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PeakOil is You

PeakOil is You

Is EROEI Important? Pt. 2

General discussions of the systemic, societal and civilisational effects of depletion.

Is EROEI important?

Yes
56
76%
No
18
24%
 
Total votes : 74

Re: Is EROEI important?

Unread postby donstewart » Mon 08 May 2017, 06:13:30

@vtsnowedin
The basic disconnect is that you expect everything to go right along pretty much as it has been going since WWII. Those who are concerned about Peaks of various kinds expect a reversal. A reversal would destroy most financial values. We would be back in a bio-physical world.
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Re: Is EROEI important?

Unread postby vtsnowedin » Mon 08 May 2017, 06:24:04

donstewart wrote:@vtsnowedin
The basic disconnect is that you expect everything to go right along pretty much as it has been going since WWII. Those who are concerned about Peaks of various kinds expect a reversal. A reversal would destroy most financial values. We would be back in a bio-physical world.
Don Stewart

My glasses are not rose colored. I would not be surprised to see a crash that takes the stock market down below 9000 and Social security and other pension plan checks cut in half. But a house and land will still have the same utility value it always had regardless of market appraisal. During a depression cash is king and owning property free and clear your best defense.
If they cut payments in half or inflate the value away which is more likely the price of golf in Florida will go down but I won't care as I have never taken up the evil sport.
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Re: Is EROEI important?

Unread postby donstewart » Tue 09 May 2017, 12:30:13

@vtsnowedin
Should The Oil Age end, the world we know which supports a high value for the stock market and makes bonds something valuable will end. It's hard to think of any corporate paper which would be worth anything.

It is true that a house with a garden would be worth something. More valuable would be the knowledge of how to actually grow food and preserve it without using electricity or oil or gas. Unfortunately, technological 'advances' tend to destroy the knowledge base and the base which made the tools of an earlier era.

A million dollar McMansion on sterile ground would not be worth very much.

Consequently, it takes a pretty sharp eye to detect what might actually have value after a collapse. And then we have the problems of civil unrest. I believe quite a few wealthy Romans correctly figured out that it was better to be in the countryside than in Rome. However, many of the refugees were killed by bandits.

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Re: Is EROEI important?

Unread postby vtsnowedin » Tue 09 May 2017, 13:18:53

donstewart wrote:@vtsnowedin
Should The Oil Age end, the world we know which supports a high value for the stock market and makes bonds something valuable will end. It's hard to think of any corporate paper which would be worth anything.


Don Stewart
It will vary by company and type of business but they will not all be worthless. Oil firms that own still producing wells here in the USA will hold quite a bit of value as will railroads and much of agribusiness. Ad agencies and gadget makers not so much. :)
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Re: Is EROEI important?

Unread postby donstewart » Tue 09 May 2017, 13:32:52

@vtsnowedin
I see no useful purpose in splitting hairs. Suffice to say that oil companies and railroads and agribusiness are dependent on the continuation of the Oil Age.

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Re: Is EROEI important?

Unread postby vtsnowedin » Tue 09 May 2017, 15:11:34

donstewart wrote:@vtsnowedin
I see no useful purpose in splitting hairs. Suffice to say that oil companies and railroads and agribusiness are dependent on the continuation of the Oil Age.

Don Stewart

Well define the "end of the oil age".
Is it when the last well is shut in or when we start down the production slope/cliff?
There is quite a time lag between the two or at least we better hope there is.
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Re: Is EROEI important?

Unread postby donstewart » Tue 09 May 2017, 15:30:05

@vtsnowedin
The ' lag time between the two' is highly dependent on how one sees the reasons for the end of the Oil Age.
??Governments agree to phase out oil
??Hubbert's curve turns negative
??Hill's thermodynamics continue negative and accelerate into more negative

Those options are probably listed in order of shorter intervals and increasing chaos.
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Re: Is EROEI important?

