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Conundrum of free parking and easy oil


It has taken me a while to understand that cost, value and ability to pay are independent things.

For example, you are driving from Clarkston to Enterprise, Ore. You blow past a sign reading, “Next services 100 miles.”

At Boggan’s Oasis you realize you don’t have enough gas.

Luckily, there is a four-wheel drive truck with a 5-gallon gas can. You ask the driver to sell his gas.

He says $20. He probably paid $2.35 a gallon in Lewiston. Cost and value are independent. The value to you is getting to Enterprise.

You look in your wallet and find $10. Ability to pay is also independent of cost or the value of the gas. You toss in a case of your prized homebrew.

That example might help you understand the oil industry and Energy Return on Energy Invested.

Since World War II, American society has been built on the fact that the value of oil to society was much higher than the cost of producing it.

A gallon of gas cost little compared to the work it could do.

At the same time, the price of the gas was high enough to pay for drilling and profits.

Diminishing returns is the idea that we start picking the low hanging fruit and, over time, picking takes more and more effort.

Same with oil. Jed Clampett found oil while shooting at a rabbit. We’ve already pumped the easy stuff. Fracked oil is much more difficult to get; it doesn’t bubble from the ground.

Diminishing returns acts like growing inefficiency; it takes more energy (materials, labor and debt) to produce energy products, leaving fewer resources for producing end products (such as homes, cars) that consumers really want.

When more energy is invested to get the oil, EROEI is lower. The gas still does the same thing in your car, the value to you doesn’t change, but the cost to produce it does.

If gas prices are higher than you can pay, you cut back. If prices are low, the oil company borrows heavily, loses money or cuts back on exploration.

The imbalances of cost, value and ability to pay work through the economy. They show up in various places.

Housing shortages can be the result of cost to develop exceeding ability to pay. One way to address the problem is reduce the land cost going into the development: taller apartments, smaller lots and converting houses to duplexes.

It upsets people to have their dream of a detached house with picket fence eroded by higher density. I think this is a result of declining EROEI. Society is spending more getting oil, tossing in smaller lots to pay for it.

Changing affordability doesn’t make the dream house go away, which is upsetting.

The personal automobile is another dream I think will fade as EROEI declines.

Pullman is worrying about downtown parking. We’ve come to think parking should be free. Donald Shoup, in “The High Cost of Free Parking,” explores how society pays to create the illusion of free parking.

We pay with sprawl and higher housing costs.

Declining EROEI exacts its toll by requiring people live closer together. We assume that will create parking congestion, but the car-owing dream is coming to an end, too.

As we reach the end of fossil fuels, we are learning that unconventional oil and renewables each have lower EROEI than the oil we used to build our dream society.

It is going to be a bumpy ride until cost, value and ability to pay get in the right relationship. Unless we get it right, we’ll be out if gas at Boggan’s Oasis.


11 Comments on "Conundrum of free parking and easy oil"

  1. Norman Pagett on Wed, 16th May 2018 4:19 pm 

    we built our current infrastructure on cheap surplus fuel……we are now trying to maintain and expand that same infrastructure on expensive scarce fuel

    the tragedy is, that few can accept this reality

    to the unthinking masses (actual intellect seems to have nothing to do with it) oil is just “oil”….the cost of actually getting hold of the stuff is seen as an irrelevance

    this explains it further:

    not that I think it will do much good

  2. energy investor on Wed, 16th May 2018 6:31 pm 


    Let me see if I have this right.

    One barrel of oil holds enough energy to match 4.5 years of human labour.

    I suppose that accounts for how in 1880 with 80% of the people working on the land we have been able to gravitate to 2018 with only about 2-4% working on the land(depending on the OECD country you live in). Oil, coal, tractors and technology have enabled us to use up our one time bounty.

    Take away the energy bounty, or decrease it too far, and our reliance on technology becomes insufficient.

    Once 80% of people were actually productive. Now probably 10% of the people are. But surprisingly in terms of their labour input, the 10% earns 10 times what the 80% that are productive do. There will be little prospect of retraining to take the unproductive and make them productive.

    In terms of demographics, the young have moved to the cities so that in countries like Japan, China and USA the average age of farmers is more than 50-60 yrs. From the 2030’s who will work the farms when oil driven tractors become too costly?

