, like "WTF is wrong with that dude?"

But more to the point; conflating your personal luxurious driving choices with typical crappy US municipal bus service is a bit presumptuous, don't ya' think? Especially when it is your Republican buddies who destroyed any chance we have to install a serious 1st World public transport system.

[OilFinder2]

Helloooooo??? Double-dip where are you???

Are you hiding beneath my dining room rug?
Maybe there's one in a corner in my garage, hidden beneath that unused set of shelves that's been sitting there for two years.
Or maybe it's fallen down a storm drain down the road somewhere.

Wherever it is, it sure is hiding really good!

Calculated Risk: U.S. Light Vehicle Sales at 14.42 million annual rate in April

[Plantagenet]

Helloooooo??? Double-dip where are you???

Are you hiding beneath my dining room rug?
Maybe there's one in a corner in my garage, hidden beneath that unused set of shelves that's been sitting there for two years.
Or maybe it's fallen down a storm drain down the road somewhere.

Wherever it is, it sure is hiding really good!

Its in Europe right now.

The double dip isn't hiding---you are just incredibly ignorant about what is going on in the world. The EU has been struggling with a double dip recession for months now.

[OilFinder2]

FACT: the productive capacity of ND wells depletes between 60%-80% in the FIRST YEAR.

You're hardly telling us anything we don't already know, but since this is a thread on the economy, the economic significance of this has already been pointed out to you.

As new wells are opened up, we can expect them to produce 80% of their capacity during the 1st year ... but then in the 2d & 3d years we're left with dribbles and trickles. So unless you're predicting that the entire surface of the US will be fracked (and we're confident that you would readily endorse such a scenario), then the Bakken bump is a limited, one-shot, short-term adrenaline rush.

As has been pointed out numerous, countless, and otherwise uncountable times on this forum, we're not just talking about the Bakken. That's merely the first one. There are going to be MANY more. And again, see green link above to note significance for the economy. Maybe this weekend I'll make that map I was talking about a couple weeks ago!

[OilFinder2]

Its in Europe right now.

The double dip isn't hiding---you are just incredibly ignorant about what is going on in the world. The EU has been struggling with a double dip recession for months now.

Right. Except that ... this thread was started to be about a double-dip in the US. If you read through part 1 there's little talk about Europe at all - except toward the end, by which time it became so obvious the US wasn't going into a double-dip, that certain posters in this thread felt they had to shift emphasis to the other side of the pond.

[Daniel_Plainview]

US Debt-to-GDP Soars to 101.5%

Reinhart, Rogoff and Reinhart identified 26 episodes of public debt overhang–where debt to GDP ratios exceed 90% of GDP–since 1800, and found that in 23 of these 26 episodes, individual countries experienced lower growth than the average of other years. Across all 26 episodes, growth is lower by an average of 1.2%. The average duration of debt overhang episodes was 23 years. In 11 of the 26 high debt overhang episodes, real interest rates were the same or lower than in other periods. The fact many countries are facing “quadruple debt overhang problems”—public, private, external, and pension–suggests the problem could in fact be worse than in the past. In addition, there is the likely possibility of significant “hidden debts”, especially public sector, which is a significant factor in many debt crises. The analysis, based on these cases and the 23 others identified, suggests that the long term risks of high debt are real.

[Plantagenet]

Its in Europe right now.
The double dip isn't hiding---

Right. Except that ...

Look. You made a bone-headed mistake. You wrongly claimed there was no double dip recession even though virtually every literate person on earth knows that Europe is in a double-dip recession. Please stop making excuses and just accept reality.

There is a double-dip recession hitting the EU right now. Just hope that it doesn't get worse and drag the USA down as well.

[pstarr]

Its in Europe right now.

The double dip isn't hiding---you are just incredibly ignorant about what is going on in the world. The EU has been struggling with a double dip recession for months now.

Right. Except that ... this thread was started to be about a double-dip in the US. If you read through part 1 there's little talk about Europe at all - except toward the end, by which time it became so obvious the US wasn't going into a double-dip, that certain posters in this thread felt they had to shift emphasis to the other side of the pond.

OF, It's one big happy world, driven into the Great Recession by guess what? You know. I know you know.

[OilFinder2]

Look. You made a bone-headed mistake. You wrongly claimed there was no double dip recession even though virtually every literate person on earth knows that Europe is in a double-dip recession.

Earth to Planetagent: Read Page #1, Post #1 of this thread. The post that started it all. It was an article by Denninger about the Empire State Manufacturing Survey. I've got important news for you: New York State in not in Europe!

I repeat: The Empire State is located in the United States, not on the other side of the Atlantic!

Here's a little map to help you out.



Thus, the geographical location in which this thread was intended for is not the geographical location currently undergoing a double-dip. Sorry!

And to emphasize the fact, the OP of the thread added his own narrative:

How much longer can this moribund economy continue to run on the fumes from the Fed's ineffective life-support measures? Of course, the Fed will try one last hail-Mary (QE3) ... but just like QE1 and QE2, it will only make matters worse.

"The Fed," of course, refers to the Federal Reserve. The Federal Reserve is not the central bank of Europe! Rather, it is the central bank of the United States. So, not only was Karl Denninger speaking of an imminent double-dip in the US, so was the OP who began this thread.

Try again!