Unread postby vtsnowedin » Tue 09 May 2017, 15:39:21

donstewart wrote:@vtsnowedin
The ' lag time between the two' is highly dependent on how one sees the reasons for the end of the Oil Age.
??Governments agree to phase out oil
??Hubbert's curve turns negative
??Hill's thermodynamics continue negative and accelerate into more negative

Those options are probably listed in order of shorter intervals and increasing chaos.
Don Stewart

Well you can forget about Hill's BS because that is just what it is B.S.
Any government that tried to phase out oil while there was still adequate supplies would be thrown out in a heartbeat so that leaves us with the backside of Hubbert's curve with whatever modifications, plateau to cliff , shark fin we have managed to build into it. So probably some number of years with steady declines of five percent or more but certainly not a one year shut off.
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Re: Is EROEI important?

Unread postby onlooker » Tue 09 May 2017, 15:42:56

This scenario promises rapid deterioration and Collapse!
Trade Off: Financial system supply-chain cross contagion – a study in global systemic collapse
I do not see this as far fetched considering how interconnected and trade dependent we are. And remember we have just in time networks
http://www.feasta.org/2012/06/17/trade- ... -collapse/
The Big Economic Plunge is approaching
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Re: Is EROEI important?

Unread postby onlooker » Tue 09 May 2017, 15:48:09

Oh and a very brittle and unstable financial system best illustrated by the volatile and haphazard nature of the stock market
The Big Economic Plunge is approaching
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Re: Is EROEI important?

Unread postby donstewart » Tue 09 May 2017, 17:49:48

ETP and Finance and Chaos
This interesting article just appeared:
http://www.zerohedge.com/news/2017-05-0 ... y-reported

If you use the 'alternative' measures of inflation to calculate real output in the US, you get curves which look very similar to the 'net energy' curves out of ETP. That is, peak around 2000 and pretty steep decline. Real output should decline more slowly than you might at first think, because we can still use much of the infrastructure. But as we fail to invest in infrastructure, everything gets more rickety. Somebody (can't remember who) had an article today predicting the imminent demise of the electrical grid. And, of course, all the FEASTA stuff on the fragility of the financial system.

Things could go downhill rapidly....Don Stewart
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Re: Is EROEI important?

Unread postby Squilliam » Tue 09 May 2017, 20:38:15

http://www.businessinsider.com/inflatio ... 16-12?IR=T

Well I would say it is a necessary adjustment. What they are doing is perfectly rational because of the systemic problems of too much savings, and too many people looking to retire at the same time. When the truth is impossible the next best thing to do is hide the truth.
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Re: Is EROEI important?

Unread postby ralfy » Tue 09 May 2017, 20:54:27

vtsnowedin wrote:It will vary by company and type of business but they will not all be worthless. Oil firms that own still producing wells here in the USA will hold quite a bit of value as will railroads and much of agribusiness. Ad agencies and gadget makers not so much. :)


Keep in mind that these oil firms, railroads, and agribusinesses operate in terms of maximization of profits and satisfying investors. Also, they also ironically rely on ad agencies and gadget makers, among others, to ensure that maximization of profits takes place.
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Re: Is EROEI important?

Unread postby ralfy » Tue 09 May 2017, 20:57:47

vtsnowedin wrote: Well define the "end of the oil age".
Is it when the last well is shut in or when we start down the production slope/cliff?
There is quite a time lag between the two or at least we better hope there is.


Perhaps one can look at how it started:

https://en.wikipedia.org/wiki/Age_of_Oil
http://sites.google.com/site/peakoilreports/
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Re: Is EROEI important?

Unread postby ralfy » Tue 09 May 2017, 21:00:39

vtsnowedin wrote:Well you can forget about Hill's BS because that is just what it is B.S.
Any government that tried to phase out oil while there was still adequate supplies would be thrown out in a heartbeat so that leaves us with the backside of Hubbert's curve with whatever modifications, plateau to cliff , shark fin we have managed to build into it. So probably some number of years with steady declines of five percent or more but certainly not a one year shut off.


The catch is that for-profit oil firms, railroads, and agribusinesses, among others, are dependent on the opposite: a steady rise in oil production. And if they engage in competition, even better than a steady rise.
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Re: Is EROEI important?

Unread postby vtsnowedin » Wed 10 May 2017, 03:24:15

ralfy wrote:
vtsnowedin wrote:Well you can forget about Hill's BS because that is just what it is B.S.
Any government that tried to phase out oil while there was still adequate supplies would be thrown out in a heartbeat so that leaves us with the backside of Hubbert's curve with whatever modifications, plateau to cliff , shark fin we have managed to build into it. So probably some number of years with steady declines of five percent or more but certainly not a one year shut off.