    Meantime, as true productivity falls, the greed of the majority who want lifestyle assets outstrips their ability to pay. This started in the 1980s. Eventually, credit has become money and the cowboys playing with money have financialised everything to provide a huge risk overhang. Unless our civilisation finds cheaper energy solutions within months rather than years, we seem doomed to an early stage financial collapse.

    Falling EROEI for oil and gas is therefore likely to be the true killer of our industrial and highly financialised society.

    We are now on the road to ruin and forced depopulation, unless we can find a high energy replacement for oil, gas and coal.

    But that won’t happen over night.

    Meantime the answer of the greens and fellow socialists is to chase the socialist dream of those who have giving everything to those who have not. But Baroness Thatcher was right in 1980’s when she said, “Socialism is all very well, but eventually, you run out of other people’s money”. I suppose that is what has happened in Venezuela.

    In Zimbabwe and South Africa, they lead the way. That is probably where we are headed. A triumph for chaos and violence over common sense and order.

    Let’s continue…

    In 1880 the global population was about 1.5 billion. Then humans and their livestock represented less than 10% of all land mammals. Today we are 7.5 billion and together with our livestock we represent more than 98% of all land mammals.

    The collapse of our civilisation will be epic. But it will then be impossible to prevent all remaining wildlife from being eaten. The unproductive members of society outnumber the productive and their numerical superiority will ensure no rational solution emerges.

    With a scarcity of beasts of burden, probably a few more humans will once more become slaves to replace tractors, and during the difficult times, we will be back to eating those slaves when the value of their protein is greater than their utility. That was certainly the South Pacific way up to 1840.

    Not even preppers posting here will be safe. They will be taxed and their meager harvests will be raided.

    See, it isn’t hard to follow the dots if we take a cynical view of human stupidity.

    Yet, I have no doubt stupidity will win the day.

  3. dave thompson on Wed, 16th May 2018 8:27 pm 

    The externalization of the true costs of industrial civ are never taken into account. As we go forth in time, this will be the tell.

  4. Cloggie on Wed, 16th May 2018 8:44 pm 

    My home town introduces financial means to have solar panels on your roof and lower your monthly electricity payments:

    At current price levels solar panels have a payback-time of 7-9 years, tendency shorter all the time, after which you’ll have free electricity for at least 20 years and potentially 40 years.

    The situation in Eindhoven is now such that you only have to pick up the phone and have these panels installed soon after and have a financing that comes with it. You’re a fool if you do not pick up the phone.

    There is a little catch: the Dutch government has announced they are probably going to scale back the “salderingsregeling” after 2023, where a privately produced kWh leads to a compensation of exactly the price the consumer needs to pay, namely currently 23 euro cent, now that sufficiently home owners have been lured into installing panels:

    In 2017 alone the installed Dutch base of solar panels increased from 0.9 GWp to 2.9 GWp (average Dutch electricity consumption is 13 GW 24/7/365 and max capacity 29 GW).

    New financing tools like in Eindhoven and elsewhere in Holland will ensure another large wave of new installations in 2018.

  5. gronkasaurusflex on Wed, 16th May 2018 8:45 pm 

    “energy investor” lad here’s pretending he’s not a prepper lmao. how many lifestraws do u have stashed in ur cistern right now dude

  6. MASTERMIND on Wed, 16th May 2018 9:56 pm 

    The Latest: Jailed man claims Paddock ranted before shooting

    Paddock called Federal Emergency Management Agency “camps” set up after Hurricane Katrina in 2005 “a dry run for law enforcement and military to start kickin’ down doors and … confiscating guns.”

  7. MASTERMIND on Wed, 16th May 2018 10:12 pm 

    See that vegas shooter is what happens when you leave the ship of fools like Clogg and Theo..And go into conspiracy land of Soros and the ZOG NWO..You end up creating mass murder of the people you are wanting to save…

  8. john kelley on Thu, 17th May 2018 1:18 am 

    This is the 3rd time I have heard the claim that humans and their livestock represent 98% of all land mammals.I would sure like to read your reference material on that”energy investor”.

  9. Davy on Thu, 17th May 2018 5:43 am 

    To understand energy in civilization you have to get holistic in a systematic way. The physics plays its part but also the psychology. Our behaviors and living arrangements are influenced by the physics. The way we utilize the physics of energy relates to our values and desires. This is a process too so you add another dimension of evolving behavior with changing physical realities influenced by innovation, substitution and depletion. Behavior changes with changes in value and economy. Economy is where behavior meets physics. Confidence and morale then become the liquidity that is grounded in trust. Trust is supported by rules of law and generally accepted accounting principles. As one can see the systemness of this arrangement is complex.

    Our current place we inhabit is robust but brittle. There is a strong resilience from incredible economy from globalization. This globalization is driven by comparative advantage driving economies of scale supported by global transport and finance. The sustainability is the weak point. We know the law of minimums importance. Our ability to sustain this fluid high complexity and high energy system is fragile. Yet, it is robust as long as the core of the system remains. The fragility is spread through this system as risk in various areas. All aspects of human civilization are now exposed to these risks. These risk relate to delocalization. All locals are now at risk to the global. All locals need support from the global. This varies by degree but it is still a reality for all. Even the subsistence farmers or the last remaining tribes in the jungle are dependent. If the global system quits then vast dangers of industrial systems and weapons of mass destruction may do permanent damage for all. Then there is the planetary system this linear human system is parasitically consuming. This system is in decline and localized failure. The living web is being torn by extinction. This fact ensures our end eventually maybe not as a species but as a civilization

    This linear human system is finally approaching limits and near boundaries of phase change. Turbulence is entering the system. Dysfunction, economic abandonment, and irrational behaviors are increasing. The planetary system and the living web is forcing our human linear civilization circular. Economies and populations don’t respond well to decline. Decline is a part of the circular process of succession. Our collective place now is a way of life with no future but then there is the element of time, place, and lastly the metaphysics of our intelligence. The element of time means this is a process and it will unfold over time. If collapse is in the cards it may not happen all at once but it can. Collapse is something we cannot know but we can see the building of it like a geologic fault. It will likely be influenced by place and time. As long as the core holds we can have collapse occur in multiple locations and sectors of human activity at the same time the core is driving growth in others. Maybe that is where we are now. Yet, there is the degradation of entropic decay that once the aggregate of decay overcomes the growth function then this process may have tipped over into the decline phase of succession of the human ecosystem. We have grown for hundreds of years so this will end. Ponzi schemes are linear and they end. Our economy and population have been on a Ponzi course. They are paying out current benefits with funding from unsustainable behavior. Bad investment with finite resources eventually causes bankruptcy.

    The last element is the metaphysical side of life. What is our intelligence? It surely is an expression of the universe. Maybe it is the universe coming to reflect on itself and as it goes dualistic in self-consciousness it then gets lost in petty egos thus solving the metaphysical nature of the great cycle. It is the metaphysical and the myth humans relate to we now need to refer to. It is becoming aware of where we are and what we have become in humility of a higher power beyond humanity that we can then go forth. This is not the same as religion but religion can be part of it. This is about the reality of now. Going forth we can then see what needs to be done.

    I see no hope for civilization. Civilization is running its course in a self-organizing adaptive direction. If you as an individual or small group fight this it will consume you. Yield to it and its flow and it will support you. Use it like judo to maintain your place like a small tree on a harsh cliff. Use modernism to leave modernism. There is no safety only relative safety. Since the system is collapsing and a reality of less is part of the future then collapse in place and embrace less. Create monasteries of knowledge and sanity but with the realization of insecurity. Embrace insecurity with wisdom. Wisdom-“the knowledge of what ordinary knowledge to gain and how to use it”. This then becomes the meaning for life in a new paradigm. Not how much you have materially although that has its place, it is about how to use knowledge. Technology is part of it too but this knowledge is a blend of technology and behavior. This then is the way forward for the individual in a collapsing world.

  10. marmico on Thu, 17th May 2018 5:51 am 

    The author of the piece, Nils Peterson, like Norman Padgett, is an idiot. In 2018 it takes on average half the gasoline to drive from Clarkston to Enterprise than it did from whatever date he wants to EROI bloviate about, say 1970 before the first OPEC supply side shock.

  11. Sissyfuss on Thu, 17th May 2018 8:54 am 

    Moronmykook, so fuel efficiency will overcome massive population growth and depleting resources. In response I would say your brain power is not abiotic but rather scraping the dregs.

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