The catch is that for-profit oil firms, railroads, and agribusinesses, among others, are dependent on the opposite: a steady rise in oil production. And if they engage in competition, even better than a steady rise.

I don't think they are dependent on a steady rise in oil output at all. When oil becomes scarce and expensive the competitive thing will be seeking ways to accomplish tasks using less oil. There will be winners and losers in that competition.
A gallon of fuel saved will be worth as much as a gallon in the tank and will be easier to come by then a replacement gallon at the pump.
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Re: Is EROEI important?

Unread postby AdamB » Wed 10 May 2017, 17:52:48

ralfy wrote:
vtsnowedin wrote: Well define the "end of the oil age".
Is it when the last well is shut in or when we start down the production slope/cliff?
There is quite a time lag between the two or at least we better hope there is.


Perhaps one can look at how it started:

https://en.wikipedia.org/wiki/Age_of_Oil


OMG Wiki? Are you kidding? How about this gem?

"The second was in 1859, when Edwin Drake invented the first modern drilling process for deep oil wells."

Invented? I can take you to the place where Drake ORDERED his equipment...you know...from the folks who had already been using that "modern" drilling process for decades already.....god....wiki....it never could get peak oil right either.
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Re: Is EROEI important?

Unread postby ralfy » Thu 11 May 2017, 07:56:21

vtsnowedin wrote: I don't think they are dependent on a steady rise in oil output at all. When oil becomes scarce and expensive the competitive thing will be seeking ways to accomplish tasks using less oil. There will be winners and losers in that competition.
A gallon of fuel saved will be worth as much as a gallon in the tank and will be easier to come by then a replacement gallon at the pump.


They are dependent on continuous oil increase because their goal is accomplish more tasks each time. That means they need more oil.

There are winners and losers but everyone needs to earn more each time. That's because increasing income and returns on investment come from increasing sales, which in turn requires increasing income, etc.

That's also why in global capitalist systems a gallon of fuel saved means a gallon that can be used to increase sales further.
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Re: Is EROEI important?

Unread postby vtsnowedin » Thu 11 May 2017, 19:54:24

ralfy wrote:
vtsnowedin wrote: I don't think they are dependent on a steady rise in oil output at all. When oil becomes scarce and expensive the competitive thing will be seeking ways to accomplish tasks using less oil. There will be winners and losers in that competition.
A gallon of fuel saved will be worth as much as a gallon in the tank and will be easier to come by then a replacement gallon at the pump.


They are dependent on continuous oil increase because their goal is accomplish more tasks each time. That means they need more oil.

There are winners and losers but everyone needs to earn more each time. That's because increasing income and returns on investment come from increasing sales, which in turn requires increasing income, etc.

That's also why in global capitalist systems a gallon of fuel saved means a gallon that can be used to increase sales further.

The need for growth is only true if you have a rising population. Of course that has been true for the last two millenniums so the grope think that it always will be true is understandable.
But think about it a moment. In a stable or even declining population everyone already has a closet full of clothes , shoes and whatever.They only need to replace what wears out so their purchases will be stable not growing. Not the end of the world for the retailer either as this years sales being just like last years wold be OK as long as they did not stock the store for an increase. When it becomes the reality the merchants will deal with the reality.
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Re: Is EROEI important?

Unread postby ralfy » Thu 11 May 2017, 21:23:05

vtsnowedin wrote:
The need for growth is only true if you have a rising population. Of course that has been true for the last two millenniums so the grope think that it always will be true is understandable.
But think about it a moment. In a stable or even declining population everyone already has a closet full of clothes , shoes and whatever.They only need to replace what wears out so their purchases will be stable not growing. Not the end of the world for the retailer either as this years sales being just like last years wold be OK as long as they did not stock the store for an increase. When it becomes the reality the merchants will deal with the reality.


The population is set to rise to between 9 to 11 billion during the next three decades or so because of population momentum. That means population aging, leading to "a stable or even declining population," will take place only much later. Worse, that can only take place if "everyone...has a closet full of clothes, shoes[,] and whatever." For that to happen, we will need several more earths.

The EROEI needed for that to happen has to be very high.
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